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 30, 2007
PILGRIM'S
PRIDE CORPORATION
(Exact
Name of Registrant as Specified in its Charter)
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Delaware
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1-9273
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75-1285071
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(State or Other Jurisdiction
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(Commission
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(IRS
Employer
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of Incorporation)
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File
Number)
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Identification
No.)
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4845 US Hwy. 271 N.
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Pittsburg, Texas
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75686-0093
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(Address of Principal Executive Offices)
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(ZIP
Code)
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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:
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q
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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q
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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q
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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
January 30, 2007, Pilgrim's Pride Corporation issued a press release reporting
a
net loss of $8.7 million, or $0.13 per share, on total sales of $1.34 billion
for the first quarter ended December 30, 2006. For the first quarter of fiscal
2006, the Company reported net income of $25.7 million, or $0.39 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 30, 2007.
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
30, 2007 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 30, 2007.
PILGRIM'S
PRIDE CORPORATION REPORTS FINANCIAL RESULTS
FOR
FIRST QUARTER OF FISCAL 2007
Company
Raises Synergy Savings Target from Gold Kist Acquisition
PITTSBURG,
Texas, January 30, 2007 - Pilgrim's Pride Corporation (NYSE: PPC) today reported
a net loss of $8.7 million, or $0.13 per share, on total sales of $1.34 billion
for the first quarter ended December 30, 2006. For the first quarter of fiscal
2006, the Company reported net income of $25.7 million, or $0.39 per share,
on
total sales of $1.34 billion.
“Our
financial results for the first quarter of fiscal 2007 reflect the continued
operating challenges facing the U.S. chicken industry,” said O.B. Goolsby, Jr.,
Pilgrim’s Pride president and chief executive officer. “Sharp increases in
feed-ingredient costs, driven largely by surging demand for corn-based ethanol,
represent the most significant threat to our business at this time. Ultimately
these higher costs will be passed on to consumers in the form of higher prices
for chicken products. While market pricing for U.S. chicken products has
shown
some improvement recently, thanks in part to industry-wide production cutbacks,
it simply is not where it needs to be to offset these cost increases for
corn
and soybean meal.”
“Now
more
than ever, it is important for us to execute on our strategic plan and seize
opportunities to build our business, whether by adjusting our product mix,
strengthening our brand identity with consumers, or shortening the time it
takes
to bring new products to market. We are confident that our continued focus
on
higher-margin prepared foods products, coupled with industry-wide production
cutbacks, will help return us to normalized profitability when markets improve,”
he added.
On
Dec.
27, 2006, Pilgrim’s Pride acquired Gold Kist Inc., creating the world’s leading
chicken company in terms of production and the fourth-largest U.S. meat protein
company by revenues.
“We
are
now ready to begin realizing the compelling strategic value and benefits
we
envisioned from this acquisition. The integration is off to a good start.
We
have appointed more than a dozen integration teams composed of employees
from
Pilgrim’s Pride and the former Gold Kist to drill down into every area of the
business looking for opportunities to improve the way we operate and eliminate
unnecessary costs. They are making good progress and we now believe that
our
synergy savings will be in the range of $100 million, an increase from our
original estimate of $50 million last fall when we commenced the tender offer
process and only had access to publicly available information,” Mr. Goolsby
said.
Conference
Call Information
A
conference call to discuss the Company's first-quarter results will be held
at
10 a.m. CT (11 a.m. ET) on January 30, 2007. 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=37377.
(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 January 30 through
February 6, 2007, at (800) 355-2355 pass code 495227#.
About
Pilgrim’s Pride Corporation
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
56,500 people and operates 37 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;
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;
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
December
30, 2006
Page
3
PILGRIM'S
PRIDE CORPORATION
Consolidated
Statements of Income (Loss)
(Unaudited)
[In
thousands, except share and per share data]
|
Three
Months Ended
|
December
30, 2006
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December
31, 2005
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|||||
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Net
Sales
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$
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1,337,132
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$
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1,343,812
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|||
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Cost
of sales
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1,271,606
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1,225,412
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|||||
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Gross
profit
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65,526
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118,400
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|||||
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Selling,
general and administrative
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68,432
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72,202
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|||||
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Operating
income (loss)
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(2,906
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)
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46,198
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||||
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Other
Expense (Income):
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|||||||
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Interest
expense
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13,914
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12,394
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|||||
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Interest
income
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(1,309
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)
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(3,946
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)
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|||
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Foreign
exchange loss (gain)
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1,504
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(620
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)
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||||
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Miscellaneous,
net
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(2,515
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)
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1,730
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||||
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Total
other expenses, net
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11,594
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9,558
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|||||
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Income
(loss) before income taxes
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(14,500
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)
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36,640
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||||
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Income
tax (benefit) expense
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(5,764
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)
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10,962
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||||
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Net
income (loss)
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$
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(8,736
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)
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$
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25,678
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||
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Net
income (loss) per common share
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|||||||
|
-basic
and diluted
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$
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(0.13
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)
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$
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0.39
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||
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Dividends
declared per common share
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$
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0.0225
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$
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1.0225
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|||
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Weighted
average shares outstanding
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66,555,733
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66,555,733
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|||||
PILGRIM'S
PRIDE CORPORATION
News
Release
December
30, 2006
Page
4
PILGRIM'S
PRIDE CORPORATION
Condensed
Consolidated Balance Sheets
(Unaudited)
[In
thousands]
|
December
30, 2006
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September
30, 2006
|
||||||
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ASSETS
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|||||||
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Cash
and cash equivalents
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$
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146,544
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$
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156,404
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|||
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Investments
in available for sale securities
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22,537
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21,246
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|||||
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Other
current assets
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1,318,593
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928,024
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|||||
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Total
Current Assets
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1,487,674
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1,105,674
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|||||
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Goodwill
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537,516
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--
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|||||
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Other
Assets
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112,308
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50,825
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|||||
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Investments
in available for sale securities
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147,141
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115,375
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|||||
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Property,
Plant and Equipment, net
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1,792,544
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1,154,994
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|||||
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Total
Assets
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$
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4,077,183
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$
|
2,426,868
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|||
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LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
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Current
maturities of long-term debt
|
$
|
4,746
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$
|
10,322
|
|||
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Other
current liabilities
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857,189
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566,515
|
|||||
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Total
Current Liabilities
|
861,935
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576,837
|
|||||
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Long-Term
Debt, Less Current Maturities
|
713,105
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554,876
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|||||
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Purchase
Obligation
|
1,057,697
|
--
|
|||||
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Deferred
Income Taxes
|
254,109
|
175,869
|
|||||
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Other
Long-Term Liabilities
|
32,760
|
||||||
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Minority
Interest in Subsidiary
|
47,247
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1,958
|
|||||
|
Total
Stockholders' Equity
|
1,110,330
|
1,117,328
|
|||||
|
Total
Liabilities and Stockholders’ Equity
|
$
|
4,077,183
|
$
|
2,426,868
|
|||
PILGRIM'S
PRIDE CORPORATION
News
Release
December
30, 2006
Page
5
Selected
Financial Information
(Unaudited)
(In
thousands)
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
|
December
30, 2006
|
December
31, 2005
|
|||||
|
Net
Income (Loss)
|
$
|
(8,736
|
)
|
$
|
25,678
|
||
|
Add:
|
|||||||
|
Income
tax (benefit) expense
|
(5,764
|
)
|
10,962
|
||||
|
Interest
expense, net
|
12,605
|
8,448
|
|||||
|
Depreciation
and amortization
|
32,697
|
30,348
|
|||||
|
Minus:
|
|||||||
|
Amortization
of capitalized financing costs
|
705
|
581
|
|||||
|
EBITDA
|
$
|
30,097
|
$
|
74,855
|
|||
|
Capital
expenditures
|
$
|
39,350
|
$
|
43,866
|
|||