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): January 28, 2008
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
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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
January 29, 2008,
Pilgrim's
Pride
Corporation reported a net loss of $32.3 million, or $0.49 per share, on net
sales of $2.09 billion for the first fiscal quarter ended December 29, 2007,
compared to a pro forma net loss of $42.9 million, or $0.64 per share, on pro
forma net sales of $1.86 billion in the same period last year. The
pro forma amounts assume the acquisition of Gold Kist Inc., which closed on
December 27, 2006, was completed on September 30, 2006, and included in the
operating results for the quarter. The results for the first quarter
of fiscal 2008 include a non-recurring income tax charge of approximately $13.0
million, or $0.20 per share, related to an adjustment in deferred taxes as
a
result of a newly enacted tax law in Mexico. For the first quarter of
fiscal 2007, the company reported a net loss of $8.7 million, or $0.13 per
share, on total sales of $1.34 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 January 29, 2008.
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: January
29, 2008
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 January 29, 2008.
PILGRIM'S
PRIDE CORPORATION REPORTS FINANCIAL RESULTS
FOR
FIRST QUARTER OF FISCAL 2008
PITTSBURG,
Texas, January 29, 2008 – Pilgrim's Pride Corporation (NYSE: PPC) today reported
a net loss of $32.3 million, or $0.49 per share, on net sales of $2.09 billion
for the first fiscal quarter ended December 29, 2007, compared to a pro forma
net loss of $42.9 million, or $0.64 per share, on pro forma net sales of
$1.86
billion in the same period last year. The pro forma amounts assume
the acquisition of Gold Kist Inc., which closed on December 27, 2006, was
completed on September 30, 2006, and included in the operating results for
the
quarter. The results for the first quarter of fiscal 2008 include a
non-recurring income tax charge of approximately $13.0 million, or $0.20
per
share, related to an adjustment in deferred taxes as a result of a newly
enacted
tax law in Mexico. For the first quarter of fiscal 2007, the company
reported a net loss of $8.7 million, or $0.13 per share, on total sales of
$1.34
billion.
“Our
results in the first quarter of fiscal 2008 reflect the significant challenge
posed by higher feed-ingredient costs, which have climbed sharply over the
past
few months and currently show no signs of abating in 2008,” said Ken Pilgrim,
chairman and interim president of Pilgrim’s Pride. “Our
feed-ingredient costs for the quarter, on a pro forma basis, rose 24%, or
$157
million, when compared to the same period a year ago. Those cost
increases – when coupled with labor shortages, higher production, freight and
fuel costs during the quarter – offset most of the improvements in market
pricing and product mix.”
He
said
the company’s consumer retail business continued to post good growth as a result
of increased penetration of supermarket meat and deli cases and new business
from a number of large customers. In addition, export demand remained
solid and the company was able to reduce its commodity pounds by upgrading
product into higher-margin, value-added chicken items.
Looking
ahead, Mr. Pilgrim said that based on the current commodity futures markets,
the
company’s total feed-ingredient costs for fiscal 2008 would be up more than $700
million from last fiscal year. Mr. Pilgrim said he believes
that surging feed costs make it unlikely that the U.S. chicken industry in
2008
will grow at the 3% rate projected by the U.S. Department of Agriculture
last
fall.
“Given
the unprecedented run-up in feed-ingredient costs, we believe the industry
will
have to take a much closer look at production levels for 2008 and that overall
production is not likely to grow at the rate previously projected by the
USDA. We will continue to closely monitor industry fundamentals and
take whatever actions we feel are necessary to better balance our supply
and
demand and to position our company for sustained, profitable growth,” said Mr.
Pilgrim.
Conference
Call Information
A
conference call to discuss the Company's first-quarter results will be held
at
10 a.m. Central (11 a.m. Eastern) on January 29, 2008. To listen live
via telephone, call toll-free 877-656-8906, verbal pass code
Pilgrim’s. The call also will be broadcast live over the Internet at
http://www.videonewswire.com/event.asp?id=44923. (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 approximately
two hours of the conclusion of the call. A telephone replay will be
available beginning at approximately 2 p.m. (Central) on January 29 through
February 5, 2008, at toll-free 877-919-4059 pass code 43593431.
About
Pilgrim’s Pride
Pilgrim’s
Pride Corporation is the largest chicken company in the United States and
Puerto
Rico and the second-largest in Mexico. Pilgrim’s Pride employs
approximately 55,000 people and operates 37 chicken processing and 12
prepared-foods facilities, with major operations in Texas, Alabama, Arkansas,
Florida, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, South
Carolina, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico as well
as
other facilities in Arizona, Iowa, Mississippi, Ohio 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 http://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 the expected benefits and synergies associated
with
the acquisition of Gold Kist and 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 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 our cash resources, particularly in light of our
substantial leverage; restrictions imposed by, and as a result of, our
substantial leverage; changes in laws or regulations affecting our operations
or
the application thereof; new
immigration legislation or
increased enforcement efforts in connection with existing immigration
legislation that cause our costs of doing business to increase, cause us
to
change the way in which we do business, or otherwise disrupt our operations;
competitive factors and pricing pressures or the loss of one or more of our
largest customers; inability to consummate, or effectively integrate, any
acquisition, including integrating our recent acquisition of Gold Kist, or
realize the associated cost savings and operating synergies currently
anticipated; currency exchange rate fluctuations, trade barriers, exchange
controls, expropriation and other risks associated with foreign operations;
disruptions in international markets and distribution channels; 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.
Contact:
Gary Rhodes
Vice
President, Corporate Communications
& Investor Relations
(903)
434-1495
PILGRIM'S
PRIDE CORPORATION
News
Release
January
29, 2008
Page
3
PILGRIM'S
PRIDE CORPORATION
Consolidated
Statements of Operations
(Unaudited)
[In
thousands, except share and per
share data]
|
Three
Months
Ended
|
December
29,
2007
|
December
30,
2006
|
||||||
|
Net
sales
|
$ | 2,093,211 | $ | 1,337,132 | ||||
|
Cost
of
sales
|
1,985,455 | 1,271,606 | ||||||
|
Gross
profit
|
107,756 | 65,526 | ||||||
|
Selling,
general and
administrative
|
105,347 | 68,432 | ||||||
|
Operating
income
(loss)
|
2,409 | (2,906 | ) | |||||
|
Other
expense
(income):
|
||||||||
|
Interest
expense
|
30,335 | 13,914 | ||||||
|
Interest
income
|
(508 | ) | (1,309 | ) | ||||
|
Currency
exchange (gain)
loss
|
(61 | ) | 1,504 | |||||
|
Miscellaneous,
net
|
(2,802 | ) | (2,515 | ) | ||||
|
Total
other expenses,
net
|
26,964 | 11,594 | ||||||
|
Loss before
income
taxes
|
(24,555 | ) | (14,500 | ) | ||||
|
Income
tax expense
(benefit)
|
7,774 | (5,764 | ) | |||||
|
Net
loss
|
$ | (32,329 | ) | $ | (8,736 | ) | ||
|
Net
loss per common
share
|
||||||||
|
-basic
and
diluted
|
$ | (0.49 | ) | $ | (0.13 | ) | ||
|
Dividends
declared per common
share
|
$ | 0.0225 | $ | 0.0225 | ||||
|
Weighted
average shares
outstanding
|
66,555,733 | 66,555,733 | ||||||
PILGRIM'S
PRIDE
CORPORATION
News
Release
January
29, 2008
Page
4
|
PILGRIM'S
PRIDE
CORPORATION
Pro
forma Financial
Information
(Unaudited)
(In
thousands except per share
amounts)
The
unaudited pro forma financial
information has been presented as if the acquisition of Gold Kist
Inc. had
occurred as of the beginning of the fiscal year
presented.
|
||||
|
Three
Months
Ended
|
December
30,
2006
|
|||
|
(Pro
forma)
|
||||
|
Net
sales
|
$ | 1,864,942 | ||
|
Depreciation
and
amortization
|
$ | 57,919 | ||
|
Operating
loss
|
$ | (33,456 | ) | |
|
Interest
expense,
net
|
$ | 38,426 | ||
|
Income
tax
benefit
|
$ | (26,514 | ) | |
|
Net
loss
|
$ | (42,919 | ) | |
|
Net
loss per common
share
|
$ | (0.64 | ) | |
|
EBITDA
|
$ | 25,710 | ||
|
Capital
expenditures
|
$ | 52,092 | ||
PILGRIM'S
PRIDE
CORPORATION
News
Release
January
29, 2008
Page
5
PILGRIM'S
PRIDE
CORPORATION
Condensed
Consolidated Balance
Sheets
(Unaudited)
[In
thousands]
|
December
29,
2007
|
September
29,
2007
|
|||||||
|
ASSETS
|
||||||||
|
Cash
and cash
equivalents
|
$ | 94,662 | $ | 66,168 | ||||
|
Investments
in available-for-sale
securities
|
8,813 | 8,153 | ||||||
|
Other
current
assets
|
1,262,521 | 1,210,013 | ||||||
|
Total
current
assets
|
1,365,996 | 1,284,334 | ||||||
|
Goodwill
|
499,669 | 505,166 | ||||||
|
Other
assets
|
135,337 | 138,546 | ||||||
|
Investments
in available-for-sale
securities
|
45,896 | 46,035 | ||||||
|
Property,
plant
and equipment,
net
|
1,789,814 | 1,800,155 | ||||||
|
Total
assets
|
$ | 3,836,712 | $ | 3,774,236 | ||||
|
LIABILITIES
AND STOCKHOLDERS'
EQUITY
|
||||||||
|
Notes
payable to
banks
|
$ | 86,500 | $ | — | ||||
|
Current
maturities of long-term
debt
|
2,884 | 2,872 | ||||||
|
Other
current
liabilities
|
922,783 | 902,330 | ||||||
|
Total
current
liabilities
|
1,012,167 | 905,202 | ||||||
|
Long-term
debt,
less
current
maturities
|
1,317,562 | 1,318,558 | ||||||
|
Deferred
income
taxes
|
312,984 | 326,570 | ||||||
|
Other
long-term
liabilities
|
55,771 | 51,685 | ||||||
|
Total
stockholders'
equity
|
1,138,228 | 1,172,221 | ||||||
|
Total
liabilities
and stockholders’
equity
|
$ | 3,836,712 | $ | 3,774,236 | ||||
PILGRIM'S
PRIDE
CORPORATION
News
Release
January
29, 2008
Page
6
PILGRIM'S
PRIDE CORPORATION
Selected
Financial Information
(Unaudited)
(In
thousands)
Note: “EBITDA”
is defined as the sum of the net income (loss) plus 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
|
December
29, 2007
Actual
|
December
30, 2006
Actual
|
December
30, 2006
Pro
forma
|
|||||||||
|
Net
loss
|
$ | (32,329 | ) | $ | (8,736 | ) | $ | (42,919 | ) | |||
|
Add:
|
||||||||||||
|
Income
tax expense (benefit)
|
7,774 | (5,764 | ) | (26,514 | ) | |||||||
|
Interest
expense, net
|
29,827 | 12,605 | 38,426 | |||||||||
|
Depreciation
and amortization
|
55,923 | 32,697 | 57,919 | |||||||||
|
Minus:
|
||||||||||||
|
Amortization
of capitalized financing costs
|
1,044 | 705 | 1,202 | |||||||||
|
EBITDA
|
$ | 60,151 | $ | 30,097 | $ | 25,710 | ||||||
|
Capital
expenditures
|
$ | 42,684 | $ | 39,350 | $ | 52,092 | ||||||