12-8 news: Sanderson Farms reports Q4, fiscal year turnaround
Net sales for fiscal 2009 were $1.789 billion compared with $1.724 billion for fiscal 2008. Net income for the year totaled $82.3 million, or $3.99 per share, compared with a net loss of $43.1 million, or $2.13 per share, for last year.
"Fiscal 2009 was a successful year for Sanderson Farms with a solid performance in our fourth quarter,” said Joe Sanderson, Jr., chairman and CEO of Sanderson Farms. "Sales for the year were a record $1.789 billion, up 3.8 percent over fiscal 2008, reflecting the growth in our Waco facility, offset by our production cuts earlier in the year. While the overall chicken market improved during our fourth fiscal quarter compared with the same period a year ago, market conditions were less favorable than the third quarter of this fiscal year. However, we continued to benefit from lower grain prices, with improved profitability over the prior year.”
According to Sanderson, market prices for poultry products were mixed in the fourth quarter of fiscal 2009 compared with prices a year ago. As measured by a simple average of the Georgia dock price for whole chickens, prices were lower by approximately 3.8 percent in the company's fourth fiscal quarter compared with the same period in fiscal 2008, and were higher by 4.0 percent for the fiscal year compared with the prior year.
Boneless breast meat prices during the quarter averaged 6.5 percent higher than the prior-year period, and averaged over 1.0 percent lower for fiscal 2009 compared with the prior year. Jumbo wing prices averaged $1.32 per pound during the fiscal year, up 40.7 percent from the average of $0.94 per pound for fiscal 2008. The average market price for bulk leg quarters decreased approximately 29.2 percent for the quarter and 19.2 percent for fiscal 2009 when compared with the same periods last year. The drop in leg quarter prices during the quarter reflects the impact of lower overall export demand.
Prices for corn and soybean meal, the company’s primary feed ingredients, decreased 35.2 percent and increased 4.2 percent, respectively, compared with the fourth quarter a year ago. For the year, total feed costs were 10 percent lower than fiscal 2008.
“We are pleased to have our new Kinston, N.C., poultry complex back on track and the construction of a new feed mill, poultry processing plant and hatchery is moving forward on schedule,” Sanderson continued. “We expect to place our first live pullets in North Carolina in April 2010, and look forward to beginning operations there in January 2011.
“Our success during fiscal 2009 also allowed us to strengthen our financial position and reduce our debt. As of October 31, 2009, our balance sheet reflected $636.2 million in assets, stockholders’ equity of $430.7 million and net working capital of $162.7 million. Our total long-term debt at year-end was $103.1 million. We believe a strong balance sheet is a critical advantage in a cyclical business and provides us with the financial strength to support our growth strategy and capitalize on the opportunities ahead.
“As we move forward to fiscal 2010, current market conditions reflect ongoing weakness in consumer spending and slow restaurant traffic. While retail grocery trends remain favorable, meaningful improvement in demand for chicken from food service customers will not likely occur until the national employment situation improves and consumers start dining out again. However, we believe the industry, through earlier production cuts now being reflected in reduced egg sets and pullet placements, is well positioned to benefit from and respond to any market improvement.”
Sanderson concluded, “We are pleased with our results for fiscal 2009 and are optimistic about the year ahead. As always, we will continue to manage our company for the long term and pursue our primary objective to deliver greater value to our shareholders. Regardless of market conditions, we will rely on our strengths- exceptional products, efficient operations, an expanding market base and a solid financial position- and move Sanderson Farms forward in fiscal 2010.”
Source: Sanderson Farms
FSIS launches help desk for small plantsThe U.S. Department of Agriculture's Food Safety and Inspection Service announced the opening of its new small plant help desk, which will provide for operators of small and very small meat, poultry and processed egg products establishments seeking help with agency requirements with direct access to knowledgeable staff specialists. The help-desk also will provide assistance to state and local food regulatory agencies – FSIS' partners in keeping meat, poultry and egg products safe for consumers.
"USDA's Food Safety and Inspection Service is committed to providing assistance to businesses of all sizes that provide American consumers with access to a safe and healthy food supply," said Deputy Under Secretary for Food Safety Jerold R. Mande. "The small plant help desk will help the development of small, local producers by offering a one-stop shop for questions about how to make sure their meat, poultry and processed egg products are safe, wholesome and properly labeled."
The FSIS small plant help-desk will serve as a "one-stop shop" for plant owners and operators with questions. More than 90 percent of the 6,000 plants inspected by FSIS are small or very small. FSIS staff will assess callers' requests and provide information and guidance materials that best meet their needs. In situations where the answer is not readily available, the staff will research the issue and follow-up with the caller. As appropriate, the help-desk will provide a portal to other services, such as AskFSIS, FSIS' existing internet service offering official agency responses to inquiries on agency policy.
Inquiries can be made to the small plant help-desk by toll-free telephone or by email. The help-desk is open from 8:00 a.m. - 4:00 p.m. EST, Monday through Friday, excluding Federal holidays. To speak to a staff specialist during this time, call 1-877-FSISHelp (1-877-374-7435). Customers may also contact the help-desk by email at InfoSource@fsis.usda.gov .
The new help desk will support USDA's "Know Your Farmer, Know Your Food" initiative by helping small processors to reduce the time and expense of dealing with agency requirements. "Know Your Farmer, Know Your Food" is designed to continue the national conversation about developing local and regional food systems and finding ways to support small and mid-sized producers. It emphasizes the need for a fundamental and critical reconnection between producers and consumers, building on the 2008 Farm Bill, which provides additional flexibility for USDA programs to promote local foods. More information on the "Know Your Farmer, Know Your Food" initiative can be found at: www.usda.gov/knowyourfarmer.
Family in JBS lawsuit seeks settlementThe family of a New Mexico boy who was sickened after eating sirloin from JBS Swift Co. has asked that its lawsuit be dismissed so that the family can pursue a settlement. Hollie Roerick and her son, Alex, initially filed the lawsuit after Alex developed kidney failure after eating meat from the company, according to AP reports. JBS recalled about 380,000 pounds of meat this year after outbreaks of E. coli.
Source: Associated Press
Church's names new CEOChurch’s Chicken’s board of directors has announced the appointment of Mel Deane as the company’s CEO, effective immediately. For the last 10 years, Deane has worked closely with many of the companies owned by Friedman, Fleischer & Lowe, a San Francisco-based private equity company and owner of Church’s. He has held senior leadership positions in many of their portfolio companies, most recently as CEO of Discovery Foods, the leading manufacturer of Asian branded frozen foods. Since August, Deane has been executive vice president and general manager of U.S. Operations for Church’s Chicken. In this role, he has accelerated operational and marketing improvements as well as product development.
Deane replaces Harsha Agadi as CEO. Agadi will remain involved with the company as an active member of the board of directors.
“There is no better time to build enterprise value and grow a company than now, when others are cutting back due to difficult economic conditions,” said David Lowe, founding partner of FFL. “Mel Deane is a true ‘value builder’ who focuses relentlessly on the consumer. He did it at Discovery Foods, and we are confident that he will do it again with Church’s Chicken.”
On assuming this new role, Deane said, “As I have gotten to know the people at Church’s – including their highly successful network of franchisees – I believe they aspire to become the most respected and admired brand in their Quick Service Restaurant segment.”
Source: Church’s Chiicken