Pilgrim’s Pride Closes Fiscal Year 2020 with Net Sales of $12.1 Billion, Operating Income of $245.5 Million and GAAP EPS of $0.39
2020 Highlights
- Net GAAP Income of
$94.8 million . - Adjusted Operating Income margins of 3.6% in
U.S. ex legal settlements, 5.5% inMexico and 3.1% inEurope operations. - Adjusted EBITDA of
$788.1 million , or a 6.5% margin. - Faced with the global Covid-19 pandemic, we remain guided by our principles of an uncompromising commitment to the safety of our team members, our duty to provide quality food globally, and our responsibility to provide continued employment opportunities and benefits for our team during these unprecedented times.
- Portfolio strategy, operational excellence and Key Customer strategy continuing to mitigate the impact of challenging market conditions. EBITDA outpacing industry peers, driven by improved agility, execution and operating performance across all business units in the
U.S. - After a very challenging first half during 2020, our Mexican operations adjusted to market conditions, rebounding strongly and delivering robust results in the second half, to finish 2020 in-line with prior years.
- Operating results from legacy European business continue to increase, reflecting our portfolio resiliency and continuous improvement despite significant Covid-19 effects. Newly acquired operations continuing to generate positive EBITDA, and on track to achieve performance competitive with leading companies with similar portfolio in next few years.
- Our liquidity position remains strong, supported by our emphasis on cash flow generation, focus on working capital management, and disciplined investments in high-return projects, preserving the opportunity to maintain strategic growth priorities while strengthening our differentiated global platforms.
Fourth Quarter
Net Sales of$3.1 billion .- Net GAAP Income of
$0.1 million . - Adjusted Consolidated Operating Income margins of 3.7%.
- Adjusted EBITDA of
$205.4 million , or a 6.6% margin, 27% higher than last year.
Unaudited (2) | Three Months Ended | Year Ended | ||||||||||||||||||||||
2020 |
2019 |
Y/Y Change | 2020 |
2019 |
Y/Y Change | |||||||||||||||||||
(In millions, except per share and percentages) | ||||||||||||||||||||||||
Net sales | $ | 3,117.8 | $ | 3,063.5 | +1.8 | % | $ | 12,091.9 | $ | 11,409.2 | +6.0 | % | ||||||||||||
$ | — | $ | 0.37 | (100.0 | ) | % | $ | 0.39 | $ | 1.83 | (78.7 | ) | % | |||||||||||
Operating income | $ | 39.5 | $ | 85.8 | (54.0 | ) | % | $ | 245.5 | $ | 690.6 | (64.5 | ) | % | ||||||||||
Adjusted EBITDA(1) | $ | 205.4 | $ | 161.6 | +27.1 | % | $ | 788.1 | $ | 973.8 | (19.1 | ) | % | |||||||||||
Adjusted EBITDA margin(1) | 6.6 | % | 5.3 | % | +1.3 | pts | 6.5 | % | 8.5 | % | (2.0 | ) | pts |
(1) Reconciliations for non-
(2) Comparisons include newly acquired European pork assets (Tulip) from
“While overall global economic and chicken market conditions were very volatile and challenging during 2020 as a result of Covid-19, our team members have continued to deliver on our strategy, achieving an increase in relative performance compared to the year before and to our industry competition. Our diverse global footprint has contributed to the well-balanced and resilient performance against different specific market conditions. We maintain our successful Key Customer strategy, which is the basis for our strong growth and consistent results. While our product portfolio is already differentiated, we are investing to further innovate, and increase our capacities and capabilities to meet customer demand. We expect value added, specialty products to account for a meaningfully larger portion of our total results over the next few years as we continue to de-emphasize the mix of more volatile commodity sales and strengthen our margin profile,” stated
“In Q4, our operating performance in the
“After a very challenging first half during 2020, our Mexican operations have continued to rebound strongly and deliver great results in the second half including Q4 to finish the year in-line with prior years. We adapted the operations well to generate strong performance despite volumes that were slightly lower than the same period in 2019 but higher than Q3. More normalized economic activities, continued good supply/demand balance in the market, our increased share of non-commodity products, fewer imported chicken, and a very good operational performance, all contributed to the strength. Demand for
“For the full year, our legacy European operations produced an EBITDA that was 6% higher than the previous year, reflecting the strength and consistency of our business model despite the significant hit of Covid-19 to our business profitability. We expect to continue an improvement in results driven by increased operational efficiencies, investments in automation, focus on higher yields, and better mitigation of input costs. The performance of our newly acquired European operations has continued to improve with EBITDA on a positive momentum. We have now been profitable on an EBITDA basis for the last seven quarters in a row. The robust performance was driven by strong pork exports and good domestic demand, as well as from the continuing implementations of operational improvements.”
Conference Call Information
A conference call to discuss Pilgrim’s quarterly results will be held tomorrow,
To pre-register, go to: https://services.choruscall.com/links/ppc210211.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
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
About Pilgrim’s Pride
Pilgrim’s employs approximately 56,400 people and operates protein processing plants and prepared-foods facilities in 14 states,
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
Contact: | |
Investor Relations | |
IRPPC@pilgrims.com | |
(970) 506-8192 | |
www.pilgrims.com |
PILGRIM’S PRIDE CORPORATION | ||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||
(In thousands, except share and par value data) | ||||||||||
Cash and cash equivalents | $ | 547,624 | $ | 260,568 | ||||||
Restricted cash and cash equivalents | 782 | 20,009 | ||||||||
Trade accounts and other receivables, less allowance for doubtful accounts | 741,992 | 741,281 | ||||||||
Accounts receivable from related parties | 1,084 | 944 | ||||||||
Inventories | 1,358,793 | 1,383,535 | ||||||||
Income taxes receivable | 69,397 | 60,204 | ||||||||
Prepaid expenses and other current assets | 183,039 | 131,695 | ||||||||
Total current assets | 2,902,711 | 2,598,236 | ||||||||
Deferred tax assets | 5,471 | 4,426 | ||||||||
Other long-lived assets | 24,780 | 36,325 | ||||||||
Operating lease assets, net | 288,886 | 301,513 | ||||||||
Identified intangible assets, net | 589,913 | 596,053 | ||||||||
1,005,245 | 973,750 | |||||||||
Property, plant and equipment, net | 2,657,491 | 2,592,061 | ||||||||
Total assets | $ | 7,474,497 | $ | 7,102,364 | ||||||
Accounts payable | $ | 1,028,710 | $ | 993,780 | ||||||
Accounts payable to related parties | 9,650 | 3,819 | ||||||||
Revenue contract liability | 65,918 | 41,770 | ||||||||
Accrued expenses and other current liabilities | 807,847 | 575,319 | ||||||||
Income taxes payable | — | 7,075 | ||||||||
Current maturities of long-term debt | 25,455 | 26,392 | ||||||||
Total current liabilities | 1,937,580 | 1,648,155 | ||||||||
Noncurrent operating lease liability, less current maturities | 217,432 | 235,382 | ||||||||
Long-term debt, less current maturities | 2,255,546 | 2,276,029 | ||||||||
Noncurrent income taxes payable | — | 7,731 | ||||||||
Deferred tax liabilities | 339,831 | 301,907 | ||||||||
Other long-term liabilities | 148,761 | 97,100 | ||||||||
Total liabilities | 4,899,150 | 4,566,304 | ||||||||
Common stock, 261,119,064 shares issued at year-end 2020 and year-end 2019, respectively; 243,512,490 and 249,572,119 shares outstanding at year-end 2020 and year-end 2019, respectively |
2,612 | 2,611 | ||||||||
and year-end 2019, respectively |
(345,134 | ) | (234,892 | ) | ||||||
Additional paid-in capital | 1,954,334 | 1,955,261 | ||||||||
Retained earnings | 972,569 | 877,812 | ||||||||
Accumulated other comprehensive loss | (20,620 | ) | (75,129 | ) | ||||||
Total Pilgrim’s |
2,563,761 | 2,525,663 | ||||||||
Noncontrolling interest | 11,586 | 10,397 | ||||||||
Total stockholders’ equity | 2,575,347 | 2,536,060 | ||||||||
Total liabilities and stockholders' equity | $ | 7,474,497 | $ | 7,102,364 |
PILGRIM’S PRIDE CORPORATION | ||||||||||||||||||||
CONSOLIDATED AND COMBINED STATEMENTS OF INCOME | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||||||
(In thousands, except per share data) | ||||||||||||||||||||
Net sales | $ | 3,117,829 | $ | 3,063,489 | $ | 12,091,901 | $ | 11,409,219 | ||||||||||||
Cost of sales | 2,890,433 | 2,862,094 | 11,253,705 | 10,338,825 | ||||||||||||||||
Gross profit | 227,396 | 201,395 | 838,196 | 1,070,394 | ||||||||||||||||
Selling, general and administrative expense | 187,773 | 115,597 | 592,610 | 379,910 | ||||||||||||||||
Administrative restructuring activities | 123 | 6 | 123 | (84 | ) | |||||||||||||||
Operating income | 39,500 | 85,792 | 245,463 | 690,568 | ||||||||||||||||
Interest expense, net of capitalized interest | 30,543 | 33,446 | 126,118 | 132,630 | ||||||||||||||||
Interest income | (2,694 | ) | (2,796 | ) | (7,305 | ) | (14,277 | ) | ||||||||||||
Foreign currency transaction loss (gain) | 4,528 | (1,006 | ) | 760 | 6,917 | |||||||||||||||
Gain on bargain purchase | — | (56,880 | ) | 3,746 | (56,880 | ) | ||||||||||||||
Miscellaneous, net | (2,062 | ) | 2,112 | (39,681 | ) | 4,633 | ||||||||||||||
Income before income taxes | 9,185 | 110,916 | 161,825 | 617,545 | ||||||||||||||||
Income tax expense | 8,855 | 18,681 | 66,755 | 161,009 | ||||||||||||||||
Net income | 330 | 92,235 | 95,070 | 456,536 | ||||||||||||||||
Less: Net income attributable to noncontrolling interests |
251 | 155 | 313 | 612 | ||||||||||||||||
Net income attributable to Pilgrim’s Pride Corporation |
$ | 79 | $ | 92,080 | $ | 94,757 | $ | 455,924 | ||||||||||||
Weighted average shares of common stock outstanding: | ||||||||||||||||||||
Basic | 243,557 | 249,571 | 245,944 | 249,401 | ||||||||||||||||
Effect of dilutive common stock equivalents | 244 | 278 | 180 | 308 | ||||||||||||||||
Diluted | 243,801 | 249,849 | 246,124 | 249,709 | ||||||||||||||||
Net income attributable to Corporation per share of common stock outstanding: |
||||||||||||||||||||
Basic | $ | — | $ | 0.37 | $ | 0.39 | $ | 1.83 | ||||||||||||
Diluted | $ | — | $ | 0.37 | $ | 0.39 | $ | 1.83 |
PILGRIM’S PRIDE CORPORATION | ||||||||||
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS | ||||||||||
Year Ended | ||||||||||
(In thousands) | ||||||||||
Cash flows from operating activities: | ||||||||||
Net income | $ | 95,070 | $ | 456,536 | ||||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||||
Depreciation and amortization | 337,104 | 287,230 | ||||||||
Deferred income tax expense | 37,337 | 42,478 | ||||||||
Gain on property disposals | (13,766 | ) | (10,896 | ) | ||||||
Loan cost amortization | 4,848 | 4,821 | ||||||||
Gain on bargain purchase | 3,746 | (56,880 | ) | |||||||
Accretion of bond discount | 982 | 982 | ||||||||
Amortization of bond premium | (668 | ) | (668 | ) | ||||||
Loss (gain) on equity method investments | 291 | (63 | ) | |||||||
Share-based compensation | (276 | ) | 10,132 | |||||||
Noncash loss on subsidiary dissolution | 115 | — | ||||||||
Foreign currency transaction losses (gains) related to borrowing arrangements | — | (4,970 | ) | |||||||
Changes in operating assets and liabilities: | ||||||||||
Trade accounts and other receivables | 29,154 | (25,000 | ) | |||||||
Inventories | 26,041 | (111,748 | ) | |||||||
Prepaid expenses and other current assets | (50,347 | ) | (15,490 | ) | ||||||
Accounts payable and accrued expenses | 295,327 | 119,892 | ||||||||
Income taxes | (39,436 | ) | (26,378 | ) | ||||||
Long-term pension and other postretirement obligations | (7,883 | ) | (9,221 | ) | ||||||
Other operating assets and liabilities | 6,608 | 5,764 | ||||||||
Cash provided by operating activities | 724,247 | 666,521 | ||||||||
Cash flows from investing activities: | ||||||||||
Acquisitions of property, plant and equipment | (354,762 | ) | (348,120 | ) | ||||||
Proceeds from property disposals | 31,976 | 15,753 | ||||||||
Purchase of acquired business, net of cash acquired | (4,216 | ) | (384,694 | ) | ||||||
Cash used in investing activities | (327,002 | ) | (717,061 | ) | ||||||
Cash flows from financing activities: | ||||||||||
Payments on revolving line of credit and long-term borrowings | (430,988 | ) | (289,917 | ) | ||||||
Proceeds from revolving line of credit and long-term borrowings | 404,522 | 259,466 | ||||||||
Purchase of common stock under share repurchase program | (110,242 | ) | (2,898 | ) | ||||||
Payment of capitalized loan costs | — | (652 | ) | |||||||
Distribution from equity contribution under Tax Sharing Agreement between |
— | (525 | ) | |||||||
Cash used in financing activities | (136,708 | ) | (34,526 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents | 7,292 | 4,065 | ||||||||
Increase in cash and cash equivalents | 267,829 | (81,001 | ) | |||||||
Cash and cash equivalents, beginning of year | 280,577 | 361,578 | ||||||||
Cash and cash equivalents, end of year | $ | 548,406 | $ | 280,577 | ||||||
Supplemental Disclosure Information: | ||||||||||
Interest paid (net of amount capitalized) | $ | 130,641 | $ | 130,882 | ||||||
Income taxes paid | 51,710 | 125,856 |
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: (1) foreign currency transaction loss (gain), (2) transaction costs from business acquisitions, (3) DOJ agreement, (4) nonrecurring legal settlement, (5) restructuring activities loss (gain), (6) Hometown Strong initiative expenses, (7), gain on bargain purchase, (8) shareholder litigation settlement and (9) net income attributable to noncontrolling interest.. 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
Reconciliation of Adjusted EBITDA | |||||||||||||||||||
(Unaudited) | Three Months Ended | Year Ended | |||||||||||||||||
2020 |
2019 |
2020 |
2019 |
||||||||||||||||
(In thousands) | |||||||||||||||||||
Net income | $ | 330 | $ | 92,235 | $ | 95,070 | $ | 456,536 | |||||||||||
Add: | |||||||||||||||||||
Interest expense, net(a) | 27,849 | 30,650 | 118,813 | 118,353 | |||||||||||||||
Income tax expense | 8,855 | 18,681 | 66,755 | 161,009 | |||||||||||||||
Depreciation and amortization | 88,463 | 76,849 | 337,104 | 287,230 | |||||||||||||||
EBITDA | 125,497 | 218,415 | 617,742 | 1,023,128 | |||||||||||||||
Add: | |||||||||||||||||||
Foreign currency transaction loss (gain)(b) | 4,528 | (1,006 | ) | 760 | 6,917 | ||||||||||||||
Transaction costs related to acquisitions(c) | — | 1,239 | 134 | 1,302 | |||||||||||||||
DOJ agreement(d) | — | — | 110,524 | — | |||||||||||||||
Nonrecurring legal settlement(e) | 75,000 | — | 75,000 | — | |||||||||||||||
Restructuring activities loss (gain)(f) | 123 | 6 | 123 | (84 | ) | ||||||||||||||
Hometown Strong commitment(g) | 494 | — | 15,000 | — | |||||||||||||||
Minus: | |||||||||||||||||||
Gain on bargain purchase(h) | — | 56,880 | (3,746 | ) | 56,880 | ||||||||||||||
Shareholder litigation settlement(i) | — | — | 34,643 | — | |||||||||||||||
Net income attributable to noncontrolling interest | 251 | 155 | 313 | 612 | |||||||||||||||
Adjusted EBITDA | $ | 205,391 | $ | 161,619 | $ | 788,073 | $ | 973,771 |
(a) Interest expense, net, consists of interest expense less interest income.
(b) The Company measures the financial statements of its
(c) Transaction costs related to acquisitions includes those charges that are incurred in conjunction with business acquisitions. See Annual Report on Form 10-K, Part II, Item 8, Notes to Consolidated Financial Statements, “Note 2. Business Acquisitions” for more information regarding recent business acquisitions.
(d) On
(e) On
(f) Restructuring charges includes tangible asset impairment, severance, change-in-control compensation costs and losses incurred on both the sale of unneeded broiler eggs and flock depletion.
(g) The Hometown Strong initiative was developed to help communities in which we operate respond to unexpected challenges. For the year ended
(h) The gain on bargain purchase was recognized as a result of the PPL acquisition in
(i) Shareholder litigation settlement is income received as a result of a settlement in the first quarter of 2020. See Part II, Item 8, Notes to Consolidated Financial Statements, “Note 20. Commitments and Contingencies” for more information regarding this settlement.
The summary unaudited consolidated income statement data for the twelve months ended
Reconciliation of LTM Adjusted EBITDA |
||||||||||||||||||||||||
(Unaudited) | Three Months Ended |
LTM Ended 2020 |
||||||||||||||||||||||
2020 |
2020 |
2020 |
2020 |
|||||||||||||||||||||
(In thousands) |
||||||||||||||||||||||||
Net income | $ | 67,449 | $ | (6,400 | ) | $ | 33,691 | $ | 330 | $ | 95,070 | |||||||||||||
Add: | ||||||||||||||||||||||||
Interest expense, net | 30,998 | 31,165 | 28,801 | 27,849 | 118,813 | |||||||||||||||||||
Income tax expense | 38,512 | (2,956 | ) | 22,344 | 8,855 | 66,755 | ||||||||||||||||||
Depreciation and amortization | 79,773 | 84,603 | 84,265 | 88,463 | 337,104 | |||||||||||||||||||
EBITDA | 216,732 | 106,412 | 169,101 | 125,497 | 617,742 | |||||||||||||||||||
Add: | ||||||||||||||||||||||||
Foreign currency transaction loss (gain) | (18,385 | ) | 5,525 | 9,092 | 4,528 | 760 | ||||||||||||||||||
Transaction costs related to acquisitions | 215 | (81 | ) | — | — | 134 | ||||||||||||||||||
DOJ agreement | — | — | 110,524 | — | 110,524 | |||||||||||||||||||
Nonrecurring legal settlement | — | — | — | 75,000 | 75,000 | |||||||||||||||||||
Restructuring activities | — | — | — | 123 | 123 | |||||||||||||||||||
Hometown Strong commitment | — | — | 14,506 | 494 | 15,000 | |||||||||||||||||||
Minus: | ||||||||||||||||||||||||
Gain on bargain purchase | (1,740 | ) | — | (2,006 | ) | — | (3,746 | ) | ||||||||||||||||
Shareholder litigation settlement | 34,643 | — | — | — | 34,643 | |||||||||||||||||||
Net income attributable to noncontrolling interest | 181 | (364 | ) | 245 | 251 | 313 | ||||||||||||||||||
Adjusted EBITDA | $ | 165,478 | $ | 112,220 | $ | 304,984 | $ | 205,391 | $ | 788,073 |
EBITDA margins have been calculated by taking the relevant unaudited EBITDA figures, then dividing by net sales for the applicable period. EBITDA margins are presented because they are used by management and we believe it is frequently used by securities analysts, investors and other interested parties, as a supplement to our results prepared in accordance with
Reconciliation of EBITDA Margin | ||||||||||||||||||||||||||||||||
(Unaudited) | Three Months Ended | Year Ended | Three Months Ended | Year Ended | ||||||||||||||||||||||||||||
(In thousands, except percent of net sales) | ||||||||||||||||||||||||||||||||
Net income | $ | 330 | $ | 92,235 | $ | 95,070 | $ | 456,536 | 0.01 | % | 3.01 | % | 0.79 | % | 4.00 | % | ||||||||||||||||
Add: | ||||||||||||||||||||||||||||||||
Interest expense, net | 27,849 | 30,650 | 118,813 | 118,353 | 0.89 | % | 1.00 | % | 0.98 | % | 1.04 | % | ||||||||||||||||||||
Income tax expense | 8,855 | 18,681 | 66,755 | 161,009 | 0.28 | % | 0.61 | % | 0.55 | % | 1.41 | % | ||||||||||||||||||||
Depreciation and amortization | 88,463 | 76,849 | 337,104 | 287,230 | 2.84 | % | 2.51 | % | 2.79 | % | 2.52 | % | ||||||||||||||||||||
EBITDA | 125,497 | 218,415 | 617,742 | 1,023,128 | 4.02 | % | 7.13 | % | 5.11 | % | 8.97 | % | ||||||||||||||||||||
Add: | ||||||||||||||||||||||||||||||||
Foreign currency transaction loss (gain) |
4,528 | (1,006 | ) | 760 | 6,917 | 0.15 | % | (0.03 | )% | 0.01 | % | 0.06 | % | |||||||||||||||||||
Transaction costs related to acquisitions |
— | 1,239 | 134 | 1,302 | — | % | 0.04 | % | — | % | 0.01 | % | ||||||||||||||||||||
DOJ agreement | — | — | 110,524 | — | — | % | — | % | 0.91 | % | — | % | ||||||||||||||||||||
Nonrecurring legal settlement | 75,000 | — | 75,000 | — | 2.41 | % | — | % | 0.62 | % | — | % | ||||||||||||||||||||
Restructuring activities | 123 | 6 | 123 | (84 | ) | — | % | — | % | — | % | — | % | |||||||||||||||||||
Hometown Strong commitment | 494 | — | 15,000 | — | 0.02 | % | — | % | 0.12 | % | — | % | ||||||||||||||||||||
Minus: | ||||||||||||||||||||||||||||||||
Gain on bargain purchase | — | 56,880 | (3,746 | ) | 56,880 | — | % | 1.86 | % | (0.03 | )% | 0.50 | % | |||||||||||||||||||
Shareholder litigation settlement | — | — | 34,643 | — | — | % | — | % | 0.29 | % | — | % | ||||||||||||||||||||
Net income attributable to noncontrolling interest | 251 | 155 | 313 | 612 | 0.01 | % | 0.01 | % | — | % | 0.01 | % | ||||||||||||||||||||
Adjusted EBITDA | $ | 205,391 | $ | 161,619 | $ | 788,073 | $ | 973,771 | 6.59 | % | 5.27 | % | 6.51 | % | 8.53 | % | ||||||||||||||||
Net sales | $ | 3,117,829 | $ | 3,063,489 | $ | 12,091,901 | $ | 11,409,219 | $ | 3,117,829 | $ | 3,063,489 | $ | 12,091,901 | $ | 11,409,219 |
Adjusted Operating Income is calculated by adding to Operating Income certain items of expense and deducting from Operating Income certain items of income. Management believes that presentation of Adjusted Operating Income provides useful supplemental information about our operating performance and enables comparison of our performance between periods because certain costs shown below are not indicative of our current operating performance. A reconciliation of GAAP operating income to adjusted operating income as follows:
Reconciliation of Adjusted Operating Income | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
(In thousands) | ||||||||||||||||
GAAP operating income ( |
$ | (57,574 | ) | $ | 60,307 | $ | 69,377 | $ | 487,275 | |||||||
DOJ agreement(a) | — | — | 110,524 | — | ||||||||||||
Nonrecurring legal settlement(b) | 75,000 | — | 75,000 | |||||||||||||
Hometown Strong commitment(c) | 494 | — | 15,000 | — | ||||||||||||
Adjusted operating income ( |
$ | 17,920 | $ | 60,307 | $ | 269,901 | $ | 487,275 | ||||||||
Adjusted operating income margin ( |
1.0 | % | 3.2 | % | 3.6 | % | 6.4 | % |
(a) On
(b) On
(c) The Hometown Strong initiative was developed to help communities in which we operate respond to unexpected challenges. For the year ended
Adjusted Operating Income Margin for the
Reconciliation of GAAP Operating Income Margin to Adjusted Operating Income Margin | ||||||||||||
(Unaudited) | ||||||||||||
Three Months Ended | Year Ended | |||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||
(In percent) | ||||||||||||
GAAP operating income margin ( |
(3.1 | ) | % | 3.2 | % | 0.9 | % | 6.4 | % | |||
DOJ agreement | — | % | — | % | 1.6 | % | — | % | ||||
Nonrecurring legal settlement | 4.1 | % | — | % | 1.1 | % | — | % | ||||
Hometown Strong commitment | — | % | — | % | — | % | — | % | ||||
Adjusted operating income margin ( |
1.0 | % | 3.2 | % | 3.6 | % | 6.4 | % |
Adjusted net income attributable to
Reconciliation of Adjusted Net Income | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||
2020 |
2019 |
2020 |
2019 |
||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||
Net income attributable to Pilgrim's | $ | 79 | $ | 92,080 | $ | 94,757 | $ | 455,924 | |||||||||||
Adjustments: | |||||||||||||||||||
Foreign currency transaction loss (gain) | 4,528 | (1,006 | ) | 760 | 6,917 | ||||||||||||||
Acquisition charges and restructuring activities | 123 | 1,245 | 257 | 1,218 | |||||||||||||||
DOJ agreement | — | — | 110,524 | — | |||||||||||||||
Nonrecurring legal settlement | 75,000 | — | 75,000 | — | |||||||||||||||
Hometown Strong commitment | 494 | — | 15,000 | — | |||||||||||||||
Gain on bargain purchase | — | (56,880 | ) | 3,746 | (56,880 | ) | |||||||||||||
Shareholder litigation settlement | — | — | (34,643 | ) | — | ||||||||||||||
Net tax impact of adjustments(a) | (19,841 | ) | (63 | ) | (14,976 | ) | (2,122 | ) | |||||||||||
Adjusted net income attributable to Pilgrim's | $ | 60,383 | $ | 35,376 | $ | 250,425 | $ | 405,057 | |||||||||||
Weighted average diluted shares of common stock outstanding |
243,801 | 249,849 | 246,124 | 249,709 | |||||||||||||||
Adjusted net income attributable to Pilgrim's per common diluted share |
$ | 0.25 | $ | 0.14 | $ | 1.02 | $ | 1.62 |
(a) Net tax impact of adjustments represents the tax impact of all adjustments shown above with the exclusion of the DOJ agreement as this item is non-deductible for tax purposes.
Adjusted EPS is calculated by dividing the adjusted net income attributable to Pilgrim's stockholders by the weighted average number of diluted shares. Management believes that Adjusted EPS provides useful supplemental information about our operating performance and enables comparison of our performance between periods because certain costs shown below are not indicative of our current operating performance. A reconciliation of
Reconciliation of GAAP EPS to Adjusted EPS | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||
2020 |
2019 |
2020 |
2019 |
||||||||||||||||
(In thousands, except per share data) | |||||||||||||||||||
$ | — | $ | 0.37 | $ | 0.39 | $ | 1.83 | ||||||||||||
Adjustments: | |||||||||||||||||||
Foreign currency transaction loss (gain) | 0.02 | — | — | 0.03 | |||||||||||||||
Acquisition charges and restructuring activities | — | — | — | — | |||||||||||||||
DOJ agreement | — | — | 0.45 | — | |||||||||||||||
Nonrecurring legal settlement | 0.31 | — | 0.30 | — | |||||||||||||||
Hometown Strong commitment | — | — | 0.06 | — | |||||||||||||||
Gain on bargain purchase | — | (0.23 | ) | 0.02 | (0.23 | ) | |||||||||||||
Shareholder litigation settlement | — | — | (0.14 | ) | — | ||||||||||||||
Net tax impact of adjustments(a) | (0.08 | ) | — | (0.06 | ) | (0.01 | ) | ||||||||||||
Adjusted EPS | $ | 0.25 | $ | 0.14 | $ | 1.02 | $ | 1.62 | |||||||||||
Weighted average diluted shares of common stock outstanding | 243,801 | 249,849 | 246,124 | 249,709 |
(a) Net tax impact of adjustments represents the tax impact of all adjustments shown above with the exclusion of the DOJ agreement as this item is non-deductible for tax purposes.
Supplementary Geographic Data | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||||
2020 |
2019 |
2020 |
2019 |
||||||||||||||||
(In thousands) | |||||||||||||||||||
Sources of net sales by country of origin: | |||||||||||||||||||
$ | 1,876,226 | $ | 1,904,515 | $ | 7,496,017 | $ | 7,636,716 | ||||||||||||
849,152 | 815,397 | 3,274,292 | 2,383,793 | ||||||||||||||||
392,451 | 343,577 | 1,321,592 | 1,388,710 | ||||||||||||||||
Total net sales | $ | 3,117,829 | $ | 3,063,489 | $ | 12,091,901 | $ | 11,409,219 | |||||||||||
Sources of cost of sales by country of origin: | |||||||||||||||||||
$ | 1,785,018 | $ | 1,779,959 | 6,995,552 | $ | 6,903 | |||||||||||||
799,931 | 759,788 | 3,055,965 | 2,212 | ||||||||||||||||
305,498 | 322,371 | 1,202,661 | 1,224 | ||||||||||||||||
Elimination | (14 | ) | (24 | ) | (473 | ) | — | ||||||||||||
Total cost of sales | $ | 2,890,433 | $ | 2,862,094 | $ | 11,253,705 | $ | 10,338,825 | |||||||||||
Sources of gross profit by country of origin: | |||||||||||||||||||
$ | 91,208 | $ | 124,556 | $ | 500,465 | $ | 733.479 | ||||||||||||
49,221 | 55,609 | 218,327 | 171.751 | ||||||||||||||||
86,953 | 21,206 | 118,931 | 165.068 | ||||||||||||||||
Elimination | 14 | 24 | 473 | 0.096 | |||||||||||||||
Total gross profit | $ | 227,396 | $ | 201,395 | $ | 838,196 | $ | 1,070,394 | |||||||||||
Sources of operating income by country of origin: | |||||||||||||||||||
$ | (57,574 | ) | $ | 60,307 | $ | 69,377 | $ | 487.275 | |||||||||||
26,410 | 16,949 | 102,734 | 79.182 | ||||||||||||||||
70,650 | 8,512 | 72,879 | 124.015 | ||||||||||||||||
Elimination | 14 | 24 | 473 | 96 | |||||||||||||||
Total operating income | $ | 39,500 | $ | 85,792 | $ | 245,463 | $ | 690,568 |
Source: Pilgrim's Pride Corporation