Exhibit 99.1
| | | | | |
| | | Contact: | | Mike Cockrell |
| | | | | Treasurer & Chief Financial Officer |
| | | | | (601) 649-4030 |
SANDERSON FARMS, INC. REPORTS
RESULTS FOR FOURTH QUARTER AND FISCAL 2007
LAUREL, Miss. (December 4, 2007) — Sanderson Farms, Inc. (NASDAQ: SAFM) today reported results for the fourth quarter and fiscal year ended October 31, 2007.
Net sales for the fourth quarter of fiscal 2007 were $426.9 million compared with $291.7 million for the same period a year ago. For the quarter, the Company reported net income of $24.1 million, or $1.18 per diluted share, compared with $10.5 million, or $0.52 per diluted share, for the fourth quarter of fiscal 2006. The results for the fourth quarter of fiscal 2006 included the recognition of other income of $3.6 million, or $0.11 per share net of income taxes, for Hurricane Katrina related insurance recoveries.
Net sales for fiscal 2007 were $1.475 billion compared with $1.048 billion for fiscal 2006. Net income for the year totaled $78.8 million, or $3.88 per diluted share, compared with the net loss of $11.5 million, or $0.57 per diluted share, for last year.
“Our fourth quarter performance marked a strong finish to fiscal 2007,” said Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms, Inc. “These results reflect improved market conditions over the prior year, which more than offset the higher grain costs we experienced. We posted record annual sales of over $1.4 billion and our operations performed well in our industry as we processed over 343.6 million chickens, or 2.0 billion dressed pounds in fiscal 2007.”
According to Sanderson, as measured by a simple average of the Georgia dock price for whole chickens, prices were higher by approximately 15.5 percent in the Company’s fourth fiscal quarter compared with the same period in 2006, and were higher by 9.9 percent for the fiscal year. Boneless breast meat prices during the quarter averaged 17.8 percent higher than the prior-year period, and averaged 25.8 percent higher for fiscal 2007 compared with the prior year. Jumbo wing prices averaged $1.16 per pound for the quarter, up 27.6 percent from the average of $0.91 per pound during the fourth quarter of fiscal 2006. The average market price for bulk leg quarters increased approximately 36.2 percent for the fourth quarter and 51.9 percent for fiscal 2007 compared with the same periods last year. Dark meat prices continue to be supported by strong export demand. Two company plants removed from the list of plants authorized to ship product to Russia effective November 1, 2007, were returned to the approved list on November 27, 2007, and are once again shipping product to that important market. While the chicken markets improved versus last year’s fourth quarter, prices for corn and soybean meal, the Company’s primary feed ingredients, increased 43.7 and 18.8 percent, respectively, compared with the fourth quarter a year ago.
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Sanderson Farms Reports Results for Fourth Quarter and Fiscal 2007
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December 4, 2007
“Fiscal 2007 was highlighted by the opening of our new Waco, Texas complex, which began processing chicken early in the fourth fiscal quarter. We were pleased to complete this project on time and on budget and we look forward to realizing the benefits of the additional capacity and marketing opportunities for the Company. At full production, this facility will represent an increase in capacity of 1.25 million head of chickens per week and will provide steady growth for Sanderson Farms through 2009.
“Looking ahead, we expect the grain markets to remain volatile with higher grain prices in fiscal 2008. However, overall poultry market conditions continue to be favorable and we believe that fundamental supply and demand economics will work to maintain industry profitability over the long term, while recognizing that short-term swings are inevitable. We remain confident in the strength of our operations and we will continue to move Sanderson Farms forward in fiscal 2008 regardless of market conditions. As always, our goal is to operate at the top of the industry and create long-term value for our shareholders,” Sanderson concluded.
Sanderson Farms will hold a conference call to discuss this press release today, December 4, 2007, at 10:00 a.m. Central, 11:00 a.m. Eastern. Investors will have the opportunity to listen to a live Internet broadcast of the conference call through the Company’s Web site atwww.sandersonfarms.com or throughwww.earnings.com. To listen to the live call, please go to the Web site at least 15 minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, an Internet replay will be available shortly after the call and continue through December 11, 2007. Those without internet access or who prefer to listen via telephone may call 877-681-3377, access code 9366343.
Sanderson Farms, Inc. is engaged in the production, processing, marketing and distribution of fresh and frozen chicken and other prepared food items. Its shares trade on the NASDAQ Global Select Market under the symbol SAFM.
This press release contains forward-looking statements based on management’s current views and assumptions. Actual results and events may differ. For a discussion of these matters, please refer to the “Cautionary Statement Regarding Risks and Uncertainties That May Affect Future Performance” in Item 7 of the Company’s 2006 Annual Report onForm 10-K and please refer to the cautionary statement found in Management’s Discussion and Analysis of Financial Condition and Results of Operations under the heading “General” in Part I, Item 2 of the Quarterly Report on Form 10-Q for the Company’s third quarter ended July 31, 2007.
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Sanderson Farms Reports Results for Fourth Quarter and Fiscal 2007
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December 4, 2007
SANDERSON FARMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share amounts)
| | | | | | | | | | | | | | | | | |
| | | Three Months Ended | | | Twelve Months Ended | |
| | | October 31, | | | October 31, | |
| | | 2007 | | | 2006 | | | 2007 | | | 2006 | |
| Net sales | | $ | 426,909 | | | $ | 291,669 | | | $ | 1,474,844 | | | $ | 1,047,930 | |
| Costs and expenses: | | | | | | | | | | | | | | | | |
| Cost of sales | | | 372,902 | | | | 269,672 | | | | 1,289,654 | | | | 1,023,438 | |
| Selling, general and administrative | | | 16,284 | | | | 11,321 | | | | 59,797 | | | | 51,308 | |
| | | | | | | | | | | | | |
| | | | 389,186 | | | | 280,993 | | | | 1,349,451 | | | | 1,074,746 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Operating income (loss) | | | 37,723 | | | | 10,676 | | | | 125,393 | | | | (26,816 | ) |
| | | | | | | | | | | | | | | | | |
| Other income (expense): | | | | | | | | | | | | | | | | |
| Interest income | | | 171 | | | | 44 | | | | 364 | | | | 235 | |
| Interest expense | | | (1,703 | ) | | | (1,078 | ) | | | (5,328 | ) | | | (2,803 | ) |
| Other | | | 60 | | | | 3,648 | | | | 84 | | | | 3,738 | |
| | | | | | | | | | | | | |
| | | | (1,472 | ) | | | 2,614 | | | | (4,880 | ) | | | 1,170 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Income (loss) before income taxes | | | 36,251 | | | | 13,290 | | | | 120,513 | | | | (25,646 | ) |
| Income tax expense (benefit) | | | 12,180 | | | | 2,825 | | | | 41,680 | | | | (14,145 | ) |
| | | | | | | | | | | | | |
| Net income (loss) | | $ | 24,071 | | | $ | 10,465 | | | $ | 78,833 | | | $ | (11,501 | ) |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Basic earnings (loss) per share | | $ | 1.19 | | | $ | 0.52 | | | $ | 3.91 | | | $ | (0.57 | ) |
| | | | | | | | | | | | | |
| Diluted earnings (loss) per share | | $ | 1.18 | | | $ | 0.52 | | | $ | 3.88 | | | $ | (0.57 | ) |
| | | | | | | | | | | | | |
| Dividends per share | | $ | 0.14 | | | $ | 0.12 | | | $ | 0.50 | | | $ | 0.48 | |
| | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Weighted average shares outstanding: | | | | | | | | | | | | | | | | |
| Basic | | | 20,200 | | | | 20,080 | | | | 20,140 | | | | 20,070 | |
| | | | | | | | | | | | | |
| Diluted | | | 20,390 | | | | 20,160 | | | | 20,301 | | | | 20,070 | |
| | | | | | | | | | | | | |
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Sanderson Farms Reports Results for Fourth Quarter and Fiscal 2007
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December 4, 2007
SANDERSON FARMS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
| | | | | | | | | |
| | | October 31, | | | October 31, | |
| | | 2007 | | | 2006 | |
| | | (Unaudited) | | | | |
| ASSETS | | | | | | | | |
| Current assets: | | | | | | | | |
| Cash and cash equivalents | | $ | 2,623 | | | $ | 7,396 | |
| Accounts receivable, net | | | 69,484 | | | | 40,930 | |
| Refundable income taxes | | | 1,102 | | | | 14,402 | |
| Inventories | | | 119,258 | | | | 96,490 | |
| Prepaid expenses | | | 14,734 | | | | 13,179 | |
| | | | | | | |
| Total Current Assets | | | 207,201 | | | | 172,397 | |
| | | | | | | | | |
| Property, plant and equipment: | | | | | | | | |
| Land and building | | | 304,218 | | | | 246,828 | |
| Machinery and equipment | | | 369,800 | | | | 326,594 | |
| | | | | | | |
| | | | 674,018 | | | | 573,422 | |
| Less accumulated depreciation | | | (283,328 | ) | | | (263,112 | ) |
| | | | | | | |
| | | | 390,690 | | | | 310,310 | |
| Other assets | | | 2,482 | | | | 2,360 | |
| | | | | | | |
| | | | | | | | | |
| Total assets | | $ | 600,373 | | | $ | 485,067 | |
| | | | | | | |
| |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | | | | |
| Current liabilities: | | | | | | | | |
| Accounts payable | | $ | 44,979 | | | $ | 31,514 | |
| Accrued expenses | | | 33,718 | | | | 23,567 | |
| Current maturities of long-term debt | | | 455 | | | | 4,433 | |
| | | | | | | |
| Total current liabilities | | | 79,152 | | | | 59,514 | |
| | | | | | | | | |
| Long-term debt, less current maturities | | | 96,623 | | | | 77,078 | |
| Claims payable | | | 3,700 | | | | 3,200 | |
| Deferred income taxes | | | 16,352 | | | | 16,935 | |
| Stockholders’ equity | | | 404,546 | | | | 328,340 | |
| | | | | | | |
| | | | | | | | | |
| Total liabilities and stockholders’ equity | | $ | 600,373 | | | $ | 485,067 | |
| | | | | | | |
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