FORM 8-K |
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) |
Emerging growth company o |
PILGRIM’S PRIDE CORPORATION | |||
Date: | August 2, 2017 | /s/ Fabio Sandri | |
Fabio Sandri | |||
Chief Financial Officer |
• | Net Sales of $2.25 billion. |
• | Net Income of $233.6 million, GAAP EPS of $0.94. |
• | Operating Income margins of 14.8% in U.S. and 22.1% in Mexico operations, respectively. |
• | Adjusted EBITDA of $420.6 million (or an 18.7% margin). |
• | Cash Flow from Operations of $254.7 million. |
• | With our announced capital projects already completed, our quarterly performance reflected our well-balanced portfolio strategy, designed to capture the upside from strong markets while reducing overall volatility. |
• | Integration of newly acquired assets in Mexico has been completed with margins at the same level as legacy business. GNP integration is on track and synergy capture is currently above expectations. |
Unaudited, In Millions, Except Per Share and Percentages | |||||
Thirteen Weeks Ended | |||||
June 25, 2017 | June 26, 2016 | Change | |||
Net Sales | $2,251.6 | $2,028.3 | +11.0% | ||
GAAP EPS | $0.94 | $0.60 | +56.7% | ||
Operating Income | $359.4 | $236.6 | +51.9% | ||
Adjusted EBITDA (1) | $420.6 | $282.7 | +48.8% | ||
Adjusted EBITDA Margin (1) | 18.7% | 13.9% | +4.8pts | ||
(1) | Reconciliations for non-GAAP measures are provided in subsequent sections within this release. |
Contact: | Dunham Winoto |
Director, Investor Relations | |
IRPPC@pilgrims.com | |
(970) 506-8192 | |
www.pilgrims.com |
PILGRIM’S PRIDE CORPORATION | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
June 25, 2017 | December 25, 2016 | |||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
Cash and cash equivalents | $ | 303,937 | $ | 120,328 | ||||
Restricted cash | 20,348 | 4,979 | ||||||
Trade accounts and other receivables, less allowance for doubtful accounts | 406,586 | 317,170 | ||||||
Accounts receivable from related parties | 4,050 | 3,913 | ||||||
Inventories | 967,577 | 813,262 | ||||||
Income taxes receivable | 13,659 | — | ||||||
Prepaid expenses and other current assets | 66,572 | 57,457 | ||||||
Assets held for sale | 5,542 | 5,259 | ||||||
Total current assets | 1,788,271 | 1,322,368 | ||||||
Other long-lived assets | 17,484 | 15,710 | ||||||
Identified intangible assets, net | 153,855 | 38,593 | ||||||
Goodwill | 175,444 | 125,607 | ||||||
Property, plant and equipment, net | 1,721,948 | 1,505,940 | ||||||
Total assets | $ | 3,857,002 | $ | 3,008,218 | ||||
Accounts payable | $ | 519,820 | $ | 555,097 | ||||
Accounts payable to related parties | 3,622 | 1,421 | ||||||
Accrued expenses and other current liabilities | 324,727 | 290,699 | ||||||
Income taxes payable | 93,910 | 20,990 | ||||||
Current maturities of long-term debt | 40,098 | 94 | ||||||
Total current liabilities | 982,177 | 868,301 | ||||||
Long-term debt, less current maturities | 1,404,264 | 1,011,858 | ||||||
Deferred tax liabilities | 171,042 | 142,651 | ||||||
Other long-term liabilities | 89,422 | 88,661 | ||||||
Total liabilities | 2,646,905 | 2,111,471 | ||||||
Common stock | 2,602 | 2,597 | ||||||
Treasury stock | (231,758 | ) | (217,117 | ) | ||||
Additional paid-in capital | 1,688,684 | 1,686,742 | ||||||
Accumulated deficit | (193,073 | ) | (520,635 | ) | ||||
Accumulated other comprehensive loss | (66,735 | ) | (64,243 | ) | ||||
Total Pilgrim’s Pride Corporation stockholders’ equity | 1,199,720 | 887,344 | ||||||
Noncontrolling interest | 10,377 | 9,403 | ||||||
Total stockholders’ equity | 1,210,097 | 896,747 | ||||||
Total liabilities and stockholders’ equity | $ | 3,857,002 | $ | 3,008,218 |
PILGRIM’S PRIDE CORPORATION | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||||
June 25, 2017 | June 26, 2016 | June 25, 2017 | June 26, 2016 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Net sales | $ | 2,251,604 | $ | 2,028,315 | $ | 4,272,096 | $ | 3,991,252 | ||||||||
Cost of sales | 1,826,217 | 1,742,184 | 3,631,504 | 3,467,559 | ||||||||||||
Gross profit | 425,387 | 286,131 | 640,592 | 523,693 | ||||||||||||
Selling, general and administrative expense | 61,636 | 49,520 | 124,489 | 98,308 | ||||||||||||
Administrative restructuring charges | 4,349 | — | 4,349 | — | ||||||||||||
Operating income | 359,402 | 236,611 | 511,754 | 425,385 | ||||||||||||
Interest expense, net of capitalized interest | 15,935 | 11,548 | 28,321 | 23,581 | ||||||||||||
Interest income | (1,044 | ) | (683 | ) | (1,346 | ) | (1,376 | ) | ||||||||
Foreign currency transaction gain | (1,810 | ) | (4,744 | ) | (1,191 | ) | (4,979 | ) | ||||||||
Miscellaneous, net | (970 | ) | (950 | ) | (3,685 | ) | (3,896 | ) | ||||||||
Income before income taxes | 347,291 | 231,440 | 489,655 | 412,055 | ||||||||||||
Income tax expense | 113,218 | 78,398 | 161,119 | 141,002 | ||||||||||||
Net income | 234,073 | 153,042 | 328,536 | 271,053 | ||||||||||||
Less: Net income (loss) attributable to noncontrolling interests | 432 | 156 | 974 | (204 | ) | |||||||||||
Net income attributable to Pilgrim’s Pride Corporation | $ | 233,641 | $ | 152,886 | $ | 327,562 | $ | 271,257 | ||||||||
Weighted average shares of common stock outstanding: | ||||||||||||||||
Basic | 248,753 | 254,554 | 248,722 | 254,681 | ||||||||||||
Effect of dilutive common stock equivalents | 220 | 390 | 228 | 364 | ||||||||||||
Diluted | 248,973 | 254,944 | 248,950 | 255,045 | ||||||||||||
Net income attributable to Pilgrim's Pride Corporation per share of common stock outstanding: | ||||||||||||||||
Basic | $ | 0.94 | $ | 0.60 | $ | 1.32 | $ | 1.07 | ||||||||
Diluted | $ | 0.94 | $ | 0.60 | $ | 1.32 | $ | 1.06 |
PILGRIM’S PRIDE CORPORATION AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited) | ||||||||
Twenty-Six Weeks Ended | ||||||||
June 25, 2017 | June 26, 2016 | |||||||
(In thousands) | ||||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 328,536 | $ | 271,053 | ||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||
Depreciation and amortization | 107,671 | 88,683 | ||||||
Foreign currency transaction loss related to borrowing arrangements | 5,634 | — | ||||||
Impairment expense | 3,534 | — | ||||||
Gain on property disposals | (768 | ) | (6,755 | ) | ||||
Gain on equity method investments | (30 | ) | — | |||||
Share-based compensation | 1,947 | 1,869 | ||||||
Deferred income tax expense (benefit) | 26,904 | (700 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Trade accounts and other receivables | (73,684 | ) | 6,610 | |||||
Inventories | (97,857 | ) | (31,208 | ) | ||||
Prepaid expenses and other current assets | (5,702 | ) | (19,817 | ) | ||||
Accounts payable, accrued expenses and other current liabilities | (34,565 | ) | (23,028 | ) | ||||
Income taxes | 60,695 | 6,967 | ||||||
Long-term pension and other postretirement obligations | (3,916 | ) | (3,952 | ) | ||||
Other operating assets and liabilities | (2,265 | ) | (738 | ) | ||||
Cash provided by operating activities | 316,134 | 288,984 | ||||||
Cash flows from investing activities: | ||||||||
Acquisitions of property, plant and equipment | (174,150 | ) | (93,978 | ) | ||||
Business acquisition | (359,698 | ) | — | |||||
Proceeds from property disposals | 1,466 | 8,097 | ||||||
Cash used in investing activities | (532,382 | ) | (85,881 | ) | ||||
Cash flows from financing activities: | ||||||||
Proceeds from note payable to bank | — | 36,838 | ||||||
Payments on note payable to bank | — | (65,564 | ) | |||||
Proceeds from revolving line of credit and long-term borrowings | 1,013,662 | 351,089 | ||||||
Payments on revolving line of credit, long-term borrowings and capital lease obligations | (586,056 | ) | (219,812 | ) | ||||
Proceeds from equity contribution under Tax Sharing Agreement between JBS USA Food Company Holdings and Pilgrim's Pride Corporation | 5,038 | 3,691 | ||||||
Payment of capitalized loan costs | (2,777 | ) | (693 | ) | ||||
Purchase of common stock under share repurchase program | (14,641 | ) | (7,328 | ) | ||||
Cash dividends | — | (699,915 | ) | |||||
Cash provided by (used in) financing activities | 415,226 | (601,694 | ) | |||||
Increase (decrease) in cash, cash equivalents and restricted cash | 198,978 | (398,591 | ) | |||||
Cash, cash equivalents and restricted cash, beginning of period | 125,307 | 439,638 | ||||||
Cash, cash equivalents and restricted cash, end of period | $ | 324,285 | $ | 41,047 |
PILGRIM'S PRIDE CORPORATION | |||||||||||||||
Reconciliation of Adjusted EBITDA | |||||||||||||||
(Unaudited) | Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||
June 25, 2017 | June 26, 2016 | June 25, 2017 | June 26, 2016 | ||||||||||||
(In thousands) | |||||||||||||||
Net income | $ | 234,073 | $ | 153,042 | $ | 328,536 | $ | 271,053 | |||||||
Add: | |||||||||||||||
Interest expense, net | 14,891 | 10,865 | 26,975 | 22,205 | |||||||||||
Income tax expense | 113,218 | 78,398 | 161,119 | 141,002 | |||||||||||
Depreciation and amortization | 57,281 | 46,293 | 107,671 | 88,683 | |||||||||||
Minus: | |||||||||||||||
Amortization of capitalized financing costs | 997 | 962 | 1,947 | 1,889 | |||||||||||
EBITDA | 418,466 | 287,636 | 622,354 | 521,054 | |||||||||||
Add: | |||||||||||||||
Foreign currency transaction gains | (1,810 | ) | (4,744 | ) | (1,191 | ) | (4,979 | ) | |||||||
Restructuring charges | 4,349 | — | 4,349 | — | |||||||||||
Minus: | |||||||||||||||
Net income (loss) attributable to noncontrolling interest | 432 | 156 | 974 | (204 | ) | ||||||||||
Adjusted EBITDA | $ | 420,573 | $ | 282,736 | $ | 624,538 | $ | 516,279 |
PILGRIM'S PRIDE CORPORATION | ||||||||||||||||||||
Reconciliation of LTM Adjusted EBITDA | ||||||||||||||||||||
(Unaudited) | Thirteen Weeks Ended | Thirteen Weeks Ended | Thirteen Weeks Ended | Thirteen Weeks Ended | LTM Ended | |||||||||||||||
September 25, 2016 | December 25, 2016 | March 26, 2017 | June 25, 2017 | June 25, 2017 | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Net income | $ | 98,527 | $ | 70,149 | $ | 94,463 | $ | 234,073 | $ | 497,212 | ||||||||||
Add: | ||||||||||||||||||||
Interest expense, net | 11,834 | 10,158 | 12,084 | 14,891 | 48,967 | |||||||||||||||
Income tax expense | 51,060 | 40,844 | 47,901 | 113,218 | 253,023 | |||||||||||||||
Depreciation and amortization | 45,772 | 46,059 | 50,390 | 57,281 | 199,502 | |||||||||||||||
Minus: | ||||||||||||||||||||
Amortization of capitalized financing costs | 970 | 972 | 951 | 997 | 3,890 | |||||||||||||||
EBITDA | 206,223 | 166,238 | 203,887 | 418,466 | 994,814 | |||||||||||||||
Add: | ||||||||||||||||||||
Foreign currency transaction losses (gains) | 4,142 | 4,734 | 619 | (1,810 | ) | 7,685 | ||||||||||||||
Restructuring charges | 279 | 790 | — | 4,349 | 5,418 | |||||||||||||||
Minus: | ||||||||||||||||||||
Net income (loss) attributable to noncontrolling interest | (130 | ) | (469 | ) | 542 | 432 | 375 | |||||||||||||
Adjusted EBITDA | $ | 210,774 | $ | 172,231 | $ | 203,964 | $ | 420,573 | $ | 1,007,542 |
PILGRIM'S PRIDE CORPORATION | ||||||||||||||||||||||||||||||||
Reconciliation of EBITDA Margin | ||||||||||||||||||||||||||||||||
(Unaudited) | Thirteen Weeks Ended | Twenty-Six Weeks Ended | Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||||||||||||||||
June 25, 2017 | June 26, 2016 | June 25, 2017 | June 26, 2016 | June 25, 2017 | June 26, 2016 | June 25, 2017 | June 26, 2016 | |||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Net income from continuing operations | $ | 234,073 | $ | 153,042 | $ | 328,536 | $ | 271,053 | 10.40 | % | 7.55 | % | 7.69 | % | 6.79 | % | ||||||||||||||||
Add: | ||||||||||||||||||||||||||||||||
Interest expense, net | 14,891 | 10,865 | 26,975 | 22,205 | 0.66 | % | 0.54 | % | 0.63 | % | 0.56 | % | ||||||||||||||||||||
Income tax expense | 113,218 | 78,398 | 161,119 | 141,002 | 5.03 | % | 3.87 | % | 3.77 | % | 3.53 | % | ||||||||||||||||||||
Depreciation and amortization | 57,281 | 46,293 | 107,671 | 88,683 | 2.54 | % | 2.28 | % | 2.52 | % | 2.22 | % | ||||||||||||||||||||
Minus: | ||||||||||||||||||||||||||||||||
Amortization of capitalized financing costs | 997 | 962 | 1,947 | 1,889 | 0.04 | % | 0.05 | % | 0.05 | % | 0.05 | % | ||||||||||||||||||||
EBITDA | 418,466 | 287,636 | 622,354 | 521,054 | 18.59 | % | 14.19 | % | 14.56 | % | 13.05 | % | ||||||||||||||||||||
Add: | ||||||||||||||||||||||||||||||||
Foreign currency transaction gains | (1,810 | ) | (4,744 | ) | (1,191 | ) | (4,979 | ) | (0.08 | )% | (0.23 | )% | (0.03 | )% | (0.12 | )% | ||||||||||||||||
Restructuring charges | 4,349 | — | 4,349 | — | 0.19 | % | — | % | 0.10 | % | — | % | ||||||||||||||||||||
Minus: | ||||||||||||||||||||||||||||||||
Net income (loss) attributable to noncontrolling interest | 432 | 156 | 974 | (204 | ) | 0.02 | % | 0.01 | % | 0.02 | % | (0.01 | )% | |||||||||||||||||||
Adjusted EBITDA | $ | 420,573 | $ | 282,736 | $ | 624,538 | $ | 516,279 | 18.68 | % | 13.95 | % | 14.61 | % | 12.94 | % | ||||||||||||||||
Net Revenue: | $ | 2,251,604 | $ | 2,028,315 | $ | 4,272,096 | $ | 3,991,252 | $ | 2,251,604 | $ | 2,028,315 | $ | 4,272,096 | $ | 3,991,252 |
PILGRIM'S PRIDE CORPORATION | ||||||||||||||||
Reconciliation of Adjusted Earnings | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||||
June 25, 2017 | June 26, 2016 | June 25, 2017 | June 26, 2016 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Net income attributable to Pilgrim's Pride Corporation | $ | 233,641 | $ | 152,886 | $ | 327,562 | $ | 271,257 | ||||||||
Loss on early extinguishment of debt | — | — | — | — | ||||||||||||
Foreign currency transaction gains | (1,810 | ) | (4,744 | ) | (1,191 | ) | (4,979 | ) | ||||||||
Income before loss on early extinguishment of debt and foreign currency transaction gains | 231,831 | 148,142 | 326,371 | 266,278 | ||||||||||||
Weighted average diluted shares of common stock outstanding | 248,973 | 254,944 | 248,950 | 255,045 | ||||||||||||
Income before loss on early extinguishment of debt and foreign currency transaction gains per common diluted share | $ | 0.93 | $ | 0.58 | $ | 1.31 | $ | 1.04 |
PILGRIM'S PRIDE CORPORATION | |||||||||||||||
Reconciliation of GAAP EPS to Adjusted EPS | |||||||||||||||
(Unaudited) | |||||||||||||||
Thirteen Weeks Ended | Twenty-Six Weeks Ended | ||||||||||||||
June 25, 2017 | June 26, 2016 | June 25, 2017 | June 26, 2016 | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
GAAP EPS | $ | 0.94 | $ | 0.60 | $ | 1.32 | $ | 1.06 | |||||||
Loss on early extinguishment of debt | — | — | — | — | |||||||||||
Foreign currency transaction gains | (0.01 | ) | (0.02 | ) | (0.01 | ) | (0.02 | ) | |||||||
Adjusted EPS | $ | 0.93 | $ | 0.58 | $ | 1.31 | $ | 1.04 | |||||||
Weighted average diluted shares of common stock outstanding | 248,973 | 254,944 | 248,950 | 255,045 |
PILGRIM'S PRIDE CORPORATION | |||||||||||||||||||
Reconciliation of Net Debt | |||||||||||||||||||
(Unaudited) | |||||||||||||||||||
June 25, 2017 | June 26, 2016 | December 25, 2016 | December 27, 2015 | December 28, 2014 | |||||||||||||||
(In thousands) | |||||||||||||||||||
Long term debt, less current maturities | $ | 1,404,264 | $ | 1,117,979 | $ | 1,011,858 | $ | 985,509 | $ | 3,980 | |||||||||
Add: Current maturities of long term debt and notes payable | 40,098 | 90 | 94 | 28,812 | 262 | ||||||||||||||
Minus: Cash and cash equivalents | 303,937 | 41,047 | 120,328 | 439,638 | 576,143 | ||||||||||||||
Net debt (cash position) | $ | 1,140,425 | $ | 1,077,022 | $ | 891,624 | $ | 574,683 | $ | (571,901 | ) |
PILGRIM'S PRIDE CORPORATION | ||||||||||||||||
Supplementary Selected Segment and Geographic Data | ||||||||||||||||
Thirteen Weeks Ended | Twenty-Six Weeks Ended | |||||||||||||||
June 25, 2017 | June 26, 2016 | June 25, 2017 | June 26, 2016 | |||||||||||||
(Unaudited) | ||||||||||||||||
(In thousands) | ||||||||||||||||
Sources of net sales by country of origin: | ||||||||||||||||
US: | $ | 1,882,142 | $ | 1,677,445 | $ | 3,618,547 | $ | 3,347,726 | ||||||||
Mexico: | 369,462 | 350,870 | 653,549 | 643,526 | ||||||||||||
Total net sales: | $ | 2,251,604 | $ | 2,028,315 | $ | 4,272,096 | $ | 3,991,252 | ||||||||
Sources of cost of sales by country of origin: | ||||||||||||||||
US: | $ | 1,547,247 | $ | 1,471,269 | $ | 3,095,346 | $ | 2,925,224 | ||||||||
Mexico: | 278,993 | 270,939 | 536,205 | 542,383 | ||||||||||||
Elimination: | (23 | ) | (24 | ) | (47 | ) | (48 | ) | ||||||||
Total cost of sales: | $ | 1,826,217 | $ | 1,742,184 | $ | 3,631,504 | $ | 3,467,559 | ||||||||
Sources of gross profit by country of origin: | ||||||||||||||||
US: | $ | 334,894 | $ | 206,176 | $ | 523,200 | $ | 422,502 | ||||||||
Mexico: | 90,470 | 79,931 | 117,345 | 101,143 | ||||||||||||
Elimination: | 23 | 24 | 47 | 48 | ||||||||||||
Total gross profit: | $ | 425,387 | $ | 286,131 | $ | 640,592 | $ | 523,693 | ||||||||
Sources of operating income by country of origin: | ||||||||||||||||
US: | $ | 277,602 | $ | 164,494 | $ | 411,158 | $ | 339,084 | ||||||||
Mexico: | 81,777 | 72,093 | 100,549 | 86,253 | ||||||||||||
Elimination: | 23 | 24 | 47 | 48 | ||||||||||||
Total operating income: | $ | 359,402 | $ | 236,611 | $ | 511,754 | $ | 425,385 |