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): August 1, 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))
|
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q
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c)
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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
August
1, 2006, Pilgrim's Pride Corporation issued a press release reporting a
net loss of $20.5 million, or $0.31 per share, on total sales of $1.29
billion for the third fiscal quarter ended July 1, 2006. For
the third quarter of fiscal 2005, the Company reported net earnings of
$85.4 million, or $1.28 per share, on total sales of $1.44 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 August 1, 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: August
1, 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 August 1, 2006.
PILGRIM'S
PRIDE CORPORATION REPORTS FINANCIAL RESULTS
FOR
THIRD QUARTER OF FISCAL 2006
PITTSBURG,
Texas, August 1, 2006 - Pilgrim's Pride Corporation (NYSE: PPC) today reported
a
net loss of $20.5 million, or $0.31 per share, on total sales of $1.29 billion
for the third quarter ended July 1, 2006. For the third quarter of fiscal 2005,
the Company reported net earnings of $85.4 million, or $1.28 per share, on
total
sales of $1.44 billion.
“Despite
recent upward trends in pricing for breast meat and leg quarters, our
third-quarter results continued to reflect the challenging protein environment
seen in the first half of the fiscal year,” said O.B. Goolsby, Jr., Pilgrim’s
Pride president and chief executive officer. “Our net loss for the third quarter
of 2006 was largely due to weak pricing caused by the lingering effects of
lower
export demand and higher inventory levels last winter and in the early spring.
We are hopeful that the recent increases in leg quarter and breast meat prices
will continue as international demand for U.S. chicken products improves and
the
full effect of the recently announced industry production cutbacks are realized
in the marketplace.”
For
the
full third quarter, pricing for leg quarters and breast meat increased 118.8%
and 36.2%, respectively, when compared to the second quarter, but were an
average of 34.2% and 16.6% lower than the year-ago period.
In
the
third quarter, Pilgrim’s Pride initiated a multi-point plan designed to improve
the Company’s competitive position. This plan included production cuts, which
had been fully implemented by the end of July, as well as a reduction in capital
investment and a sharpened focus on cost reductions and improved efficiencies.
“We
are
pleased with the progress we have achieved on our strategic plan. Operating
efficiently has never been more important than it is in the current industry
environment. We believe the combination of stronger domestic and export selling
prices, resumption of demand for our products in the export markets, and
improved operating efficiencies should position Pilgrim’s Pride for a return to
profitability,” Goolsby said.
For
the
nine months ended July 1, 2006, the Company reported a net loss of $26.7
million, or $0.40 per share, on total sales of $3.90 billion. For the first
nine
months of fiscal 2005, Pilgrim’s Pride reported net earnings of $190.3 million,
or $2.86 per share, on sales of $4.18 billion.
Conference
Call Information
A
conference call to discuss the Company's third-quarter results will be held
at
10 a.m. CDT (11 a.m. EDT) on August 1, 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://www.videonewswire.com/event.asp?id=34647.
(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 August
1 through August 8, 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 as to changes in pricing, demand
and market conditions for chicken products and profitability, 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, Vice President
Pilgrim's
Pride Corporation
(903)
434-1430
Media
Contact:
Gary
Rhodes, Vice President
Pilgrim’s
Pride Corporation
(903)
434-1495
PILGRIM'S
PRIDE CORPORATION
News
Release
August
1,
2006
Page
3
PILGRIM'S
PRIDE CORPORATION
Consolidated
Statements of Income (Loss)
(Unaudited)
[In
thousands, except share and per share data]
|
Three
Months Ended
|
July
1, 2006
|
July
2, 2005
|
|||||
|
Net
Sales
|
$
|
1,287,646
|
$
|
1,440,039
|
|||
|
Cost
of sales
|
1,244,950
|
1,220,818
|
|||||
|
Gross
profit
|
42,696
|
219,221
|
|||||
|
Selling,
general and administrative
|
69,433
|
83,228
|
|||||
|
Operating
income (loss)
|
(26,737
|
)
|
135,993
|
||||
|
Other
Expense (Income):
|
|||||||
|
Interest
expense
|
12,736
|
13,602
|
|||||
|
Interest
income
|
(1,268
|
)
|
(1,280
|
)
|
|||
|
Foreign
exchange loss (gain)
|
1,822
|
(94
|
)
|
||||
|
Miscellaneous,
net
|
(2,053
|
)
|
88
|
||||
|
Total
other expenses, net
|
11,237
|
12,316
|
|||||
|
Income
(loss) before income taxes
|
(37,974
|
)
|
123,677
|
||||
|
Income
tax (benefit) expense
|
(17,501
|
)
|
38,324
|
||||
|
Net
income (loss)
|
$
|
(20,473
|
)
|
$
|
85,353
|
||
|
Net
income (loss) per common share
|
|||||||
|
-basic
and diluted
|
$
|
(0.31
|
)
|
$
|
1.28
|
||
|
Dividends
declared per common share
|
$
|
0.0225
|
$
|
0.0150
|
|||
|
Weighted
average shares outstanding
|
66,555,733
|
66,555,733
|
|
Nine
Months Ended
|
July
1, 2006
|
July
2, 2005
|
|||||
|
Net
Sales
|
$
|
3,897,167
|
$
|
4,183,607
|
|||
|
Cost
of sales
|
3,698,870
|
3,639,213
|
|||||
|
Gross
profit
|
198,297
|
544,394
|
|||||
|
Selling,
general and administrative
|
216,772
|
228,431
|
|||||
|
Operating
income (loss)
|
(18,475
|
)
|
315,963
|
||||
|
Other
Expense (Income):
|
|||||||
|
Interest
expense, net
|
38,402
|
37,436
|
|||||
|
Interest
income
|
(8,429
|
)
|
(3,572
|
)
|
|||
|
Foreign
exchange loss (gain)
|
1,012
|
(420
|
)
|
||||
|
Miscellaneous,
net
|
(1,025
|
)
|
(11,659
|
)
|
|||
|
Total
other expenses, net
|
29,960
|
21,785
|
|||||
|
Income
(loss) before income taxes
|
(48,435
|
)
|
294,178
|
||||
|
Income
tax (benefit) expense
|
(21,686
|
)
|
103,928
|
||||
|
Net
income (loss)
|
$
|
(26,749
|
)
|
$
|
190,250
|
||
|
Net
income (loss) per common share
|
|||||||
|
-basic
and diluted
|
$
|
(0.40
|
)
|
$
|
2.86
|
||
|
Dividends
declared per common share
|
$
|
1.0675
|
$
|
0.0450
|
|||
|
Weighted
average shares outstanding
|
66,555,733
|
66,555,733
|
PILGRIM'S
PRIDE CORPORATION
News
Release
August
1,
2006
Page
4
PILGRIM'S
PRIDE CORPORATION
Condensed
Consolidated Balance Sheets
(Unaudited)
[In
thousands]
|
July
1, 2006
|
October
1, 2005
|
||||||
|
ASSETS
|
|||||||
|
Cash
and cash equivalents
|
$
|
44,069
|
$
|
132,567
|
|||
|
Investments
in available for sale securities
|
54,322
|
--
|
|||||
|
Other
current assets
|
894,231
|
866,848
|
|||||
|
Total
Current Assets
|
992,622
|
999,415
|
|||||
|
Investments
in Available for Sale Securities
|
148,123
|
304,593
|
|||||
|
Other
Assets
|
47,139
|
53,798
|
|||||
|
Property,
Plant and Equipment, net
|
1,147,687
|
1,154,097
|
|||||
|
Total
Assets
|
$
|
2,335,571
|
$
|
2,511,903
|
|||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
Current
maturities of long-term debt
|
$
|
7,768
|
$
|
8,603
|
|||
|
Other
current liabilities
|
545,998
|
586,211
|
|||||
|
Total
Current Liabilities
|
553,766
|
594,814
|
|||||
|
Long-Term
Debt, Less Current Maturities
|
484,970
|
518,863
|
|||||
|
Deferred
Income Taxes
|
169,970
|
173,232
|
|||||
|
Minority
Interest in Subsidiary
|
2,004
|
1,396
|
|||||
|
Total
Stockholders' Equity
|
1,124,861
|
1,223,598
|
|||||
|
Total
Liabilities and Stockholders’ Equity
|
$
|
2,335,571
|
$
|
2,511,903
|
|||
PILGRIM'S
PRIDE CORPORATION
News
Release
August
1,
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
|
July
1, 2006
|
July
2, 2005
|
|||||
|
Net
Income (Loss)
|
$
|
(20,473
|
)
|
$
|
85,353
|
||
|
Add:
|
|||||||
|
Income
tax (benefit) expense
|
(17,501
|
)
|
38,324
|
||||
|
Interest
expense, net
|
11,468
|
12,322
|
|||||
|
Depreciation
and amortization
|
34,960
|
30,421
|
|||||
|
Minus:
|
|||||||
|
Amortization
of capitalized financing costs
|
477
|
590
|
|||||
|
EBITDA
|
$
|
7,977
|
$
|
165,830
|
|||
|
Capital
expenditures
|
$
|
26,795
|
$
|
37,994
|
|||
|
Nine
Months Ended
|
July
1, 2006
|
July
2, 2005
|
|||||
|
Net
Income (Loss)
|
$
|
(26,749
|
)
|
$
|
190,250
|
||
|
Add:
|
|||||||
|
Income
tax (benefit) expense
|
(21,686
|
)
|
103,928
|
||||
|
Interest
expense, net
|
29,973
|
33,864
|
|||||
|
Depreciation
and amortization
|
100,052
|
94,263
|
|||||
|
Minus:
|
|||||||
|
Amortization
of capitalized financing costs
|
2,034
|
1,740
|
|||||
|
EBITDA
|
$
|
79,556
|
$
|
420,565
|
|||
|
Capital
expenditures
|
$
|
101,314
|
$
|
90,148
|
|||