SANDERSON Farms Inc. reported results for its 2015 fourth quarter and fiscal year ended Oct. 31, with net sales of $679.6 million, compared with $760.9 million for the fourth quarter of fiscal 2014 (Table).

Net income was $27.4 million, or $1.22 per share, compared with net income of $93.1 million, or $4.04 per share, for the fourth quarter of 2014.

For the year, Sanderson Farms reported net sales of $2.803 billion, compared with $2.775 billion for fiscal 2014. Net income for the year totaled $216.0 million, or $9.52 per share, compared with net income of $249.0 million, or $10.80 per share, for last year.

"While conditions during the fourth quarter of fiscal 2015 deteriorated in the big bird deboning market, the quarter marked the end of another successful year for Sanderson Farms," said Joe F. Sanderson Jr., chairman and chief executive officer.

"While overall poultry market prices declined compared with fiscal 2014, grain prices were significantly lower during the year when compared with fiscal 2014," he added. "For the year, we sold 3.418 billion lb. of dressed poultry — another record — compared with 3.045 billion lb. in fiscal 2014."

According to Sanderson, overall market prices for poultry products were significantly lower in the 2015 fourth quarter than a year ago.

As measured by an average of the Georgia dock price for whole chickens, prices were approximately 1.2% higher in the company's fourth quarter compared with the same period in 2014 and were 5.6% higher for the 2015 fiscal year versus the prior year. The Georgia dock whole bird price remained in record territory during fiscal 2015 and reflected strong demand for the company's retail chill pack product during this fiscal year.

Boneless breast meat prices averaged 29.5% lower in the fourth quarter than the prior year and were 15.4% lower for the year versus fiscal 2014.

Prices for jumbo wings averaged $1.48/lb. during the fourth quarter, down 1.3% from the average of $1.50/lb. during the prior-year period, but prices averaged $1.52/lb. for the fiscal year, up 26.9% from $1.20/lb. for fiscal 2014.

The average market price for bulk leg quarters decreased about 53.3% for the quarter and 31.5% for fiscal 2015. Lower dark meat prices reflected the significant decline in industry export volumes during the second half of fiscal 2015.

Cash prices for corn during the fourth quarter increased slightly, by 0.4%, while soybean meal cash prices were down 21.2%.

"We are pleased that our profitability during fiscal 2015 allowed us to fund our planned expansion in Palestine, Texas, further reduce outstanding debt, strengthen our balance sheet and reward our shareholders with a special dividend," Sanderson pointed out. "We are well positioned to continue our growth strategy as we continue to move our new poultry complex in Palestine, Texas, to full production and continue construction of our newest complex in St. Pauls, N.C. The pounds produced in Palestine and St. Pauls, at full production, will represent a 32% increase in our capacity."

He added that at the end of fiscal 2015, "our balance sheet reflected $1.251 billion in assets, stockholders' equity of $1.030 billion and net working capital of $401.5 million. We had no long-term debt at year-end. A strong balance sheet is an important advantage in our industry and provides us with the financial strength to not only support our growth strategy but also to manage our operations through cycles that characterize our industry."

Sanderson Farms is engaged in the production, processing, marketing and distribution of fresh and frozen chicken and other prepared chicken items.

Volume:87 Issue:49