Sanderson Farms, Inc. (NASDAQ: SAFM) today reported that it continues to assess damage to its North Carolina assets and live production infrastructure caused by Hurricane Florence. The Company is pleased to report that it has still received no report of serious injuries or loss of life among its employees and growers. However, many employees and growers have lost homes and property, and in some cases are being housed in shelters.
Sanderson Farms will continue to do whatever possible to help those who have been displaced. While the Company is pleased its employees and growers have remained safe, the Company deeply regrets the loss of animals under its care. Although the Company and family farmers who care for its chickens did everything possible to prevent the loss of birds, the unprecedented rainfall from Hurricane Florence caused serious flooding that affected the Company’s live grow out operations.
“I continue to be pleased that our people remained safe during this catastrophic storm,” said Joe F. Sanderson, Jr., chairman and chief executive officer of Sanderson Farms, Inc. “Those who have been displaced, lost their homes or had their lives disrupted will continue to be in our thoughts and prayers, and we will do whatever we can to help them recover from this storm. Everyone at Sanderson Farms is deeply saddened by the loss of live birds, whose well-being has been entrusted to our care, especially our farmers and live production employees who care for our birds on a daily basis. We take very seriously our responsibility for the well-being of the animals we raise, and we will continue to do everything we can to protect those birds still threatened by rising flood waters.”
As earlier reported, the Company did not experience any significant damage to either of its processing facilities, feed mill or hatcheries in North Carolina. The Kinston, North Carolina, processing plant resumed one shift of operations on Tuesday, September 18, 2018. Many roadways in and around Lumberton and St. Pauls, North Carolina, remain impassable and are closed, and local streams and rivers are expected to crest later this week. The Company will resume operations at its St. Pauls processing plant once it is safe for employees to navigate roads and highways.
The Company continues to assess the extent of damage to its independent contract farms and the loss of live birds. Current information indicates that 70 broiler houses out of 880 in North Carolina have flooded. Those farms housed 2.1 million chickens. Of that number, 1.35 million were in the Company’s St. Pauls, North Carolina, big bird deboning division, and 755,000 birds were associated with the Kinston, North Carolina, tray pack division. The Company has been able to reach most of the farms previously isolated by flood waters to ensure adequate care and feed is available to the chickens on those farms.
Electrical power continues to be restored at a steady pace, and the Company believes power will be fully restored to all of its independent farms in short order.
Sanderson Farms, Inc. is engaged in the production, processing, marketing and distribution of fresh, frozen and minimally prepared chicken. Its shares trade on the NASDAQ Global Select Market under the symbol SAFM.
This press release includes forward-looking statements within the meaning of the “safe harbor” provisions of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on a number of assumptions about future events and are subject to various risks, uncertainties and other factors that may cause actual results to differ materially from the views, beliefs, projections and estimates expressed in such statements. These risks, uncertainties and other factors include, but are not limited to, those discussed under “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2017, the Company’s subsequent reports on Form 10-Q, and the following:
(1) Changes in the market price for the Company’s finished products and feed grains, both of which may fluctuate substantially and exhibit cyclical characteristics typically associated with commodity markets.
(2) Changes in economic and business conditions, monetary and fiscal policies or the amount of growth, stagnation or recession in the global or U.S. economies, any of which may affect the value of inventories, the collectability of accounts receivable or the financial integrity of customers, and the ability of the end user or consumer to afford protein.
(3) Changes in the political or economic climate, trade policies, laws and regulations or the domestic poultry industry of countries to which the Company or other companies in the poultry industry ship product, and other changes that might limit the Company’s or the industry’s access to foreign markets.
(4) Changes in laws, regulations, and other activities in government agencies and similar organizations applicable to the Company and the poultry industry and changes in laws, regulations and other activities in government agencies and similar organizations related to food safety.
(5) Various inventory risks due to changes in market conditions, including, but not limited to, the risk that net realizable values of live and processed poultry inventories might be lower than the cost of such inventories, requiring a downward adjustment to record the value of such inventories at the lower of cost or net realizable value as required by generally accepted accounting principles.
(6) Changes in and effects of competition, which is significant in all markets in which the Company competes, and the effectiveness of marketing and advertising programs. The Company competes with regional and national firms, some of which have greater financial and marketing resources than the Company.
(7) Changes in accounting policies and practices adopted voluntarily by the Company or required to be adopted by accounting principles generally accepted in the United States.
(8) Disease outbreaks affecting the production, performance and/or marketability of the Company’s poultry products, or the contamination of its products.
(9) Changes in the availability and cost of labor and growers.
(10) The loss of any of the Company’s major customers.
(11) Inclement weather that could hurt Company flocks or otherwise adversely affect the Company’s operations, or changes in global weather patterns that could affect the supply and price of feed grains.
(12) Failure to respond to changing consumer preferences and negative or competitive media campaigns.
(13) Failure to successfully and efficiently start up and run a new plant or integrate any business the Company might acquire.
(14) Unfavorable results from currently pending litigation and proceedings or litigation and proceedings that could arise in the future.
Readers are cautioned not to place undue reliance on forward-looking statements made by or on behalf of Sanderson Farms. Each such statement speaks only as of the day it was made. The Company undertakes no obligation to update or to revise any forward-looking statements. The factors described above cannot be controlled by the Company. When used in this press release or in the related conference call, the words “believes,” “estimates,” “plans,” “expects,” “should,” “could,” “outlook,” and “anticipates” and similar expressions as they relate to the Company or its management are intended to identify forward-looking statements. Examples of forward-looking statements include statements of the Company’s belief about future operations, live inventory and growing conditions, weather, earnings, production levels, capital expenditures, and other industry conditions.
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Contacts:
Mike Cockrell
Treasurer
& Chief Financial Officer
(601) 649-4030
