Pilgrim's Pride Corporation
PILGRIMS PRIDE CORP (Form: 8-K, Received: 08/03/2017 06:02:25)


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): August 2, 2017
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 August 2, 2017 the Registrant issued a press relase, 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 August 2, 2017.






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:
August 2, 2017
 
/s/ Fabio Sandri
 
 
 
Fabio Sandri
 
 
 
Chief Financial Officer






Exhibit Index
Exhibit 99.1 Press release dated August 2, 2017.




PILGRIMSLOGOA05A01A01A01A03.JPG


Pilgrim’s Pride Reports Operating Income of $359 Million and Operating Margin of 16.0% for the Second Quarter of 2017

GREELEY, Colo., August 2, 2017 (GLOBE NEWSWIRE) - Pilgrim’s Pride Corporation (NASDAQ: PPC) reports second quarter 2017 financial results.

Second Quarter Highlights
Net Sales of $2.25 billion.
Net Income of $233.6 million, GAAP EPS of $0.94.
Operating Income margins of 14.8% in U.S. and 22.1% in Mexico operations, respectively.
Adjusted EBITDA of $420.6 million (or an 18.7% margin).
Cash Flow from Operations of $254.7 million.
With our announced capital projects already completed, our quarterly performance reflected our well-balanced portfolio strategy, designed to capture the upside from strong markets while reducing overall volatility.
Integration of newly acquired assets in Mexico has been completed with margins at the same level as legacy business. GNP integration is on track and synergy capture is currently above expectations.

Unaudited, In Millions, Except Per Share and Percentages
 
Thirteen Weeks Ended
 
June 25, 2017
 
June 26, 2016
 
Change
Net Sales
$2,251.6
 
$2,028.3
 
+11.0%
GAAP EPS
$0.94
 
$0.60
 
+56.7%
Operating Income
$359.4
 
$236.6
 
+51.9%
Adjusted EBITDA (1)
$420.6
 
$282.7
 
+48.8%
Adjusted EBITDA Margin (1)
18.7%
 
13.9%
 
+4.8pts
 
 
 
 
 
 
(1)
Reconciliations for non-GAAP measures are provided in subsequent sections within this release.

“Our Q2 results materially improved from last quarter as well as from a year ago driven by much stronger results at our U.S. operations while Mexico continued to perform very well. Demonstrating the diversity of our portfolio of bird sizes; while small bird and tray-pack remained robust during the period, our team captured the strength in the large bird deboning environment, which significantly rebounded after a slower than expected start earlier in the

1



year, driven by stronger exports and very good domestic demand as the grilling season kicked off. This portfolio approach is working well and is what fundamentally differentiates us from the competition, giving us the potential to reduce volatility and generate higher margins over time. This summer has brought strong demand for grilling season and we see continuation of chicken as a choice protein in domestic and international markets,” stated Bill Lovette, Chief Executive Officer of Pilgrim's.

“We continue to search for solutions in delivering more differentiated customized products that are innovative to satisfy our key customers’ needs. We currently have market leading positions in USDA-certified organic and NAE, two segments that resonate very well with new consumer trends for more natural products while adding more value to our portfolio. We also have the potential to expand into new segments with our broad channel approach using the Gold’n Plump brand as well as the new premium Just BARE chicken in the “better for you” category.”

Conference Call Information

A conference call to discuss Pilgrim’s quarterly results will be held tomorrow, August 3, 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: http://services.choruscall.com/links/ppc170803.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 November 3, 2017.

About Pilgrim’s Pride

Pilgrim’s employs approximately 42,000 people and operates chicken processing plants and prepared-foods facilities in 14 states, Puerto Rico and Mexico. 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

2



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
 
 
 
June 25, 2017
 
December 25, 2016
 
 
(Unaudited)
 
 
 
 
(In thousands)
Cash and cash equivalents
 
$
303,937

 
$
120,328

Restricted cash
 
20,348

 
4,979

Trade accounts and other receivables, less allowance for doubtful accounts
 
406,586

 
317,170

Accounts receivable from related parties
 
4,050

 
3,913

Inventories
 
967,577

 
813,262

Income taxes receivable
 
13,659

 

Prepaid expenses and other current assets
 
66,572

 
57,457

Assets held for sale
 
5,542

 
5,259

Total current assets
 
1,788,271

 
1,322,368

Other long-lived assets
 
17,484

 
15,710

Identified intangible assets, net
 
153,855

 
38,593

Goodwill
 
175,444

 
125,607

Property, plant and equipment, net
 
1,721,948

 
1,505,940

Total assets
 
$
3,857,002

 
$
3,008,218

 
 
 
 
 
Accounts payable
 
$
519,820

 
$
555,097

Accounts payable to related parties
 
3,622

 
1,421

Accrued expenses and other current liabilities
 
324,727

 
290,699

Income taxes payable
 
93,910

 
20,990

Current maturities of long-term debt
 
40,098

 
94

Total current liabilities
 
982,177

 
868,301

Long-term debt, less current maturities
 
1,404,264

 
1,011,858

Deferred tax liabilities
 
171,042

 
142,651

Other long-term liabilities
 
89,422

 
88,661

Total liabilities
 
2,646,905

 
2,111,471

Common stock
 
2,602

 
2,597

Treasury stock
 
(231,758
)
 
(217,117
)
Additional paid-in capital
 
1,688,684

 
1,686,742

Accumulated deficit
 
(193,073
)
 
(520,635
)
Accumulated other comprehensive loss
 
(66,735
)
 
(64,243
)
Total Pilgrim’s Pride Corporation stockholders’ equity
 
1,199,720

 
887,344

Noncontrolling interest
 
10,377

 
9,403

Total stockholders’ equity
 
1,210,097

 
896,747

Total liabilities and stockholders’ equity
 
$
3,857,002

 
$
3,008,218



4




PILGRIM’S PRIDE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
 
June 25, 2017
 
June 26, 2016
 
June 25, 2017
 
June 26, 2016
 
 
(In thousands, except per share data)
Net sales
 
$
2,251,604

 
$
2,028,315

 
$
4,272,096

 
$
3,991,252

Cost of sales
 
1,826,217

 
1,742,184

 
3,631,504

 
3,467,559

Gross profit
 
425,387

 
286,131

 
640,592

 
523,693

Selling, general and administrative expense
 
61,636

 
49,520

 
124,489

 
98,308

Administrative restructuring charges
 
4,349

 

 
4,349

 

Operating income
 
359,402

 
236,611

 
511,754

 
425,385

Interest expense, net of capitalized interest
 
15,935

 
11,548

 
28,321

 
23,581

Interest income
 
(1,044
)
 
(683
)
 
(1,346
)
 
(1,376
)
Foreign currency transaction gain
 
(1,810
)
 
(4,744
)
 
(1,191
)
 
(4,979
)
Miscellaneous, net
 
(970
)
 
(950
)
 
(3,685
)
 
(3,896
)
Income before income taxes
 
347,291

 
231,440

 
489,655

 
412,055

Income tax expense
 
113,218

 
78,398

 
161,119

 
141,002

Net income
 
234,073

 
153,042

 
328,536

 
271,053

Less: Net income (loss) attributable to noncontrolling interests
 
432

 
156

 
974

 
(204
)
Net income attributable to Pilgrim’s Pride Corporation
 
$
233,641

 
$
152,886

 
$
327,562

 
$
271,257

 
 
 
 
 
 
 
 
 
Weighted average shares of common stock outstanding:
 
 
 
 
 
 
 
 
Basic
 
248,753

 
254,554

 
248,722

 
254,681

Effect of dilutive common stock equivalents
 
220

 
390

 
228

 
364

Diluted
 
248,973

 
254,944

 
248,950

 
255,045

 
 
 
 
 
 
 
 
 
Net income attributable to Pilgrim's Pride Corporation per share of
     common stock outstanding:
 
 
 
 
 
 
 
 
Basic
 
$
0.94

 
$
0.60

 
$
1.32

 
$
1.07

Diluted
 
$
0.94

 
$
0.60

 
$
1.32

 
$
1.06



5



PILGRIM’S PRIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
 
 
Twenty-Six Weeks Ended
 
 
June 25, 2017
 
June 26, 2016
 
 
(In thousands)
Cash flows from operating activities:
 
 
 
 
Net income
 
$
328,536

 
$
271,053

Adjustments to reconcile net income to cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
107,671

 
88,683

Foreign currency transaction loss related to borrowing arrangements
 
5,634

 

Impairment expense
 
3,534

 

Gain on property disposals
 
(768
)
 
(6,755
)
Gain on equity method investments
 
(30
)
 

Share-based compensation
 
1,947

 
1,869

Deferred income tax expense (benefit)
 
26,904

 
(700
)
Changes in operating assets and liabilities:
 
 
 
 
Trade accounts and other receivables
 
(73,684
)
 
6,610

Inventories
 
(97,857
)
 
(31,208
)
Prepaid expenses and other current assets
 
(5,702
)
 
(19,817
)
Accounts payable, accrued expenses and other current liabilities
 
(34,565
)
 
(23,028
)
Income taxes
 
60,695

 
6,967

Long-term pension and other postretirement obligations
 
(3,916
)
 
(3,952
)
Other operating assets and liabilities
 
(2,265
)
 
(738
)
Cash provided by operating activities
 
316,134

 
288,984

Cash flows from investing activities:
 
 
 
 
Acquisitions of property, plant and equipment
 
(174,150
)
 
(93,978
)
Business acquisition
 
(359,698
)
 

Proceeds from property disposals
 
1,466

 
8,097

Cash used in investing activities
 
(532,382
)
 
(85,881
)
Cash flows from financing activities:
 
 
 
 
Proceeds from note payable to bank
 

 
36,838

Payments on note payable to bank
 

 
(65,564
)
Proceeds from revolving line of credit and long-term borrowings
 
1,013,662

 
351,089

Payments on revolving line of credit, long-term borrowings and capital lease obligations
 
(586,056
)
 
(219,812
)
Proceeds from equity contribution under Tax Sharing Agreement between JBS USA Food Company Holdings and Pilgrim's Pride Corporation
 
5,038

 
3,691

Payment of capitalized loan costs
 
(2,777
)
 
(693
)
Purchase of common stock under share repurchase program
 
(14,641
)
 
(7,328
)
Cash dividends
 

 
(699,915
)
Cash provided by (used in) financing activities
 
415,226

 
(601,694
)
Increase (decrease) in cash, cash equivalents and restricted cash
 
198,978

 
(398,591
)
Cash, cash equivalents and restricted cash, beginning of period
 
125,307

 
439,638

Cash, cash equivalents and restricted cash, end of period
 
$
324,285

 
$
41,047


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
 
Twenty-Six Weeks Ended
 
June 25, 2017
 
June 26, 2016
 
June 25, 2017
 
June 26, 2016
 
(In thousands)
Net income
$
234,073

 
$
153,042

 
$
328,536

 
$
271,053

Add:
 
 
 
 
 
 
 
Interest expense, net
14,891

 
10,865

 
26,975

 
22,205

Income tax expense
113,218

 
78,398

 
161,119

 
141,002

Depreciation and amortization
57,281

 
46,293

 
107,671

 
88,683

Minus:
 
 
 
 
 
 
 
Amortization of capitalized financing costs
997

 
962

 
1,947

 
1,889

EBITDA
418,466

 
287,636

 
622,354

 
521,054

Add:
 
 
 
 
 
 
 
Foreign currency transaction gains
(1,810
)
 
(4,744
)
 
(1,191
)
 
(4,979
)
Restructuring charges
4,349

 

 
4,349

 

Minus:
 
 
 
 
 
 
 
   Net income (loss) attributable to noncontrolling interest
432

 
156

 
974

 
(204
)
Adjusted EBITDA
$
420,573

 
$
282,736

 
$
624,538

 
$
516,279



7



The summary unaudited consolidated income statement data for the twelve months ended June 25, 2017 (the LTM Period) have been calculated by subtracting the applicable unaudited consolidated income statement data for the six months ended June 26, 2016 from the sum of (1) the applicable audited consolidated income statement data for the year ended December 25, 2016 and (2) the applicable audited consolidated income statement data for the six months ended June 25, 2017.

PILGRIM'S PRIDE CORPORATION
Reconciliation of LTM Adjusted EBITDA
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
 
Thirteen Weeks Ended
 
Thirteen Weeks Ended
 
Thirteen Weeks Ended
 
Thirteen Weeks Ended
 
LTM Ended
 
 
September 25,
2016
 
December 25,
2016
 
March 26,
2017
 
June 25,
2017
 
June 25,
2017
 
 
(In thousands)
Net income
 
$
98,527

 
$
70,149

 
$
94,463

 
$
234,073

 
$
497,212

Add:
 
 
 
 
 
 
 
 
 
 
Interest expense, net
 
11,834

 
10,158

 
12,084

 
14,891

 
48,967

Income tax expense
 
51,060

 
40,844

 
47,901

 
113,218

 
253,023

Depreciation and amortization
 
45,772

 
46,059

 
50,390

 
57,281

 
199,502

Minus:
 
 
 
 
 
 
 
 
 
 
Amortization of capitalized financing costs
 
970

 
972

 
951

 
997

 
3,890

EBITDA
 
206,223

 
166,238

 
203,887

 
418,466

 
994,814

Add:
 
 
 
 
 
 
 
 
 
 
Foreign currency transaction losses (gains)
 
4,142

 
4,734

 
619

 
(1,810
)
 
7,685

Restructuring charges
 
279

 
790

 

 
4,349

 
5,418

Minus:
 
 
 
 
 
 
 
 
 
 
   Net income (loss) attributable to noncontrolling interest
 
(130
)
 
(469
)
 
542

 
432

 
375

Adjusted EBITDA
 
$
210,774

 
$
172,231

 
$
203,964

 
$
420,573

 
$
1,007,542



8



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
 
Twenty-Six Weeks Ended
 
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
 
June 25, 2017
 
June 26, 2016
 
June 25, 2017
 
June 26, 2016
 
June 25, 2017
 
June 26, 2016
 
June 25, 2017
 
June 26, 2016
 
 
(In thousands)
Net income from continuing operations
 
$
234,073

 
$
153,042

 
$
328,536

 
$
271,053

 
10.40
 %
 
7.55
 %
 
7.69
 %
 
6.79
 %
Add:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense, net
 
14,891

 
10,865

 
26,975

 
22,205

 
0.66
 %
 
0.54
 %
 
0.63
 %
 
0.56
 %
Income tax expense
 
113,218

 
78,398

 
161,119

 
141,002

 
5.03
 %
 
3.87
 %
 
3.77
 %
 
3.53
 %
Depreciation and amortization
 
57,281

 
46,293

 
107,671

 
88,683

 
2.54
 %
 
2.28
 %
 
2.52
 %
 
2.22
 %
Minus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of capitalized financing costs
 
997

 
962

 
1,947

 
1,889

 
0.04
 %
 
0.05
 %
 
0.05
 %
 
0.05
 %
EBITDA
 
418,466

 
287,636

 
622,354

 
521,054

 
18.59
 %
 
14.19
 %
 
14.56
 %
 
13.05
 %
Add:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency transaction gains
 
(1,810
)
 
(4,744
)
 
(1,191
)
 
(4,979
)
 
(0.08
)%
 
(0.23
)%
 
(0.03
)%
 
(0.12
)%
Restructuring charges
 
4,349

 

 
4,349

 

 
0.19
 %
 
 %
 
0.10
 %
 
 %
Minus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Net income (loss) attributable to noncontrolling interest
 
432

 
156

 
974

 
(204
)
 
0.02
 %
 
0.01
 %
 
0.02
 %
 
(0.01
)%
Adjusted EBITDA
 
$
420,573

 
$
282,736

 
$
624,538

 
$
516,279

 
18.68
 %
 
13.95
 %
 
14.61
 %
 
12.94
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Revenue:
 
$
2,251,604

 
$
2,028,315

 
$
4,272,096

 
$
3,991,252

 
$
2,251,604

 
$
2,028,315

 
$
4,272,096

 
$
3,991,252



9



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 Earnings
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
 
June 25,
2017
 
June 26,
2016
 
June 25,
2017
 
June 26,
2016
 
 
(In thousands, except per share data)
Net income attributable to Pilgrim's Pride Corporation
 
$
233,641

 
$
152,886

 
$
327,562

 
$
271,257

Loss on early extinguishment of debt
 

 

 

 

Foreign currency transaction gains
 
(1,810
)
 
(4,744
)
 
(1,191
)
 
(4,979
)
Income before loss on early extinguishment of debt and foreign currency transaction gains
 
231,831

 
148,142

 
326,371

 
266,278

Weighted average diluted shares of common stock outstanding
 
248,973

 
254,944

 
248,950

 
255,045

Income before loss on early extinguishment of debt and foreign currency transaction gains
     per common diluted share
 
$
0.93

 
$
0.58

 
$
1.31

 
$
1.04



10



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
 
Twenty-Six Weeks Ended
 
June 25, 2017
 
June 26, 2016
 
June 25, 2017
 
June 26, 2016
 
(In thousands, except per share data)
GAAP EPS
$
0.94

 
$
0.60

 
$
1.32

 
$
1.06

Loss on early extinguishment of debt

 

 

 

Foreign currency transaction gains
(0.01
)
 
(0.02
)
 
(0.01
)
 
(0.02
)
Adjusted EPS
$
0.93

 
$
0.58

 
$
1.31

 
$
1.04

 
 
 
 
 
 
 
 
Weighted average diluted shares of common stock outstanding
248,973

 
254,944

 
248,950

 
255,045



11



Net debt is defined as total long term debt less current maturities, plus current maturities of long term debt and notes payable, minus cash, cash equivalents and investments in available-for-sale securities.  Net debt is presented because it is used by management, and we believe it is frequently used by securities analysts, investors and other parties, in addition to and not in lieu of debt as presented under GAAP, to compare the indebtedness of companies.  A reconciliation of net debt is as follows:
PILGRIM'S PRIDE CORPORATION
Reconciliation of Net Debt
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
June 25,
2017
 
June 26,
2016
 
December 25,
2016
 
December 27,
2015
 
December 28,
2014
 
(In thousands)
Long term debt, less current maturities
$
1,404,264

 
$
1,117,979

 
$
1,011,858

 
$
985,509

 
$
3,980

Add:  Current maturities of long term debt and notes payable
40,098

 
90

 
94

 
28,812

 
262

Minus:  Cash and cash equivalents
303,937

 
41,047

 
120,328

 
439,638

 
576,143

Net debt (cash position)
$
1,140,425

 
$
1,077,022

 
$
891,624

 
$
574,683

 
$
(571,901
)


12



PILGRIM'S PRIDE CORPORATION
Supplementary Selected Segment and Geographic Data
 
 
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
 
June 25, 2017
 
June 26, 2016
 
June 25, 2017
 
June 26, 2016
 
 
(Unaudited)
 
 
 
 
 
 
 
 
(In thousands)
Sources of net sales by country of origin:
 
 
 
 
 
 
 
 
US:
 
$
1,882,142

 
$
1,677,445

 
$
3,618,547

 
$
3,347,726

Mexico:
 
369,462

 
350,870

 
653,549

 
643,526

Total net sales:
 
$
2,251,604

 
$
2,028,315

 
$
4,272,096

 
$
3,991,252

 
 
 
 
 
 
 
 
 
Sources of cost of sales by country of origin:
 
 
 
 
 
 
 
 
US:
 
$
1,547,247

 
$
1,471,269

 
$
3,095,346

 
$
2,925,224

Mexico:
 
278,993

 
270,939

 
536,205

 
542,383

Elimination:
 
(23
)
 
(24
)
 
(47
)
 
(48
)
Total cost of sales:
 
$
1,826,217

 
$
1,742,184

 
$
3,631,504

 
$
3,467,559

 
 
 
 
 
 
 
 
 
Sources of gross profit by country of origin:
 
 
 
 
 
 
 
 
US:
 
$
334,894

 
$
206,176

 
$
523,200

 
$
422,502

Mexico:
 
90,470

 
79,931

 
117,345

 
101,143

Elimination:
 
23

 
24

 
47

 
48

Total gross profit:
 
$
425,387

 
$
286,131

 
$
640,592

 
$
523,693

 
 
 
 
 
 
 
 
 
Sources of operating income by country of origin:
 
 
 
 
 
 
 
 
US:
 
$
277,602

 
$
164,494

 
$
411,158

 
$
339,084

Mexico:
 
81,777

 
72,093

 
100,549

 
86,253

Elimination:
 
23

 
24

 
47

 
48

Total operating income:
 
$
359,402

 
$
236,611

 
$
511,754

 
$
425,385




13