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Release Details

Pilgrim’s Pride Reports Q1 Net Sales of $3.07 Billion, Operating Income of $84 Million and GAAP EPS of $0.27

Apr 29, 2020

GREELEY, Colo., April 29, 2020 (GLOBE NEWSWIRE) -- Pilgrim’s Pride Corporation (NASDAQ: PPC) reports first quarter 2020 financial results.

First Quarter Highlights

  • Net Sales of $3.07 billion.
  • Net GAAP Income of $67.3 million, including one-time $0.09 per share gain on case settlement.
  • Operating Income margins of 4.4% in U.S., -7.3% in Mexico and 2.8% in Europe operations, respectively.
  • Adjusted EBITDA of $165.5 million, or a 5.4% margin.
  • Strong focus in execution and dedication by our team members, combined with portfolio strategy of differentiated products, strong Key Customer relationships, and diversified global footprint reducing volatility of specific market conditions, especially under unprecedented Covid-19 impact at end of first quarter.
  • U.S. continues to improve our relative performance versus the industry across all business units, supported by our business model and agility in changing mix.
  • Mexico experiencing weak macro conditions persisting longer than expected, partially offset by growth in Prepared Foods.
  • Operating results from legacy European business (Moy Park) at strong levels with increasing operational efficiencies and input cost mitigation. Newly acquired operations continue to generate positive EBITDA, and remain on track to achieve performance comparable to 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 priorities to continue strengthening our differentiated global platforms.
Unaudited (2)   Three Months Ended
    March 29,
  March 31,
  Y/Y Change
    (In millions, except per share and percentages)
Net sales   $ 3,074.9     $ 2,724.7     +12.9 %
U.S. GAAP EPS   $ 0.27     $ 0.34     (20.6 )%
Operating income   $ 84.4     $ 137.0     (38.4 )%
Adjusted EBITDA(1)   $ 165.5     $ 204.4     (19.0 )%
Adjusted EBITDA margin(1)   5.4 %   7.5 %   -2.1  pts

(1)           Reconciliations for non-U.S. GAAP measures are provided in subsequent sections within this release.
(2)           Comparisons include Tulip from 10/15/19 forward.

“We are grateful to our team members for their commitment, dedication, and continued hard work, in supporting our ability to keep our team members safe and healthy, while maintaining production and supply to our customers during this unprecedented crisis. Despite the volatile and challenging markets in Q1, in part due to Covid-19, our strategy has continued to achieve solid results in relative performance to industry competition, and deliver more resilient performance regardless of changes in specific market conditions. Operating results in Europe significantly improved but were more than offset by difficult market dynamics in the U.S. and Mexico. In spite of the difficult global macro conditions, our results have remained well-balanced, and are the result of our vision to become the best and most respected company, creating the opportunity of a better future for our team members. To support our vision, we are continuing our strategy of developing a unique portfolio of diverse, complementary business models, continuing to relentlessly pursue operational excellence, becoming a more valued partner with Key Customers, and creating an environment for safe people, safe products and healthy attitudes,” stated Jayson Penn, Chief Executive Officer of Pilgrim's.

“In the U.S., the market tracked normal seasonality initially during Q1 before wider implementations of travel and movement restrictions due to Covid-19 disrupted retail and foodservice channel demand. The large bird deboning market was especially volatile during the quarter and remained challenging compared to 2019. Operationally however, we continue to improve our relative performance versus the industry across all our business units, including large bird deboning. We also adapted quickly to the change in channel demand by shifting the mix of our production capabilities, supported by our close partnerships with Key Customers, strong focus in execution by our team members, the geographical diversity of our footprint, and our presence across all bird size categories.”

“Market environment in Mexico during Q1 was difficult as weak macro conditions persisted longer than expected, contributing to uncertainties in consumer spending. Prices, especially in the traditional markets, were below seasonal expectations before rebounding to reach normal levels by the end of the quarter. Our increased share of non-commodity products, strong execution, and growth in Prepared Foods, have helped to partially offset the weakness.”

“The legacy European operations once again delivered robust results in Q1, maintaining the trend achieved in the last three quarters of 2019. We generated revenue that was in-line with last year while operating income significantly improved year on year, and was 8% higher than the previous quarter. Our newly acquired European operations also performed well and continued to generate positive EBITDA. The increase in performance was driven by robust demand at retail, partially offset by a reduction in foodservice, continuing strength in pork exports especially to China, as well as the initial implementations of operational improvements.”

Conference Call Information

A conference call to discuss Pilgrim’s quarterly results will be held tomorrow, April 30, 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 (844) 883-3889 within the US, or +1 (412) 317-9245 internationally, 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 30, 2020.

About Pilgrim’s Pride

Pilgrim’s employs approximately 58,600 people and operates protein processing plants and prepared-foods facilities in 14 states, Puerto Rico, Mexico, the U.K, and continental Europe. 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. 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 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 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, 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.

Contact: Dunham Winoto
  Investor Relations 
  (970) 506-8192 

    March 29, 2020   December 29, 2019
    (In thousands)
Cash and cash equivalents   $ 511,183     $ 260,568  
Restricted cash and cash equivalents   25,234     20,009  
Trade accounts and other receivables, less allowance for doubtful accounts   754,246     741,281  
Accounts receivable from related parties   743     944  
Inventories   1,362,358     1,383,535  
Income taxes receivable   53,495     60,204  
Prepaid expenses and other current assets   152,920     131,695  
Total current assets   2,860,179     2,598,236  
Deferred tax assets   4,443     4,426  
Other long-lived assets   34,511     36,325  
Identified intangible assets, net   286,606     301,513  
Goodwill   568,183     596,053  
Operating lease assets, net   935,266     973,750  
Property, plant and equipment, net   2,562,794     2,592,061  
Total assets   $ 7,251,982     $ 7,102,364  
Accounts payable   $ 915,663     $ 993,780  
Accounts payable to related parties   7,998     3,819  
Revenue contract liability   32,084     41,770  
Accrued expenses and other current liabilities   532,509     575,319  
Income taxes payable   1,951     7,075  
Current maturities of long-term debt   25,877     26,392  
Total current liabilities   1,516,082     1,648,155  
Noncurrent operating lease liability, less current maturities   219,860     235,382  
Long-term debt, less current maturities   2,620,907     2,276,029  
Noncurrent income taxes payable   7,731     7,731  
Deferred tax liabilities   309,471     301,907  
Other long-term liabilities   101,440     97,100  
Total liabilities   4,775,491     4,566,304  
Common stock   2,612     2,611  
Treasury stock   (262,798 )   (234,892 )
Additional paid-in capital   1,955,936     1,955,261  
Retained earnings   945,080     877,812  
Accumulated other comprehensive loss   (174,917 )   (75,129 )
Total Pilgrim’s Pride Corporation stockholders’ equity   2,465,913     2,525,663  
Noncontrolling interest   10,578     10,397  
Total stockholders’ equity   2,476,491     2,536,060  
Total liabilities and stockholders’ equity   $ 7,251,982     $ 7,102,364  

    Three Months Ended
    March 29, 2020   March 31, 2019
    (In thousands, except per share data)
Net sales   $ 3,074,928     $ 2,724,675  
Cost of sales   2,897,829     2,505,736  
Gross profit   177,099     218,939  
Selling, general and administrative expense   92,713     81,924  
Administrative restructuring activity       (27 )
Operating income   84,386     137,042  
Interest expense, net of capitalized interest   32,688     33,562  
Interest income   (1,690 )   (3,340 )
Foreign currency transaction losses (gains)   (18,385 )   2,636  
Miscellaneous, net   (34,188 )   (357 )
Income before income taxes   105,961     104,541  
Income tax expense   38,512     20,416  
Net income   67,449     84,125  
Less: Net income (loss) attributable to noncontrolling interests   181     114  
Net income attributable to Pilgrim’s Pride Corporation   $ 67,268     $ 84,011  
Weighted average shares of common stock outstanding:        
Basic   249,347     249,167  
Effect of dilutive common stock equivalents   275     390  
Diluted   249,622     249,557  
Net income attributable to Pilgrim's Pride Corporation per share of common stock outstanding:        
Basic   $ 0.27     $ 0.34  
Diluted   $ 0.27     $ 0.34  

    Three Months Ended
    March 29, 2020   March 31, 2019
    (In thousands)
Cash flows from operating activities:        
Net income   $ 67,449     $ 84,125  
Adjustments to reconcile net income to cash provided by operating activities:        
Depreciation and amortization   79,773     67,182  
Deferred income tax expense (benefit)   17,023     (4,089 )
Negative adjustment to previously recognized gain on bargain purchase   1,740      
Loan cost amortization   1,212     1,201  
Share-based compensation   676     1,882  
Gain on property disposals   (521 )   (108 )
Loss (gain) on equity-method investments   309     (16 )
Accretion of discount related to Senior Notes   246     246  
Amortization of premium related to Senior Notes   (167 )   (167 )
Foreign currency transaction loss (gain) related to borrowing arrangements       (1,034 )
Changes in operating assets and liabilities:        
Trade accounts and other receivables   (26,296 )   2,381  
Inventories   9,333     (1,368 )
Prepaid expenses and other current assets   (22,419 )   (11,479 )
Accounts payable, accrued expenses and other current liabilities   (108,004 )   (21,968 )
Income taxes   (16 )   6,579  
Long-term pension and other postretirement obligations   (6,282 )   (1,315 )
Other operating assets and liabilities   7,008     (1,683 )
Cash provided by operating activities   21,064     120,369  
Cash flows from investing activities:        
Acquisitions of property, plant and equipment   (77,168 )   (87,941 )
Business acquisition   (1,740 )    
Proceeds from property disposals   632     539  
Cash used in investing activities   (78,276 )   (87,402 )
Cash flows from financing activities:        
Proceeds from revolving line of credit and long-term borrowings   356,547     67,193  
Purchase of common stock under share repurchase program   (27,906 )    
Payments on revolving line of credit, long-term borrowings and finance lease obligations   (13,396 )   (62,293 )
Proceeds from equity contribution under Tax Sharing Agreement between JBS USA Food Company Holdings and Pilgrim's Pride Corporation       (525 )
Payment of capitalized loan costs       (458 )
Cash provided by (used in) financing activities   315,245     3,917  
Effect of exchange rate changes on cash and cash equivalents   (2,193 )   429  
Increase (decrease) in cash, cash equivalents and restricted cash   255,840     37,313  
Cash, cash equivalents and restricted cash, beginning of period   280,577     361,578  
Cash, cash equivalents and restricted cash, end of period   $ 536,417     $ 398,891  


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: (1) income (loss) attributable to noncontrolling interests, (2) charges or income from restructuring activities, (3) reorganization items, (4) transaction costs related to acquisitions, (5) gain on bargain purchase and (6) 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 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. 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. 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 U.S. GAAP.

Reconciliation of Adjusted EBITDA
(Unaudited) Three Months Ended
  March 29, 2020   March 31, 2019
  (In thousands)
Net income $ 67,449     $ 84,125  
Interest expense, net 30,998     30,222  
Income tax expense 38,512     20,416  
Depreciation and amortization 79,773     67,182  
EBITDA 216,732     201,945  
Foreign currency transaction losses (gains) (18,385 )   2,636  
Transaction costs related to acquisitions 215      
Restructuring activity     (27 )
Negative adjustment to previously recognized gain on bargain purchase (1,740 )    
Shareholder litigation settlement 34,643      
Net income attributable to noncontrolling interest 181     114  
Adjusted EBITDA $ 165,478     $ 204,440  

The summary unaudited consolidated income statement data for the twelve months ended March 29, 2020 (the LTM Period) have been calculated by subtracting the applicable unaudited consolidated income statement data for the three months ended March 31, 2019 from the sum of (1) the applicable audited consolidated income statement data for the year ended December 29, 2019 and (2) the applicable audited consolidated income statement data for the three months ended March 29, 2020.

Reconciliation of LTM Adjusted EBITDA
(Unaudited)   Three Months Ended   LTM Ended
    June 30,
  September 29,
  December 29,
  March 29,
  March 29,
    (In thousands)
Net income   $ 170,080     $ 110,096     $ 92,235     $ 67,449     $ 439,860  
Interest expense, net   30,150     27,330     30,650     30,998     119,128  
Income tax expense   75,547     46,365     18,681     38,512     179,105  
Depreciation and amortization   71,348     71,851     76,849     79,773     299,821  
EBITDA   347,125     255,642     218,415     216,732     1,037,914  
Foreign currency transaction losses (gains)   2,260     3,027     (1,006 )   (18,385 )   (14,104 )
Transaction costs related to acquisitions       63     1,239     215     1,517  
Restructuring activity   (43 )   (20 )   6         (57 )
Gain on bargain purchase           56,880     (1,740 )   55,140  
Shareholder litigation settlement               34,643     34,643  
Net income attributable to noncontrolling interest   12     331     155     181     679  
Adjusted EBITDA   $ 349,330     $ 258,381     $ 161,619     $ 165,478     $ 934,808  

EBITDA margins have been calculated by taking the relevant unaudited EBITDA figures, then dividing by Net Sales for the applicable period.

Reconciliation of EBITDA Margin
(Unaudited)   Three Months Ended   Three Months Ended
    March 29, 2020   March 31, 2019   March 29, 2020   March 31, 2019
    (In thousands)
Net income   $ 67,449     $ 84,125     2.19 %   3.09 %
Interest expense, net   30,998     30,222     1.01 %   1.11 %
Income tax expense   38,512     20,416     1.25 %   0.75 %
Depreciation and amortization   79,773     67,182     2.59 %   2.47 %
EBITDA   216,732     201,945     7.05 %   7.41 %
Foreign currency transaction losses (gains)   (18,385 )   2,636     (0.59 )%   0.10 %
Acquisition charges   215         0.01 %   %
Shareholder litigation settlement           %   %
Restructuring activity       (27 )   %   %
Negative adjustment to previously recognized gain on bargain purchase   (1,740 )       (0.06 )%   %
Shareholder litigation settlement   34,643         1.13 %   %
Net income (loss) attributable to noncontrolling interest   181     114     0.01 %   %
Adjusted EBITDA   $ 165,478     $ 204,440     5.38 %   7.50 %
Net sales   $ 3,074,928     $ 2,724,675          

Supplementary Selected Segment and Geographic Data
(Unaudited)   Three Months Ended
    March 29, 2020   March 31, 2019
    (In thousands)
Sources of net sales by geographic region of origin:        
US   $ 1,926,880     $ 1,883,591  
Europe   822,262     514,962  
Mexico   325,786     326,122  
Total net sales   $ 3,074,928     $ 2,724,675  
Sources of cost of sales by geographic region of origin:        
US   $ 1,788,777     $ 1,713,419  
Europe   770,134     485,378  
Mexico   338,942     306,963  
Elimination   (24 )   (24 )
Total cost of sales   $ 2,897,829     $ 2,505,736  
Sources of gross profit by geographic region of origin:        
US   $ 138,103     $ 170,172  
Europe   52,128     29,584  
Mexico   (13,156 )   19,159  
Elimination   24     24  
Total gross profit   $ 177,099     $ 218,939  
Sources of operating income by geographic region of origin:        
US   $ 85,052     $ 114,840  
Europe   23,190     12,714  
Mexico   (23,880 )   9,464  
Elimination   24     24  
Total operating income   $ 84,386     $ 137,042  



Source: Pilgrim's Pride Corporation