|
x
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Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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¨
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Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Mississippi
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64-0615843
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer
Identification No.)
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|
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127 Flynt Road
Laurel, Mississippi
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39443
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(Address of principal executive offices)
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(Zip Code)
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Title of each Class:
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Name of exchange on which registered:
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Common stock, $1.00 par value per share
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The NASDAQ Stock Market LLC
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Item 1.
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||
Item 1A.
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||
Item 1B.
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||
Item 2.
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||
Item 3.
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||
Item 4.
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||
Item 4A.
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||
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Item 5.
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||
Item 6.
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||
Item 7.
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||
Item 7A.
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Item 8.
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||
Item 9.
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||
Item 9A.
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||
Item 9B.
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||
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Item 10.
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||
Item 11.
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||
Item 12.
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Item 13.
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Item 14.
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||
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Item 15.
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Item 16.
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Item 1.
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Business
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Fiscal Year Ended October 31,
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|||||||||||||
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2017
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2016
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2015
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2014
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2013
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|||||
Registrant processed chicken:
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|
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|||||
Value added:
|
|
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|||||
Chill pack
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31.0
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%
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34.7
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%
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36.9
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%
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36.0
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%
|
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34.4
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%
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Fresh bulk pack
|
56.2
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|
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52.7
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|
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49.1
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|
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48.3
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|
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50.5
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Frozen
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6.7
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|
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5.1
|
|
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6.3
|
|
|
9.2
|
|
|
10.5
|
|
Subtotal
|
93.9
|
|
|
92.5
|
|
|
92.3
|
|
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93.5
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|
|
95.4
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|
Non-value added:
|
|
|
|
|
|
|
|
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|
|||||
Ice pack
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1.0
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|
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0.9
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1.0
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0.9
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1.0
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Subtotal
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1.0
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|
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0.9
|
|
|
1.0
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|
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0.9
|
|
|
1.0
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Total Company processed chicken
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94.9
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93.4
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|
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93.3
|
|
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94.4
|
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96.4
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Minimally prepared chicken
|
5.1
|
|
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6.6
|
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6.7
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|
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5.6
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3.6
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Total
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100.0
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%
|
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100.0
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%
|
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100.0
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%
|
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100.0
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%
|
|
100.0
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%
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Plant Location
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Market
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Capacity Per Week
|
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Industry Bird Size
|
||
Laurel, Mississippi
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Big Bird
|
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625,000
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|
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8.99
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Hazlehurst, Mississippi
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Big Bird
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625,000
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8.99
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Hammond, Louisiana
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Big Bird
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625,000
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|
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8.99
|
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Collins, Mississippi
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Big Bird
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1,250,000
|
|
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8.99
|
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Waco, Texas
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Big Bird
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1,250,000
|
|
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8.99
|
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Palestine, Texas
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Big Bird
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1,250,000
|
|
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8.99
|
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St. Pauls, North Carolina
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Big Bird
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1,250,000
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8.99
|
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McComb, Mississippi
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Chill Pack Retail
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1,250,000
|
|
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6.46
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Bryan, Texas
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Chill Pack Retail
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1,250,000
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6.46
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Moultrie, Georgia
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Chill Pack Retail
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1,250,000
|
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6.46
|
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Kinston, North Carolina
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Chill Pack Retail
|
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1,250,000
|
|
|
6.46
|
|
Item 1A.
|
Risk Factors
|
•
|
market volatility and fluctuations in the price of feed grains and chicken products, as described above;
|
•
|
quarterly variations in our operating results, or results that vary from the expectations of securities analysts and investors;
|
•
|
changes in investor perceptions of the poultry industry in general, including our competitors; and
|
•
|
general economic and competitive conditions.
|
•
|
power outages;
|
•
|
fuel shortages;
|
•
|
damage to infrastructure or our facilities;
|
•
|
water shortages;
|
•
|
disruption of shipping channels;
|
•
|
less efficient or non-routine operating practices necessitated by adverse events; or
|
•
|
increased costs of insurance coverage in the aftermath of such events, among other things.
|
•
|
the availability and terms of additional debt or equity financing and its effect on our financial condition;
|
•
|
increases in our expenses and working capital needs;
|
•
|
integrating the acquired business or new plant into our operations;
|
•
|
attracting and retaining growers;
|
•
|
streamlining overlapping supply chains;
|
•
|
identifying customers for additional product we generate and retaining existing customers; and
|
•
|
identifying and training our key managers and employees to run the new business or plant, while continuing to operate our existing plants efficiently.
|
•
|
difficulty identifying suitable candidates for acquisitions or consummating transactions on terms that are favorable;
|
•
|
implementing and maintaining consistent standards, controls, procedures and information systems;
|
•
|
potential loss of key employees or customers of any acquired business;
|
•
|
managing the geographic distance of an acquired business from our other facilities; and
|
•
|
exposure to unforeseen or undisclosed liabilities of any acquired business.
|
•
|
identify a site and purchase or lease such site;
|
•
|
obtain a number of licenses and permits;
|
•
|
enter into construction contracts;
|
•
|
identify and enter into contracts with a sufficient number of independent contract poultry producers;
|
•
|
complete construction on time; and
|
•
|
hire and train our workforce.
|
•
|
price;
|
•
|
product quality;
|
•
|
brand identification;
|
•
|
innovation;
|
•
|
breadth of product line; and
|
•
|
customer service.
|
Item 1B.
|
Unresolved Staff Comments
|
Item 2.
|
Properties
|
Use
|
Location (City, State)
|
Poultry processing plant, hatchery and feed mill
|
Laurel, Mississippi
|
Poultry processing plant, hatchery and feed mill
|
McComb, Mississippi
|
Poultry processing plant, hatchery and feed mill
|
Hazlehurst and Gallman, Mississippi
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Poultry processing plant, hatchery and feed mill
|
Bryan and Robertson Counties, Texas
|
Poultry processing plant, hatchery and feed mill
|
Moultrie and Adel, Georgia
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Poultry processing plant, hatchery and feed mill
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Kinston and Lenoir County, North Carolina
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Poultry processing plant, hatchery and feed mill
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Palestine and Freestone County, Texas
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Poultry processing plant and hatchery
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Waco, Texas
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Poultry processing plant and hatchery
|
Lumberton and St. Pauls, North Carolina
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Poultry processing plant
|
Hammond, Louisiana
|
Poultry processing plant, hatchery, child care facility and feedmill
|
Collins, Mississippi
|
Prepared chicken plant
|
Flowood, Mississippi
|
Corporate general offices and technical laboratory
|
Laurel, Mississippi
|
Item 3.
|
Legal Proceedings
|
Item 4.
|
Mine Safety Disclosures
|
Name
|
Age
|
|
Office
|
|
Executive
Officer Since
|
|
Joe F. Sanderson, Jr.
|
70
|
|
Chairman of the Board of Directors and Chief Executive Officer
|
|
1984
|
(1)
|
Lampkin Butts
|
66
|
|
President and Chief Operating Officer, Director
|
|
1996
|
(2)
|
Mike Cockrell
|
60
|
|
Treasurer and Chief Financial Officer, Director
|
|
1993
|
(3)
|
Tim Rigney
|
53
|
|
Secretary and Chief Accounting Officer
|
|
2012
|
(4)
|
(1)
|
Joe F. Sanderson, Jr. has served as Chief Executive Officer of the Registrant since November 1, 1989, and as Chairman of the Board since January 8, 1998. Mr. Sanderson served as President from November 1, 1989, to October 21, 2004. From January 1984 to November 1989, Mr. Sanderson served as Vice-President, Processing and Marketing of the Registrant.
|
(2)
|
Lampkin Butts was elected President and Chief Operating Officer of the Registrant effective October 21, 2004. From November 1, 1996, to October 21, 2004, Mr. Butts served as Vice President — Sales and was elected to the Board of Directors on February 19, 1998. Prior to that time, Mr. Butts served the Registrant in various capacities since 1973.
|
(3)
|
Mike Cockrell became Treasurer and Chief Financial Officer of the Registrant effective November 1, 1993, and was elected to the Board of Directors on February 19, 1998. Prior to that time, for more than five years, Mr. Cockrell was a member and shareholder of the Jackson, Mississippi law firm of Wise Carter Child & Caraway, Professional Association.
|
(4)
|
Tim Rigney became Secretary of the Registrant effective November 1, 2012. Mr. Rigney also began service as Chief Accounting Officer on that date. Prior to that time, Mr. Rigney served the Registrant in various capacities since 1990.
|
Item 5.
|
Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
|
|
Closing Stock Price
|
||||||||||
Fiscal Year 2017
|
High
|
|
Low
|
|
Dividends
|
||||||
First Quarter
|
$
|
98.16
|
|
|
$
|
78.98
|
|
|
$
|
0.24
|
|
Second Quarter
|
$
|
115.78
|
|
|
$
|
88.61
|
|
|
$
|
0.24
|
|
Third Quarter
|
$
|
130.75
|
|
|
$
|
111.88
|
|
|
$
|
0.24
|
|
Fourth Quarter
|
$
|
165.12
|
|
|
$
|
132.13
|
|
|
$
|
1.32
|
|
Period
|
(a) Total Number
of Shares
Purchased
1
|
|
(b) Average Price
Paid per Share
|
|
(c) Total Number
of Shares
Purchased as Part
of Publicly
Announced Plans
or Programs
2
|
|
(d) Maximum
Number (or
Approximate
Dollar Value) of
Shares that May
Yet Be Purchased
Under the Plans or
Programs
3
|
|||||
Aug. 1 - Aug. 31, 2017
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
1,000,000
|
|
Sep. 1 - Sep. 30, 2017
|
915
|
|
|
$
|
161.52
|
|
|
915
|
|
|
1,000,000
|
|
Oct. 1 - Oct. 31, 2017
|
44,927
|
|
|
$
|
149.57
|
|
|
44,927
|
|
|
1,000,000
|
|
Total
|
45,842
|
|
|
$
|
149.81
|
|
|
45,842
|
|
|
1,000,000
|
|
1
|
All purchases were made pursuant to the Company’s Stock Incentive Plan, as amended and restated on February 11, 2016, under which shares were withheld to satisfy tax withholding obligations.
|
2
|
On April 23, 2015, the Company’s Board of Directors expanded and extended the share repurchase program originally approved on October 22, 2009, under which the Company may purchase up to one million shares of its common stock in open market transactions or negotiated purchases, subject to market conditions, share price and other considerations. The authorization will expire on April 23, 2018. The Company’s repurchase of vested restricted stock to satisfy tax withholding obligations of its Stock Incentive Plan participants will not be made under the 2015 general repurchase plan.
|
3
|
Does not include vested restricted shares that may yet be repurchased under the Stock Incentive Plan as described in Note 1. In March 2015, the Company repurchased 700,003 shares of its common stock in open market transactions, and on April 23, 2015, the Company's Board of Directors expanded the share repurchase program by 700,003 shares to authorize the repurchase of up to 1,000,000 additional shares.
|
|
Year Ended October 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||
Net sales
|
$
|
3,342,226
|
|
|
$
|
2,816,057
|
|
|
$
|
2,803,480
|
|
|
$
|
2,774,845
|
|
|
$
|
2,682,980
|
|
Operating income
|
425,239
|
|
|
294,111
|
|
|
335,998
|
|
|
381,922
|
|
|
205,678
|
|
|||||
Net income
|
279,745
|
|
|
188,961
|
|
|
216,001
|
|
|
249,048
|
|
|
130,617
|
|
|||||
Basic earnings per share
|
12.30
|
|
|
8.37
|
|
|
9.52
|
|
|
10.80
|
|
|
5.68
|
|
|||||
Diluted earnings per share
|
12.30
|
|
|
8.37
|
|
|
9.52
|
|
|
10.80
|
|
|
5.68
|
|
|||||
Working capital
|
650,817
|
|
|
465,135
|
|
|
396,834
|
|
|
363,071
|
|
|
269,200
|
|
|||||
Total assets
|
1,733,243
|
|
|
1,422,700
|
|
|
1,246,752
|
|
|
1,111,252
|
|
|
924,645
|
|
|||||
Long-term debt, less current maturities
|
—
|
|
|
—
|
|
|
—
|
|
|
10,000
|
|
|
29,414
|
|
|||||
Stockholders’ equity
|
1,432,862
|
|
|
1,190,262
|
|
|
1,029,861
|
|
|
897,948
|
|
|
671,599
|
|
|||||
Cash dividends declared per share
|
$
|
2.04
|
|
|
$
|
1.90
|
|
|
$
|
1.38
|
|
|
$
|
1.32
|
|
|
$
|
0.71
|
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Fiscal Year 2017
|
|
Fiscal Year 2016
|
|
Incr/(Decr)
|
||||||||||||||||||
Description
|
Dollars
|
|
Per lb.
|
|
Dollars
|
|
Per lb.
|
|
Dollars
|
|
Per lb.
|
||||||||||||
Beginning Inventory
|
$
|
15,378
|
|
|
$
|
0.3397
|
|
|
$
|
10,158
|
|
|
$
|
0.2171
|
|
|
$
|
5,220
|
|
|
$
|
0.1226
|
|
Feed in broilers processed
|
1,061,793
|
|
|
0.2512
|
|
|
961,562
|
|
|
0.2554
|
|
|
100,231
|
|
|
(0.0042
|
)
|
||||||
All other cost of sales
|
1,508,765
|
|
|
0.3570
|
|
|
1,284,960
|
|
|
0.3413
|
|
|
223,805
|
|
|
0.0157
|
|
||||||
Less: Ending Inventory
|
37,769
|
|
|
0.4437
|
|
|
15,378
|
|
|
0.3397
|
|
|
22,391
|
|
|
0.1040
|
|
||||||
Total poultry cost of sales
|
$
|
2,548,167
|
|
(1) (2)
|
$
|
0.6090
|
|
|
$
|
2,241,302
|
|
(1)
|
$
|
0.5953
|
|
|
$
|
306,865
|
|
|
$
|
0.0137
|
|
Pounds:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning Inventory
|
45,272
|
|
|
|
|
46,800
|
|
|
|
|
|
|
|
||||||||||
Poultry processed
|
4,226,781
|
|
(2)
|
|
|
3,764,878
|
|
|
|
|
|
|
|
||||||||||
Poultry sold
|
4,184,365
|
|
(1) (2)
|
|
|
3,764,971
|
|
(1)
|
|
|
|
|
|
||||||||||
Ending Inventory
|
85,120
|
|
|
|
|
45,272
|
|
|
|
|
|
|
|
Description
|
Twelve months ended October 31, 2017
|
|
Twelve months ended October 31, 2016
|
|
Increase/(Decrease)
|
||||||
Marketing expense
|
$
|
34,272
|
|
|
$
|
18,776
|
|
|
$
|
15,496
|
|
Bonus award program expense
|
15,098
|
|
|
124
|
|
|
14,974
|
|
|||
Employee Stock Ownership Plan ("ESOP") expense
|
18,000
|
|
|
12,300
|
|
|
5,700
|
|
|||
Legal services
|
7,879
|
|
|
2,455
|
|
|
5,424
|
|
|||
Trainee expense
|
16,182
|
|
|
11,955
|
|
|
4,227
|
|
|||
Administrative salaries
|
36,193
|
|
|
32,379
|
|
|
3,814
|
|
|||
Donations
|
3,036
|
|
|
1,132
|
|
|
1,904
|
|
|||
Stock compensation expense
|
16,952
|
|
|
15,449
|
|
|
1,503
|
|
|||
Start-up expense (Tyler, Texas complex)
|
403
|
|
|
—
|
|
|
403
|
|
|||
Start-up expense (St. Pauls, North Carolina complex)
|
4,022
|
|
|
8,445
|
|
|
(4,423
|
)
|
|||
All other SG&A
|
64,266
|
|
|
56,875
|
|
|
7,391
|
|
|||
Total SG&A
|
$
|
216,303
|
|
|
$
|
159,890
|
|
|
$
|
56,413
|
|
|
Fiscal Year 2016
|
|
Fiscal Year 2015
|
|
Incr/(Decr)
|
||||||||||||||||||
Description
|
Dollars
|
|
Per lb.
|
|
Dollars
|
|
Per lb.
|
|
Dollars
|
|
Per lb.
|
||||||||||||
Beginning Inventory
|
$
|
10,158
|
|
|
$
|
0.2171
|
|
|
$
|
24,426
|
|
|
$
|
0.3983
|
|
|
$
|
(14,268
|
)
|
|
$
|
(0.1812
|
)
|
Feed in broilers processed
|
961,562
|
|
|
0.2554
|
|
|
962,764
|
|
|
0.2798
|
|
|
(1,202
|
)
|
|
(0.0244
|
)
|
||||||
All other cost of sales
|
1,284,960
|
|
|
0.3413
|
|
|
1,215,284
|
|
|
0.3531
|
|
|
69,676
|
|
|
(0.0118
|
)
|
||||||
Less: Ending Inventory
|
15,378
|
|
|
0.3397
|
|
|
10,158
|
|
|
0.2171
|
|
|
5,220
|
|
|
0.1226
|
|
||||||
Total poultry cost of sales
|
$
|
2,241,302
|
|
(1)
|
$
|
0.5953
|
|
|
$
|
2,192,316
|
|
(1)
|
$
|
0.6345
|
|
|
$
|
48,986
|
|
|
$
|
(0.0392
|
)
|
Pounds:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Beginning Inventory
|
46,800
|
|
|
|
|
61,333
|
|
|
|
|
|
|
|
||||||||||
Poultry processed
|
3,764,878
|
|
|
|
|
3,441,409
|
|
|
|
|
|
|
|
||||||||||
Poultry sold
|
3,764,971
|
|
(1)
|
|
|
3,455,365
|
|
(1)
|
|
|
|
|
|
||||||||||
Ending Inventory
|
45,272
|
|
|
|
|
46,800
|
|
|
|
|
|
|
|
Description
|
Twelve months ended October 31, 2016
|
|
Twelve months ended October 31, 2015
|
|
Increase/(Decrease)
|
||||||
Marketing expense
|
$
|
18,776
|
|
|
$
|
7,823
|
|
|
$
|
10,953
|
|
Start-up expense (St. Pauls, North Carolina complex)
|
8,445
|
|
|
439
|
|
|
8,006
|
|
|||
Administrative salaries
|
32,379
|
|
|
29,499
|
|
|
2,880
|
|
|||
Sanderson Farms Championship expense
|
6,369
|
|
|
5,322
|
|
|
1,047
|
|
|||
Trainee expense
|
11,955
|
|
|
11,641
|
|
|
314
|
|
|||
Stock compensation expense
|
15,449
|
|
|
15,692
|
|
|
(243
|
)
|
|||
ESOP expense
|
12,300
|
|
|
15,000
|
|
|
(2,700
|
)
|
|||
Start-up expense (Palestine, Texas complex)
|
—
|
|
|
4,835
|
|
|
(4,835
|
)
|
|||
Bonus award program expense
|
124
|
|
|
12,983
|
|
|
(12,859
|
)
|
|||
All other SG&A
|
54,093
|
|
|
51,880
|
|
|
2,213
|
|
|||
Total SG&A
|
$
|
159,890
|
|
|
$
|
155,114
|
|
|
$
|
4,776
|
|
Item 7A.
|
Quantitative and Qualitative Disclosure About Market Risk.
|
•
|
Current market prices;
|
•
|
Current and predicted weather patterns in the United States, South America, China and other grain producing areas, as such weather patterns might affect the planting, growing, harvesting and yield of feed grains;
|
•
|
The expected size of the harvest of feed grains in the United States and other grain producing areas of the world as reported by governmental and private sources;
|
•
|
Current and expected changes to the agricultural policies of the United States and foreign governments;
|
•
|
The relative strength of United States currency and expected changes therein as it might impact the ability of foreign countries to buy United States feed grain commodities;
|
•
|
The current and expected volumes of export of feed grain commodities as reported by governmental and private sources;
|
•
|
The current and expected use of available feed grains for uses other than as livestock feed grains (such as the use of corn for the production of ethanol, which use is impacted by the price of crude oil); and
|
•
|
Current and expected market prices for the Company’s poultry products.
|
Feed Ingredient
|
Quantity Purchased
during Fiscal 2016
|
|
Hypothetical Price
Change
|
|
Impact on Cash
Outlay
|
|
Ultimate Impact on
Feed Cost per
Pound of broilers
Processed
|
Corn
|
113.5 million bushels
|
|
$1.00 per bushel
|
|
$113.5 million
|
|
$0.0269/lb processed
|
Soybean meal
|
1,031,378 tons
|
|
$10.00 per ton
|
|
$10.3 million
|
|
$0.0024/lb processed
|
Item 8.
|
Financial Statements and Supplementary Data
|
/s/ Ernst & Young LLP
|
|
October 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands,
except share data)
|
||||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
419,285
|
|
|
$
|
234,111
|
|
Accounts receivable, less allowance of $3,260 in 2017 and $2,650 in 2016
|
138,868
|
|
|
124,348
|
|
||
Inventories
|
252,765
|
|
|
220,306
|
|
||
Prepaid expenses
|
38,620
|
|
|
34,559
|
|
||
Total current assets
|
849,538
|
|
|
613,324
|
|
||
Property, plant and equipment:
|
|
|
|
||||
Land and buildings
|
685,811
|
|
|
579,051
|
|
||
Machinery and equipment
|
906,084
|
|
|
793,632
|
|
||
Construction-in-process
|
65,189
|
|
|
132,913
|
|
||
|
1,657,084
|
|
|
1,505,596
|
|
||
Accumulated depreciation
|
(780,276
|
)
|
|
(701,605
|
)
|
||
|
876,808
|
|
|
803,991
|
|
||
Other assets
|
6,897
|
|
|
5,385
|
|
||
Total assets
|
$
|
1,733,243
|
|
|
$
|
1,422,700
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
90,904
|
|
|
$
|
72,774
|
|
Accrued expenses
|
101,168
|
|
|
57,918
|
|
||
Accrued income taxes
|
6,649
|
|
|
17,497
|
|
||
Total current liabilities
|
198,721
|
|
|
148,189
|
|
||
Claims payable and other liabilities
|
9,762
|
|
|
8,501
|
|
||
Deferred income taxes
|
91,898
|
|
|
75,748
|
|
||
Commitments and contingencies
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred Stock:
|
|
|
|
||||
Series A Junior Participating Preferred Stock, $100 par value: authorized shares-500,000; none issued - Par value to be determined by the Board of Directors: authorized shares-4,500,000; none issued
|
|
|
|
||||
Common Stock, $1 par value: authorized shares-100,000,000; issued and outstanding shares- 22,802,690 in 2017 and 22,693,225 in 2016
|
22,803
|
|
|
22,693
|
|
||
Paid-in capital
|
134,999
|
|
|
125,855
|
|
||
Retained earnings
|
1,275,060
|
|
|
1,041,714
|
|
||
Total stockholders’ equity
|
1,432,862
|
|
|
1,190,262
|
|
||
Total liabilities and stockholders’ equity
|
$
|
1,733,243
|
|
|
$
|
1,422,700
|
|
|
Years ended October 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands, except per share data)
|
||||||||||
Net sales
|
$
|
3,342,226
|
|
|
$
|
2,816,057
|
|
|
$
|
2,803,480
|
|
Cost and expenses:
|
|
|
|
|
|
||||||
Cost of sales
|
2,700,684
|
|
|
2,362,056
|
|
|
2,312,368
|
|
|||
Selling, general and administrative
|
216,303
|
|
|
159,890
|
|
|
155,114
|
|
|||
|
2,916,987
|
|
|
2,521,946
|
|
|
2,467,482
|
|
|||
Operating income
|
425,239
|
|
|
294,111
|
|
|
335,998
|
|
|||
Other income (expense):
|
|
|
|
|
|
||||||
Interest income
|
1,167
|
|
|
244
|
|
|
106
|
|
|||
Interest expense
|
(1,886
|
)
|
|
(1,708
|
)
|
|
(2,136
|
)
|
|||
Other
|
10
|
|
|
30
|
|
|
123
|
|
|||
|
(709
|
)
|
|
(1,434
|
)
|
|
(1,907
|
)
|
|||
Income before income taxes
|
424,530
|
|
|
292,677
|
|
|
334,091
|
|
|||
Income tax expense
|
144,785
|
|
|
103,716
|
|
|
118,090
|
|
|||
Net income
|
$
|
279,745
|
|
|
$
|
188,961
|
|
|
$
|
216,001
|
|
Earnings per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
12.30
|
|
|
$
|
8.37
|
|
|
$
|
9.52
|
|
Diluted
|
$
|
12.30
|
|
|
$
|
8.37
|
|
|
$
|
9.52
|
|
Dividends per share
|
$
|
2.04
|
|
|
$
|
1.90
|
|
|
$
|
1.38
|
|
|
Common Stock
|
|
Paid-In
Capital
|
|
Retained
Earnings
|
|
Total
Stockholders’
Equity
|
|||||||||||
|
Shares
|
|
Amount
|
|
|
|
||||||||||||
|
(In thousands, except shares and per share amounts)
|
|||||||||||||||||
Balance at October 31, 2014
|
23,130,503
|
|
|
$
|
23,130
|
|
|
$
|
150,122
|
|
|
$
|
724,696
|
|
|
$
|
897,948
|
|
Net income for year
|
—
|
|
|
—
|
|
|
—
|
|
|
216,001
|
|
|
216,001
|
|
||||
Cash dividends ($1.38 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(31,092
|
)
|
|
(31,092
|
)
|
||||
Purchase of common stock
|
(700,003
|
)
|
|
(700
|
)
|
|
(40,540
|
)
|
|
(13,952
|
)
|
|
(55,192
|
)
|
||||
Issuance of stock under stock compensation plans
|
90,375
|
|
|
91
|
|
|
(9,974
|
)
|
|
—
|
|
|
(9,883
|
)
|
||||
Amortization of unearned compensation
|
—
|
|
|
—
|
|
|
12,079
|
|
|
—
|
|
|
12,079
|
|
||||
Balance at October 31, 2015
|
22,520,875
|
|
|
22,521
|
|
|
111,687
|
|
|
895,653
|
|
|
1,029,861
|
|
||||
Net income for year
|
—
|
|
|
—
|
|
|
—
|
|
|
188,961
|
|
|
188,961
|
|
||||
Cash dividends ($1.90 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(42,900
|
)
|
|
(42,900
|
)
|
||||
Issuance of stock under stock compensation plans
|
172,350
|
|
|
172
|
|
|
669
|
|
|
—
|
|
|
841
|
|
||||
Amortization of unearned compensation
|
—
|
|
|
—
|
|
|
13,499
|
|
|
—
|
|
|
13,499
|
|
||||
Balance at October 31, 2016
|
22,693,225
|
|
|
22,693
|
|
|
125,855
|
|
|
1,041,714
|
|
|
1,190,262
|
|
||||
Net income for year
|
—
|
|
|
—
|
|
|
—
|
|
|
279,745
|
|
|
279,745
|
|
||||
Cash dividends ($2.04 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(46,399
|
)
|
|
(46,399
|
)
|
||||
Issuance of stock under stock compensation plans
|
109,465
|
|
|
110
|
|
|
(5,733
|
)
|
|
—
|
|
|
(5,623
|
)
|
||||
Amortization of unearned compensation
|
—
|
|
|
—
|
|
|
14,877
|
|
|
—
|
|
|
14,877
|
|
||||
Balance at October 31, 2017
|
22,802,690
|
|
|
$
|
22,803
|
|
|
$
|
134,999
|
|
|
$
|
1,275,060
|
|
|
$
|
1,432,862
|
|
|
Years ended October 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Operating activities
|
|
|
|
|
|
||||||
Net income
|
$
|
279,745
|
|
|
$
|
188,961
|
|
|
$
|
216,001
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
100,337
|
|
|
84,583
|
|
|
74,661
|
|
|||
Amortization of share-based compensation
|
17,376
|
|
|
15,813
|
|
|
16,068
|
|
|||
Provision for losses on accounts receivable
|
610
|
|
|
150
|
|
|
300
|
|
|||
Deferred income taxes
|
16,150
|
|
|
28,223
|
|
|
4,781
|
|
|||
Change in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(15,130
|
)
|
|
(11,574
|
)
|
|
5,071
|
|
|||
Inventories
|
(32,459
|
)
|
|
(21,553
|
)
|
|
(7,930
|
)
|
|||
Income taxes
|
(9,341
|
)
|
|
37,821
|
|
|
(35,273
|
)
|
|||
Prepaid expenses and other assets
|
(4,279
|
)
|
|
(1,263
|
)
|
|
(1,162
|
)
|
|||
Accounts payable
|
12,013
|
|
|
5,109
|
|
|
11,615
|
|
|||
Accrued expenses, claims payable and other liabilities
|
43,931
|
|
|
(29,511
|
)
|
|
16,304
|
|
|||
Total adjustments
|
129,208
|
|
|
107,798
|
|
|
84,435
|
|
|||
Net cash provided by operating activities
|
408,953
|
|
|
296,759
|
|
|
300,436
|
|
|||
Investing activities
|
|
|
|
|
|
||||||
Capital expenditures
|
(166,768
|
)
|
|
(200,882
|
)
|
|
(158,289
|
)
|
|||
Net proceeds from sale of property and equipment
|
853
|
|
|
478
|
|
|
848
|
|
|||
Net cash used in investing activities
|
(165,915
|
)
|
|
(200,404
|
)
|
|
(157,441
|
)
|
|||
Financing activities
|
|
|
|
|
|
||||||
Principal payments on long-term debt
|
—
|
|
|
(10,000
|
)
|
|
(10,000
|
)
|
|||
Payments for debt issuance costs
|
(2,416
|
)
|
|
—
|
|
|
(1,960
|
)
|
|||
Dividends paid
|
(46,399
|
)
|
|
(42,900
|
)
|
|
(31,092
|
)
|
|||
Repurchase of common stock
|
—
|
|
|
—
|
|
|
(55,193
|
)
|
|||
Proceeds from issuance of restricted stock under stock compensation plans
|
983
|
|
|
1,279
|
|
|
1,209
|
|
|||
Payments from issuance of common stock under stock compensation plans
|
(10,032
|
)
|
|
(7,282
|
)
|
|
(14,910
|
)
|
|||
Net cash used in financing activities
|
(57,864
|
)
|
|
(58,903
|
)
|
|
(111,946
|
)
|
|||
Net change in cash and cash equivalents
|
185,174
|
|
|
37,452
|
|
|
31,049
|
|
|||
Cash and cash equivalents at beginning of year
|
234,111
|
|
|
196,659
|
|
|
165,610
|
|
|||
Cash and cash equivalents at end of year
|
$
|
419,285
|
|
|
$
|
234,111
|
|
|
$
|
196,659
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Income taxes paid
|
$
|
139,990
|
|
|
$
|
72,213
|
|
|
$
|
149,770
|
|
Interest paid, net
|
$
|
1,867
|
|
|
$
|
1,709
|
|
|
$
|
2,615
|
|
Product
Category
|
Description
|
|
Fiscal Year 2017
|
|
Fiscal Year 2016
|
|
Fiscal Year 2015
|
||||||
Fresh Ice Packed Chicken
|
Gross Sales
|
|
$
|
585.0
|
|
|
$
|
438.5
|
|
|
$
|
399.1
|
|
Commissions
|
|
(4.3
|
)
|
|
(4.2
|
)
|
|
(4.1
|
)
|
||||
Sales and Customer Allowances
|
|
(15.6
|
)
|
|
(14.1
|
)
|
|
(12.8
|
)
|
||||
Other
(1)
|
|
(18.0
|
)
|
|
(13.5
|
)
|
|
(13.5
|
)
|
||||
Net Sales
|
|
547.1
|
|
|
406.7
|
|
|
368.7
|
|
||||
Chill Pack Chicken
|
Gross Sales
|
|
1,061.1
|
|
|
999.9
|
|
|
1,057.6
|
|
|||
Commissions
|
|
(4.6
|
)
|
|
(4.4
|
)
|
|
(4.6
|
)
|
||||
Sales and Customer Allowances
|
|
(5.6
|
)
|
|
(5.7
|
)
|
|
(6.5
|
)
|
||||
Other
(1)
|
|
(6.2
|
)
|
|
(5.6
|
)
|
|
(5.3
|
)
|
||||
Net Sales
|
|
1,044.7
|
|
|
984.2
|
|
|
1,041.2
|
|
||||
Frozen Chicken
|
Gross Sales
|
|
224.5
|
|
|
144.0
|
|
|
178.3
|
|
|||
Commissions
|
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
||||
Sales and Customer Allowances
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other
(1)
|
|
(0.6
|
)
|
|
(0.5
|
)
|
|
(0.6
|
)
|
||||
Net Sales
|
|
223.9
|
|
|
143.5
|
|
|
177.6
|
|
||||
Fresh Vacuum Sealed Chicken
|
Gross Sales
|
|
1,359.8
|
|
|
1,085.7
|
|
|
1,010.6
|
|
|||
Commissions
|
|
(1.5
|
)
|
|
(1.9
|
)
|
|
(1.7
|
)
|
||||
Sales and Customer Allowances
|
|
(9.9
|
)
|
|
(9.4
|
)
|
|
(9.0
|
)
|
||||
Other
(1)
|
|
(9.3
|
)
|
|
(7.5
|
)
|
|
(7.7
|
)
|
||||
Net Sales
|
|
1,339.1
|
|
|
1,066.9
|
|
|
992.2
|
|
||||
Minimally Prepared Chicken
|
Gross Sales
|
|
172.4
|
|
|
186.0
|
|
|
187.7
|
|
|||
Commissions
|
|
(0.8
|
)
|
|
(0.4
|
)
|
|
(0.5
|
)
|
||||
Sales and Customer Allowances
|
|
(0.4
|
)
|
|
(0.2
|
)
|
|
(0.1
|
)
|
||||
Other
(1)
|
|
(0.4
|
)
|
|
(0.3
|
)
|
|
(0.3
|
)
|
||||
Net Sales
|
|
170.8
|
|
|
185.1
|
|
|
186.8
|
|
||||
Mechanically Deboned Chicken
|
Gross Sales
|
|
16.6
|
|
|
29.7
|
|
|
37.0
|
|
|||
Commissions
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Sales and Customer Allowances
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net Sales
|
|
16.6
|
|
|
29.7
|
|
|
37.0
|
|
||||
Totals
|
Gross Sales
|
|
3,419.4
|
|
|
2,883.8
|
|
|
2,870.3
|
|
|||
Commissions
|
|
(11.2
|
)
|
|
(10.9
|
)
|
|
(11.0
|
)
|
||||
Sales and Customer Allowances
|
|
(31.5
|
)
|
|
(29.4
|
)
|
|
(28.4
|
)
|
||||
Other
(1)
|
|
(34.5
|
)
|
|
(27.4
|
)
|
|
(27.4
|
)
|
||||
Net Sales
|
|
$
|
3,342.2
|
|
|
$
|
2,816.1
|
|
|
$
|
2,803.5
|
|
(1)
|
Other deductions include short weights, miscellaneous deductions, credit memos, rebates and other items.
|
|
October 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Live poultry-broilers and breeders
|
$
|
161,575
|
|
|
$
|
143,554
|
|
Feed, eggs and other
|
35,361
|
|
|
40,834
|
|
||
Processed poultry
|
37,769
|
|
|
15,378
|
|
||
Prepared chicken
|
12,207
|
|
|
13,640
|
|
||
Packaging materials
|
5,853
|
|
|
6,900
|
|
||
|
$
|
252,765
|
|
|
$
|
220,306
|
|
|
October 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Parts and supplies
|
$
|
25,293
|
|
|
$
|
23,022
|
|
Prepaid insurance
|
6,691
|
|
|
6,084
|
|
||
Other prepaid expenses
|
6,636
|
|
|
5,453
|
|
||
|
$
|
38,620
|
|
|
$
|
34,559
|
|
|
October 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Accrued bonuses
|
$
|
36,028
|
|
|
$
|
441
|
|
Workers’ compensation claims
|
8,351
|
|
|
7,971
|
|
||
Accrued wages
|
11,574
|
|
|
8,415
|
|
||
Accrued rebates
|
6,753
|
|
|
6,761
|
|
||
Accrued vacation
|
8,223
|
|
|
6,721
|
|
||
Accrued property taxes
|
9,318
|
|
|
8,710
|
|
||
Accrued payroll taxes
|
11,383
|
|
|
9,209
|
|
||
Other accrued expenses
|
9,538
|
|
|
9,690
|
|
||
|
$
|
101,168
|
|
|
$
|
57,918
|
|
Level
|
Leverage Ratio
|
|
Spread
|
|
Commitment Fee
|
||
1
|
< 25%
|
|
0.25
|
%
|
|
0.20
|
%
|
2
|
≥ 25% and < 35%
|
|
0.50
|
%
|
|
0.25
|
%
|
3
|
≥ 35% and < 45%
|
|
1.00
|
%
|
|
0.30
|
%
|
4
|
≥ 45%
|
|
1.50
|
%
|
|
0.35
|
%
|
|
Years Ended October 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Current expense:
|
|
|
|
|
|
||||||
Federal
|
$
|
117,611
|
|
|
$
|
67,880
|
|
|
$
|
101,605
|
|
State
|
11,024
|
|
|
7,613
|
|
|
11,704
|
|
|||
|
128,635
|
|
|
75,493
|
|
|
113,309
|
|
|||
Deferred expense (benefit):
|
|
|
|
|
|
||||||
Federal
|
15,452
|
|
|
27,983
|
|
|
4,169
|
|
|||
State
|
1,804
|
|
|
1,194
|
|
|
1,043
|
|
|||
Change in valuation allowance
|
(1,106
|
)
|
|
(954
|
)
|
|
(431
|
)
|
|||
|
16,150
|
|
|
28,223
|
|
|
4,781
|
|
|||
|
$
|
144,785
|
|
|
$
|
103,716
|
|
|
$
|
118,090
|
|
|
October 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Deferred tax liabilities:
|
|
|
|
||||
Property, plant and equipment
|
$
|
116,431
|
|
|
$
|
96,027
|
|
Prepaid and other assets
|
2,154
|
|
|
2,243
|
|
||
Total deferred tax liabilities
|
118,585
|
|
|
98,270
|
|
||
Deferred tax assets:
|
|
|
|
||||
Accrued expenses and accounts receivable
|
11,941
|
|
|
10,572
|
|
||
Inventory
|
348
|
|
|
493
|
|
||
Compensation on restricted stock
|
13,606
|
|
|
10,591
|
|
||
State income tax credits
|
14,050
|
|
|
15,229
|
|
||
Other
|
165
|
|
|
166
|
|
||
Valuation allowance
|
(13,423
|
)
|
|
(14,529
|
)
|
||
Total deferred tax assets
|
26,687
|
|
|
22,522
|
|
||
Net deferred tax liabilities
|
$
|
91,898
|
|
|
$
|
75,748
|
|
|
Years Ended October 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In thousands)
|
||||||||||
Income taxes at statutory rate
|
$
|
148,585
|
|
|
$
|
102,437
|
|
|
$
|
116,932
|
|
State income taxes
|
9,038
|
|
|
7,007
|
|
|
8,757
|
|
|||
State income tax credits
|
(606
|
)
|
|
(948
|
)
|
|
(342
|
)
|
|||
Federal income tax credits
|
(390
|
)
|
|
(390
|
)
|
|
(90
|
)
|
|||
Federal manufacturers deduction
|
(11,527
|
)
|
|
(8,425
|
)
|
|
(10,714
|
)
|
|||
Excess tax benefits
|
(3,345
|
)
|
|
—
|
|
|
—
|
|
|||
Nondeductible expenses
|
3,506
|
|
|
2,482
|
|
|
3,234
|
|
|||
Other, net
|
630
|
|
|
2,507
|
|
|
744
|
|
|||
Change in valuation allowance
|
(1,106
|
)
|
|
(954
|
)
|
|
(431
|
)
|
|||
Income tax expense
|
$
|
144,785
|
|
|
$
|
103,716
|
|
|
$
|
118,090
|
|
|
For the years ended
|
||||||||||
|
October 31, 2017
|
|
October 31, 2016
|
|
October 31, 2015
|
||||||
Net income
|
$
|
279,745
|
|
|
$
|
188,961
|
|
|
$
|
216,001
|
|
Distributed and undistributed (earnings) to unvested restricted stock
|
(4,285
|
)
|
|
(2,930
|
)
|
|
(4,172
|
)
|
|||
Distributed and undistributed earnings to common shareholders — Basic
|
275,460
|
|
|
186,031
|
|
|
211,829
|
|
|||
Weighted average shares outstanding — Basic
|
22,393
|
|
|
22,225
|
|
|
22,243
|
|
|||
Weighted average shares outstanding — Diluted
|
22,393
|
|
|
22,225
|
|
|
22,243
|
|
|||
Earnings per common share — Basic
|
$
|
12.30
|
|
|
$
|
8.37
|
|
|
$
|
9.52
|
|
Earnings per common share — Diluted
|
$
|
12.30
|
|
|
$
|
8.37
|
|
|
$
|
9.52
|
|
|
Number of
Shares
|
|
Weighted
Average Grant
Price
|
|||
Outstanding at October 31, 2014
|
566,050
|
|
|
$
|
49.39
|
|
Granted during fiscal 2015
|
77,600
|
|
|
$
|
82.75
|
|
Vested during 2015
|
(327,988
|
)
|
|
$
|
44.98
|
|
Forfeited during 2015
|
(1,362
|
)
|
|
$
|
62.15
|
|
Outstanding at October 31, 2015
|
314,300
|
|
|
$
|
62.16
|
|
Granted during fiscal 2016
|
101,935
|
|
|
$
|
71.58
|
|
Vested during 2016
|
(119,407
|
)
|
|
$
|
54.09
|
|
Forfeited during 2016
|
(3,018
|
)
|
|
$
|
67.82
|
|
Outstanding at October 31, 2016
|
293,810
|
|
|
$
|
68.65
|
|
Granted during fiscal 2017
|
83,587
|
|
|
$
|
91.71
|
|
Vested during 2017
|
(69,294
|
)
|
|
$
|
55.50
|
|
Forfeited during 2017
|
(6,874
|
)
|
|
$
|
78.22
|
|
Outstanding at October 31, 2017
|
301,229
|
|
|
$
|
77.86
|
|
|
Number of shares issued (actual (a) or estimated (e))
|
|
For the years ended
|
|||||||||||
Date of Performance Share Agreement
|
|
October 31, 2017
|
|
October 31, 2016
|
|
October 31, 2015
|
||||||||
November 1, 2012
|
186,951
|
(a)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,891
|
|
November 1, 2013
|
146,169
|
(a)
|
|
—
|
|
|
3,165
|
|
|
6,428
|
|
|||
November 1, 2014
|
102,193
|
(a)
|
|
2,787
|
|
|
5,876
|
|
|
—
|
|
|||
November 1, 2015
|
145,777
|
(e)
|
|
6,752
|
|
|
—
|
|
|
—
|
|
|||
November 1, 2016 (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total compensation cost
|
|
|
$
|
9,539
|
|
|
$
|
9,041
|
|
|
$
|
9,319
|
|
Fiscal Year
|
Amount
|
||
2018
|
$
|
11.7
|
|
2019
|
9.4
|
|
|
2020
|
7.0
|
|
|
2021
|
4.5
|
|
|
2022
|
1.2
|
|
|
|
$
|
33.8
|
|
|
Fiscal Year 2017
|
||||||||||||||
|
First
Quarter (1)
|
|
Second
Quarter (1)
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
(In thousands, except per share data)
|
||||||||||||||
|
|
|
(Unaudited)
|
|
|
||||||||||
Net sales
|
$
|
688,346
|
|
|
$
|
802,038
|
|
|
$
|
931,901
|
|
|
$
|
919,941
|
|
Gross profit
|
81,955
|
|
|
146,755
|
|
|
239,316
|
|
|
173,516
|
|
||||
Net income
|
24,025
|
|
|
67,015
|
|
|
115,834
|
|
|
72,871
|
|
||||
Diluted earnings per share
|
$
|
1.06
|
|
|
$
|
2.95
|
|
|
$
|
5.09
|
|
|
$
|
3.20
|
|
|
Fiscal Year 2016
|
||||||||||||||
|
First
Quarter
|
|
Second
Quarter
|
|
Third
Quarter
|
|
Fourth
Quarter
|
||||||||
|
(In thousands, except per share data)
|
||||||||||||||
|
|
|
(unaudited)
|
|
|
||||||||||
Net sales
|
$
|
605,166
|
|
|
$
|
692,089
|
|
|
$
|
727,991
|
|
|
$
|
790,811
|
|
Gross profit
|
50,105
|
|
|
113,813
|
|
|
129,428
|
|
|
160,655
|
|
||||
Net income
|
10,681
|
|
|
47,602
|
|
|
54,716
|
|
|
75,962
|
|
||||
Diluted earnings per share
|
$
|
0.47
|
|
|
$
|
2.11
|
|
|
$
|
2.42
|
|
|
$
|
3.36
|
|
Classification
|
Balance at
Beginning
of Period
|
|
Charged to
Costs and
Expenses
|
|
Charged to
Other
Accounts
|
|
Deductions
Describe(1)
|
|
Balance at
End of
Period
|
|||||||||
|
(In Thousands)
|
|||||||||||||||||
Year Ended October 31, 2017
|
|
|
|
|
|
|
|
|
|
|||||||||
Deducted from accounts receivable:
|
|
|
|
|
|
|
|
|
|
|||||||||
Allowance for doubtful accounts
|
|
|
|
|
|
|
|
|
|
|||||||||
Totals
|
$
|
2,650
|
|
|
$
|
610
|
|
|
|
—
|
|
$
|
—
|
|
|
$
|
3,260
|
|
Year Ended October 31, 2016
|
|
|
|
|
|
|
|
|
|
|||||||||
Deducted from accounts receivable:
|
|
|
|
|
|
|
|
|
|
|||||||||
Allowance for doubtful accounts
|
|
|
|
|
|
|
|
|
|
|||||||||
Totals
|
$
|
2,500
|
|
|
$
|
178
|
|
|
|
|
$
|
28
|
|
|
$
|
2,650
|
|
|
Year Ended October 31, 2015
|
|
|
|
|
|
|
|
|
|
|||||||||
Deducted from accounts receivable:
|
|
|
|
|
|
|
|
|
|
|||||||||
Allowance for doubtful accounts
|
|
|
|
|
|
|
|
|
|
|||||||||
Totals
|
$
|
2,200
|
|
|
$
|
300
|
|
|
|
|
$
|
—
|
|
|
$
|
2,500
|
|
(1)
|
Uncollectible accounts written off, net of recoveries
|
Item 9.
|
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
/s/ Ernst & Young LLP
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Plan category
|
(a) Number of
securities to be issued
upon exercise of
outstanding options,
warrants and
rights (1)
|
|
(b) Number of
securities remaining
available for future
issuance under equity
compensation plans
(excluding securities
reflected in column
(a)(2)
|
||
Equity compensation plans approved by security holders
|
278,277
|
|
|
649,770
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
—
|
|
Total
|
278,277
|
|
|
649,770
|
|
(1)
|
This column reflects
145,777
performance shares outstanding at
October 31, 2017
, that have been earned and that are subject to an additional one year, service-based vesting period ending on
October 31, 2018
, before they can be issued, and 132,500 unearned performance shares at
October 31, 2017
, at the maximum level. However, management could not determine that achievement of the applicable performance based criteria is probable for those unearned performance shares. This column does not include the 102,193 fiscal 2015 performance shares that were issued on October 31, 2017.
|
(2)
|
This column reflects the 1,234,751 shares of restricted stock granted to participants under the Stock Incentive Plan, the 281,728 shares of restricted stock purchased by or granted to participants under the MSPP provisions of the Stock Incentive Plan, the 823,627 earned performance shares that have been issued or are expected to be issued under the Stock Incentive Plan, and the 132,500 unearned outstanding performance shares that could be earned as described in footnote (1) above, in each case since the inception of the plan and net of forfeitures, but including shares withheld to satisfy tax withholding obligations.
|
Item 13.
|
Certain Relationships and Related Transactions and Director Independence
|
Item 14.
|
Principal Accounting Fees and Services
|
Item 15.
|
Exhibits and Financial Statement Schedules
|
(a)
|
The following documents are filed as a part of this report:
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
Restated Articles of Incorporation of the Registrant. (Incorporated by reference to Exhibit 3.1 filed with the Registrant’s Quarterly Report on Form 10-Q for the Quarter ended on July 31, 2015.)
|
|
|
|
3.2
|
|
By-Laws of the Registrant, amended and restated as of October 24, 2017. (Incorporated by reference to Exhibit 3 filed with the Registrant’s Current Report on Form 8-K on October 24, 2017.)
|
|
|
|
10.1+
|
|
Sanderson Farms, Inc. and Affiliates Employee Stock Ownership Plan, as amended and restated effective November 1, 2013. (Incorporated by reference to Exhibit 10.5 to the Registrant’s Annual Report on Form 10-K for the year ended October 31, 2013.)
|
|
|
|
10.2+
|
|
First Amendment to the Sanderson Farms, Inc. and Affiliates Employee Stock Ownership Plan dated as of July 23, 2014. (Incorporated by reference to Exhibit 10.6 to the Registrant's Annual Report on Form 10-K for the year ended October 31, 2016.)
|
|
|
|
10.3+
|
|
Second Amendment to the Sanderson Farms, Inc. and Affiliates Employee Stock Ownership Plan dated as of May 2, 2016. (Incorporated by reference to Exhibit 10.7 to the Registrant's Annual Report on Form 10-K for the year ended October 31, 2016.)
|
|
|
|
10.4+
|
|
Third Amendment to the Sanderson Farms, Inc. and Affiliates Employee Stock Ownership Plan dated as of October 20, 2016. (Incorporated by reference to Exhibit 10.8 to the Registrant's Annual Report on Form 10-K for the year ended October 31, 2016.)
|
|
|
|
10.5+
|
|
Fourth Amendment to the Sanderson Farms, Inc. and Affiliates Employee Stock Ownership Plan dated as of January 19, 2017. (Incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended January 31, 2017.)
|
|
|
|
10.6+*
|
|
Fifth Amendment to the Sanderson Farms, Inc. and Affiliates Employee Stock Ownership Plan dated as of October 19, 2017.
|
|
|
|
10.7+
|
|
Sanderson Farms, Inc. and Affiliates Stock Incentive Plan, as amended and restated on February 17, 2011. (Incorporated by reference to Appendix A to the Registrant’s definitive proxy statement filed on January 14, 2011, for its annual meeting held February 17, 2011.)
|
Exhibit
Number
|
|
Description
|
|
|
|
10.8+
|
|
Sanderson Farms, Inc. and Affiliates Stock Incentive Plan, as amended and restated on February 11, 2016. (Incorporated by reference to Exhibit 4.3 to the Registrant's registration statement on Form S-8 filed by the Registrant on February 11, 2016, Registration No. 333-209481.)
|
|
|
|
10.9+
|
|
Sanderson Farms, Inc. Bonus Award Program Effective November 1, 2015. (Incorporated by reference to Exhibit 10 filed with the Registrant’s Current Report on Form 8-K on January 25, 2016.)
|
|
|
|
10.10+
|
|
Sanderson Farms, Inc. Bonus Award Program Effective November 1, 2016. (Incorporated by reference to Exhibit 10 filed with the Registrant’s Current Report on Form 8-K on January 24, 2017.)
|
|
|
|
10.11+
|
|
Sanderson Farms, Inc. Supplemental Disability Plan effective September 1, 2008. (Incorporated by reference to Exhibit 10 to the Current Report on Form 8-K filed by the Registrant on October 1, 2008).
|
|
|
|
10.12+
|
|
Form of Share Purchase Agreement between the Registrant and its non-employee directors who participate in its management share purchase plan, as amended. (Incorporated by reference to Exhibit 10.2 filed with the Registrant’s Quarterly Report on Form 10-Q for the quarter ended April 30, 2007.)
|
|
|
|
10.13+
|
|
Form of Share Purchase Agreement between the Registrant and its officers and employees who participate in its management share purchase plan, as amended. (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Quarterly Report on Form 10-Q for the Quarter ended April 30, 2008.)
|
|
|
|
10.14+
|
|
Form of Restricted Stock Agreement between the Registrant and its officers and employees who are granted restricted stock with a four-year vesting period (for awards granted after August 2009 through fiscal 2013). (Incorporated by reference to Exhibit 10.21 to the Registrant’s Annual Report on Form 10-K for the year ended October 31, 2009.)
|
|
|
|
10.15+
|
|
Form of Restricted Stock Agreement between the Registrant and its officers and employees who are granted restricted stock with a four-year vesting period (for awards granted on or after November 1, 2013). (Incorporated by reference to Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K for the year ended October 31, 2013.)
|
|
|
|
10.16+
|
|
Form of Restricted Stock Agreement between the Registrant and its non-employee directors who are granted restricted stock, as amended. (Incorporated by reference to Exhibit 10.4 filed with the Registrant’s Quarterly Report on Form 10-Q for the quarter ended April 30, 2007.)
|
|
|
|
10.17+
|
|
Form of Performance Share Agreement between the Registrant and its employees who are granted performance shares (for fiscal 2015). (Incorporated by reference to Exhibit 10.20 to the Registrant's Annual Report on Form 10-K for the year ended October 31, 2014.)
|
|
|
|
10.18+
|
|
Form of Performance Share Agreement between the Registrant and its employees who are granted performance shares (for fiscal 2016). (Incorporated by reference to Exhibit 10.20 to the Registrant's Annual Report on Form 10-K for the year ended October 31, 2015.)
|
|
|
|
10.19+
|
|
Form of Performance Share Agreement between the Registrant and its employees who are granted performance shares (for fiscal 2017). (Incorporated by reference to Exhibit 10.22 to the Registrant's Annual Report on Form 10-K for the year ended October 31, 2016.)
|
|
|
|
10.20+*
|
|
Form of Performance Share Agreement between the Registrant and its employees who are granted performance shares (for fiscal 2018).
|
|
|
|
10.21+
|
|
Employment Agreement dated as of November 1, 2015 between the Registrant and Joe F. Sanderson, Jr. (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Current Report on Form 8-K/A on January 13, 2016.)
|
|
|
|
10.22+
|
|
Employment Agreement dated as of November 1, 2015 between the Registrant and Lampkin Butts. (Incorporated by reference to Exhibit 10.2 filed with the Registrant’s Current Report on Form 8-K/A on January 13, 2016.)
|
|
|
|
10.23+
|
|
Employment Agreement dated as of November 1, 2015 between the Registrant and D. Michael Cockrell. (Incorporated by reference to Exhibit 10.3 filed with the Registrant’s Current Report on Form 8-K on November 2, 2015.)
|
|
|
|
10.24
|
|
Lease Agreement dated as of December 1, 2004, between Moultrie-Colquitt County Development Authority, as Lessor, and Sanderson Farms, Inc. (Processing Division) as Lessee. (Incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended July 31, 2005.)
|
|
|
|
10.25
|
|
Bond Purchase Loan Agreement between Moultrie-Colquitt County Development Authority, as Issuer, and Sanderson Farms, Inc. (Processing Division), as Purchaser. (Incorporated by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended July 31, 2005.)
|
Exhibit
Number
|
|
Description
|
|
|
|
10.26
|
|
Credit Agreement dated April 28, 2017 among Sanderson Farms, Inc. and BMO Harris Bank N.A. as Agent for the Banks defined therein. (Incorporated by reference to Exhibit 10.1 filed with the Registrant's Current Report on Form 8-K on May 4, 2017.)
|
|
|
|
10.27
|
|
Guaranty Agreement dated April 28, 2017 of Sanderson Farms, Inc. (Foods Division), Sanderson Farms, Inc. (Production Division) and Sanderson Farms, Inc. (Processing Division). (Incorporated by reference to Exhibit 10.2 filed with the Registrant’s Current Report on Form 8-K filed May 4, 2017.)
|
|
|
|
10.28
|
|
First Amendment to the Credit Agreement among Sanderson Farms, Inc. and BMO Harris Bank N.A. as Agent for the Banks defined therein dated as of November 22, 2017. (Incorporated by reference to Exhibit 10.1 filed with the Registrant's Current Report on Form 8-K on November 29, 2017.)
|
|
|
|
10.29
|
|
Note Purchase Agreement dated as of April 28, 2006, between Sanderson Farms, Inc. and Northwest Farm Credit Services, PCA. (Incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed May 3, 2006.)
|
|
|
|
10.30
|
|
Guarantee Agreement dated as of April 28, 2006, of Sanderson Farms, Inc. (Foods Division). (Incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed May 3, 2006.)
|
|
|
|
10.31
|
|
Guarantee Agreement dated as of April 28, 2006, of Sanderson Farms, Inc. (Production Division). (Incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed May 3, 2006.)
|
|
|
|
10.32
|
|
Guarantee Agreement dated as of April 28, 2006, of Sanderson Farms, Inc. (Processing Division). (Incorporated by reference to Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed May 3, 2006.)
|
|
|
|
10.33
|
|
Intercreditor Agreement dated as of April 28, 2006, among The Lincoln National Life Insurance Company, Northwest Farm Credit Services, PCA, Harris N.A., SunTrust Bank, AmSouth Bank, U.S. Bank National Association, Regions Bank, and Trustmark National Bank. (Incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on Form 8-K filed May 3, 2006.)
|
|
|
|
10.34
|
|
Lease Agreement dated as of July 1, 2006, between Adel Industrial Development Authority as Lessor, and Sanderson Farms, Inc. (Production Division) as Lessee. (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Quarterly Report on Form 10-Q for the quarter ended July 31, 2006.)
|
|
|
|
10.35
|
|
Bond Purchase Agreement dated as of July 31, 2006, between Sanderson Farms, Inc. (Production Division) as Purchaser and Adel Industrial Development Authority as Issuer. (Incorporated by reference to Exhibit 10.2 filed with the Registrant’s Quarterly Report on Form 10-Q for the quarter ended July 31, 2006.)
|
|
|
|
21
|
|
List of Subsidiaries of the Registrant. (Incorporated by reference to Exhibit 21 to the Registrant’s Annual Report on Form 10-K for the year ended October 31, 2002.)
|
|
|
|
23*
|
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
|
31.1*
|
|
Certification of Chief Executive Officer.
|
|
|
|
31.2*
|
|
Certification of Chief Financial Officer.
|
|
|
|
32.1**
|
|
Section 1350 Certification.
|
|
|
|
32.2**
|
|
Section 1350 Certification.
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
+
|
Management contract or compensatory plan or arrangement.
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
|
|
|
|
3.2
|
|
|
|
|
|
10.1+
|
|
|
|
|
|
10.2+
|
|
|
|
|
|
10.3+
|
|
|
|
|
|
10.4+
|
|
|
|
|
|
10.5+
|
|
|
|
|
|
10.6+*
|
|
|
|
|
|
10.7+
|
|
|
|
|
|
10.8+
|
|
|
|
|
|
10.9+
|
|
|
|
|
|
10.10+
|
|
|
|
|
|
10.11+
|
|
|
|
|
|
10.12+
|
|
|
|
|
|
10.13+
|
|
|
|
|
|
10.14+
|
|
|
|
|
|
10.15+
|
|
|
|
|
|
10.16+
|
|
|
|
|
|
10.17+
|
|
|
|
|
|
10.18+
|
|
|
|
|
|
10.19+
|
|
|
|
|
|
10.20+*
|
|
|
|
|
|
10.21+
|
|
|
|
|
|
10.22+
|
|
|
|
|
|
10.23+
|
|
|
|
|
|
10.24
|
|
|
|
|
|
10.25
|
|
|
|
|
|
10.26
|
|
|
|
|
|
10.27
|
|
|
|
|
|
10.28
|
|
|
|
|
|
10.29
|
|
|
|
|
|
10.30
|
|
|
|
|
|
10.31
|
|
|
|
|
|
10.32
|
|
|
|
|
|
10.33
|
|
|
|
|
|
10.34
|
|
|
|
|
|
10.35
|
|
|
|
|
|
21
|
|
|
|
|
|
23*
|
|
|
|
|
|
31.1*
|
|
|
|
|
|
31.2*
|
|
|
|
|
|
32.1**
|
|
|
|
|
|
32.2**
|
|
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
+
|
Management contract or compensatory plan or arrangement.
|
SANDERSON FARMS, INC.
|
||
|
|
|
By:
|
|
/s/ Joe F. Sanderson, Jr.
|
|
|
Chairman of the Board and Chief Executive Officer
|
/s/ Joe F. Sanderson, Jr.
|
12/14/2017
|
Joe F. Sanderson, Jr.,
|
|
Chairman of the Board and Chief Executive Officer
|
|
(Principal Executive Officer)
|
|
|
|
/s/ Lampkin Butts
|
12/14/2017
|
Lampkin Butts, Director,
|
|
President and Chief Operating Officer
|
|
|
|
/s/ D. Michael Cockrell
|
12/14/2017
|
D. Michael Cockrell,
|
|
Director, Treasurer and Chief Financial Officer
|
|
|
|
/s/ Tim Rigney
|
12/14/2017
|
Tim Rigney,
|
|
Secretary and Chief Accounting Officer
|
|
(Principal Accounting Officer)
|
|
|
|
/s/ John H. Baker, III
|
12/14/2017
|
John H. Baker, III,
|
|
Director
|
|
|
|
/s/ Fred Banks, Jr.
|
12/14/2017
|
Fred Banks, Jr.,
|
|
Director
|
|
|
|
/s/ John Bierbusse
|
12/14/2017
|
John Bierbusse,
|
|
Director
|
|
|
|
/s/ Ms. Toni Cooley
|
12/14/2017
|
Toni Cooley,
|
|
Director
|
|
|
|
/s/ Beverly Wade Hogan
|
12/14/2017
|
Beverly Wade Hogan,
|
|
Director
|
|
|
|
/s/ Robert C. Khayat
|
12/14/2017
|
Robert C. Khayat,
|
|
Director
|
|
|
|
/s/ Phil K. Livingston
|
12/14/2017
|
Phil K. Livingston,
|
|
Director
|
|
|
|
/s/ Suzanne T. Mestayer
|
12/14/2017
|
Suzanne T. Mestayer,
|
|
Director
|
|
|
|
/s/ Dianne Mooney
|
12/14/2017
|
Dianne Mooney,
|
|
Director
|
|
|
|
/s/ Gail Jones Pittman
|
12/14/2017
|
Gail Jones Pittman,
|
|
Director
|
|
(a)
|
Each Participant may designate a person or persons who shall receive a distribution payable hereunder and has the right to revoke such designation, subject to paragraph (b) below. Any such designation shall be evidenced by a written instrument filed with the Administrative Committee and signed by the Participant; provided, however, that the Administrative Committee may accept designations made electronically through a system approved by the Administrative Committee. Notwithstanding the foregoing, the Beneficiary of a Participant who is married at the date of the Participant’s death shall be the Participant’s spouse, unless the Participant has designated another beneficiary in accordance with paragraph (b) below. If a Participant designates a trust as Beneficiary, the beneficiaries of the trust with respect to the Participant's interest in the Plan shall be treated as designated Beneficiaries for purposes of Article 15 hereof if such beneficiaries are individuals and the requirements of Treasury Regulations Section 1.401(a)(9)-4, Q&A 5 are met. If no Beneficiary designation is on file with the Administrative Committee at the time of the death of an unmarried Participant, or if such designation is not effective for any reason as determined by the Administrative Committee, then payment of the distribution shall be made to the unmarried Participant’s estate.
|
(b)
|
A married Participant may designate as his or her Beneficiary a person who is not his or her spouse if either (1) (A) the spouse consents in writing to such designation, (B) the designation provides that it may not be changed without spousal consent (or the consent of the spouse expressly permits designations by the Participant without further consent by the spouse), and (C) the spouse’s consent acknowledges the effect of such election and is witnessed by a representative of the Plan or a notary public, or (2) it is established to the satisfaction of the Administrative Committee that such consent may not be obtained because the spouse cannot be located or because of such other circumstances as are prescribed by Treasury Regulations. An unmarried Participant may designate any person as his or her Beneficiary, subject to providing such proof as the Administrative Committee may require that the Participant is not married.
|
(c)
|
Notwithstanding anything in this Section to the contrary, if a Participant has designated his or her spouse as a Beneficiary, then a divorce that relates to such spouse shall revoke the Participant’s designation of the spouse as a Beneficiary, unless a qualified domestic relations order, within the meaning of Code Section 414(p), provides otherwise or a subsequent Beneficiary designation is made; the foregoing revocation shall not affect the valid designation of another Beneficiary under this Section, and the Beneficiary designation shall be administered as though the spouse had predeceased the Participant. By way of example, if prior to a divorce a Participant designated his former spouse as his primary Beneficiary and his son as his contingent Beneficiary, then following the divorce the Participant’s former spouse is no longer a Beneficiary and the Participant’s son is the sole remaining Beneficiary. By further example, if prior to a divorce a Participant designated her spouse and her two children (with the valid consent of the spouse) as equal primary Beneficiaries (i.e., each Beneficiary to receive ⅓ of any distributions) and her niece as the contingent Beneficiary, then following the divorce the Participant’s former spouse is no longer a Beneficiary, the Participant’s two children are the only primary Beneficiaries (i.e, each child to receive ½ of any distributions), and the Participant’s niece remains the contingent Beneficiary. Notwithstanding the foregoing, upon the marriage or remarriage of a Participant, the Participant’s surviving spouse becomes the Participant’s sole primary Beneficiary in accordance with paragraph (a) above, subject to a subsequent designation of another Beneficiary in accordance paragraph (b).
|
Age of Participant at the end of the
Plan Year in which an election to receive a distribution is made |
Distribution shall be made in
|
62
|
Four (4) annual installments calculated as one-fourth (¼), one-third (⅓), one-half (½) and one (1) respectively, times the Participant’s Account balances at the end of the Plan Year.
|
63
|
Three (3) annual installments calculated as one-third (⅓), one-half (½) and one (1), respectively, times the Participant’s Account balances at the end of the Plan Year.
|
64
|
Two (2) annual installments, calculated as one-half (½) and one (1), respectively, times the Participant’s Account balances at the end of the Plan Year.
|
65 and older
|
One (1) installment of the entire amount in the Participant’s Account balances at the end of the Plan Year.
|
15.
|
Arbitration.
|
1.
|
I have reviewed this annual report on Form 10-K of Sanderson Farms, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Joe F. Sanderson, Jr.
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Chief Executive Officer
and Chairman of the Board
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(Principal Executive Officer)
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1.
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I have reviewed this annual report on Form 10-K of Sanderson Farms, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ D. Michael Cockrell
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Treasurer and Chief Financial Officer
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/s/ Joe F. Sanderson, Jr.
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Joe F. Sanderson, Jr.
|
Chief Executive Officer and Chairman of the Board
|
(Principal Executive Officer)
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/s/ D. Michael Cockrell
|
D. Michael Cockrell
|
Treasurer and Chief Financial Officer
|