Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): October 31, 2018
PILGRIM'S PRIDE CORPORATION
(Exact Name of registrant as specified in its charter)
 
Delaware
1-9273
75-1285071
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
 
 
 
1770 Promontory Circle
Greeley, CO
80634-9038
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (970) 506-8000
 
Not Applicable
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 Emerging growth company o
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o






Item 2.02 Results of Operations and Financial Condition.
On October 31, 2018 the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
Exhibit 99.1 Press release dated October 31, 2018.






SIGNATURE  
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 hereunto duly authorized.
 
 
 
PILGRIM’S PRIDE CORPORATION
 
 
 
 
Date:
October 31, 2018
 
/s/ Fabio Sandri
 
 
 
Fabio Sandri
 
 
 
Chief Financial Officer






Exhibit Index
Exhibit 99.1 Press release dated October 31, 2018.


Exhibit


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Pilgrim’s Pride Reports Net Sales of $2.70 Billion, Operating Income of $85 Million and GAAP EPS of $0.12 for the Third Quarter of 2018.

GREELEY, Colo., October 31, 2018 (GLOBE NEWSWIRE) - Pilgrim’s Pride Corporation (NASDAQ: PPC) reports third quarter 2018 financial results.

Third Quarter Highlights
Net Sales of $2.70 billion, -3.2% vs same quarter last year. Net Income of $29.3 million.
Operating Income margins of 4.0% in U.S., -4.0% in Mexico and 5.4% in Europe operations, respectively.
Adjusted EBITDA of $156.0 million (or a 5.8% margin) and Adjusted EPS of $0.21, for one-time tax and currency translation.
Our diverse portfolio of differentiated products and Key Customer strategy have continued to generate a more resilient performance and moderate margin impact compared to peers despite one of the most difficult pricing environment ever in U.S. commodity chicken, a slowdown in Mexico and feed cost pressures in Europe. Non-commodity U.S. chicken, including organic and small-birds, continues to perform relatively better to help mitigate the results of our U.S. business.
Integration of European business is tracking better than expectations and ahead of our $50 million synergy target for the next two years, supporting a margin increase of 130bps over last year while still retaining its consistency and offsetting the volatility of the other businesses.
Very challenging market environment during the quarter in Mexico, but is already starting to recover and we remain focused on operational excellence and offering customized products to satisfy growing demand for chicken. Investments into premium Pilgrim’s brand is gaining pace and producing better than expected results.

Unaudited, In Millions, Except Per Share and Percentages
 
 
Thirteen Weeks Ended
Thirteen Weeks Ended
 
 
Thirty-Nine Weeks Ended
Thirty-Nine Weeks Ended
 
 
 
Sep 30, 2018
 
September 24, 2017
 
Y/Y Change
 
Sep 30, 2018
 
Sep 24, 2017
 
Y/Y Change
Net Sales
$2,697.6
 
$2,793.9
 
-3.4%
 
$8,281.0
 
$8,025.5
 
+3.2%
GAAP EPS
$0.12
 
$0.93
 
-87.1%
 
$1.03
 
$2.25
 
-54.2%
Operating Income
$85.3
 
$372.2
 
-77.1%
 
$472.1
 
$917.3
 
-48.5%
Adjusted EBITDA (1)
$156.0
 
$463.6
 
-66.3%
 
$687.1
 
$1,147.0
 
-40.1%
Adjusted EBITDA Margin (1)
5.8%
 
16.6%
 
-10.8pts
 
8.3%
 
14.3%
 
-6.0pts
(1)
Reconciliations for non-GAAP measures are provided in subsequent sections within this release.

1




“During Q3 conditions in the U.S. markets continued to be mixed, with the commodity segment experiencing counter seasonal and weak pricing whereas the less commodity businesses better balanced. Despite challenging market conditions in commodity chicken, the investments we made over the past few years, the recent acquisitions and our capture of operational improvements, are adding diversification and differentiation to the evolution of our portfolio to deliver more resilient performance regardless of specific market conditions,” stated Bill Lovette, Chief Executive Officer of Pilgrim's.

“In Europe, the integration is tracking better than expectations and we are slightly ahead of our $50 million synergy target for the next two years, supporting a margin increase of 130bps over last year. The results, given the adverse scenario of feed inputs, are a proof of our more stable business model, while our team members improved the operations and contributed to the strong performance by continuing to focus on cost optimization, cost control, excellent customer relationships, synergy capture and a culture of constant innovation while still maintaining a consistent margin performance of the business. As part of the integration activities, our team is driving for an increased focus on utilization of the whole chicken by opening up more opportunities and diversifying into new markets to improve the cutout.”

“Supply in Mexico Q3 grew more than expected as a reaction to strong prices in the first half and also as a result of outstanding growing conditions, impacting market prices. Prices are already recovering and while Mexico can be volatile quarter to quarter, historically our operations have produced very good margin performance on a full-year basis and we expect this trend to continue in the future. Prepared Foods are growing at a double digit rate and are generating strong results under both premium Pilgrim’s and Del Dia to drive the evolution of our Mexican portfolio towards more differentiated, higher-value products, and expanded margins.”

Conference Call Information

A conference call to discuss Pilgrim’s quarterly results will be held tomorrow, November 1, at 7:00 a.m. MT (9 a.m. ET). 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: https://services.choruscall.com/links/ppc181101.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 (844) 883-3889 within the US, or +1 (412) 317-9245 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 February 1, 2019.

About Pilgrim’s Pride

Pilgrim’s employs approximately 51,300 people and operates chicken processing plants and prepared-foods facilities in 14 states, Puerto Rico, Mexico, the U.K., and continental Europe. The Company’s primary distribution is through retailers and foodservice distributors. For more information, please visit www.pilgrims.com.


2



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 considered forward-looking statements. It is important to note that 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 anti-dumping proceedings and countervailing duty proceedings; 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.








Contact:
Dunham Winoto
 
Director, Investor Relations
 
IRPPC@pilgrims.com
 
(970) 506-8192
 
www.pilgrims.com


3




PILGRIM’S PRIDE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
 
 
September 30, 2018
 
December 31, 2017
 
 
(In thousands)
Cash and cash equivalents
 
$
401,306

 
$
581,510

Restricted cash
 
14,534

 
8,021

Trade accounts and other receivables, less allowance for doubtful accounts
 
559,559

 
565,478

Accounts receivable from related parties
 
652

 
2,951

Inventories
 
1,182,962

 
1,255,070

Income taxes receivable
 
4,568

 

Prepaid expenses and other current assets
 
116,536

 
102,550

Assets held for sale
 
2,616

 
708

     Total current assets
 
2,282,733

 
2,516,288

Deferred tax assets
 
3,167

 

Other long-lived assets
 
17,162

 
18,165

Identified intangible assets, net
 
581,119

 
617,163

Goodwill
 
971,611

 
1,001,889

Property, plant and equipment, net
 
2,120,646

 
2,095,147

     Total assets
 
$
5,976,438

 
$
6,248,652

 
 
 
 
 
Accounts payable
 
$
817,927

 
$
733,027

Accounts payable to related parties
 
6,795

 
2,889

Revenue contract liability
 
28,873

 
36,607

Accrued expenses and other current liabilities
 
403,146

 
410,152

Income taxes payable
 
42,369

 
222,073

Current maturities of long-term debt
 
24,026

 
47,775

     Total current liabilities
 
1,323,136

 
1,452,523

Long-term debt, less current maturities
 
2,302,194

 
2,635,617

Noncurrent income taxes payable
 
7,731

 

Deferred tax liabilities
 
205,604

 
208,492

Other long-term liabilities
 
70,230

 
96,359

     Total liabilities
 
3,908,895

 
4,392,991

Common stock
 
2,604

 
2,602

Treasury stock
 
(231,758
)
 
(231,758
)
Additional paid-in capital
 
1,941,766

 
1,932,509

Retained earnings
 
429,212

 
173,943

Accumulated other comprehensive loss
 
(83,548
)
 
(31,140
)
     Total Pilgrim’s Pride Corporation stockholders’ equity
 
2,058,276

 
1,846,156

Noncontrolling interest
 
9,267

 
9,505

     Total stockholders’ equity
 
2,067,543

 
1,855,661

          Total liabilities and stockholders’ equity
 
$
5,976,438

 
$
6,248,652



4




PILGRIM’S PRIDE CORPORATION
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF INCOME
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
 
September 30, 2018
 
September 24, 2017
 
September 30, 2018
 
September 24, 2017
 
 
(In thousands, except per share data)
Net sales
 
$
2,697,604

 
$
2,793,885

 
$
8,280,995

 
$
8,025,511

Cost of sales
 
2,527,863

 
2,315,301

 
7,549,367

 
6,815,701

Gross profit
 
169,741

 
478,584

 
731,628

 
1,209,810

Selling, general and administrative expense
 
84,138

 
102,191

 
257,396

 
284,009

Administrative restructuring charges
 
257

 
4,147

 
2,181

 
8,496

Operating income
 
85,346

 
372,246

 
472,051

 
917,305

Interest expense, net of capitalized interest
 
35,334

 
24,636

 
125,901

 
66,315

Interest income
 
(4,241
)
 
(2,128
)
 
(10,665
)
 
(3,600
)
Foreign currency transaction losses (gains)
 
(6,711
)
 
(888
)
 
(2,802
)
 
(2,500
)
Miscellaneous, net
 
653

 
(1,083
)
 
(1,781
)
 
(5,198
)
Income before income taxes
 
60,311

 
351,709

 
361,398

 
862,288

Income tax expense
 
30,848

 
113,396

 
106,367

 
278,046

Net income
 
29,463

 
238,313

 
255,031

 
584,242

Less: Net income from Granite Holdings Sàrl prior to
acquisition by Pilgrim's Pride Corporation
 

 
6,093

 

 
23,486

Less: Net income (loss) attributable to noncontrolling interests
 
153

 
(460
)
 
(238
)
 
514

Net income attributable to Pilgrim’s Pride Corporation
 
$
29,310

 
$
232,680

 
$
255,269

 
$
560,242

 
 
 
 
 
 
 
 
 
Weighted average shares of common stock outstanding:
 
 
 
 
 
 
 
 
Basic
 
248,981

 
248,753

 
248,933

 
248,732

Effect of dilutive common stock equivalents
 
198

 
235

 
143

 
230

Diluted
 
249,179

 
248,988

 
249,076

 
248,962

 
 
 
 
 
 
 
 
 
Net income attributable to Pilgrim's Pride Corporation per
share of common stock outstanding:
 
 
 
 
 
 
 
 
Basic
 
$
0.12

 
$
0.94

 
$
1.03

 
$
2.25

Diluted
 
$
0.12

 
$
0.93

 
$
1.03

 
$
2.25



5



PILGRIM’S PRIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(Unaudited)
 
 
 
Thirty-Nine Weeks Ended
 
 
September 30, 2018
 
September 24, 2017
 
 
(In thousands)
Cash flows from operating activities:
 
 
 
 
Net income
 
$
255,031

 
$
584,242

Adjustments to reconcile net income to cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
211,450

 
204,625

Noncash loss on early extinguishment of debt
 
6,037

 

Foreign currency transaction loss related to borrowing
arrangements
 
4,221

 
6,830

Amortization of premium related to Senior Notes
 
(501
)
 

Accretion of discount related to Senior Notes
 
567

 

Impairment expense
 
884

 
4,947

Gain on property disposals
 
(452
)
 
(540
)
Gain on equity method investment
 
(48
)
 
(44
)
Share-based compensation
 
9,259

 
2,454

Deferred income tax expense (benefit)
 
(2,147
)
 
25,768

Changes in operating assets and liabilities:
 
 
 
 
Trade accounts and other receivables
 
(3,437
)
 
(146,477
)
Inventories
 
64,787

 
(149,806
)
Prepaid expenses and other current assets
 
(15,428
)
 
(15,377
)
Accounts payable, accrued expenses and other current
liabilities
 
78,107

 
(36,105
)
Income taxes
 
(175,569
)
 
149,063

Long-term pension and other postretirement obligations
 
(9,087
)
 
(9,660
)
Other operating assets and liabilities
 
1,606

 
(1,429
)
Cash provided by operating activities
 
425,280

 
618,491

Cash flows from investing activities:
 
 
 
 
Acquisitions of property, plant and equipment
 
(231,875
)
 
(258,364
)
Business acquisition
 

 
(658,520
)
Proceeds from property disposals
 
2,707

 
2,585

Cash used in investing activities
 
(229,168
)
 
(914,299
)
Cash flows from financing activities:
 
 
 
 
Proceeds from revolving line of credit and long-term borrowings
 
703,090

 
1,013,662

Payments on revolving line of credit, long-term borrowings and capital lease obligations
 
(1,071,441
)
 
(609,678
)
Proceeds from equity contribution under Tax Sharing Agreement between JBS USA Food Company Holdings and Pilgrim's Pride Corporation
 
5,558

 
5,038

Payment of capitalized loan costs
 
(11,081
)
 
(4,550
)
Purchase of common stock under share repurchase program
 

 
(14,641
)
Cash provided by (used in) financing activities
 
(373,874
)
 
389,831

Effect of exchange rate changes on cash and cash equivalents
 
4,071

 
15,084

Increase (decrease) in cash, cash equivalents and restricted cash
 
(173,691
)
 
109,107

Cash, cash equivalents and restricted cash, beginning of period
 
589,531

 
297,523

Cash, cash equivalents and restricted cash, end of period
 
$
415,840

 
$
406,630


6



PILGRIM’S PRIDE CORPORATION
Selected Financial Information
(Unaudited)

“EBITDA” is defined as the sum of net income (loss) plus interest, taxes, depreciation and amortization. “Adjusted EBITDA” is calculated by adding to EBITDA certain items of expense and deducting from EBITDA certain items of income that we believe are not indicative of our ongoing operating performance consisting of: (i) income (loss) attributable to non-controlling interests, (ii) restructuring charges, (iii) reorganization items, (iv) losses on early extinguishment of debt and (v) foreign currency transaction losses (gains). 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. 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.

PILGRIM'S PRIDE CORPORATION
Reconciliation of Adjusted EBITDA
 
 
 
 
 
 
 
 
(Unaudited)
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
September 30, 2018
 
September 24, 2017
 
September 30, 2018
 
September 24, 2017
 
(In thousands)
Net income
$
29,463

 
$
238,313

 
$
255,031

 
$
584,242

Add:
 
 
 
 
 
 
 
Interest expense, net
31,093

 
22,508

 
115,236

 
62,715

Income tax expense
30,848

 
113,396

 
106,367

 
278,046

Depreciation and amortization
71,971

 
71,763

 
211,450

 
204,625

Minus:
 
 
 
 
 
 
 
Amortization of capitalized financing costs
944

 
1,181

 
4,337

 
3,129

EBITDA
162,431

 
444,799

 
683,747

 
1,126,499

Add:
 
 
 
 
 
 
 
Foreign currency transaction gains
(6,711
)
 
(888
)
 
(2,802
)
 
(2,500
)
Acquisition charges
16

 
15,039

 
320

 
15,039

Restructuring charges
257

 
4,147

 
2,181

 
8,496

Nonrecurring expense
164

 

 
3,462

 

Minus:
 
 
 
 
 
 
 
   Net income (loss) attributable to noncontrolling interest
153

 
(460
)
 
(238
)
 
514

Adjusted EBITDA
$
156,004

 
$
463,557

 
$
687,146

 
$
1,147,020



7



EBITDA margins have been calculated by taking the relevant unaudited EBITDA figures, then dividing by Net Revenue for the applicable period.

PILGRIM'S PRIDE CORPORATION
Reconciliation of EBITDA Margin
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
 
September 30, 2018
 
September 24, 2017
 
September 30, 2018
 
September 24, 2017
 
September 30, 2018
 
September 24, 2017
 
September 30, 2018
 
September 24, 2017
 
 
(In thousands)
Net income
 
$
29,463

 
$
238,313

 
$
255,031

 
$
584,242

 
1.09
 %
 
8.53
 %
 
3.08
 %
 
7.28
 %
Add:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense, net
 
31,093

 
22,508

 
115,236

 
62,715

 
1.15
 %
 
0.81
 %
 
1.39
 %
 
0.78
 %
Income tax expense
 
30,848

 
113,396

 
106,367

 
278,046

 
1.14
 %
 
4.06
 %
 
1.28
 %
 
3.46
 %
Depreciation and amortization
 
71,971

 
71,763

 
211,450

 
204,625

 
2.67
 %
 
2.57
 %
 
2.55
 %
 
2.55
 %
Minus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of capitalized financing costs
 
944

 
1,181

 
4,337

 
3,129

 
0.03
 %
 
0.04
 %
 
0.05
 %
 
0.04
 %
EBITDA
 
162,431

 
444,799

 
683,747

 
1,126,499

 
6.02
 %
 
15.92
 %
 
8.25
 %
 
14.03
 %
Add:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency transaction gains
 
(6,711
)
 
(888
)
 
(2,802
)
 
(2,500
)
 
(0.25
)%
 
(0.03
)%
 
(0.03
)%
 
(0.03
)%
Acquisition charges
 
16

 
15,039

 
320

 
15,039

 
 %
 
0.54
 %
 
 %
 
0.19
 %
Restructuring charges
 
257

 
4,147

 
2,181

 
8,496

 
0.01
 %
 
0.15
 %
 
0.03
 %
 
0.11
 %
Nonrecurring expense
 
164

 

 
3,462

 

 
0.01
 %
 
 %
 
0.04
 %
 
 %
Minus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to noncontrolling interest
 
153

 
(460
)
 
(238
)
 
514

 
0.01
 %
 
(0.02
)%
 
 %
 
0.01
 %
Adjusted EBITDA
 
$
156,004

 
$
463,557

 
$
687,146

 
$
1,147,020

 
5.78
 %
 
16.59
 %
 
8.30
 %
 
14.28
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
2,697,604

 
$
2,793,885

 
$
8,280,995

 
$
8,025,511

 
$
2,697,604

 
$
2,793,885

 
$
8,280,995

 
$
8,025,511



8



A reconciliation of net income (loss) attributable to Pilgrim's Pride Corporation per common diluted share to adjusted net income (loss) attributable to Pilgrim's Pride Corporation per common diluted share is as follows:
PILGRIM'S PRIDE CORPORATION
Reconciliation of Adjusted Net Income
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
 
September 30,
2018
 
September 24,
2017
 
September 30,
2018
 
September 24,
2017
 
 
(In thousands, except per share data)
Net income attributable to Pilgrim's Pride Corporation
 
$
29,310

 
$
232,680

 
$
255,269

 
$
560,242

Adjustments, net of tax:
 
 
 
 
 
 
 
 
     Loss on early extinguishment of debt
 
929

 
113

 
13,050

 
113

     Acquisition and restructuring charges

213

 
11,336

 
1,948

 
14,282

     Foreign currency transaction gains
 
(5,226
)
 
(602
)
 
(2,182
)
 
(1,693
)
 
 
$
25,226

 
$
243,527

 
$
268,085

 
$
572,944

U.S. Tax Cuts & Jobs Act transition tax
 
26,400

 

 
26,400

 

Adjusted net income
 
$
51,626

 
$
243,527

 
$
294,485

 
$
572,944

Weighted average diluted shares of common stock outstanding
 
249,179

 
248,988

 
249,076

 
248,962

Adjusted net income per common diluted share
 
$
0.21

 
$
0.98

 
$
1.18

 
$
2.30



9



A reconciliation of GAAP earnings per share (EPS) to adjusted earnings per share (EPS) is as follows:

PILGRIM'S PRIDE CORPORATION
Reconciliation of GAAP EPS to Adjusted EPS
(Unaudited)
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
September 30, 2018
 
September 24, 2017
 
September 30, 2018
 
September 24, 2017
 
(In thousands, except per share data)
GAAP EPS
$
0.12

 
$
0.93

 
$
1.02

 
$
2.25

Adjustments, net of tax:
 
 
 
 
 
 
 
     Loss on early extinguishment of debt

 

 
0.05

 

     Acquisition and restructuring charges

 
0.05

 
0.01

 
0.06

     Foreign currency transaction gains
(0.02
)
 

 
(0.01
)
 
(0.01
)
 
$
0.10

 
$
0.98

 
$
1.07

 
$
2.30

U.S. Tax Cuts & Jobs Act transition tax
0.11

 

 
0.11

 

Adjusted EPS
$
0.21

 
$
0.98

 
$
1.18

 
$
2.30

 
 
 
 
 
 
 
 
Weighted average diluted shares of common stock outstanding
249,179

 
248,988

 
249,076

 
248,962



10



PILGRIM'S PRIDE CORPORATION
Supplementary Selected Segment and Geographic Data
 
 
 
 
 
 
 
 
 
(Unaudited)
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
 
September 30, 2018
 
September 24, 2017
 
September 30, 2018
 
September 24, 2017
 
 
(In thousands)
Sources of net sales by country of origin:
 
 
 
 
 
 
 
 
US
 
$
1,864,169

 
$
1,938,542

 
$
5,604,709

 
$
5,557,089

Europe
 
526,722

 
514,325

 
1,634,125

 
1,473,854

Mexico
 
306,713

 
341,018

 
1,042,161

 
994,568

Total net sales
 
$
2,697,604

 
$
2,793,885

 
$
8,280,995

 
$
8,025,511

 
 
 
 
 
 
 
 
 
Sources of cost of sales by country of origin:
 
 
 
 
 
 
 
 
US
 
$
1,732,803

 
$
1,561,333

 
$
5,137,049

 
$
4,656,825

Europe
 
485,435

 
467,374

 
1,500,994

 
1,336,123

Mexico
 
309,650

 
286,617

 
911,358

 
822,822

Elimination
 
(25
)
 
(23
)
 
(34
)
 
(69
)
Total cost of sales
 
$
2,527,863

 
$
2,315,301

 
$
7,549,367

 
$
6,815,701

 
 
 
 
 
 
 
 
 
Sources of gross profit by country of origin:
 
 
 
 
 
 
 
 
US
 
$
131,366

 
$
377,209

 
$
467,660

 
$
900,262

Europe
 
41,288

 
46,951

 
133,131

 
137,734

Mexico
 
(2,938
)
 
54,401

 
130,803

 
171,745

Elimination
 
25

 
23

 
34

 
69

Total gross profit
 
$
169,741

 
$
478,584

 
$
731,628

 
$
1,209,810

 
 
 
 
 
 
 
 
 
Sources of operating income by country of origin:
 
 
 
 
 
 
 
 
US
 
$
74,206

 
$
307,962

 
$
300,960

 
$
719,121

Europe
 
23,470

 
18,569

 
68,545

 
51,874

Mexico
 
(12,355
)
 
45,692

 
102,512

 
146,241

Elimination
 
25

 
23

 
34

 
69

Total operating income
 
$
85,346

 
$
372,246

 
$
472,051

 
$
917,305




11