Sanderson Farms reported a net loss of $43.2 million, or $1.95 per share, for the fourth quarter of fiscal year 2018, compared with net income of $72.9 million, or $3.20 per share, for the fourth quarter of fiscal 2017.
For the full year, net income totaled $61.4 million, or $2.70 per share, compared with net income of $279.7 million, or $12.30 per share, for last fiscal year.
Net sales for the fourth quarter of fiscal 2018 were $798.1 million compared with $919.9 million for the same period a year ago. Net sales for fiscal 2018 were $3.236 billion compared with $3.342 billion for fiscal 2017.
The results for the quarter and fiscal year include a charge of $9.6 million to record live inventories on hand at October 31, 2018, at the lower of cost or net realizable value as required by generally accepted accounting principles. Results also reflect costs and inefficiencies as a result of two hurricanes (Florence and Michael) during the fourth quarter that affected operations in North Carolina and Georgia.
“The fourth quarter marked the end of a challenging year for Sanderson Farms,”
Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms, stated in a press release. “Market conditions weakened significantly during our fourth fiscal quarter of 2018, as market prices declined after Labor Day, reflecting weak demand for products produced for the food service market at our plants that process a larger bird. The decrease in demand and resulting weak market prices were exacerbated by hurricane disruptions.
“For the fiscal year, we reported record volume of poultry products sold of 4.44 billion pounds, compared to 4.22 billion pounds in fiscal 2017. Grain prices were slightly higher during fiscal 2018 compared with prices paid in fiscal 2017; however, feed costs in processed flocks were higher by only 1.3 percent per pound, as higher prices paid for feed grain were partially offset by improved live bird performance.”
According to Sanderson, overall realized prices for poultry products were 9.2 percent lower in fiscal 2018 compared with prices of fiscal year 2017, and were significantly lower for the fourth fiscal quarter of 2018. Boneless breast meat market prices averaged 26.1 percent lower in the fourth quarter than the prior-year period.
For the full fiscal year, however, boneless breast meat prices were 16.7 percent lower compared with fiscal 2017. Jumbo wing market prices averaged $1.46 per pound during the fourth quarter of fiscal 2018, down 30.2 percent from the average of $2.09 per pound during the prior-year period. Jumbo wing market prices averaged $1.44 per pound during the fiscal year, down 25.2 percent from the average of $1.92 per pound for fiscal 2017. The average market price for bulk leg quarters decreased approximately 24.8 percent for the fourth fiscal quarter of 2018 compared with the fourth fiscal quarter of 2017, and decreased 5.5 percent for fiscal 2018 compared to fiscal 2017. Cash prices for corn during the fourth fiscal quarter decreased by 1.2 percent, while soybean meal cash prices were up 1.9 percent.
“As of October 31, 2018, our balance sheet reflected $1.659 billion in assets, stockholders’ equity of $1.388 billion and net working capital of $367.6 million. We repurchased 823,385 shares during the fourth fiscal quarter at an average price of $101.37 per share, and we had no debt at fiscal year-end. We believe our balance sheet provides us with the financial strength not only to support our growth strategy, but also to consistently manage our operations through the 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.
