Skip to Content

Release Details

Pilgrim's Pride Reports Operating Income of $189 Million with a Margin of 9.6% for the First Quarter of 2016

Apr 27, 2016

GREELEY, Colo., April 27, 2016 (GLOBE NEWSWIRE) -- Pilgrim's Pride Corporation (NASDAQ:PPC) reports first quarter 2016 financial results.

First Quarter Highlights

  • Net Sales of $1.96 billion.
  • Net Income of $118.4 million, GAAP EPS of $0.46.
  • EBIT margins of 10.5% in U.S. and 4.8% in Mexico operations, respectively.
  • Adjusted EBITDA of $233.5 million (or an 11.9% margin).
  • Free Cash Flow of $141.3 million.
  • Conversion of a production facility to USDA-certified organic chicken, enhancing PPC leadership in emerging consumer trends and leveraging partnerships with key customers to support their growth.
Unaudited, In Millions, Except Per Share and Percentages
 Thirteen Weeks Ended
 March 27, 2016 March 29, 2015 Change
Net Sales$1,962.9  $2,052.9   -4.3%
GAAP EPS$0.46  $0.79   -42%
Operating Income$188.8  $327.6   -42.4%
Adjusted EBITDA (1)$233.5  $363.5   -35.8%
Adjusted EBITDA Margin 11.9%  17.8% -5.9pts

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

"Our U.S. and Mexican businesses improved sequentially in Q1 following a challenging Q4, putting us in a strong position for Q2. While market conditions contributed to the improvement, our well-balanced portfolio played a key factor in delivering the improved Q1 performance since we were able to leverage the strength in specific market segments while minimizing the impact of the others," stated Bill Lovette, Chief Executive Officer of Pilgrim's.

"Leveraging our leadership in the ABF market and our partnership with Key customers, we are excited to announce that we have begun work on converting one of our facilities to produce USDA-certified organic chicken. We are committed to deploy valuable resources, when necessary, to accelerate our growth by offering creative solutions to fulfill emerging consumer demand preference trends for more natural products such as ABF and organic chicken. We continue to believe our portfolio strategy, combined with our approach of being a valued partner with key customers and pursuing operational excellence while strategically growing value-added exports, will allow us to deliver less volatility and higher earnings to our shareholders over time."

"In Mexico, we continue to see improvements in market conditions year to date, and we are on target in integrating the new assets and realizing announced synergies. We will continue to seek new opportunities to position us to be a much stronger player in all geographies, meet future demand growth in the region, and give us the best portfolio to serve the Mexican consumers."

"Within Prepared Foods, our vision of sustainable growth remains intact. With the well-regarded Pierce brand playing a central role and the addition of a new fully-cooked line at our Moorefield, WV complex scheduled for completion late this year, we are on track to expand margins and increase our footprint to new accounts where we did not have prior presence."

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:

You may also reach the pre-registration link by logging in through the investor section of our website at 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 (866) 777-2509 within the US, or +1 (412) 317-5413, 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 The webcast will be available for replay through July 28, 2016.

About Pilgrim's Pride

Pilgrim's employs approximately 37,900 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

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.

  March 27, 2016 December 27, 2015
  (In thousands)
Cash and cash equivalents $574,888  $439,638 
Trade accounts and other receivables, less allowance for doubtful accounts 347,401  348,994 
Account receivable from related parties 6,155  2,668 
Inventories 778,528  801,357 
Income taxes receivable 24,105  71,410  
Prepaid expenses and other current assets 76,210  75,602 
Assets held for sale 6,555  6,555 
Total current assets 1,813,842  1,746,224 
Other long-lived assets 15,982   15,672 
Identified intangible assets, net 44,458  47,453 
Goodwill 161,578  156,565 
Property, plant and equipment, net 1,350,890  1,352,529 
Total assets $3,386,750  $3,318,443 
Notes payable to banks $21,577  $28,726 
Accounts payable 471,952  482,954 
Account payable to related parties  1,654  7,000 
Accrued expenses and other current liabilities 279,249  314,966 
Income taxes payable 20,810   13,228 
Current maturities of long-term debt 88  86 
Total current liabilities 795,330  846,960 
Long-term debt, less current maturities 986,400  985,509 
Deferred tax liabilities 132,755  131,882 
Other long-term liabilities 101,076  92,282 
Total liabilities 2,015,561  2,056,633 
Common stock 2,597  2,597 
Treasury stock (101,890) (99,233)
Additional paid-in capital 1,676,554  1,675,674 
Retained earnings (accumulated deficit)  (142,881) (261,252)
Accumulated other comprehensive loss (65,785) (58,930)
Total Pilgrim's Pride Corporation stockholders' equity 1,368,595  1,258,856 
Noncontrolling interest 2,594  2,954 
Total stockholders' equity 1,371,189  1,261,810 
Total liabilities and stockholders' equity $3,386,750  $3,318,443 

  Thirteen Weeks Ended 
  March 27, 2016 March 29, 2015 
  (In thousands, except per share data)
Net sales $1,962,937  $2,052,919  
Cost of sales 1,725,375  1,675,799  
Gross profit 237,562  377,120  
Selling, general and administrative expense 48,788  49,507  
Operating income 188,774  327,613  
Interest expense, net of capitalized interest 12,033  4,855  
Interest income (693) (1,490) 
Foreign currency transaction loss (gain) (235) 8,974  
Miscellaneous, net (2,946) (413) 
Income before income taxes 180,615  315,687  
Income tax expense 62,604  111,494  
Net income 118,011  204,193  
Less: Net income (loss) attributable to noncontrolling interests (360) (22) 
Net income attributable to Pilgrim's Pride Corporation $118,371  $204,215  
Weighted average shares of common stock outstanding:      
Basic 254,807  259,653  
Effect of dilutive common stock equivalents 340  276  
Diluted 255,147  259,929  
Net income attributable to Pilgrim's Pride Corporation per share of common stock outstanding:     
Basic $0.46  $0.79  
Diluted $0.46  $0.79  

  Thirteen Weeks Ended
  March 27, 2016  March 29, 2015
  (In thousands)
Cash flows from operating activities:    
Net income $118,011  $204,193 
Adjustments to reconcile net income to cash provided by operating activities:    
Depreciation and amortization 42,391  36,152 
Foreign currency transaction losses   12,074 
Loss (gain) on property disposals (129) (881)
Share-based compensation 880  797 
Deferred income tax benefit (215)  (2,408)
Changes in operating assets and liabilities:    
Trade accounts and other receivables (1,894) 13,289 
Inventories 22,829  (2,313)
Prepaid expenses and other current assets (608) 9,294 
Accounts payable, accrued expenses and other current liabilities (55,990) (28,702)
Income taxes 55,261  50,639 
Long-term pension and other postretirement obligations (2,311) 1,617 
Other operating assets and liabilities (362) 2,335 
Cash provided by operating activities 177,863  296,086 
Cash flows from investing activities:    
Acquisitions of property, plant and equipment (37,074) (32,591)
Proceeds from property disposals 610  867 
Cash provided by (used in) investing activities (36,464) (31,724)
Cash flows from financing activities:    
Proceeds from note payable to bank 8,885   
Payments on note payable to bank (16,034)  
Proceeds from revolving line of credit   1,680,000 
Payments on revolving line of credit, long-term borrowings and capital lease obligations (21) (533,669)
Proceeds from equity contribution under Tax Sharing Agreement between JBS USA Food Company Holdings and Pilgrim's Pride Corporation 3,691   
Tax benefit related to share-based compensation   7,834 
Payment of capitalized loan costs (13) (8,862)
Purchase of treasury stock (2,657)  
Cash dividends   (1,498,470)
Cash used in financing activities (6,149 ) (353,167)
Effect of exchange rate changes on cash and cash equivalents   (9,301)
Increase (decrease) in cash and cash equivalents 135,250  (98,106)
Cash and cash equivalents, beginning of period 439,638  576,143 
Cash and cash equivalents, end of period $574,888  $478,037 

Selected Financial Information

"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: (i) income (loss) attributable to non-controlling interests, (ii) restructuring charges, (iii) reorganization items, (iv) losses on early extinguishment of debt and (v) foreign currency transaction losses (gains). 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.

Reconciliation of Adjusted EBITDA
(Unaudited)Thirteen Weeks Ended
 March 27, 2016 March 29, 2015
 (In thousands)
Net income$118,011  $204,193 
Interest expense, net11,340  3,365 
Income tax expense (benefit)62,604  111,494 
Depreciation and amortization42,391  36,152 
Amortization of capitalized financing costs928  725 
EBITDA233,418  354,479 
Foreign currency transaction losses (gains)(235) 8,974  
Restructuring charges   
Net income (loss) attributable to noncontrolling interest(360) (22)
Adjusted EBITDA$233,543  $363,475 

The summary unaudited consolidated income statement data for the twelve months ended March 27, 2016 (the LTM Period) have been calculated by subtracting the applicable unaudited consolidated income statement data for the three months ended March 29, 2015 from the sum of (1) the applicable audited consolidated income statement data for the year ended December 27, 2015 and (2) the applicable audited consolidated income statement data for the three months ended March 27, 2016.

Reconciliation of LTM Adjusted EBITDA
(Unaudited) Thirteen Weeks
 Thirteen Weeks
 Thirteen Weeks
 Thirteen Weeks
 LTM Ended
  June 28,
 September 27,
 December 27,
 March 27,
 March 27,
 (In thousands)
Net income $241,624  $ 137,095  $63,050  $118,011  $559,780 
Interest expense, net 10,237  10,182  10,091  11,340  41,850 
Income tax expense (benefit) 129,104  73,153  33,045  62,604  297,906 
Depreciation and amortization 38,918  41,415  42,490  42,391  165,214 
Amortization of capitalized financing costs 864  1,119  930  928  3,841 
EBITDA 419,019  260,726  147,746  233,418  1,060,909 
Foreign currency transaction losses (gains) 2,059  12,773  2,134  (235) 16,731 
Restructuring charges 4,813  792      5,605 
  Net income (loss) attributable to noncontrolling interest 135  33  (98) (360) (290)
Adjusted EBITDA $425,756  $274,258  $149,978  $233,543  $1,083,535 

EBITDA margins have been calculated using by taking the unaudited EBITDA figures and income statement components, then dividing by Net Revenue for the applicable period.

Reconciliation of EBITDA Margin
(Unaudited) Thirteen Weeks Ended Thirteen Weeks Ended
  March 27,
 March 29,
 March 27,
 March 29,
 (In thousands)
Net income from continuing operations $118,011  $204,193  6.01% 9.95%
Interest expense, net 11,340  3,365  0.58% 0.16%
Income tax expense (benefit) 62,604  111,494  3.19% 5.43%
Depreciation and amortization 42,391  36,152  2.16% 1.76 %
Amortization of capitalized financing costs 928  725  0.05% 0.04%
EBITDA 233,418   354,479  11.89% 17.27%
Foreign currency transaction losses (gains) (235) 8,974  (0.01)% 0.44%
Restructuring charges     % %
Net income (loss) attributable to noncontrolling interest (360) (22) (0.02)% %
Adjusted EBITDA $233,543  $363,475  11.90% 17.71%
Net Revenue: $1,962,937  $2,052,919  $1,962,937  $2,052,919 

A reconciliation of net income (loss) attributable to Pilgrim's Pride Corporation per common diluted share to adjusted net income (loss) attributable to Pilgrim's Pride Corporation per common diluted share is as follows:

Reconciliation of Adjusted Earnings
  Thirteen Weeks Ended
  March 27,
 March 29,
  (In thousands, except per share data)
Net income (loss) attributable to Pilgrim's Pride Corporation $118,371  $204,215 
Loss on early extinguishment of debt   68 
Foreign currency transaction losses (gains) (235) 8,974 
Income (loss) before loss on early extinguishment of debt and foreign currency transaction losses (gains) 118,136  213,257 
Weighted average diluted shares of common stock outstanding 255,147  259,929 
Income (loss) before loss on early extinguishment of debt and foreign currency transaction losses (gains) per common diluted share $0.46  $0.82 

A reconciliation of GAAP earnings per share (EPS) to adjusted earnings per share (EPS) is as follows:

Reconciliation of GAAP EPS to Adjusted EPS
  Thirteen Weeks Ended
 March 27, 2016 March 29, 2015
 (In thousands, except per share data)
GAAP EPS$0.46   $0.79 
Loss on early extinguishment of debt   
Foreign currency transaction losses (gains)   0.03 
Adjusted EPS$0.46  $0.82 
Weighted average diluted shares of common stock outstanding255,147  259,929 

Net debt is defined as total long term debt less current maturities, plus current maturities of long term debt and notes payable, minus cash, cash equivalents and investments in available-for-sale securities.  Net debt is presented because it is used by management, 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:

Reconciliation of Net Debt
       Thirteen Weeks Ended
 December 29,
 December 28,
 December 27,
 March 29,
 March 27,
 (In thousands)
Long term debt, less current maturities$501,999  $3,980  $985,509  $1,150,441   $986,400 
Add:  Current maturities of long term debt and notes payable410,234  262  28,812   133  21,665 
Minus:  Cash and cash equivalents508,206  576,143  439,638  478,037  574,888 
Minus:  Available-for-sale securities96,902         
Net debt (cash position)$307,125  $(571,901) $574,683  $672,537  $433,177 

Supplementary Selected Segment and Geographic Data
  Thirteen Weeks Ended
  March 27, 2016 March 29, 2015
  (In thousands)
Sources of net sales by country of origin:    
US: $1,670,281  $1,842,758 
Mexico: 292,656  210,161 
Total net sales: $1,962,937  $2,052,919 
Sources of cost of sales by country of origin:    
US: $1,453,955  $1,504,207 
Mexico: 271,444  171,616 
Elimination: (24) (24)
Total cost of sales: $1,725,375  $1,675,799 
Sources of gross profit by country of origin:    
US: $216,326  $338,551 
Mexico: 21,212  38,545 
Elimination: 24  24 
Total gross profit: $237,562  $377,120 



Dunham Winoto

Director, Investor Relations

(970) 506-8192

Primary Logo

Source: Pilgrim's Pride Corporation

News Provided by Acquire Media