Pilgrim's Pride Reports Financial Results for Third Quarter of Fiscal 2011
GREELEY, Colo., Oct 28, 2011 (GlobeNewswire via COMTEX) --
Pilgrim's Pride Corporation (NYSE:PPC) today reported a net loss of $162.5 million, or $0.76 per share, on net sales of $1.9 billion for the third quarter ended September 25, 2011. For the comparable quarter a year ago, the company reported net earnings of $57.9 million, or $0.27 per share, on total sales of $1.7 billion.
Bill Lovette, Chief Executive Officer of Pilgrim's Pride, commented on the results, stating, "The quarter results included non-recurring charges of $52.7 million, without which our net loss per share would have been $0.52. We are at a $295 million run rate against our goal of $400 million on operational improvements, which helped provide a positive operating cash flow of $10.7 million for the quarter. We continue to drive ownership, responsibility and accountability at every level. We are making decisions now that will drive profitability going forward."
Market prices for some key chicken products were down sharply compared to a year ago. Boneless skinless breast meat in the third quarter averaged $1.27 per pound versus $1.71 a year ago, while the market price for wings was $0.89, compared to $1.19 per pound last year. The average market price for leg quarters was $0.46 per pound, up $0.09 per pound from a year ago, while Georgia Dock prices stayed essentially flat at $0.88 per pound.
Simultaneously, feed-ingredient costs remained high over the quarter. Market prices for corn averaged $6.92 per bushel, up 65% from a year ago, while soybean meal averaged $352 per ton, a 15.4% increase. Feed ingredient purchases, which represent the largest component of Pilgrim's cost of goods sold, were approximately $102 million higher during the quarter than the year-ago period. The corn market continues to demonstrate volatility, ranging from $6.17 to $7.65 per bushel during the third quarter. The company recognized $34 million in net mark-to-market gains related to changes in the fair value of its derivatives during the third quarter of 2011.
Lovette also discussed the supply indicators in the market, stating that although prices have yet to stabilize at profitable levels, egg sets, pullet placements and chicks placed all showed declines year over year. As cold storage levels also reflect a reduction for the year, the signals are in favor of stronger chicken pricing heading into 2012. He also reiterated the success that the company has had in moving away from 12 month fixed pricing scenarios.
For the first three quarters of fiscal 2011, Pilgrim's reported a net loss of $411.4 million, or $1.92 per share, on sales of $5.7 billion. This compares to net earnings of $45.3 million, or $0.21 per share for the comparable period in 2010.
Conference Call Information
Pilgrim's quarterly earnings call will be held today at 11:30 a.m. Eastern. Participants may join the conference live by telephone, by calling +1-877-875-0930, and requesting the "Pilgrim's Pride Conference." International callers should dial +1-412-902-6569. We encourage participants to join us for the live webcast by logging in via the internet at http://services.choruscall.com/links/ppc111028.html (Please copy and paste the link into the browser.) The live call and related slide presentation may also be accessed through the "Investors" section of our website at www.pilgrims.com.
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 that same day beginning at approximately 2:30 p.m. Eastern time by Those without internet access can listen to the replay through the close of business on November 11, 2011 by dialing +1-877-344-7529 from U.S. telephones, or at +1-412-317- 0088 for those calling internationally. The conference number is 10005093.
About Pilgrim's Pride
Pilgrim's employs approximately 40,500 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. For more information, please visit http://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 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 67.3% 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.
PILGRIM'S PRIDE CORPORATION
Consolidated Statements of Operations
(Unaudited)
Thirteen Weeks Ended Thirty-Nine Weeks Ended
-------------------------- --------------------------
September September September September
25, 26, 25, 26,
2011 2010 2011 2010
------------ ------------ ------------ ------------
(In thousands, except per share data)
Net sales $ 1,891,224 $ 1,719,850 $ 5,706,390 $ 5,070,336
Costs and expenses:
Cost of sales 1,953,611 1,560,031 5,868,115 4,726,007
Operational restructuring
charges -- 2,525 -- 2,525
------------ ------------ ------------ ------------
Gross profit (loss) (62,387) 157,294 (161,725) 341,804
Selling, general and
administrative expense 51,197 45,096 157,341 157,415
Administrative restructuring
charges, net 11,472 (1,006) 11,472 51,695
------------ ------------ ------------ ------------
Operating income (loss) (125,056) 113,204 (330,538) 132,694
Interest expense 27,930 26,492 82,863 81,027
Interest income (323) (646) (1,311) (1,820)
Foreign currency transaction
losses (gains) 13,925 (280) 11,235 877
Miscellaneous, net (3,728) (1,396) (6,236) (9,382)
------------ ------------ ------------ ------------
Income (loss) before
reorganization items and
income taxes (162,860) 89,034 (417,089) 61,992
Reorganization items, net -- -- -- 18,541
------------ ------------ ------------ ------------
Income (loss) before income
taxes (162,860) 89,034 (417,089) 43,451
Income tax expense (benefit) (60) 30,512 (6,462) (4,295)
------------ ------------ ------------ ------------
Net income (loss) (162,800) 58,522 (410,627) 47,746
Less: Net income (loss)
attributable to
noncontrolling interests (284) 596 790 2,449
------------ ------------ ------------ ------------
Net income (loss) attributable
to Pilgrim's Pride
Corporation $ (162,516) $ 57,926 $ (411,417) $ 45,297
============ ============ ============ ============
Weighted average shares of
common stock outstanding:
Basic 214,282 214,282 214,282 214,282
Diluted 214,282 214,282 214,282 214,282
Net income (loss) per share of
common stock outstanding:
Basic $ (0.76) $ 0.27 $ (1.92) $ 0.21
Diluted $ (0.76) $ 0.27 $ (1.92) $ 0.21
PILGRIM'S PRIDE CORPORATION
Consolidated Balance Sheets
(Unaudited)September 25, December 26,
2011 2010 ------------ ------------ (In thousands)
Cash and cash equivalents $ 46,904 $ 106,077 Restricted cash and cash equivalents 57,308 60,953 Investment in available-for-sale securities 52 1,554 Trade accounts and other receivables, less allowance for doubtful accounts 355,349 321,300 Account receivable from JBS USA, LLC 6,021 465 Inventories 919,550 1,029,254 Income taxes receivable 57,896 58,465 Current deferred tax assets 3,176 3,476 Prepaid expenses and other current assets 44,987 81,250
Assets held for sale 46,220 47,671 ------------ ------------ Total current assets 1,537,463 1,710,465 Investment in available-for-sale securities 1,797 11,595 Deferred tax assets 35,091 22,609 Other long-lived assets 62,124 67,143 Identified intangible assets, net 45,519 48,950 Property, plant and equipment, net 1,317,692 1,358,136 ------------ ------------
Total assets $ 2,999,686 $ 3,218,898 ============ ============
Accounts payable $ 326,308 $ 329,780 Account payable to JBS USA, LLC 16,257 7,212 Accrued expenses and other current liabilities 312,155 297,940 Income taxes payable 1,659 6,814 Current deferred tax liabilities 38,744 38,745 Current maturities of long-term debt 15,609 58,144 ------------ ------------
Total current liabilities 710,732 738,635
Long-term debt, less current maturities 1,458,890 1,281,160 Note payable to JBS USA Holdings, Inc. 50,000 -- Deferred tax liabilities 4,751 3,476
Other long-term liabilities 111,391 117,031 ------------ ------------ Total liabilities 2,335,764 2,140,302 Common stock 2,143 2,143 Additional paid-in capital 1,443,335 1,442,810 Accumulated deficit (758,590) (348,653) Accumulated other comprehensive loss (25,492) (23,637) ------------ ------------ Total Pilgrim's Pride Corporation stockholders' equity 661,396 1,072,663
Noncontrolling interest 2,526 5,933 ------------ ------------
Total stockholders' equity 663,922 1,078,596 ------------ ------------ Total liabilities and stockholders' equity $ 2,999,686 $ 3,218,898 ============ ============
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, reorganization items and loss on
early extinguishment of debt less net income attributable to noncontrolling
interests. 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.
Thirteen Weeks Ended Thirty-Nine Weeks Ended
------------------------ ------------------------
September September September September
25, 26, 25, 26,
2011 2010 2011 2010
------------ ---------- ------------ ----------
(In thousands, except (In thousands, except
per share data) per share data)
Net loss from continuing
operations $ (162,800) $ 58,522 $ (410,627) $ 47,746
Add:
Income tax expense (benefit) (60) 30,512 (6,462) (4,295)
Interest expense, net 27,607 25,846 81,552 79,207
Depreciation and amortization 53,631 57,924 159,425 175,397
Minus:
Amortization of capitalized
loan costs 2,515 3,726 7,008 11,266
------------ ---------- ------------ ----------
EBITDA (84,137) 169,078 (183,120) 286,789
Add:
Restructuring charges 11,472 1,519 11,472 54,220
Reorganization items, net -- -- -- 18,541
Minus:
Net income attributable to
noncontrolling interest (284) 596 790 2,449
------------ ---------- ------------ ----------
Adjusted EBITDA $ (72,381) $ 170,001 $ (172,438) $ 357,101
============ ========== ============ ==========
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SOURCE: Pilgrim's Pride Corporation
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Phone: +1 970.506.7801 | Email: cameron.bruett@jbssa.com