Sanderson Farms, Inc. Reports Results for Second Quarter of Fiscal 2009
LAUREL, Miss.–(BUSINESS WIRE)–May. 28, 2009– Sanderson Farms, Inc. (NASDAQ: SAFM) today reported results for its second fiscal quarter and six months ended April 30, 2009.
Net sales for the second quarter of fiscal 2009 were $426.8 million compared with $433.9 million for the same period a year ago. For the quarter, net income was $26.2 million, or $1.27 per fully diluted share, compared with net income of $6.2 million, or $0.30 per fully diluted share, for the second quarter of fiscal 2008.
Net sales for the first six months of fiscal 2009 were $815.6 million compared with $796.4 million for the first half of fiscal 2008. Net income for the first half of the year totaled $19.5 million, or $0.95 per fully diluted share, compared with net income of $12.4 million, or $0.61 per fully diluted share, for the first six months of last year.
“We are pleased to report a return to profitability for Sanderson Farms during the second fiscal quarter of 2009,” said Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms, Inc. “Our results reflect improved market conditions for the poultry industry and the efficient management of our operations by our managers, employees and contract producers. Much of the market improvement is due to production cuts and resulting reduced supply of chicken in the market. Demand for chicken at retail grocery stores remains strong and the export market improved compared to our first quarter. However, as in the previous two quarters, demand from some food service customers has been adversely affected by the economic downturn, as demand for protein consumed away from home remains soft. We also benefited from lower feed costs during the quarter compared with a year ago.”
According to Sanderson, overall market prices for poultry products were higher during the second quarter of fiscal 2009 compared with the first quarter of the year. However, prices were mixed compared with prices a year ago. As measured by a simple average of the Georgia dock price for whole chickens, prices increased approximately 6.1 percent in the Company’s second fiscal quarter compared with the same period in 2008. Bulk leg quarter prices were lower by 18.1 percent compared with last year’s second quarter. Boneless breast meat prices during the quarter were approximately 5.0 percent lower than the prior year period. Jumbo wing prices remained strong and averaged $1.39 per pound during the second quarter of fiscal 2009, compared with the average of $0.97 per pound during the second quarter of fiscal 2008, an increase of 43.0 percent. The Company’s costs for corn and soybean meal, the Company’s primary feed ingredients, dropped 22.8 and 14.2 percent, respectively, compared with the second quarter a year ago.
“We are cautiously optimistic as we head into the summer months and what is typically a period of better demand for chicken. Broiler egg sets have continued to be lower, which indicates continued lower supply levels. While our industry has never gone through the summer demand season with five to six percent less chicken, we have also never gone through the summer months with the economy and the American consumers as uncertain and cautious as they are today,” added Sanderson.
Sanderson Farms will hold a conference call to discuss this press release today, May 28, 2009, at 10:00 a.m. Central, 11:00 a.m. Eastern. Investors will have the opportunity to listen to a live Internet broadcast of the conference call through the Company’s Web site at sandersonfarms.com or through www.earnings.com. To listen to the live call, please go to the Web site at least 15 minutes early to register, download, and install any necessary audio software. For those who cannot listen to the live broadcast, an Internet replay will be available shortly after the call and continue through June 25, 2009. Those without Internet access may listen to the call by dialing (877-723-9517).
Sanderson Farms, Inc. is engaged in the production, processing, marketing and distribution of fresh and frozen chicken and other prepared chicken items. Its shares trade on the NASDAQ Global Select Market under the symbol SAFM.
This press release contains forward-looking statements based on management’s current views and assumptions. Actual results and events may differ. For a discussion of these matters, please refer to the “Cautionary Statement Regarding Risks and Uncertainties That May Affect Future Performance” in Item 7 of the Company’s 2008 Annual Report on Form 10-K and please refer to the cautionary statement found in Management’s Discussion and Analysis of Financial Condition and Results of Operations under the heading “General” in Part I, Item 2 of the Quarterly Report on Form 10-Q for the Company’s second quarter ended April 30, 2009.