Document


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): October 26, 2016
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 October 26, 2016 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 October 26, 2016






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:
October 26, 2016
 
/s/ Fabio Sandri
 
 
 
Fabio Sandri
 
 
 
Chief Financial Officer






Exhibit Index
Exhibit 99.1    Press release dated October 26, 2016


Exhibit


https://cdn.kscope.io/35970520aa9845ba8c68ebd6b790d12d-pilgrimslogoa05a01a01a01a03.jpg


Pilgrim’s Pride Reports Operating Income of $164 Million with an Operating Margin of 8.1% for the Third Quarter of 2016

GREELEY, Colo., October 26, 2016 (GLOBE NEWSWIRE) - Pilgrim’s Pride Corporation (NASDAQ: PPC) reports third quarter 2016 financial results.

Third Quarter Highlights
Net Sales of $2.03 billion.
Net Income of $98.7 million, GAAP EPS of $0.39.
Operating Income margins of 8.2% in U.S. and 7.4% in Mexico operations, respectively.
Adjusted EBITDA of $210.8 million (or a 10.4% margin).
Cash Flow From Operations of $242.1 million.
Conversion of a commodity markets facility into USDA-certified organic production on schedule to begin in Q1 2017.
Planned conversion of an additional case-ready facility to ABF, veg-fed production to support growth of key customers and further enhance portfolio differentiation, to put us more than half way to our 25% ABF target by 2018.
On-going ramp up of largest Prepared Foods facility to full capacity, with a target completion by end of Q1 2017, together with start-up of a new fully cooked line to strengthen and grow Prepared Foods Operations.

Unaudited, In Millions, Except Per Share and Percentages
 
Thirteen Weeks Ended
 
Sep 25, 2016
 
Sep 27, 2015
 
Change
Net Sales
$2,031.7
 
$2,112.5
 
-3.8%
GAAP EPS
$0.39
 
$0.53
 
-26.4%
Operating Income
$163.8
 
$231.1
 
-29.1%
Adjusted EBITDA (1)
$210.8
 
$274.3
 
-23.1%
Adjusted EBITDA Margin (1)
10.4%
 
13.0%
 
-2.6pts
 
 
 
 
 
 
(1)
Reconciliations for non-GAAP measures are provided in subsequent sections within this release.

“During Q3, our Fresh business continued to perform well driven by our differentiated portfolio strategy of having presence in all three bird sizes and strong relationships with key customers. Retail demand for our birds remained robust despite concerns about greater availability of other competing proteins. Within exports, volumes are also improving from a year ago, which improves value for the back half of the bird, and supportive of the overall cutout,” stated Bill Lovette, Chief Executive Officer of Pilgrim's.

1




“The conversion of our existing facility to certified USDA organic chicken production is proceeding well and we plan to have the first chicken to market in Q1 of 2017. Additionally, we are starting work on converting one of our case-ready plants to produce ABF, veg-fed chicken. Together with our prior announcements on organic and ABF Fresh chicken as well as further processed products, we believe the latest conversion reinforces our strategy to better resonate with new consumer trends for more natural products while adding further value to our portfolio and supporting the growth of key customers. Furthermore, these investments signify our commitment to look for new sources of potential earnings driver while lessening the impact of volatile commodity markets in the long run.”

“Market environment in Mexico during Q3 followed its normal seasonality and our team members were relentless and continued to improve on the operating performance of the legacy business as well as implement synergies with the newly acquired assets. Despite the impact of unfavorable grain cost and exchange rate, our profitability in Mexico has remained steady compared to last year, which is a positive sign of the potential leverage we have within our operations. The outlook for Mexico remains very strong and we will continue to grow our offerings in the region, together with leveraging our strong fresh brand to leverage the growth of our Prepared Foods business.”

Conference Call Information

A conference call to discuss Pilgrim’s quarterly results will be held tomorrow, October 27, at 7:00 a.m. MT (9 a.m. ET). 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/ppc161027.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 (844) 883-3889 within the US, or +1 (412) 317-9245 internationally, 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 January 27, 2017.

About Pilgrim’s Pride

Pilgrim’s employs approximately 38,200 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

2



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


3




PILGRIM’S PRIDE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
 
 
 
September 25, 2016
 
December 27, 2015
 
 
(Unaudited)
 
 
 
 
(In thousands)
Cash and cash equivalents
 
$
85,994

 
$
439,638

Trade accounts and other receivables, less allowance for doubtful accounts
 
350,810

 
348,994

Account receivable from related parties
 
3,491

 
2,668

Inventories
 
796,808

 
801,357

Income taxes receivable
 
51,057

 
71,410

Prepaid expenses and other current assets
 
75,686

 
75,602

Assets held for sale
 
6,049

 
6,555

Total current assets
 
1,369,895

 
1,746,224

Other long-lived assets
 
15,887

 
15,672

Identified intangible assets, net
 
40,548

 
47,453

Goodwill
 
125,607

 
156,565

Property, plant and equipment, net
 
1,450,352

 
1,352,529

Total assets
 
$
3,002,289

 
$
3,318,443

 
 
 
 
 
Notes payable to banks
 
$

 
$
28,726

Accounts payable
 
494,076

 
482,954

Account payable to related parties
 
9,689

 
7,000

Accrued expenses and other current liabilities
 
297,214

 
314,966

Income taxes payable
 
43,258

 
13,228

Current maturities of long-term debt
 
92

 
86

Total current liabilities
 
844,329

 
846,960

Long-term debt, less current maturities
 
1,004,840

 
985,509

Deferred tax liabilities
 
144,423

 
131,882

Other long-term liabilities
 
91,890

 
92,282

Total liabilities
 
2,085,482

 
2,056,633

Common stock
 
2,597

 
2,597

Treasury stock
 
(119,566
)
 
(99,233
)
Additional paid-in capital
 
1,681,005

 
1,675,674

Accumulated deficit
 
(591,253
)
 
(261,252
)
Accumulated other comprehensive loss
 
(65,848
)
 
(58,930
)
Total Pilgrim’s Pride Corporation stockholders’ equity
 
906,935

 
1,258,856

Noncontrolling interest
 
9,872

 
2,954

Total stockholders’ equity
 
916,807

 
1,261,810

Total liabilities and stockholders’ equity
 
$
3,002,289

 
$
3,318,443



4




PILGRIM’S PRIDE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
 
September 25, 2016
 
September 27, 2015
 
September 25, 2016
 
September 27, 2015
 
 
(In thousands, except per share data)
Net sales
 
$
2,031,721

 
$
2,112,529

 
$
6,022,973

 
$
6,219,324

Cost of sales
 
1,821,504

 
1,827,985

 
5,289,063

 
5,125,640

Gross profit
 
210,217

 
284,544

 
733,910

 
1,093,684

Selling, general and administrative expense
 
46,116

 
52,620

 
144,424

 
150,961

Administrative restructuring charges
 
279

 
792

 
279

 
5,605

Operating income
 
163,822

 
231,132

 
589,207

 
937,118

Interest expense, net of capitalized interest
 
11,959

 
10,501

 
35,540

 
26,870

Interest income
 
(125
)
 
(319
)
 
(1,501
)
 
(3,086
)
Foreign currency transaction loss (gain)
 
4,142

 
12,773

 
(837
)
 
23,806

Miscellaneous, net
 
(1,741
)
 
(2,071
)
 
(5,637
)
 
(7,135
)
Income before income taxes
 
149,587

 
210,248

 
561,642

 
896,663

Income tax expense
 
51,060

 
73,153

 
192,062

 
313,751

Net income
 
98,527

 
137,095

 
369,580

 
582,912

Less: Net income (loss) attributable to noncontrolling interests
 
(130
)
 
33

 
(334
)
 
146

Net income attributable to Pilgrim’s Pride Corporation
 
$
98,657

 
$
137,062

 
$
369,914

 
$
582,766

 
 
 
 
 
 
 
 
 
Weighted average shares of common stock outstanding:
 
 
 
 
 
 
 
 
Basic
 
254,460

 
259,280

 
254,607

 
259,540

Effect of dilutive common stock equivalents
 
460

 
223

 
430

 
225

Diluted
 
254,920

 
259,503

 
255,037

 
259,765

 
 
 
 
 
 
 
 
 
Net income attributable to Pilgrim's Pride Corporation per share of
     common stock outstanding:
 
 
 
 
 
 
 
 
Basic
 
$
0.39

 
$
0.53

 
$
1.45

 
$
2.25

Diluted
 
$
0.39

 
$
0.53

 
$
1.45

 
$
2.24



5



PILGRIM’S PRIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
 
 
Thirty-Nine Weeks Ended
 
 
September 25, 2016
 
September 27, 2015
 
 
(In thousands)
Cash flows from operating activities:
 
 
 
 
Net income
 
$
369,580

 
$
582,912

Adjustments to reconcile net income to cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
134,455

 
116,485

Impairment expense
 

 
4,813

Gain on property disposals
 
(7,315
)
 
(9,817
)
Loss on equity method investments
 
194

 

Share-based compensation
 
5,404

 
2,132

Deferred income tax benefit
 
(1,285
)
 
(7,214
)
Changes in operating assets and liabilities:
 
 
 
 
Trade accounts and other receivables
 
(2,639
)
 
40,694

Inventories
 
4,548

 
17,162

Prepaid expenses and other current assets
 
(83
)
 
(1,415
)
Accounts payable, accrued expenses and other current liabilities
 
(7,812
)
 
92,159

Income taxes
 
45,220

 
17,836

Long-term pension and other postretirement obligations
 
(8,294
)
 
(2,668
)
Other operating assets and liabilities
 
(864
)
 
3,235

Cash provided by operating activities
 
531,109

 
856,314

Cash flows from investing activities:
 
 
 
 
Acquisitions of property, plant and equipment
 
(173,440
)
 
(129,848
)
Business acquisition
 

 
(373,532
)
Proceeds from property disposals
 
10,316

 
13,553

Cash provided by (used in) investing activities
 
(163,124
)
 
(489,827
)
Cash flows from financing activities:
 
 
 
 
Proceeds from note payable to bank
 
36,838

 
5,869

Payments on note payable to bank
 
(65,564
)
 

Proceeds from revolving line of credit
 
515,292

 
1,680,000

Payments on revolving line of credit, long-term borrowings and capital lease obligations
 
(498,124
)
 
(683,742
)
Proceeds from equity contribution under Tax Sharing Agreement between JBS USA Food Company Holdings and Pilgrim's Pride Corporation
 
3,691

 

Tax benefit related to share-based compensation
 

 
7,834

Equity contribution to subsidiary by noncontrolling interest
 
7,252

 

Payment of capitalized loan costs
 
(693
)
 
(12,322
)
Purchase of common stock under share repurchase program
 
(20,333
)
 
(45,080
)
Purchase of common stock from retirement plan participants
 
(73
)
 

Cash dividends
 
(699,915
)
 
(1,498,470
)
Cash used in financing activities
 
(721,629
)
 
(545,911
)
Increase (decrease) in cash and cash equivalents
 
(353,644
)
 
(179,424
)
Cash and cash equivalents, beginning of period
 
439,638

 
576,143

Cash and cash equivalents, end of period
 
$
85,994

 
$
396,719


6



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
 
Thirty-Nine Weeks Ended
 
September 25, 2016
 
September 27, 2015
 
September 25, 2016
 
September 27, 2015
 
(In thousands)
Net income
$
98,527

 
$
137,095

 
$
369,580

 
$
582,912

Add:
 
 
 
 
 
 
 
Interest expense, net
11,834

 
10,182

 
34,039

 
23,784

Income tax expense (benefit)
51,060

 
73,153

 
192,062

 
313,751

Depreciation and amortization
45,772

 
41,415

 
134,455

 
116,485

Minus:
 
 
 
 
 
 
 
Amortization of capitalized financing costs
970

 
1,119

 
2,859

 
2,708

EBITDA
206,223

 
260,726

 
727,277

 
1,034,224

Add:
 
 
 
 
 
 
 
Foreign currency transaction losses (gains)
4,142

 
12,773

 
(837
)
 
23,806

Restructuring charges
279

 
792

 
279

 
5,605

Minus:
 
 
 
 
 
 
 
   Net income (loss) attributable to noncontrolling interest
(130
)
 
33

 
(334
)
 
146

Adjusted EBITDA
$
210,774

 
$
274,258

 
$
727,053

 
$
1,063,489



7



The summary unaudited consolidated income statement data for the twelve months ended September 25, 2016 (the LTM Period) have been calculated by subtracting the applicable unaudited consolidated income statement data for the nine months ended September 27, 2015 from the sum of (1) the applicable audited consolidated income statement data for the year ended December 27, 2015 and (2) the applicable audited consolidated income statement data for the nine months ended September 25, 2016.

PILGRIM'S PRIDE CORPORATION
Reconciliation of LTM Adjusted EBITDA
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
 
Thirteen Weeks Ended
 
Thirteen Weeks Ended
 
Thirteen Weeks Ended
 
Thirteen Weeks Ended
 
LTM Ended
 
 
December 27,
2015
 
March 27,
2016
 
June 26,
2016
 
September 25,
2016
 
September 25,
2016
 
(In thousands)
Net income
 
$
63,050

 
$
118,011

 
$
153,042

 
$
98,527

 
$
432,630

Add:
 
 
 
 
 
 
 
 
 
 
Interest expense, net
 
10,091

 
11,340

 
10,865

 
11,834

 
44,130

Income tax expense (benefit)
 
33,045

 
62,604

 
78,398

 
51,060

 
225,107

Depreciation and amortization
 
42,490

 
42,391

 
46,293

 
45,772

 
176,946

Minus:
 
 
 
 
 
 
 
 
 
 
Amortization of capitalized financing costs
 
930

 
928

 
962

 
970

 
3,790

EBITDA
 
147,746

 
233,418

 
287,636

 
206,223

 
875,023

Add:
 
 
 
 
 
 
 
 
 
 
Foreign currency transaction losses (gains)
 
2,134

 
(235
)
 
(4,744
)
 
4,142

 
1,297

Restructuring charges
 

 

 

 
279

 
279

Minus:
 
 
 
 
 
 
 
 
 
 
   Net income (loss) attributable to noncontrolling interest
 
(98
)
 
(360
)
 
156

 
(130
)
 
(432
)
Adjusted EBITDA
 
$
149,978

 
$
233,543

 
$
282,736

 
$
210,774

 
$
877,031



8



EBITDA margins have been calculated by taking the relevant unaudited EBITDA figures, then dividing by Net Revenue for the applicable period.

PILGRIM'S PRIDE CORPORATION
Reconciliation of EBITDA Margin
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
 
September 25, 2016
 
September 27, 2015
 
September 25, 2016
 
September 27, 2015
 
September 25, 2016
 
September 27, 2015
 
September 25, 2016
 
September 27, 2015
 
(In thousands)
Net income from continuing operations
 
$
98,527

 
$
137,095

 
$
369,580

 
$
582,912

 
4.85
 %
 
6.49
%
 
6.14
 %
 
9.37
%
Add:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense, net
 
11,834

 
10,182

 
34,039

 
23,784

 
0.58
 %
 
0.48
%
 
0.57
 %
 
0.38
%
Income tax expense (benefit)
 
51,060

 
73,153

 
192,062

 
313,751

 
2.51
 %
 
3.46
%
 
3.19
 %
 
5.04
%
Depreciation and amortization
 
45,772

 
41,415

 
134,455

 
116,485

 
2.25
 %
 
1.96
%
 
2.23
 %
 
1.87
%
Minus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of capitalized financing costs
 
970

 
1,119

 
2,859

 
2,708

 
0.05
 %
 
0.05
%
 
0.05
 %
 
0.04
%
EBITDA
 
206,223

 
260,726

 
727,277

 
1,034,224

 
10.15
 %
 
12.34
%
 
12.08
 %
 
16.63
%
Add:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency transaction losses (gains)
 
4,142

 
12,773

 
(837
)
 
23,806

 
0.20
 %
 
0.60
%
 
(0.01
)%
 
0.38
%
Restructuring charges
 
279

 
792

 
279

 
5,605

 
0.01
 %
 
0.04
%
 
 %
 
0.09
%
Minus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Net income (loss) attributable to noncontrolling interest
 
(130
)
 
33

 
(334
)
 
146

 
(0.01
)%
 
%
 
(0.01
)%
 
%
Adjusted EBITDA
 
$
210,774

 
$
274,258

 
$
727,053

 
$
1,063,489

 
10.37
 %
 
12.98
%
 
12.07
 %
 
17.10
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Revenue:
 
$
2,031,721

 
$
2,112,529

 
$
6,022,973

 
$
6,219,324

 
$
2,031,721

 
$
2,112,529

 
$
6,022,973

 
$
6,219,324



9



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
 
Thirty-Nine Weeks Ended
 
 
September 25,
2016
 
September 27,
2015
 
September 25,
2016
 
September 27,
2015
 
 
(In thousands, except per share data)
Net income (loss) attributable to Pilgrim's Pride Corporation
 
$
98,657

 
$
137,062

 
$
369,914

 
$
582,766

Loss on early extinguishment of debt
 

 

 

 
68

Foreign currency transaction losses (gains)
 
4,142

 
12,773

 
(837
)
 
23,806

Income (loss) before loss on early extinguishment of debt and foreign currency transaction losses (gains)
 
102,799

 
149,835

 
369,077

 
606,640

Weighted average diluted shares of common stock outstanding
 
254,920

 
259,503

 
255,037

 
259,765

Income (loss) before loss on early extinguishment of debt and foreign currency transaction losses (gains)
     per common diluted share
 
$
0.40

 
$
0.58

 
$
1.45

 
$
2.34



10



A reconciliation of GAAP earnings per share (EPS) to adjusted earnings per share (EPS) is as follows:

PILGRIM'S PRIDE CORPORATION
Reconciliation of GAAP EPS to Adjusted EPS
(Unaudited)
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
September 25, 2016
 
September 27, 2015
 
September 25, 2016
 
September 27, 2015
 
(In thousands, except per share data)
GAAP EPS
$
0.39

 
$
0.53

 
$
1.45

 
$
2.24

Loss on early extinguishment of debt

 

 

 

Foreign currency transaction losses (gains)
0.02

 
0.05

 

 
0.09

Adjusted EPS
$
0.40

 
$
0.58

 
$
1.45

 
$
2.34

 
 
 
 
 
 
 
 
Weighted average diluted shares of common stock outstanding
254,920

 
259,503

 
255,037

 
259,765



11



Net debt is defined as total long term debt less current maturities, plus current maturities of long term debt and notes payable, 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)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 29,
2013
 
December 28,
2014
 
December 27,
2015
 
September 27,
2015
 
September 25,
2016
 
(In thousands)
Long term debt, less current maturities
$
501,999

 
$
3,980

 
$
985,509

 
$
1,000,398

 
$
1,004,840

Add:  Current maturities of long term debt and notes payable
410,234

 
262

 
28,812

 
5,971

 
92

Minus:  Cash and cash equivalents
508,206

 
576,143

 
439,638

 
396,719

 
85,994

Minus:  Available-for-sale securities
96,902

 

 

 

 

Net debt (cash position)
$
307,125

 
$
(571,901
)
 
$
574,683

 
$
609,650

 
$
918,938



12



PILGRIM'S PRIDE CORPORATION
Supplementary Selected Segment and Geographic Data
 
 
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
 
September 25, 2016
 
September 27, 2015
 
September 25, 2016
 
September 27, 2015
 
 
(Unaudited)
 
 
 
 
 
 
 
 
(In thousands)
Sources of net sales by country of origin:
 
 
 
 
 
 
 
 
US:
 
$
1,724,625

 
$
1,798,375

 
$
5,072,351

 
$
5,479,992

Mexico:
 
307,096

 
314,154

 
950,622

 
739,332

Total net sales:
 
$
2,031,721

 
$
2,112,529

 
$
6,022,973

 
$
6,219,324

 
 
 
 
 
 
 
 
 
Sources of cost of sales by country of origin:
 
 
 
 
 
 
 
 
US:
 
$
1,545,163

 
$
1,552,282

 
$
4,470,387

 
$
4,511,158

Mexico:
 
276,365

 
275,727

 
818,748

 
614,554

Elimination:
 
(24
)
 
(24
)
 
(72
)
 
(72
)
Total cost of sales:
 
$
1,821,504

 
$
1,827,985

 
$
5,289,063

 
$
5,125,640

 
 
 
 
 
 
 
 
 
Sources of gross profit by country of origin:
 
 
 
 
 
 
 
 
US:
 
$
179,462

 
$
246,093

 
$
601,964

 
$
968,836

Mexico:
 
30,731

 
38,427

 
131,874

 
124,777

Elimination:
 
24

 
24

 
72

 
71

Total gross profit:
 
$
210,217

 
$
284,544

 
$
733,910

 
$
1,093,684

 
 
 
 
 
 
 
 
 
Sources of operating income by country of origin:
 
 
 
 
 
 
 
 
US:
 
$
141,194

 
$
203,755

 
$
480,278

 
$
833,193

Mexico:
 
22,604

 
27,353

 
108,857

 
103,854

Elimination:
 
24

 
24

 
72

 
71

Total operating income:
 
$
163,822

 
$
231,132

 
$
589,207

 
$
937,118




13