Pilgrim's Pride Reports an Increase in Year Over Year Net Income of 175% for the Second Quarter GREELEY, Colo., July 31, 2013 (GLOBE NEWSWIRE) -- Pilgrim's Pride Corporation (Nasdaq:PPC) reports second quarter 2013 financial results with net sales of $2.2 billion, compared to $2.0 billion reported in the second quarter of 2012. Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA") of $264.6 million compared to the $125.1 million generated in the prior year. Net income of $190.7 million reflected an improvement of 175% compared to the $69.4 million reported in the same period in 2012, with earnings per share reaching $0.74 compared to $0.27 in the second quarter of 2012. "Our second quarter results continue to validate our strategy. Our focus on our key customers and ability to adapt to changing market conditions has helped us gain significant business in strategic channels to improve our sales mix, enabling us to take advantage of strong industry fundamentals. We continue to reap the benefits of operational excellence in areas of yield improvements and plant cost and efficiency gains, all of which contributed to our positive results, while our export and Mexico business continue to operate more favorably," stated Bill Lovette, Pilgrim's Chief Executive Officer. "We're also pleased to announce that we have substantially completed an amendment to our U.S. Credit Facility. With this amendment we will refinance the Revolver and the Term Loan B-1through 2018 with reduced interest costs and more favorable covenants.We view this amendment as further confirmation of the progress we have made in optimizing our capital structure, supported by strong operations and our effective management of working capital, which enabled us to reduce our net debt to $834 million at quarter end, a leverage of 1.5 times our EBITDA of the last twelve months." Conference Call Information A conference call to discuss Pilgrim's quarterly results will be held tomorrow, August 1 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/ppc130801.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 November 1, 2013. About Pilgrim's Pride Pilgrim's Pride Corporation employs approximately 37,500 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 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. PILGRIM'S PRIDE CORPORATION Condensed Consolidated Balance Sheets June 30 December 30 2013 2012 (Unaudited) (In thousands) Cash and cash equivalents $78,231 $68,180 Trade accounts and other receivables, less allowance 390,461 384,930 for doubtful accounts Account receivable from JBS USA, LLC 3,892 1,514 Inventories 952,191 950,296 Income taxes receivable 60,388 54,719 Prepaid expenses and other current assets 71,166 56,047 Assets held for sale 28,830 27,042 Total current assets 1,585,159 1,542,728 Deferred tax assets 97,434 97,431 Other long-lived assets 38,941 45,523 Identified intangible assets, net 35,395 38,266 Property, plant and equipment, net 1,166,985 1,189,921 Total assets $ 2,923,914 $2,913,869 Accounts payable $327,185 $312,365 Account payable to JBS USA, LLC 5,793 13,436 Accrued expenses and other current liabilities 285,075 283,540 Income taxes payable 10,592 468 Current deferred tax liabilities 104,486 104,482 Current maturities of long-term debt 393 15,886 Total current liabilities 733,524 730,177 Long-term debt, less current maturities 911,939 1,148,870 Other long-term liabilities 87,031 125,825 Total liabilities 1,732,494 2,004,872 Common stock 2,590 2,590 Additional paid-in capital 1,643,606 1,642,003 Accumulated deficit (424,424) (669,711) Accumulated other comprehensive loss (32,710) (68,511) Total Pilgrim's Pride Corporation stockholders' 1,189,062 906,371 equity Noncontrolling interest 2,358 2,626 Total stockholders' equity 1,191,420 908,997 Total liabilities and stockholders' equity $ 2,923,914 $2,913,869 PILGRIM'S PRIDE CORPORATION Condensed Consolidated Statements of Operations (Unaudited) Thirteen Weeks Ended Twenty-Six Weeks Ended June 30 June 24 June 30 June 24 2013 2012 2013 2012 (In thousands, except per (In thousands, except per share data) share data) Net sales $2,184,119 $1,974,469 $4,221,048 $3,863,242 Costs and expenses: Cost of sales 1,901,611 1,830,380 3,820,106 3,609,088 Gross profit 282,508 144,089 400,942 254,154 Selling, general and 44,099 44,439 88,091 89,695 administrative expense Administrative 480 389 964 3,274 restructuring charges, net Operating income 237,929 99,261 311,887 161,185 Interest expense 22,965 24,925 47,786 53,170 Interest income (707) (356) (923) (630) Foreign currency 9,713 8,212 2,089 2,284 transaction losses, net Miscellaneous, net (717) (315) (722) (685) Income before income taxes 206,675 66,795 263,657 107,046 Income tax expense 15,884 (2,358) 18,638 (1,705) (benefit) Net income 190,791 69,153 245,019 108,751 Less:Net income (loss) attributable to 86 (205) (268) 220 noncontrolling interests Net income attributable to Pilgrim's Pride $190,705 $69,358 $245,287 $108,531 Corporation Weighted average shares of common stock outstanding: Basic 258,826 258,726 258,825 241,144 Diluted 259,158 258,841 259,055 241,236 Net income per share of common stock outstanding: Basic $0.74 $0.27 $0.95 $0.45 Diluted $0.74 $0.27 $0.95 $0.45 PILGRIM'S PRIDE CORPORATION Condensed Consolidated Statements of Cash Flows Twenty-Six Weeks Ended June 30 June 24 2013 2012 (In thousands) Cash flows from operating activities: Net income $245,019 $ 108,751 Adjustments to reconcile net income attributable to Pilgrim's Pride Corporation to cash provided by operating activities: Depreciation and amortization 75,939 71,980 Foreign currency transaction losses (gains) 1,338 1,948 Accretion of bond discount 228 228 Asset impairment -- 1,342 (Gain) loss on property disposals (824) 628 Share-based compensation 1,603 299 Changes in operating assets and liabilities: Restricted cash and cash equivalents -- 8,013 Trade accounts and other receivables (7,654) (2,123) Inventories (579) (109,638) Prepaid expenses and other current assets (15,114) 8,763 Accounts payable and accrued expenses and other 7,097 7,403 current liabilities Income taxes 4,687 (14,698) Deposits 480 160 Long-term pension and other postretirement (2,149) -- obligations Other operating assets and liabilities 856 (2,734) Cash provided by operating activities 310,927 80,322 Cash flows from investing activities: Acquisitions of property, plant and equipment (48,969) (37,561) Purchases of investment securities -- (162) Proceeds from sale or maturity of investment -- 58 securities Proceeds from property sales and disposals 2,883 12,461 Cash used in investing activities (46,086) (25,204) Cash flows from financing activities: Proceeds from revolving line of credit 505,600 391,300 Payments on revolving line of credit, long-term (758,251) (584,904) borrowings and capital lease obligations Payment of note payable to JBS USA -- (50,000) Proceeds from sale of common stock -- 198,282 Cash used in financing activities (252,651) (45,322) Effect of exchange rate changes on cash and cash (2,139) (2,178) equivalents Increase in cash and cash equivalents 10,051 7,618 Cash and cash equivalents, beginning of period 68,180 41,609 Cash and cash equivalents, end of period 78,231 49,227 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 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 Twenty-Six Weeks Ended June 30 June 24 June 30 June 24 2013 2012 2013 2012 (In thousands) (In thousands) Net income from continuing $190,791 $69,153 $245,019 $108,751 operations Add: Income tax expense (benefit) 15,884 (2,358) 18,638 (1,705) Interest expense, net 22,258 24,569 46,863 52,540 Depreciation and amortization 38,149 36,214 75,939 71,980 Minus: Amortization of capitalized loan 2,518 2,469 5,034 4,937 costs EBITDA 264,564 125,109 381,425 226,629 Add: Restructuring charges 480 389 964 3,274 Minus: Net income (loss) attributable to noncontrolling 86 (205) (268) 220 interest Adjusted EBITDA $264,958 $125,703 $382,657 $229,683 Net debt is defined as total long term debt, less current maturities, plus current maturities of long term debt minus cash and cash equivalents. Net debt is presented because it is used by us, and we believe it is frequently used by securities analysts, investors and other parties, in addition to and not in lieu of debt as presented under GAAP, to compare the indebtedness of companies. A reconciliation of net debt is as follows: PILGRIM'S PRIDE CORPORATION Reconciliation of Net Debt Period Ended 2011 2012 June 24, 2012 June 30, 2013 (in Thousands) Long term debt, less 1,458,001 1,148,870 1,214,619 911,939 current maturities Add: Current maturities of long 15,611 15,886 15,617 393 term debt Minus: Cash and cash 41,609 68,180 49,227 78,231 equivalents Net debt 1,432,003 1,096,576 1,181,009 834,101 PILGRIM'S PRIDE CORPORATION Supplementary Selected Segment and Geographic Data Thirteen Weeks Ended Twenty-Six Weeks Ended June 30 June 24 June 30 June 24 2013 2012 2013 2012 (In thousands) (In thousands) Net sales to customers by country of origin: US: $1,921,872 $ 1,776,740 $3,730,358 $ 3,461,344 Mexico: 262,247 197,729 490,690 401,898 Total net sales: $2,184,119 $ 1,974,469 $4,221,048 $ 3,863,242 Cost of sales by country of origin: US: $1,707,256 $ 1,650,885 $3,437,092 $ 3,251,154 Mexico: 194,355 179,495 383,014 357,934 Total cost of sales: $1,901,611 $ 1,830,380 $3,820,106 $ 3,609,088 Components of gross profit US: $214,616 $125,855 $293,266 $210,190 Mexico: 67,892 18,234 107,676 43,964 Total gross profit: $282,508 $144,089 $400,942 $254,154 CONTACT: Rosemary Geelan Pilgrim's Pride Corp Investor Relations Rosemary.email@example.com (970) 506-8192 www.pilgrims.com
Pilgrim's Pride Reports an Increase in Year Over Year Net Income of 175% for the Second Quarter
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