LAUREL, MS - Sanderson Farms, Inc. announced record quarterly sales and profits for the fourth quarter ended October 31, 1998. Net sales for the fourth quarter totaled $142.9 million, up 13% from sales of $126.8 million for the fourth quarter a year ago. Net income for the fourth quarter of fiscal 1998 was $11.4 million, or $.79 per diluted share, up sharply from net income of $436,000, or $.03 per diluted share, for the comparable period of fiscal 1997.
For the 1998 fiscal year, Sanderson Farms reported net sales of $521.4 million, an 8% increase over net sales of $481.8 million for fiscal 1997. Net income for fiscal 1998 totaled $15.3 million, or $1.06 per diluted share, compared with fiscal 1997 net income, before extraordinary gain from fire, of $558,000, or $.04 per diluted share.
“For the fourth quarter of fiscal 1998, Sanderson Farms achieved the highest quarterly sales and profits in our Company's history,” said Joe F. Sanderson, Jr., President and Chief Executive Officer of Sanderson Farms. “The records for the quarter, as well as the results for the fiscal year, reflect more favorable grain prices, an improved poultry market in the second half of the year, improved operating results during the year and the benefits of our ongoing expansion program. The capital investments we have made in new and expanded facilities are allowing us to capitalize on the strong current market conditions.”
According to Sanderson, market prices for poultry products, as measured by a simple average of the Georgia dock price, increased approximately 13.9% in the fourth quarter of fiscal 1998 compared with the same quarter of 1997, while the average cash market prices for corn and soy meal, primary feed ingredients, declined 23.2% and 42.9%, respectively.
“Historically, our Company has not engaged in the forward pricing of corn and soy meal beyond a sixty- to ninety-day period. However, in the late summer and early fall of 1998, we observed a cost environment for both of these feed ingredients that to us appeared particularly favorable. As a result, we have purchased a substantial amount of our feed grain needs for fiscal 1999, thereby reducing for that year the risk of material increases for our most significant input costs.
“In light of the reduced risk of increases for feed costs and the USDA's prediction that 1999 red meat and poultry total production should remain stable, we are cautiously optimistic in our outlook for fiscal 1999. The USDA has forecast that, after record beef production in 1998, beef production is expected to drop about 7% in 1999. Although broiler production is expected to increase, the market for our products should remain favorable,” Sanderson concluded.
Sanderson Farms, Inc. is engaged in the production, processing, marketing and distribution of fresh and frozen chicken and other prepared food items. Its shares trade on the Nasdaq Stock Market under the symbol SAFM.
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