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Sanderson Farms, Inc. Reports Results for Second Quarter of Fiscal 2010

^{Published on 2010-05-25 03:41:11 - Market Wire}
 

LAUREL, Miss.--([ BUSINESS WIRE ])--Sanderson Farms, Inc. (NASDAQ: SAFM) today reported resultsfor its second fiscal quarter and six months ended April30,2010.

"Cautionary Statement Regarding Risks and Uncertainties That May Affect Future Performance"

Net sales for the second quarter of fiscal 2010 were $487.1 million compared with $426.8million for the same period a year ago. For the quarter, net income was $35.1 million, or $1.62per fully diluted share, compared with net income of $26.2 million, or $1.25 per fully diluted share, forthe second quarter of fiscal 2009.

Net sales for the first six months of fiscal 2010 were $907.2 million compared with $815.6million for the first half of fiscal 2009. Net income for the first half of the year totaled $50.9million, or $2.39 per fully diluted share, compared with net income of $19.5 million, or $0.93perfully diluted share, for the first six months of last year.

aWe are pleased with the performance of Sanderson Farms during the second fiscal quarter of 2010," said Joe F. Sanderson, Jr., chairman and chiefexecutive officer of Sanderson Farms, Inc. aOur results reflect the efficient management of our operations by our managers, employees andcontract producers. Demand for chicken at retail grocery stores remains strong and the ongoingissues we and our industry face in export markets have not yet significantly disrupted themarkets. As has been the case for two years, demand from some food service customers continues to be adversely affected by the economic downturn as demand for protein consumed away from home remains soft. Market prices for boneless breast meat strengthened seasonally anddue to limited supply during the quarter. While our net sales price and feed costs did not change significantly during the quarter compared to last yeara™s second fiscal quarter, we sold 16% more pounds of fresh chicken during the quarter, and the additional volume allowed us to significantly reduce our average non-feed related costs per pound.a

According to Sanderson, market prices for poultry products were mixed during the second quarter of fiscal 2010 compared with the same quarter a year ago. As measured by a simple average of the Georgia dock price for whole chickens, prices decreased approximately 2.0 percent in the Company's second fiscalquarter compared with the same period in 2009. Despite the ongoing Russian embargo of United States chicken, bulk leg quarter market prices were flat with last year's second quarter. Boneless breast meat prices during the quarter were approximately 8.6percent higher than the prior year period. Jumbo wing prices, while relatively strong, retreatedfrom their all time high in January and were 5.8 percent lower for the quarter compared to last year.

aWe are cautiously optimistic as we head into the summer months and what is typically a period of better demand for chicken. Broiler egg sets continue to indicate manageable supplies over the short term, while breeder placements point to reasonable supplies for the next few months. Progress continues on our new Kinston, North Carolina, complex, and we placed our first breeder flock in April. The plant is on schedule to begin processing chickens in January of next year. As announced in March, we also look forward to the next phase of our growth, which is our plans for the construction of a new big bird deboning facility in Goldsboro, North Carolina, subject to previously announced contingencies. Together, the two North Carolina plants will add 30 percent more capacity and support our growth through 2014,a added Sanderson.

Sanderson Farms will hold a conference call to discuss this press release today, May25,2010, 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 [ www.sandersonfarms.com ] or through [ www.earnings.com ]. To listen to the live call, please go to theWeb 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 thecall and continue through June 25, 2010. Those without Internet access may listen and participate in the call by dialing 888-219-1467, confirmation code 4398177.

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 2009 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, 2010.