Sanderson Farms, Inc. Reports Results for Second Quarter of Fiscal 2017
Net sales for the second quarter of fiscal 2017 were
Net sales for the first six months of fiscal 2017 were
"The results for our second quarter of fiscal 2017 reflect benign feed
costs, continued favorable demand for poultry products from retail
grocery store customers, higher volume, and an improving export
"In addition to higher sales prices, our net sales for the quarter also
reflect more pounds sold. Our new
According to Sanderson, overall market prices for poultry products were higher during the second quarter compared with the same period last year. Market prices for chicken products sold to retail grocery store customers remained relatively strong during the quarter and continue to reflect good demand. Compared with the second fiscal quarter of 2016, boneless breast meat market prices were approximately 9.1 percent higher, the average market price for bulk leg quarters increased approximately 17.2 percent, and jumbo wing market prices were higher by 5.1 percent. The Company's average feed costs per pound of poultry products processed were essentially flat when compared with the second quarter of fiscal 2016, while prices paid for corn and soybean meal, the Company's primary feed ingredients, decreased 0.4 percent and increased 15.0 percent, respectively, compared with the second quarter of fiscal 2016. The Company's feed costs per pound processed were affected by changes in feed formulation and improved broiler performance.
"Looking ahead to the second half of the fiscal year, we continue to
expect grain prices to remain relatively benign," added Sanderson.
"There are ample supplies of both corn and soybeans worldwide, and the
planting progress of the 2017 corn and soybean crops remains close to
average, despite a wet spring in
"With respect to production numbers, while 2017 breeder placements have
been relatively flat with 2016 placements, hatch rates and live weights
are trending below last year. The current
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 fiscal year ended
(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
(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
(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 of feed grains.
(12) Failure to respond to changing consumer preferences and negative 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 or litigation that could arise in the future.
Readers are cautioned not to place undue reliance on forward-looking
statements made by or on behalf of
|Condensed Consolidated Statements of Income|
(In thousands, except per share amounts)
Three Months Ended
Six Months Ended
|Costs and expenses:|
|Cost of sales||655,283||578,276||1,261,674||1,133,337|
|Selling, general and administrative||43,641||40,039||89,711||70,333|
|Other income (expense):|
|Income before income taxes||102,990||73,361||138,640||92,744|
|Income tax expense||36,047||25,759||48,524||34,461|
|Basic earnings per share||$||2.94||$||2.11||$||3.96||$||2.58|
|Diluted earnings per share||$||2.94||$||2.11||$||3.96||$||2.58|
|Dividends per share||$||0.24||$||0.22||$||0.48||$||0.44|
Condensed Consolidated Balance Sheets
|Cash and cash equivalents||$||246,281||$||234,111|
|Accounts receivable, net||138,532||124,348|
|Prepaid expenses and other current assets||42,048||34,559|
|Total current assets||661,657||613,324|
|Property, plant and equipment:|
|Property, plant and equipment||1,593,910||1,505,596|
|LIABILITIES AND STOCKHOLDERS' EQUITY|
|Accrued income taxes||1,855||17,497|
|Total current liabilities||133,145||148,189|
|Claims payable and other liabilities||9,080||8,501|
|Deferred income taxes||97,449||75,748|
|Commitments and contingencies|
|Total stockholders' equity||1,279,287||1,190,262|
|Total liabilities and stockholders' equity||$||1,518,961||$||1,422,700|
(1)The Condensed Consolidated Balance Sheet at
Treasurer & Chief Financial Officer
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