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| Joe F. Sanderson Jr., chairman and CEO of Sanderson Farms |
Sanderson Farms Inc. reported net sales for the fiscal year 2017, ended Oct. 31, 2017, were $3.342 billion compared with $2.816 billion for fiscal 2016. Net income for the year was $279.7 million, or $12.30 per share, compared to $189.0 million, or $8.37 per share, for last fiscal year.
Net sales for the fourth quarter of fiscal 2017 were $919.9 million compared with $790.8 million for the same period a year ago. Sanderson’s fourth quarter income was $72.9 million, or $3.20 per share, compared to $76.0 million, or $3.36 per share, for the fourth quarter of 2016.
“The fourth quarter marked the end of another record year for Sanderson Farms,” Sanderson said in a statement. “Market conditions weakened during our fourth fiscal quarter of 2017, as market prices declined seasonally after Labor Day. The seasonal decrease in demand was exacerbated by hurricane disruptions and higher than expected chicken production caused by higher than expected live weights. Despite this weakness, we performed well during the quarter.
“For the fiscal year, we reported record annual sales, with improved overall poultry market prices compared with fiscal 2016, and higher volume of poultry products sold by 13.2 percent. Grain prices were slightly higher during fiscal 2017 compared with prices paid in fiscal 2016; however, feed costs in processed flocks were lower per pound on improved live bird performance. For fiscal 2017, we sold 4.22 billion pounds of dressed poultry, another record, compared with 3.73 billion pounds in fiscal 2016.”
Market prices for poultry products overall were generally higher in 2017 relative to the prior year, according to Sanderson’s statement, but were mixed during the fourth quarter of fiscal 2017. Boneless breast meat prices averaged 6.3 percent lower in the fourth quarter than the prior-year period. For the full fiscal year, however, boneless breast meat prices were 5.8 percent higher compared with fiscal 2016. The average price for bulk leg quarters was up roughly 22.7 percent for the fourth quarter of 2017 compared to 2016 and increased 21.2 percent in 2017 versus the prior year. Jumbo wing prices averaged $2.09 per lb. during the fourth quarter of fiscal 2017, up 28.4 percent from the average of $1.62 per lb. during the prior-year period. Jumbo wing prices averaged $1.92 per lb. during the fiscal year, up 21.4 percent from the average of $1.58 per lb. for fiscal 2016. An increase in export volumes of dark meat improved prices during 2017. The year also saw cash prices for corn increase 6.0 percent in the fourth quarter, while soybean meal cash prices were down 2.0 percent.
“We are pleased that our profitability during fiscal 2017 allowed us to fund from cash on hand the completion of our new facilities in St. Pauls, North Carolina, start construction at our new complex in Tyler, Texas, strengthen our balance sheet, and reward our shareholders with a special dividend,” Sanderson continued. “We are well positioned to continue our growth strategy as we move St. Pauls to full production during fiscal 2018 and continue construction of our new complex in Tyler.
“As of Oct. 31, 2017, our balance sheet reflected $1.733 billion in assets, stockholders’ equity of $1.433 billion and net working capital of $650.8 million. 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.
An internet replay of a conference call discussing the company’s earnings release will be available through Dec. 26.
