Document
false0000802481PILGRIMS PRIDE CORP 0000802481 2019-10-30 2019-10-30


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 30, 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
Securities registered pursuant to Section 12(b) of the Act:
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 October 30, 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 October 30, 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:
October 30, 2019
 
/s/ Fabio Sandri
 
 
 
Fabio Sandri
 
 
 
Chief Financial Officer



Exhibit


https://cdn.kscope.io/8220f4659f9bbdaa7ed2e33ca1238c6e-ppclogoa07.jpg

Pilgrim’s Pride Reports Q3 Net Sales of $2.78 Billion, Operating Income of $188 Million and GAAP EPS of $0.44, a 267% increase over the $0.12 in Q3 2018

GREELEY, Colo., October 30, 2019 (GLOBE NEWSWIRE) - Pilgrim’s Pride Corporation (NASDAQ: PPC) reports third quarter 2019 financial results.

Third Quarter Highlights
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.


1



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.

“After a challenging Q3 2018 within the U.S. pure commodity market, conditions during Q3 of this year were much improved. The environment in non-commodity chicken was in-line with seasonality and remained strong, driven by demand from retailers and QSRs. We remain committed to our Key Customer strategy, which is the basis for our growth. Revenues from Key Customers have more than doubled over the past eight years, and we will continue to support their growth. We are investing 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 our mix of more volatile commodity sales and improve our margin profile,” stated Jayson Penn, Chief Executive Officer of Pilgrim's.

“Mexico was in-line with normal seasonality and significantly better than last year. We expect to generate improved performance for the remainder of 2019 as demand continues to grow. Our Prepared Foods have continued to increase 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 continued to make progress in mitigating input cost challenges, and are already generating better results throughout Q3. Despite seasonally cooler weather, improvements in operational efficiencies, and better integration of input costs into customer pricing models drove the improvement in performance. We expect a continuation of the momentum into Q4.”

“The addition of the Tulip team further enhances our position as a leading global player by expanding our portfolio of prepared foods and brands while strengthening our leadership position in the UK market. It aligns with our strategic priorities as we continue growing our geographical footprint and extending our global reach into attractive new markets.”

Conference Call Information

A conference call to discuss Pilgrim’s quarterly results will be held tomorrow, October 31, 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/ppc191031.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 February 1, 2020.

About Pilgrim’s Pride

Pilgrim’s employs approximately 58,850 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
 
 
 
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



5




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



6



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


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
 
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



8



The summary unaudited consolidated income statement data for the twelve months ended September 29, 2019 (the LTM Period) have been calculated by subtracting the applicable unaudited consolidated income statement data for the nine months ended September 30, 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 nine months ended September 29, 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
 
 
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



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
 
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



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
 
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



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
 
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



12



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




13