SAFM - Sanderson Farms, Inc. - Q3 2013 Earnings Call Transcript

    Company Name:Sanderson Farms, Inc.
    Event Title:Q3 2013 Earnings Call Transcript
    Event Date:27-Aug-2013
    Event Time:11:00 AM ET



    Good day, and welcome to the Sanderson Farms Inc. Third Quarter Fiscal 2013 Conference Call. Today's call is being recorded. At this time, for opening remarks and introductions, I would like to turn the conference over to Mr. Joe Sanderson. Please go ahead sir.

    Joe F. Sanderson Jr.

    Chairman and Chief Executive Officer
    Thank you. Good morning, and welcome to Sanderson Farms third quarter conference call.

    Lampkin Butts and Mike Cockrell are with me this morning. We reported net income for our third fiscal quarter of $67.9 million or $2.95 per share . This compares to net income of $28.7 million or $1.25 per share during last year's third quarter.

    Results for our third fiscal quarter include $14.2 million and expenses related to our bonus compensation plans including our ESOP are $9.4 million or $0.41 per share net of income taxes. I'll begin this morning's call with a few general comments and will then turn the call over to Lampkin and Mike for more detail.

    Before making any further comments, I will ask Mike to give the cautionary statement regarding forward-looking statements.

    Mike Cockrell

    Treasurer and Chief Financial Officer, Board Member
    Thank you, Joe.

    This morning's call call will contain forward-looking statements about the business, financial condition and prospects of the company. Examples of forward-looking statements include statements about our belief regarding future grain and fresh chicken prices, consumer demand, production levels and the supply of fresh chicken products or economic conditions and our expansion plans. The actual performance of the company could differ materially from that indicated by the forward-looking statements because of various risks and uncertainties.

    These risks and uncertainties are described in annual report on Form 10-K for the fiscal year that ended October 31, 2012 as well as subsequent quarterly reports on Form 10-Q filed with the SEC. Our third quarter 10-Q was filed this morning.

    You are cautioned not to place undue reliance on the forward-looking statements made this morning and each such statement speaks only as of today. We undertake no obligation to update or to revise forward-looking statements. External factors affecting our business such as feed grain price , market prices for poultry meat and the overall health of the economy among others remain volatile and our view this morning might be very different from our view a few days from now.

    Joe F. Sanderson Jr.

    Chairman and Chief Executive Officer
    Thank you, Mike. Our reserve reflects significantly higher poultry market prices during our third fiscal quarter, when compared to last year's third quarter but as has been the case all year, we experienced continued high grain cost during the quarter.

    The higher market prices for fresh chicken during the quarter compared to last year's third quarter were driven impart by continued record high, Georgia Dock whole bird prices and significantly higher prices from boneless breast meat. These increases were fueled by steady demand for chicken in the retail grocery store market and continued good white meat demand in food service.

    Food service demand and market prices for boneless breast meat spiked in May as several QSR and food service establishments featured chicken on their menus. As I stated on our May call, this food service demand has been driven by menu shift rather than increased food traffic through restaurants as restaurant traffic continues to be flat at best.

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