000259 Sanderson Farms Reports First Quarter Results

Laurel, MS - Sanderson Farms, Inc. reported results for the first quarter of fiscal 2000.

For the three months ended January 31, 2000, net sales increased 8.5% to $137,008,000 compared with $126,229,000 for the first quarter of fiscal 1999. The Company reported a net loss for the quarter of $1,416,000, or $(.10) per basic and diluted share, compared with net income of $3,444,000, or $.24 per basic and diluted share, for the same period last year.

“The increase in net sales in the first quarter of fiscal 2000 was due to an increase in the total pounds of poultry products sold,” commented Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms. “However, our operations and profitability continue to be negatively impacted by continued weakness in the poultry markets due to an oversupply of chicken and other meats. In the first quarter of fiscal 2000 the average sales price of poultry products, as measured by a simple average of the Georgia dock whole bird price, decreased 10.5% as compared with the first quarter of fiscal 1999.

“We have completed the previously announced shift in our marketing strategy, resulting in an increase in the average live weight of chickens processed during the first quarter compared to last year's first quarter. Although the additional pounds sold was offset by a planned decrease in the number of chickens processed during the first quarter of fiscal 2000, we believe this strategy will benefit the Company when more favorable market conditions emerge. As we have previously announced, we plan to continue this production cutback through the second fiscal quarter of 2000.”

In conclusion, Sanderson commented, “Looking ahead, we expect the current industry environment will continue to affect our operations through the first half of our fiscal year. However, we are encouraged by a number of indicators pointing to declining red meat production and moderating poultry production this calendar year. After declining the last two years, poultry exports are actually expected to increase about 3%, which is also encouraging news. On the cost side, we believe the poultry industry will continue to benefit from relatively low grain prices. Although we continue to buy our corn and soybean meal needs on the market, we will take advantage of opportunities to lock in low costs and reduce the risk of material increases for our most significant input costs.”

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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