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Sanderson Farms, Inc. Reports Results For First Quarter Of Fiscal 2013

Stocks in this article: 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, 2012, 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.

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 future earnings, grain prices, supply and demand factors, 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,

2013

 

2012

Net sales $ 595,760 $ 517,826
Costs and expenses:
Cost of sales 584,867 509,004
Selling, general and administrative 20,565 17,903
605,432 526,907
 
Operating loss (9,672 ) (9,081 )
 
Other income (expense):
Interest income 3 2
Interest expense (1,805 ) (2,962 )
Other 171 (564 )
(1,631 ) (3,524 )
 
Loss before income taxes (11,303 ) (12,605 )
Income tax benefit (4,360 ) (4,616 )
Net loss $ (6,943 ) $ (7,989 )
 
Basic loss per share $ (0.31 ) $ (0.36 )
Diluted loss per share $ (0.31 ) $ (0.36 )
Dividends per share $ 0.17 $ 0.17
 
   

SANDERSON FARMS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands)
 
 

January 31,

October 31,

2013

2012

(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 23,816 $ 27,802
Accounts receivable, net 100,948 98,022
Inventories 235,122 235,912
Refundable income taxes 7,315 4,467
Deferred income taxes 2,409 3,945
Prepaid expenses 28,637 27,639
Total current assets 398,247 397,787
 
Property, plant and equipment 992,691 985,198
Less accumulated depreciation (501,063 ) (489,885 )
491,628 495,313
 
Other assets 3,321 3,353
 
Total assets $ 893,196 $ 896,453
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 128,056 $ 124,837
Current maturities of long-term debt 10,757 10,757
Total current liabilities 138,813 135,594
 
Long-term debt, less current maturities 150,027 150,212
Claims payable 9,200 4,000
Deferred income taxes 55,481 56,572
Stockholders' equity:
Common stock 23,009 22,969
Paid-in capital 135,688 135,283
Retained earnings 380,978 391,823
 
Total stockholders’ equity 539,675 550,075
 
Total liabilities and stockholder’s equity $ 893,196 $ 896,453
 

SAFM-G

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