Sanderson Farms reported strong results for the fourth quarter and fiscal year ended October 31, 2013, with substantial increases in net income and net sales. The U.S. poultry producer and processor announced its financial results on December 17.
Net sales for the fourth quarter of fiscal 2013 were $727.1 million compared with $648.4 million for the same period a year ago. For the quarter, the company reported net income of $45.3 million, or $1.97 per share, compared with net income of $9.3 million, or $0.41 per share, for the fourth quarter of fiscal 2012 - nearly a 500 percent increase.
Net sales for fiscal 2013 were $2.683 billion compared with $2.386 billion for fiscal 2012. Net income for the year totaled $130.6 million, or $5.68 per share, compared with net income of $53.9 million, or $2.35 per share, for last year.
"The fourth quarter of fiscal 2013 marked a strong finish to a successful year for Sanderson Farms and the poultry industry," said Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms, Inc. "We reported record annual sales of $2.683 billion, a 12.4 percent increase over fiscal 2012. While poultry markets improved compared to fiscal 2012, grain prices remained near record high levels during much of fiscal 2013 before moderating during the fourth quarter on optimism surrounding the current year's grain harvest. However, the improved poultry market prices more than offset the higher feed costs, and our margins improved significantly during fiscal 2013 compared to fiscal 2012. For the year, we sold 3.031 billion pounds of dressed poultry, another record, compared with 2.952 billion pounds in fiscal 2012."
According to Sanderson, overall market prices for poultry products were higher in the fourth quarter of fiscal 2013 compared with prices a year ago, but came down significantly from peaks earlier during the year. As measured by a simple average of the Georgia Dock price for whole chickens, prices were higher by approximately 10.9 percent in the company's fourth fiscal quarter compared with the same period in fiscal 2012, and were higher by 10.4 percent for the fiscal year compared with the prior year. The Georgia Dock whole bird price remained in record territory through all of fiscal 2013 and reflected steady demand for the Company's retail chill pack product during this fiscal year.
Boneless breast meat prices averaged 8.4 percent higher in the fourth quarter than the prior-year period. For fiscal 2013, boneless prices were 15.3 percent higher when compared with fiscal 2012. Jumbo wing prices averaged $1.43 per pound during the fourth quarter of fiscal 2013, down 16.5 percent from the average of $1.71 per pound during the prior-year period. Jumbo wing prices averaged $1.50 per pound during the fiscal year, down 5.1 percent from the average of $1.58 per pound for fiscal 2012. The average market price for bulk leg quarters decreased approximately 1.4 percent for the quarter, and decreased approximately 0.5 percent for fiscal 2013. The steady dark meat prices reflect continued good export demand during the year. Cash prices for corn and soybean meal, the company's primary feed ingredients, increased during the year but were down 32.8 percent and 1.6 percent, respectively, during the fourth fiscal quarter when compared with the fourth quarter a year ago. For the year, total feed costs in broiler flocks processed were 5.7 percent higher than fiscal 2012.
"We are pleased that our profitability during fiscal 2013 allowed us to significantly reduce outstanding debt and strengthen our balance sheet," Sanderson continued. "As a result, we are well positioned to continue our growth strategy, and we began construction of our new poultry complex in Palestine, Texas, in October. Operations at that new facility are scheduled to start in the first calendar quarter of 2015, and the pounds produced in Palestine, at full production, will represent a 16 percent increase in our capacity.
"As of October 31, 2013, our balance sheet reflected $924.6 million in assets, stockholders' equity of $671.6 million and net working capital of $269.2 million. Our total long-term debt at year-end was $29.4 million. A strong balance sheet is an important advantage in our industry, especially given today's economic environment, and provides us with the financial strength to not only support our growth strategy, but also to manage our operations through challenging market conditions. We deeply appreciate the hard work and dedication to excellence of our employees, growers and everyone associated with our company," Sanderson concluded.
