Sanderson Farms net income more than doubles during Q4
Net income for Sanderson Farms fiscal year 2014 nearly doubles
Sanderson Farms more than doubled its net income during the fourth quarter while nearly doubling its net income during fiscal year 2014. The company on December 18 announced the financial results for both periods ending October 31.
For the fourth quarter, Sanderson Farms reported net income of $93.1 million, or $4.04 per share, compared with net income of $45.3 million, or $1.97 per share, for the fourth quarter of fiscal 2013. Net sales for the fourth quarter of fiscal were $760.9 million compared with $727.1 million for the same period a year ago.
Net income for the year totaled $249.0 million, or $10.80 per share, compared with net income of $130.6 million, or $5.68 per share, for last year. Net sales for fiscal 2014 were $2.775 billion compared with $2.683 billion for fiscal 2013.
"The fourth quarter of fiscal 2014 marked a strong finish to a successful year for Sanderson Farms," said Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms. "We reported record annual sales of $2.775 billion, a 3.4 percent increase over fiscal 2013. While poultry markets improved only slightly compared to fiscal 2013, grain prices, especially corn prices, were significantly lower during the year when compared to fiscal 2013. For the year, we sold 3.045 billion pounds of dressed poultry, another record, compared with 3.031 billion pounds in fiscal 2013."
According to Sanderson, overall market prices for poultry products were higher in the fourth quarter of fiscal 2014 compared with prices a year ago. As measured by an average of the Georgia dock price for whole chickens, prices were higher by approximately 7.1 percent in the company's fourth fiscal quarter compared with the same period in fiscal 2013, and were higher by 5.7 percent for the fiscal year compared with the prior year. The Georgia Dock whole bird price remained in record territory during fiscal 2014 and reflected strong demand for the Company's retail chill pack product during this fiscal year. Boneless breast meat prices averaged 15.8 percent higher in the fourth quarter than the prior-year period. For fiscal 2014, boneless prices were 3.7 percent higher when compared with fiscal 2013. Jumbo wing prices averaged $1.50 per pound during the fourth quarter of fiscal 2014, up 5.2 percent from the average of $1.43 per pound during the prior-year period. Jumbo wing prices averaged $1.20 per pound during the fiscal year, down 19.9 percent from the average of $1.50 per pound for fiscal 2013. The average market price for bulk leg quarters decreased approximately 6.5 percent for the quarter, and decreased approximately 9.6 percent for fiscal 2014. Cash prices for corn and soybean meal, the company's primary feed ingredients, were down 23.2 percent and 10.5 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 18.0 percent lower than fiscal 2013.
"We are pleased that our profitability during fiscal 2014 allowed us to fund our planned expansion in Palestine, Texas, further reduce outstanding debt, strengthen our balance sheet, reward our shareholders with a special dividend and increase our regular quarterly dividend rate," Sanderson continued. "We are well positioned to continue our growth strategy as we begin operations at our new poultry complex in Palestine, Texas, in February 2015. The pounds produced in Palestine, at full production, will represent a 16 percent increase in our capacity,” said Sanderson.
"As of October 31, 2014, our balance sheet reflected $1.111 billion in assets, stockholders' equity of $897.9 million and net working capital of $363.1 million. Our total long-term debt at year-end was $10 million. A strong balance sheet is an important advantage in our industry and provides us with the financial strength to not only support our growth strategy, but also to manage our operations through cycles that characterize our industry. We deeply appreciate the hard work and dedication to excellence of our employees, growers and everyone associated with our company," Sanderson concluded.