Sanderson Farms, Inc. (NASDAQ: SAFM) today reported results for
the first quarter of fiscal 2017 ended January 31, 2017.
Net sales for the first quarter of fiscal 2017 were $688.3
million compared with $605.2 million for the same period a year
ago. The Company reported net income of $23.2 million, or $1.02 per
share, for the quarter compared with net income of $10.7 million,
or $0.47 per share, for the first quarter of fiscal 2016.
"Our results for the first quarter reflect improved market
prices for dark meat products sold from our big bird deboning
plants compared with last year’s first quarter,” said Joe F.
Sanderson, Jr., chairman and chief executive officer of Sanderson
Farms, Inc. “Leg quarter prices during last year’s first fiscal
quarter reflected avian influenza-related bans on United States
poultry products by many of our export partners, which bans, except
for China, have been lifted. Poultry market prices for our tray
pack products sold to retail grocery store customers were only
slightly lower when compared with the same period a year ago. On
the other hand, the food service market remains weak. Traffic
numbers through all categories of food service continue to trend
lower, and market prices for boneless breast meat reflect that
weakness. Demand and prices for jumbo wings were seasonally strong
during the quarter."
According to Sanderson, overall market prices for poultry
products were higher during the first quarter compared with the
same period last year. Compared with the first fiscal quarter of
2016, the average whole bird price used as the base of a portion of
the Company’s retail tray pack pricing formulas was approximately
2.7 percent lower, boneless breast meat prices were approximately
4.6 percent lower, the average market price for bulk leg quarters
increased by approximately 33.1 percent, and jumbo wing prices were
higher by 14.3 percent. The Company’s average feed cost per pound
of poultry products processed decreased 1.3 cents per pound, or 4.9
percent, compared with the first quarter of fiscal 2016, and prices
paid for corn and soybean meal, the Company’s primary feed
ingredients, decreased 4.9 percent and increased 1.9 percent,
respectively, compared with the first quarter of fiscal 2016.
“Record corn and soybean crops harvested in the United States
last fall contributed to healthy soybean and corn balance tables
heading into the 2017 planting season,” added Sanderson. “Strong
export demand, however, has supported higher prices for both corn
and soybeans despite record harvests and ample supplies of both
grains.
“Operations at our new St. Pauls, North Carolina, complex began
on schedule in January 2017. We expect the plant to reach full
production in the Company’s first fiscal quarter of 2018, and we
look forward to the opportunities the new facility will create,”
added Sanderson.
Sanderson Farms will hold a conference call to discuss this
press release today, February 23, 2017, 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 website at www.sandersonfarms.com. To listen
to the live call, please go to the website 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 March 22, 2017. Those who would like to
participate in the call can do so by dialing 888-778-9067;
confirmation code 8356028.
Sanderson Farms, Inc. is engaged in the production, processing,
marketing and distribution of fresh, frozen and minimally
prepared chicken. Its shares trade on the NASDAQ Global Select
Market under the symbol SAFM.
This press release includes forward-looking statements within
the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995, as amended.
Forward-looking statements are based on a number of assumptions
about future events and are subject to various risks, uncertainties
and other factors that may cause actual results to differ
materially from the views, beliefs, projections and estimates
expressed in such statements. These risks, uncertainties and
other factors include, but are not limited to those discussed
under “Risk Factors” in the Company’s Annual Report on
Form 10-K for the year ended October 31, 2016, and the
following:
(1) Changes in the market price for the Company’s finished
products and feed grains, both of which may fluctuate
substantially and exhibit cyclical characteristics typically
associated with commodity markets.
(2) Changes in economic and business conditions, monetary and
fiscal policies or the amount of growth, stagnation or recession in
the global or U.S. economies, either of which may affect the value
of inventories, the collectability of accounts receivable or the
financial integrity of customers, and the ability of the end
user or consumer to afford protein.
(3) Changes in the political or economic climate, trade
policies, laws and regulations or the domestic poultry
industry of countries to which the Company or other companies in
the poultry industry ship product, and other changes that might
limit the Company’s or the industry’s access to foreign
markets.
(4) Changes in laws, regulations, and other activities in
government agencies and similar organizations applicable to the
Company and the poultry industry and changes in laws, regulations
and other activities in government agencies and similar
organizations related to food safety.
(5) Various inventory risks due to changes in market conditions
including, but not limited to, the risk that market values of live
and processed poultry inventories might be lower than the cost of
such inventories, requiring a downward adjustment to record the
value of such inventories at the lower of cost or market as
required by generally accepted accounting principles.
(6) Changes in and effects of competition, which is significant
in all markets in which the Company competes, and the effectiveness
of marketing and advertising programs. The Company competes with
regional and national firms, some of which have greater financial
and marketing resources than the Company.
(7) Changes in accounting policies and practices adopted
voluntarily by the Company or required to be adopted by
accounting principles generally accepted in the United States.
(8) Disease outbreaks affecting the production, performance
and/or marketability of the Company’s poultry products, or the
contamination of its products.
(9) Changes in the availability and cost of labor and
growers.
(10) The loss of any of the Company’s major customers.
(11) Inclement weather that could hurt Company flocks or
otherwise adversely affect its operations, or changes in global
weather patterns that could impact the supply of feed grains.
(12) Failure to respond to changing consumer preferences.
(13) Failure to successfully and efficiently start up and run a
new plant or integrate any business the Company might
acquire.
(14) Unfavorable results from currently pending litigation and
proceedings, or litigation and proceedings that could arise in the
future.
Readers are cautioned not to place undue reliance on
forward-looking statements made by or on behalf of the
Company. Each such statement speaks only as of the day it was made.
The Company undertakes no obligation to update or to revise any
forward-looking statements. The factors described above cannot
be controlled by the Company. When used in this press release or in
the related conference call, the words “believes,”
“estimates,” “plans,” “expects,” “should,” “could,” “outlook,” and
“anticipates” and similar expressions as they relate to the
Company or its management are intended to
identify forward-looking statements. Examples of
forward-looking statements include statements of the Company’s
belief about future earnings, grain prices, supply and demand
factors, growth plans and other industry conditions.
SANDERSON FARMS, INC. AND
SUBSIDIARIES
Condensed Consolidated Statements of Operations
(Unaudited)
(In thousands, except per share
amounts)
Three Months Ended
January 31, 2017 2016 Net sales $ 688,346 $
605,166 Cost and expenses: Cost of sales 606,391 555,061 Selling,
general and administrative 46,070 30,294
652,461 585,355 Operating income
35,885 19,811 Other income (expense): Interest income 195 ---
Interest expense (432 ) (431 ) Other 2 3
(235 ) (428 ) Income before income taxes
35,650 19,383 Income tax expense 12,477 8,702
Net income $ 23,173 $ 10,681
Earnings per share: Basic $ 1.02 $ 0.47 Diluted $
1.02 $ 0.47 Dividends per share $ 0.24 $ 0.22
SANDERSON FARMS, INC. AND
SUBSIDIARIES
Condensed Consolidated Balance
Sheets
(In thousands)
January 31,2017
October 31,2016
(unaudited) (1) Assets Current assets: Cash and cash equivalents $
225,821 $ 234,111 Accounts receivable, net 115,633 124,348
Inventories 236,353 220,306 Refundable income taxes 4,066 ---
Prepaid expenses and other current assets 37,906
34,559 Total current assets 619,779 613,324 Property,
plant and equipment 1,548,434 1,505,596 Less accumulated
depreciation (721,664 ) (701,605 ) 826,770 803,991
Other assets 4,989 5,385 Total assets $
1,451,538 $ 1,422,700 Liabilities and
stockholders’ equity Current liabilities: Accounts payable $ 85,859
$ 72,774 Dividends payable 5,458 --- Accrued expenses 50,248 57,918
Accrued income taxes --- 17,497 Total
current liabilities 141,565 148,189 Claims payable and other
liabilities 8,663 8,501 Deferred income taxes 87,675 75,748
Commitments and contingencies Stockholders’ equity: Common Stock
22,740 22,693 Paid-in capital 131,466 125,855 Retained earnings
1,059,429 1,041,714 Total stockholders’
equity 1,213,635 1,190,262 Total
liabilities and stockholders’ equity $ 1,451,538 $ 1,422,700
(1) The Condensed Consolidated Balance Sheet at October 31,
2016, was derived from the audited consolidated financial
statements at that date, but does not include all of the
information and footnotes required by U.S. generally accepted
accounting principles for complete financial statements.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170223005242/en/
Sanderson Farms, Inc.Mike Cockrell, 601-649-4030Treasurer &
Chief Financial Officer
Sanderson Farms (NASDAQ:SAFM)
Historical Stock Chart
From Apr 2024 to May 2024
Sanderson Farms (NASDAQ:SAFM)
Historical Stock Chart
From May 2023 to May 2024