FORM |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (IRS Employer Identification No.) | ||
(Zip Code) | ||||
(Address of principal executive offices) |
Title of each class | Trading Symbol | Name of Exchange on Which Registered | ||
Emerging growth company |
PILGRIM’S PRIDE CORPORATION | |||
Date: | October 30, 2019 | /s/ Fabio Sandri | |
Fabio Sandri | |||
Chief Financial Officer |
• | Net Sales of $2.78 billion. |
• | Net Income of $109.8 million. |
• | Operating Income margins of 6.5% in U.S., 11.5% in Mexico and 4.9% in Europe operations, respectively. |
• | Adjusted EBITDA of $258.4 million (or a 9.3% margin), and Adjusted EPS of $0.45. |
• | U.S portfolio generated an improved performance due to our differentiated strategy. Demand in less commoditized segment remained strong while pure commodity was significantly better year on year but weaker than last quarter. We continue to evolve our well-balanced portfolio to further differentiate our products and brands, strengthen Key Customer relationships, and deliver operational improvements. |
• | Q3 in Mexico was in-line with normal seasonality and stronger than last year. Growth in our branded products and prepared foods continue to create portfolio differentiation in the region. |
• | European operations continuing to mitigate the impact of input cost challenges and already achieved better results than last year. Addition of Tulip team will further enhance our position as a leading global player by expanding our portfolio of prepared foods and brands in the UK, and present opportunities for synergies. |
Unaudited, In Millions, Except Per Share and Percentages | ||||||||||||||||
Thirteen Weeks Ended | Thirteen Weeks Ended | Thirty-Nine Weeks Ended | Thirty-Nine Weeks Ended | |||||||||||||
Sep 29, 2019 | Sep 30, 2018 | Y/Y Change | Sep 29, 2019 | Sep 30, 2018 | Y/Y Change | |||||||||||
Net Sales | $2,778.0 | $2,697.6 | +3.0% | $8,345.7 | $8,281.0 | +0.8% | ||||||||||
GAAP EPS | $0.44 | $0.12 | +266.7% | $1.46 | $1.03 | +41.7% | ||||||||||
Operating Income | $188.2 | $85.3 | +120.6% | $604.8 | $472.1 | +28.1% | ||||||||||
Adjusted EBITDA (1) | $258.4 | $156.0 | +65.6% | $812.2 | $687.1 | +18.2% | ||||||||||
Adjusted EBITDA Margin (1) | 9.3% | 5.8% | +3.5pts | 9.7% | 8.3% | +1.4pts |
(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 | ||||||||
September 29, 2019 | December 30, 2018 | |||||||
(Unaudited) | ||||||||
(In thousands) | ||||||||
Cash and cash equivalents | $ | 598,054 | $ | 338,386 | ||||
Restricted cash and cash equivalents | 26,950 | 23,192 | ||||||
Trade accounts and other receivables, less allowance for doubtful accounts | 602,038 | 561,549 | ||||||
Accounts receivable from related parties | 1,573 | 1,331 | ||||||
Inventories | 1,261,362 | 1,159,519 | ||||||
Income taxes receivable | 16,143 | 38,479 | ||||||
Prepaid expenses and other current assets | 107,398 | 112,201 | ||||||
Total current assets | 2,613,518 | 2,234,657 | ||||||
Deferred tax assets | 4,286 | 4,248 | ||||||
Other long-lived assets | 15,211 | 16,717 | ||||||
Identified intangible assets, net | 533,733 | 564,128 | ||||||
Goodwill | 924,766 | 949,750 | ||||||
Operating lease assets, net | 300,495 | — | ||||||
Property, plant and equipment, net | 2,211,124 | 2,161,702 | ||||||
Total assets | $ | 6,603,133 | $ | 5,931,202 | ||||
Accounts payable | $ | 846,200 | $ | 830,059 | ||||
Accounts payable to related parties | 5,157 | 7,269 | ||||||
Revenue contract liability | 39,743 | 33,328 | ||||||
Accrued expenses and other current liabilities | 494,247 | 386,941 | ||||||
Income taxes payable | 25,762 | 8,221 | ||||||
Current maturities of long-term debt | 26,636 | 30,405 | ||||||
Total current liabilities | 1,437,745 | 1,296,223 | ||||||
Noncurrent operating lease liability, less current maturities | 231,018 | — | ||||||
Long-term debt, less current maturities | 2,279,871 | 2,295,190 | ||||||
Noncurrent income taxes payable | 7,731 | 7,731 | ||||||
Deferred tax liabilities | 235,357 | 237,422 | ||||||
Other long-term liabilities | 81,307 | 75,051 | ||||||
Total liabilities | 4,273,029 | 3,911,617 | ||||||
Common stock | 2,611 | 2,604 | ||||||
Treasury stock | (234,892 | ) | (231,994 | ) | ||||
Additional paid-in capital | 1,952,451 | 1,945,136 | ||||||
Retained earnings | 785,732 | 421,888 | ||||||
Accumulated other comprehensive loss | (186,040 | ) | (127,834 | ) | ||||
Total Pilgrim’s Pride Corporation stockholders’ equity | 2,319,862 | 2,009,800 | ||||||
Noncontrolling interest | 10,242 | 9,785 | ||||||
Total stockholders’ equity | 2,330,104 | 2,019,585 | ||||||
Total liabilities and stockholders’ equity | $ | 6,603,133 | $ | 5,931,202 |
PILGRIM’S PRIDE CORPORATION | ||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||||||
(Unaudited) | ||||||||||||||||
Thirteen Weeks ended | Thirty-Nine Weeks Ended | |||||||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | |||||||||||||
(In thousands, except per share data) | ||||||||||||||||
Net sales | $ | 2,777,970 | $ | 2,697,604 | $ | 8,345,730 | $ | 8,280,995 | ||||||||
Cost of sales | 2,495,773 | 2,527,863 | 7,476,731 | 7,549,367 | ||||||||||||
Gross profit | 282,197 | 169,741 | 868,999 | 731,628 | ||||||||||||
Selling, general and administrative expense | 94,032 | 84,138 | 264,313 | 257,396 | ||||||||||||
Administrative restructuring activities | (20 | ) | 257 | (90 | ) | 2,181 | ||||||||||
Operating income | 188,185 | 85,346 | 604,776 | 472,051 | ||||||||||||
Interest expense, net of capitalized interest | 32,028 | 35,334 | 99,184 | 125,901 | ||||||||||||
Interest income | (4,698 | ) | (4,241 | ) | (11,481 | ) | (10,665 | ) | ||||||||
Foreign currency transaction loss (gain) | 3,027 | (6,711 | ) | 7,923 | (2,802 | ) | ||||||||||
Miscellaneous, net | 1,367 | 653 | 2,521 | (1,781 | ) | |||||||||||
Income before income taxes | 156,461 | 60,311 | 506,629 | 361,398 | ||||||||||||
Income tax expense | 46,365 | 30,848 | 142,328 | 106,367 | ||||||||||||
Net income | 110,096 | 29,463 | 364,301 | 255,031 | ||||||||||||
Less: Net income (loss) attributable to noncontrolling interests | 331 | 153 | 457 | (238 | ) | |||||||||||
Net income attributable to Pilgrim’s Pride Corporation | $ | 109,765 | $ | 29,310 | $ | 363,844 | $ | 255,269 | ||||||||
Weighted average shares of common stock outstanding: | ||||||||||||||||
Basic | 249,467 | 248,981 | 249,344 | 248,933 | ||||||||||||
Effect of dilutive common stock equivalents | 262 | 198 | 308 | 143 | ||||||||||||
Diluted | 249,729 | 249,179 | 249,652 | 249,076 | ||||||||||||
Net income attributable to Pilgrim's Pride Corporation per share of common stock outstanding: | ||||||||||||||||
Basic | $ | 0.44 | $ | 0.12 | $ | 1.46 | $ | 1.03 | ||||||||
Diluted | $ | 0.44 | $ | 0.12 | $ | 1.46 | $ | 1.03 |
PILGRIM’S PRIDE CORPORATION AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited) | ||||||||
Thirty-Nine Weeks Ended | ||||||||
September 29, 2019 | September 30, 2018 | |||||||
(In thousands) | ||||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 364,301 | $ | 255,031 | ||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||
Depreciation and amortization | 210,381 | 207,113 | ||||||
Share-based compensation | 7,322 | 9,259 | ||||||
Deferred income tax expense (benefit) | 2,396 | (2,147 | ) | |||||
Loan cost amortization | 3,609 | 4,337 | ||||||
Accretion of discount related to Senior Notes | 737 | 567 | ||||||
Amortization of premium related to Senior Notes | (501 | ) | (501 | ) | ||||
Loss on property disposals | (9,546 | ) | (452 | ) | ||||
Foreign currency transaction loss related to borrowing arrangements | 1,259 | 4,221 | ||||||
Gain on equity-method investments | (48 | ) | (48 | ) | ||||
Noncash loss on early extinguishment of debt | — | 6,037 | ||||||
Asset impairment | — | 884 | ||||||
Changes in operating assets and liabilities: | ||||||||
Trade accounts and other receivables | (46,648 | ) | (3,437 | ) | ||||
Inventories | (108,117 | ) | 64,787 | |||||
Prepaid expenses and other current assets | 3,536 | (15,428 | ) | |||||
Accounts payable, accrued expenses and other current liabilities | 67,308 | 78,107 | ||||||
Income taxes | 40,549 | (175,569 | ) | |||||
Long-term pension and other postretirement obligations | (1,578 | ) | (9,087 | ) | ||||
Other operating assets and liabilities | 544 | 1,606 | ||||||
Cash provided by operating activities | 535,504 | 425,280 | ||||||
Cash flows from investing activities: | ||||||||
Acquisitions of property, plant and equipment | (258,725 | ) | (231,875 | ) | ||||
Proceeds from property disposals | 15,168 | 2,707 | ||||||
Cash used in investing activities | (243,557 | ) | (229,168 | ) | ||||
Cash flows from financing activities: | ||||||||
Payments on revolving line of credit, long-term borrowings and capital lease obligations | (123,276 | ) | (1,071,441 | ) | ||||
Proceeds from revolving line of credit and long-term borrowings | 99,638 | 703,090 | ||||||
Purchase of common stock under share repurchase program | (2,898 | ) | — | |||||
Payment of capitalized loan costs | (652 | ) | (11,081 | ) | ||||
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 | (27,713 | ) | (373,874 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | (808 | ) | 4,071 | |||||
Increase in cash, cash equivalents and restricted cash | 263,426 | (173,691 | ) | |||||
Cash, cash equivalents and restricted cash, beginning of period | 361,578 | 589,531 | ||||||
Cash, cash equivalents and restricted cash, end of period | $ | 625,004 | $ | 415,840 |
PILGRIM'S PRIDE CORPORATION | |||||||||||||||
Reconciliation of Adjusted EBITDA | |||||||||||||||
(Unaudited) | |||||||||||||||
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | ||||||||||||
(In thousands) | |||||||||||||||
Net income | $ | 110,096 | $ | 29,463 | $ | 364,301 | $ | 255,031 | |||||||
Add: | |||||||||||||||
Interest expense, net | 27,330 | 31,093 | 87,703 | 115,236 | |||||||||||
Income tax expense | 46,365 | 30,848 | 142,328 | 106,367 | |||||||||||
Depreciation and amortization | 71,851 | 71,026 | 210,381 | 207,113 | |||||||||||
EBITDA | 255,642 | 162,430 | 804,713 | 683,747 | |||||||||||
Add: | |||||||||||||||
Foreign currency transaction losses | 3,027 | (6,711 | ) | 7,923 | (2,802 | ) | |||||||||
Acquisition charges | 63 | 16 | 63 | 320 | |||||||||||
Restructuring activity | (20 | ) | 257 | (90 | ) | 2,181 | |||||||||
Other nonrecurring losses and expenses | — | 164 | — | 3,462 | |||||||||||
Minus: | |||||||||||||||
Net income (loss) attributable to noncontrolling interest | 331 | 153 | 457 | (238 | ) | ||||||||||
Adjusted EBITDA | $ | 258,381 | $ | 156,003 | $ | 812,152 | $ | 687,146 |
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 30, 2018 | March 31, 2019 | June 30, 2019 | September 29, 2019 | September 29, 2019 | ||||||||||||||||
(In thousands) | ||||||||||||||||||||
Net income | $ | (8,227 | ) | $ | 84,125 | $ | 170,080 | $ | 110,096 | $ | 356,074 | |||||||||
Add: | ||||||||||||||||||||
Interest expense, net | 33,765 | 30,222 | 30,150 | 27,330 | 121,467 | |||||||||||||||
Income tax expense | (20,944 | ) | 20,416 | 75,547 | 46,365 | 121,384 | ||||||||||||||
Depreciation and amortization | 66,975 | 67,182 | 71,348 | 71,851 | 277,356 | |||||||||||||||
EBITDA | 71,569 | 201,945 | 347,125 | 255,642 | 876,281 | |||||||||||||||
Add: | ||||||||||||||||||||
Foreign currency transaction losses (gains) | 19,962 | 2,636 | 2,260 | 3,027 | 27,885 | |||||||||||||||
Acquisition charges | — | — | — | 63 | 63 | |||||||||||||||
Restructuring activities | 2,584 | (27 | ) | (43 | ) | (20 | ) | 2,494 | ||||||||||||
Other nonrecurring losses and expenses | 16,023 | — | — | — | 16,023 | |||||||||||||||
Minus: | ||||||||||||||||||||
Net income (loss) attributable to noncontrolling interest | (903 | ) | 114 | 12 | 331 | (446 | ) | |||||||||||||
Adjusted EBITDA | $ | 111,041 | $ | 204,440 | $ | 349,330 | $ | 258,381 | $ | 923,192 |
PILGRIM'S PRIDE CORPORATION | |||||||||||||||||||||||||||||||
Reconciliation of EBITDA Margin | |||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||||||||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | ||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||
Net income | $ | 110,096 | $ | 29,463 | $ | 364,301 | $ | 255,031 | 3.96 | % | 1.09 | % | 4.37 | % | 3.08 | % | |||||||||||||||
Add: | |||||||||||||||||||||||||||||||
Interest expense, net | 27,330 | 31,093 | 87,703 | 115,236 | 0.98 | % | 1.15 | % | 1.05 | % | 1.39 | % | |||||||||||||||||||
Income tax expense | 46,365 | 30,848 | 142,328 | 106,367 | 1.67 | % | 1.14 | % | 1.71 | % | 1.28 | % | |||||||||||||||||||
Depreciation and amortization | 71,851 | 71,026 | 210,381 | 207,113 | 2.59 | % | 2.63 | % | 2.52 | % | 2.50 | % | |||||||||||||||||||
EBITDA | 255,642 | 162,430 | 804,713 | 683,747 | 9.20 | % | 6.03 | % | 9.64 | % | 8.26 | % | |||||||||||||||||||
Add: | |||||||||||||||||||||||||||||||
Foreign currency transaction losses | 3,027 | (6,711 | ) | 7,923 | (2,802 | ) | 0.11 | % | (0.25 | )% | 0.09 | % | (0.03 | )% | |||||||||||||||||
Acquisition charges | 63 | 16 | 63 | 320 | — | % | — | % | — | % | — | % | |||||||||||||||||||
Restructuring activity | (20 | ) | 257 | (90 | ) | 2,181 | — | % | 0.01 | % | — | % | 0.03 | % | |||||||||||||||||
Other nonrecurring losses and expenses | — | 164 | — | 3,462 | — | % | 0.01 | % | — | % | 0.04 | % | |||||||||||||||||||
Minus: | |||||||||||||||||||||||||||||||
Net income (loss) attributable to noncontrolling interest | 331 | 153 | 457 | (238 | ) | 0.01 | % | 0.01 | % | 0.01 | % | — | % | ||||||||||||||||||
Adjusted EBITDA | $ | 258,381 | $ | 156,003 | $ | 812,152 | $ | 687,146 | 9.30 | % | 5.79 | % | 9.73 | % | 8.30 | % | |||||||||||||||
Net sales | $ | 2,777,970 | $ | 2,697,604 | $ | 8,345,730 | $ | 8,280,995 | $ | 2,777,970 | $ | 2,697,604 | $ | 8,345,730 | $ | 8,280,995 |
PILGRIM'S PRIDE CORPORATION | |||||||||||||||
Reconciliation of Adjusted Earnings | |||||||||||||||
(Unaudited) | |||||||||||||||
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Net income attributable to Pilgrim's Pride Corporation | $ | 109,765 | $ | 29,310 | $ | 363,844 | $ | 255,269 | |||||||
Adjustments, net of tax: | |||||||||||||||
Loss on early extinguishment of debt | — | 903 | — | 12,679 | |||||||||||
Acquisition charges and restructuring activities | 33 | 207 | (20 | ) | 1,893 | ||||||||||
Foreign currency transaction losses | 2,290 | (5,077 | ) | 5,994 | (2,120 | ) | |||||||||
Income before loss on early extinguishment of debt, acquisition charges and restructuring activities, and foreign currency transaction losses | $ | 112,088 | $ | 25,343 | $ | 369,818 | $ | 267,721 | |||||||
U.S. Tax Cuts & Jobs Act transition tax | — | 26,400 | — | 26,400 | |||||||||||
Adjusted net income (loss) | $ | 112,088 | $ | 51,743 | $ | 369,818 | $ | 294,121 | |||||||
Weighted average diluted shares of common stock outstanding | 249,729 | 249,179 | 249,652 | 249,076 | |||||||||||
Income before loss on early extinguishment of debt, acquisition and restructuring activities and foreign currency transaction losses per common diluted share | $ | 0.45 | $ | 0.21 | $ | 1.48 | $ | 1.18 |
PILGRIM'S PRIDE CORPORATION | |||||||||||||||
Reconciliation of GAAP EPS to Adjusted EPS | |||||||||||||||
(Unaudited) | |||||||||||||||
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
GAAP EPS | $ | 0.44 | $ | 0.12 | $ | 1.46 | $ | 1.03 | |||||||
Adjustments, net of tax: | |||||||||||||||
Loss on early extinguishment of debt | — | — | — | 0.05 | |||||||||||
Foreign currency transaction losses | 0.01 | (0.02 | ) | 0.02 | (0.01 | ) | |||||||||
$ | 0.45 | $ | 0.10 | $ | 1.48 | $ | 1.08 | ||||||||
U.S. Tax Cuts & Jobs Act transition tax | — | 0.11 | — | 0.11 | |||||||||||
Adjusted EPS | $ | 0.45 | $ | 0.21 | $ | 1.48 | $ | 1.18 | |||||||
Weighted average diluted shares of common stock outstanding | 249,729 | 249,179 | 249,652 | 249,076 |
PILGRIM'S PRIDE CORPORATION | |||||||||||||||
Supplementary Selected Segment and Geographic Data | |||||||||||||||
(Unaudited) | |||||||||||||||
Thirteen Weeks Ended | Thirty-Nine Weeks Ended | ||||||||||||||
September 29, 2019 | September 30, 2018 | September 29, 2019 | September 30, 2018 | ||||||||||||
(In thousands) | |||||||||||||||
Sources of net sales by country of origin: | |||||||||||||||
US | $ | 1,931,657 | $ | 1,864,169 | $ | 5,732,201 | $ | 5,604,709 | |||||||
Europe | 517,531 | 526,722 | 1,568,396 | 1,634,125 | |||||||||||
Mexico | 328,782 | 306,713 | 1,045,133 | 1,042,161 | |||||||||||
Total net sales | $ | 2,777,970 | $ | 2,697,604 | $ | 8,345,730 | $ | 8,280,995 | |||||||
Sources of cost of sales by country of origin: | |||||||||||||||
US | $ | 1,739,474 | $ | 1,732,803 | $ | 5,123,278 | $ | 5,137,049 | |||||||
Europe | 474,490 | 485,435 | 1,452,254 | 1,500,994 | |||||||||||
Mexico | 281,833 | 309,650 | 901,271 | 911,358 | |||||||||||
Intersegment transactions, net | (24 | ) | (25 | ) | (72 | ) | (34 | ) | |||||||
Total cost of sales | $ | 2,495,773 | $ | 2,527,863 | $ | 7,476,731 | $ | 7,549,367 | |||||||
Sources of gross profit by country of origin: | |||||||||||||||
US | $ | 192,183 | $ | 131,366 | $ | 608,923 | $ | 467,660 | |||||||
Europe | 43,041 | 41,287 | 116,142 | 133,131 | |||||||||||
Mexico | 46,949 | (2,937 | ) | 143,862 | 130,803 | ||||||||||
Intersegment transactions, net | 24 | 25 | 72 | 34 | |||||||||||
Total gross profit | $ | 282,197 | $ | 169,741 | $ | 868,999 | $ | 731,628 | |||||||
Sources of operating income by country of origin: | |||||||||||||||
US | $ | 125,169 | $ | 74,206 | $ | 426,968 | $ | 300,960 | |||||||
Europe | 25,325 | 23,470 | 62,233 | 68,545 | |||||||||||
Mexico | 37,667 | (12,355 | ) | 115,503 | 102,512 | ||||||||||
Intersegment transactions, net | 24 | 25 | 72 | 34 | |||||||||||
Total operating income | $ | 188,185 | $ | 85,346 | $ | 604,776 | $ | 472,051 |