Release Details

GREELEY, Colo., Oct. 25, 2023 (GLOBE NEWSWIRE) -- Pilgrim’s Pride Corporation (NASDAQ: PPC), one of the world's largest poultry producers, reports its third quarter 2023 financial results.

Third Quarter Highlights

• Net Sales of $4.4 billion.
• GAAP Net Income of $121.6 million and GAAP EPS of $0.51. Adjusted Net Income of $136.7 million or Adjusted EPS of $0.58.
• Consolidated GAAP operating income margin of 4.7%.
• Adjusted EBITDA of $324.0 million, or a 7.4% margin, with adjusted EBITDA margins of 7.0% in the U.S., 6.1% in the U.K. & Europe, and 12.4% in Mexico.
• Our global and diversified portfolio drove improved margins across all regions relative to prior quarter given results from operational excellence programs, continued partnership with Key Customers, and increased diversification through branded and differentiated offerings.
• The U.S. Fresh business continued to improve over prior quarters given sustained operational improvement and enhanced market fundamentals in Big Bird, growth with Key Customers in Case Ready, and strong performance in Small Bird. Our service levels for Key Customers remained outstanding despite disruptions from Hurricane Idalia to operations in the Southeastern United States.
• The U.S. Prepared Foods business increased its momentum through additional distribution, differentiated offerings, and promotional activities across both Retail and Food Service. Branded growth was a key driver as both Just Bare^® and Pilgrim’s^® collectively grew 65% year over year.
• The U.K. and Europe business continues on its profitability growth trajectory given further efficiencies from optimization of its manufacturing network, integration of back office support activities, and recovery of inflationary costs. Key Customer partnerships have created opportunities for future growth through branded innovation, long term supply arrangements, and new product development.
• Mexico experienced a strong quarter with continued improvement in live operations, grain and currency exchange favorability, and balanced market fundamentals. Diversification through branded growth remains robust as Pilgrim’s^® retail offerings are up double digits relative to prior year and the recently launched Just Bare^® brand continues to gain significant marketplace traction.
• Our growth projects to support Key Customers and further diversify our portfolio are progressing as planned as start up for our Athens, Georgia expansion has commenced and our construction of our new protein conversion plant in South Georgia remains on track.
• With the publication of our 2022 Sustainability Report in September, we reinforced our progress towards becoming a leader in the food and agriculture industry in ESG as we reduced our plant GHG emissions intensity by 20% and highlighted continued investments in our communities and team members through our Hometown Strong and Better Futures programs.
  

“Throughout the quarter, we continued to strengthen our business through consistent application and execution of our strategies of Key Customer partnership, portfolio diversification, and operational excellence. Given our focus, profitability improved again relative to prior quarter across all regions despite uneven market conditions and persistent consumer inflation,” said Fabio Sandri, Pilgrim’s Chief Executive Officer.

In the U.S., margins grew from the second quarter given further momentum in our operational excellence efforts and enhanced fundamentals in Big Bird. Margins were further aided by growth in promotional activity and increased distribution in Case Ready, along with strong performance in Small Bird. Prepared Foods generated growth in branded offerings as Just Bare^® and Pilgrim’s^® net sales collectively grew 65% compared to prior year.

“The U.S. Big Bird commodity business continued to drive sequential profitability improvements under volatile market conditions. Our action plans have driven meaningful progress in operational excellence and uncovered further improvement opportunities. Our Key Customer partnerships in both Case Ready and Small Bird have been remarkably beneficial as we strengthened our sales pipeline through service, quality, and higher value attributes. The expansion at our Athens complex remains on schedule as we’ve recently initiated production to accommodate Key Customer needs. The construction of our protein conversion facility in South Georgia is also progressing as planned,” remarked Sandri.

As for the U.K. and Europe business, profitability grew over 65% from the prior year given continued benefits from manufacturing network optimization, continued recovery of inflationary costs, and enhanced Key Customer partnerships.

“Over the past 18 months, the team has demonstrated remarkable determination to further cultivate operational excellence in our production facilities and back office activities. When these efforts are combined with our Key Customer focus, innovation pipeline, and diversified offerings, the business has strengthened the foundation to drive further profitable growth,” said Sandri.

Mexico achieved strong, counter-seasonal results for the third quarter through a combination of improved live operations, grain and currency favorability, and enhanced supply and demand fundamentals.

“Our Mexico team has shown extraordinary ownership to overcome challenges in live operations through operational excellence over the past year. Given these efforts, the team was well positioned to drive profitable growth with Key Customers and further cultivate its branded presence throughout the quarter. Our investments in live expansion are tracking as planned and will simultaneously enable growth and reduce potential supply risks,” remarked Sandri.

Pilgrim’s provided an update on its journey to be an industry leader in sustainability in the publication of its 2022 Sustainability Report. The report described progress in GHG emissions reduction through usage of renewable energy, capital improvements, and plant management processes as well as the investments in communities and team members we serve through free college tuition, community centers, and agricultural programs.

“Over the past year, we’ve faced a demanding set of business circumstances. Nonetheless, we maintained a leadership mindset given the opportunity in food and agriculture to reduce emissions and to create a better future for our team members. I look forward to continuation of these efforts to achieve our vision of becoming the best and most respected company in our industry,” said Sandri.

Conference Call Information

A conference call to discuss Pilgrim’s quarterly results will be held tomorrow, Oct. 26, 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/ppc231026.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 approximately 62,000 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) costs related to litigation settlements, (3) restructuring activities losses, (4) transaction costs related to acquisitions, (5) property insurance recoveries for Mayfield, Kentucky tornado property damage losses, 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 September 24, 2023 (the LTM Period) have been calculated by subtracting the applicable unaudited consolidated income statement data for the nine months ended September 25, 2022 from the sum of (1) the applicable audited consolidated income statement data for the year ended December 25, 2022 and (2) the applicable unaudited consolidated income statement data for the nine months ended September 24, 2023.

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

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:

Adjusted Operating Income Margin for each of our reportable segments is calculated by dividing Adjusted operating income by Net Sales. Management believes that presentation of Adjusted Operating Income Margin 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 margin for each of our reportable segments to adjusted operating income margin for each of our reportable segments is as follows:

Adjusted net income attributable to Pilgrim's Pride Corporation (“Pilgrim's”) is calculated by adding to Net income (loss) attributable to Pilgrim's certain items of expense and deducting from Net income (loss) 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 (loss) 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:

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:

Source: Pilgrim's Pride Corporation