EXHIBIT 99.1
(SANDERSON FARMS, INC. LOGO)
CONTACT: MIKE COCKRELL
TREASURER & CHIEF FINANCIAL OFFICER
(601) 649-4030
SANDERSON FARMS, INC. REPORTS
THIRD QUARTER RESULTS FOR FISCAL 2005
LAUREL, Miss. (August 23, 2005) -- Sanderson Farms, Inc. (NASDAQ/NM: SAFM)
today reported results for the third fiscal quarter and nine months ended July
31, 2005.
Net sales for the third quarter of fiscal 2005 were $264.6 million
compared with $293.9 million for the same period a year ago. For the quarter,
the Company reported net income of $24.0 million, or $1.19 per diluted share,
compared with $33.9 million, or $1.69 per diluted share, for the third quarter
of fiscal 2004.
Net sales for the first nine months of fiscal 2005 were $757.1 million
compared with $793.1 million for the first nine months of fiscal 2004. Net
income for the first nine months of fiscal 2005 totaled $60.6 million, or $3.01
per diluted share, compared with $86.4 million, or $4.33 per diluted share, for
the first nine months of last year.
"We delivered a solid performance for the third quarter of fiscal
2005," said Joe F. Sanderson, Jr., chairman and chief executive officer of
Sanderson Farms, Inc. "Market prices for all poultry products except for leg
quarters were lower than the record high prices we experienced in the third
quarter of last year. However, we enjoyed lower feed costs and have continued to
maintain a favorable product mix between the retail market and the big bird
deboning market. Start-up costs associated with the new poultry complex in
Georgia for the third quarter and nine months ended July 31, 2005, were $0.07
and $0.12, respectively, net of income taxes. These costs are included in
selling, general and administrative costs in the accompanying financial
statements."
According to Sanderson, as measured by a simple average of the Georgia
dock price for whole chickens, prices were lower by approximately 6.3 percent in
the Company's third fiscal quarter compared with the same period in 2004, but
increased 0.8 percent for the first nine months of the fiscal year compared with
the year-earlier period. Boneless breast meat prices during the quarter averaged
41.0 percent lower than the prior-year period, and averaged 27.7 percent lower
for the first nine months of the year compared with the prior year. Wing prices
averaged 96.8 cents per pound through the first nine months of the fiscal year,
down 11.2 percent from the average of $1.09 per pound for the first nine months
of fiscal 2004. The average market price for bulk leg quarters increased
approximately 25.4 percent for the quarter and 6.5 percent for the nine-month
period in fiscal 2005 compared with the same periods last year. This trend in
leg quarter prices reflects stronger export demand, primarily from Russia, but
also from other parts of the world. At the same time, market prices for corn and
soybean meal, the Company's primary feed ingredients, declined 18.3 percent and
24.2 percent, respectively, compared with the third quarter a year ago.
"We reached an important milestone yesterday as we began processing
chickens at our new facility in Moultrie, Georgia," added Sanderson. "We are
pleased with the efforts of our employees and contract growers who worked to
bring this facility online, on time and on budget. The Georgia facility will be
dedicated exclusively to serving retail customers, and this new state-of-the-art
poultry complex is closer to our growing list of customers located in the
Southeast. The additional capacity
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Sanderson Farms Reports Third Quarter 2005 Results
Page 2
August 23, 2005
from the new facility, together with the additional pounds generated as a result
of the ongoing conversion of the Collins, Mississippi, plant to a larger weight
bird, will allow us to increase our overall production by about 26 percent when
both projects are complete. We are excited about the growth opportunities ahead
as we continue to bring both of these projects up to full capacity.
"We remain optimistic about our prospects for the remainder of fiscal
2005. While severe hot and dry weather conditions in certain parts of the
country have created uncertainty regarding the size of this year's crop of corn
and soybean in the United States, we have continued to enjoy lower costs this
fiscal year when compared with last year. As projected, we expect to reduce our
grain costs by approximately $60 million to $65 million for fiscal 2005 compared
with 2004. While these commodity prices are somewhat unsettled at this time, we
will continue to monitor pricing trends with respect to evaluating our cost
structure for fiscal 2006. Overall, poultry market conditions remain favorable
with good consumer demand and expected continued growth in volumes for exports.
We are pleased with the momentum in our business and look forward to completing
another successful year," Sanderson concluded.
Sanderson Farms will hold a conference call to discuss this press
release today, August 23, 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.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 September 23,
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 third
quarter ended July 31, 2005.
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Sanderson Farms Reports Third Quarter 2005 Results
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August 23, 2005
SANDERSON FARMS, INC. AND SUBSIDIARIES
(Unaudited)
(In thousands, except per share amounts)
THREE MONTHS ENDED NINE MONTHS ENDED
JULY 31, JULY 31,
------------------------- -------------------------
2005 2004 2005 2004
--------- --------- --------- ---------
Net sales $ 264,650 $ 293,923 $ 757,116 $ 793,074
Costs and expenses:
Cost of sales 207,304 222,011 611,038 609,304
Selling, general and administrative 18,406 16,137 47,818 41,640
--------- --------- --------- ---------
225,710 238,148 658,856 650,944
--------- --------- --------- ---------
Operating income 38,940 55,775 98,260 142,130
Other income (expense):
Interest income 331 101 952 196
Interest expense (58) (383) (376) (1,247)
Other 7 (69) 75 (62)
--------- --------- --------- ---------
280 (351) 651 (1,113)
--------- --------- --------- ---------
Income before income taxes 39,220 55,424 98,911 141,017
Income tax expense 15,198 21,480 38,328 54,650
--------- --------- --------- ---------
Net income $ 24,022 $ 33,944 $ 60,583 $ 86,367
========= ========= ========= =========
Basic earnings per share $ 1.20 $ 1.71 $ 3.03 $ 4.38
========= ========= ========= =========
Diluted earnings per share $ 1.19 $ 1.69 $ 3.01 $ 4.33
========= ========= ========= =========
Dividends per share $ 0.10 $ 0.08 $ 0.30 $ 0.24
========= ========= ========= =========
Weighted average shares outstanding:
Basic 20,032 19,905 19,999 19,739
========= ========= ========= =========
Diluted 20,149 20,090 20,130 19,960
========= ========= ========= =========
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Sanderson Farms Reports Third Quarter 2005 Results
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August 23, 2005
SANDERSON FARMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
JULY 31, OCTOBER 31,
2005 2004
---------- ----------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 60,278 $ 75,910
Accounts receivable, net 39,089 49,240
Inventories 79,376 75,603
Refundable income taxes 0 2,592
Prepaid expenses 12,714 13,077
--------- ---------
Total current assets 191,457 216,422
Property, plant and equipment
Land and buildings 144,410 134,219
Machinery and equipment 249,178 257,671
Construction in progress 88,992 7,508
--------- ---------
482,580 399,398
Less accumulated depreciation (248,253) (242,685)
--------- ---------
234,327 156,713
Other assets 1,840 1,872
--------- ---------
Total assets $ 427,624 $ 375,007
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 62,192 $ 61,413
Current maturities of long-term debt 4,391 4,385
--------- ---------
Total current liabilities 66,583 65,798
Long-term debt, less current maturities 6,787 10,918
Claims payable 2,600 2,600
Deferred income taxes 14,695 16,350
Stockholders' equity 336,959 279,341
--------- ---------
Total liabilities and stockholders' equity $ 427,624 $ 375,007
========= =========
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