Exhibit 99.1
(SANDERSON FARMS LOGO) SANDERSON FARMS, INC.
GENERAL OFFICES
Post Office Box 988 . Laurel, Mississippi 39441-0988
Telephone (601) 649-4030 . Facsimile (601) 426-1461
CONTACT: MIKE COCKRELL
TREASURER & CHIEF FINANCIAL OFFICER
(601) 649-4030
SANDERSON FARMS, INC. REPORTS
RESULTS FOR FOURTH QUARTER AND FISCAL 2004
LAUREL, Miss. (December 7, 2004) -- Sanderson Farms, Inc. (NASDAQ/NM: SAFM)
today reported results for the fourth quarter and fiscal year ended October 31,
2004.
Net sales for the fourth quarter of fiscal 2004 were $259.2 million
compared with $254.7 million for the same period a year ago. For the quarter,
net income was $5.1 million, or $0.25 per diluted share, compared with net
income of $20.5 million, or $1.04 per diluted share, for the fourth quarter of
fiscal 2003.
Net sales for fiscal 2004 were $1.052 billion compared with $872.2 million
for fiscal 2003. Net income for the year totaled $91.4 million, or $4.57 per
diluted share, compared with net income of $54.1 million, or $2.75 per diluted
share, for last year. During fiscal 2004, the Company recognized $177,000, net
of income taxes, for Sanderson Farms' share in the partial settlement of
lawsuits against vitamin and methionine suppliers for overcharges, compared with
total similar recoveries of $7.6 million, net of income taxes, or $0.38 per
diluted share, during fiscal 2003.
On January 29, 2004, the Company's Board of Directors approved a
three-for-two stock split effected as a 50% stock dividend. All share and per
share data for the periods presented have been adjusted to reflect this split.
"Fiscal 2004 was another successful year for Sanderson Farms by every
measure," said Joe F. Sanderson, Jr., chairman and chief executive officer of
Sanderson Farms, Inc. "We reached a significant milestone with the Company's
sales exceeding $1 billion for the first time and, more importantly, we are
pleased to deliver another year of improved earnings to our shareholders. These
results reflect our focus on operational execution and ability to capitalize on
strong market conditions through most of the fiscal year."
According to Sanderson, overall market prices for poultry products were
less favorable during the fourth quarter than the Company experienced for the
first three quarters of Fiscal 2004, but the markets for the year showed
considerable strength. As measured by a simple average of the Georgia dock price
for whole chickens, prices increased approximately 13.0% in the Company's fourth
fiscal quarter compared with the same period in 2003, and increased 15.0% for
the full fiscal year compared with last year. Bulk leg quarter prices increased
7.2% during the quarter compared with last year's fourth quarter, and were 41.0%
higher for the year compared with last year. Boneless breast meat prices during
the quarter were approximately 0.1% higher than the prior-year period, and were
up 22.0% for the year. Wing prices averaged $1.03 per pound, up 50.6% from the
average of $0.68 per pound during the fourth quarter of fiscal 2003. At the same
time, however, costs for corn and soybean meal, the Company's primary feed
ingredients, increased 16.4% and 74.2%, respectively, compared with the fourth
quarter a year ago.
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Sanderson Farms Reports Year-end 2004 Results
Page 2
December 7, 2004
Sanderson added, "Our operations have continued to run at near full
capacity and the Company processed a record 1.6 billion dressed pounds in Fiscal
2004. We look forward to further growth with the construction of Sanderson
Farms' new poultry processing complex in South Georgia underway as planned.
These facilities will comprise a state-of-the-art poultry complex with capacity
to process 1.25 million birds per week at full capacity. We expect initial
operations at the new complex will begin during the Company's fourth fiscal
quarter of 2005.
"Maintaining a strong balance sheet and carefully managing our working
capital have continued to be top priorities for Sanderson Farms. As of October
31, 2004, our balance sheet reflects $75.9 million in cash and cash equivalents.
During fiscal 2004, we generated cash flow well in excess of our capital
expenditure needs, were able to significantly reduce debt, and were pleased to
reward our shareholders through dividends. During the fourth fiscal quarter, the
Board of Directors declared a special dividend of $0.50 (fifty cents) per share
and increased the regular quarterly dividend to reflect a new annual dividend
rate of $0.40 (forty cents) per share. Additionally, our strong financial
position provides us with the flexibility to pursue our strategic growth
initiatives, including the expansion in Georgia.
"Looking ahead, we enter Fiscal 2005 with confidence that we will continue
to build on our momentum. The outlook appears promising for continued strong
consumer demand for chicken and improvement in exports, which should produce a
favorable market environment next year. We also will realize a significant
reduction in our operating costs with materially lower prices projected for corn
and soybean meal, our primary feed ingredients. We have already contracted for a
portion of our feed grain needs for fiscal 2005, and, based on the pricing of
those purchases and given current conditions, we expect to realize savings of
between $60 million and $65 million during fiscal 2005 compared with fiscal
2004. We are excited about the opportunities ahead for Sanderson Farms and our
prospects for continued growth. Our core strengths, including operational
excellence, a proven product mix, exceptional customer service and financial
strength, provide us with confidence that we will reach our objectives in Fiscal
2005," concluded Sanderson.
Sanderson Farms will hold a conference call to discuss this press release
today, December 7, 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.fulldisclosure.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 January 7,
2005.
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 third
quarter ended July 31, 2004.
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Sanderson Farms Reports Year-end 2004 Results
Page 3
December 7, 2004
SANDERSON FARMS, INC. AND SUBSIDIARIES
(In thousands, except per share amounts)
THREE MONTHS ENDED TWELVE MONTHS ENDED
OCTOBER 31, OCTOBER 31,
--------------------------- ---------------------------
2004 2003 2004 2003
----------- ----------- ----------- -----------
Net sales $ 259,223 $ 254,712 $ 1,052,297 $ 872,235
Costs and expenses:
Cost of sales 233,033 205,864 842,337 741,420
Selling, general and administrative 18,166 14,778 59,806 40,293
----------- ----------- ----------- -----------
251,199 220,642 902,143 781,713
----------- ----------- ----------- -----------
Operating income 8,024 34,070 150,154 90,522
Other income (expense):
Interest income 547 29 743 80
Interest expense (322) (450) (1,569) (2,484)
Other 2 74 (60) 43
----------- ----------- ----------- -----------
227 (347) (886) (2,361)
----------- ----------- ----------- -----------
Income before income taxes 8,251 33,723 149,268 88,161
Income tax expense 3,190 13,223 57,840 34,100
----------- ----------- ----------- -----------
Net income $ 5,061 $ 20,500 $ 91,428 $ 54,061
=========== =========== =========== ===========
Basic earnings per share $ 0.25 $ 1.05 $ 4.62 $ 2.78
=========== =========== =========== ===========
Diluted earnings per share $ 0.25 $ 1.04 $ 4.57 $ 2.75
=========== =========== =========== ===========
Dividends per share $ 0.60 $ 0.41 $ 0.84 $ 0.61
=========== =========== =========== ===========
Weighted average shares outstanding:
Basic 19,945 19,509 19,789 19,462
=========== =========== =========== ===========
Diluted 20,105 19,785 19,995 19,689
=========== =========== =========== ===========
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Sanderson Farms Reports Year-end 2004 Results
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December 7, 2004
SANDERSON FARMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
OCTOBER 31, OCTOBER 31,
2004 2003
--------- ---------
ASSETS
Current assets:
Cash and cash equivalents $ 75,910 $ 22,224
Accounts receivable, net 49,240 46,195
Income taxes receivable 2,592 --
Inventories 75,603 61,753
Prepaid expenses 13,077 13,001
--------- ---------
Total current assets 216,422 143,173
Property, plant and equipment:
Land and building 141,727 135,865
Machinery and equipment 257,671 240,369
--------- ---------
399,398 376,234
Less accumulated depreciation (242,685) (221,010)
--------- ---------
156,713 155,224
Other assets 1,872 508
--------- ---------
Total assets $ 375,007 $ 298,905
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 30,384 $ 19,033
Accrued expenses 31,029 37,540
Current maturities of long-term debt 4,385 4,364
--------- ---------
Total current liabilities 65,798 60,937
Long-term debt, less current maturities 10,918 21,604
Claims payable 2,600 2,600
Deferred income taxes 16,350 16,665
Stockholders' equity 279,341 197,099
--------- ---------
Total liabilities and stockholders' equity $ 375,007 $ 298,905
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