Pilgrim's Pride Reports Financial Results for First Quarter of Fiscal 2010
PITTSBURG, Texas, May 6, 2010 /PRNewswire via COMTEX/ --Pilgrim's Pride Corporation (NYSE: PPC) today reported a net loss of $45.5 million, or $0.21 per diluted share, on net sales of $1.6 billion for the first quarter ended March 28, 2010. These results include nonrecurring administrative restructuring charges and reorganization expenses of $56.5 million pre-tax, or $32.7 million after tax, or $0.16 per diluted share. For the comparable quarter a year earlier, the company reported a net loss of $58.8 million, or $0.79 per share, on total sales of nearly $1.7 billion. Adjusted EBITDA, which excludes restructuring and reorganization charges, was a positive $59.5 million for the first quarter of fiscal 2010.
"While I am encouraged by the progress we have made in several areas of our business, our overall performance in the first quarter of fiscal 2010 was below our expectations," said Don Jackson, Pilgrim's Pride president and chief executive.
The company said several factors contributed to the loss for the quarter, including: restructuring and reorganization costs; a delay in the addition of new further-processed volume which forced the company to sell commodity meat at lower prices; a loss of approximately $11 million related to grain hedges, of which $6 million was mark-to-market on open positions; and lower-than-anticipated market prices for dark meat. Mr. Jackson said the further-processed volume should be onboard before the end of June.
"Our single largest opportunity to create value is through improved product mix both in retail and foodservice," he explained. "At the same time, we must continue to focus on operating more efficiently. We are making good progress in all of these areas, and I am confident that our financial results in the second quarter will show significant improvement. Based on preliminary results, we were profitable for the month of April."
Mr. Jackson said he is optimistic about industry fundamentals heading into the summer. "Although production is slightly higher than a year ago, supplies remain fairly tight. Feed costs appear to have stabilized and there are growing signs that the economy is improving. With many retailers and foodservice operators planning to feature chicken in the months ahead, demand is strengthening," he said.
Consistent with its strategy of matching production to forecasted demand, Pilgrim's Pride announced plans to re-open its chicken processing plant in Douglas, Ga., by January 2011. The company also plans to re-open two other idled facilities, one by mid-2011 and the other by spring 2012. The re-opening of these three plants will result in a production increase of 10 percent, or approximately 3.5 million birds per week.
"Pilgrim's Pride and the industry have taken out significant production capacity over the past two years. We fully believe that with the strengthening economy and improving fundamentals, consumer demand for chicken is increasing. By re-opening these facilities, Pilgrim's Pride will be uniquely positioned to fulfill our customers' needs," said Mr. Jackson.
Conference Call Information
A conference call to discuss the company's quarterly results will be held today at 10 a.m. Central (11 a.m. Eastern). To listen live via telephone, call toll-free 888-264-8905, pass code 9500242. International callers should dial 913-312-1230, pass code 9500242. The presentation will be broadcast live over the Internet at http://www.videonewswire.com/event.asp?id=67962. (Please copy and paste the link into the browser.)
Additionally, the company has posted a slide presentation on its website at http://www.pilgrimspride.com, which may be viewed by listeners in connection with today's conference call. The webcast will be available for replay within approximately two hours of the conclusion of the call. A toll-free telephone replay will be available today beginning at approximately 1 p.m. Central by calling 888-203-1112 pass code 9500242. International callers should dial 719-457-0820, pass code 9500242. The replay will be available for 30 days.
About Pilgrim's Pride
Pilgrim's Pride Corporation employs approximately 41,000 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. For more information, please visit http://www.pilgrimspride.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 forward-looking statements. It is important to note that the 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; the ability of the company to achieve the anticipated synergistic gains from the sale of 64% of its common stock to JBS USA Holdings, Inc; the ability of the company to re-open its idled facilities in the manner and on the time schedule planned due to, among other things, the company's dependence on commodity prices and economic conditions; future pricing for feed ingredients and the company's products; additional 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, particularly in light of Pilgrim's Pride's substantial leverage; restrictions imposed by, and as a result of, Pilgrim's Pride's substantial 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 exports into Russia, the anti-dumping proceeding in Ukraine and the anti-dumping and countervailing duty proceeding in China; 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.
Media & Investor Contact: Gary Rhodes
Vice President, Corporate Communications and Investor Relations
(903) 434-1495
PILGRIM'S PRIDE CORPORATION
Consolidated Statements of Operations
(Unaudited)
Three Months Ended
------------------
March 28, March 28,
--------- ---------
2010 2009
---- ----
(In thousands, except per
share data)
Net sales $1,642,918 $1,698,102
Costs and expenses:
Cost of sales 1,590,899 1,619,359
Gross profit 52,019 78,743
Selling, general and
administrative expense 48,601 58,898
Administrative restructuring
charges, net 35,819 (435)
------ ----
Total costs and expenses 1,675,319 1,677,822
--------- ---------
Operating income (loss) (32,401) 20,280
Other expenses (income):
Interest expense 28,420 46,444
Interest income (547) (2,824)
Miscellaneous, net (2,325) (1,876)
------ ------
Total other expenses (income) 25,548 41,744
------ ------
Loss from continuing operations
before reorganization items and
income taxes (57,949) (21,464)
Reorganization items, net 20,719 35,355
------ ------
Loss from continuing operations
before income taxes (78,668) (56,819)
Income tax expense (benefit) (33,304) 2,347
------- -----
Loss from continuing operations (45,364) (59,166)
Income from discontinued business,
net of tax - 25
--- ---
Net loss (45,364) (59,141)
Less: Net income (loss)
attributable to noncontrolling
interest 183 (376)
--- ----
Net loss attributable to Pilgrim's
Pride Corporation $(45,547) $(58,765)
======== ========
Net loss per common share-basic
and diluted:
Loss from continuing operations
attributable to Pilgrim's Pride
Corporation common stockholders $(0.21) $(0.79)
Income from discontinued business
attributable to Pilgrim's Pride
Corporation common stockholders - -
--- ---
Net loss attributable to Pilgrim's
Pride Corporation common
stockholders $(0.21) $(0.79)
====== ======
Weighted average shares
outstanding - basic and diluted 214,282 74,056
PILGRIM'S PRIDE CORPORATION
Consolidated Balance Sheets
(Unaudited)
March 28, September 26,
--------- -------------
2010 2009
---- ----
Assets: (In thousands)
Cash and cash equivalents $48,398 $220,029
Investment in available-for-sale
securities 7,874 5,302
Trade accounts and other receivables,
less allowance for doubtful accounts 300,101 316,953
Inventories 731,763 763,869
Income taxes receivable 52,102 15,028
Prepaid expenses and other current
assets 55,168 45,013
Total current assets 1,195,406 1,366,194
Investment in available-for-sale
securities 60,646 57,314
Deferred tax assets 296 16,732
Other long-lived assets 125,103 63,609
Identified intangible assets, net 53,213 57,179
Property, plant and equipment, net 1,453,273 1,499,476
---------
$2,887,937 $3,060,504
========== ==========
Liabilities and stockholders' equity:
Accounts payable $242,635 $182,173
Accrued expenses 317,546 309,259
Pre-petition obligations 30,992 -
Income taxes payable 338 -
Current deferred tax liabilities 15,277 16,732
Current maturities of long-term debt 50,347 -
---
Total current liabilities 657,135 508,164
Long-term debt, less current
maturities 1,145,755 41,062
Deferred tax liabilities 41,197 22,213
Other long-term liabilities 93,224 98,783
------ ------
Total liabilities not subject to
compromise 1,937,311 670,222
Liabilities subject to compromise - 2,233,161
Common stock 2,143 771
Additional paid-in capital 1,447,211 646,793
Accumulated deficit (481,339) (469,407)
Accumulated other comprehensive loss (23,966) (27,237)
-------
Total Pilgrim's Pride Corporation
stockholders' equity 944,049 150,920
Noncontrolling interest 6,577 6,201
----- -----
Total stockholders' equity 950,626 157,121
------- -------
$2,887,937 $3,060,504
========== ==========
PILGRIM'S PRIDE CORPORATION
Selected Financial Information
(Unaudited)
Note: "EBITDA" is defined as the sum of income (loss) from
continuing operations plus interest, taxes, depreciation and
amortization. "Adjusted EBITDA" is defined as the sum of EBITDA plus
restructuring charges and reorganization items. EBITDA is presented
because it is used by us 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 from continuing operations. 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.
Three Months Ended
------------------
March 28, March 28,
--------- ---------
2010 2009
---- ----
(In thousands)
Net loss attributable to Pilgrim's
Pride Corporation $(45,547) $(58,765)
Add:
Income tax expense (benefit) (33,304) 2,347
Interest expense, net 27,873 43,620
Depreciation and amortization 57,767 60,513
Minus:
Amortization of capitalized loan
costs 3,780 1,769
EBITDA 3,009 45,946
Add:
Restructuring charges, net 35,819 (435)
Pre-petition reorganization items,
net - (103)
Post-petition reorganization
items, net 20,719 35,355
Adjusted EBITDA $59,547 $80,763
======= =======
SOURCE Pilgrim's Pride Corporation
 |
Media Contact
Cameron Bruett
Communications
Phone: +1 970.506.7801 | Email: cameron.bruett@jbssa.com