Pilgrim's Pride Corporation Reports Financial Results for Third Quarter of Fiscal 2006
PITTSBURG, Texas, Aug. 1 /PRNewswire-FirstCall/ -- Pilgrim's Pride Corporation (NYSE: PPC) today reported a net loss of $20.5 million, or $0.31 per share, on total sales of $1.29 billion for the third quarter ended July 1, 2006. For the third quarter of fiscal 2005, the Company reported net earnings of $85.4 million, or $1.28 per share, on total sales of $1.44 billion.
"Despite recent upward trends in pricing for breast meat and leg quarters, our third-quarter results continued to reflect the challenging protein environment seen in the first half of the fiscal year," said O.B. Goolsby, Jr., Pilgrim's Pride president and chief executive officer. "Our net loss for the third quarter of 2006 was largely due to weak pricing caused by the lingering effects of lower export demand and higher inventory levels last winter and in the early spring. We are hopeful that the recent increases in leg quarter and breast meat prices will continue as international demand for U.S. chicken products improves and the full effect of the recently announced industry production cutbacks are realized in the marketplace."
For the full third quarter, pricing for leg quarters and breast meat increased 118.8% and 36.2%, respectively, when compared to the second quarter, but were an average of 34.2% and 16.6% lower than the year-ago period.
In the third quarter, Pilgrim's Pride initiated a multi-point plan designed to improve the Company's competitive position. This plan included production cuts, which had been fully implemented by the end of July, as well as a reduction in capital investment and a sharpened focus on cost reductions and improved efficiencies.
"We are pleased with the progress we have achieved on our strategic plan. Operating efficiently has never been more important than it is in the current industry environment. We believe the combination of stronger domestic and export selling prices, resumption of demand for our products in the export markets, and improved operating efficiencies should position Pilgrim's Pride for a return to profitability," Goolsby said.
For the nine months ended July 1, 2006, the Company reported a net loss of $26.7 million, or $0.40 per share, on total sales of $3.90 billion. For the first nine months of fiscal 2005, Pilgrim's Pride reported net earnings of $190.3 million, or $2.86 per share, on sales of $4.18 billion.
Conference Call Information
A conference call to discuss the Company's third-quarter results will be held at 10 a.m. CDT (11 a.m. EDT) on August 1, 2006. To listen live via telephone, call (800) 391-2548, verbal pass code Pilgrim's Pride or VG495227. The call will also be webcast live on the Internet at http://www.videonewswire.com/event.asp?id=34647 . (Please copy and paste the link into the browser).
Additionally, the Company has posted a slide presentation on its website at http://www.pilgrimspride.com , which may be viewed by listeners in connection with today's conference call. The webcast will be available for replay within two hours of the conclusion of the call. A telephone replay will be available beginning at 2:00 p.m. CDT on August 1 through August 8, 2006, at (800) 355-2355 pass code 495227#.
Pilgrim's Pride Corporation is the second-largest chicken producer in the United States and Mexico and the largest chicken producer in Puerto Rico. Pilgrim's Pride employs approximately 40,000 people and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah.
Pilgrim's Pride products are sold to foodservice, retail and frozen entree customers. The Company's primary distribution is through retailers, foodservice distributors and restaurants throughout the United States and Puerto Rico and in the Northern and Central regions of Mexico. For more information, please visit http://www.pilgrimspride.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, including as to changes in pricing, demand and market conditions for chicken products and profitability, are forward-looking statements. It is important to note that the 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, including fluctuations in the commodity prices of feed ingredients, chicken and turkey; additional outbreaks of avian influenza or other diseases, either in our own flocks or elsewhere, affecting our ability to conduct our operations and/or demand for our poultry products; contamination of our products, which has recently 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; changes in laws or regulations affecting our operations or the application thereof; competitive factors and pricing pressures or the loss of one or more of our largest customers; currency exchange rate fluctuations, trade barriers, exchange controls, expropriation and other risks associated with foreign operations; management of our cash resources, particularly in light of our leverage, and restrictions imposed by and as a result of, our leverage; and the impact of uncertainties of litigation as well as other risks described under "Risk Factors" in our 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.
For further information:
Investor Contact:
Kathy Costner, Vice President
Pilgrim's Pride Corporation
(903) 434-1430
Media Contact:
Gary Rhodes, Vice President
Pilgrim's Pride Corporation
(903) 434-1495
PILGRIM'S PRIDE CORPORATION
Consolidated Statements of Income (Loss)
(Unaudited)
[In thousands, except share and per share data]
Three Months Ended July 1, 2006 July 2, 2005
Net Sales $1,287,646 $1,440,039
Cost of sales 1,244,950 1,220,818
Gross profit 42,696 219,221
Selling, general and administrative 69,433 83,228
Operating income (loss) (26,737) 135,993
Other Expense (Income):
Interest expense 12,736 13,602
Interest income (1,268) (1,280)
Foreign exchange loss (gain) 1,822 (94)
Miscellaneous, net (2,053) 88
Total other expenses, net 11,237 12,316
Income (loss) before income taxes (37,974) 123,677
Income tax (benefit) expense (17,501) 38,324
Net income (loss) $(20,473) $85,353
Net income (loss) per common share
-basic and diluted $(0.31) $1.28
Dividends declared per common share $0.0225 $0.0150
Weighted average shares outstanding 66,555,733 66,555,733
Nine Months Ended July 1, 2006 July 2, 2005
Net Sales $3,897,167 $4,183,607
Cost of sales 3,698,870 3,639,213
Gross profit 198,297 544,394
Selling, general and administrative 216,772 228,431
Operating income (loss) (18,475) 315,963
Other Expense (Income):
Interest expense, net 38,402 37,436
Interest income (8,429) (3,572)
Foreign exchange loss (gain) 1,012 (420)
Miscellaneous, net (1,025) (11,659)
Total other expenses, net 29,960 21,785
Income (loss) before income taxes (48,435) 294,178
Income tax (benefit) expense (21,686) 103,928
Net income (loss) $(26,749) $190,250
Net income (loss) per common share
-basic and diluted $(0.40) $2.86
Dividends declared per common share $1.0675 $0.0450
Weighted average shares outstanding 66,555,733 66,555,733
PILGRIM'S PRIDE CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited)
[In thousands]
July 1, 2006 Oct. 1, 2005
ASSETS
Cash and cash equivalents $44,069 $132,567
Investments in available for sale securities 54,322 ---
Other current assets 894,231 866,848
Total Current Assets 992,622 999,415
Investments in Available for Sale Securities 148,123 304,593
Other Assets 47,139 53,798
Property, Plant and Equipment, net 1,147,687 1,154,097
Total Assets $2,335,571 $2,511,903
LIABILITIES AND STOCKHOLDERS' EQUITY
Current maturities of long-term debt $7,768 $8,603
Other current liabilities 545,998 586,211
Total Current Liabilities 553,766 594,814
Long-Term Debt, Less Current Maturities 484,970 518,863
Deferred Income Taxes 169,970 173,232
Minority Interest in Subsidiary 2,004 1,396
Total Stockholders' Equity 1,124,861 1,223,598
Total Liabilities and Stockholders' Equity $2,335,571 $2,511,903
Selected Financial Information
(Unaudited)
[In thousands]
Note: "EBITDA" is defined as net income before interest, income taxes, and depreciation and amortization. EBITDA is presented because it is used by us and we believe it is frequently used by securities analysts, investors and other interested parties, in addition to and not in lieu of Generally Accepted Accounting Principles (GAAP) results, to compare the performance of companies. EBITDA is not a measurement of financial performance under GAAP and 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.
EBITDA is calculated as follows:
Three Months Ended July 1, 2006 July 2, 2005
Net Income (Loss) $(20,473) $85,353
Add:
Income tax (benefit) expense (17,501) 38,324
Interest expense, net 11,468 12,322
Depreciation and amortization 34,960 30,421
Minus:
Amortization of capitalized financing costs 477 590
EBITDA $7,977 $165,830
Capital expenditures $26,795 $37,994
Nine Months Ended July 1, 2006 July 2, 2005
Net Income (Loss) $(26,749) $190,250
Add:
Income tax (benefit) expense (21,686) 103,928
Interest expense, net 29,973 33,864
Depreciation and amortization 100,052 94,263
Minus:
Amortization of capitalized financing costs 2,034 <!1,740
EBITDA $79,556 $420,565
Capital expenditures $101,314 $90,148
SOURCE Pilgrim's Pride Corporation
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Media Contact
Cameron Bruett
Communications
Phone: +1 970.506.7801 | Email: cameron.bruett@jbssa.com