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
FIRST QUARTER RESULTS FOR FISCAL 2005
LAUREL, Miss. (February 24, 2005) -- Sanderson Farms, Inc. (NASDAQ/NM:SAFM)
today reported results for the first quarter of fiscal 2005 ended January 31,
2005.
Net sales for the first quarter of fiscal 2005 were $233.3 million
compared with $226.4 million for the same period a year ago. For the quarter,
the Company reported net income of $10.0 million, or $0.50 per diluted share,
compared with net income of $19.0 million, or $0.96 per diluted share, for the
first quarter of fiscal 2004. For the first quarter of fiscal 2004, the Company
recognized $177,000, net of income taxes, or $0.01 per diluted share, for
Sanderson Farms' share in the partial settlement of litigation against a vitamin
supplier for overcharges.
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.
"Sanderson Farms' financial and operating performance during the first
quarter marked a solid start for fiscal 2005," said Joe F. Sanderson, Jr.,
chairman and chief executive officer of Sanderson Farms, Inc. "While our cost
structure during the first half of the quarter reflected relatively high priced
grain bought before the start of the fiscal year, that cost structure improved
steadily during the quarter, as did the market for chicken."
According to Sanderson, market prices for all poultry products showed
improvement from the previous quarter, but were mixed when compared to the first
quarter a year ago. As measured by a simple average of the Georgia dock price
for whole chickens, values increased approximately 7.2% in the Company's first
fiscal quarter compared with the same period in fiscal 2004. Boneless breast
meat prices during the quarter, however, were approximately 10% lower than the
prior-year period and bulk leg quarter prices were up slightly during the
quarter. Wing prices averaged 1.05 cents per pound, up 5.4% from the average of
99.7 cents per pound during the first quarter of fiscal 2004.
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Sanderson Farms Reports First Quarter 2005 Results
Page 2
February 24, 2005
"While our operating costs for the first quarter of fiscal 2005 still
reflected the higher grain prices we incurred in late fiscal 2004, by the end of
the quarter we began to realize significant savings in our cost structure. We
believe we will enjoy these lower costs for the balance of our fiscal year. We
have already contracted for a portion of our feed grain needs for the year in
order to take advantage of the lower prices projected for corn and soybean meal,
our primary feed ingredients. Based on current trends, we now expect to realize
savings of between $65 million and $70 million during fiscal 2005 compared with
fiscal 2004.
"We are excited about the opportunities ahead for Sanderson Farms in
fiscal 2005," added Sanderson. "Our expansion into Georgia is underway as
planned and we still expect initial operations to begin during the fourth fiscal
quarter. Considering the current market environment and lower feed costs,
positive consumer demand trends and the renewed growth in exports, we expect
favorable market conditions to prevail in fiscal 2005."
Sanderson Farms will hold a conference call to discuss this press release
today, February 24, 2005, 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 1-800-967-7140. For those who cannot
listen to the live broadcast, an Internet replay will be available shortly after
the call and continue through March 24, 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 2004 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, 2005.
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Sanderson Farms Reports First Quarter 2005 Results
Page 3
February 24, 2005
SANDERSON FARMS, INC. AND SUBSIDIARIES
(Unaudited)
(In thousands, except per share amounts)
THREE MONTHS ENDED
JANUARY 31,
-----------------------------
2005 2004
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Net sales $ 233,290 $ 226,441
Cost and expenses:
Cost of sales 203,755 183,798
Selling, general and administrative 13,027 11,260
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216,782 195,058
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Operating income 16,508 31,383
Other income (expense):
Interest income 199 45
Interest expense (318) (432)
Other 4 2
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(115) (385)
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Income before income taxes 16,393 30,998
Income tax expense 6,352 12,012
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Net income $ 10,041 $ 18,986
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Basic earnings per share $ 0.50 $ 0.97
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Diluted earnings per share $ 0.50 $ 0.96
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Dividends per share $ 0.10 $ 0.10
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Weighted average shares outstanding:
Basic 19,962 19,562
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Diluted 20,115 19,818
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Sanderson Farms Reports First Quarter 2005 Results
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February 24, 2005
SANDERSON FARMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
JANUARY 31, OCTOBER 31,
2005 2004
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(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 74,149 $ 75,910
Accounts receivable, net 42,257 49,240
Inventories 72,876 75,603
Refundable income taxes 0 2,592
Prepaid expenses 14,073 13,077
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Total current assets 203,355 216,422
Property, plant and equipment
Land and buildings 142,005 134,219
Machinery and equipment 254,201 257,671
Construction in progress 17,979 7,508
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414,185 399,398
Less accumulated depreciation (248,224) (242,685)
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165,961 156,713
Other assets 2,283 1,872
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Total assets $ 371,599 $ 375,007
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 25,924 $ 30,384
Accrued expenses 24,010 31,029
Current maturities of long-term debt 4,391 4,385
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Total current liabilities 54,325 65,798
Long-term debt, less current maturities 10,787 10,918
Claims payable 2,600 2,600
Deferred income taxes 16,270 16,350
Stockholders' equity 287,617 279,341
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Total liabilities and stockholders' equity $ 371,599 $ 375,007
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