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 31, 2007
PILGRIM'S
PRIDE CORPORATION
(Exact
Name of Registrant as Specified in its Charter)
|
Delaware
|
1-9273
|
75-1285071
|
||
|
(State
or Other Jurisdiction of Incorporation)
|
(Commission
File Number)
|
(IRS
Employer 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
July
31, 2007, Pilgrim's Pride Corporation (NYSE: PPC), the world’s largest chicken
company, today reported net income of $62.6 million, or $0.94 per share, on
record sales of $2.12 billion for the third fiscal quarter ended June 30,
2007. For the third quarter of fiscal 2006, the Company reported a
net loss of $20.5 million, or $0.31 per share, on total sales of $1.29
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 31, 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:
July 31, 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 July 31,
2007.
PILGRIM'S
PRIDE CORPORATION REPORTS STRONG FINANCIAL RESULTS
FOR
THIRD QUARTER OF FISCAL 2007
Company
Returns to Profitability on Strength of Improved Pricing and Product
Demand
PITTSBURG,
Texas, July 31, 2007 – Pilgrim's Pride Corporation (NYSE: PPC), the world’s
largest chicken company, today reported net income of $62.6 million, or $0.94
per share, on record sales of $2.12 billion for the third fiscal quarter
ended
June 30, 2007. For the third quarter of fiscal 2006, the Company
reported a net loss of $20.5 million, or $0.31 per share, on total sales
of
$1.29 billion.
“We
are
pleased with our improved financial performance in the third quarter,
particularly in light of continued high costs for feed ingredients,” said O.B.
Goolsby Jr., Pilgrim’s Pride president and chief executive
officer. “Our return to profitability is a direct result of improved
pricing driven by industry-wide production cuts implemented earlier this
year,
coupled with strong demand for our products, particularly in the consumer
retail
segment. As a result of these higher selling prices for our products,
we were able to offset the impact of higher corn and soybean meal
costs.”
Mr.
Goolsby also said the Company’s Mexico operations returned to profitability in
the third quarter.
He
also
said the Company continues to make good progress with the Gold Kist
integration. Through the end of the third fiscal quarter, the Company
had realized approximately $48 million in annualized cost savings – well ahead
of its previously forecasted schedule of $25 million by the end of
September.
“Our
employees are making good progress in identifying opportunities to improve
our
combined businesses. Together they are working on a wide variety of
projects that will help us operate more efficiently and deliver improved
service
to our customers. In some cases, we’ve been able to capture synergy
savings ahead of schedule, while in other cases the project timelines have
been
adjusted to meet the demands of our business. In total, however, I’m
now confident that we’ll be able to exceed our previously announced synergy
savings target of $100 million and believe that our annual run rate is likely
to
be closer to $150 million by January 2008,” Mr. Goolsby said.
Looking
ahead, he believes that feed-ingredient costs will continue to pose one of
the
biggest operating challenges for the U.S. chicken industry.
“There
is
no question that high feed costs are with us for the long-term, thanks to
what
many believe is the nation’s misguided public policy that subsidizes production
of corn-based ethanol. It’s important to note that next year the
agriculture industry once again will have to find millions of additional
acres
for corn – on top of this year’s record plantings – just to meet increased
production demand for ethanol. While American consumers may one day
realize some marginal benefit from cheaper prices at the fuel pump, they
undoubtedly will continue to pay more for food items at their neighborhood
grocery store or favorite restaurant,” Mr. Goolsby said.
For
the
nine months ended June 30, 2007, the Company reported net income of $13.8
million, or $0.21 per share, on record sales of $5.45
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 nine months of fiscal 2006, Pilgrim’s
Pride reported a net loss of $26.7 million, or $0.40 per share, on sales
of
$3.90 billion.
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 31, 2007. To listen live
via telephone, call (877) 366-0713, verbal pass code Pilgrim’s Pride or
VC53173. The call will also be webcast live on the Internet at
http://www.videonewswire.com/event.asp?id=41007. (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 July 31 through August 7, 2007, at (800) 355-2355 pass
code
53173#.
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 55,500 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;
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
31,
2007
Page
3
PILGRIM'S
PRIDE CORPORATION
Consolidated
Statements of Operations
(Unaudited)
[In
thousands, except share and per share data]
|
Three
Months Ended
|
June
30, 2007
|
July
1, 2006
|
||||||
|
|
|
|
||||||
|
Net
sales
|
$ |
2,118,386
|
$ |
1,287,646
|
||||
|
Cost
of sales
|
1,883,148
|
1,244,950
|
||||||
|
Gross
profit
|
235,238
|
42,696
|
||||||
|
Selling,
general and administrative
|
98,461
|
69,433
|
||||||
|
|
||||||||
|
Operating
income (loss)
|
136,777
|
(26,737 | ) | |||||
|
|
||||||||
|
Other
expense (income):
|
||||||||
|
Interest
expense
|
40,921
|
12,736
|
||||||
|
Interest
income
|
(198 | ) | (1,268 | ) | ||||
|
Foreign
exchange (gain) loss
|
(264 | ) |
1,822
|
|||||
|
Miscellaneous,
net
|
(2,605 | ) | (2,053 | ) | ||||
|
Total
other expenses, net
|
37,854
|
11,237
|
||||||
|
|
||||||||
|
Income
(loss) before income taxes
|
98,923
|
(37,974 | ) | |||||
|
Income
tax expense (benefit)
|
36,282
|
(17,501 | ) | |||||
|
Net
income (loss)
|
$ |
62,641
|
$ | (20,473 | ) | |||
|
|
||||||||
|
Net
income (loss) per common share -basic and diluted
|
$ |
0.94
|
$ | (0.31 | ) | |||
|
Dividends
declared per common share
|
$ |
0.0225
|
$ |
0.0225
|
||||
|
Weighted
average shares outstanding
|
66,555,733
|
66,555,733
|
||||||
|
Nine
Months Ended
|
June
30, 2007
|
July
1, 2006
|
||||||
|
|
||||||||
|
Net
sales
|
$ |
5,449,483
|
$ |
3,897,167
|
||||
|
Cost
of sales
|
5,064,776
|
3,698,870
|
||||||
|
Gross
profit
|
384,707
|
198,297
|
||||||
|
Selling,
general and administrative
|
262,534
|
216,772
|
||||||
|
|
||||||||
|
Operating
income (loss)
|
122,173
|
(18,475 | ) | |||||
|
|
||||||||
|
Other
expense (income):
|
||||||||
|
Interest
expense
|
94,130
|
38,402
|
||||||
|
Interest
income
|
(3,190 | ) | (8,429 | ) | ||||
|
Loss
on early extinguishment of debt
|
14,475
|
--
|
||||||
|
Foreign
exchange loss
|
1,250
|
1,012
|
||||||
|
Miscellaneous,
net
|
(8,799 | ) | (1,025 | ) | ||||
|
Total
other expenses, net
|
97,866
|
29,960
|
||||||
|
|
||||||||
|
Income
(loss) before income taxes
|
24,307
|
(48,435 | ) | |||||
|
Income
tax expense (benefit)
|
10,478
|
(21,686 | ) | |||||
|
Net
income (loss)
|
$ |
13,829
|
$ | (26,749 | ) | |||
|
|
||||||||
|
Net
income (loss) per common share -basic and diluted
|
$ |
0.21
|
$ | (0.40 | ) | |||
|
Dividends
declared per common share
|
$ |
0.0675
|
$ |
1.0675
|
||||
|
Weighted
average shares outstanding
|
66,555,733
|
66,555,733
|
||||||
PILGRIM'S
PRIDE CORPORATION
News
Release
July
31,
2007
Page
4
PILGRIM'S
PRIDE CORPORATION
Condensed
Consolidated Balance Sheets
(Unaudited)
[In
thousands]
|
|
June
30, 2007
|
September
30, 2006
|
||||||
|
ASSETS
|
|
|
||||||
|
Current
Assets:
|
||||||||
|
Cash
and cash equivalents
|
$ |
57,390
|
$ |
156,404
|
||||
|
Investments
in available for sale securities
|
13,782
|
21,246
|
||||||
|
Other
current assets
|
1,578,748
|
928,024
|
||||||
|
Total
Current Assets
|
1,649,920
|
1,105,674
|
||||||
|
Investments
in Available for Sale Securities
|
44,003
|
115,375
|
||||||
|
Other
Assets
|
87,765
|
50,825
|
||||||
|
Goodwill
|
509,059
|
--
|
||||||
|
Property,
Plant and Equipment, net
|
1,896,803
|
1,154,994
|
||||||
|
|
||||||||
|
Total
Assets
|
$ |
4,187,550
|
$ |
2,426,868
|
||||
|
|
||||||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
|
Current
Liabilities:
|
||||||||
|
Current
maturities of long-term debt
|
$ |
3,134
|
$ |
10,322
|
||||
|
Other
current liabilities
|
945,135
|
566,515
|
||||||
|
Total
Current Liabilities
|
948,269
|
576,837
|
||||||
|
Long-Term
Debt, Less Current Maturities
|
1,718,774
|
554,876
|
||||||
|
Deferred
Income Taxes
|
308,797
|
175,869
|
||||||
|
Other
Long-Term Liabilities
|
79,747
|
--
|
||||||
|
Minority
Interest in Subsidiary
|
1,929
|
1,958
|
||||||
|
Commitments
and Contingencies
|
--
|
--
|
||||||
|
Total
Stockholders' Equity
|
1,130,034
|
1,117,328
|
||||||
|
|
||||||||
|
Total
Liabilities and Stockholders' Equity
|
$ |
4,187,550
|
$ |
2,426,868
|
||||
PILGRIM'S
PRIDE CORPORATION
News
Release
July
31,
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
|
June
30, 2007
|
July
1, 2006
|
||||||
|
|
(Actual)
|
(Pro
forma)
|
||||||
|
|
|
|
||||||
|
Net
sales
|
$ |
2,118,386
|
$ |
1,791,070
|
||||
|
Depreciation
and amortization
|
$ |
58,005
|
$ |
57,947
|
||||
|
Operating
income (loss)
|
$ |
136,777
|
$ | (47,724 | ) | |||
|
Interest
expense, net
|
$ |
40,723
|
$ |
32,642
|
||||
|
Income
tax expense (benefit)
|
$ |
36,282
|
$ | (33,624 | ) | |||
|
Net
income (loss)
|
$ |
62,641
|
$ | (45,284 | ) | |||
|
Net
income (loss) per common share
|
$ |
0.94
|
$ | (0.68 | ) | |||
|
Weighted
average shares outstanding
|
66,555,733
|
66,555,733
|
||||||
|
Nine
Months Ended
|
June
30, 2007
|
July
1, 2006
|
||||||
|
|
(Pro
forma)
|
(Pro
forma)
|
||||||
|
|
|
|
||||||
|
Net
sales
|
$ |
5,977,293
|
$ |
5,471,272
|
||||
|
Depreciation
and amortization
|
$ |
170,781
|
$ |
167,893
|
||||
|
Operating
income (loss)
|
$ |
91,741
|
$ | (79,214 | ) | |||
|
Interest
expense , net
|
$ |
116,761
|
$ |
93,935
|
||||
|
Income
tax expense (benefit)
|
$ | (10,229 | ) | $ | (68,952 | ) | ||
|
Net
income (loss)
|
$ | (20,279 | ) | $ | (100,357 | ) | ||
|
Net
income (loss) per common share
|
$ | (0.30 | ) | $ | (1.51 | ) | ||
|
Weighted
average shares outstanding
|
66,555,733
|
66,555,733
|
||||||
PILGRIM'S
PRIDE CORPORATION
News
Release
July
31,
2007
Page
6
Selected
Financial Information
(Unaudited)
(In
thousands)
Note:
“EBITDA” is defined as net income (loss) plus interest, taxes, depreciation and
amortization (other than amortization of capitalized financing costs). 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. We have also included
EBITDA as adjusted to exclude loss on the early extinguishment of
debt. We have included this information as we believe that investors
may be interested in our EBITDA excluding this item as this is how our
management analyzes our EBITDA from continuing operations. EBITDA
is calculated as follows:
|
Three
Months Ended
|
June
30, 2007
|
July
1, 2006
|
||||||
|
Net
Income (Loss)
|
$ |
62,641
|
$ | (20,473 | ) | |||
|
Add:
|
||||||||
|
Income
tax (benefit) expense
|
36,282
|
(17,501 | ) | |||||
|
Interest
expense, net
|
40,723
|
11,468
|
||||||
|
Depreciation
and amortization
|
58,005
|
34,960
|
||||||
|
Minus:
|
||||||||
|
Amortization
of capitalized financing costs
|
1,118
|
477
|
||||||
|
|
||||||||
|
EBITDA
|
$ |
196,533
|
$ |
7,977
|
||||
|
|
||||||||
|
|
||||||||
|
Capital
expenditures
|
$ |
41,711
|
$ |
26,795
|
||||
|
Nine
Months Ended
|
June
30, 2007
|
July
1, 2006
|
||||||
|
|
|
|
||||||
|
Net
Income (Loss)
|
$ |
13,829
|
$ | (26,749 | ) | |||
|
Add:
|
||||||||
|
Income
tax (benefit) expense
|
10,478
|
(21,686 | ) | |||||
|
Interest
expense, net
|
90,940
|
29,973
|
||||||
|
Depreciation
and amortization
|
145,678
|
100,052
|
||||||
|
Minus:
|
||||||||
|
Amortization
of capitalized financing costs
|
2,933
|
2,034
|
||||||
|
|
||||||||
|
EBITDA
|
$ |
257,992
|
$ |
79,556
|
||||
|
|
||||||||
|
Loss
on early extinguishment of debt
|
14,475
|
--
|
||||||
|
EBITDA
- Adjusted
|
272,467
|
79,556
|
||||||
|
|
||||||||
|
Capital
expenditures
|
$ |
136,160
|
$ |
101,314
|
||||
|
|
||||||||