2015_Q1_PPC Cover


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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): April 29, 2015
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.)
 
 
 
1770 Promontory Circle
Greeley, CO
80634-9038
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (970) 506-8000
 
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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o 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.
On April 29, 2015 the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.
Exhibit 99.1    Press release dated April 29, 2015






SIGNATURE  
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:
April 29, 2015
 
/s/ Fabio Sandri
 
 
 
Fabio Sandri
 
 
 
Chief Financial Officer

Exhibit Index
Exhibit 99.1    Press release dated April 29, 2015


2015_Q1_PPC Earnings Release




Pilgrim’s Pride Reports Operating Income of $328 Million with a Margin of 16.0% for the First Quarter of 2015, a Significant 95% Improvement Compared to 2014

GREELEY, Colo., April 29, 2015 (GLOBE NEWSWIRE) - Pilgrim’s Pride Corporation (NASDAQ: PPC) reports first quarter 2015 financial results with Net Sales of $2.05 billion for the thirteen week period, as compared to $2.02 billion for the same period in 2014. The 2015 Q1 net income of $204.2 million was an improvement of 108% compared to the $98.1 million reported in the same period in 2014. Adjusted Earnings Per Share was $0.82 in the first quarter of 2015 compared to $0.39 in the same period last year, while adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) of $363.5 million, a 17.7% margin, increased 77% compared to the $205.5 million generated in the prior year.

“We are pleased to report we are off to a strong start in 2015 in U.S. and Mexico despite some challenges in Q1. We continue to execute well against our goals of focusing on key customers, relentless pursuit of operational excellence and growing value added exports. Our strong results are a testament to the benefits of our portfolio model, which we believe provide superior results with lower volatility than our peers over time. Our portfolio strategy also enables us to take advantage of differing conditions in various markets,” stated Bill Lovette, Chief Executive Officer of Pilgrim's.

“While we saw some softness in export markets, we believe these issues are temporary and will be resolved over time. Despite certain challenging market conditions for some cuts, overall cutout pricing has remained strong as consumer demands more chicken since it continues to be the most competitive protein.”

“Our team members continue to be very motivated to set the highest standards and be more efficient in every aspect of our business. We are continuing our work on zero based budgeting and are on track to capture the identified operational improvements for 2015, which will strengthen our competitive advantage.”

Conference Call Information
A conference call to discuss Pilgrim’s quarterly results will be held tomorrow, April 30, at 7:00 a.m. MDT (9 a.m. EDT). Participants are encouraged to pre-register for the conference call using the link below. Callers who pre-register will be given a unique PIN to gain immediate access to the call and bypass the live operator. Participants may pre-register at any time, including up to and after the call start time.
To pre-register, go to: http://services.choruscall.com/links/ppc150430.html

You may also reach the pre-registration link by logging in through the investor section of our website at www.pilgrims.com and clicking on the link under “Upcoming Events.”

For those who would like to join the call but have not pre-registered, access is available by dialing +1 (866) 777-2509 within the US, or +1 (412) 317-5413, and requesting the “Pilgrim’s Pride Conference.” Please note that to submit a question to management during the call, you must be logged in via telephone.






Replays of the conference call will be available on Pilgrim’s website approximately two hours after the call concludes and can be accessed through the “Investor” section of www.pilgrims.com. The webcast will be available for replay through June 1, 2015.

About Pilgrim’s Pride

Pilgrim's Pride Corporation employs approximately 35,000 people and operates chicken processing plants and prepared-foods facilities in 12 states, Puerto Rico and Mexico. The Company's primary distribution is through retailers and foodservice distributors. For more information, please visit www.pilgrims.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 are considered forward-looking statements. It is important to note that 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; the ability to execute the Company’s business plan to achieve desired cost savings and profitability; future pricing for feed ingredients and the Company’s products; outbreaks of avian influenza or other diseases, either in Pilgrim’s Pride’s flocks or elsewhere, affecting its ability to conduct its operations and/or demand for its poultry products; contamination of Pilgrim’s Pride’s 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 cash resources; restrictions imposed by, and as a result of, Pilgrim’s Pride’s leverage; changes in laws or regulations affecting Pilgrim’s Pride’s operations or the application thereof; new immigration legislation or increased enforcement efforts in connection with existing immigration legislation that cause the costs of doing business to increase, cause Pilgrim’s Pride to change the way in which it does business, or otherwise disrupt its operations; competitive factors and pricing pressures or the loss of one or more of Pilgrim’s Pride’s largest customers; currency exchange rate fluctuations, trade barriers, exchange controls, expropriation and other risks associated with foreign operations; disruptions in international markets and distribution channel, including anti-dumping proceedings and countervailing duty proceedings; and the impact of uncertainties of litigation as well as other risks described under “Risk Factors” in the Company’s 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:
Dunham Winoto
 
Director, Investor Relations
 
IRPPC@pilgrims.com
 
(970) 506 8192
 
www.pilgrims.com







PILGRIM’S PRIDE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS


 
March 29, 2015
 
December 28, 2014

 
(Unaudited)
 
 
 
 
(In thousands)
Cash and cash equivalents
 
$
478,037

 
$
576,143

Trade accounts and other receivables, less allowance for doubtful accounts
 
364,991

 
378,890

Account receivable from related parties
 
4,719

 
5,250

Inventories
 
788,722

 
790,305

Income taxes receivable
 

 
10,288

Current deferred tax assets
 
30,751

 
27,345

Prepaid expenses and other current assets
 
84,997

 
95,439

Assets held for sale
 
1,419

 
1,419

Total current assets
 
1,753,636

 
1,885,079

Other long-lived assets
 
31,488

 
24,406

Identified intangible assets, net
 
25,348

 
26,783

Property, plant and equipment, net
 
1,181,408

 
1,182,795

Total assets
 
$
2,991,880

 
$
3,119,063

 
 
 
 
 
Accounts payable
 
$
412,342

 
$
399,486

Account payable to related parties
 
3,698

 
4,862

Accrued expenses and other current liabilities
 
272,063

 
311,879

Income taxes payable
 
41,475

 
3,068

Current deferred tax liabilities
 
26,478

 
25,301

Current maturities of long-term debt
 
133

 
262

Total current liabilities
 
756,189

 
744,858

Long-term debt, less current maturities
 
1,150,441

 
3,980

Deferred tax liabilities
 
73,908

 
76,216

Other long-term liabilities
 
102,275

 
97,208

Total liabilities
 
2,082,813

 
922,262

Common stock
 
2,597

 
2,590

Additional paid-in capital
 
1,670,978

 
1,662,354

Retained earnings (accumulated deficit)
 
(702,763
)
 
591,492

Accumulated other comprehensive loss
 
(64,629
)
 
(62,541
)
Total Pilgrim’s Pride Corporation stockholders’ equity
 
906,183

 
2,193,895

Noncontrolling interest
 
2,884

 
2,906

Total stockholders’ equity
 
909,067

 
2,196,801

Total liabilities and stockholders’ equity
 
$
2,991,880

 
$
3,119,063







PILGRIM’S PRIDE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
 
March 29, 2015
 
March 30, 2014
 
 
(In thousands, except per share data)
Net sales
 
$
2,052,919

 
$
2,018,065

Cost of sales
 
1,675,799

 
1,802,959

Gross profit
 
377,120

 
215,106

Selling, general and administrative expense
 
49,507

 
45,201

Administrative restructuring charges
 

 
1,713

Operating income
 
327,613

 
168,192

Interest expense, net of capitalized interest
 
4,855

 
19,473

Interest income
 
(1,490
)
 
(811
)
Foreign currency transaction loss
 
8,974

 
337

Miscellaneous, net
 
(413
)
 
(1,006
)
Income before income taxes
 
315,687

 
150,199

Income tax expense
 
111,494

 
52,012

Net income
 
204,193

 
98,187

Less: Net income (loss) attributable to noncontrolling interests
 
(22
)
 
70

Net income attributable to Pilgrim’s Pride Corporation
 
$
204,215

 
$
98,117

 
 
 
 
 
Weighted average shares of common stock outstanding:
 
 
 
 
Basic
 
259,653

 
258,923

Effect of dilutive common stock equivalents
 
276

 
523

Diluted
 
259,929

 
259,446

 
 
 
 
 
Net income attributable to Pilgrim's Pride Corporation per share of
common stock outstanding:
 
 
 
 
Basic
 
$
0.79

 
$
0.38

Diluted
 
$
0.79

 
$
0.38







PILGRIM’S PRIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
 
 
Thirteen Weeks Ended
 
 
March 29, 2015
 
March 30, 2014
 
 
(In thousands)
Cash flows from operating activities:
 
 
 
 
Net income
 
$
204,193

 
$
98,187

Adjustments to reconcile net income to cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
36,152

 
38,260

Foreign currency transaction loss
 
12,074

 
941

Accretion of bond discount
 

 
114

Loss (gain) on property disposals
 
(881
)
 
570

Gain on investment securities
 

 
(53
)
Share-based compensation
 
797

 
1,022

Deferred income tax benefit
 
(2,408
)
 

Changes in operating assets and liabilities:
 
 
 
 
Trade accounts and other receivables
 
13,289

 
2,145

Inventories
 
(2,313
)
 
14,310

Prepaid expenses and other current assets
 
9,294

 
(11,099
)
Accounts payable, accrued expenses and other current liabilities
 
(28,702
)
 
5,833

Income taxes
 
50,639

 
43,662

Long-term pension and other postretirement obligations
 
1,617

 
995

Other operating assets and liabilities
 
2,335

 
814

Cash provided by operating activities
 
296,086

 
195,701

Cash flows from investing activities:
 
 
 
 
Acquisitions of property, plant and equipment
 
(32,591
)
 
(47,760
)
Purchases of investment securities
 

 
(37,000
)
Proceeds from sale or maturity of investment securities
 

 
96,950

Proceeds from property disposals
 
867

 
1,511

Cash provided by (used in) investing activities
 
(31,724
)
 
13,701

Cash flows from financing activities:
 
 
 
 
Proceeds from revolving line of credit and long-term borrowings
 
1,680,000

 

Payments on revolving line of credit, long-term borrowings and capital lease
obligations
 
(533,669
)
 
(204,913
)
Tax benefit related to share-based compensation
 
7,834

 

Payment of capitalized loan costs
 
(8,862
)
 

Payment of special cash dividends
 
(1,498,470
)
 

Cash used in financing activities
 
(353,167
)
 
(204,913
)
Effect of exchange rate changes on cash and cash equivalents
 
(9,301
)
 
2,280

Increase in cash and cash equivalents
 
(98,106
)
 
6,769

Cash and cash equivalents, beginning of period
 
576,143

 
508,206

Cash and cash equivalents, end of period
 
$
478,037

 
$
514,975







PILGRIM’S PRIDE CORPORATION
Selected Financial Information
(Unaudited)

“EBITDA” is defined as the sum of net income (loss) plus interest, taxes, depreciation and amortization. “Adjusted EBITDA” is calculated by adding to EBITDA certain items of expense and deducting from EBITDA certain items of income that we believe are not indicative of our ongoing operating performance consisting of: (i) income (loss) attributable to non-controlling interests, (ii) restructuring charges, (iii) reorganization items, (iv) losses on early extinguishment of debt and (v) foreign currency transaction losses (gains). EBITDA is presented because it is used by management and we believe it is frequently used by securities analysts, investors and other interested parties, in addition to and not in lieu of results prepared in conformity with accounting principles generally accepted in the US (“GAAP”), to compare the performance of companies. We believe investors would be interested in our Adjusted EBITDA because this is how our management analyzes EBITDA. The Company also believes that Adjusted EBITDA, in combination with the Company’s financial results calculated in accordance with GAAP, provides investors with additional perspective regarding the impact of certain significant items on EBITDA and facilitates a more direct comparison of its performance with its competitors. EBITDA and Adjusted EBITDA are not measurements of financial performance under GAAP. They 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.

PILGRIM'S PRIDE CORPORATION
Reconciliation of Adjusted EBITDA
 
 
 
 
 
(Unaudited)
 
Thirteen Weeks Ended
 
 
March 29, 2015
 
March 30, 2014
 
 
(In thousands)
Net income
 
$
204,193

 
$
98,187

Add:
 
 
 
 
Interest expense, net
 
3,365

 
18,662

Income tax expense (benefit)
 
111,494

 
52,012

Depreciation and amortization
 
36,152

 
38,260

Minus:
 
 
 
 
Amortization of capitalized financing costs
 
725

 
3,586

EBITDA
 
354,479

 
203,535

Add:
 
 
 
 
Foreign currency transaction losses (gains)
 
8,974

 
337

Restructuring charges
 

 
1,713

Minus:
 
 
 
 
   Net income (loss) attributable to noncontrolling interest
 
(22
)
 
70

Adjusted EBITDA
 
$
363,475

 
$
205,515







The summary unaudited consolidated income statement data for the twelve months ended March 29, 2015 (the LTM Period) have been calculated by subtracting the applicable unaudited consolidated income statement data for the three months ended March 30, 2014 from the sum of (1) the applicable audited consolidated income statement data for the year ended December 28, 2014 and (2) the applicable audited consolidated income statement data for the three months ended March 29, 2015.

PILGRIM'S PRIDE CORPORATION
Reconciliation of Adjusted EBITDA
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
 
Thirteen Weeks Ended
 
Thirteen Weeks Ended
 
Thirteen Weeks Ended
 
Thirteen Weeks Ended
 
LTM Ended
 
 
June 29, 2014
 
September 28, 2014
 
December 28, 2014
 
March 29, 2015
 
March 29, 2015
 
(In thousands)
Net income
 
$
190,445

 
$
255,803

 
$
167,003

 
$
204,193

 
$
817,444

Add:
 
 
 
 
 
 
 
 
 
 
Interest expense, net
 
13,570

 
10,201

 
34,838

 
3,365

 
61,974

Income tax expense (benefit)
 
99,227

 
133,693

 
106,021

 
111,494

 
450,435

Depreciation and amortization
 
38,261

 
36,218

 
43,084

 
36,152

 
153,715

Asset impairments
 

 

 

 

 

Minus:
 
 
 
 
 
 
 
 
 
 
Amortization of capitalized financing costs
 
2,906

 
871

 
6,348

 
725

 
10,850

EBITDA
 
338,597

 
435,044

 
344,598

 
354,479

 
1,472,718

Add:
 
 
 
 
 
 
 
 
 
 
Foreign currency transaction losses (gains)
 
(1,819
)
 
6,414

 
23,048

 
8,974

 
36,617

Restructuring charges
 
438

 
135

 

 

 
573

Minus:
 
 
 
 
 
 
 
 
 
 
   Net income (loss) attributable to noncontrolling interest
 
85

 
(181
)
 
(184
)
 
(22
)
 
(302
)
Adjusted EBITDA
 
$
337,131

 
$
441,774

 
$
367,830

 
$
363,475

 
$
1,510,210







A reconciliation of net income (loss) attributable to Pilgrim's Pride Corporation per common diluted share to adjusted net income (loss) attributable to Pilgrim's Pride Corporation per common diluted share is as follows:
PILGRIM'S PRIDE CORPORATION
Reconciliation of Adjusted Earnings
(Unaudited)
 
 
 
 
 
Thirteen Weeks Ended
 
March 29, 2015
 
March 30, 2014
 
(In thousands)
Net income (loss) attributable to Pilgrim's Pride Corporation
$
204,215

 
$
98,117

Loss on early extinguishment of debt
68

 
2,376

Foreign currency transaction losses (gains)
8,974

 
337

Income (loss) before loss on early extinguishment of debt and foreign currency transaction losses (gains)
213,257

 
100,830

Weighted average diluted shares of common stock outstanding
259,929

 
259,446

Income (loss) before loss on early extinguishment of debt and foreign currency transaction losses (gains)
     per common diluted share
$
0.82

 
$
0.39







Net debt is defined as total long term debt less current maturities, plus current maturities of long term debt, minus cash, cash equivalents and investments in available-for-sale securities.  Net debt is presented because it is used by management, and we believe it is frequently used by securities analysts, investors and other parties, in addition to and not in lieu of debt as presented under GAAP, to compare the indebtedness of companies.  A reconciliation of net debt is as follows:
PILGRIM'S PRIDE CORPORATION
Reconciliation of Net Debt
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
2012
 
2013
 
2014
 
March 29, 2015
 
March 30, 2014
 
(In thousands)
Long term debt, less current maturities
$
1,148,870

 
$
501,999

 
$
3,980

 
$
1,150,441

 
$
502,077

Add:  Current maturities of long term debt
15,886

 
410,234

 
262

 
$
133

 
$
205,357

Minus:  Cash and cash equivalents
68,180

 
508,206

 
576,143

 
$
478,037

 
$
514,975

Minus:  Available-for-sale securities

 
96,902

 

 
$

 
$
37,005

Net debt (cash position)
$
1,096,576

 
$
307,125

 
$
(571,901
)
 
$
672,537

 
$
155,454







PILGRIM'S PRIDE CORPORATION
Supplementary Selected Segment and Geographic Data
 
 
 
 
 
Thirteen Weeks Ended
 
March 29, 2015
 
March 30, 2014
 
(Unaudited)
 
 
 
(In thousands)
Sources of net sales by country of origin:
 
 
 
US:
$
1,842,758

 
$
1,794,677

Mexico:
210,161

 
223,388

Total net sales:
$
2,052,919

 
$
2,018,065

 
 
 
 
Sources of cost of sales by country of origin:
 
 
 
US:
$
1,504,207

 
$
1,621,977

Mexico:
171,616

 
180,982

Elimination:
(24
)
 

Total cost of sales:
$
1,675,799

 
$
1,802,959

 

 
 
Sources of gross profit by country of origin:
 
 
 
US:
$
338,551

 
$
172,700

Mexico:
38,545

 
42,406

Elimination:
24

 

Total gross profit:
$
377,120

 
$
215,106