EXHIBIT 99.1
[SANDERSON FARMS LOGO]
CONTACT: MIKE COCKRELL
TREASURER & CHIEF FINANCIAL OFFICER
(601) 340-1859
SANDERSON FARMS, INC.
PROVIDES UPDATE ON HURRICANE KATRINA DAMAGE
LAUREL, Miss. (September 6, 2005) -- Sanderson Farms, Inc. (NASDAQ/NM: SAFM)
today reported that it is near completion of its assessment of damage caused by
Hurricane Katrina. The Company is pleased to report that it has still received
no report of serious injuries or loss of life among its employees and growers.
As earlier reported, the Company experienced no significant damage to
any of its Mississippi or Louisiana processing facilities, feedmills or
hatcheries. The Company's four hatcheries located in the affected area, all in
Mississippi, maintained generator power until electrical service was restored.
The Company resumed operations at all three of its Mississippi feedmills by the
end of last week, began operations over the weekend at all of its Mississippi
and Louisiana processing plants except for the Laurel, Mississippi, plant, and
will resume operations at its Laurel processing plant on Wednesday, September 7,
2005. The slower resumption of operations at the Laurel plant has been caused by
a delay in the completion of water quality tests in the city of Laurel. The
Company's Georgia and Texas operations were not affected by the storm.
Sanderson Farms said it is currently evaluating the terms, conditions
and extent of its insurance coverage, which is expected to cover a significant
portion of the loss.
Over the weekend, the Company was able to complete its assessment of
damage and losses to its live inventories. The Company estimates that, out of a
total of 1,874 broiler houses in Mississippi, 72 were totally destroyed. Another
86 experienced considerable damage and will be unable to house broilers until
repairs are made. In addition to broiler houses, two breeder houses out of a
total of 187 in Mississippi were either totally destroyed or heavily damaged,
and two pullet houses out of a total of 100 were destroyed or heavily damaged.
As a result of these losses, the Company estimates that approximately 3.0
million head of broiler chickens out of an average live inventory of
approximately 35.0 million head, ranging in age from 7 days to 62 days, have
been destroyed. The Company does not believe the loss of this housing capacity
will affect its ongoing operations however, as it can shorten layouts and take
other temporary measures to compensate for these losses.
In addition to the loss of live birds, the Company was unable to hatch
and place live broilers in the field at its normal rate during the past week.
While the Company maintained operations at its hatcheries, the incubation
process was halted on some hatching eggs and the Company was unable to set eggs
in its hatcheries on its normal schedule. As a result of these interruptions,
the Company estimates that approximately 5.2 million hatching eggs were either
lost or destroyed and will not be placed as broiler chicks. Because chicks are
raised in the field for 48 - 64 days, the reduced egg sets and chick placements
will affect the Company's weekly processing volumes through November, with the
reductions occurring primarily during October. During normal operations, the
Company processes approximately 4.2 million head per week at its Mississippi and
Louisiana plants.
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SAFM Provides Update on Effects of Hurricane Katrina
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September 6, 2005
While electrical power is being restored to the farms of independent
contract producers on a steady basis, the Company believes that it could be as
long as three to four weeks before power is fully restored to all of its
independent contractors' farms. Until power is restored, equipment on grow-out
farms, including ventilation, feeding and watering equipment, will be operated
using electricity generated by diesel-powered generators. The Company currently
is providing diesel fuel to its independent contract producers to allow them to
run their generators and maintain power to farms. While the source of diesel
over much of last week was tight, the Company was able to secure sufficient
diesel fuel to operate substantially all of the farms housing its live
inventories. While supplies of diesel have become more available each day since
the hurricane, the Company's ability to secure diesel fuel until power is fully
restored to its farms will be an important factor in maintaining its live
inventories.
Joe Sanderson, Jr., chairman and chief executive officer, commented, "I
am relieved that it appears the Company's employees and independent contract
growers experienced no loss of life or serious injuries. The magnitude of this
storm and the damage it caused were great and widespread, and I am pleased that
our people remained safe."
Sanderson continued, "I am also pleased that our assets were not
significantly damaged by the hurricane. While the storm's impact on our live
inventories and our live production process will have an impact on the Company's
capacity and volume over the next three months, none of the losses we sustained
will affect the Company over the long term. The impact on volume from our live
losses amounts to approximately two week's volume spread over three months.
Working with our management team over the last week has reinforced my confidence
in the long-term success of this Company and its ability to recover from this
short-term set back. Our focus over the next few weeks will include working to
maintain our assets, responding to our customers' needs and replenishing our
live production inventories. Our customers have been very supportive over the
last week, and we believe that by week's end we will be in a position to fully
service their needs.
"Most importantly, we will also continue to provide ice, water, food
and other necessities to those affected by this catastrophic storm. While we
have worked hard over the last week to get our operations back on line, a
primary focus has been to respond to the needs of those along the Gulf Coast and
beyond. We are fortunate that our Company sustained only minimal damage and no
loss of life as a result of the storm, and we will continue to help those whose
lives have been more seriously disrupted," Sanderson concluded
Sanderson Farms also announced that it will hold a conference call with
investors and analysts at 10:00 a.m. central time on Thursday, September 15,
2005. 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 without Internet access or who would rather listen
live via telephone, you may call 1-800-289-0569. An Internet replay will be
available shortly after the call and continue through October 15, 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.
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SAFM Provides Update on Effects of Hurricane Katrina
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September 6, 2005
This press release contains statements about the Company's future that
are not statements of historical fact. The words "believe," "expect,"
"anticipate," and similar expressions signify forward-looking statements. These
statements are "forward looking statements" for purposes of applicable
securities laws, and are based on current information and/or management's good
faith belief as to future events. Forward-looking statements are subject to
risks and uncertainties, which change over time. Actual performance or results
could differ materially from that anticipated by the forward-looking statement,
and future results could differ materially from historical performance.
Important factors resulting from Hurricane Katrina that could cause such
differences include: the ability to achieve and maintain normal operations
across all Company and grower facilities; the availability of continued electric
power and fuel and feedstock supplies in adequate quantities at reasonable
prices; the effect of inefficiencies in Company operations; the extent of
increased operating expenses; the extent of absenteeism; and the extent and
availability of insurance coverage for the Company's losses. For a description
of additional factors that can affect forward-looking statements, 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. Forward-looking statements speak
only as of the date the statement was made. The Corporation assumes no
obligation to update forward-looking information to reflect actual results,
changes in assumptions or changes in other factors affecting forward-looking
information. If the Corporation does update any forward-looking statement, no
inference should be drawn that the Corporation will make additional updates with
respect to that statement or any other forward-looking statements.
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