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): November 14, 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
November 14, 2006, Pilgrim's Pride Corporation issued a press release announcing
its financial results for the quarter and year ended September 30,
2006.
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 November 14, 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: November
14, 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 November 14, 2006.
PILGRIM'S
PRIDE CORPORATION REPORTS FINANCIAL RESULTS FOR 2006 FISCAL FOURTH QUARTER
AND
ANNUAL PERIODS
Results,
Excluding Tax Effects of Dividend Repatriation, Exceed Consensus Analyst
Estimates
PITTSBURG,
Texas, November 14, 2006 - Pilgrim's Pride Corporation (NYSE: PPC) today
reported a net loss of $7.5 million, or $0.11 per share, on total sales of
$1.338 billion for the fourth quarter ended September 30, 2006. Included in
net
income for the fourth quarter of fiscal 2006 are non-recurring U.S. and foreign
tax expenses of $25.8 million, or $0.39 per share, related to the Company’s
repatriation of $155 million of foreign earnings pursuant to the American Jobs
Creation Act of 2004. Excluding the effect of this one-time item, net income
for
the fourth fiscal quarter would have been $18.3 million, or $0.28 per share,
exceeding consensus analyst estimates of $0.14 per share. For the fourth quarter
of fiscal 2005, the Company reported net earnings of $74.7 million, or $1.12
per
share, on total sales of $1.483 billion.
“We
are
pleased that in the fourth quarter, excluding the tax effect associated with
our
foreign dividend repatriation, we returned to profitability, particularly in
light of the tremendous challenges facing the U.S. chicken industry,” said O.B.
Goolsby, Jr., Pilgrim’s Pride president and chief executive officer. “Our
financial performance during the quarter reflected an improvement in chicken
prices for most of the quarter, coupled with the progress we have made toward
lowering our costs and operating more efficiently in a difficult operating
environment.”
Last
May,
Pilgrim’s Pride announced a multi-point plan designed to improve the Company’s
competitive position. This plan included a 3% reduction in weekly chicken
processing, 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.
However,
over the past two months market conditions have weakened, as evidenced by a
decrease in prices for boneless breast meat and leg quarters, as well as a
sharp
increase in the price of corn and soybean meal.
In
response, Pilgrim’s Pride on Oct. 29 announced further plans to reduce weekly
chicken processing by 5% year-over-year - or approximately 1.3 million head
-
beginning January 1, 2007, in an effort to better balance production and demand.
The Company said it intends to keep the reduction in effect until average
industry margins return to more normalized levels.
“We
firmly believe that lowering overall supply to better match demand is an
important component in helping return the U.S. chicken industry to more
normalized levels. Although the near-term operating environment remains
challenging, we are confident that continued demand for high-quality, convenient
and low-fat meat proteins will position Pilgrim’s Pride for profitable long-term
growth when conditions in the chicken markets improve,” added Mr.
Goolsby.
For
the
full 2006 fiscal year, the Company reported a net loss of $34.2 million, or
$0.51 per share, on total sales of $5.236 billion. Included in net income for
fiscal 2006 are non-recurring U.S. and foreign tax expenses of $25.8 million,
or
$0.39 per share, related to the Company’s repatriation of $155 million of
foreign earnings pursuant to the American Jobs Creation Act of 2004. Excluding
the effect of this one-time item, net loss for fiscal 2006 would have been
$8.4
million, or $0.12 per share, exceeding consensus analyst estimates of a loss
of
$0.26 per share. For the full 2005 fiscal year, Pilgrim’s Pride reported net
earnings of $265.0 million, or $3.98 per share, on sales of $5.666 billion.
Included
in the net income for fiscal 2005 were a
non-recurring gain of $7.5 million net of tax, or $0.11 per share, associated
with a litigation settlement, and recoveries on prior year’s turkey
restructuring charges of $3.3 million net of tax, or $0.05 per share. Excluding
these items, adjusted earnings for fiscal 2005 would have been $254.2 million,
or $3.82 per share.
Conference
Call Information
A
conference call to discuss the Company's fourth-quarter results will be held
at
10 a.m. CT (11 a.m. ET) on November 14, 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 approximately 2 p.m.
(CT) on November 14 through November 21, 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.
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
November
14, 2006
Page
4
PILGRIM'S
PRIDE CORPORATION
Consolidated
Statements of Income
[In
thousands, except share and per share amounts]
|
Three
Months Ended
|
September
30, 2006
|
October
1, 2005
|
|||||
|
Net
Sales
|
$
|
1,338,398
|
$
|
1,482,668
|
|||
|
Cost
of sales
|
1,239,095
|
1,281,863
|
|||||
|
Gross
Profit
|
99,303
|
200,805
|
|||||
|
Selling,
general and administrative
|
77,826
|
80,956
|
|||||
|
Operating
Income
|
21,477
|
119,849
|
|||||
|
Other
Expense (Income):
|
|||||||
|
Interest
expense
|
12,199
|
12,149
|
|||||
|
Interest
income
|
(1,620
|
)
|
(2,081
|
)
|
|||
|
Foreign
exchange gain
|
(868
|
)
|
(54
|
)
|
|||
|
Miscellaneous,
net
|
(352
|
)
|
491
|
||||
|
Total
Other Expenses, Net
|
9,359
|
10,505
|
|||||
|
Income
before Income Taxes
|
12,118
|
109,344
|
|||||
|
Income
Tax Expense
|
19,601
|
34,616
|
|||||
|
Net
Income (Loss)
|
$
|
(7,483
|
)
|
$
|
74,728
|
||
|
Net
Income (Loss) per Common Share
|
|||||||
|
-Basic
and Diluted
|
$
|
(0.11
|
)
|
$
|
1.12
|
||
|
Dividends
Declared per Common Share
|
$
|
0.023
|
$
|
0.015
|
|||
|
Weighted
Average Shares Outstanding
|
66,555,733
|
66,555,733
|
|||||
|
Fiscal
Year Ended
|
September
30, 2006
|
October
1, 2005
|
|||||
|
Net
Sales
|
$
|
5,235,565
|
$
|
5,666,275
|
|||
|
Cost
of sales
|
4,937,965
|
4,921,076
|
|||||
|
Gross
Profit
|
297,600
|
745,199
|
|||||
|
Selling,
general and administrative
|
294,598
|
309,387
|
|||||
|
Operating
Income
|
3,002
|
435,812
|
|||||
|
Other
Expense (Income):
|
|||||||
|
Interest
expense
|
50,601
|
49,585
|
|||||
|
Interest
income
|
(10,048
|
)
|
(5,653
|
)
|
|||
|
Foreign
exchange (gain) loss
|
144
|
(474
|
)
|
||||
|
Miscellaneous,
net
|
(1,378
|
)
|
(11,169
|
)
|
|||
|
Total
Other Expenses, Net
|
39,319
|
32,289
|
|||||
|
Income
(Loss) before Income Taxes
|
(36,317
|
)
|
403,523
|
||||
|
Income
Tax (Benefit) Expense
|
(2,085
|
)
|
138,544
|
||||
|
Net
Income (Loss)
|
$
|
(34,232
|
)
|
$
|
264,979
|
||
|
Net
Income (Loss) per Common Share
|
|||||||
|
-Basic
and Diluted
|
$
|
(0.51
|
)
|
$
|
3.98
|
||
|
Dividends
Declared per Common Share
|
$
|
1.090
|
$
|
0.06
|
|||
|
Weighted
Average Shares Outstanding
|
66,555,733
|
66,555,733
|
|||||
PILGRIM'S
PRIDE CORPORATION
News
Release
November
14, 2006
Page
5
PILGRIM'S
PRIDE CORPORATION
Condensed
Consolidated Balance Sheets
[In
thousands]
|
September
30, 2006
|
October
1, 2005
|
||||||
|
ASSETS
|
|||||||
|
Cash
|
$
|
156,404
|
$
|
132,567
|
|||
|
Other
Current Assets
|
949,270
|
866,848
|
|||||
|
Total
Current Assets
|
1,105,674
|
999,415
|
|||||
|
Investments
in Available for Sale Securities
|
115,375
|
304,593
|
|||||
|
Other
Assets
|
50,825
|
53,798
|
|||||
|
Property,
Plant and Equipment, net
|
1,154,994
|
1,154,097
|
|||||
|
Total
Assets
|
$
|
2,426,868
|
$
|
2,511,903
|
|||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
Current
Maturities of Long-term Debt
|
$
|
10,322
|
$
|
8,603
|
|||
|
Other
Current Liabilities
|
566,516
|
586,211
|
|||||
|
Total
Current Liabilities
|
576,838
|
594,814
|
|||||
|
Long-Term
Debt, Less Current Maturities
|
554,876
|
518,863
|
|||||
|
Deferred
Income Taxes
|
175,869
|
173,232
|
|||||
|
Minority
Interest in Subsidiary
|
1,958
|
1,396
|
|||||
|
Total
Stockholders' Equity
|
1,117,327
|
1,223,598
|
|||||
|
Total
Liabilities and Stockholders’ Equity
|
$
|
2,426,868
|
$
|
2,511,903
|
|||
PILGRIM'S
PRIDE CORPORATION
News
Release
November
14, 2006
Page
6
Selected
Financial Information (in thousands)
(Unaudited)
Note:
“EBITDA” is defined as the sum of the net income (loss) before interest, taxes,
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
|
September
30, 2006
|
October
1, 2005
|
|||||
|
Net
Income (Loss)
|
$
|
(7,483
|
)
|
$
|
74,728
|
||
|
Add:
|
|||||||
|
Income
tax expense
|
19,601
|
34,616
|
|||||
|
Interest
expense, net
|
10,579
|
10,068
|
|||||
|
Depreciation
and amortization
|
35,082
|
40,681
|
|||||
|
Minus:
|
|||||||
|
Amortization
of capitalized financing costs
|
572
|
581
|
|||||
|
EBITDA
|
$
|
57,207
|
$
|
159,512
|
|||
|
Capital
Expenditures
|
$
|
42,568
|
$
|
26,439
|
|
Fiscal
Year Ended
|
September
30, 2006
|
October
1, 2005
|
|||||
|
Net
Income (Loss)
|
$
|
(34,232
|
)
|
$
|
264,979
|
||
|
Add:
|
|||||||
|
Income
tax expense
|
(2,085
|
)
|
138,544
|
||||
|
Interest
expense, net
|
40,553
|
43,932
|
|||||
|
Depreciation
and amortization
|
135,133
|
134,944
|
|||||
|
Minus:
|
|||||||
|
Amortization
of capitalized financing costs
|
2,606
|
2,321
|
|||||
|
EBITDA
|
$
|
136,763
|
$
|
580,078
|
|||
|
Capital
Expenditures
|
$
|
143,882
|
$
|
116,588
|
|||
|
Other
Data:
|
September
30, 2006
|
October
1, 2005
|
|||||
|
Current
Maturities of Long-term Debt
|
$
|
10,322
|
$
|
8,603
|
|||
|
Long-term
Debt
|
554,876
|
518,863
|
|||||
|
Total
Debt
|
$
|
565,198
|
$
|
527,466
|
Note
Regarding Non-GAAP Financial Information:
We
have
included certain information regarding our results of operations that has been
adjusted to exclude non-recurring U.S. and foreign tax expenses of $25.8
million, or $0.39 per share, in the fourth quarter of fiscal 2006 related to
the
Company’s repatriation of $155 million of foreign earnings pursuant to the
American Jobs Creation Act of 2004 and to exclude, in fiscal 2005, a
non-recurring gain of $7.5 million net of tax, or $0.11 per share, associated
with a litigation settlement, and recoveries on prior year’s turkey
restructuring charges of $3.3 million net of tax, or $0.05 per share. We believe
investors may be interested in our results excluding these items as this is
how
our management analyzes our results from continuing
operations.