UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of
report (Date of earliest event reported): May 2, 2006
PILGRIM'S
PRIDE CORPORATION
(Exact
Name of Registrant as Specified in its Charter)
|
Delaware
|
1-9273
|
75-1285071
|
|
(State or Other Jurisdiction
|
(Commission
|
(IRS
Employer
|
|
of Incorporation)
|
File
Number)
|
Identification
No.)
|
|
4845 US Hwy. 271 N.
|
|
|
Pittsburg, Texas
|
75686-0093
|
|
(Address of Principal Executive Offices)
|
(ZIP
Code)
|
Registrant's
telephone number, including area code: (903)
434-1000
Not
Applicable
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
q
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
q
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
|
q
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
|
q
|
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c)
|
Item
2.02. Results
of Operations and Financial Condition.
The
information in this Item 2.02 and the Exhibit attached hereto shall not be
deemed "filed" for purposes of Section 18 of the Securities Exchange Act of
1934, nor shall it be deemed incorporated by reference in any filing under
the
Securities Act of 1933, except as shall be expressly set forth by specific
reference in such filing.
On
May 2,
2006, Pilgrim's Pride Corporation issued a press release reporting a
net loss of $32.0 million, or $0.48 per share, on total sales of $1.27
billion for the second fiscal quarter ended April 1, 2006. For the
second quarter of fiscal 2005, the Company reported net earnings of $56.4
million, or $0.85 per share, on total sales of $1.38 billion.
The
press
release is furnished as Exhibit 99.1 to this Form 8-K.
Item
9.01. Financial Statements and Exhibits.
(c)
Exhibits
Exhibit
Number Description
99.1
Press Release dated May 2, 2006.
Signatures
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
PILGRIM'S
PRIDE CORPORATION
Date: May
2, 2006 By:
/s/
Richard A Cogdill
Richard
A. Cogdill
Executive Vice President,
Chief Financial Officer,
Secretary and Treasurer
Exhibit
Index
Exhibit
Number Description
99.1 Press
Release dated May 2, 2006.
PILGRIM'S
PRIDE CORPORATION REPORTS FINANCIAL RESULTS
FOR
SECOND QUARTER OF FISCAL 2006
PITTSBURG,
Texas, May 2, 2006 - Pilgrim's Pride Corporation (NYSE: PPC) today reported
a
net loss of $32.0 million, or $0.48 per share, on total sales of $1.27 billion
for the second quarter ended April 1, 2006. For the second quarter of fiscal
2005, the Company reported net earnings of $56.4 million, or $0.85 per share,
on
total sales of $1.38 billion.
“Our
second-quarter results reflect a challenging operating environment for U.S.
poultry companies,” said O.B. Goolsby, Jr., Pilgrim’s Pride president and chief
executive officer. “The spread of H5N1 avian influenza in parts of Europe and
Asia has significantly reduced export demand, leading to higher inventory
levels
and contributing to lower overall market pricing. At the same time, industry
production levels have continued to increase, creating an oversupply situation
and further weakening prices.”
Mr.
Goolsby said that in the Company’s U.S. operations during the second quarter,
market pricing for both breast meat and leg quarters declined approximately
30%
from a year ago levels. Additionally, U.S. chicken sales volumes declined
approximately 4% because of lower demand versus a year ago due primarily
to the
effects of avian influenza concerns in the international markets.
In
response to the current operating environment, Pilgrim’s Pride has initiated a
multi-point plan designed to improve the Company’s competitive position. The
plan includes:
| · |
A
reduction in the weekly slaughter rate of approximately 3%, which
is
equivalent to approximately 830,000 head per week.
|
| · |
A
$25-$40 million reduction in capital investment for fiscal 2006.
The
Company’s revised estimate for capital investment this year is $140-$175
million.
|
| · |
A
sharpened focus on cost reductions and improved efficiencies.
|
“We
believe that by taking these actions at a time of the year when chicken
consumption normally increases, we will better balance our production with
demand for the remainder of the year and strengthen our competitive position.
Reducing overall supply to better match demand is an important component
in
helping return the industry to profitability. While the short-term operating
environment remains challenging, we are confident that continued long-term
growth in demand for high-quality, convenient and low-fat meat proteins will
position our Company for a return to profitable growth when conditions in
the
chicken markets begin to improve,” Mr. Goolsby said.
For
the
six months ended April 1, 2006, the Company reported a net loss of $6.3 million,
or $0.09 per share, on total sales of $2.61 billion. For the first six months
of
fiscal 2005, Pilgrim’s Pride reported net earnings of $104.9 million, or $1.58
per share, on sales of $2.74 billion.
Conference
Call Information
A
conference call to discuss the Company's second-quarter results will be held
at
10 a.m. CST (11 a.m. EST) on May 2, 2006. To listen live via telephone, call
(800) 391-2548, verbal pass code Pilgrim’s Pride or VG495227. The call will also
be webcast live on the Internet at http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=68228&eventID=1189714.
(Please
copy and paste the link into the browser).
Additionally,
the Company has posted a slide presentation on its website at http://www.pilgrimspride.com,
which
may be viewed by listeners in connection with today’s conference call. The
webcast will be available for replay within two hours of the conclusion of
the
call. A telephone replay will be available beginning at 2:00 p.m. CST on
May 2
through May 9, 2006 at (800) 355-2355 pass code 495227#.
Pilgrim's
Pride Corporation is the second-largest chicken producer in the United States
and Mexico and the largest chicken producer in Puerto Rico. Pilgrim's Pride
employs approximately 40,000 people and has major operations in Texas, Alabama,
Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee,
Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in
Arizona, Florida, Iowa, Mississippi and Utah.
Pilgrim's
Pride products are sold to foodservice, retail and frozen entree customers.
The
Company's primary distribution is through retailers, foodservice distributors
and restaurants throughout the United States and Puerto Rico and in the Northern
and Central regions of Mexico. For more information, please visit www.pilgrimspride.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, including anticipated changes is demand
and market conditions for chicken products, are forward-looking statements.
It
is important to note that the 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, including
fluctuations in the commodity prices of feed ingredients, chicken and turkey;
additional outbreaks of avian influenza or other diseases, either in our
own
flocks or elsewhere, affecting our ability to conduct our operations and/or
demand for our poultry products; contamination of our products, which has
recently 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; changes in laws or regulations
affecting our operations or the application thereof; competitive factors
and
pricing pressures or the loss of one or more of our largest customers; currency
exchange rate fluctuations, trade barriers, exchange controls, expropriation
and
other risks associated with foreign operations; management of our cash
resources, particularly in light of our leverage, and restrictions imposed
by
and as a result of, our leverage; and the impact of uncertainties of litigation
as well as other risks described under "Risk Factors" in our 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.
For
further information:
Investor
Contact:
Kathy
Costner
Pilgrim's
Pride Corporation
(903)
434-1430
Media
Contact:
Gary
Rhodes
Pilgrim’s
Pride Corporation
(903)
434-1495
PILGRIM'S
PRIDE CORPORATION
News
Release
May
2,
2006
Page
3
PILGRIM'S
PRIDE CORPORATION
Consolidated
Statements of Income (Loss)
(Unaudited)
[In
thousands, except share and per share amounts]
|
Three
Months Ended
|
April
1, 2006
|
April
2, 2005
|
|||||
|
Net
Sales
|
$
|
1,265,709
|
$
|
1,375,321
|
|||
|
Cost
of sales
|
1,228,508
|
1,211,266
|
|||||
|
Gross
profit
|
37,201
|
164,055
|
|||||
|
Selling,
general and administrative
|
75,137
|
75,100
|
|||||
|
Operating
income (loss)
|
(37,936
|
)
|
88,955
|
||||
|
Other
Expense (Income):
|
|||||||
|
Interest
expense
|
13,271
|
12,049
|
|||||
|
Interest
income
|
(3,214
|
)
|
(2,731
|
)
|
|||
|
Foreign
exchange gain
|
(190
|
)
|
(223
|
)
|
|||
|
Miscellaneous,
net
|
(702
|
)
|
(10,733
|
)
|
|||
|
Total
other expenses, net
|
9,165
|
(1,638
|
)
|
||||
|
Income
(loss) before income taxes
|
(47,101
|
)
|
90,593
|
||||
|
Income
tax (benefit) expense
|
(15,147
|
)
|
34,204
|
||||
|
Net
income (loss)
|
$
|
(31,954
|
)
|
$
|
56,389
|
||
|
Net
income (loss) per common share
|
|||||||
|
-basic
and diluted
|
$
|
(0.48
|
)
|
$
|
0.85
|
||
|
Dividends
declared per common share
|
$
|
0.0225
|
$
|
0.0150
|
|||
|
Weighted
average shares outstanding
|
66,555,733
|
66,555,733
|
|
Six
Months Ended
|
April
1, 2006
|
April
2, 2005
|
|||||
|
Net
Sales
|
$
|
2,609,521
|
$
|
2,743,568
|
|||
|
Cost
of sales
|
2,453,920
|
2,418,395
|
|||||
|
Gross
profit
|
155,601
|
325,173
|
|||||
|
Selling,
general and administrative
|
147,339
|
145,203
|
|||||
|
Operating
income
|
8,262
|
179,970
|
|||||
|
Other
Expense (Income):
|
|||||||
|
Interest
expense, net
|
25,666
|
25,216
|
|||||
|
Interest
income
|
(7,161
|
)
|
(3,674
|
)
|
|||
|
Foreign
exchange (gain) loss
|
(810
|
)
|
(326
|
)
|
|||
|
Miscellaneous,
net
|
1,028
|
(11,748
|
)
|
||||
|
Total
other expenses, net
|
18,723
|
9,468
|
|||||
|
Income
(loss) before income taxes
|
(10,461
|
)
|
170,502
|
||||
|
Income
tax (benefit) expense
|
(4,185
|
)
|
65,604
|
||||
|
Net
income (loss)
|
$
|
(6,276
|
)
|
$
|
104,898
|
||
|
Net
income (loss) per common share
|
|||||||
|
-basic
and diluted
|
$
|
(0.09
|
)
|
$
|
1.58
|
||
|
Dividends
declared per common share
|
$
|
1.0450
|
$
|
0.0150
|
|||
|
Weighted
average shares outstanding
|
66,555,733
|
66,555,733
|
PILGRIM'S
PRIDE CORPORATION
News
Release
May
2,
2006
Page
4
PILGRIM'S
PRIDE CORPORATION
Condensed
Consolidated Balance Sheets
(Unaudited)
[In
thousands]
|
April
1, 2006
|
October
1, 2005
|
||||||
|
ASSETS
|
|||||||
|
Cash
and Cash Equivalents
|
$
|
67,680
|
$
|
132,567
|
|||
|
Other
current assets
|
918,302
|
866,848
|
|||||
|
Total
Current Assets
|
985,982
|
999,415
|
|||||
|
Investments
in Available for Sale Securities
|
199,754
|
304,593
|
|||||
|
Other
Assets
|
48,916
|
53,798
|
|||||
|
Property,
Plant and Equipment, net
|
1,157,811
|
1,154,097
|
|||||
|
Total
Assets
|
$
|
2,392,463
|
$
|
2,511,903
|
|||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
Current
maturities of long-term debt
|
$
|
8,211
|
$
|
8,603
|
|||
|
Other
current liabilities
|
575,570
|
586,211
|
|||||
|
Total
Current Liabilities
|
583,781
|
594,814
|
|||||
|
Long-Term
Debt, Less Current Maturities
|
486,903
|
518,863
|
|||||
|
Deferred
Income Taxes
|
172,558
|
173,232
|
|||||
|
Minority
Interest in Subsidiary
|
1,866
|
1,396
|
|||||
|
Total
Stockholders' Equity
|
1,147,355
|
1,223,598
|
|||||
|
Total
Liabilities and Stockholders’ Equity
|
$
|
2,392,463
|
$
|
2,511,903
|
|||
PILGRIM'S
PRIDE CORPORATION
News
Release
May
2,
2006
Page
5
Selected
Financial Information
(Unaudited)
(In
thousands)
Note:
“EBITDA” is defined as net income before interest, income taxes, and
depreciation and amortization. EBITDA is presented because it is used by
us and
we believe it is frequently used by securities analysts, investors and other
interested parties, in addition to and not in lieu of Generally Accepted
Accounting Principles (GAAP) results, to compare the performance of companies.
EBITDA is not a measurement of financial performance under GAAP and 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.
EBITDA
is
calculated as follows:
|
Three
Months Ended
|
April
1, 2006
|
April
2, 2005
|
|||||
|
Net
Income (Loss)
|
$
|
(31,954
|
)
|
$
|
56,389
|
||
|
Add:
|
|||||||
|
Income
tax (benefit) expense
|
(15,147
|
)
|
34,204
|
||||
|
Interest
expense, net
|
10,057
|
9,318
|
|||||
|
Depreciation
and amortization
|
34,744
|
33,777
|
|||||
|
Minus:
|
|||||||
|
Amortization
of capitalized financing costs
|
976
|
580
|
|||||
|
EBITDA
|
$
|
(3,276
|
)
|
$
|
133,108
|
||
|
Capital
expenditures
|
$
|
30,654
|
$
|
27,994
|
|||
|
Six
Months Ended
|
April
1, 2006
|
April
2, 2005
|
|||||
|
Net
Income (Loss)
|
$
|
(6,276
|
)
|
$
|
104,898
|
||
|
Add:
|
|||||||
|
Income
tax (benefit) expense
|
(4,185
|
)
|
65,604
|
||||
|
Interest
expense, net
|
18,505
|
21,542
|
|||||
|
Depreciation
and amortization
|
65,092
|
63,842
|
|||||
|
Minus:
|
|||||||
|
Amortization
of capitalized financing costs
|
1,557
|
1,150
|
|||||
|
EBITDA
|
$
|
71,579
|
$
|
254,736
|
|||
|
Capital
expenditures
|
$
|
74,519
|
$
|
52,154
|
|||