 991224 Sanderson Farms Reports Year-End ResultsDecember 10, 1999 Laurel, MI - Sanderson Farms, Inc. reported results for the fourth quarter and fiscal year ended October 31, 1999. Net sales in the fourth quarter of 1999 were $149.4 million, a 4.6% increase compared with net sales of $142.9 million for the same period a year ago. For the quarter, the Company reported net income of $975,000, or $0.07 per diluted share, compared with net income of $11.4 million, or $0.79 per diluted share, for the fourth quarter of fiscal 1998. Net sales for fiscal 1999 were $559.0 million, a 7.2% increase compared with net sales of $521.4 million for the same period last year. For the 1999 fiscal year, the Company reported net income of $10.5 million, or $0.75 per diluted share, compared with net income of $15.3 million, or $1.06 per diluted share, for fiscal 1998. “Results for the fourth quarter and fiscal 1999 reflect higher sales in the pounds of poultry products sold compared with a year ago, but also reflect the weakness in the poultry market that we witnessed throughout the second half of the year,” said Joe F. Sanderson, Jr., President and Chief Executive Officer. “We continued to benefit from a favorable cost structure in fiscal 1999 as evidenced by decreases in the cash market prices for corn and soybean meal, primary feed ingredients, of 13.0% and 17.7%, respectively. However, this advantage was more than offset by lower chicken prices due primarily to an oversupply of chicken and other meats in the marketplace.” According to Sanderson, market prices for poultry products, as measured by a simple average of the Georgia dock price for whole chickens, declined approximately 14.6% in the fourth quarter compared with the same period in 1998. In addition, the average market price for boneless breast meat during the fiscal year was 11.0% lower than a year ago, while the average market price for leg quarters for the year was 35.9% below the average price during fiscal 1998. “Looking ahead, we expect that the current market environment will continue to affect our operations through the first half of our fiscal year. In light of the current oversupply of chicken meat in the marketplace, we reduced our chicken production in October 1999, and plan to continue the cutback at least through the end of our first fiscal quarter of 2000. Although market prices continue to be depressed, we are pleased with the results of our sales efforts in the retail and restaurant markets, and will continue to focus on providing the right product mix to meet the demands of our customers and enhance our profitability. In spite of the challenges of the marketplace, Sanderson Farms will continue to benefit from lower grain prices, improved operating efficiencies and a focused marketing strategy that we believe will keep the Company positioned to take advantage of improved market conditions,” concluded Sanderson. 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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