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): July 29, 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)
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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 July
29, 2008, Pilgrim's Pride Corporation reported a net loss from continuing
operations of $48.3 million, or $0.69 per share, on net sales of $2.2 billion
for the third fiscal quarter ended June 28, 2008. These results
exclude charges of $4.4 million, or $0.06 per share, related to discontinued
operations. For the third quarter of fiscal 2007, the company
reported a net profit from continuing operations of $63.3 million, or $0.95 per
share, on total sales of $2.1 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 July 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:
July 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 July 29, 2008.
PILGRIM'S
PRIDE CORPORATION REPORTS FINANCIAL RESULTS
FOR
THIRD QUARTER OF FISCAL 2008
PITTSBURG,
Texas, July 29, 2008 – Pilgrim's Pride Corporation (NYSE: PPC) today reported a
net loss from continuing operations of $48.3 million, or $0.69 per share, on net
sales of $2.2 billion for the third fiscal quarter ended June 28,
2008. These results exclude charges of $4.4 million, or $0.06 per
share, related to discontinued operations. For the third quarter of
fiscal 2007, the company reported a net profit from continuing operations of
$63.3 million, or $0.95 per share, on total sales of $2.1 billion.
“Our
financial results in the third quarter of fiscal 2008 reflect the significant
headwinds facing our company and industry from high feed costs,” said Clint
Rivers, president and chief executive officer. “We have worked
diligently to pass along price increases to our customers to help offset the
impact of record-high corn and soybean meal costs. But, like other
producers, we simply have not been able to keep pace with the extreme price
volatility in the grain markets.”
Pilgrim’s
Pride said its total feed-ingredient costs in the quarter climbed $266 million,
or 41 percent, when compared to the same period a year ago. Based on
the actual costs incurred for the first three quarters of the fiscal year and
current commodity futures markets for the remaining quarter, the company’s total
feed-ingredient costs for fiscal 2008 would be up an estimated $900 million from
last fiscal year.
“Looking
ahead, there is no question that high feed costs will continue to be a
significant concern for our industry. Pilgrim’s Pride is part of a
broad-based coalition of food companies that is strongly urging the federal
government to fix its badly flawed ethanol policy before the food versus fuel
debate sends the global economy into a tailspin and leads to even worse food
shortages. Thousands of American workers already have lost their jobs
as a result of the crisis facing the meat protein industry. We are
pleased by the EPA’s announcement last week that it needs additional time to
review Texas Gov. Rick Perry’s request for a waiver of the Renewable Fuels
Standard. It is important for the EPA to understand all of the facts
and compelling economic data, which we believe overwhelmingly support a waiver
of the fuel standards, so that it can truly make an informed
decision.”
Mr.
Rivers continued: “At Pilgrim’s Pride, we are doing everything in our control to
manage through this extremely difficult operating environment. Over
the past six months we have made some tough, but necessary, decisions to
position our company as a stronger, more efficient competitor. Those
decisions include: closing a processing plant and seven distribution centers;
consolidating our tray-pack business from our El Dorado, Ark., facility into six
other case-ready plants; eliminating approximately 1,700 positions; and reducing
our chicken production in an effort to better balance supply and demand at
appropriate selling prices to cover input costs. In addition, we
amended our debt covenants and completed a stock offering for $177 million to
provide us with more financial flexibility to manage our business through this
tumultuous period. Additionally, while the egg set data trend over
the past three weeks has been encouraging, with year-over-year reductions
ranging from 2.4 to 3.9 percent over the past three weeks, we believe that these
levels of reductions indicate a longer recovery period than we would have hoped
for. As such, we believe that high grain costs will continue to exert
pressure on our financial results in the fourth quarter of fiscal 2008,
resulting in the continuation of operating losses.”
For the
first nine months of fiscal 2008, Pilgrim’s Pride reported a net loss from
continuing operations of $193.0 million, or $2.85 per share, on net sales of
$6.4 billion compared to a pro forma net loss from continuing operations of
$20.4 million, or $0.31 per share, on pro forma net sales of $5.9 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 nine months. The
results for the first nine months of fiscal 2008 include a non-recurring income
tax charge of approximately $13.0 million, or $0.19 per share, related to an
adjustment in deferred taxes as a result of a newly enacted tax law in Mexico,
and asset impairment and restructuring charges of approximately $21.1 million,
$13.2 million net of tax, or $0.19 per share, related to the closing of one
processing plant, one administrative office and six distribution
centers. Additionally, these results exclude net losses of $3.5 million, or
$0.05 per share, related to discontinued operations. The results for the first
nine months of fiscal 2007 include charges of $14.5 million, or $0.14 per share,
related to the early extinguishment of debt incurred by the Company in
connection with the financing of the Gold Kist acquisition
Conference
Call Information
A
conference call to discuss the Company's third-quarter results will be held at
10 a.m. Central (11 a.m. Eastern) on July 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=49823. (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 July 29 toll-free at
877-919-4059 pass code 44751270. The replay will be available for
seven days.
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
53,500 people and operates 36 chicken processing plants and 12 prepared-foods
facilities. 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 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 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
July 29,
2008
Page
3
PILGRIM'S
PRIDE CORPORATION
Consolidated
Statements of Operations
(Unaudited)
[In
thousands, except share and per share data]
|
Three Months Ended
|
June
28, 2008
|
June
30, 2007
|
||||||
|
Net
sales
|
$ | 2,207,476 | $ | 2,104,499 | ||||
|
Cost
of sales
|
2,154,265 | 1,869,674 | ||||||
|
Gross
profit
|
53,211 | 234,825 | ||||||
|
Selling,
general and administrative
|
92,291 | 97,929 | ||||||
|
Restructuring
charges
|
3,451 | -- | ||||||
|
Operating
income (loss)
|
(42,531 | ) | 136,896 | |||||
|
Other
expense (income):
|
||||||||
|
Interest
expense
|
35,500 | 40,018 | ||||||
|
Interest
income
|
(646 | ) | (198 | ) | ||||
|
Miscellaneous,
net
|
(590 | ) | (2,869 | ) | ||||
|
Total
other expenses, net
|
34,264 | 36,951 | ||||||
|
Income
(loss) from continuing operations before income taxes
|
(76,795 | ) | 99,945 | |||||
|
Income
tax expense (benefit)
|
(28,451 | ) | 36,668 | |||||
|
Income
(loss) from continuing operations
|
(48,344 | ) | 63,277 | |||||
|
Loss
from operation of discontinued business, net of tax
|
(4,437 | ) | (636 | ) | ||||
|
Net
income (loss)
|
$ | (52,781 | ) | $ | 62,641 | |||
|
Net
income (loss) per common share – basic and diluted:
|
||||||||
|
Continuing
operations
|
$ | (0.69 | ) | $ | 0.95 | |||
|
Discontinued
business
|
(0.06 | ) | (0.01 | ) | ||||
|
Net
income (loss)
|
$ | (0.75 | ) | $ | 0.94 | |||
|
Dividends
declared per common share
|
$ | 0.0225 | $ | 0.0225 | ||||
|
Weighted
average shares outstanding
|
70,182,107 | 66,555,733 | ||||||
PILGRIM'S
PRIDE CORPORATION
News
Release
July 29,
2008
Page
4
PILGRIM'S
PRIDE CORPORATION
Consolidated
Statements of Operations
(Unaudited)
[In
thousands, except share and per share data]
|
Nine Months Ended
|
June
28, 2008
|
June
30, 2007
|
||||||
|
Net
sales
|
$ | 6,355,623 | $ | 5,383,641 | ||||
|
Cost
of sales
|
6,220,688 | 5,002,528 | ||||||
|
Asset
impairment
|
12,022 | -- | ||||||
|
Gross
profit
|
122,913 | 381,113 | ||||||
|
Selling,
general and administrative
|
299,283 | 259,792 | ||||||
|
Restructuring
charges
|
9,120 | -- | ||||||
|
Operating
income (loss)
|
(185,490 | ) | 121,321 | |||||
|
Other
expense (income):
|
||||||||
|
Interest
expense
|
99,212 | 92,309 | ||||||
|
Interest
income
|
(1,600 | ) | (3,191 | ) | ||||
|
Loss
on early extinguishment of debt
|
-- | 14,475 | ||||||
|
Miscellaneous,
net
|
(4,614 | ) | (7,548 | ) | ||||
|
Total
other expenses, net
|
92,998 | 96,045 | ||||||
|
Income
(loss) from continuing operations before income taxes
|
(278,488 | ) | 25,276 | |||||
|
Income
tax expense (benefit)
|
(85,477 | ) | 10,844 | |||||
|
Income
(loss) from continuing operations
|
(193,011 | ) | 14,432 | |||||
|
Loss
from operation of discontinued business, net of tax
|
(4,450 | ) | (603 | ) | ||||
|
Gain
on disposal of discontinued business, net of tax
|
903 | -- | ||||||
|
Net
income (loss)
|
$ | (196,558 | ) | $ | 13,829 | |||
|
Net
income (loss) per common share – basic and diluted:
|
||||||||
|
Continuing
operations
|
$ | (2.85 | ) | $ | 0.22 | |||
|
Discontinued
business
|
(0.05 | ) | (0.01 | ) | ||||
|
Net
income (loss)
|
$ | (2.90 | ) | $ | 0.21 | |||
|
Dividends
declared per common share
|
$ | 0.0675 | $ | 0.0675 | ||||
|
Weighted
average shares outstanding
|
67,764,524 | 66,555,733 | ||||||
PILGRIM'S
PRIDE CORPORATION
News
Release
July 29,
2008
Page
5
|
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.
|
||||||||
|
Nine Months Ended
|
June
28, 2008
|
June
30, 2007
|
||||||
|
(Actual)
|
(Pro
forma)
|
|||||||
|
Net
sales
|
$ | 6,355,623 | $ | 5,911,451 | ||||
|
Depreciation
and amortization expense
|
$ | 176,107 | $ | 169,722 | ||||
|
Operating
income (loss)
|
$ | (185,490 | ) | $ | 90,769 | |||
|
Interest
expense, net
|
$ | 97,612 | $ | 114,940 | ||||
|
Income
tax benefit
|
$ | (85,477 | ) | $ | (9,907 | ) | ||
|
Loss
from continuing operations
|
$ | (193,011 | ) | $ | (19,752 | ) | ||
|
Loss
from operation of discontinued business, net of tax
|
$ | (3,547 | ) | $ | (603 | ) | ||
|
Net
loss
|
$ | (196,558 | ) | $ | (20,355 | ) | ||
|
Net
loss per common share:
|
||||||||
|
Continuing
operations
|
$ | (2.85 | ) | $ | (0.30 | ) | ||
|
Discontinued
business
|
$ | (0.05 | ) | $ | (0.01 | ) | ||
|
Net
loss
|
$ | (2.90 | ) | $ | (0.31 | ) | ||
|
EBITDA
|
$ | (8,567 | ) | $ | 251,572 | |||
|
Capital
expenditures
|
$ | 97,641 | $ | 147,407 | ||||
PILGRIM'S
PRIDE CORPORATION
News
Release
July 29,
2008
Page
6
PILGRIM'S
PRIDE CORPORATION
Condensed
Consolidated Balance Sheets
(Unaudited)
[In
thousands]
|
June
28, 2008
|
September
29, 2007
|
|||||||
|
ASSETS
|
||||||||
|
Cash
and cash equivalents
|
$ | 54,071 | $ | 66,168 | ||||
|
Investments
in available-for-sale securities
|
10,790 | 8,153 | ||||||
|
Other
current assets
|
1,389,142 | 1,226,739 | ||||||
|
Total
current assets
|
1,454,003 | 1,301,060 | ||||||
|
Goodwill
|
499,669 | 505,166 | ||||||
|
Other
assets
|
123,544 | 138,546 | ||||||
|
Investments
in available-for-sale securities
|
54,342 | 46,035 | ||||||
|
Property,
plant and equipment, net
|
1,715,627 | 1,783,429 | ||||||
|
Total
assets
|
$ | 3,847,185 | $ | 3,774,236 | ||||
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
||||||||
|
Current
maturities of long-term debt
|
$ | 2,295 | $ | 2,872 | ||||
|
Other
current liabilities
|
916,042 | 902,330 | ||||||
|
Total
current liabilities
|
918,337 | 905,202 | ||||||
|
Long-term
debt, less current maturities
|
1,518,979 | 1,318,558 | ||||||
|
Deferred
income taxes
|
178,102 | 326,570 | ||||||
|
Other
long-term liabilities
|
84,721 | 51,685 | ||||||
|
Total
stockholders' equity
|
1,147,046 | 1,172,221 | ||||||
|
Total
liabilities and stockholders’ equity
|
$ | 3,847,185 | $ | 3,774,236 | ||||
PILGRIM'S
PRIDE CORPORATION
News
Release
July 29,
2008
Page
7
PILGRIM'S
PRIDE CORPORATION
Selected
Financial Information
(Unaudited)
(In thousands)
Note: “EBITDA”
is defined as the sum of the income (loss) from continuing operations 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
|
June
28, 2008
Actual
|
June
30, 2007
Actual
|
||||||
|
Income
(loss) from continuing operations
|
$ | (48,344 | ) | $ | 63,277 | |||
|
Add:
|
||||||||
|
Income
tax expense (benefit)
|
(28,451 | ) | 36,668 | |||||
|
Interest
expense, net
|
34,854 | 39,820 | ||||||
|
Depreciation
and amortization
|
60,506 | 57,601 | ||||||
|
Minus:
|
||||||||
|
Amortization
of capitalized financing costs
|
1,696 | 1,118 | ||||||
|
EBITDA
|
$ | 16,869 | $ | 196,248 | ||||
|
Capital
expenditures
|
$ | 28,407 | $ | 41,795 | ||||
|
Nine
Months Ended
|
June
28, 2008
Actual
|
June
30, 2007
Actual
|
June
30, 2007
Pro
forma
|
|||||||||
|
Income
(loss) from continuing operations
|
$ | (193,011 | ) | $ | 14,432 | $ | (19,752 | ) | ||||
|
Add:
|
||||||||||||
|
Income
tax expense (benefit)
|
(85,477 | ) | 10,844 | (9,907 | ) | |||||||
|
Interest
expense, net
|
97,612 | 89,118 | 114,940 | |||||||||
|
Depreciation
and amortization
|
176,107 | 144,499 | 169,722 | |||||||||
|
Minus:
|
||||||||||||
|
Amortization
of capitalized financing costs
|
3,798 | 2,933 | 3,430 | |||||||||
|
EBITDA
|
$ | (8,567 | ) | $ | 255,960 | $ | 251,572 | |||||
|
Loss
on early extinguishment of debt
|
-- | 14,475 | 14,475 | |||||||||
|
EBITDA
|
(8,567 | ) | 270,435 | 266,047 | ||||||||
|
Capital
expenditures
|
$ | 97,641 | $ | 134,665 | $ | 147,407 | ||||||