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Pilgrim's Pride Reports Results for Third Quarter of Fiscal 2012

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GREELEY, Colo., Oct. 26, 2012 (GLOBE NEWSWIRE) -- Pilgrim's Pride Corporation (NYSE: PPC) reported its third quarter 2012 results with net sales of $2.1 billion and Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") of $103 million. The Company recognized net income of $42.9 million during the third quarter of 2012, resulting in net income of $0.17 per diluted share. This compares to a net loss of $162.5 million, or an adjusted loss of $0.72 per diluted share in the same quarter of the prior year. Net debt was reduced to $1.1 billion in the period, reflecting a year-to-date reduction in net debt of $317.1 million.

"Our execution of the strategy implemented during the past 18 months has provided for vast improvement in our results, even in an uncertain and volatile environment," explained Bill Lovette, Pilgrim's Chief Executive Officer.

"Notwithstanding a year-over-year increase of $109 million in feed costs, the positive change in our net income for the first three quarters of 2012 is a swing of $672 million compared to 2011, owing to cost and yield improvements, pricing strategy changes, enhanced sales mix and a reduction of $24.6 million in SG&A costs."

"Even with rapidly increasing input costs impacting our live inventories, we demonstrated effective management of working capital that resulted in positive cash flows. This, together with our successful rights offering and focus on managing our core business, delivered a year-to-date reduction in net debt of $317.1 million, and culminated in a solid liquidity position of $671.5 million, with our lowest net debt position in over five years."

Conference Call Information

A conference call to discuss Pilgrim's quarterly results will be held today at 7:00 a.m. Mountain (9 a.m. Eastern). Participants are encouraged to pre-register for the conference call using the link below. Callers who pre-register will be given a unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call start time.

To pre-register, go to:
http://services.choruscall.com/links/ppc121026.html

You may also reach the pre-registration link by logging in through the investor section of our website at www.pilgrims.com and clicking on the link under "Upcoming Events."

For those who would like to join the call but have not pre-registered, access is available by dialing +1 (877) 270-2148 within the US or +1 (412) 902-6510 internationally and requesting the "Pilgrim's Pride Conference." Please note that to submit a question to management during the call, you must be logged in via telephone.

Replays of the conference call will be available on Pilgrim's website approximately two hours after the call concludes and can be accessed through the "Investor" section of www.pilgrims.com. The webcast will be available for replay through January 26, 2013.

About Pilgrim's Pride

Pilgrim's employs approximately 38,000 people and operates chicken processing plants and prepared-foods facilities in 12 states, Puerto Rico and Mexico. The Company's primary distribution is through retailers and foodservice distributors.

Forward-Looking Statements

Statements contained in this press release that state the intentions, plans, hopes, beliefs, anticipations, expectations or predictions of the future of Pilgrim's Pride Corporation and its management are forward-looking statements. It is important to note that the actual results could differ materially from those projected in such forward-looking statements. Factors that could cause actual results to differ materially from those projected in such forward-looking statements include: matters affecting the poultry industry generally; the ability to execute the Company's business plan to achieve desired cost savings and profitability; future pricing for feed ingredients and the Company's products; outbreaks of avian influenza or other diseases, either in Pilgrim's Pride's flocks or elsewhere, affecting its ability to conduct its operations and/or demand for its poultry products; contamination of Pilgrim's Pride's products, which has previously and can in the future lead to product liability claims and product recalls; exposure to risks related to product liability, product recalls, property damage and injuries to persons, for which insurance coverage is expensive, limited and potentially inadequate; management of cash resources; restrictions imposed by, and as a result of, Pilgrim's Pride's leverage; changes in laws or regulations affecting Pilgrim's Pride's operations or the application thereof; new immigration legislation or increased enforcement efforts in connection with existing immigration legislation that cause the costs of doing business to increase, cause Pilgrim's Pride to change the way in which it does business, or otherwise disrupt its operations; competitive factors and pricing pressures or the loss of one or more of Pilgrim's Pride's largest customers; currency exchange rate fluctuations, trade barriers, exchange controls, expropriation and other risks associated with foreign operations; disruptions in international markets and distribution channel, including exports into Russia, the anti-dumping proceeding in Ukraine and the anti-dumping and countervailing duty proceeding in China; and the impact of uncertainties of litigation as well as other risks described under "Risk Factors" in the Company's Annual Report on Form 10-K and subsequent filings with the Securities and Exchange Commission. Pilgrim's Pride Corporation undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

         
PILGRIM'S PRIDE CORPORATION    
Consolidated Statements of Operations    
(Unaudited)    
         
  Thirteen Weeks Ended Thirty-Nine Weeks Ended
  September 23, September 25, September 23, September 25,
  2012 2011 2012 2011
  (In thousands) (In thousands)
         
Net sales  $ 2,068,478  $ 1,891,224  $ 5,931,720  $ 5,706,390
Costs and expenses:        
Cost of sales  1,962,343  1,953,611  5,571,431  5,864,810
Operational restructuring charges  --  --  --  3,305
Gross profit (loss)  106,135  (62,387)  360,289  (161,725)
         
Selling, general and administrative expense  41,782  51,197  131,477  156,073
Administrative restructuring charges, net  2,647  11,472  5,921  12,740
Operating income (loss)  61,706  (125,056)  222,891  (330,538)
         
Interest expense  25,260  27,930  78,430  82,863
Interest income  (256)  (323)  (886)  (1,311)
Foreign currency transaction losses (gains)  (7,701)  13,925  (5,417)  11,235
Miscellaneous, net  413  (3,728)  (272)  (6,236)
         
Income (loss) before income taxes  43,990  (162,860)  151,036  (417,089)
Income tax expense (benefit)  1,049  (60)  (656)  (6,462)
Net income (loss)  42,941  (162,800)  151,692  (410,627)
Less: Net income (loss) attributable to noncontrolling interests  10  (284)  230  790
Net income (loss) attributable to Pilgrim's Pride Corporation  $ 42,931  $ (162,516)  $ 151,462  $ (411,417)
         
Weighted average shares of common stock outstanding:        
Basic  258,726  224,996  247,005  224,996
Diluted  258,837  224,996  247,103  224,996
         
Net income (loss) per share of common stock outstanding:        
Basic  $ 0.17  $ (0.72)  $ 0.61  $ (1.83)
Diluted  $ 0.17  $ (0.72)  $ 0.61  $ (1.83)
         
     
PILGRIM'S PRIDE CORPORATION
Consolidated Balance Sheets
     
  September 23 December 25,
  2012 2011
  (Unaudited)  
  (In thousands)
     
Cash and cash equivalents  $ 55,030  $ 41,609
Restricted cash and cash equivalents  4,526  7,680
Investment in available-for-sale securities  --  157
Trade accounts and other receivables, less allowance for doubtful accounts  367,854  349,222
Account receivable from JBS USA, LLC  8,170  21,198
Inventories  979,243  879,094
Income taxes receivable  64,944  59,067
Prepaid expenses and other current assets  54,884  52,350
Assets held for sale  28,826  53,816
Total current assets  1,563,477  1,464,193
Investment in available-for-sale securities  --  497
Deferred tax assets  71,099  71,099
Other long-lived assets  48,931  57,921
Identified intangible assets, net  39,803  44,083
Property, plant and equipment, net  1,196,964  1,241,752
Total assets  $ 2,920,274  $ 2,879,545
     
Accounts payable  $ 320,004  $ 328,864
Account payable to JBS USA, LLC  6,280  11,653
Accrued expenses and other current liabilities  310,463  281,797
Current deferred tax liabilities  79,319  79,248
Current maturities of long-term debt  15,619  15,611
Total current liabilities  731,685  717,173
Long-term debt, less current maturities  1,151,127  1,408,001
Note payable to JBS USA Holdings, Inc.  --  50,000
Other long-term liabilities  144,746  145,941
Total liabilities  2,027,558  2,321,115
Common stock  2,590  2,143
Additional paid-in capital  1,641,783  1,443,484
Accumulated deficit  (692,483)  (843,945)
Accumulated other comprehensive loss  (62,222)  (46,070)
Total Pilgrim's Pride Corporation stockholders' equity  889,668  555,612
Noncontrolling interest  3,048  2,818
Total stockholders' equity  892,716  558,430
Total liabilities and stockholders' equity  $ 2,920,274  $ 2,879,545
     

 

PILGRIM'S PRIDE CORPORATION
Selected Financial Information
(Unaudited)

NOTE: "EBITDA" is defined as the sum of income (loss) from continuing operations plus interest, taxes, depreciation and amortization. "Adjusted EBITDA" is defined as the sum of EBITDA plus restructuring charges, reorganization items and loss on early extinguishment of debt less net income attributable to noncontrolling interests. EBITDA is presented because it is used by management and we believe it is frequently used by securities analysts, investors and other interested parties, in addition to and not in lieu of results prepared in conformity with accounting principles generally accepted in the US ("GAAP"), to compare the performance of companies. We believe investors would be interested in our Adjusted EBITDA because this is how our management analyzes EBITDA from continuing operations. The Company also believes that Adjusted EBITDA, in combination with the Company's financial results calculated in accordance with GAAP, provides investors with additional perspective regarding the impact of certain significant items on EBITDA and facilitates a more direct comparison of its performance with its competitors. EBITDA and Adjusted EBITDA are not measurements of financial performance under GAAP. They should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net income as indicators of our operating performance or any other measures of performance derived in accordance with GAAP.

  Thirteen Weeks Ended Thirty-Nine Weeks Ended
  September 23, September 25, September 23, September 25,
  2012 2011 2012 2011
  (In thousands) (In thousands)
Net income (loss) from continuing operations  $ 42,941  $ (162,800)  $ 151,692  $ (410,627)
Add:        
Income tax expense (benefit)  1,049  (60)  (656)  (6,462)
Interest expense, net  25,004  27,607  77,544  81,552
Depreciation and amortization  36,431  53,631  108,408  159,425
Minus:        
Amortization of capitalized loan costs  2,469  2,515  7,405  7,008
EBITDA  102,956  (84,137)  329,583  (183,120)
Add:        
Restructuring charges  2,647  11,472  5,921  12,740
Minus:        
Net income (loss) attributable to noncontrolling interest  10  (284)  230  790
Adjusted EBITDA  $ 105,593  $ (72,381)  $ 335,274  $ (171,170)
         
CONTACT: Rosemary Geelan, Investor Relations Pilgrim's Pride Corporation Rosemary.geelan@pilgrims.com (970) 506-8192
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