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CORRECTION -- Pilgrim's Pride Reports EBITDA of $222.5 Million With a Margin of 10.4% for the Third Quarter of 2013

Oct 30, 2013

GREELEY, Colo., Oct. 30, 2013 (GLOBE NEWSWIRE) -- Pilgrim's Pride Corporation (Nasdaq:PPC) reports third quarter 2013 financial results with net sales of $2.14 billion, $74 million higher than the $2.07 billion reported in the third quarter of 2012. Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") of $222.5 million increased 116% compared to the $103 million generated in the prior year. Net income of $160.9 million reflected an improvement of 275% compared to the $42.9 million reported in the same period in 2012, with diluted earnings per share reaching $0.62 compared to $0.17 in the third quarter of 2012.

"We are pleased to see continued improvement reflected in our results based on the consistent execution of our strategy. Our engagement with key customers continues to reflect the value they expect from Pilgrim's and is driving growth and success for our customers. We've also seen improvements in our margins as a result of the processes we've transformed through our commitment to operational excellence. We are close to achieving our operational improvement targets for the year and envision capturing even greater efficiencies in 2014. Our export model has enabled us to attain our goal of achieving 30% growth in value-added products year to date," stated Bill Lovette, Pilgrim's Chief Executive Officer.

"While we saw some volatility in the Mexican market this quarter, we believe the fundamentals of the business and growth opportunities remain intact. Market prices in the region softened during the quarter; however, we continue to view Mexico as a tremendous opportunity for profitability and growth.

Cash flows from operations were $285.8 million for the quarter, enabling us to reduce our debt by $252 million. Our ending net debt position was $582.1 million, which is 0.87 times our trailing twelve months' EBITDA. This stronger capital structure is reflective of our effective operational execution and cash management strategy."

Conference Call Information

A conference call to discuss Pilgrim's quarterly results will be held tomorrow, October 31 at 7:00 a.m. Mountain (9 a.m. Eastern). Participants are encouraged to pre-register for the conference call using the link below. Callers who pre-register will be given a unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call start time.

To pre-register, go to:
http://services.choruscall.com/links/ppc131031.html

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

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

Replays of the conference call will be available on Pilgrim's website approximately two hours after the call concludes and can be accessed through the "Investor" section of www.pilgrims.com.   The webcast will be available for replay through February 13, 2014. 

About Pilgrim's Pride

Pilgrim's Pride Corporation employs approximately 37,500 people and operates chicken processing plants and prepared-foods facilities in 12 states, Puerto Rico and Mexico. The Company's primary distribution is through retailers and foodservice distributors. 

Forward-Looking Statements

Statements contained in this press release that state the intentions, plans, hopes, beliefs, anticipations, expectations or predictions of the future of Pilgrim's Pride Corporation and its management are 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. 

PILGRIM'S PRIDE CORPORATION
Condensed Consolidated Balance Sheets
     
  September 29, December 30,
  2013 2012
  (Unaudited)  
  (In thousands)
     
Cash and cash equivalents  $ 330,316  $ 68,180
Trade accounts and other receivables, less allowance
 for doubtful accounts		  407,002  384,930
Account receivable from JBS USA, LLC  4,454  1,514
Inventories  911,086  950,296
Income taxes receivable  66,649  54,719
Prepaid expenses and other current assets  72,825  56,047
Assets held for sale  25,320  27,042
     
Total current assets  1,817,652  1,542,728
     
Deferred tax assets  59,620  97,431
Other long-lived assets  38,831  45,523
Identified intangible assets, net  33,960  38,266
Property, plant and equipment, net  1,159,358  1,189,921
     
Total assets  $ 3,109,421  $ 2,913,869
     
Accounts payable  $ 370,034  $ 312,365
Account payable to JBS USA, LLC  5,893  13,436
Accrued expenses and other current liabilities  302,095  283,540
Income taxes payable  --  468
Current deferred tax liabilities  80,849  104,482
Current maturities of long-term debt  396  15,886
     
Total current liabilities  759,267  730,177
     
Long-term debt, less current maturities  912,019  1,148,870
Other long-term liabilities  84,566  125,825
     
Total liabilities  1,755,852  2,004,872
     
Common stock  2,590  2,590
Additional paid-in capital  1,644,418  1,642,003
Accumulated deficit  (263,507)  (669,711)
Accumulated other comprehensive loss  (32,397)  (68,511)
     
Total Pilgrim's Pride Corporation stockholders' equity  1,351,104  906,371
     
Noncontrolling interest  2,465  2,626
     
Total stockholders' equity  1,353,569  908,997
     
Total liabilities and stockholders' equity  $ 3,109,421  $ 2,913,869

 

         
PILGRIM'S PRIDE CORPORATION
Condensed Consolidated Statements of Operations
(Unaudited)
         
         
  Thirteen Weeks Ended Thirty-Nine Weeks Ended
  September 29, September 23, September 29, September 23,
  2013 2012 2013 2012
  (In thousands, except per share data) (In thousands, except per share data)
         
Net sales  $ 2,142,815  $ 2,068,478  $ 6,363,863  $ 5,931,720
Cost of sales  1,906,242  1,962,343  5,726,348  5,571,431
         
Gross profit  236,573  106,135  637,515  360,289
         
Selling, general and administrative expense  43,797  41,782  131,888  131,477
Administrative restructuring charges, net  3,658  2,647  4,622  5,921
         
Operating income  189,118  61,706  501,005  222,891
         
Interest expense  20,413  25,260  68,199  78,430
Interest income  (571)  (256)  (1,494)  (886)
Foreign currency transaction losses, net  2,682  (7,701)  4,771  (5,417)
Miscellaneous, net  (8)  413  (730)  (272)
         
         
Income before income taxes  166,602  43,990  430,259  151,036
Income tax expense (benefit)  5,578  1,049  24,216  (656)
         
Net income  161,024  42,941  406,043  151,692
Less: Net income (loss) attributable to noncontrolling interests  107  10  (161)  230
         
Net income attributable to Pilgrim's Pride Corporation  $ 160,917  $ 42,931  $ 406,204  $ 151,462
         
Weighted average shares of common stock outstanding:        
Basic  258,826  258,726  258,825  247,005
Diluted  259,386  258,837  259,166  247,103
         
Net income per share of common stock outstanding:        
Basic  $ 0.62  $ 0.17  $ 1.57  $ 0.61
Diluted  $ 0.62  $ 0.17  $ 1.57  $ 0.61

 

     
PILGRIM'S PRIDE CORPORATION
Condensed Consolidated Statements of Cash Flows
     
  Thirty-Nine Weeks Ended
  September 29 September 23
  2013 2012
  (In thousands)
Cash flows from operating activities:    
Net income  $ 406,043  $ 151,692
Adjustments to reconcile net income attributable to Pilgrim's Pride Corporation to cash provided by operating activities:    
Depreciation and amortization  113,853  108,411
Foreign currency transaction losses (gains)  3,734  (5,620)
Accretion of bond discount  342  342
Asset impairment  3,457  1,342
Loss (gain) on property disposals  (509)  5,134
Share-based compensation  2,415  465
Changes in operating assets and liabilities:    
Restricted cash and cash equivalents  --  8,153
Trade accounts and other receivables  (25,458)  (3,172)
Inventories  39,421  (94,972)
Prepaid expenses and other current assets  (17,304)  (1,120)
Accounts payable and accrued expenses and other current liabilities  69,895  9,636
Income taxes  (1,818)  (14,428)
Deposits  1,898  734
Long-term pension and other postretirement obligations  (3,174)  (7,120)
Other operating assets and liabilities  3,921  (3,516)
Cash provided by operating activities  596,716  155,961
Cash flows from investing activities:    
Acquisitions of property, plant and equipment  (76,293)  (62,110)
Purchases of investment securities  --  (162)
Proceeds from sale or maturity of investment securities  --  688
Proceeds from property sales and disposals  3,330  28,687
Cash used in investing activities  (72,963)  (32,897)
Cash flows from financing activities:    
Proceeds from revolving line of credit  505,600  595,800
Payments on revolving line of credit, long-term borrowings and capital lease obligations  (758,283)  (853,008)
Payment of note payable to JBS USA  --  (50,000)
Proceeds from sale of common stock  --  198,282
Payment of capitalized loan costs  (5,006)  --
Cash used in financing activities  (257,689)  (108,926)
Effect of exchange rate changes on cash and cash equivalents  (3,928)  (717)
Increase in cash and cash equivalents  262,136  13,421
Cash and cash equivalents, beginning of period  68,180  41,609
Cash and cash equivalents, end of period  330,316  55,030
     

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

  Thirteen Weeks Ended Thirty-Nine Weeks Ended
  September 29, September 23, September 29, September 23,
  2013 2012 2013 2012
  (In thousands) (In thousands)
         
Net income  $ 161,024  $ 42,941  $ 406,043  $ 151,692
         
Add:        
Income tax expense (benefit)  5,578  1,049  24,216  (656)
Interest expense, net  19,842  25,004  66,705  77,544
Depreciation and amortization  37,914  36,431  113,853  108,408
Asset impairments  361  --  361  --
Minus:        
Amortization of capitalized loan costs  2,204  2,469  7,238  7,405
         
EBITDA  222,515  102,956  603,940  329,583
         
Add:        
Restructuring charges  3,658  2,647  4,622  5,921
Minus:        
Net income (loss) attributable to noncontrolling interest  106  10  (162)  230
Adjusted EBITDA  $ 226,067  $ 105,593  $ 608,724  $ 335,274

The summary unaudited consolidated income statement data for the twelve months ended September 29, 2013 (the LTM Period) have been calculated by subtracting the applicable unaudited consolidated income statement data for the nine months ended September 23, 2012 from the sum of (1) the applicable audited consolidated income statement data for the year ended December 30, 2012 and (2) the applicable unaudited consolidated income statement data for the nine months ended September 29, 2013.

Reconciliation of LTM EBITDA          
  Fourteen  Thirteen  Thirteen  Thirteen   
  Weeks Ended Weeks Ended Weeks Ended Weeks Ended LTM Ended
  December 30, March 31, June 30, September 29, September 29,
  2012 2013 2013 2013 2013
   (In thousands)
           
Net income  $ 22,350  $ 54,228  $ 190,791  $ 161,024  $ 428,393
           
Add:          
Income tax expense (benefit)  (20,325)  2,754  15,884  5,578  3,891
Interest expense, net  25,985  24,605  22,258  19,842  92,690
Depreciation and amortization  39,088  37,790  38,149  37,914  152,941
Asset impairments  --  -- --  361  361
Minus:          
Amortization of capitalized loan costs  2,658  2,516  2,518  2,204  9,896
           
EBITDA  64,440  116,861  264,564  222,515  668,380
           
Add:          
Restructuring charges  2,528  484  480  3,658  7,150
Minus:          
Net income (loss) attributable to noncontrolling interest  (423)  (354)  86  106  (585)
Adjusted EBITDA  $ 67,391  $ 117,699  $ 264,958  $ 226,067  676,115

Net debt is defined as total long term debt, less current maturities, plus current maturities of long term debt minus cash and cash equivalents.  Net debt is presented because it is used by us, 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
         
      Thirty-Nine Weeks Ended
  2011 2012 September 23, 2012 September 29, 2013
  (in Thousands)
Long term debt, less current maturities 1,458,001 1,148,870 1,151,127 912,019
Add:  Current maturities of long term debt 15,611 15,886 15,619 396
Minus:  Cash and cash equivalents 41,609 68,180 59,556 330,316
Net debt 1,432,003 1,096,576 1,107,190 582,099
 
 
PILGRIM'S PRIDE CORPORATION
Supplementary Selected Segment and Geographic Data
         
  Thirteen Weeks Ended Thirty-Nine Weeks Ended
  September 29, September 23, September 29, September 23,
  2013 2012 2013 2012
  (In thousands) (In thousands)
Sources of net sales by country of origin:    CORRECTED   CORRECTED
US:  $ 1,932,634  $ 1,850,934  $ 5,662,991  $ 5,312,278
Mexico:  210,181  217,544  700,872  619,442
Total net sales:  $ 2,142,815  $ 2,068,478  $ 6,363,863  $ 5,931,720
         
Sources of cost of sales by country of origin:       
US:  $ 1,702,791  $ 1,772,550  $ 5,139,883  $ 5,023,704
Mexico:  203,451  189,793  586,465  547,727
Total cost of sales:  $ 1,906,242  $ 1,962,343  $ 5,726,348  $ 5,571,431
         
Sources of gross profit by country of origin:        
US:  $ 229,843  $ 78,384  $ 523,108  $ 288,574
Mexico:  6,730  27,751  114,407  71,715
Total gross profit:  $ 236,573  $ 106,135  $ 637,515  $ 360,289 
CONTACT: Rosemary Geelan

         Pilgrim's Pride Corp Investor Relations

         Rosemary.geelan@pilgrims.com

         (970) 506-8192

         www.pilgrims.com
Source: Pilgrim's Pride Corporation

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