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): February 13, 2019
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 12b2 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 February 13, 2019, Pilgrim’s Pride Corporation (the “Company”) issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
Exhibit 99.1 Press release dated February 13, 2019






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:
February 13, 2019
 
/s/ Fabio Sandri
 
 
 
Fabio Sandri
 
 
 
Chief Financial Officer



Exhibit


http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12705411&doc=4

http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=12705411&doc=3

Pilgrim’s Pride Ends Fiscal Year 2018 with Net Sales of $10.94 Billion, Operating Income of $496 Million and GAAP EPS of $1.00

GREELEY, Colo., February 13, 2019 (GLOBE NEWSWIRE) - Pilgrim’s Pride Corporation (NASDAQ: PPC) reports fourth quarter and year-end 2018 financial results.

2018 Highlights
Adjusted Operating Income margins of 4.2% in U.S., 8.8% in Mexico and 4.3% in Europe operations, respectively.
Adjusted EBITDA of $798 million, or a 7.3% margin.
Portfolio strategy and geographic diversification reducing the impact of challenging market conditions, specifically in U.S. commodity chicken. We remain motivated to pursue additional growth potential and product differentiation in 2019, aligning our strategic priorities to continue providing stronger platforms for the future.
Prepared Foods grew 15% in the U.S. and 33% in Mexico, and is increasing its momentum, realizing the results of investments made over the past few years to further widen our product and brand portfolio, strengthen key customer relationships, and improve margin consistency.
Moy Park integration is better than expected; operations and profitability improving with synergies captured despite headwinds from feed costs caused by regional drought.
Fourth Quarter Results
Net Sales of $2.66 billion, -3.1% versus same quarter last year.
Adjusted Net Income of $21 million and adjusted EPS of $0.09.
Adjusted Operating Income margins of 0.3% in U.S., 5.3% in Mexico and 3.8% in Europe operations, respectively, adjusted for non-recurring items related to weather events, Moy Park acquisition and Exchange Rate.
Adjusted EBITDA of $111 million, or a 4.2% margin.



1



Unaudited (2), In Millions, Except Per Share and Percentages
 
 
Thirteen Weeks Ended
Fourteen Weeks Ended
 
 
Fifty-Two Weeks Ended
Fifty-Three Weeks Ended
 
 
 
Dec 30, 2018
 
Dec 31, 2017
 
Y/Y Change
 
Dec 30, 2018
 
Dec 31, 2017
 
Y/Y Change
Net Sales
$2,656.8
 
$2,742.4
 
-3.1%
 
$10,937.8
 
$10,767.9
 
+1.6%
GAAP EPS
$(0.03)
 
$0.54
 
-105.6%
 
$1.00
 
$2.79
 
-64.2%
Operating Income
$23.6
 
$155.0
 
-84.8%
 
$495.7
 
$1,072.3
 
-53.8%
Adjusted EBITDA (1)
$111.0
 
$241.0
 
-53.9%
 
$798.2
 
$1,388.0
 
-42.5%
Adjusted EBITDA Margin (1)
4.2%
 
8.8%
 
-4.6pts
 
7.3%
 
12.9%
 
-5.6pts
(1)
Reconciliations for non-GAAP measures are provided in subsequent sections within this release.
(2)
Figures have been adjusted to include full-quarter and year of Moy Park, in accordance to U.S. GAAP.

“In the U.S. we endured a very challenging environment in commodity chicken, slower than expected recovery from weather disruptions at some complexes, partially offset by an improvement in operating results from Prepared Foods. In Europe we improved the performance through expected synergies but were impacted by higher feed inputs as a result of a drought that will be passed to our prices in coming quarters. Our Mexican operations produced a very strong first half, a weaker than seasonal Q3, followed by a rebound in Q4. The diversity of our portfolio of bird sizes, geographical market exposure, our culture and our people, are what fundamentally differentiate us from the competition, giving us the potential to reduce volatility and generate higher margins over time, and the results for 2018 represented the power of that strategy. As we begin 2019, conditions in the U.S. commodity markets including exports are already recovering, supporting OECD-FAO data that over the longer term chicken as a protein will continue to outperform in terms of growth potential globally,” stated Bill Lovette, Chief Executive Officer of Pilgrim's.

“Results from Prepared Foods are accelerating in momentum with a strong 15% increase in volume in the U.S. and 33% increase in Mexico, reflecting the investments we made over the past few years to grow capacities and capabilities to meet customer expectations. The build out for innovation and marketing to drive future strong growth continues. We believe the prospects for more growth remain and the improvement in performance is sustainable. To further support the growth initiatives, we are also transitioning to a more innovative package design.”

“We are continuing to improve the performance of our European (Moy Park) operations. Margins have increased since the acquisition just a year and a half ago, and are moving in a positive trajectory. The integration is better than expected and we have extracted both operating and product synergies with our other geographical facilities. The cost of feed inputs have increased due to the drought in Europe and some of this impact will only be mitigated in coming quarters. However, we have plans in place which, combined with the success in improving the profitability of our prior acquisitions, have reaffirmed our belief we have the methodology and the experienced personnel required to continue growing the operating and financial performance of the U.K. and continental Europe business.”

Conference Call Information

A conference call to discuss Pilgrim’s quarterly results will be held tomorrow, February 14, 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/ppc190214.html


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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 May 14, 2019.

About Pilgrim’s Pride

Pilgrim’s employs approximately 52,100 people and operates chicken processing plants and prepared-foods facilities in 14 states, Puerto Rico, Mexico, the U.K, Ireland and continental Europe. The Company’s primary distribution is through retailers and foodservice distributors. For more information, please visit www.pilgrims.com.

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.








3




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


4





5



PILGRIM’S PRIDE CORPORATION
CONSOLIDATED BALANCE SHEETS
 
 
 
December 30, 2018
 
December 31, 2017
 
 
 
 
 
 
 
(In thousands, except share and par value data)
Cash and cash equivalents
 
$
338,386

 
$
581,510

Restricted cash and cash equivalents
 
23,192

 
8,021

Trade accounts and other receivables, less allowance for doubtful accounts
 
561,549

 
565,478

Accounts receivable from related parties
 
1,331

 
2,951

Inventories
 
1,159,519

 
1,255,070

Income taxes receivable
 
38,479

 

Prepaid expenses and other current assets
 
112,023

 
102,550

Assets held for sale
 
178

 
708

Total current assets
 
2,234,657

 
2,516,288

Noncurrent income taxes receivable
 

 

Deferred tax assets
 
4,248

 

Other long-lived assets
 
16,717

 
18,165

Identified intangible assets, net
 
564,128

 
617,163

Goodwill
 
949,750

 
1,001,889

Property, plant and equipment, net
 
2,161,702

 
2,095,147

Total assets
 
$
5,931,202

 
$
6,248,652

 
 
 
 
 
Accounts payable
 
$
830,059

 
$
733,027

Accounts payable to related parties
 
7,269

 
2,889

Revenue contract liability
 
33,328

 
36,607

Accrued expenses and other current liabilities
 
386,941

 
410,152

Income taxes payable
 
8,221

 
222,073

Current maturities of long-term debt
 
30,405

 
47,775

Total current liabilities
 
1,296,223

 
1,452,523

Long-term debt, less current maturities
 
2,295,190

 
2,635,617

Noncurrent income taxes payable
 
7,731

 

Deferred tax liabilities
 
237,422

 
208,492

Other long-term liabilities
 
75,051

 
96,359

Total liabilities
 
3,911,617

 
4,392,991

Commitments and contingencies
 

 

Preferred stock, $.01 par value, 50,000,000 shares authorized; no shares issued
 

 

Common stock, $.01 par value, 800,000,000 shares authorized; 260,396,032 and
260,167,881 shares issued at year-end 2018 and year-end 2017, respectively;
248,965,081 and 248,752,508 shares outstanding at year-end 2018 and year-end
2017, respectively
 
2,604

 
2,602

Treasury stock, at cost, 11,430,951 shares and 11,415,373 shares at year-end 2018 and year-end 2017, respectively
 
(231,994
)
 
(231,758
)
Additional paid-in capital
 
1,945,136

 
1,932,509

Retained earnings
 
421,888

 
173,943

Accumulated other comprehensive loss
 
(127,834
)
 
(31,140
)
Total Pilgrim’s Pride Corporation stockholders’ equity
 
2,009,800

 
1,846,156

Noncontrolling interest
 
9,785

 
9,505

Total stockholders’ equity
 
2,019,585

 
1,855,661

Total liabilities and stockholders' equity
 
$
5,931,202

 
$
6,248,652


6




PILGRIM’S PRIDE CORPORATION
CONSOLIDATED AND COMBINED STATEMENTS OF INCOME
(Unaudited)
 
 
 
Thirteen Weeks Ended
 
Fourteen Weeks Ended
 
Fifty-Two Weeks Ended
 
Fifty-Three Weeks Ended
 
 
December 30, 2018
 
December 31, 2017
 
December 30, 2018
 
December 31, 2017
 
 
(In thousands, except per share data)
Net sales
 
$
2,656,789

 
$
2,742,352

 
$
10,937,784

 
$
10,767,863

Cost of sales
 
2,544,941

 
2,480,548

 
10,094,308

 
9,296,249

Gross profit
 
111,848

 
261,804

 
843,476

 
1,471,614

Selling, general and administrative expense
 
85,629

 
105,508

 
343,025

 
389,517

Administrative restructuring charges
 
2,584

 
1,279

 
4,765

 
9,775

Operating income
 
23,635

 
155,017

 
495,686

 
1,072,322

Interest expense, net of capitalized interest
 
36,911

 
40,868

 
162,812

 
107,183

Interest income
 
(3,146
)
 
(4,130
)
 
(13,811
)
 
(7,730
)
Foreign currency transaction losses (gains)
 
19,962

 
(159
)
 
17,160

 
(2,659
)
Miscellaneous, net
 
(921
)
 
(1,340
)
 
(2,702
)
 
(6,538
)
Income before income taxes
 
(29,171
)
 
119,778

 
332,227

 
982,066

Income tax expense
 
(20,944
)
 
(14,147
)
 
85,423

 
263,899

Net income
 
(8,227
)
 
133,925

 
246,804

 
718,167

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

 

 

 
23,486

Less: Net income (loss) attributable to noncontrolling interests
 
(903
)
 
(412
)
 
(1,141
)
 
102

Net income (loss) attributable to Pilgrim’s Pride Corporation
 
$
(7,324
)
 
$
134,337

 
$
247,945

 
$
694,579

 
 
 
 
 
 
 
 
 
Weighted average shares of common stock outstanding:
 
 
 
 
 
 
 
 
Basic
 
248,980

 
248,753

 
248,945

 
248,738

Effect of dilutive common stock equivalents
 
386

 
241

 
204

 
233

Diluted
 
249,366

 
248,994

 
249,149

 
248,971

 
 
 
 
 
 
 
 
 
Net income attributable to Pilgrim's Pride Corporation per share of
common stock outstanding:
 
 
 
 
 
 
 
 
Basic
 
$
(0.03
)
 
$
0.54

 
$
1.00

 
$
2.79

Diluted
 
$
(0.03
)
 
$
0.54

 
$
1.00

 
$
2.79



7



PILGRIM’S PRIDE CORPORATION
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
 
 
 
 
Fifty-Two Weeks Ended
 
Fifty-Three Weeks Ended
 
 
December 30, 2018
 
December 31, 2017
 
 
(In thousands)
Cash flows from operating activities:
 
 
 
 
Net income
 
$
246,804

 
$
718,167

Adjustments to reconcile net income to cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
279,657

 
277,792

Asset impairment
 
3,504

 
5,156

Foreign currency transaction losses (gains) related to borrowing arrangements
 
5,267

 
(1,387
)
Loss on early extinguishment of debt recognized as a component of interest expense
 
15,818

 

Amortization of bond premium
 
(668
)
 
(180
)
Accretion of bond discount
 
812

 

Gain on property disposals
 
(1,889
)
 
(506
)
Gain on equity method investments
 
(63
)
 
(59
)
Share-based compensation
 
13,153

 
3,020

Deferred income tax expense (benefit)
 
32,540

 
(49,963
)
Changes in operating assets and liabilities:
 
 
 
 
Trade accounts and other receivables
 
(10,918
)
 
(82,169
)
Inventories
 
83,174

 
(207,399
)
Prepaid expenses and other current assets
 
(11,612
)
 
(14,827
)
Accounts payable and accrued expenses
 
86,834

 
(22,827
)
Income taxes
 
(248,470
)
 
188,120

Long-term pension and other postretirement obligations
 
(6,751
)
 
(10,864
)
Other
 
4,458

 
(753
)
Cash provided by operating activities
 
491,650

 
801,321

Cash flows from investing activities:
 
 
 
 
Acquisitions of property, plant and equipment
 
(348,666
)
 
(339,872
)
Purchase of acquired business, net of cash acquired
 

 
(658,520
)
Proceeds from property disposals
 
9,775

 
4,475

Proceeds from settlement of life insurance contract
 

 
1,845

Cash used in investing activities
 
(338,891
)
 
(992,072
)
Cash flows from financing activities:
 
 
 
 
Payment of note payable to affiliate
 

 
(753,512
)
Proceeds from revolving line of credit and long-term borrowings
 
748,382

 
1,871,818

Payments on revolving line of credit, long-term borrowings and capital lease obligations
 
(1,117,009
)
 
(628,677
)
Proceeds from equity contribution under Tax Sharing Agreement between
JBS USA Food Company Holdings and Pilgrim's Pride Corporation
 
5,558

 
5,038

Payment on early extinguishment of debt
 
(9,781
)
 

Capital contributions to subsidiary by noncontrolling stockholders
 
1,421

 

Payment of capitalized loan costs
 
(12,581
)
 
(13,631
)
Purchase of common stock under share repurchase program
 
(236
)
 
(14,641
)
Cash provided by (used in) financing activities
 
(384,246
)
 
466,395

Effect of exchange rate changes on cash and cash equivalents
 
3,534

 
16,364

Increase in cash and cash equivalents
 
(227,953
)
 
292,008

Cash and cash equivalents, beginning of period
 
589,531

 
297,523

Cash and cash equivalents, end of period
 
$
361,578

 
$
589,531

Supplemental Disclosure Information:
 
 
 
 
Interest paid (net of amount capitalized)
 
$
154,627

 
$
81,260

Income taxes paid
 
253,932

 
122,956


8



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
 
Fourteen Weeks Ended
 
Fifty-Two Weeks Ended
 
Fifty-Three Weeks Ended
 
 
December 30, 2018
 
December 31, 2017
 
December 30, 2018
 
December 31, 2017
 
 
(In thousands)
Net income
 
$
(8,227
)
 
$
133,925

 
$
246,804

 
$
718,167

Add:
 
 
 
 
 
 
 
 
Interest expense, net
 
33,765

 
36,738

 
149,001

 
99,453

Income tax expense (benefit)
 
(20,944
)
 
(14,147
)
 
85,423

 
263,899

Depreciation and amortization
 
68,207

 
73,167

 
279,657

 
277,792

Minus:
 
 
 
 
 
 
 
 
Amortization of capitalized financing costs
 
1,232

 
2,839

 
5,569

 
5,968

EBITDA
 
71,569

 
226,844

 
755,316

 
1,353,343

Add:
 
 
 
 
 
 
 
 
Foreign currency transaction losses (gains)
 
19,962

 
(159
)
 
17,160

 
(2,659
)
Acquisition charges
 

 
4,567

 
320

 
19,606

Restructuring charges
 
2,584

 
1,279

 
4,765

 
9,775

Other non-recurring losses and expenses
 
16,023

 
8,066

 
19,485

 
8,066

Minus:
 
 
 
 
 
 
 
 
Net income (loss) attributable to noncontrolling interest
 
(903
)
 
(412
)
 
(1,141
)
 
102

Adjusted EBITDA
 
$
111,041

 
$
241,009

 
$
798,187

 
$
1,388,029



9



The summary unaudited consolidated income statement data for the twelve months ended December 30, 2018 (the LTM Period) have been calculated by summing each of the unaudited thirteen week periods within the audited fifty-two week period ended December 30, 2018.

PILGRIM'S PRIDE CORPORATION
Reconciliation of LTM Adjusted EBITDA
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
 
Thirteen Weeks Ended
 
Thirteen Weeks Ended
 
Thirteen Weeks Ended
 
Thirteen Weeks Ended
 
LTM Ended
 
 
April 1,
2018
 
July 1,
2018
 
September 30,
2018
 
December 30, 2018
 
December 30, 2018
 
(In thousands)
Net income
 
$
119,224

 
$
106,344

 
$
29,463

 
$
(8,227
)
 
$
246,804

Add:
 
 
 
 
 
 
 
 
 
 
Interest expense, net
 
48,710

 
35,433

 
31,093

 
33,765

 
149,001

Income tax expense (benefit)
 
36,997

 
38,522

 
30,848

 
(20,944
)
 
85,423

Depreciation and amortization
 
69,201

 
70,278

 
71,971

 
68,207

 
279,657

Minus:
 
 
 
 
 
 
 
 
 
 
Amortization of capitalized financing costs
 
940

 
2,453

 
944

 
1,232

 
5,569

EBITDA
 
273,192

 
248,124

 
162,431

 
71,569

 
755,316

Add:
 
 
 
 
 
 
 
 
 
 
Foreign currency transaction losses (gains)
 
(1,721
)
 
5,630

 
(6,711
)
 
19,962

 
17,160

Acquisition charges
 
179

 
125

 
16

 

 
320

Restructuring charges
 
789

 
1,135

 
257

 
2,584

 
4,765

Other non-recurring losses and expenses
 

 
3,298

 
164

 
16,023

 
19,485

Minus:
 
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to noncontrolling interest
 
(194
)
 
(197
)
 
153

 
(903
)
 
(1,141
)
Adjusted EBITDA
 
$
272,633

 
$
258,509

 
$
156,004

 
$
111,041

 
$
798,187



10



PILGRIM'S PRIDE CORPORATION
Reconciliation of EBITDA Margin
 
(Unaudited)
 
Thirteen Weeks Ended
 
Fourteen Weeks Ended
 
Fifty-Two Weeks Ended
 
Fifty-Three Weeks Ended
 
Thirteen Weeks Ended
 
Fourteen Weeks Ended
 
Fifty-Two Weeks Ended
 
Fifty-Three Weeks Ended
 
 
December 30, 2018
 
December 31, 2017
 
December 30, 2018
 
December 31, 2017
 
December 30, 2018
 
December 31, 2017
 
December 30, 2018
 
December 31, 2017
 
(In thousands)
Net income
 
$
(8,227
)
 
$
133,925

 
$
246,804

 
$
718,167

 
(0.31
)%
 
4.88
 %
 
2.26
 %
 
6.67
 %
Add:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense, net
 
33,765

 
36,738

 
149,001

 
99,453

 
1.27
 %
 
1.34
 %
 
1.36
 %
 
0.92
 %
Income tax expense (benefit)
 
(20,944
)
 
(14,147
)
 
85,423

 
263,899

 
(0.79
)%
 
(0.52
)%
 
0.78
 %
 
2.45
 %
Depreciation and amortization
 
68,207

 
73,167

 
279,657

 
277,792

 
2.57
 %
 
2.67
 %
 
2.56
 %
 
2.58
 %
Minus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of capitalized financing costs
 
1,232

 
2,839

 
5,569

 
5,968

 
0.05
 %
 
0.10
 %
 
0.05
 %
 
0.06
 %
EBITDA
 
71,569

 
226,844

 
755,316

 
1,353,343

 
2.69
 %
 
8.27
 %
 
6.91
 %
 
12.57
 %
Add:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency transaction losses (gains)
 
19,962

 
(159
)
 
17,160

 
(2,659
)
 
0.75
 %
 
(0.01
)%
 
0.16
 %
 
(0.02
)%
Acquisition charges
 

 
4,567

 
320

 
19,606

 
 %
 
0.17
 %
 
 %
 
0.18
 %
Restructuring charges
 
2,584

 
1,279

 
4,765

 
9,775

 
0.10
 %
 
0.05
 %
 
0.04
 %
 
0.09
 %
Other non-recurring losses and expenses
 
16,023

 
8,066

 
19,485

 
8,066

 
0.60
 %
 
0.29
 %
 
0.18
 %
 
0.07
 %
Minus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to noncontrolling interest
 
(903
)
 
(412
)
 
(1,141
)
 
102

 
(0.03
)%
 
(0.02
)%
 
(0.01
)%
 
 %
Adjusted EBITDA
 
$
111,041

 
$
241,009

 
$
798,187

 
$
1,388,029

 
4.18
 %
 
8.79
 %
 
7.30
 %
 
12.89
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Revenue:
 
$
2,656,789

 
$
2,742,352

 
$
10,937,784

 
$
10,767,863

 
$
2,656,789

 
$
2,742,352

 
$
10,937,784

 
$
10,767,863



11



A reconciliation of GAAP operating income to adjusted operating income is as follows:
PILGRIM'S PRIDE CORPORATION
Reconciliation of Adjusted Operating Income
(Unaudited)
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Fourteen Weeks Ended
 
Fifty-Two Weeks Ended
 
Fifty-Three Weeks Ended
 
December 30, 2018
 
December 31, 2017
 
December 30, 2018
 
December 31, 2017
 
(In thousands)
GAAP operating income (U.S. operations)
$
(9,579
)
 
$
122,370

 
$
291,381

 
$
841,491

Administrative restructuring charges
(41
)
 
529

 
2,140

 
9,025

Acquisition charges

 
4,567

 
320

 
19,606

Other non-recurring losses and expenses
14,867

 
8,066

 
14,867

 
8,066

Adjusted operating income (U.S. operations)
$
5,247

 
$
135,532

 
$
308,708

 
$
878,188

 
 
 
 
 
 
 
 
Adjusted operating income margin (U.S. operations)
0.29
%
 
7.19
%
 
4.16
%
 
11.80
%
 
 
 
 
 
 
 
 
GAAP operating income (Mexico operations)
$
17,137

 
$
7,390

 
$
119,649

 
$
153,631

Foreign exchange

 
6,100

 

 
(13,000
)
Adjusted operating income (Mexico operations)
$
17,137

 
$
13,490

 
$
119,649

 
$
140,631

 
 
 
 
 
 
 
 
Adjusted operating income margin (Mexico operations)
5.33
%
 
4.04
%
 
8.78
%
 
10.59
%
 
 
 
 
 
 
 
 
GAAP operating income (Europe operations)
$
15,979

 
$
25,231

 
$
84,524

 
$
77,105

Administrative restructuring charges
2,625

 
750

 
2,625

 
750

Other non-recurring losses and expenses
1,156

 

 
4,618

 

Adjusted operating income (Europe operations)
$
19,760

 
$
25,981

 
$
91,767

 
$
77,855

 
 
 
 
 
 
 
 
Adjusted operating income margin (Europe operations)
3.84
%
 
4.97
%
 
4.27
%
 
3.90
%


12



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
 
Fourteen Weeks Ended
 
Fifty-Two Weeks Ended
 
Fifty-Three Weeks Ended
 
December 30,
2018
 
December 31,
2017
 
December 30,
2018
 
December 31,
2017
 
(In thousands, except per share data)
Net income (loss) attributable to Pilgrim's Pride Corporation
$
(7,324
)
 
$
134,337

 
$
247,945

 
$
694,579

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

 

 
12,449

 
113

     Acquisition and restructuring charges
1,919

 

 
3,778

 
14,282

     Other non-recurring losses and expenses
11,903

 

 
14,475

 

     Foreign currency transaction losses (gains)
14,829

 
(107
)
 
12,748

 
(1,802
)
 
$
21,327

 
$
134,230

 
$
291,395

 
$
707,172

U.S. Tax Cuts & Jobs Act transition tax

 

 
26,400

 

Adjusted net income (loss)
$
21,327

 
$
134,230

 
$
317,795

 
$
707,172

Weighted average diluted shares of common stock outstanding
249,366

 
248,994

 
249,149

 
248,971

Adjusted net income (loss) per common diluted share
$
0.09

 
$
0.54

 
$
1.28

 
$
2.84



13



A reconciliation of GAAP to non-GAAP financial measures. Net income (loss) per share is calculated by dividing the net income (loss) attributable to Pilgrim's Pride Corporation stockholders by the weighted average number of diluted shares.
PILGRIM'S PRIDE CORPORATION
Reconciliation of GAAP EPS to Adjusted EPS
(Unaudited)
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Fourteen Weeks Ended
 
Fifty-Two Weeks Ended
 
Fifty-Three Weeks Ended
 
December 30, 2018
 
December 31, 2017
 
December 30, 2018
 
December 31, 2017
 
(In thousands, except per share data)
GAAP EPS
$
(0.03
)
 
$
0.54

 
$
1.00

 
$
2.79

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

 

 
0.05

 

     Acquisition and restructuring charges
0.01

 

 
0.02

 
0.06

     Other non-recurring losses and expenses
0.05

 

 
0.05

 

     Foreign currency transaction losses (gains)
0.06

 

 
0.05

 
(0.01
)
 
$
0.09

 
$
0.54

 
$
1.17

 
$
2.84

U.S. Tax Cuts & Jobs Act transition tax

 

 
0.11

 

Adjusted EPS
$
0.09

 
$
0.54

 
$
1.28

 
$
2.84

 
 
 
 
 
 
 
 
Weighted average diluted shares of common stock outstanding
249,366

 
248,994

 
249,149

 
248,971



14



PILGRIM'S PRIDE CORPORATION
Supplementary Selected Segment and Geographic Data
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Fourteen Weeks Ended
 
Fifty-Two Weeks Ended
 
Fifty-Three Weeks Ended
 
 
December 30, 2018
 
December 31, 2017
 
December 30, 2018
 
December 31, 2017
 
 
(In thousands)
Sources of net sales by country of origin:
 
 
 
 
 
 
 
 
U.S.
 
$
1,820,952

 
$
1,886,133

 
$
7,425,661

 
$
7,443,222

Europe
 
514,541

 
522,465

 
2,148,666

 
1,996,319

Mexico
 
321,296

 
333,754

 
1,363,457

 
1,328,322

Total net sales
 
$
2,656,789

 
$
2,742,352

 
$
10,937,784

 
$
10,767,863

 
 
 
 
 
 
 
 
 
Sources of cost of sales by country of origin:
 
 
 
 
 
 
 
 
U.S.
 
$
1,772,730

 
$
1,691,586

 
$
6,909,779

 
$
6,348,411

Europe
 
476,844

 
472,016

 
1,977,838

 
1,808,139

Mexico
 
295,465

 
316,972

 
1,206,823

 
1,139,794

Elimination
 
(98
)
 
(26
)
 
(132
)
 
(95
)
Total cost of sales
 
$
2,544,941

 
$
2,480,548

 
$
10,094,308

 
$
9,296,249

 
 
 
 
 
 
 
 
 
Sources of gross profit by country of origin:
 
 
 
 
 
 
 
 
U.S.
 
$
48,222

 
$
194,549

 
$
515,882

 
$
1,094,811

Europe
 
37,697

 
50,446

 
170,828

 
188,180

Mexico
 
25,831

 
16,783

 
156,634

 
188,528

Elimination
 
98

 
26

 
132

 
95

Total gross profit
 
$
111,848

 
$
261,804

 
$
843,476

 
$
1,471,614

 
 
 
 
 
 
 
 
 
Sources of operating income by country of origin:
 
 
 
 
 
 
 
 
U.S.
 
$
(9,579
)
 
$
122,370

 
$
291,381

 
$
841,491

Europe
 
15,979

 
25,231

 
84,524

 
77,105

Mexico
 
17,137

 
7,390

 
119,649

 
153,631

Elimination
 
98

 
26

 
132

 
95

Total operating income
 
$
23,635

 
$
155,017

 
$
495,686

 
$
1,072,322




15