PILGRIMS PRIDE CORP - FORM 8-K - EX-99.1 - PRESS RELEASE DATED OCTOBER 26, 2012 - October 26, 2012

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Pilgrim's Pride Reports Results for Third Quarter of Fiscal 2012
GREELEY, Colo., October 26, 2012 - Pilgrim's Pride Corporation (NYSE: PPC) reported its third quarter 2012 results with net sales of $2.1 billion and Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) of $103 million. The Company recognized net income of $42.9 million during the third quarter of 2012, resulting in net income of $0.17 per diluted share. This compares to a net loss of $162.5 million, or an adjusted loss of $0.72 per diluted share in the same quarter of the prior year. Net debt was reduced to $1.1 billion in the period, reflecting a year-to-date reduction in net debt of $317.1 million.
“Our execution of the strategy implemented during the past 18 months has provided for vast improvement in our results, even in an uncertain and volatile environment,” explained Bill Lovette, Pilgrim's Chief Executive Officer.
“Notwithstanding a year-over-year increase of $109 million in feed costs, the positive change in our net income for the first three quarters of 2012 is a swing of $672 million compared to 2011, owing to cost and yield improvements, pricing strategy changes, enhanced sales mix and a reduction of $24.6 million in SG&A costs.”
“Even with rapidly increasing input costs impacting our live inventories, we demonstrated effective management of working capital that resulted in positive cash flows. This, together with our successful rights offering and focus on managing our core business, delivered a year-to-date reduction in net debt of $317.1 million, and culminated in a solid liquidity position of $671.5 million, with our lowest net debt position in over five years.”
Conference Call Information
A conference call to discuss Pilgrim's quarterly results will be held today at 7:00 a.m. Mountain (9 a.m. Eastern). 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:
http://services.choruscall.com/links/ppc121026.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.”

For those who would like to join the call but have not pre-registered, access is available by dialing +1 (877) 270-2148 within the US or +1 (412) 902-6510 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 January 26, 2013.

About Pilgrim's Pride

Pilgrim's employs approximately 38,000 people and operates chicken processing plants and prepared-foods facilities in 12 states, Puerto Rico and Mexico. The Company's primary distribution is through retailers and foodservice distributors.



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 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; 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 exports into Russia, the anti-dumping proceeding in Ukraine and the anti-dumping and countervailing duty proceeding in China; 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.


Contact:    Rosemary Geelan, Investor Relations
Pilgrim's Pride Corporation
Rosemary.geelan@pilgrims.com
(970) 506-8192


 







PILGRIM'S PRIDE CORPORATION
Consolidated Statements of Operations
(Unaudited)


 
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
 
September 23,
 
September 25,
 
September 23,
 
September 25,
 
 
2012
 
2011
 
2012
 
2011
 
 
(In thousands)
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
 
Net sales
$
2,068,478

 
$
1,891,224

 
$
5,931,720

 
$
5,706,390

 
Costs and expenses:
 
 
 
 
 
 
 
 
   Cost of sales
1,962,343

 
1,953,611

 
5,571,431

 
5,864,810

 
   Operational restructuring charges
—

 
—

 
—

 
3,305

 
 
 
 
 
 
 
 
 
 
Gross profit (loss)
106,135

 
(62,387
)
 
360,289

 
(161,725
)
 
 
 
 
 
 
 
 
 
 
Selling, general and administrative expense
41,782

 
51,197

 
131,477

 
156,073

 
Administrative restructuring charges, net
2,647

 
11,472

 
5,921

 
12,740

 
 
 
 
 
 
 
 
 
 
Operating income (loss)
61,706

 
(125,056
)
 
222,891

 
(330,538
)
 
 
 
 
 
 
 
 
 
 
Interest expense
25,260

 
27,930

 
78,430

 
82,863

 
Interest income
(256
)
 
(323
)
 
(886
)
 
(1,311
)
 
Foreign currency transaction losses (gains)
(7,701
)
 
13,925

 
(5,417
)
 
11,235

 
Miscellaneous, net
413

 
(3,728
)
 
(272
)
 
(6,236
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes
43,990

 
(162,860
)
 
151,036

 
(417,089
)
 
Income tax expense (benefit)
1,049

 
(60
)
 
(656
)
 
(6,462
)
 
 
 
 
 
 
 
 
 
 
Net income (loss)
42,941

 
(162,800
)
 
151,692

 
(410,627
)
 
Less: Net income (loss) attributable to
   noncontrolling interests
10

 
(284
)
 
230

 
790

 
 
 
 
 
 
 
 
 
 
Net income (loss) attributable to
   Pilgrim’s Pride Corporation
$
42,931

 
$
(162,516
)
 
$
151,462

 
$
(411,417
)
 
 
 
 
 
 
 
 
 
 
Weighted average shares of common stock
   outstanding:
 
 
 
 
 
 
 
 
Basic
258,726

 
224,996

 
247,005

 
224,996

 
Diluted
258,837

 
224,996

 
247,103

 
224,996

 
 
 
 
 
 
 
 
 
 
Net income (loss) per share of common stock
   outstanding:
 
 
 
 
 
 
 
 
Basic
$
0.17

 
$
(0.72
)
 
$
0.61

 
$
(1.83
)
 
Diluted
$
0.17

 
$
(0.72
)
 
$
0.61

 
$
(1.83
)
 
 
 
 
 
 
 
 
 
 









PILGRIM’S PRIDE CORPORATION
Consolidated Balance Sheets

 
 
 
 
 
 
 
 
September 23
 
December 25,
 
 
 
2012
 
2011
 
 
 
(Unaudited)
 
 
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
55,030

 
$
41,609

 
Restricted cash and cash equivalents
 
4,526

 
7,680

 
Investment in available-for-sale securities
 
—

 
157

 
Trade accounts and other receivables, less allowance
   for doubtful accounts
 
367,854

 
349,222

 
Account receivable from JBS USA, LLC
 
8,170

 
21,198

 
Inventories
 
979,243

 
879,094

 
Income taxes receivable
 
64,944

 
59,067

 
Prepaid expenses and other current assets
 
54,884

 
52,350

 
Assets held for sale
 
28,826

 
53,816

 
 
 
 
 
 
 
Total current assets
 
1,563,477

 
1,464,193

 
 
 
 
 
 
 
Investment in available-for-sale securities
 
—

 
497

 
Deferred tax assets
 
71,099

 
71,099

 
Other long-lived assets
 
48,931

 
57,921

 
Identified intangible assets, net
 
39,803

 
44,083

 
Property, plant and equipment, net
 
1,196,964

 
1,241,752

 
 
 
 
 
 
 
Total assets
 
$
2,920,274

 
$
2,879,545

 
 
 
 
 
 
 
Accounts payable
 
$
320,004

 
$
328,864

 
Account payable to JBS USA, LLC
 
6,280

 
11,653

 
Accrued expenses and other current liabilities
 
310,463

 
281,797

 
Current deferred tax liabilities
 
79,319

 
79,248

 
Current maturities of long-term debt
 
15,619

 
15,611

 
 
 
 
 
 
 
Total current liabilities
 
731,685

 
717,173

 
 
 
 
 
 
 
Long-term debt, less current maturities
 
1,151,127

 
1,408,001

 
Note payable to JBS USA Holdings, Inc.
 
—

 
50,000

 
Other long-term liabilities
 
144,746

 
145,941

 
 
 
 
 
 
 
Total liabilities
 
2,027,558

 
2,321,115

 
 
 
 
 
 
 
Common stock
 
2,590

 
2,143

 
Additional paid-in capital
 
1,641,783

 
1,443,484

 
Accumulated deficit
 
(692,483
)
 
(843,945
)
 
Accumulated other comprehensive loss
 
(62,222
)
 
(46,070
)
 
 
 
 
 
 
 
Total Pilgrim’s Pride Corporation stockholders’ equity
 
889,668

 
555,612

 
 
 
 
 
 
 
Noncontrolling interest
 
3,048

 
2,818

 
 
 
 
 
 
 
Total stockholders’ equity
 
892,716

 
558,430

 
 
 
 
 
 
 
Total liabilities and stockholders' equity
 
$
2,920,274

 
$
2,879,545

 





PILGRIM’S PRIDE CORPORATION
SELECTED FINANCIAL INFORMATION
(UNAUDITED)

NOTE: “EBITDA” is defined as the sum of income (loss) from continuing operations plus interest, taxes, depreciation and amortization. “Adjusted EBITDA” is defined as the sum of EBITDA plus restructuring charges, reorganization items and loss on early extinguishment of debt less net income attributable to noncontrolling interests. 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 from continuing operations. 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.

 
Thirteen Weeks Ended
 
Thirty-Nine Weeks Ended
 
 
September 23,
 
September 25,
 
September 23,
 
September 25,
 
 
2012
 
2011
 
2012
 
2011
 
 
(In thousands)
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss) from continuing operations
$
42,941

 
$
(162,800
)
 
$
151,692

 
$
(410,627
)
 
 
 
 
 
 
 
 
 
 
Add:
 
 
 
 
 
 
 
 
Income tax expense (benefit)
1,049

 
(60
)
 
(656
)
 
(6,462
)
 
Interest expense, net
25,004

 
27,607

 
77,544

 
81,552

 
Depreciation and amortization
36,431

 
53,631

 
108,408

 
159,425

 
Minus:
 
 
 
 
 
 
 
 
Amortization of capitalized loan costs
2,469

 
2,515

 
7,405

 
7,008

 
 
 
 
 
 
 
 
 
 
EBITDA
102,956

 
(84,137
)
 
329,583

 
(183,120
)
 
 
 
 
 
 
 
 
 
 
Add:
 
 
 
 
 
 
 
 
Restructuring charges
2,647

 
11,472

 
5,921

 
12,740

 
Minus:
 
 
 
 
 
 
 
 
Net income (loss) attributable to noncontrolling interest
10

 
(284
)
 
230

 
790

 
Adjusted EBITDA
$
105,593

 
$
(72,381
)
 
$
335,274

 
$
(171,170
)
 
 
 
 
 
 
 
 
 
 


PILGRIMS PRIDE CORP Reports