Document
false0000802481PILGRIMS PRIDE CORP 0000802481 2020-02-20 2020-02-20


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): February 20, 2020
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 February 20, 2020 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 February 20, 2020.
Exhibit 104 Cover Page Interactive Data File formatted in iXBRL






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:
February 20, 2020
 
/s/ Fabio Sandri
 
 
 
Fabio Sandri
 
 
 
Chief Financial Officer



Exhibit


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Pilgrim’s Pride Closes Fiscal Year 2019 with Net Sales of $11.41 Billion, Operating Income of $691 Million and GAAP EPS of $1.83, an 83% increase over the $1.00 in Fiscal Year 2018

GREELEY, Colo., February 20, 2020 (GLOBE NEWSWIRE) - Pilgrim’s Pride Corporation (NASDAQ: PPC) reports fourth quarter and year-end 2019 financial results.

2019 Highlights
Operating Income margins of 6.4% in U.S., 8.9% in Mexico and 3.3% in Europe operations, respectively.
Net Income of $455.9 million, or an 84% increase from last year.
Adjusted EBITDA of $973.8 million, a 22% increase over 2018, or an 8.5% margin.
Portfolio strategy and geographic diversification reducing the impact of challenging specific market conditions. EBITDA outpacing the industry competition, driven by improved execution and increased operating performance across all business units, including the U.S., Mexico and Europe.
Operating results from legacy European business rose by 7% on better operational efficiencies and input cost mitigation. Newly acquired operations already generating positive EBITDA, and on track to achieve performance competitive with leading companies with similar portfolio in next few years.
We remain motivated to pursue additional growth potential and product differentiation, aligning our strategic priorities to continue to strengthen our differentiated global platforms.
Fourth Quarter
Net Sales of $3.06 billion.
Net GAAP Income of $92.1 million, including one-time asset acquisition net gain due to valuation and acquisition adjustments.
Operating Income margins of 3.2% in U.S., 2.5% in Mexico and 2.1% in Europe operations, respectively.
Adjusted EBITDA of $161.6 million (or a 5.3% margin).





1



Unaudited (2)
 
Thirteen Weeks Ended
 
Fifty-Two Weeks Ended
 
 
December 29, 2019
 
December 30, 2018
 
Y/Y Change
 
December 29, 2019
 
December 30, 2018
 
Y/Y Change
 
 
(In millions, except per share and percentages)
 
 
Net sales
 
$
3,063.5

 
$
2,656.8

 
+15.3
%
 
$
11,409.2

 
$
10,937.8

 
+4.3
%
U.S. GAAP EPS
 
$
0.37

 
$
(0.03
)
 
+1,333.3
%
 
$
1.83

 
$
1.00

 
+83.0
%
Operating income
 
$
85.8

 
$
23.6

 
+263.6
%
 
$
690.6

 
$
495.7

 
+39.3
%
Adjusted EBITDA(1)
 
$
161.6

 
$
111.0

 
+45.6
%
 
$
973.8

 
$
798.2

 
+22.0
%
Adjusted EBITDA margin(1)
 
5.3
%
 
4.2
%
 
+1.1
 pts
 
8.5
%
 
7.3
%
 
+1.2
 pts
(1)     Reconciliations for non-U.S. GAAP measures are provided in subsequent sections within this release.
(2)     Comparisons include Tulip from 10/15/19 forward.


“While overall global market conditions including U.S. commodity chicken improved during 2019, our team members have continued to deliver on our strategy, achieving a significant increase in relative performance compared to last year and to our industry competition. Our diverse global footprint has contributed to well-balanced and more consistent results against different specific market conditions. We maintain our approach to the successful Key Customer strategy, which is the basis for our strong growth. While our product portfolio is already differentiated, we are investing to further innovate, and increase our capacities and capabilities to meet customer demand. We expect value added, specialty products to account for a meaningfully larger portion of our total results over the next few years as we continue to de-emphasize the mix of more volatile commodity sales and strengthen our margin profile,” stated Jayson Penn, Chief Executive Officer of Pilgrim's.

“In Q4, our operating performance in the U.S. has continued to improve, driven by our partnership with Key customers and the relentless focus on executing and delivering the best results possible despite changes in market conditions. Within our case-ready and small bird businesses, strong demand, especially from QSR customers, has continued to outstrip supply. The commodity sector has continued to be challenging but we experienced improved market conditions compared to 2018. Our U.S. Prepared Foods continues to evolve, reflecting the investments made over the last few years.”

“Weak macro conditions during Q4 in Mexico contributed to uncertainties in consumer spending and demand, especially in traditional markets. Although volume growth was solid, prices were below seasonal expectations. Despite the difficult market environment in Q4, our Mexican business has continued to perform well operationally versus the industry, and was able to generate an improvement in results during fiscal 2019 compared to 2018.”

“Our legacy European operations once again produced continuing improvement in results driven by increased operational efficiencies, investments in automation, focus on higher yields, and better mitigation of input costs. Joining our global team during the quarter, the newly acquired operations are off to a strong start and already generating positive EBITDA. The solid performance was driven by strong pork exports and good domestic demand, as well as from the initial implementations of operational improvements.”

Conference Call Information

A conference call to discuss Pilgrim’s quarterly results will be held tomorrow, February 21, 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/ppc200221.html


2



You may also reach the pre-registration link by logging in through the investor section of our website at www.pilgrims.com and clicking on the link under “Upcoming Events.”

For those who would like to join the call but have not pre-registered, access is available by dialing +1 (844) 883-3889 within the US, or +1 (412) 317-9245 internationally, and requesting the “Pilgrim’s Pride Conference.” Please note that to submit a question to management during the call, you must be logged in via telephone.

Replays of the conference call will be available on Pilgrim’s website approximately two hours after the call concludes and can be accessed through the “Investor” section of www.pilgrims.com. The webcast will be available for replay through May 21, 2020.

About Pilgrim’s Pride

Pilgrim’s employs approximately 58,500 people and operates protein processing plants and prepared-foods facilities in 14 states, Puerto Rico, Mexico, the U.K, 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
 
Investor Relations
 
IRPPC@pilgrims.com
 
(970) 506-8192
 
www.pilgrims.com


4



PILGRIM’S PRIDE CORPORATION
CONSOLIDATED BALANCE SHEETS
 
 
 
December 29, 2019
 
December 30, 2018
 
 
(In thousands, except share and par value data)
Cash and cash equivalents
 
$
260,568

 
$
338,386

Restricted cash and cash equivalents
 
20,009

 
23,192

Trade accounts and other receivables, less allowance for doubtful accounts
 
741,281

 
561,549

Accounts receivable from related parties
 
944

 
1,331

Inventories
 
1,383,535

 
1,159,519

Income taxes receivable
 
60,204

 
38,479

Prepaid expenses and other current assets
 
131,695

 
112,201

Total current assets
 
2,598,236

 
2,234,657

Deferred tax assets
 
4,426

 
4,248

Operating lease assets, net
 
301,513

 

Other long-lived assets
 
36,325

 
16,717

Identified intangible assets, net
 
596,053

 
564,128

Goodwill
 
973,750

 
949,750

Property, plant and equipment, net
 
2,592,061

 
2,161,702

Total assets
 
$
7,102,364

 
$
5,931,202

 
 
 
 
 
Accounts payable
 
$
993,780

 
$
827,825

Accounts payable to related parties
 
3,819

 
7,269

Revenue contract liability
 
41,770

 
33,328

Accrued expenses and other current liabilities
 
575,319

 
389,175

Income taxes payable
 
7,075

 
8,221

Current maturities of long-term debt
 
26,392

 
30,405

Total current liabilities
 
1,648,155

 
1,296,223

Long-term debt, less current maturities
 
2,276,029

 
2,295,190

Noncurrent operating lease liability, less current maturities
 
235,382

 

Noncurrent income taxes payable
 
7,731

 
7,731

Deferred tax liabilities
 
301,907

 
237,422

Other long-term liabilities
 
97,100

 
75,051

Total liabilities
 
4,566,304

 
3,911,617

Common stock, $.01 par value, 800,000,000 shares authorized;
261,119,064 and 260,396,032 shares issued at year-end 2019 and
year-end 2018, respectively; 249,572,119 and 248,965,081 shares
outstanding at year-end 2019 and year-end 2018, respectively
 
2,611

 
2,604

Treasury stock, at cost, 11,546,945 shares and 11,430,951 shares
at year-end 2019 and year-end 2018, respectively
 
(234,892
)
 
(231,994
)
Additional paid-in capital
 
1,955,261

 
1,945,136

Retained earnings
 
877,812

 
421,888

Accumulated other comprehensive loss
 
(75,129
)
 
(127,834
)
Total Pilgrim’s Pride Corporation stockholders’ equity
 
2,525,663

 
2,009,800

Noncontrolling interest
 
10,397

 
9,785

Total stockholders’ equity
 
2,536,060

 
2,019,585

Total liabilities and stockholders' equity
 
$
7,102,364

 
$
5,931,202


5




PILGRIM’S PRIDE CORPORATION
CONSOLIDATED AND COMBINED STATEMENTS OF INCOME
(Unaudited)
 
 
 
Thirteen Weeks Ended
 
Fifty-Two Weeks Ended
 
 
December 29, 2019
 
December 30, 2018
 
December 29, 2019
 
December 30, 2018
 
 
(In thousands, except per share data)
Net sales
 
$
3,063,489

 
$
2,656,789

 
$
11,409,219

 
$
10,937,784

Cost of sales
 
2,862,094

 
2,544,941

 
10,338,825

 
10,094,308

Gross profit
 
201,395

 
111,848

 
1,070,394

 
843,476

Selling, general and administrative expense
 
115,597

 
85,629

 
379,910

 
343,025

Administrative restructuring activities
 
6

 
2,584

 
(84
)
 
4,765

Operating income
 
85,792

 
23,635

 
690,568

 
495,686

Interest expense, net of capitalized interest
 
33,446

 
36,911

 
132,630

 
162,812

Interest income
 
(2,796
)
 
(3,146
)
 
(14,277
)
 
(13,811
)
Foreign currency transaction loss (gain)
 
(1,006
)
 
19,962

 
6,917

 
17,160

Gain on bargain purchase
 
(56,880
)
 

 
(56,880
)
 

Miscellaneous, net
 
2,112

 
(921
)
 
4,633

 
(2,702
)
Income before income taxes
 
110,916

 
(29,171
)
 
617,545

 
332,227

Income tax expense (benefit)
 
18,681

 
(20,944
)
 
161,009

 
85,423

Net income
 
92,235

 
(8,227
)
 
456,536

 
246,804

Less: Net income (loss) attributable to noncontrolling
interests
 
155

 
(903
)
 
612

 
(1,141
)
Net income (loss) attributable to Pilgrim’s Pride
Corporation
 
$
92,080

 
$
(7,324
)
 
$
455,924

 
$
247,945

 
 
 
 
 
 
 
 
 
Weighted average shares of common stock outstanding:
 
 
 
 
 
 
 
 
Basic
 
249,571

 
248,980

 
249,401

 
248,945

Effect of dilutive common stock equivalents
 
278

 
386

 
308

 
204

Diluted
 
249,849

 
249,366

 
249,709

 
249,149

 
 
 
 
 
 
 
 
 
Net income attributable to Pilgrim's Pride
Corporation per share of common stock
outstanding:
 
 
 
 
 
 
 
 
Basic
 
$
0.37

 
$
(0.03
)
 
$
1.83

 
$
1.00

Diluted
 
$
0.37

 
$
(0.03
)
 
$
1.83

 
$
1.00



6



PILGRIM’S PRIDE CORPORATION
CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
 
 
 
 
Fifty-Two Weeks Ended
 
 
December 29, 2019
 
December 30, 2018
 
 
(In thousands)
Cash flows from operating activities:
 
 
 
 
Net income
 
$
456,536

 
$
246,804

Adjustments to reconcile net income to cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
287,230

 
274,088

Asset impairment
 

 
3,504

Gain on bargain purchase
 
(56,880
)
 

Foreign currency transaction losses (gains) related to borrowing arrangements
 
(4,970
)
 
5,267

Loss on early extinguishment of debt recognized as a component of interest expense
 

 
15,818

Amortization of bond premium
 
(668
)
 
(668
)
Accretion of bond discount
 
982

 
812

Gain on property disposals
 
(10,896
)
 
(1,889
)
Gain on equity method investments
 
(63
)
 
(63
)
Share-based compensation
 
10,132

 
13,153

Deferred income tax expense
 
42,478

 
32,540

Changes in operating assets and liabilities:
 
 
 
 
Trade accounts and other receivables
 
(25,000
)
 
(10,918
)
Inventories
 
(111,748
)
 
83,174

Prepaid expenses and other current assets
 
(15,490
)
 
(11,612
)
Accounts payable and accrued expenses
 
119,892

 
86,834

Income taxes
 
(26,378
)
 
(248,470
)
Long-term pension and other postretirement obligations
 
(9,221
)
 
(6,751
)
Other
 
5,764

 
4,458

Cash provided by operating activities
 
666,521

 
491,650

Cash flows from investing activities:
 
 
 
 
Acquisitions of property, plant and equipment
 
(348,120
)
 
(348,666
)
Purchase of acquired business, net of cash acquired
 
(384,694
)
 

Proceeds from property disposals
 
15,753

 
9,775

Cash used in investing activities
 
(717,061
)
 
(338,891
)
Cash flows from financing activities:
 
 
 
 
Proceeds from revolving line of credit and long-term borrowings
 
259,466

 
748,382

Payments on revolving line of credit, long-term borrowings and capital lease obligations
 
(289,917
)
 
(1,117,009
)
Proceeds (distribution) from equity contribution under the Tax Sharing Agreement between
JBS USA Food Company Holdings and Pilgrim's Pride Corporation
 
(525
)
 
5,558

Payment on early extinguishment of debt
 

 
(9,781
)
Capital contributions to subsidiary by noncontrolling stockholders
 

 
1,421

Payment of capitalized loan costs
 
(652
)
 
(12,581
)
Purchase of common stock under share repurchase program
 
(2,898
)
 
(236
)
Cash used in financing activities
 
(34,526
)
 
(384,246
)
Effect of exchange rate changes on cash and cash equivalents
 
4,065

 
3,534

Decrease in cash and cash equivalents
 
(81,001
)
 
(227,953
)
Cash and cash equivalents, beginning of period
 
361,578

 
589,531

Cash and cash equivalents, end of period
 
$
280,577

 
$
361,578

Supplemental Disclosure Information:
 
 
 
 
Interest paid (net of amount capitalized)
 
$
130,882

 
$
154,627

Income taxes paid
 
125,856

 
253,932


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: (1) income (loss) attributable to noncontrolling interests, (2) charges or income from restructuring activities, (3) reorganization items, (4) losses on early extinguishment of debt and (5) 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 U.S. (“U.S. 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 U.S. 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 U.S. 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 U.S. GAAP.

PILGRIM'S PRIDE CORPORATION
Reconciliation of Adjusted EBITDA
 
 
 
 
 
(Unaudited)
 
Thirteen Weeks Ended
 
Fifty-Two Weeks Ended
 
 
December 29, 2019
 
December 30, 2018
 
December 29, 2019
 
December 30, 2018
 
 
(In thousands)
Net income (loss)
 
$
92,235

 
$
(8,227
)
 
$
456,536

 
$
246,804

Add:
 
 
 
 
 
 
 
 
Interest expense, net
 
30,650

 
33,765

 
118,353

 
149,001

Income tax expense (benefit)
 
18,681

 
(20,944
)
 
161,009

 
85,423

Depreciation and amortization
 
76,849

 
66,975

 
287,230

 
274,088

EBITDA
 
218,415

 
71,569

 
1,023,128

 
755,316

Add:
 
 
 
 
 
 
 
 
Foreign currency transaction loss (gain)
 
(1,006
)
 
19,962

 
6,917

 
17,160

Transaction costs related to acquisitions
 
1,239

 

 
1,302

 
320

Restructuring activities loss (gain)
 
6

 
2,584

 
(84
)
 
4,765

Other nonrecurring losses
 

 
16,023

 

 
19,485

Minus:
 
 
 
 
 
 
 
 
Gain on bargain purchase
 
56,880

 

 
56,880

 

Net income (loss) attributable to noncontrolling interest
 
155

 
(903
)
 
612

 
(1,141
)
Adjusted EBITDA
 
$
161,619

 
$
111,041

 
$
973,771

 
$
798,187



8



The summary unaudited consolidated income statement data for the twelve months ended December 29, 2019 (the LTM Period) have been calculated by summing each of the unaudited thirteen week periods within the audited fifty-two week period ended December 29, 2019.

PILGRIM'S PRIDE CORPORATION
Reconciliation of LTM Adjusted EBITDA
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
 
Thirteen Weeks Ended
 
LTM Ended December 29, 2019
 
 
March 31,
2019
 
June 30,
2019
 
September 29,
2019
 
December 29, 2019
 
 
(In thousands)
Net income
 
$
84,125

 
$
170,080

 
$
110,096

 
$
92,235

 
$
456,536

Add:
 
 
 
 
 
 
 
 
 
 
Interest expense, net
 
30,222

 
30,150

 
27,330

 
30,650

 
118,352

Income tax expense
 
20,416

 
75,547

 
46,365

 
18,681

 
161,009

Depreciation and amortization
 
67,182

 
71,348

 
71,851

 
76,849

 
287,230

EBITDA
 
201,945

 
347,125

 
255,642

 
218,415

 
1,023,127

Add:
 
 
 
 
 
 
 
 
 
 
Foreign currency transaction loss (gain)
 
2,636

 
2,260

 
3,027

 
(1,006
)
 
6,917

Transaction costs related to acquisitions
 

 

 
63

 
1,239

 
1,302

Restructuring activities loss (gain)
 
(27
)
 
(43
)
 
(20
)
 
6

 
(84
)
Minus:
 
 
 
 
 
 
 
 
 
 
Gain on bargain purchase
 

 

 

 
56,880

 
56,880

Net income attributable to noncontrolling
interest
 
114

 
12

 
331

 
155

 
612

Adjusted EBITDA
 
$
204,440

 
$
349,330

 
$
258,381

 
$
161,619

 
$
973,770



9



PILGRIM'S PRIDE CORPORATION
Reconciliation of EBITDA Margin
 
(Unaudited)
 
Thirteen Weeks Ended
 
Fifty-Two Weeks Ended
 
Thirteen Weeks Ended
 
Fifty-Two Weeks Ended
 
 
Dec 29, 2019
 
Dec 30, 2018
 
Dec 29, 2019
 
Dec 30, 2018
 
Dec 29, 2019
 
Dec 30, 2018
 
Dec 29, 2019
 
Dec 30, 2018
 
(In thousands, except percent of net sales)
Net income (loss)
 
$
92,235

 
$
(8,227
)
 
$
456,536

 
$
246,804

 
3.01
 %
 
(0.31
)%
 
4.00
 %
 
2.26
 %
Add:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense, net
 
30,650

 
33,765

 
118,353

 
149,001

 
1.00
 %
 
1.27
 %
 
1.04
 %
 
1.36
 %
Income tax expense (benefit)
 
18,681

 
(20,944
)
 
161,009

 
85,423

 
0.61
 %
 
(0.79
)%
 
1.41
 %
 
0.78
 %
Depreciation and amortization
 
76,849

 
66,975

 
287,230

 
274,088

 
2.51
 %
 
2.52
 %
 
2.52
 %
 
2.51
 %
EBITDA
 
218,415

 
71,569

 
1,023,128

 
755,316

 
7.13
 %
 
2.69
 %
 
8.97
 %
 
6.91
 %
Add:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency transaction
loss (gain)
 
(1,006
)
 
19,962

 
6,917

 
17,160

 
(0.03
)%
 
0.75
 %
 
0.06
 %
 
0.16
 %
Transaction costs related
to acquisitions
 
1,239

 

 
1,302

 
320

 
0.04
 %
 
 %
 
0.01
 %
 
 %
Restructuring activities
loss (gain)
 
6

 
2,584

 
(84
)
 
4,765

 
 %
 
0.10
 %
 
 %
 
0.04
 %
Other nonrecurring losses
 

 
16,023

 

 
19,485

 
 %
 
0.60
 %
 
 %
 
0.18
 %
Minus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gain on bargain purchase
 
56,880

 

 
56,880

 

 
1.86
 %
 
 %
 
0.50
 %
 
 %
Net income (loss) attributable to
noncontrolling interest
 
155

 
(903
)
 
612

 
(1,141
)
 
0.01
 %
 
(0.03
)%
 
0.01
 %
 
(0.01
)%
Adjusted EBITDA
 
$
161,619

 
$
111,041

 
$
973,771

 
$
798,187

 
5.28
 %
 
4.18
 %
 
8.53
 %
 
7.30
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
 
$
3,063,489

 
$
2,656,789

 
$
11,409,219

 
$
10,937,784

 
 
 
 
 
 
 
 


10



A reconciliation of net income (loss) attributable to Pilgrim's Pride Corporation (“Pilgrim's”) per common diluted share to adjusted net income (loss) attributable to Pilgrim's per common diluted share is as follows:
PILGRIM'S PRIDE CORPORATION
Reconciliation of Adjusted Net Income
(Unaudited)
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Fifty-Two Weeks Ended
 
December 29,
2019
 
December 30,
2018
 
December 29,
2019
 
December 30,
2018
 
(In thousands, except per share data)
Net income (loss) attributable to Pilgrim's
$
92,080

 
$
(7,324
)
 
$
455,924

 
$
247,945

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

 

 

 
12,449

     Transaction costs related to acquisitions
and restructuring activities net loss
920

 
1,919

 
900

 
3,778

     Other nonrecurring losses

 
11,903

 

 
14,475

     Foreign currency transaction loss (gain)
(744
)
 
14,829

 
5,113

 
12,748

     Gain on bargain purchase
(56,880
)
 

 
(56,880
)
 

 
$
35,376

 
$
21,327

 
$
405,057

 
$
291,395

U.S. Tax Cuts & Jobs Act transition tax

 

 

 
26,400

Adjusted net income attributable to Pilgrim's
$
35,376

 
$
21,327

 
$
405,057

 
$
317,795

Weighted average diluted shares of common stock
outstanding
249,849

 
249,366

 
249,709

 
249,149

Adjusted net income attributable to Pilgrim's per
common diluted share
$
0.14

 
$
0.09

 
$
1.62

 
$
1.28



11



A reconciliation of U.S. GAAP to non-U.S. GAAP financial measures. Net income (loss) per share is calculated by dividing the net income (loss) attributable to Pilgrim's Pride Corporation stockholders by the weighted average number of diluted shares.
PILGRIM'S PRIDE CORPORATION
Reconciliation of GAAP EPS to Adjusted EPS
(Unaudited)
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Fifty-Two Weeks Ended
 
December 29, 2019
 
December 30, 2018
 
December 29, 2019
 
December 30, 2018
 
(In thousands, except per share data)
U.S. GAAP EPS
$
0.37

 
$
(0.03
)
 
$
1.83

 
$
1.00

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

 

 

 
0.05

     Transaction costs related to acquisitions and restructuring
activities loss (gain)

 
0.01

 

 
0.02

     Other nonrecurring losses

 
0.05

 

 
0.05

     Foreign currency transaction loss (gain)

 
0.06

 
0.02

 
0.05

     Gain on bargain purchase
(0.23
)
 

 
(0.23
)
 

 
0.14

 
0.09

 
1.62

 
1.17

U.S. Tax Cuts & Jobs Act transition tax

 

 

 
0.11

Adjusted EPS
$
0.14

 
$
0.09

 
$
1.62

 
$
1.28

 
 
 
 
 
 
 
 
Weighted average diluted shares of common stock outstanding
249,849

 
249,366

 
249,709

 
249,149



12



PILGRIM'S PRIDE CORPORATION
Supplementary Geographic Data
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Fifty-Two Weeks Ended
 
 
December 29, 2019
 
December 30, 2018
 
December 29, 2019
 
December 30, 2018
 
 
(In thousands)
Sources of net sales by geographic region of origin:
 
 
 
 
 
 
 
 
U.S.
 
$
1,904,515

 
$
1,820,952

 
$
7,636,716

 
$
7,425,661

Europe
 
815,397

 
514,541

 
2,383,793

 
2,148,666

Mexico
 
343,577

 
321,296

 
1,388,710

 
1,363,457

Total net sales
 
$
3,063,489

 
$
2,656,789

 
$
11,409,219

 
$
10,937,784

 
 
 
 
 
 
 
 
 
Sources of cost of sales by geographic region of origin:
 
 
 
 
 
 
 
 
U.S.
 
$
1,779,959

 
$
1,772,730

 
$
6,903,237

 
$
6,909,779

Europe
 
759,788

 
476,844

 
2,212,042

 
1,977,838

Mexico
 
322,371

 
295,465

 
1,223,642

 
1,206,823

Elimination
 
(24
)
 
(98
)
 
(96
)
 
(132
)
Total cost of sales
 
$
2,862,094

 
$
2,544,941

 
$
10,338,825

 
$
10,094,308

 
 
 
 
 
 
 
 
 
Sources of gross profit by geographic region of origin:
 
 
 
 
 
 
 
 
U.S.
 
$
124,556

 
$
48,222

 
$
733,479

 
$
515,882

Europe
 
55,609

 
37,697

 
171,751

 
170,828

Mexico
 
21,206

 
25,831

 
165,068

 
156,634

Elimination
 
24

 
98

 
96

 
132

Total gross profit
 
$
201,395

 
$
111,848

 
$
1,070,394

 
$
843,476

 
 
 
 
 
 
 
 
 
Sources of operating income by geographic region
     of origin:
 
 
 
 
 
 
 
 
U.S.
 
$
60,307

 
$
(9,579
)
 
$
487,275

 
$
291,381

Europe
 
16,949

 
15,979

 
79,182

 
84,524

Mexico
 
8,512

 
17,137

 
124,015

 
119,649

Elimination
 
24

 
98

 
96

 
132

Total operating income
 
$
85,792

 
$
23,635

 
$
690,568

 
$
495,686




13