Sanderson Farms, Inc. Reports Results for Second Quarter of Fiscal 2018
Net sales for the second quarter of fiscal 2018 were
Net sales for the first six months of fiscal 2018 were
“The results of our second quarter of fiscal 2018 reflect slightly lower
feed costs per pound, continued favorable demand for poultry products
from retail grocery store customers, higher volume, and a stable export
environment," said
“Lower average sales prices were offset during the quarter by more
pounds sold, as our new
According to Sanderson, overall market prices for poultry products were lower 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 2017, boneless breast meat market prices were approximately 5.3 percent lower, the average market price for bulk leg quarters increased approximately 6.2 percent, and jumbo wing market prices were lower by 23.6 percent. Market prices for chicken breast tenders averaged 4.7 percent lower than a year ago. The Company’s average feed costs per pound of poultry products processed decreased by 3.3 percent when compared with the second quarter of fiscal 2017, while prices paid for corn and soybean meal, the Company’s primary feed ingredients, decreased 1.3 percent and increased 3.6 percent, respectively, compared with the second quarter of fiscal 2017. 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 expect grain
prices to be somewhat higher as we move through the crop growing
season,” added Sanderson. “While there are ample supplies of both corn
and soybeans worldwide, a slow start to
“With respect to chicken production numbers, while the USDA reports that
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 fiscal year ended October 31, 2017, the Company’s subsequent reports on Form 10-Q 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 net realizable 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
(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 the Company’s 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, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Income (Unaudited) (In thousands, except per share amounts) |
||||||||||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||||||
April 30, |
April 30, |
|||||||||||||||||||
2018 |
2017 |
2018 |
2017 |
|||||||||||||||||
Net sales |
$ |
813,474 |
$ | 802,038 | $ | 1,585,422 | $ | 1,490,384 | ||||||||||||
Costs and expenses: | ||||||||||||||||||||
Cost of sales | 703,410 | 655,283 | 1,405,511 | 1,261,674 | ||||||||||||||||
Selling, general and administrative | 55,037 | 43,641 | 107,612 | 89,711 | ||||||||||||||||
758,447 | 698,924 | 1,513,123 | 1,351,385 | |||||||||||||||||
Operating income | 55,027 | 103,114 | 72,299 | 138,999 | ||||||||||||||||
Other income (expense): | ||||||||||||||||||||
Interest income | 905 | 301 | 1,324 | 496 | ||||||||||||||||
Interest expense | (506 | ) | (428 | ) | (1,029 | ) | (860 | ) | ||||||||||||
Other | 4 | 3 | 6 | 5 | ||||||||||||||||
403 | (124 | ) | 301 | (359 | ) | |||||||||||||||
Income before income taxes | 55,430 | 102,990 | 72,600 | 138,640 | ||||||||||||||||
Income tax expense (benefit) |
13,482 |
35,975 |
(20,554 |
) |
47,600 |
|||||||||||||||
Net income |
$ |
41,948 |
$ | 67,015 | $ | 93,154 | $ | 91,040 | ||||||||||||
Basic earnings per share |
$ |
1.84 |
$ |
2.95 |
$ |
4.08 |
$ | 4.00 | ||||||||||||
Diluted earnings per share |
$ |
1.84 |
$ |
2.95 |
$ |
4.08 |
$ | 4.00 | ||||||||||||
Dividends per share |
$ |
0.32 |
$ |
0.24 |
$ |
0.64 |
$ | 0.48 | ||||||||||||
SANDERSON FARMS, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands) |
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|
||||||||||
April 30, |
October 31, |
|||||||||
2018 |
2017 |
|||||||||
(Unaudited) | (1) | |||||||||
ASSETS | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 327,260 | $ | 419,285 | ||||||
Accounts receivable, net | 145,600 | 138,868 | ||||||||
Inventories | 267,746 | 252,765 | ||||||||
Refundable income taxes | 27,130 | ---- | ||||||||
Prepaid expenses and other current assets | 37,669 | 38,620 | ||||||||
Total current assets | 805,405 | 849,538 | ||||||||
Property, plant and equipment: | ||||||||||
Property, plant and equipment | 1,784,475 | 1,657,084 | ||||||||
Accumulated depreciation | (828,629 | ) | (780,276 | ) | ||||||
955,846 | 876,808 | |||||||||
Other assets | 6,164 | 6,897 | ||||||||
Total assets | $ | 1,767,415 | $ | 1,733,243 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 104,212 | $ | 90,904 | ||||||
Dividends payable | 7,307 | ---- | ||||||||
Accrued expenses | 62,188 | 101,168 | ||||||||
Accrued income taxes | ---- | 6,649 | ||||||||
Total current liabilities | 173,707 | 198,721 | ||||||||
Claims payable and other liabilities | 9,621 | 9,762 | ||||||||
Deferred income taxes | 66,133 | 91,898 | ||||||||
Commitments and contingencies | ||||||||||
Stockholders' equity: | ||||||||||
Common stock | 22,836 | 22,803 | ||||||||
Paid-in capital | 141,517 | 134,999 | ||||||||
Retained earnings | 1,353,601 | 1,275,060 | ||||||||
Total stockholders’ equity | 1,517,954 | 1,432,862 | ||||||||
Total liabilities and stockholders’ equity | $ | 1,767,415 | $ | 1,733,243 | ||||||
(1)The Condensed Consolidated Balance Sheet at
View source version on businesswire.com: https://www.businesswire.com/news/home/20180524005343/en/
Source:
Sanderson Farms, Inc.
Mike Cockrell, 601-649-4030
Treasurer
& Chief Financial Officer