000866 Sanderson Farms Reports Third Quarter Results

Laurel, MI - Sanderson Farms, Inc. reported results for the third quarter and nine months ended July 31, 2000.

Net sales for the third quarter of fiscal 2000 were $158.4 million, up 6.4% compared with $148.8 million for the same period a year ago. For the quarter, the Company reported a net loss of $5.6 million, or ($.41) per diluted share, compared with net income of $3.7 million, or $.26 per diluted share, for the third quarter of fiscal 1999.

For the first nine months of fiscal 2000, net sales were $435.2 million, a 6.2% increase compared with net sales of $409.7 million for the same period last year. The Company reported a net loss of $11.5 million, or ($.84) per diluted share, for the first nine months ended July 31, 2000 compared with net income of $9.6 million, or $.68 per diluted share, for the same period of fiscal 1999.

“The current softness in the poultry markets and depressed market prices continue to have a significant impact on the Company's margins,” said Joe F. Sanderson, Jr., President and Chief Executive Officer of Sanderson Farms. “The current cycle caused by an oversupply of chicken and other meats has resulted in historically low market prices and has created a challenging operating environment.”

According to Sanderson, a simple average of the Georgia dock whole bird prices for the third quarter of fiscal 2000 reflected a decrease of 3.0% compared with the third fiscal quarter last year. For the first nine months of fiscal 2000 whole bird prices decreased 5.8% as compared with the same period last year. In addition to the price decrease for whole birds, boneless breast meat prices have fallen significantly during the third fiscal quarter, reaching an historical low during a period that is typically characterized by peak demand for poultry products. Boneless breast meat prices during the third fiscal quarter averaged 17.6% lower than the third quarter of fiscal 1999, and averaged 16.9% lower during the first nine months of the year compared to a year ago.

Sanderson added, “We continue to focus on our operations and on managing our business as efficiently as possible during this cycle. In spite of market conditions, we are pleased with the results of our sales efforts, particularly in the retail and restaurant markets. We remain committed to meeting the demands of our customers and building value for our shareholders.”

Finally, Sanderson noted that the Company has continued its stock buyback program and has repurchased 106,400 shares at an average cost of $7.43 per share since the second quarter of fiscal 2000. “We believe the repurchase of the Company's common shares represents a very good use of our corporate funds and reflects our confidence in Sanderson Farms' future.”

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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