EXHIBIT 99.1
[SANDERSON FARMS, INC. LOGO]
SANDERSON FARMS, INC.
GENERAL OFFICES
Post Office Box 988 - Laurel, Mississippi 39441-0988
Telephone (601) 549-4030 - Facsimile (601) 426-1461
CONTACT: MIKE COCKRELL
TREASURER & CHIEF FINANCIAL OFFICER
(601) 649-4030
SANDERSON FARMS, INC. REPORTS
RESULTS FOR THIRD QUARTER FISCAL 2003
LAUREL, Miss. (August 25, 2003) -- Sanderson Farms, Inc. (NASDAQ/NM: SAFM) today
reported results for the third quarter and nine months ended July 31, 2003.
Net sales for the third quarter of fiscal 2003 were $232.2 million
compared with $202.7 million for the same period a year ago. For the quarter,
the Company reported net income of $15.4 million, or $1.17 per diluted share,
compared with net income of $9.3 million, or $0.70 per diluted share, for the
third quarter of fiscal 2002.
Net sales for the first nine months of fiscal 2003 were $617.5 million
compared with $542.6 million for the same period during fiscal 2002. Net income
for the first nine months of the year totaled $33.6 million, or $2.55 per
diluted share, compared with net income of $22.3 million, or $1.66 per diluted
share, for the first nine months of last year. During the first nine months of
fiscal 2003, the Company recognized $7.6 million, net of income taxes, or $0.58
per diluted share, for Sanderson Farms' share in the partial settlement of
lawsuits against vitamin and methionine suppliers for overcharges, compared to
$1.6 million, or $0.12 per diluted share, during the same period of last year.
Excluding these special items, net income was $26.0 million, or $1.97 per
diluted share, for the first nine months of this year, compared to $20.7
million, or $1.54 per diluted share, for the first nine months of last year.
"We are pleased with our sales and operating execution during the third
fiscal quarter of 2003," said Joe F. Sanderson, Jr., President and Chief
Executive Officer of Sanderson Farms, Inc. "Our results reflect continued
strength in our operations and overall improvement in the chicken market
compared with conditions a year ago. Furthermore, poultry prices have remained
firm through August, and leading indicators of protein supplies continue to
signal no significant increase in production for the balance of this fiscal
year."
As measured by a simple average of the Georgia dock price for whole
chickens, prices increased approximately 3.1% in the Company's third fiscal
quarter compared with the same period in 2002, while increasing 0.6% for the
first nine months of the fiscal year compared with the same period last year.
Bulk leg quarter prices increased approximately 36.2% during the quarter
compared with last
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Sanderson Farms Reports Third Quarter 2003 Results
Page 2
August 25, 2003
year's third quarter, but are down 2.3% for the first nine months of the year
compared with the first nine months of last year. Boneless breast meat prices
during the quarter were approximately 15.3% higher than the prior-year period,
and were up 13.8% through the first nine months of the year. Wing prices
averaged 66.5 cents per pound, up 34.3% from the average of 49.5 cents per pound
during the third quarter of fiscal 2002. Market prices for corn and soybean
meal, our primary feed ingredients, increased 8.9% and 9.5%, respectively,
compared with the third quarter a year ago.
"We are pleased with our financial results and overall execution so far
during this fiscal year," continued Sanderson. "Our operating performance in
both live production and in our processing plants continues to be strong.
Likewise, our sales execution in our targeted markets has been excellent.
While higher raw material costs have pressured margins at our prepared foods
division, sales have increased 32% through the first nine months of the year
compared to the same period last year.
"As noted, leading indicators of future production, such as weekly
broiler egg sets and chick placements, continue to indicate firm market
conditions for the balance of the current fiscal year. While market prices
typically soften seasonally following the Labor Day holiday, we expect market
conditions during our fourth fiscal quarter to be better than a year ago. As a
result, we now believe the revised earnings estimate for fiscal 2003 of $2.60
per diluted share, excluding non-recurring items such as the vitamin and
methionine lawsuit recoveries described above, is conservative."
Sanderson Farms will hold a conference call to discuss this press
release today, August 25, 2003, 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 at www.sandersonfarms.com or
through www.companyboardroom.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
September 25, 2003.
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 Stock 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 2002 Annual Report on Form 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, 2003.
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Sanderson Farms Reports Third Quarter 2003 Results
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August 25, 2003
SANDERSON FARMS, INC. AND SUBSIDIARIES
(Unaudited)
(In thousands, except per share amounts)
THREE MONTHS ENDED NINE MONTHS ENDED
JULY 31, JULY 31,
----------------------------- -----------------------------
2003 2002 2003 2002
------------- -------------- ------------- --------------
Net sales $ 232,151 $ 202,694 $ 617,523 $ 542,634
Costs and expenses:
Cost of sales 195,160 179,550 535,556 483,213
Selling, general and administrative 11,265 7,234 25,515 20,632
------------- -------------- ------------- --------------
206,425 186,784 561,071 503,845
------------- -------------- ------------- --------------
Operating income 25,726 15,910 56,452 38,789
Other income (expense):
Interest income 25 30 51 81
Interest expense (602) (950) (2,034) (2,904)
Other 6 (15) (31) (18)
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(571) (935) (2,014) (2,841)
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Income before income taxes 25,155 14,975 54,438 35,948
Income tax expense 9,747 5,690 20,877 13,660
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Net income $ 15,408 $ 9,285 $ 33,561 $ 22,288
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Basic earnings per share $ 1.19 $ 0.71 $ 2.59 $ 1.69
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Diluted earnings per share $ 1.17 $ 0.70 $ 2.55 $ 1.66
============= ============== ============= ==============
Dividends per share $ 0.10 $ 0.10 $ 0.30 $ 0.30
============= ============== ============= ==============
Weighted average shares outstanding:
Basic 12,947 13,125 12,966 13,217
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Diluted 13,203 13,343 13,161 13,417
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Sanderson Farms Reports Third Quarter 2003 Results
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August 25, 2003
SANDERSON FARMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
JULY 31, OCTOBER 31,
2003 2002
------------- --------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 22,052 $ 9,542
Accounts receivable, net 42,390 41,073
Inventories 64,301 57,964
Refundable income taxes 0 2,764
Prepaid expenses 12,937 12,121
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Total current assets 141,680 123,464
Property, plant and equipment 373,796 389,666
Less accumulated depreciation (215,252) (233,183)
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158,544 156,483
Other assets 411 563
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Total assets $ 300,635 $ 280,510
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 56,727 $ 51,769
Current maturities of long-term debt 4,349 3,243
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Total current liabilities 61,076 55,012
Long-term debt, less current maturities 36,849 49,969
Claims payable 2,600 2,600
Deferred income taxes 17,038 17,038
Stockholders' equity 183,072 155,891
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Total liabilities and stockholders' equity $ 300,635 $ 280,510
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