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): May 1, 2007
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
May 1,
2007, Pilgrim's Pride Corporation issued a press release reporting
a net loss of $40.1 million, or $0.60 per share, on total sales of $1.99 billion
for the second quarter ended March 31, 2007. These results include, for the
first time, the acquisition of Gold Kist Inc., which was completed Dec. 27,
2006. The results also include charges of $14.5 million, $9.1 million, net
of
tax or $0.14 per share, related to the early extinguishment of debt incurred
by
the Company in connection with the financing for the acquisition. For the second
quarter of fiscal 2006, the Company reported a net loss of $32.0 million, or
$0.48 per share, on total sales of $1.27 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 May 1, 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: May
1, 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 May 1, 2007.
PILGRIM'S
PRIDE CORPORATION REPORTS FINANCIAL RESULTS
FOR
SECOND QUARTER OF FISCAL 2007
Company
Posts Loss for Second Quarter, but is Currently Profitable in Third Quarter
on
Strength of Production Cuts and Improved Pricing
PITTSBURG,
Texas, May 1, 2007 - Pilgrim's Pride Corporation (NYSE: PPC), the world’s
largest chicken company, today reported a net loss of $40.1 million, or
$0.60
per share, on total sales of $1.99 billion for the second quarter ended
March
31, 2007. These results include, for the first time, the acquisition of
Gold
Kist Inc., which was completed Dec. 27, 2006. The results also include
charges
of $14.5 million, $9.1 million, net of tax or $0.14 per share, related
to the
early extinguishment of debt incurred by the Company in connection with
the
financing for the acquisition. For the second quarter of fiscal 2006, the
Company reported a net loss of $32.0 million, or $0.48 per share, on total
sales
of $1.27 billion.
“Our
financial performance in the second quarter of fiscal 2007 reflects some
of the
significant operating challenges faced by U.S. chicken processors during
that
period,” said O.B. Goolsby, Jr., Pilgrim’s Pride president and chief executive
officer. “Feed-ingredient prices remain at very high levels amid rapidly growing
demand for corn-based ethanol. While we have succeeded in passing along
some of
these higher costs to our customers this year, most of the benefit from
those
price increases was not fully realized in the second quarter. Additionally,
we
are continuing to address pricing opportunities in a number of below-market
customer contracts we acquired through the Gold Kist transaction.”
Mr.
Goolsby noted, however, that the Company’s U.S. operations returned to
profitability late in the second quarter - and the Company is currently
profitable in the third quarter - as production cutbacks in the United
States
helped strike a better balance between production and demand. In addition,
U.S. market prices for chicken products have strengthened heading into
the
summer as well. Mr. Goolsby also said the Company’s Mexico operations have
returned to profitability in the third quarter to date. He said
current U.S. production at Pilgrim’s Pride is “in line” with the Company’s
previously announced 5.0% reduction target when compared to year-ago
levels. The cuts will stay in place throughout the third quarter of fiscal
2007 before leveling off in the fourth quarter, when the Company cycles
through
the first anniversary of its production cutback from last summer.
“We
are
cautiously optimistic about the second half of the fiscal year. We believe
that
the combination of lower industry production levels year-over-year, should
they
remain in place, and stronger pricing heading into the summer months will
lead
to continuing improvement in our financial results for the remainder of
the
year,” Mr. Goolsby said. “On the Gold Kist integration front, our employees are
investing a lot of time and effort in the integration, and I’m excited by the
tremendous opportunities they have uncovered for improving our combined
businesses. They are clearly focused on our common goal of delivering the
best
possible service and value to our customers every day and are making good
progress toward achieving our previously announced estimate of $100 million
in
synergy savings.”
For
the
six months ended March 31, 2007, the company reported a net loss of $48.8
million, or $0.73 per share, on total sales of $3.33 billion. Included
in these
results were charges of $14.5 million, $9.1 million, net of tax or $0.14
per
share, related to the early extinguishment of debt incurred by the Company
in
connection with the financing for the Gold Kist acquisition. For the first
six
months of fiscal 2006, Pilgrim’s Pride reported a net loss of $6.3 million, or
$0.09 per share, on sales of $2.61 billion.
Conference
Call Information
A
conference call to discuss the Company's second-quarter results will be held
at
10 a.m. Central (11 a.m. Eastern) on May 1, 2007. To listen live via telephone,
call (877) 366-0713, verbal pass code Pilgrim’s Pride or VC34864. The call will
also be webcast live on the Internet at http://www.videonewswire.com/event.asp?id=39123.
(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. (Central) on May 1 through
May 8,
2007, at (800) 355-2355 pass code 34864#.
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
(903) 434-1430
Media
Contact: Gary
Rhodes, Vice President
(903) 434-1495
PILGRIM'S
PRIDE CORPORATION
News
Release
May
1,
2007
Page
3
PILGRIM'S
PRIDE CORPORATION
Consolidated
Statements of Income (Loss)
(Unaudited)
[In
thousands, except share and per share data]
|
Three
Months Ended
|
March
31, 2007
|
April
1, 2006
|
|||||
|
Net
Sales
|
$
|
1,993,965
|
$
|
1,265,709
|
|||
|
Cost
of sales
|
1,910,023
|
1,228,508
|
|||||
|
Gross
profit
|
83,942
|
37,201
|
|||||
|
Selling,
general and administrative
|
95,641
|
75,137
|
|||||
|
Operating
income (loss)
|
(11,699
|
)
|
(37,936
|
)
|
|||
|
Other
Expense (Income):
|
|||||||
|
Interest
expense
|
39,295
|
13,271
|
|||||
|
Interest
income
|
(1,684
|
)
|
(3,214
|
)
|
|||
|
Loss
on early extinguishment of debt
|
14,475
|
--
|
|||||
|
Foreign
exchange loss (gain)
|
10
|
(190
|
)
|
||||
|
Miscellaneous,
net
|
(3,678
|
)
|
(702
|
)
|
|||
|
Total
other expenses, net
|
48,418
|
9,165
|
|||||
|
Income
(loss) before income taxes
|
(60,117
|
)
|
(47,101
|
)
|
|||
|
Income
tax (benefit) expense
|
(20,040
|
)
|
(15,147
|
)
|
|||
|
Net
income (loss)
|
$
|
(40,077
|
)
|
$
|
(31,954
|
)
|
|
|
Net
income (loss) per common share
|
|||||||
|
-basic
and diluted
|
$
|
(0.60
|
)
|
$
|
(0.48
|
)
|
|
|
Dividends
declared per common share
|
$
|
0.0225
|
$
|
0.0225
|
|||
|
Weighted
average shares outstanding
|
66,555,733
|
66,555,733
|
|
Six
Months Ended
|
March
31, 2007
|
April
1, 2006
|
|||||
|
Net
Sales
|
$
|
3,331,097
|
$
|
2,609,521
|
|||
|
Cost
of sales
|
3,181,628
|
2,453,920
|
|||||
|
Gross
profit
|
149,469
|
155,601
|
|||||
|
Selling,
general and administrative
|
164,073
|
147,339
|
|||||
|
Operating
income (loss)
|
(14,604
|
)
|
8,262
|
||||
|
Other
Expense (Income):
|
|||||||
|
Interest
expense
|
53,209
|
25,666
|
|||||
|
Interest
income
|
(2,992
|
)
|
(7,161
|
)
|
|||
|
Loss
on early extinguishment of debt
|
14,475
|
--
|
|||||
|
Foreign
exchange loss (gain)
|
1,514
|
(810
|
)
|
||||
|
Miscellaneous,
net
|
(6,194
|
)
|
1,028
|
||||
|
Total
other expenses, net
|
60,012
|
18,723
|
|||||
|
Income
(loss) before income taxes
|
(74,616
|
)
|
(10,461
|
)
|
|||
|
Income
tax (benefit) expense
|
(25,804
|
)
|
(4,185
|
)
|
|||
|
Net
income (loss)
|
$
|
(48,812
|
)
|
$
|
(6,276
|
)
|
|
|
Net
income (loss) per common share
|
|||||||
|
-basic
and diluted
|
$
|
(0.73
|
)
|
$
|
(0.09
|
)
|
|
|
Dividends
declared per common share
|
$
|
0.0450
|
$
|
1.0450
|
|||
|
Weighted
average shares outstanding
|
66,555,733
|
66,555,733
|
PILGRIM'S
PRIDE CORPORATION
News
Release
May
1,
2007
Page
4
PILGRIM'S
PRIDE CORPORATION
Condensed
Consolidated Balance Sheets
(Unaudited)
[In
thousands]
|
March
31, 2007
|
September
30, 2006
|
||||||
|
ASSETS
|
|||||||
|
Cash
and cash equivalents
|
$
|
69,170
|
$
|
156,404
|
|||
|
Investments
in available for sale securities
|
24,000
|
21,246
|
|||||
|
Other
current assets
|
1,494,565
|
928,024
|
|||||
|
Total
Current Assets
|
1,587,735
|
1,105,674
|
|||||
|
Goodwill
|
515,387
|
--
|
|||||
|
Other
Assets
|
101,283
|
50,825
|
|||||
|
Investments
in available for sale securities
|
31,042
|
115,375
|
|||||
|
Property,
Plant and Equipment, net
|
1,911,550
|
1,154,994
|
|||||
|
Total
Assets
|
$
|
4,146,997
|
$
|
2,426,868
|
|||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|||||||
|
Current
maturities of long-term debt
|
$
|
8,253
|
$
|
10,322
|
|||
|
Other
current liabilities
|
854,510
|
566,515
|
|||||
|
Total
Current Liabilities
|
862,763
|
576,837
|
|||||
|
Long-Term
Debt, Less Current Maturities
|
1,789,519
|
554,876
|
|||||
|
Deferred
Income Taxes
|
338,788
|
175,869
|
|||||
|
Other
Long-Term Liabilities
|
85,048
|
--
|
|||||
|
Minority
Interest in Subsidiary
|
2,033
|
1,958
|
|||||
|
Total
Stockholders' Equity
|
1,068,846
|
1,117,328
|
|||||
|
Total
Liabilities and Stockholders’ Equity
|
$
|
4,146,997
|
$
|
2,426,868
|
|||
PILGRIM'S
PRIDE CORPORATION
News
Release
May
1,
2007
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.
|
|||||||
|
Three
Months Ended
|
March
31, 2007
|
April
1, 2006
|
|||||
|
(Actual)
|
(Pro forma)
|
|
|||||
|
Net
sales
|
$
|
1,993,965
|
$
|
1,795,249
|
|||
|
Depreciation
and amortization
|
$
|
54,976
|
$
|
57,347
|
|||
|
Operating
loss
|
$
|
(11,699
|
)
|
$
|
(74,376
|
)
|
|
|
Interest
expense, net
|
$
|
37,611
|
$
|
31,291
|
|||
|
Income
tax benefit
|
$
|
(20,040
|
)
|
$
|
(37,592
|
)
|
|
|
Net
loss
|
$
|
(40,077
|
)
|
$
|
(65,738
|
)
|
|
|
Net
loss per common share
|
$
|
(0.60
|
)
|
$
|
(0.99
|
)
|
|
|
Weighted
average shares outstanding
|
66,555,733
|
66,555,733
|
|||||
|
Six
Months Ended
|
March
31, 2007
|
April
1, 2006
|
|||||
|
(Pro
forma)
|
(Pro forma)
|
|
|||||
|
Net
sales
|
$
|
3,858,907
|
$
|
3,680,202
|
|||
|
Depreciation
and amortization
|
$
|
112,775
|
$
|
111,088
|
|||
|
Operating
loss
|
$
|
(45,036
|
)
|
$
|
(31,490
|
)
|
|
|
Interest
expense, net
|
$
|
76,038
|
$
|
61,293
|
|||
|
Income
tax benefit
|
$
|
(46,511
|
)
|
$
|
(35,327
|
)
|
|
|
Net
loss
|
$
|
(82,920
|
)
|
$
|
(55,073
|
)
|
|
|
Net
loss per common share
|
$
|
(1.25
|
)
|
$
|
(0.83
|
)
|
|
|
Weighted
average shares outstanding
|
66,555,733
|
66,555,733
|
|||||
PILGRIM'S
PRIDE CORPORATION
News
Release
May
1,
2007
Page
6
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
|
March
31, 2007
|
April
1, 2006
|
|||||
|
Net
Income (Loss)
|
$
|
(40,077
|
)
|
$
|
(31,954
|
)
|
|
|
Add:
|
|||||||
|
Income
tax (benefit) expense
|
(20,040
|
)
|
(15,147
|
)
|
|||
|
Interest
expense, net
|
37,611
|
10,057
|
|||||
|
Depreciation
and amortization
|
54,976
|
34,744
|
|||||
|
Minus:
|
|||||||
|
Amortization
of capitalized financing costs
|
1,110
|
976
|
|||||
|
EBITDA
|
$
|
31,360
|
$
|
(3,276
|
)
|
||
|
Loss
on early extinguishment of debt
|
14,475
|
--
|
|||||
|
EBITDA
- Adjusted
|
$
|
45,835
|
(3,276
|
)
|
|||
|
Capital
expenditures
|
$
|
55,101
|
$
|
30,653
|
|||
|
Six
Months Ended
|
March
31, 2007
|
April
1, 2006
|
|||||
|
Net
Income (Loss)
|
$
|
(48,812
|
)
|
$
|
(6,276
|
)
|
|
|
Add:
|
|||||||
|
Income
tax (benefit) expense
|
(25,804
|
)
|
(4,185
|
)
|
|||
|
Interest
expense, net
|
50,217
|
18,505
|
|||||
|
Depreciation
and amortization
|
87,673
|
65,092
|
|||||
|
Minus:
|
|||||||
|
Amortization
of capitalized financing costs
|
1,815
|
1,557
|
|||||
|
EBITDA
|
$
|
61,459
|
$
|
71,579
|
|||
|
Loss
on early extinguishment of debt
|
14,475
|
--
|
|||||
|
EBITDA
- Adjusted
|
75,934
|
71,579
|
|||||
|
Capital
expenditures
|
$
|
94,449
|
$
|
74,519
|
|||