UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
(MARK ONE)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
For the quarterly period ended July 31, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _________________to_______________
Commission file number 0-16567
Sanderson Farms, Inc.
(Exact name of registrant as specified in its charter)
Mississippi 64-0615843
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
225 North Thirteenth Avenue Laurel, Mississippi 39440
(Address of principal executive offices) (Zip Code)
(601) 649-4030
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since
last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods that the
registrant was required to file such reports), and (2) has been subject to such
filing requirement for the past 90 days.
Yes X No _____
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes _____ No _____
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Common Stock, $1 Per Share Par Value-----13,632,955 shares outstanding as
of July 31, 2000.
<PAGE>
INDEX
SANDERSON FARMS, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets--July 31, 2000 and
October 31, 1999
Condensed consolidated statements of income (loss)--Three months ended
July 31, 2000 and 1999; Nine months ended July 31, 2000 and 1999
Condensed consolidated statements of cash flows--Nine months ended
July 31, 2000 and 1999
Notes to condensed consolidated financial statements--
July 31, 2000 and 1999
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Item 3. Quantitative and Qualitative Disclosures of Market Risks
PART II OTHER INFORMATION
Item 5. Other Matters
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
SANDERSON FARMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
July 31, October 31,
2000 1999
---- ----
(Unaudited) (Note 1)
(In thousands)
Assets
Current assets
Cash and temporary cash investments $ 5,289 $ 7,052
Accounts receivables, net 37,381 36,577
Inventories - Note 2 51,707 47,634
Refundable income taxes 6,554 426
Other current assets 7,963 7,503
------- -------
Total current assets 108,894 99,192
Property, plant and equipment 366,574 356,276
Less accumulated depreciation (189,862) (173,204)
------- -------
176,712 183,072
Other assets 698 1,246
------- -------
Total assets $286,304 $283,510
======= =======
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and
accrued expenses $ 31,737 $ 27,877
Current maturities of long-
term debt 6,905 4,043
------ ------
Total current liabilities 38,642 31,920
Long-term debt, less current maturities 116,839 104,651
Claims payable 1,100 1,100
Deferred income taxes 14,995 14,995
Stockholders' equity Preferred Stock:
Series A Junior Participating
Preferred Stock, $100 par value:
authorized 500,000 shares; none
issued
Par value to be determined by the
Board of Directors: authorized
4,500,000 shares; none issued
Common Stock, $1 par value: authorized
100,000,000 shares; issued and
outstanding shares - 13,632,955
and 13,932,455 at July 31, 2000 and
October 31, 1999, respectively 13,633 13,932
Paid-in capital 3,616 5,835
Retained earnings 97,479 111,077
------- -------
Total stockholders' equity 114,728 130,844
======= =======
Total liabilities and stockholders' equity $286,304 $283,510
======== ========
See notes to condensed consolidated financial statements.
<PAGE>
SANDERSON FARMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(UNAUDITED)
Three Months Ended Nine Months Ended
July 31, July 31,
2000 1999 2000 1999
---- ---- ---- ----
(In thousands, except per share data)
Net sales $158,422 $148,842 $435,211 $409,657
Cost and expenses:
Cost of sales 158,916 135,809 427,905 374,290
Selling, general and
administrative 6,064 5,683 19,381 15,521
------- ------- ------- -------
164,980 141,492 447,286 389,811
------- ------- ------- -------
OPERATING INCOME (LOSS) (6,558) 7,350 (12,075) 19,846
Other income (expense):
Interest income 15 44 109 192
Interest expense (2,242) (1,506) (5,930) (4,711)
Other (87) 58 (46) 46
------- ------- ------- --------
(2,314) (1,404) (5,867) (4,473)
------- ------- ------ -------
INCOME (LOSS) BEFORE
INCOME TAXES AND
CUMULATIVE EFFECT
OF ACCOUNTING CHANGE (8,872) 5,946 (17,942) 15,373
Income tax expense(benefit) (3,244) 2,257 (6,636) 5,802
------- ------- ------ -------
NET INCOME (LOSS) BEFORE
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE (5,628) 3,689 (11,306) 9,571
Cumulative effect of accounting
change (net of income taxes
of $140,000) 0 0 (234) 0
------ ------- --------- -------
NET INCOME (LOSS) $ (5,628) $ 3,689 $(11,540) $ 9,571
======= ======= ======== =======
Earnings (loss) per share:
Basic and diluted earnings
(loss) before cumulative
effect of accounting change $ (.41) $ .26 $ (.82) $ .68
Cumulative effect of
accounting change 0 0 (.02) 0
------- ------- -------- -------
Basic and diluted earnings
(loss) $ (.41) $ .26 $ (.84) $ .68
======= ======= ======== =======
Dividends per share $ .05 $ .05 $ .15 $ .15
======= ======= ======== =======
Basic weighted average
shares outstanding 13,671 13,932 13,756 14,114
======= ======= ======== =======
Diluted weighted average
shares outstanding 13,671 13,996 13,756 14,195
======= ======= ======== =======
See notes to condensed consolidated financial statements.
<PAGE>
SANDERSON FARMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
July 31,
2000 1999
---- ----
(In thousands)
Operating activities
Net income(loss) $(11,540) $ 9,571
Adjustments to reconcile net income
(loss)to net cash provided by operating
activities:
Cumulative effect of accounting change 234 0
Depreciation and amortization 19,788 18,282
Change in assets and liabilities:
Increase in accounts receivable, net (804) (4,099)
Increase in inventories (4,073) (8,629)
Increase in refundable income taxes (6,128) 0
Increase in other assets (264) (850)
Increase in accounts payable and
accrued expenses 3,860 6,262
------ ------
Total adjustments 12,613 10,966
------ ------
Net cash provided by operating activities 1,073 20,537
Investing activities
Net proceeds from sales of property and equipment 117 379
Capital expenditures (13,427) (24,498)
------ ------
Net cash used in investing activities (13,310) (24,119)
Financing activities
Principal payments on long-term debt (2,950) (3,844)
Net change in revolving credit 18,000 (3,000)
Retirement of Common Stock (2,518) (6,916)
Long-term borrowings 0 20,000
Net proceeds from issuance of Common Stock 0 414
Dividends paid (2,058) (2,110)
------ ------
Net cash proved by financing
activities 10,474 4,544
------ ------
Net increase (decrease) in cash and temporary
cash investments (1,763) 962
Cash and temporary cash investments
at beginning of period 7,052 3,626
------ ------
Cash and temporary cash investments
at end of period $ 5,289 $ 4,588
====== ======
See notes to condensed consolidated financial statements.
<PAGE>
SANDERSON FARMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
July 31, 2000
NOTE 1 -- BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States for complete financial statements. In the opinion of management, all
adjustments consisting of normal recurring accruals considered necessary for a
fair presentation have been included. Operating results for the three-month and
nine-month periods ended July 31, 2000 are not necessarily indicative of the
results that may be expected for the year ending October 31, 2000. For further
information, reference is made to the consolidated financial statements and
footnotes thereto included in the Company's annual report on Form 10-K for the
year ended October 31, 1999.
The balance sheet at October 31, 1999 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
NOTE 2--INVENTORIES
Inventories consisted of the following:
July 31, October 31,
2000 1999
---- ----
(In thousands)
Live poultry-broilers and breeders $33,436 $29,323
Feed, eggs and other 6,664 6,494
Processed poultry 3,967 3,037
Processed food 3,329 4,900
Packaging materials 4,311 3,880
------- -------
$51,707 $47,634
======= =======
NOTE 3--INCOME TAXES
Deferred income taxes relate principally to cash basis temporary differences and
depreciation expense which are accounted for differently for financial and
income tax purposes. Effective November 1, 1988, the Company changed from the
cash to the accrual basis of accounting for its farming subsidiary. The Taxpayer
Relief Act of 1997 (the "Act") provides that the taxes on the cash basis
temporary differences as of that date are payable over the next 20 years or in
full in the first fiscal year in which the Company fails to qualify as a "Family
Farming Corporation". The Company will continue to qualify as a "Family Farming
Corporation" provided there are no changes in ownership control, which
management does not anticipate during fiscal 2000.
<PAGE>
NOTE 4--START-UP COSTS
In April 1998, the American Institute of Certified Public Accountants issued
Statement of Position 98-5, "Reporting the Costs of Start-Up Activities", which
requires that costs related to start-up activities be expensed as incurred.
Prior to October 31, 1999, the Company capitalized its start-up costs. The
Company adopted the provisions of the SOP in its consolidated financial
statements in the first quarter of fiscal 2000. The effect of adoption of SOP
98-5 was to record a charge for the cumulative effect of an accounting change of
$234,000 (net of income taxes of $140,000) or $.02 per basic and diluted
earnings per share.
NOTE 5--EMPLOYEE BENEFIT PLANS
During the second quarter of fiscal 2000, the Company's Board of Directors
approved an amendment to the 401(k) plan (the "Plan") to add a matching feature.
Effective July 1, 2000, the Company will match 100% of employee contributions to
the Plan up to 3% of each employee's compensation and 50% of employee
contributions between 3% and 5% of each employee's compensation, as limited by
Internal Revenue Service regulations.
Note 6--OTHER MATTERS
On June 15, 2000, the Company delivered to two banks a guaranty of $3.2 million
on a $13.5 million loan (the "Loan") under a credit agreement from those banks
to the estate of Joe Frank Sanderson, a co-founder and former member of the
Company's Board of Directors. The Estate collateralized the Loan with 3,229,672
shares of Common Stock of the Company and agreed to indemnify the Company
against any loss from such guaranty.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
General
The following Discussion and Analysis should be read in conjunction with
Management's Discussion and Analysis of Financial Condition and Results of
Operations included in Item 7 of the Company's Annual Report on Form 10-K for
its fiscal year ended October 31, 1999.
This Quarterly Report, and other periodic reports filed by the Company under the
Securities and Exchange Act of 1934, and other written or oral statements made
by it or on its behalf, may include forward-looking statements, which 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 and estimates expressed in such statements.
These risks, uncertainties and other factors include, but are not limited to 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,
either of which may affect the value of inventories, the collectability of
accounts receivable or the financial integrity of customers.
(3) Changes in laws, regulations, and other activities in government agencies
and similar organizations applicable to the Company and the poultry industry.
(4) Various inventory risks due to changes in market conditions.
(5) Changes in and effects of competition, which is significant in all markets
in which the Company competes with regional and national firms, some of which
have greater financial and marketing resources than the Company.
(6) Changes in accounting policies and practices adopted voluntarily by the
Company or required to be adopted by generally accepted accounting principles.
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 quarterly report, the words "estimates",
"plans", "expects", "should", "outlook", and "anticipates" and similar
expressions as they relate to the Company or its management are intended to
identify forward-looking statements.
The Company's poultry operations are integrated through its control of all
functions relative to the production of its chicken products, including hatching
egg production, hatching, feed manufacturing, raising chickens to marketable age
("grow out"), processing, and marketing. Consistent with the poultry industry,
the Company's profitability is substantially impacted by the market prices for
its finished products and feed grains, both of which may fluctuate substantially
and exhibit cyclical characteristics typically associated with commodity
markets. Other costs, excluding feed grains, related to the profitability of the
Company's poultry operations, including hatching egg production, hatching,
growing, and processing cost, are responsive to efficient cost containment
programs and management practices.
The Company believes that value-added products are subject to less price
volatility and generate higher, more consistent profit margins than whole
chickens ice packed and shipped in bulk form. To reduce its exposure to market
cyclicality that has historically characterized commodity chicken market prices,
the Company has increasingly concentrated on the production and marketing of
value-added product lines with emphasis on product quality, customer service and
brand recognition. Nevertheless, market prices continue to have a significant
influence on prices of the Company's chicken products. The Company adds value to
its poultry products by performing one or more processing steps beyond the stage
where the whole chicken is first saleable as a finished product, such as
cutting, deep chilling, packaging and labeling the product. The Company believes
that one of its major strengths is its ability to change its product mix to meet
customer demands.
The Company's processed and prepared foods product lines include over 200
institutional and consumer packaged food items that it sells nationally and
regionally, primarily to distributors, food service establishments and
retailers. The majority of the prepared food items are made to the
specifications of food service users.
<PAGE>
RESULTS OF OPERATION
Net sales for the third quarter of fiscal 2000 were $158.4 million as compared
to $148.8 million for the third quarter of fiscal 2000. The increase in the
Company's net sales of $9.6 million or 6.4% resulted from increases in the
pounds of poultry products sold of 10.0% and prepared food products sold of
13.4% during the three months ended July 31, 2000 as compared to the three
months ended July 31, 1999. The effect of these increases in pounds of poultry
and prepared food products sold on the Company's net sales was partially offset
by a net decrease in the average sales price per pound of 3.3%. For the quarter
ended July 31, 2000 as compared to the same quarter during fiscal 1999 the net
sales price of poultry products decreased 4.9%. A simple average of the Georgia
dock whole bird prices for the third quarter of fiscal 2000 as compared to the
third quarter of fiscal 1999 reflected a decrease of 3.0%. Market prices for
breast and wings were substantially lower as the industry continued to be
adversely affected by an over supply of chicken and other meats. Net sales of
prepared food products increased $3.7 million or 20.6% during the three months
ended July 31, 2000 as compared to the three months ended July 31, 1999.
Net sales for the nine months ended July 31, 2000 were $435.2 million, an
increase of $25.6 million or 6.2% as compared to net sales for the nine months
ended July 31, 1999 of $409.7 million. A majority of the increase in net sales
was derived from an increase in pounds of poultry products sold of 10.8%.
However, the increase in pounds of poultry products sold was partially offset by
a decrease in the average sales price per pound of poultry products of 4.9%, as
the Company continued to be adversely affected by lower prices of poultry
products. During the first nine months of fiscal 2000 as compared to the same
period during fiscal 1999, a simple average of the Georgia dock whole bird
prices reflected a decrease of 5.8%. In addition to the price decrease for whole
birds, boneless breast meat prices have fallen significantly during the third
fiscal quarter, reaching an historical low during a period that is typically
characterized by peak demand for poultry products. Net sales of prepared food
products during the nine months ended July 31, 2000 as compared to the nine
months ended July 31, 1999, increased $6.3 million, or 12.1%, as a result of an
increase in the average sales price per pound of prepared food products of 5.2%
and an increase in the pounds of prepared food products sold of 6.6%
Cost of sales for the three months ended July 31, 2000 as compared to the three
months ended July 31, 1999 increased $23.1 million or 17.0%. The cost of sales
of poultry products increased $20.2 million or 16.7% due to the increase in the
pounds of poultry products sold of 10.0% and an increase in the average cost per
pound of poultry products sold of 6.2%. The increase in the average cost per
pound of poultry products sold resulted from an increase in the cost of feed
grains and increased packaging and labor costs associated with the Company's
larger presence in the chill pack markets. Corn and soybean meal cash market
prices for the three months ended July 31, 2000 as compared to the three months
ended July 31, 1999 reflected a decrease of 1.0% and an increase of 27.2%,
respectively. Cost of sales of prepared food products increased $2.9 million or
19.3%, resulting from the increase in the pounds of prepared food products sold
of 13.4% and a change in the mix of products sold.
For the nine months ended July 31, 2000 as compared to the nine months ended
July 31, 1999, cost of sales increased $53.6 million or 14.3%. Cost of sales of
poultry products increased $49.4 million or 15.0%. This increase in the cost of
sales of poultry products was the result of an increase in the pounds of poultry
products sold of 10.8%, an increase in the processing cost of poultry products
related to the Company's increased presence in the chill pack market and higher
cost of soybean meal. Corn and soybean meal cash market prices reflected a
decrease of 1.9% and an increase of 18.7%, respectively, when compared to the
same nine months a year ago. Cost of sales of prepared food products during the
first half of fiscal 2000 as compared to the first half of fiscal 1999 increased
$4.2 million or 9.5% due primarily to the increase in the pounds of prepared
food products sold of 6.6%
Selling, general and administrative expenses for the third quarter and nine
months of fiscal 2000 increased $.4 million and $3.9 million, respectively, as
compared to the same periods during fiscal 1999. These increases reflect the
additional advertising and marketing costs related to the Company's change of
certain of its production from the fast food market to the chill pack market. In
addition, the Company recorded a bad debt reserve of $1.2 million during the
second quarter of fiscal 2000 resulting from the bankruptcy filing by Ameriserve
on February 1, 2000.
The Company's operating loss for the nine months ended July 31, 2000 was $12.1
million as compared to operating income during the same quarter of fiscal 1999
of $19.8 million. During fiscal 2000 as compared to fiscal 1999 the Company
experienced lower prices for poultry products. Also, the bad debt reserve
relating to the bankruptcy filing by Ameriserve increased the Company's
operating loss by $1.2 million during fiscal 2000 as compared to fiscal 1999.
The Company expects the current weakness in the poultry market to continue
through the fourth quarter of fiscal 2000.
Interest expense during the third quarter of fiscal 2000 was $2.2 million as
compared to $1.5 million during the third quarter of fiscal 1999. For the nine
months ended July 31, 2000 as compared to the same period during fiscal 1999,
interest expense increased $1.2 to $5.9 million.
The Company adopted the AICPA Statement of Position 98-5, "Reporting the Costs
of Start-up Activities" in the first quarter of fiscal 2000. The effect of
adopting SOP 98-5 was to record a charge for the cumulative effect of an
accounting change of $234,000 (net of income taxes of $140,000).
The effective tax rate for the three months and the nine months ended July 31,
2000 were 36.6% and 37.0%, respectively, as compared to effective tax rates
during the same periods of fiscal 1999 of 38.0% and 37.7%.
LIQUIDITY AND CAPITAL RESOURCES
As of July 31, 2000, the Company's working capital was $70.3 million and its
current ratio was 2.8 to 1, as compared to working capital of $67.3 million and
a current ratio of 3.1 to 1 at October 31, 1999. During the nine months ended
July 31, 2000 the Company spent approximately $13.4 million on planned capital
projects and $2.5 million to repurchase 299,500 shares of its Common Stock under
its existing stock repurchase plan.
The Company's capital budget for fiscal 2000 was increased to $19.8 million from
$15.8 million. The increase of $4.0 million pertains to items not approved at
the beginning of fiscal 2000, pending justification, field trial and alternate
costing. Included in the fiscal 2000 budget are items that include cost of
renovations, changes and additions to existing processing facilities to allow
better product flows and product mix for more product flexibility.
The Company believes that anticipated capital expenditures for fiscal 2000 will
be funded from working capital and by cash flows from operations; however, as of
July 31, 2000 the Company had $16.0 million available under its revolving credit
agreement, if needed.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES OF MARKET RISK
There have been no material changes in the market risks reported in the
Company's fiscal 1999 Annual Report on 10K.
PART II. OTHER INFORMATION
Item 5: Other Matters
Joe Frank Sanderson, a co-founder of the Company and a member of its Board of
Directors, died on January 4, 1998. The 3,229,672 shares of Common Stock of the
Company that Mr. Sanderson owned of record are now owned of record by the Estate
of Joe Frank Sanderson, deceased (the "Estate"). The co-executors of the Estate
are Mr. Sanderson's sons, Joe F. Sanderson, Jr. and William R. Sanderson (the
"Co-executors"). On March 21, 2000, the Estate borrowed $13,500,000 from Harris
Trust and Savings Bank and SunTrust Bank (the "Banks")under a Credit Agreement
dated as of that date (the "Credit Agreement"). The entire proceeds were used to
pay the Estate's obligations to another financial institution incurred for the
payment of federal and state estate taxes. The loan under the Credit Agreement
is secured by the Estate's pledge of 3,229,672 shares of Common Stock of the
Company. The loan requires that the ratio of the principal amount of the loan,
divided by the market value of the pledged Common Stock not exceed 60%. In
making this calculation, the value of the pledged Common Stock is its market
value, except that if the market value is less than $5.00 per share, the Common
Stock is deemed to have no collateral value. In addition, in making this
calculation, the principal amount of the loan is reduced by any cash collateral
held by the banks, and also by the principal amount of any guaranty of the loan
that the Company may decide to provide to the banks. The Company's Board of
Directors authorized the officers of the Company to deliver to the Banks the
Company's guaranty of the loan of $3.2 million as of June 15, 2000. Any guaranty
provided by the Company will be released at the request of the Estate or the
Company if, on the last day of any calendar quarter, the above-mentioned ratio
is 50% or less. The Estate has agreed to indemnify the Company against any loss
from any such guaranty. Upon payment in full to the banks, the Company, if it
has delivered any guaranty of the loan to the Banks as of that date, would
succeed to the bank's position as pledgee of the Common Stock, and the shares
would secure any obligation of the Estate to the Company.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) The following exhibits are filed with this report
Exhibit 15a - Independent Accountants' Review Report
on Interim Financial Information
Exhibit 15b - Auditors' letter re: Unaudited Financial
Information
(b) On June 21, 2000, the Company filed a report on Form 8-K, dated
June 15, 2000, concerning a guaranty delivered by the registrant
to Harris Trust and Savings Bank and SunTrust Bank of $3,206,000
of a $13,500,000 loan by those banks to the Estate of Joe Frank
Sanderson.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned duly authorized offices.
_____ SANDERSON FARMS, INC. _______
(Registrant)
Date: August 30, 2000 By:/s/D. Michael Cockrell
Treasurer and Chief
Financial Officer
Date: August 30, 2000 By: /s/ James A. Grimes
Secretary and Principal
Accounting Officer
<PAGE>
EXHIBIT 15a
INDEPENDENT ACCOUNTANTS'REVIEW REPORT ON INTERIM
FINANCIAL INFORMATION
Shareholders and
Board of Directors
Sanderson Farms, Inc.
We have reviewed the accompanying condensed consolidated balance sheet of
Sanderson Farms, Inc. and subsidiaries as of July 31, 2000, and the related
condensed consolidated statements of income (loss) for the three-and nine-month
periods ended July 31, 2000 and 1999 and the condensed consolidated statements
of cash flows for the nine-month periods ended July 31, 2000 and 1999. These
financial statements are the responsibility of the Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data, and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted in
accordance with auditing standards generally accepted in the United States,
which will be performed for the full year with the objective of expressing an
opinion regarding the financial statements taken as a whole. Accordingly, we do
not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated financial statements referred
to above for them to be in conformity with accounting principles generally
accepted in the United States.
We previously audited, in accordance with auditing standards generally accepted
in the United States, the consolidated balance sheet of Sanderson Farms, Inc.
and subsidiaries as of October 31, 1999, and the related consolidated statements
of income, stockholders' equity and cash flows for the year then ended (not
presented herein) and in our report dated December 8, 1999, we expressed an
unqualified opinion on those consolidated financial statements. In our opinion,
the information set forth in the accompanying condensed consolidated balance
sheet as of October 31, 1999, is fairly stated, in all material respects, in
relation to the consolidated balance sheet from which it has been derived.
/s/ERNST & YOUNG LLP
Jackson, Mississippi
August 23, 2000
<PAGE>
EXHIBIT 15b
Shareholders and Board of Directors
Sanderson Farms, Inc.
We are aware of the incorporation by reference in Post-Effective Amendment
No. 1 to Registration Statement (Form S-8 No. 33-67474) of Sanderson Farms,
Inc. for the registration of 750,000 shares of its common stock of our report
dated August 23, 2000 relating to the unaudited condensed consolidated
interim financial statements of Sanderson Farms, Inc. that are included in
its Form 10-Q for the quarter ended July 31, 2000.
/s/ERNST & YOUNG LLP
Jackson, Mississippi
August 23, 2000
