EXHIBIT 99.1
(SANDERSON FARMS, INC. LETTERHEAD)
CONTACT: MIKE COCKRELL
TREASURER & CHIEF FINANCIAL OFFICER
(601) 649-4030
SANDERSON FARMS, INC. REPORTS
FIRST QUARTER RESULTS FOR FISCAL 2004
LAUREL, Miss. (February 24, 2004) -- Sanderson Farms, Inc. (NASDAQ/NM:SAFM)
today reported results for the first quarter of fiscal 2004 ended January 31,
2004.
Net sales for the first quarter of fiscal 2004 were $226.4 million
compared with $184.2 million for the same period a year ago. For the quarter,
the Company reported net income of $19.0 million, or $1.44 per diluted share,
compared with $5.3 million, or $0.40 per diluted share, for the first quarter of
fiscal 2003. The Company recognized $177,000, net of income taxes, or $0.01 per
diluted share, during the quarter for Sanderson Farms' share in the partial
settlement of litigation against a vitamin supplier for overcharges. In the
prior-year quarter, the Company recognized $3.8 million, net of income taxes, or
$0.29 per diluted share, from similar litigation.
"Sanderson Farms' financial and operating performance during the first
quarter marked a very strong start for fiscal 2004," said Joe F. Sanderson, Jr.,
president and chief executive officer of Sanderson Farms, Inc. "Our sales
performance for the quarter reflects a marketplace that has seen high demand for
chicken during what is typically a seasonally slow period. Both domestic and
export demand for chicken products was strong during our first fiscal quarter,
resulting in higher chicken prices. In addition, our operations continue to
perform very well."
According to Sanderson, market prices for all poultry products were
appreciably higher during the first quarter than in the prior-year period. As
measured by a simple average of the Georgia dock price for whole chickens,
values increased approximately 11.3% in the Company's first fiscal quarter
compared with the same period in 2003. Boneless breast meat prices during the
quarter were approximately 17.9% higher than the prior-year period and bulk leg
quarter prices increased approximately 67.7% during the quarter. Wing prices
averaged 99.7 cents per pound, up 89.9% from the average of 52.5 cents per pound
during the first quarter of fiscal 2003. Market prices for corn and soybean
meal, the Company's primary feed ingredients, were higher during the quarter.
Market prices for corn increased 4.7%, while market prices for soybean meal
increased 43.0%, compared with the first quarter a year ago. The Company
anticipates that overall feed grain prices will be higher during fiscal 2004
than during fiscal 2003. However, for the first quarter, this increase was more
than offset by higher chicken prices.
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Sanderson Farms Reports First Quarter 2004 Results
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February 24, 2004
Sanderson added, "Looking ahead, we are optimistic about our prospects
for fiscal 2004. Considering the current market environment, consumer demand
trends and the projected moderate growth in production, we expect favorable
market conditions to continue for the foreseeable future. Furthermore, we
believe Sanderson Farms' 100% natural fresh chicken and innovative product
offerings, combined with excellent marketing and efficient operations, will
continue to be the key drivers of our success in the marketplace."
The Company also noted that, at this time and based on current trends,
it is comfortable with the published annual earnings estimate for fiscal 2004 of
$4.00 per diluted share.
Sanderson Farms will hold a conference call to discuss this press
release today, February 24, 2004, 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 without Internet access or who would rather
listen live via telephone, you may call 1-800-289-0544. For those who cannot
listen to the live broadcast, an Internet replay will be available shortly after
the call and continue through March 24, 2004.
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 2003 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 first
quarter ended January 31, 2004.
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Sanderson Farms Reports First Quarter 2004 Results
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February 24, 2004
SANDERSON FARMS, INC. AND SUBSIDIARIES
(Unaudited)
(In thousands, except per share amounts)
THREE MONTHS ENDED
JANUARY 31,
2004 2003
--------- ---------
Net sales $ 226,441 $ 184,188
Cost and expenses:
Cost of sales 183,798 167,593
Selling, general and administrative 11,260 7,191
--------- ---------
195,058 174,784
--------- ---------
Operating income 31,383 9,404
Other income (expense):
Interest income 45 14
Interest expense (432) (738)
Other 2 (78)
--------- ---------
(385) (802)
--------- ---------
Income before income taxes 30,998 8,602
Income tax expense 12,012 3,265
--------- ---------
Net income $ 18,986 $ 5,337
========= =========
Basic earnings per share $ 1.46 $ 0.41
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Diluted earnings per share $ 1.44 $ 0.40
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Dividends per share $ 0.12 $ 0.10
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Weighted average shares outstanding:
Basic 13,041 13,009
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Diluted 13,212 13,215
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Sanderson Farms Reports First Quarter 2004 Results
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February 24, 2004
SANDERSON FARMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
JANUARY 31, OCTOBER 31,
2004 2003
--------- ---------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 29,501 $ 22,224
Accounts receivable, net 43,732 46,195
Inventories 67,057 61,753
Prepaid expenses 14,229 13,001
--------- ---------
Total current assets 154,519 143,173
Property, plant and equipment
Land and buildings 137,223 135,865
Machinery and equipment 244,511 240,369
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381,734 376,234
Less accumulated depreciation (226,283) (221,010)
--------- ---------
155,451 155,224
Other assets 2,152 508
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Total assets $ 312,122 $ 298,905
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 21,279 $ 19,033
Accrued expenses 28,984 37,540
Current maturities of long-term debt 4,370 4,364
--------- ---------
Total current liabilities 54,633 60,937
Long-term debt, less current maturities 21,478 21,604
Claims payable 2,600 2,600
Deferred income taxes 16,665 16,665
Stockholders' equity 216,746 197,099
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Total liabilities and stockholders' equity $ 312,122 $ 298,905
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