Pilgrim’s Pride Reports Second Quarter 2024 Results with $4.6 Billion in Net Sales and Operating Income of $440.8 Million
Second Quarter Highlights
Net Sales of$4.6 billion .- Consolidated GAAP operating income margin of 9.7%.
- GAAP Net Income of
$326.5 million and GAAP EPS of$1.37 . Adjusted Net Income of$398.0 million or Adjusted EPS of$1.67 . - Adjusted EBITDA of
$655.9 million , or a 14.4% margin, with Adjusted EBITDA margins of 16.7% in theU.S. , 7.4% inEurope , and 19.4% inMexico . - Our
U.S. fresh portfolio continued to strengthen given enhanced market conditions and disciplined execution of our strategies. Case Ready and Small Bird continue to improve through expanding partnerships with Key Customers with differentiated offerings, and Big Bird improved from better commodity fundamentals and progress in operational excellence. - Diversification through
Prepared Foods continues to gain momentum as fully cooked branded offerings grew across retail and food service through innovation, increased distribution, and promotional activity. Net sales of Just Bare® grew double digits and ahead of the category; and our new and innovative offerings under the Pilgrim’s® brand has secured incremental distribution. Europe grew Adjusted EBITDA over 40% compared to prior year as mix with Key Customers improved and operational excellence remained on track. Our performance in safety, quality and service was recognized at the National Egg & Poultry Awards as Processor of the Year forUnited Kingdom . Diversification through brands and innovation accelerated as Richmond® and Fridge Raiders® grew nearly double digits, and over 85 new products have been launched.Mexico improved given sustained balance in commodity supply and demand fundamentals, growth with Key Customers, and continued momentum of brands across Fresh and Prepared offerings.- Strong liquidity position with a net leverage ratio of 1.1x Adjusted EBITDA providing the foundation to execute our growth strategy.
- Advancing our strategy of growing and adding value to our portfolio, we ramped up our new protein conversion plant in
South Georgia during the quarter and continue to partner with Key Customers to support future growth.
(Unaudited) | Three Months Ended | Six Months Ended | ||||||||||||||||||||
2024 |
2023 |
Y/Y Change | 2024 |
2023 |
Y/Y Change | |||||||||||||||||
(In millions, except per share and percentages) | ||||||||||||||||||||||
Net sales | $ | 4,559.3 | $ | 4,308.1 | +5.8 | % | $ | 8,921.2 | $ | 8,473.7 | +5.3 | % | ||||||||||
$ | 1.37 | $ | 0.25 | +448.0 | % | $ | 2.11 | $ | 0.28 | +653.6 | % | |||||||||||
Operating income | $ | 440.8 | $ | 100.3 | +339.5 | % | $ | 691.1 | $ | 131.6 | +425.2 | % | ||||||||||
Adjusted EBITDA(1) | $ | 655.9 | $ | 248.7 | +163.7 | % | $ | 1,027.8 | $ | 400.7 | +156.5 | % | ||||||||||
Adjusted EBITDA margin(1) | 14.4 | % | 5.8 | % | +8.6pts | 11.5 | % | 4.7 | % | +6.8pts |
(1) Reconciliations for non-
“Our global portfolio delivered significant year-over-year profitability growth. We remained disciplined in the execution of our strategies, focusing on what we can control and continuing to expand our relationships with Key Customers, elevating our performance as market fundamentals became increasingly attractive,” said
In the
“Our diversified
In
“Europe’s performance demonstrates the robust nature of our strategies and agility of our team. Our diversified portfolio allowed us to rapidly adjust to consumer preferences and meet Key Customer needs. These efforts were further amplified by continued operational excellence to improve production efficiencies,” said Sandri.
“Mexico continues to drive growth above market for our Key Customers and branded offerings. Given our investments to expand production, we have an opportunity to further develop our marketplace presence and diversify our portfolio,” said Sandri.
The ramp up of our recently completed protein conversion plant in
“Our investment in protein conversion reinforces our strategies to drive profitable growth and mitigates our operational risk. We will continue to explore opportunities to strengthen our business and further diversify our portfolio,” remarked Sandri.
Conference Call Information
A conference call to discuss Pilgrim’s quarterly results will be held tomorrow,
To pre-register, go to: https://services.choruscall.com/links/ppc240801.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
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 approximately 62,400 people and operates protein processing plants and prepared foods facilities in 14 states,
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
Contact: | |
Head of Strategy, Investor Relations, & Sustainability | |
IRPPC@pilgrims.com | |
www.pilgrims.com |
PILGRIM’S PRIDE CORPORATION | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
Cash and cash equivalents | $ | 1,317,087 | $ | 697,748 | ||||
Restricted cash and restricted cash equivalents | 17,039 | 33,475 | ||||||
Trade accounts and other receivables, less allowance for credit losses | 1,045,860 | 1,129,178 | ||||||
Accounts receivable from related parties | 2,055 | 1,778 | ||||||
Inventories | 1,806,244 | 1,985,399 | ||||||
Income taxes receivable | 93,259 | 161,062 | ||||||
Prepaid expenses and other current assets | 230,610 | 195,831 | ||||||
Total current assets | 4,512,154 | 4,204,471 | ||||||
Deferred tax assets | 31,980 | 4,890 | ||||||
Operating lease assets, net | 270,872 | 266,707 | ||||||
Other long-lived assets | 53,236 | 35,646 | ||||||
Intangible assets, net | 828,902 | 853,983 | ||||||
1,258,285 | 1,286,261 | |||||||
Property, plant and equipment, net | 3,123,028 | 3,158,403 | ||||||
Total assets | $ | 10,078,457 | $ | 9,810,361 | ||||
Accounts payable | $ | 1,337,691 | $ | 1,410,576 | ||||
Accounts payable to related parties | 23,331 | 41,254 | ||||||
Revenue contract liabilities | 67,176 | 84,958 | ||||||
Accrued expenses and other current liabilities | 999,075 | 926,727 | ||||||
Income taxes payable | 56,487 | 31,678 | ||||||
Current maturities of long-term debt | 585 | 674 | ||||||
Total current liabilities | 2,484,345 | 2,495,867 | ||||||
Noncurrent operating lease liabilities, less current maturities | 212,219 | 203,348 | ||||||
Long-term debt, less current maturities | 3,183,095 | 3,340,841 | ||||||
Deferred tax liabilities | 419,366 | 385,548 | ||||||
Other long-term liabilities | 33,951 | 40,180 | ||||||
Total liabilities | 6,332,976 | 6,465,784 | ||||||
Common stock | 2,621 | 2,620 | ||||||
(544,687 | ) | (544,687 | ) | |||||
Additional paid-in capital | 1,986,198 | 1,978,849 | ||||||
Retained earnings | 2,571,797 | 2,071,073 | ||||||
Accumulated other comprehensive loss | (284,390 | ) | (176,483 | ) | ||||
Total Pilgrim’s |
3,731,539 | 3,331,372 | ||||||
Noncontrolling interest | 13,942 | 13,205 | ||||||
Total stockholders’ equity | 3,745,481 | 3,344,577 | ||||||
Total liabilities and stockholders’ equity | $ | 10,078,457 | $ | 9,810,361 |
PILGRIM’S PRIDE CORPORATION | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Net sales | $ | 4,559,314 | $ | 4,308,091 | $ | 8,921,248 | $ | 8,473,719 | ||||||||
Cost of sales | 3,867,688 | 4,029,666 | 7,845,713 | 8,022,247 | ||||||||||||
Gross profit | 691,626 | 278,425 | 1,075,535 | 451,472 | ||||||||||||
Selling, general and administrative expense | 214,161 | 148,436 | 333,237 | 282,114 | ||||||||||||
Restructuring activities | 36,675 | 29,718 | 51,234 | 37,744 | ||||||||||||
Operating income | 440,790 | 100,271 | 691,064 | 131,614 | ||||||||||||
Interest expense, net of capitalized interest | 31,201 | 47,152 | 72,444 | 89,814 | ||||||||||||
Interest income | (15,863 | ) | (7,628 | ) | (26,209 | ) | (11,228 | ) | ||||||||
Foreign currency transaction losses (gains) | (2,225 | ) | 16,395 | (6,562 | ) | 34,538 | ||||||||||
Miscellaneous, net | 504 | (1,331 | ) | (2,782 | ) | (23,984 | ) | |||||||||
Income before income taxes | 427,173 | 45,683 | 654,173 | 42,474 | ||||||||||||
Income tax expense (benefit) | 100,650 | (15,225 | ) | 152,712 | (24,065 | ) | ||||||||||
Net income | 326,523 | 60,908 | 501,461 | 66,539 | ||||||||||||
Less: Net income attributable to noncontrolling interests | 220 | 452 | 737 | 896 | ||||||||||||
Net income attributable to Pilgrim’s |
$ | 326,303 | $ | 60,456 | $ | 500,724 | $ | 65,643 | ||||||||
Weighted average shares of |
||||||||||||||||
Basic | 236,943 | 236,733 | 236,894 | 236,659 | ||||||||||||
Effect of dilutive common stock equivalents | 790 | 476 | 721 | 527 | ||||||||||||
Diluted | 237,733 | 237,209 | 237,615 | 237,186 | ||||||||||||
Net income attributable to |
||||||||||||||||
Basic | $ | 1.38 | $ | 0.26 | $ | 2.11 | $ | 0.28 | ||||||||
Diluted | $ | 1.37 | $ | 0.25 | $ | 2.11 | $ | 0.28 |
PILGRIM’S PRIDE CORPORATION AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(Unaudited) | |||||||
Six Months Ended | |||||||
(In thousands) | |||||||
Cash flows from operating activities: | |||||||
Net income | $ | 501,461 | $ | 66,539 | |||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||
Depreciation and amortization | 211,298 | 203,114 | |||||
Gain on early extinguishment of debt recognized as a component of interest expense | (11,159 | ) | — | ||||
Asset impairment | 13,412 | 4,011 | |||||
Deferred income tax expense (benefit) | 8,952 | (56,151 | ) | ||||
Stock-based compensation | 6,811 | 3,300 | |||||
Loss (gain) on property disposals | 2,715 | (9,316 | ) | ||||
Loan cost amortization | 2,573 | 4,733 | |||||
Accretion of discount related to Senior Notes | 1,289 | 980 | |||||
Gain (loss) on equity-method investments | (3 | ) | 328 | ||||
Changes in operating assets and liabilities: | |||||||
Trade accounts and other receivables | 62,350 | (54,971 | ) | ||||
Inventories | 146,189 | (45,242 | ) | ||||
Prepaid expenses and other current assets | (43,532 | ) | (27,754 | ) | |||
Accounts payable, accrued expenses and other current liabilities | 14,290 | 5,139 | |||||
Income taxes | 88,631 | 9,933 | |||||
Long-term pension and other postretirement obligations | 3,652 | 944 | |||||
Other operating assets and liabilities | (19,273 | ) | (16,246 | ) | |||
Cash provided by operating activities | 989,656 | 89,341 | |||||
Cash flows from investing activities: | |||||||
Acquisitions of property, plant and equipment | (213,247 | ) | (286,630 | ) | |||
Proceeds from property disposals | 4,551 | 15,008 | |||||
Proceeds from insurance recoveries | — | 20,681 | |||||
Cash used in investing activities | (208,696 | ) | (250,941 | ) | |||
Cash flows from financing activities: | |||||||
Payments on revolving line of credit, long-term borrowings and finance lease obligations | (150,895 | ) | (565,658 | ) | |||
Proceeds from revolving line of credit and long-term borrowings | — | 1,078,032 | |||||
Proceeds from contribution (distribution) of capital under Tax Sharing Agreement between |
1,425 | (1,592 | ) | ||||
Payments on early extinguishment of debt | (200 | ) | — | ||||
Payments of capitalized loan costs | (16 | ) | (10,353 | ) | |||
Cash provided by (used in) financing activities | (149,686 | ) | 500,429 | ||||
Effect of exchange rate changes on cash and cash equivalents | (28,371 | ) | 3,422 | ||||
Increase in cash, cash equivalents and restricted cash | 602,903 | 342,251 | |||||
Cash, cash equivalents and restricted cash, beginning of period | 731,223 | 434,759 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 1,334,126 | $ | 777,010 |
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 (gains), (2) costs related to litigation settlements, (3) restructuring activities losses, (4) property insurance recoveries for property damage losses, and (5) 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
Reconciliation of Adjusted EBITDA | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands) | |||||||||||||||
Net income | $ | 326,523 | $ | 60,908 | $ | 501,461 | $ | 66,539 | |||||||
Add: | |||||||||||||||
Interest expense, net(a) | 15,338 | 39,524 | 46,235 | 78,586 | |||||||||||
Income tax expense (benefit) | 100,650 | (15,225 | ) | 152,712 | (24,065 | ) | |||||||||
Depreciation and amortization | 107,948 | 104,857 | 211,298 | 203,114 | |||||||||||
EBITDA | 550,459 | 190,064 | 911,706 | 324,174 | |||||||||||
Add: | |||||||||||||||
Foreign currency transaction losses (gains)(b) | (2,225 | ) | 16,395 | (6,562 | ) | 34,538 | |||||||||
Litigation settlements(c) | 71,250 | 13,000 | 72,190 | 24,200 | |||||||||||
Restructuring activities losses(d) | 36,675 | 29,718 | 51,234 | 37,744 | |||||||||||
Minus: | |||||||||||||||
Property insurance recoveries(e) | — | — | — | 19,086 | |||||||||||
Net income attributable to noncontrolling interest | 220 | 452 | 737 | 896 | |||||||||||
Adjusted EBITDA | $ | 655,939 | $ | 248,725 | $ | 1,027,831 | $ | 400,674 |
(a) Interest expense, net, consists of interest expense less interest income.
(b) Prior to
(c) This represents expenses recognized in anticipation of probable settlements in ongoing litigation.
(d) Restructuring activities losses are related to costs incurred, such as severance, asset impairment, contract termination, and others, as part of multiple ongoing restructuring initiatives throughout our
(e) This represents property insurance recoveries primarily for the property damage losses incurred as a result of the tornado in
(f) The summary unaudited consolidated income statement data for the twelve months ended
Reconciliation of LTM Adjusted EBITDA | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
Three Months Ended | LTM Ended | ||||||||||||||||||
2023 |
2023 |
2024 |
2024 |
2024 |
|||||||||||||||
(In thousands) | |||||||||||||||||||
Net income | $ | 121,567 | $ | 134,211 | $ | 174,938 | $ | 326,523 | $ | 757,239 | |||||||||
Add: | |||||||||||||||||||
Interest expense, net | 33,530 | 54,505 | 30,897 | 15,338 | 134,270 | ||||||||||||||
Income tax expense | 44,553 | 22,417 | 52,062 | 100,650 | 219,682 | ||||||||||||||
Depreciation and amortization | 104,300 | 112,486 | 103,350 | 107,948 | 428,084 | ||||||||||||||
EBITDA | 303,950 | 323,619 | 361,247 | 550,459 | 1,539,275 | ||||||||||||||
Add: | |||||||||||||||||||
Foreign currency transaction losses (gains) | 8,924 | (22,892 | ) | (4,337 | ) | (2,225 | ) | (20,530 | ) | ||||||||||
Litigation settlements | 10,500 | 4,700 | 940 | 71,250 | 87,390 | ||||||||||||||
Restructuring activities losses | 940 | 5,661 | 14,559 | 36,675 | 57,835 | ||||||||||||||
Minus: | |||||||||||||||||||
Property insurance recoveries | — | 2,038 | — | — | 2,038 | ||||||||||||||
Net income (loss) attributable to noncontrolling interest | 289 | (442 | ) | 517 | 220 | 584 | |||||||||||||
Adjusted EBITDA | $ | 324,025 | $ | 309,492 | $ | 371,892 | $ | 655,939 | $ | 1,661,348 |
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
Reconciliation of EBITDA Margin | ||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||
Three Months Ended | Six Months Ended | Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||
Net income | $ | 326,523 | $ | 60,908 | $ | 501,461 | $ | 66,539 | 7.16 | % | 1.41 | % | 5.62 | % | 0.79 | % | ||||||||||||
Add: | ||||||||||||||||||||||||||||
Interest expense, net | 15,338 | 39,524 | 46,235 | 78,586 | 0.34 | % | 0.92 | % | 0.52 | % | 0.93 | % | ||||||||||||||||
Income tax expense (benefit) | 100,650 | (15,225 | ) | 152,712 | (24,065 | ) | 2.21 | % | (0.35 | )% | 1.71 | % | (0.28 | )% | ||||||||||||||
Depreciation and amortization | 107,948 | 104,857 | 211,298 | 203,114 | 2.36 | % | 2.43 | % | 2.36 | % | 2.39 | % | ||||||||||||||||
EBITDA | 550,459 | 190,064 | 911,706 | 324,174 | 12.07 | % | 4.41 | % | 10.21 | % | 3.83 | % | ||||||||||||||||
Add: | ||||||||||||||||||||||||||||
Foreign currency transaction losses (gains) | (2,225 | ) | 16,395 | (6,562 | ) | 34,538 | (0.04 | )% | 0.38 | % | (0.07 | )% | 0.40 | % | ||||||||||||||
Litigation settlements | 71,250 | 13,000 | 72,190 | 24,200 | 1.56 | % | 0.30 | % | 0.81 | % | 0.29 | % | ||||||||||||||||
Restructuring activities losses | 36,675 | 29,718 | 51,234 | 37,744 | 0.80 | % | 0.69 | % | 0.57 | % | 0.45 | % | ||||||||||||||||
Minus: | ||||||||||||||||||||||||||||
Property insurance recoveries | — | — | — | 19,086 | — | % | — | % | — | % | 0.23 | % | ||||||||||||||||
Net income attributable to noncontrolling interest | 220 | 452 | 737 | 896 | — | % | 0.01 | % | 0.01 | % | 0.01 | % | ||||||||||||||||
Adjusted EBITDA | $ | 655,939 | $ | 248,725 | $ | 1,027,831 | $ | 400,674 | 14.39 | % | 5.77 | % | 11.51 | % | 4.73 | % | ||||||||||||
Net sales | $ | 4,559,314 | $ | 4,308,091 | $ | 8,921,248 | $ | 8,473,719 | — | — | — | — |
Adjusted EBITDA by segment figures are presented because they are used by management and we believe they are frequently used by securities analysts, investors and other interested parties, as a supplement to our results prepared in accordance with
Reconciliation of Adjusted EBITDA | |||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||
Total | Total | ||||||||||||||||||||||||||||||
(In thousands) | (In thousands) | ||||||||||||||||||||||||||||||
Net income (loss) | $ | 199,076 | $ | 41,511 | $ | 85,936 | $ | 326,523 | $ | (21,335 | ) | $ | 11,929 | $ | 70,314 | $ | 60,908 | ||||||||||||||
Add: | |||||||||||||||||||||||||||||||
Interest expense, net(a) | 24,946 | (2,556 | ) | (7,052 | ) | 15,338 | 43,538 | (623 | ) | (3,391 | ) | 39,524 | |||||||||||||||||||
Income tax expense (benefit) | 82,117 | (14,212 | ) | 32,745 | 100,650 | (14,026 | ) | (6,730 | ) | 5,531 | (15,225 | ) | |||||||||||||||||||
Depreciation and amortization | 67,200 | 34,865 | 5,883 | 107,948 | 63,759 | 35,279 | 5,819 | 104,857 | |||||||||||||||||||||||
EBITDA | 373,339 | 59,608 | 117,512 | 550,459 | 71,936 | 39,855 | 78,273 | 190,064 | |||||||||||||||||||||||
Add: | |||||||||||||||||||||||||||||||
Foreign currency transaction losses (gains)(b) | (1 | ) | (39 | ) | (2,185 | ) | (2,225 | ) | 28,546 | (1,482 | ) | (10,669 | ) | 16,395 | |||||||||||||||||
Litigation settlements(c) | 71,250 | — | — | 71,250 | 13,000 | — | — | 13,000 | |||||||||||||||||||||||
Restructuring activities losses(d) | — | 36,675 | — | 36,675 | — | 29,718 | — | 29,718 | |||||||||||||||||||||||
Minus: | |||||||||||||||||||||||||||||||
Net income attributable to noncontrolling interest | — | — | 220 | 220 | — | — | 452 | 452 | |||||||||||||||||||||||
Adjusted EBITDA | $ | 444,588 | $ | 96,244 | $ | 115,107 | $ | 655,939 | $ | 113,482 | $ | 68,091 | $ | 67,152 | $ | 248,725 |
(a) Interest expense, net, consists of interest expense less interest income.
(b) Prior to
(c) This represents expenses recognized in anticipation of probable settlements in ongoing litigation.
(d) Restructuring activities losses are related to costs incurred, such as severance, asset impairment, contract termination, and others, as part of multiple ongoing restructuring initiatives throughout our
Reconciliation of Adjusted EBITDA | ||||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||
Six Months Ended | Six Months Ended | |||||||||||||||||||||||||||||
Total | Total | |||||||||||||||||||||||||||||
(In thousands) | (In thousands) | |||||||||||||||||||||||||||||
Net income (loss) | $ | 301,707 | $ | 66,023 | $ | 133,731 | $ | 501,461 | $ | (74,925 | ) | $ | 32,742 | $ | 108,722 | $ | 66,539 | |||||||||||||
Add: | ||||||||||||||||||||||||||||||
Interest expense, net(a) | 69,532 | (4,539 | ) | (18,758 | ) | 46,235 | 84,903 | (821 | ) | (5,496 | ) | 78,586 | ||||||||||||||||||
Income tax expense (benefit) | 114,177 | (4,655 | ) | 43,190 | 152,712 | (30,848 | ) | (807 | ) | 7,590 | (24,065 | ) | ||||||||||||||||||
Depreciation and amortization | 129,885 | 69,893 | 11,520 | 211,298 | 123,996 | 67,556 | 11,562 | 203,114 | ||||||||||||||||||||||
EBITDA | 615,301 | 126,722 | 169,683 | 911,706 | 103,126 | 98,670 | 122,378 | 324,174 | ||||||||||||||||||||||
Add: | ||||||||||||||||||||||||||||||
Foreign currency transaction losses (gains)(b) | 1 | (255 | ) | (6,308 | ) | (6,562 | ) | 48,859 | (2,098 | ) | (12,223 | ) | 34,538 | |||||||||||||||||
Litigation settlements(c) | 72,190 | — | — | 72,190 | 24,200 | — | — | 24,200 | ||||||||||||||||||||||
Restructuring activities losses(d) | — | 51,234 | — | 51,234 | — | 37,744 | — | 37,744 | ||||||||||||||||||||||
Minus: | ||||||||||||||||||||||||||||||
Property insurance recoveries(e) | — | — | — | — | 19,086 | — | — | 19,086 | ||||||||||||||||||||||
Net income attributable to noncontrolling interest | — | — | 737 | 737 | — | — | 896 | 896 | ||||||||||||||||||||||
Adjusted EBITDA | $ | 687,492 | $ | 177,701 | $ | 162,638 | $ | 1,027,831 | $ | 157,099 | $ | 134,316 | $ | 109,259 | $ | 400,674 |
(a) Interest expense, net, consists of interest expense less interest income.
(b) Prior to
(c) This represents expenses recognized in anticipation of probable settlements in ongoing litigation.
(d) Restructuring activities losses are related to costs incurred, such as severance, asset impairment, contract termination, and others, as part of multiple ongoing restructuring initiatives throughout our
(e) This represents property insurance recoveries primarily for the property damage losses incurred as a result of the tornado in
Adjusted Operating Income is calculated by adding to Operating Income certain items of expense and deducting from Operating Income certain items of income. Management believes that presentation of Adjusted Operating Income 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 GAAP operating income to adjusted operating income as follows:
Reconciliation of Adjusted Operating Income | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands) | |||||||||||||||
GAAP operating income, |
$ | 307,988 | $ | 37,265 | $ | 487,405 | $ | 9,159 | |||||||
Litigation settlements | 71,250 | 13,000 | 72,190 | 24,200 | |||||||||||
Adjusted operating income, |
$ | 379,238 | $ | 50,265 | $ | 559,595 | $ | 33,359 | |||||||
Adjusted operating income margin, |
14.2 | % | 2.1 | % | 10.7 | % | 0.7 | % | |||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands) | |||||||||||||||
GAAP operating income, |
$ | 23,993 | $ | 2,513 | $ | 55,109 | $ | 27,774 | |||||||
Restructuring activities losses | 36,675 | 29,718 | 51,234 | 37,744 | |||||||||||
Adjusted operating income, |
$ | 60,668 | $ | 32,231 | $ | 106,343 | $ | 65,518 | |||||||
Adjusted operating income margin, |
4.7 | % | 2.5 | % | 4.1 | % | 2.6 | % | |||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands) | |||||||||||||||
GAAP operating income, |
$ | 108,809 | $ | 60,719 | $ | 148,550 | $ | 94,894 | |||||||
No adjustments | — | — | — | — | |||||||||||
Adjusted operating income, |
$ | 108,809 | $ | 60,719 | $ | 148,550 | $ | 94,894 | |||||||
Adjusted operating income margin, |
18.3 | % | 11.0 | % | 13.4 | % | 9.1 | % |
Adjusted Operating Income Margin for each of our reportable segments is calculated by dividing Adjusted operating income by
Reconciliation of GAAP Operating Income Margin to Adjusted Operating Income Margin | |||||||||||
(Unaudited) | |||||||||||
Three Months Ended | Six Months Ended | ||||||||||
(In percent) | |||||||||||
GAAP operating income margin, |
11.6 | % | 1.5 | % | 9.3 | % | 0.2 | % | |||
Litigation settlements | 2.6 | % | 0.6 | % | 1.4 | % | 0.5 | % | |||
Adjusted operating income margin, |
14.2 | % | 2.1 | % | 10.7 | % | 0.7 | % | |||
Three Months Ended | Six Months Ended | ||||||||||
(In percent) | |||||||||||
GAAP operating income margin, |
1.8 | % | 0.2 | % | 2.1 | % | 1.1 | % | |||
Restructuring activities losses | 2.9 | % | 2.3 | % | 2.0 | % | 1.5 | % | |||
Adjusted operating income margin, |
4.7 | % | 2.5 | % | 4.1 | % | 2.6 | % | |||
Three Months Ended | Six Months Ended | ||||||||||
(In percent) | |||||||||||
GAAP operating income margin, |
18.3 | % | 11.0 | % | 13.4 | % | 9.1 | % | |||
No adjustments | — | % | — | % | — | % | — | % | |||
Adjusted operating income margin, |
18.3 | % | 11.0 | % | 13.4 | % | 9.1 | % |
Adjusted net income attributable to
Reconciliation of Adjusted Net Income | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands, except per share data) | |||||||||||||||
Net income attributable to Pilgrim's | $ | 326,303 | $ | 60,456 | $ | 500,724 | $ | 65,643 | |||||||
Add: | |||||||||||||||
Foreign currency transaction losses (gains) | (2,225 | ) | 16,395 | (6,562 | ) | 34,538 | |||||||||
Litigation settlements | 71,250 | 13,000 | 72,190 | 24,200 | |||||||||||
Restructuring activities losses | 36,675 | 29,718 | 51,234 | 37,744 | |||||||||||
Minus: | |||||||||||||||
Gain on early extinguishment of debt | 11,159 | — | 11,159 | — | |||||||||||
Property insurance recoveries | — | — | — | 19,086 | |||||||||||
Adjusted net income attributable to Pilgrim's before tax impact of adjustments | 420,844 | 119,569 | 606,427 | 143,039 | |||||||||||
Net tax impact of adjustments(a) | (22,879 | ) | (14,306 | ) | (25,580 | ) | (18,729 | ) | |||||||
Adjusted net income attributable to Pilgrim's | $ | 397,965 | $ | 105,263 | $ | 580,847 | $ | 124,310 | |||||||
Weighted average diluted shares of common stock outstanding | 237,733 | 237,209 | 237,615 | 237,186 | |||||||||||
Adjusted net income attributable to Pilgrim's per common diluted share | $ | 1.67 | $ | 0.44 | $ | 2.44 | $ | 0.52 |
(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
Reconciliation of GAAP EPS to Adjusted EPS | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||
(In thousands, except per share data) | |||||||||||||||
GAAP EPS | $ | 1.37 | $ | 0.25 | $ | 2.11 | $ | 0.28 | |||||||
Add: | |||||||||||||||
Foreign currency transaction losses (gains) | (0.01 | ) | 0.07 | (0.03 | ) | 0.15 | |||||||||
Litigation settlements | 0.30 | 0.05 | 0.30 | 0.09 | |||||||||||
Restructuring activities losses | 0.15 | 0.13 | 0.23 | 0.16 | |||||||||||
Minus: | |||||||||||||||
Gain on early extinguishment of debt | 0.05 | — | 0.05 | — | |||||||||||
Property insurance recoveries | — | — | — | 0.08 | |||||||||||
Adjusted EPS before tax impact of adjustments | 1.76 | 0.50 | 2.56 | 0.60 | |||||||||||
Net tax impact of adjustments(a) | (0.09 | ) | (0.06 | ) | (0.12 | ) | (0.08 | ) | |||||||
Adjusted EPS | $ | 1.67 | $ | 0.44 | $ | 2.44 | $ | 0.52 | |||||||
Weighted average diluted shares of common stock outstanding | 237,733 | 237,209 | 237,615 | 237,186 |
(a) Net tax impact of adjustments represents the tax impact of all adjustments shown above.
Supplementary Selected Segment and Geographic Data | ||||||||||||||
(Unaudited) | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
(In thousands) | ||||||||||||||
Sources of net sales by geographic region of origin: | ||||||||||||||
$ | 2,663,965 | $ | 2,446,208 | $ | 5,243,297 | $ | 4,878,776 | |||||||
1,301,541 | 1,310,750 | 2,569,444 | 2,550,014 | |||||||||||
593,808 | 551,133 | 1,108,507 | 1,044,929 | |||||||||||
Total net sales | $ | 4,559,314 | $ | 4,308,091 | $ | 8,921,248 | $ | 8,473,719 | ||||||
Sources of cost of sales by geographic region of origin: | ||||||||||||||
$ | 2,211,626 | $ | 2,332,103 | $ | 4,553,666 | $ | 4,726,342 | |||||||
1,187,671 | 1,223,722 | 2,363,409 | 2,378,793 | |||||||||||
468,391 | 473,615 | 928,638 | 916,899 | |||||||||||
Elimination | — | 226 | — | 213 | ||||||||||
Total cost of sales | $ | 3,867,688 | $ | 4,029,666 | $ | 7,845,713 | $ | 8,022,247 | ||||||
Sources of gross profit by geographic region of origin: | ||||||||||||||
$ | 452,339 | $ | 114,105 | $ | 689,631 | $ | 152,434 | |||||||
113,870 | 87,028 | 206,035 | 171,221 | |||||||||||
125,417 | 77,518 | 179,869 | 128,030 | |||||||||||
Elimination | — | (226 | ) | — | (213 | ) | ||||||||
Total gross profit | $ | 691,626 | $ | 278,425 | $ | 1,075,535 | $ | 451,472 | ||||||
Sources of operating income by geographic region of origin: | ||||||||||||||
$ | 307,988 | $ | 37,265 | $ | 487,405 | $ | 9,159 | |||||||
23,993 | 2,513 | 55,109 | 27,774 | |||||||||||
108,809 | 60,719 | 148,550 | 94,894 | |||||||||||
Elimination | — | (226 | ) | — | (213 | ) | ||||||||
Total operating income | $ | 440,790 | $ | 100,271 | $ | 691,064 | $ | 131,614 |
Source: Pilgrim's Pride Corporation