LAUREL, MISS. — Increased production as the result of the addition of the Kinston, N.C., facility helped Sanderson Farms, Inc. return to profitability during fiscal 2012.
For the year ended Oct. 31, the company had income of $53,944,000, equal to $2.35 per share on the common stock, which compared with a loss of $127,077,000 during the previous year. Sales for the year were $2,386,105,000, up 21% from $1,978,085,000 during the previous year.
“While poultry markets improved compared to fiscal 2011, grain prices surged to record levels during August as a result of drought conditions across much of the corn belt,” said Joe F. Sanderson Jr., chairman and chief executive officer. “As a result, the improvement in poultry market prices was offset in part by higher feed costs. Our increased sales and return to profitability during the year reflected higher production as we completed the ramp up to near full production at our Kinston, N.C., facility. For the year, we sold 2.952 billion lbs of dressed poultry, another record, compared with 2.794 billion lbs in fiscal 2011.”
Mr. Sanderson said the company’s profitability during fiscal 2012 has allowed it to reduce outstanding debt, and the company has stockholders’ equity of $550.1 million.
For the fourth quarter ended Oct. 31, the company had income of $9,347,000, or 41c per share, which compared with a loss of $21,562,000 during the same quarter of the previous year. Sales for the quarter were $648,379,000, up 16% from $559,842,000 during the same quarter of the previous year.Mr. Sanderson also said the increased production at the Kinston plant during the year more than offset a 4% production cut at other plants. The move was made to better balance production with customer demand. He said Smithfield believes demand from food service customers will remain soft until there is more consumer confidence and the unemployment rate drops. Considering those factors and higher prices for grain and uncertainty about supply, the company is cutting production an additional 2% and plans to leave this production cut in place through fiscal 2013.