Sanderson Farms, Inc. (NASDAQ: SAFM) announced today that it
held its annual meeting of stockholders this morning at its general
office in Laurel, Mississippi. In the formal business conducted at
the meeting, stockholders re-elected five Class A directors for
terms expiring at the 2023 annual meeting, and one Class C director
for a term expiring at the 2022 annual meeting. Management also
reported on the Company’s performance during fiscal 2019 and
provided an outlook for fiscal 2020. Re-elected to three-year terms
were David Barksdale, Principal, Alluvian Capital; Lampkin Butts,
President, Sanderson Farms, Inc.; Beverly W. Hogan, President
Emerita, Tougaloo College; Phil K. Livingston, Retired Chairman and
Chief Executive Officer, Deposit Guaranty National Bank of
Louisiana; and Joe F. Sanderson, Jr., Chairman and Chief Executive
Officer, Sanderson Farms, Inc. Sonia Perez, President, AT&T
Southeast States, was elected to serve two years remaining in an
unexpired term.
Other directors, whose terms continue to future years, are: John
H. Baker, III, Fred L. Banks, Jr., John Bierbusse, Mike Cockrell,
Toni D. Cooley, Edith Kelly-Green, Suzanne T. Mestayer and Gail
Jones Pittman.
In other action at the annual meeting, stockholders approved the
following items of business: the Sanderson Farms, Inc. and
Affiliates Amended and Restated Stock Incentive Plan; in a
non-binding advisory vote, the compensation of the Company’s Named
Executive Officers; also in a non-binding advisory vote, a
resolution that the Company should hold future non-binding advisory
votes on executive compensation every year; and the ratification of
the selection of Ernst & Young LLP as the Company’s independent
auditors for the fiscal year ending October 31, 2020. Stockholders
rejected a stockholder proposal to request that the Board of
Directors report annually on water resource risks and related
metrics and rejected a stockholder proposal to request that the
Board of Directors report on the Company’s human rights due
diligence process.
Even though the two stockholder proposals were rejected, the
Company announced that following recent extensive engagement with
many of its largest stockholders, and in recognition of evolving
investor expectations in regard to sustainability reporting, the
Company is committing to integrate the reporting standards of the
Sustainability Accounting Standards Board (SASB) into its
environmental, social, and governance (ESG) disclosures by the end
of fiscal 2020. The purpose of these enhanced disclosures is to
provide the Company’s stockholders with transparent, comparable,
and decision-useful ESG data that SASB has identified as being
material to the Company’s business.
“Sanderson Farms recognizes that investors’ ESG priorities are
rapidly evolving, and our board and management agree that it is
important for our company to provide reliable and consistent data
on sustainability topics,” said Joe F. Sanderson, Jr., chairman and
chief executive officer of Sanderson Farms. “We thank our investors
for their feedback and support, and we look forward to providing
SASB-aligned disclosures addressing ESG issues that are important
to them.”
Earlier in his remarks to stockholders concerning the Company’s
operations, Sanderson said, “Sanderson Farms faced
challenging market conditions for much of fiscal 2019, especially
during the fourth quarter of the year. Our results for the year
reflect a favorable supply and demand balance for products sold to
retail grocery stores, but continued pricing pressure on boneless
breast meat produced from larger birds processed for our food
service customers, as an abundant supply of competing proteins
affected demand. Despite the challenging environment, we achieved
record sales of $3.4 billion on record production of 4.61 billion
pounds during fiscal 2019. We continued to execute our growth
strategy as we opened our new Tyler, Texas complex in January 2019.
And, importantly, we maintained our commitment to responsible
growth, sustainable operations and the reputation of our brand
throughout the year.
“Looking ahead, we are optimistic about fiscal 2020. First, we
are operating well in all areas of our business. Second, while
market prices for boneless breast meat produced at our plants
processing larger birds for food service customers remain under
pressure and market conditions during our first fiscal quarter were
very challenging, we continue to be positive about our
opportunities in both the domestic and export markets over the next
year.
“With respect to domestic markets, we expect to see continued
favorable demand in retail grocery stores. Chicken remains
favorably priced compared to other proteins, and we believe that
dynamic will continue. We also believe we will see improved demand
from food service customers, supported by an increase in
promotional activity for chicken.
“With respect to the export markets, the outbreak of African
swine fever in China has affected the worldwide supply of pork,
creating a significant protein deficit that should ultimately
benefit poultry markets in the United States. At the end of 2019,
China lifted its nearly five-year ban on the import of United
States poultry, and we resumed shipments to China almost
immediately. Since the ban was lifted, we have shipped
approximately 11.6 million pounds of chicken products, including
dark meat parts, to China. We continue to receive strong
indications of interest for our products from buyers in China, and
we were pleased to see the recent announcement regarding the
reduction of tariffs on United States poultry, which should further
support our business. While the devastating Novel coronavirus is
currently disrupting the markets and slowing China’s economic
growth rate, we believe demand for protein from China is strong,
and we expect to benefit in 2020 from the return to an open
market.”
Sanderson added, “Regardless of changing market conditions,
Sanderson Farms is well positioned to continue our organic growth
strategy in fiscal 2020 with quality products and a respected
brand, supported by the scale of our efficient and sustainable
operations, exceptional customer service and a strong financial
position. Above all, we continue to focus on our primary goal to
build long-term shareholder value.”
Following the stockholders meeting, the Board of Directors named
Edward Chisholm as the Company’s Director of Operations. Lampkin
Butts will continue as President of Sanderson Farms. Chisholm began
his career at Sanderson Farms in 1998 as a hatchery superintendent
at the Company’s Hazlehurst, Mississippi, production division.
Throughout his 21-year tenure with the Company, he has held various
management positions and most recently served as Director of
Production. Chisholm serves on the Company’s executive committee,
corporate compensation committee and serves as chairman of the
diversity and inclusion committee. Chisholm has a Bachelor of
Business Administration degree and a Master of Business
Administration degree from Belhaven College in Jackson,
Mississippi.
Commenting on the announcement, Sanderson said, “We are
delighted to promote Edward Chisholm to this important leadership
role with Sanderson Farms. He has been a dedicated employee for
over 21 years and brings significant operations and production
experience to this position. We look forward to his valuable
contributions as we work together to execute our growth
strategy.”
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 Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, 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, 2019, 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, any 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 net realizable
value 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 affect the supply and price of feed
grains.
(12) Failure to respond to changing consumer preferences and
negative or competitive media campaigns.
(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 Sanderson Farms.
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”, “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 its growth plans, future demand for its products,
future prices for feed grains, future expenses, future production
levels, future earnings, future growth plans or other industry
conditions.
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Mike Cockrell
Treasurer, Chief Financial
Officer & Chief Legal
Officer (601) 649-4030
Sanderson Farms (NASDAQ:SAFM)
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