Document
false0000802481PILGRIMS PRIDE CORP 0000802481 2019-07-31 2019-07-31


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): July 31, 2019
PILGRIM'S PRIDE CORPORATION
(Exact Name of registrant as specified in its charter)
Delaware
1-9273
75-1285071
(State or other jurisdiction of
incorporation or organization)
(Commission File Number)
(IRS Employer Identification No.)
 
 
 
 
1770 Promontory Circle
 
80634-9038
Greeley
CO
 
(Zip Code)
(Address of principal executive offices)
 
 
 
Registrant's telephone number, including area code: (970) 506-8000
Title of each class
 
Trading Symbol
 
Name of Exchange on Which Registered
Common Stock, Par Value $0.01
 
PPC
 
The NASDAQ Stock Market LLC
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:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.






Item 2.02 Results of Operations and Financial Condition.
On July 31, 2019 the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
Exhibit 99.1 Press release dated July 31, 2019.






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:
July 31, 2019
 
/s/ Fabio Sandri
 
 
 
Fabio Sandri
 
 
 
Chief Financial Officer



Exhibit


https://cdn.kscope.io/5e05b059b4a7d2cc4708d60ec81aaecb-ppclogoa03.jpg

Pilgrim’s Pride Reports Q2 Net Sales of $2.84 Billion, Operating Income of $280 Million and GAAP EPS of $0.68, a 58% increase over Q2 2018

GREELEY, Colo., July 31, 2019 (GLOBE NEWSWIRE) - Pilgrim’s Pride Corporation (NASDAQ: PPC) reports second quarter 2019 financial results.

Second Quarter Highlights
Net Sales of $2.84 billion.
Net Income of $170.1 million.
Operating Income margins of 9.8% in U.S., 17.5% in Mexico and 4.5% in Europe operations, respectively.
Adjusted EBITDA of $349.3 million (or a 12.3% margin), and Adjusted EPS of $0.69.
U.S portfolio continues to deliver strong results in our differentiated segments, while more market features and promotional activity of chicken supported better demand in the commodity segment. We continue to evolve our well-balanced portfolio to further differentiate our products and brands, strengthen Key Customer relationships, and improve margin consistency.
Strong market recovery in Mexico as growing conditions of chicken reverted back to normal and less competing proteins, driving chicken demand and prices higher. Diversification into premium Pilgrim’s brand is gaining momentum and producing strong results while significant growth in Prepared Foods remains.
European operations mitigating the impact of recent input cost challenges. Along with continuous operational improvements, the implementation of our Key Customer strategy has enhanced the ability to reflect input cost changes through adjustments within our pricing models.


1



Unaudited, In Millions, Except Per Share and Percentages
 
 
Thirteen Weeks Ended
Thirteen Weeks Ended
 
 
Twenty-Six Weeks Ended
Twenty-Six Weeks Ended
 
 
 
June 30, 2019
 
July 1, 2018
 
Y/Y Change
 
June 30, 2019
 
July 1, 2018
 
Y/Y Change
Net Sales
$2,843.1
 
$2,836.7
 
+0.2%
 
$5,567.8
 
$5,583.4
 
-0.3%
GAAP EPS
$0.68
 
$0.43
 
+58.1%
 
$1.02
 
$0.91
 
+12.1%
Operating Income
$279.6
 
$185.1
 
+51.1%
 
$416.6
 
$386.7
 
+7.7%
Adjusted EBITDA (1)
$349.3
 
$259.3
 
+34.7%
 
$553.8
 
$531.1
 
+4.3%
Adjusted EBITDA Margin (1)
12.3%
 
9.2%
 
+3.1pts
 
10.0%
 
9.5%
 
+0.5pts
(1)
Reconciliations for non-GAAP measures are provided in subsequent sections within this release.

“After a very challenging market in Q2 of last year, we experienced a much better environment in the U.S. during Q2 2019, particularly in commodity large bird deboning, while feature activities at retailers and QSRs returned to seasonal levels. Large-bird cutout tracked much closer to the five-year average, driven by strengths in wings, leg quarters, and tenders. We remain committed to our Key Customer strategy, which is relevant to our growth. Revenues from Key Customers have more than doubled over the last eight years, reducing our relative dependency on pure commodity sales and reducing volatility. Opportunities for additional growth remain available. We will continue to invest to further differentiate our portfolio, and increase our capacities and capabilities to meet customer expectations. We expect value added, differentiated products to account for a significantly larger portion of our total results over the next few years as we continue to reduce the volatility of our commodity sales mix,” stated Jayson Penn, Chief Executive Officer of Pilgrim's.

“Conditions in Mexico significantly rebounded from a counter-seasonally weak Q1. A return to much more normal growing conditions together with strong demand drove a very positive price reaction throughout the quarter. The availability of imported pork from the U.S. has also significantly diminished, and presented much less competition to demand for chicken. Our Prepared Foods have continued to grow at a double digit rate and are generating great results under both premium Pilgrim’s and Del Dia brands to drive the evolution of our Mexican portfolio towards more differentiated, higher-value products and margin expansion.”

“Our European operations have started to overcome recent input cost challenges and generated improving results throughout Q2. While pressure from wheat prices has been reduced, increased implementation of our Key Customer strategy also enabled us to better reflect input cost increases by adjusting our pricing models compared to before. Along with additional improvements in operational efficiencies, we exited Q2 with a stronger EBIT performance than when we began, and we expect this momentum to continue into the second half of the year.”

Conference Call Information

A conference call to discuss Pilgrim’s quarterly results will be held tomorrow, August 1, 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: https://services.choruscall.com/links/ppc190801.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.”


2



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 November 1, 2019.

About Pilgrim’s Pride

Pilgrim’s employs approximately 52,600 people and operates chicken processing plants and prepared-foods facilities in 14 states, Puerto Rico, Mexico, the U.K, Ireland and continental Europe. 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.


3



Contact:
Dunham Winoto
 
Director, Investor Relations
 
IRPPC@pilgrims.com
 
(970) 506-8192
 
www.pilgrims.com


4




PILGRIM’S PRIDE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
 
 
 
June 30, 2019
 
December 30, 2018
 
 
(Unaudited)
 
 
 
 
(In thousands)
Cash and cash equivalents
 
$
538,227

 
$
338,386

Restricted cash and cash equivalents
 
33,379

 
23,192

Trade accounts and other receivables, less allowance for doubtful accounts
 
582,296

 
561,549

Accounts receivable from related parties
 
957

 
1,331

Inventories
 
1,186,655

 
1,159,519

Income taxes receivable
 
22,273

 
38,479

Prepaid expenses and other current assets
 
113,409

 
112,023

Assets held for sale
 
146

 
178

     Total current assets
 
2,477,342

 
2,234,657

Deferred tax assets
 
4,321

 
4,248

Other long-lived assets
 
15,289

 
16,717

Identified intangible assets, net
 
552,922

 
564,128

Goodwill
 
949,869

 
949,750

Operating lease assets, net
 
317,963

 

Property, plant and equipment, net
 
2,210,212

 
2,161,702

     Total assets
 
$
6,527,918

 
$
5,931,202

 
 
 
 
 
Accounts payable
 
$
816,126

 
$
830,059

Accounts payable to related parties
 
5,938

 
7,269

Revenue contract liability
 
23,016

 
33,328

Accrued expenses and other current liabilities
 
508,337

 
386,941

Income taxes payable
 
8,930

 
8,221

Current maturities of long-term debt
 
30,282

 
30,405

     Total current liabilities
 
1,392,629

 
1,296,223

Noncurrent operating lease liability, less current maturities
 
243,661

 

Long-term debt, less current maturities
 
2,283,847

 
2,295,190

Noncurrent income taxes payable
 
7,731

 
7,731

Deferred tax liabilities
 
235,487

 
237,422

Other long-term liabilities
 
91,299

 
75,051

     Total liabilities
 
4,254,654

 
3,911,617

Common stock
 
2,609

 
2,604

Treasury stock
 
(234,892
)
 
(231,994
)
Additional paid-in capital
 
1,950,348

 
1,945,136

Retained earnings
 
675,967

 
421,888

Accumulated other comprehensive loss
 
(130,679
)
 
(127,834
)
     Total Pilgrim’s Pride Corporation stockholders’ equity
 
2,263,353

 
2,009,800

Noncontrolling interest
 
9,911

 
9,785

     Total stockholders’ equity
 
2,273,264

 
2,019,585

          Total liabilities and stockholders’ equity
 
$
6,527,918

 
$
5,931,202



5




PILGRIM’S PRIDE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Thirteen Weeks ended
 
Twenty-Six Weeks Ended
 
 
June 30, 2019
 
July 1, 2018
 
June 30, 2019
 
July 1, 2018
 
 
(In thousands, except per share data)
Net sales
 
$
2,843,085

 
$
2,836,713

 
$
5,567,760

 
$
5,583,391

Cost of sales
 
2,475,221

 
2,562,491

 
4,980,957

 
5,021,504

Gross profit
 
367,864

 
274,222

 
586,803

 
561,887

Selling, general and administrative expense
 
88,357

 
87,975

 
170,281

 
173,258

Administrative restructuring activities
 
(43
)
 
1,135

 
(70
)
 
1,924

Operating income
 
279,550

 
185,112

 
416,592

 
386,705

Interest expense, net of capitalized interest
 
33,594

 
40,267

 
67,156

 
90,567

Interest income
 
(3,444
)
 
(4,834
)
 
(6,784
)
 
(6,424
)
Foreign currency transaction loss
 
2,260

 
5,630

 
4,896

 
3,909

Miscellaneous, net
 
1,513

 
(817
)
 
1,156

 
(2,434
)
Income before income taxes
 
245,627

 
144,866

 
350,168

 
301,087

Income tax expense
 
75,547

 
38,522

 
95,963

 
75,519

Net income
 
170,080

 
106,344

 
254,205

 
225,568

Less: Net income (loss) attributable to noncontrolling interests
 
12

 
(197
)
 
126

 
(391
)
Net income attributable to Pilgrim’s Pride Corporation
 
$
170,068

 
$
106,541

 
$
254,079

 
$
225,959

 
 
 
 
 
 
 
 
 
Weighted average shares of common stock outstanding:
 

 

 

 

Basic
 
249,400

 
248,981

 
249,283

 
248,909

Effect of dilutive common stock equivalents
 
236

 
76

 
320

 
116

Diluted
 
249,636

 
249,057

 
249,603

 
249,025

 
 
 
 
 
 
 
 
 
Net income attributable to Pilgrim's Pride Corporation
per share of common stock outstanding:
 
 
 
 
 
 
 
 
Basic
 
$
0.68

 
$
0.43

 
$
1.02

 
$
0.91

Diluted
 
$
0.68

 
$
0.43

 
$
1.02

 
$
0.91



6



PILGRIM’S PRIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
 
 
Twenty-Six Weeks Ended
 
 
June 30, 2019
 
July 1, 2018
 
 
(In thousands)
Cash flows from operating activities:
 
 
 
 
Net income
 
$
254,205

 
$
225,568

Adjustments to reconcile net income to cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
138,530

 
136,087

Share-based compensation
 
5,217

 
5,633

Deferred income tax expense (benefit)
 
(3,354
)
 
(11,927
)
Loan cost amortization
 
2,401

 
3,392

Accretion of discount related to Senior Notes
 
491

 
321

Amortization of premium related to Senior Notes
 
(334
)
 
(334
)
Loss on property disposals
 
230

 
239

Foreign currency transaction loss related to borrowing arrangements
 
37

 
4,221

Gain on equity-method investments
 
(32
)
 
(32
)
Noncash loss on early extinguishment of debt
 

 
4,918

Asset impairment
 

 
573

Changes in operating assets and liabilities:
 
 
 
 
Trade accounts and other receivables
 
(20,385
)
 
(31,913
)
Inventories
 
(27,212
)
 
60,303

Prepaid expenses and other current assets
 
(1,339
)
 
(31,099
)
Accounts payable, accrued expenses and other current liabilities
 
20,664

 
103,991

Income taxes
 
34,013

 
(161,571
)
Long-term pension and other postretirement obligations
 
(1,121
)
 
(5,323
)
Other operating assets and liabilities
 
1,353

 
942

Cash provided by operating activities
 
403,364

 
303,989

Cash flows from investing activities:
 
 
 
 
Acquisitions of property, plant and equipment
 
(177,609
)
 
(155,188
)
Proceeds from property disposals
 
1,740

 
1,205

Cash used in investing activities
 
(175,869
)
 
(153,983
)
Cash flows from financing activities:
 
 
 
 
     Payments on revolving line of credit, long-term borrowings and capital lease
obligations
 
(113,079
)
 
(673,452
)
Proceeds from revolving line of credit and long-term borrowings
 
99,636

 
604,062

Purchase of common stock under share repurchase program
 
(2,898
)
 

Payment of capitalized loan costs
 
(596
)
 
(5,708
)
Proceeds (payment) from equity contribution (distribution) under Tax Sharing
Agreement between JBS USA Food Company Holdings and Pilgrim's
Pride Corporation
 
(525
)
 
5,558

Cash used in financing activities
 
(17,462
)
 
(69,540
)
Effect of exchange rate changes on cash and cash equivalents
 
(5
)
 
4,030

Increase in cash, cash equivalents and restricted cash
 
210,028

 
84,496

Cash, cash equivalents and restricted cash, beginning of period
 
361,578

 
589,531

Cash, cash equivalents and restricted cash, end of period
 
$
571,606

 
$
674,027


7



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
 
Twenty-Six Weeks Ended
 
June 30, 2019
 
July 1, 2018
 
June 30, 2019
 
July 1, 2018
 
(In thousands)
Net income
$
170,080

 
$
106,344

 
$
254,205

 
$
225,568

Add:
 
 
 
 
 
 
 
Interest expense, net
33,594

 
35,433

 
67,156

 
84,143

Income tax expense
75,547

 
38,522

 
95,963

 
75,519

Depreciation and amortization
71,348

 
68,643

 
138,530

 
136,087

EBITDA
347,125

 
248,942

 
549,070

 
521,317

Add:
 
 
 
 
 
 
 
Foreign currency transaction losses
2,260

 
5,630

 
4,896

 
3,909

Acquisition charges

 
125

 

 
304

Derivative loss

 

 

 

Restructuring activity
(43
)
 
1,135

 
(70
)
 
1,924

Other nonrecurring losses and expenses

 
3,298

 

 
3,298

Minus:
 
 
 
 
 
 
 
   Net income (loss) attributable to noncontrolling interest
12

 
(197
)
 
126

 
(391
)
Adjusted EBITDA
$
349,330

 
$
259,327

 
$
553,770

 
$
531,143



8



The summary unaudited consolidated income statement data for the twelve months ended June 30, 2019 (the LTM Period) have been calculated by subtracting the applicable unaudited consolidated income statement data for the six months ended July 1, 2018 from the sum of (1) the applicable audited consolidated income statement data for the year ended December 30, 2018 and (2) the applicable audited consolidated income statement data for the six months ended June 30, 2019.

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 30,
2018
 
December 30,
2018
 
March 31,
2019
 
June 30,
2019
 
June 30,
2019
 
 
(In thousands)
Net income
 
$
29,463

 
$
(8,227
)
 
$
84,125

 
$
170,080

 
$
275,441

Add:
 
 
 
 
 
 
 
 
 
 
Interest expense, net
 
31,093

 
33,765

 
30,222

 
30,150

 
125,230

Income tax expense
 
30,848

 
(20,944
)
 
20,416

 
75,547

 
105,867

Depreciation and amortization
 
71,027

 
66,975

 
67,182

 
71,348

 
276,532

EBITDA
 
162,431

 
71,569

 
201,945

 
347,125

 
783,070

Add:
 
 
 
 
 
 
 
 
 
 
Foreign currency transaction
     losses (gains)
 
(6,711
)
 
19,962

 
2,636

 
2,260

 
18,147

Acquisition charges
 
16

 

 

 

 
16

Restructuring activities
 
257

 
2,584

 
(27
)
 
(43
)
 
2,771

Other nonrecurring losses and
     expenses
 
164

 
16,023

 

 

 
16,187

Minus:
 
 
 
 
 
 
 
 
 
 
   Net income (loss) attributable to
        noncontrolling interest
 
153

 
(903
)
 
114

 
12

 
(624
)
Adjusted EBITDA
 
$
156,004

 
$
111,041

 
$
204,440

 
$
349,330

 
$
820,815



9



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
 
Twenty-Six Weeks Ended
 
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
June 30, 2019
 
July 1, 2018
 
June 30, 2019
 
July 1, 2018
 
June 30, 2019
 
July 1, 2018
 
June 30, 2019
 
July 1, 2018
 
(In thousands)
Net income
$
170,080

 
$
106,344

 
$
254,205

 
$
225,568

 
5.98
 %
 
3.75
 %
 
4.57
 %
 
4.04
 %
Add:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense, net
30,150

 
35,433

 
60,372

 
84,143

 
1.06
 %
 
1.25
 %
 
1.08
 %
 
1.51
 %
Income tax expense
75,547

 
38,522

 
95,963

 
75,519

 
2.66
 %
 
1.36
 %
 
1.72
 %
 
1.35
 %
Depreciation and
     amortization
71,348

 
68,643

 
138,530

 
136,087

 
2.51
 %
 
2.42
 %
 
2.49
 %
 
2.44
 %
EBITDA
347,125

 
248,942

 
549,070

 
521,317

 
12.21
 %
 
8.79
 %
 
9.86
 %
 
9.34
 %
Add:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency
     transaction losses
2,260

 
5,630

 
4,896

 
3,909

 
0.08
 %
 
0.20
 %
 
0.09
 %
 
0.07
 %
Acquisition charges

 
125

 

 
304

 
 %
 
 %
 
 %
 
0.01
 %
Restructuring activity
(43
)
 
1,135

 
(70
)
 
1,924

 
 %
 
0.04
 %
 
 %
 
0.03
 %
Other nonrecurring
     losses and
     expenses

 
3,298

 

 
3,298

 
 %
 
0.12
 %
 
 %
 
0.06
 %
Minus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
     attributable to
     noncontrolling
     interest
12

 
(197
)
 
126

 
(391
)
 
 %
 
(0.01
)%
 
 %
 
(0.01
)%
Adjusted EBITDA
$
349,330

 
$
259,327

 
$
553,770

 
$
531,143

 
12.29
 %
 
9.15
 %
 
9.95
 %
 
9.51
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
$
2,843,085

 
$
2,836,713

 
$
5,567,760

 
$
5,583,391

 
$
2,843,085

 
$
2,836,713

 
$
5,567,760

 
$
5,583,391



10



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
 
Twenty-Six Weeks Ended
 
June 30, 2019
 
July 1, 2018
 
June 30, 2019
 
July 1, 2018
 
(In thousands, except per share data)
Net income attributable to Pilgrim's Pride Corporation
$
170,068

 
$
106,541

 
$
254,079

 
$
225,959

Adjustments, net of tax:
 
 
 
 
 
 
 
Loss on early extinguishment of debt

 
1,513

 

 
8,823

Acquisition charges and restructuring activities
(33
)
 
954

 
(53
)
 
1,686

Foreign currency transaction losses
1,710

 
4,260

 
3,704

 
2,957

Income before loss on early extinguishment of debt,
     acquisition charges and restructuring activities, and
     foreign currency transaction losses
$
171,745

 
$
113,268

 
$
257,730

 
$
239,425

Weighted average diluted shares of common stock outstanding
249,636

 
249,057

 
249,603

 
249,025

Income before loss on early extinguishment of debt,
     acquisition and restructuring activities and foreign
     currency transaction losses per common diluted share
$
0.69

 
$
0.45

 
$
1.03

 
$
0.96



11



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
 
Twenty-Six Weeks Ended
 
June 30, 2019
 
July 1, 2018
 
June 30, 2019
 
July 1, 2018
 
(In thousands, except per share data)
GAAP EPS
$
0.68

 
$
0.43

 
$
1.02

 
$
0.91

Adjustments, net of tax:
 
 
 
 
 
 
 
Loss on early extinguishment of debt

 
0.01

 

 
0.04

Foreign currency transaction losses
0.01

 
0.01

 
0.01

 
0.01

Adjusted EPS
$
0.69

 
$
0.45

 
$
1.03

 
$
0.96

 
 
 
 
 
 
 
 
Weighted average diluted shares of common stock
    outstanding
249,636

 
249,057

 
249,603

 
249,025



12



PILGRIM'S PRIDE CORPORATION
Supplementary Selected Segment and Geographic Data
(Unaudited)
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
June 30, 2019
 
July 1, 2018
 
June 30, 2019
 
July 1, 2018
 
(In thousands)
Sources of net sales by country of origin:
 
 
 
 
 
 
 
US
$
1,916,954

 
$
1,899,435

 
$
3,800,544

 
$
3,740,540

Europe
535,902

 
563,102

 
1,050,865

 
1,107,402

Mexico
390,229

 
374,176

 
716,351

 
735,449

Total net sales
$
2,843,085

 
$
2,836,713

 
$
5,567,760

 
$
5,583,391

 
 
 
 
 
 
 
 
Sources of cost of sales by country of origin:
 
 
 
 
 
 
 
US
$
1,670,384

 
$
1,745,511

 
$
3,383,803

 
$
3,404,245

Europe
492,386

 
513,991

 
977,764

 
1,015,559

Mexico
312,475

 
302,973

 
619,438

 
601,708

Intersegment transactions, net
(24
)
 
16

 
(48
)
 
(8
)
Total cost of sales
$
2,475,221

 
$
2,562,491

 
$
4,980,957

 
$
5,021,504

 
 
 
 
 
 
 
 
Sources of gross profit by country of origin:
 
 
 
 
 
 
 
US
$
246,570

 
$
153,924

 
$
416,741

 
$
336,295

Europe
43,516

 
49,111

 
73,101

 
91,843

Mexico
77,754

 
71,203

 
96,913

 
133,741

Intersegment transactions, net
24

 
(16
)
 
48

 
8

Total gross profit
$
367,864

 
$
274,222

 
$
586,803

 
$
561,887

 
 
 
 
 
 
 
 
Sources of operating income by country of origin:
 
 
 
 
 
 
 
US
$
186,960

 
$
99,469

 
$
301,800

 
$
226,755

Europe
24,194

 
23,662

 
36,908

 
45,075

Mexico
68,372

 
61,997

 
77,836

 
114,867

Intersegment transactions, net
24

 
(16
)
 
48

 
8

Total operating income
$
279,550

 
$
185,112

 
$
416,592

 
$
386,705




13