Sanderson Farms, Inc. Announces Increase In Quarterly Dividend
Board of Directors approves plans to commence construction of new Texas facility
LAUREL, Miss. ─ Sanderson Farms, Inc. (NASDAQ:SAFM) today announced that its Board of Directors has declared a regular quarterly cash dividend of $0.20 (twenty cents) per share payable October 15, 2013, to stockholders of record on October 1, 2013. This represents a new annual dividend rate of $0.80 (eighty cents) per share. Payment of the regular quarterly dividend will remain subject to Board approval each quarter.
In other action, the Board of Directors approved the commencement of construction of Sanderson Farms’ new poultry complex in Palestine, Texas, to start on October 1, 2013. The Company previously announced the selection of this location on February 14, 2013, but plans for construction had been on hold due to uncertainty surrounding grain prices, as well as other contingencies including obtaining Board approval to move forward with the project.
The new complex will consist of a feed mill, hatchery, poultry processing plant and waste water facility. At full capacity, the Palestine facility will process 1.250 million head of chickens per week for the big bird deboning market.
“We are very pleased the Board has authorized an increase in our dividend rate and granted final approval to commence construction of our next poultry complex,” commented Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms. “Our solid financial and operating performance, consistent growth and strong balance sheet have allowed us to move forward on both of these actions and further demonstrate our confidence in Sanderson Farms’ future and our commitment to building shareholder value.”
Sanderson added, “We are excited about the new opportunities ahead for Sanderson Farms as we expand our production capacity and presence in Texas. We sincerely appreciate the support, encouragement and welcome we have received from the public officials and communities in Palestine, Anderson County, Freestone County and Austin, and we look forward to this next stage of growth for our shareholders, employees, customers and other stakeholders.”
Sanderson Farms, Inc. is engaged in the production, processing, marketing and distribution of fresh and frozen chicken and other prepared food items. 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 Form10-K for the year ended October 31,2012, and its subsequent Quarterly Reports on Form 10-Q filed with the SEC, 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 the Company’s 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. Most of the factors described above cannot be controlled by the Company. When used in this press release, 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 (but are not limited to) statements of the Company’s belief about future earnings, expansion plans, sales, production, and expenses, including feed grain costs.
Mike Cockrell, 601-649-4030 Treasurer & Chief Financial Officer