Release Details

GREELEY, Colo., April 27, 2022 (GLOBE NEWSWIRE) -- Pilgrim’s Pride Corporation (NASDAQ: PPC), one of the world's largest poultry producers, reports its first quarter 2022 financial results.

First Quarter Highlights

• Net Sales of $4.24 billion, up nearly 30% from prior year.
• Consolidated GAAP operating income margin of 9.5% with GAAP operating income margins of 13.8% in U.S., 14.7% in Mexico and -1.8% in Europe.
• GAAP Net Income of $280.6 million and GAAP EPS of $1.15. Adjusted Net Income of $287.2 million or adjusted EPS of $1.18.
• Adjusted EBITDA of $501.8 million, or an 11.8% margin, 97.7% higher than a year ago.
• Our diversified portfolio across geographies, brands, and products coupled with our long-term investments in operational excellence, including automation, and focus on service for key customers continued to improve our results and drive further earnings resilience.
• Our US foodservice business improved year-over-year, achieving pre-pandemic sales volumes, while retail volumes remained strong. Our margins improved significantly within the commodity large bird deboning business, while we continue to face higher inputs, increased operating costs, and less than optimal product mix resulting from ongoing labor shortages in all our business.
• Brand momentum continues throughout US retail as Just Bare^® was up 49%, Pilgrim’s^® fully cooked grew over 150%, and e-commerce more than tripled year over year.
• We continue to grow in Mexico, especially in our branded product lines, while profitability followed the normal seasonality of the business.
• Our combined European business was severely impacted by ongoing labor shortages, increasing input costs and unprecedented inflation. Our live pork operations were also challenged by excess supply conditions throughout Europe. The UK teams are focused on leveraging the combined strengths of the businesses to drive operational improvements and capture synergies.
• Our liquidity position remains strong with an adjusted EBITDA net leverage ratio at 1.75x.
  

(1)        Reconciliations for non-U.S. GAAP measures are provided in subsequent sections within this release.

“Throughout the first quarter, we focused on consistent execution of our strategy. As a result, first quarter net sales increased by almost 30% and Adjusted EBITDA nearly doubled from a year ago. Overall, I am very pleased with our team and their ability to navigate through volatile market conditions and grow our business both top and bottom line,” said Fabio Sandri, Chief Executive Officer of Pilgrim’s.

“Our US business led the way in performance as our retail demand remained stable and foodservice recovered to pre-COVID levels. Equally important, our momentum in the retail branded business continued as consumer demand remained resilient despite inflationary headwinds. We have continued to improve our operational staffing levels and to provide a better future for our team members through unprecedented wage increases the last two years and significant investments in our communities. Our team successfully managed through difficult circumstances by driving superior service levels to our Key Customers, improving overall mix, and combating inflation throughout our supply chain.

“Although our UK and European business has undertaken a variety of steps to improve profitability, we faced weak market conditions and rapid escalation of costs that have diluted efforts to improve margins. The teams are confident in their plans and are working in conjunction with Key Customers, while leveraging global supply chain partnerships to resume profitable growth.

“Mexico rebounded from the previous quarter as it experienced better than expected demand while managing through less than ideal grow out conditions and increasing grain costs. We continue to grow our branded business and invest in capacity expansion.

“Moving forward, we will need to remain vigilant given significant inflationary headwinds challenging our entire business. Costs have dramatically increased in commodities, labor, logistics, and other operational inputs. To ensure our business continues to grow and creates value for all stakeholders, we must mitigate these impacts through operational efficiencies and growing with our Key Customers. We will continue to monitor and adjust our business accordingly.

“I am very excited about our growth prospects with our synergies and scale in the U.S., Mexico and the United Kingdom. We are committed to being the best and most respected company in our industry, and I am confident that our team will perform to the best of their ability to manage this extremely volatile environment.”

Conference Call Information

A conference call to discuss Pilgrim’s quarterly results will be held tomorrow, April 28, 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: https://services.choruscall.com/links/ppc220428.html

You may also reach the pre-registration link by logging in through the investor section of our website at https://ir.pilgrims.com in the “Events & Presentations” section.

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.”

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.

About Pilgrim’s Pride

Pilgrim’s employs over 59,000 people and operates protein processing plants and prepared-foods facilities in 14 states, Puerto Rico, Mexico, the U.K., the Republic of Ireland and continental Europe. 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. Without limiting the foregoing, words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “should,” “targets,” “will” and the negative thereof and similar words and expressions are intended to identify 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: the impact of the COVID-19 pandemic, efforts to contain the pandemic and resulting economic downturn on our operations and financial condition, including the risk that our health and safety measures at Pilgrim’s Pride production facilities will not be effective, the risk that we may be unable to prevent the infection of our employees at these facilities, and the risk that we may need to temporarily close one or more of our production facilities; the risk that we may experience decreased production and sales due to the changing demand for food products; the risk that we may face a significant increase in delayed payments from our customers; and additional risks related to COVID-19 set forth in our most recent Form 10-K and Form 10-Q filed with the SEC; 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 channels, including, but not limited to, the impacts of the Russia-Ukraine conflict; the risk of cyber-attacks, natural disasters, power losses, unauthorized access, telecommunication failures, and other problems on our information systems; and the impact of uncertainties of litigation and other legal matters described in our most recent Form 10-K and Form 10-Q, including the In re Broiler Chicken Antitrust Litigation, as well as other risks described under “Risk Factors” in the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and subsequent filings with the Securities and Exchange Commission. The forward-looking statements in this release speak only as of the date hereof, and the Company undertakes no obligation to update any such statement after the date of this release, whether as a result of new information, future developments or otherwise, except as may be required by applicable law.

PILGRIM’S PRIDE CORPORATION

Non-GAAP Financial Measures Reconciliation

(Unaudited)

“EBITDA” is defined as the sum of net income 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 losses, (2) transaction costs related to business acquisitions, (3) costs related to the DOJ agreement and litigation settlements, (4) initial insurance recoveries for Mayfield, Kentucky tornado property damage losses, (5) deconsolidation of subsidiary and (6) 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 U.S. (“U.S. 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 applicable to continuing operations. The Company also believes that Adjusted EBITDA, in combination with the Company’s financial results calculated in accordance with U.S. 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 U.S. GAAP. EBITDA and Adjusted EBITDA have limitations as analytical tools and should not be considered in isolation or as substitutes for an analysis of our results as reported under U.S. GAAP. In addition, other companies in our industry may calculate these measures differently limiting their usefulness as a comparative measure. Because of these limitations, EBITDA and Adjusted EBITDA should not be considered as an alternative to net income as indicators of our operating performance or any other measures of performance derived in accordance with U.S. GAAP. These limitations should be compensated for by relying primarily on our U.S. GAAP results and using EBITDA and Adjusted EBITDA only on a supplemental basis.

The summary unaudited consolidated income statement data for the twelve months ended March 27, 2022 (the LTM Period) have been calculated by subtracting the applicable unaudited consolidated income statement data for the three months ended March 28, 2021 from the sum of (1) the applicable audited consolidated income statement data for the year ended December 26, 2021 and (2) the applicable unaudited consolidated income statement data for the three months ended March 27, 2022.

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 U.S. GAAP, to compare the performance of companies.

Adjusted net income attributable to Pilgrim's Pride Corporation (“Pilgrim's”) is calculated by adding to Net income attributable to Pilgrim's certain items of expense and deducting from Net income attributable to Pilgrim's certain items of income, as shown below in the table. Adjusted net income attributable to Pilgrim’s Pride Corporation per common diluted share 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 U.S. GAAP, to compare the performance of companies. Management also believe that this non-U.S. GAAP financial measure, in combination with our financial results calculated in accordance with U.S. GAAP, provides investors with additional perspective regarding the impact of such charges on net income attributable to Pilgrim’s Pride Corporation per common diluted share. Adjusted net income attributable to Pilgrim’s Pride Corporation per common diluted share is not a measurement of financial performance under U.S. GAAP, has limitations as an analytical tool and should not be considered in isolation or as a substitute for an analysis of our results as reported under U.S. GAAP. Management believes that presentation of adjusted net income attributable to Pilgrim’s 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 net income attributable to Pilgrim’s Pride Corporation per common diluted share to adjusted net income attributable to Pilgrim’s Pride Corporation per common diluted share is as follows:

(a)        Net tax expense (benefit) of adjustments represents the tax impact of all adjustments shown above.

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 U.S. GAAP to non-U.S. GAAP financial measures is as follows:

(a)        Net tax impact of adjustments represents the tax impact of all adjustments shown above.

Source: Pilgrim's Pride Corporation