Sanderson Farms, Inc. (NASDAQ:SAFM) Q4 2017 Earnings Conference Call Transcript

Dec 14, 2017 • 11:00 am ET

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Sanderson Farms, Inc. (NASDAQ:SAFM) Q4 2017 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, and welcome to the Sanderson Farms, Inc. Fourth Quarter Fiscal 2017 Conference Call. Today's call is being recorded. At this time, for opening remarks and introductions, I'd like to turn the call over to Mr. Joe Sanderson, Chairman and CEO. Please go ahead.

Executive
Joe Sanderson

Thank you. Good morning, and welcome to Sanderson Farms Fourth Quarter and Fiscal Year End Conference Call. This morning we reported net income of $72.9 million or $3.20 per share for our fourth fiscal quarter of 2017. During the fourth quarter of last year, we made $76 million or $3.36 per share.

For the year ended October 31, 2017, we reported net income of $279.7 million or $12.30 per share. For fiscal 2016, we reported net income of $189 million or $8.37 per share. If you did not receive a copy of the release and accompanying financial summary, they are available on our website at www.sandersonfarms.com.

Before we continue, I'll ask Mike to give the cautionary statement regarding forward-looking statements.

Executive
Mike Cockrell

Thank you, Joe, and good morning, everyone.

This morning's call will contain forward-looking statements about the business, financial condition and prospects of the company. Examples of forward-looking statements include statements about future earnings, expenditures, supply and demand factors, production levels, grain costs and supply, poultry prices, growth plans and economic conditions.

(Forward-Looking Cautionary Statements)

Executive
Joe Sanderson

Thank you, Mike. Fiscal 2017 was a record year for Sanderson Farms. Overall, poultry market prices increased for the year compared to fiscal 2016, and while grain prices were slightly higher during the year, feed cost and flock sold were slightly lower per pound because of improved efficiencies. Our net sales for fiscal 2017 of $3.34 billion and our net income of $12.30 per share were records for Sanderson Farms. All of our salaried employees earned top bonuses for their performance during the year, and key operations managers earned an additional bonus for their operational results versus our peers.

We opened our new St. Pauls, North Carolina plant, we began construction of our new Tyler, Texas complex; we made progress in sales; we finished the year in a competitive position in our industry; and we had no debt on our balance sheet. While we have room to improve our performance, I'm very grateful for the efforts of our growers and our employees during this past fiscal year, and I look forward to working with them to capture the opportunities available to us during the coming year. With that introduction, I'll ask Lampkin and Mike to provide details on the quarter, and I will return after they've finished, to discuss our focus during fiscal 2018 and answer your questions.

Executive
Lampkin Butts

Thank you, Joe. This is Lampkin and good morning to everyone. As Joe said, overall market prices for chicken improved during the fiscal year compared to 2016, and we benefited from lower feed cost per pound for the year. Tray pack market prices during our fourth quarter and the fiscal year continue to reflect strong supply and demand dynamics for fresh chicken sold at