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