Pilgrim’s Pride Corporation (NASDAQ: PPC) reports third quarter
2020 financial results.
Third Quarter Highlights
- Net Sales of $3.08 billion.
- Net GAAP Income of $33.4 million. Adjusted Net Income of $161.7
million or adjusted EPS of $0.66 excluding $110.5 million DOJ
agreement.
- Consolidated Operating Income margin of 3% with Adjusted
Operating Income margins of 6.7% in U.S. excluding DOJ agreement,
18.4% in Mexico and 3.5% in Europe.
- Adjusted EBITDA of $305.0 million, or a 9.9% margin, 18% higher
than a year ago.
- Faced with the global Covid-19 pandemic, we continue to be
guided by our principles of an uncompromising commitment to the
safety of our team members, our duty to provide quality food
globally, and our responsibility to provide continued employment
opportunities and benefits for our team. To support the local
communities where we operate, we initiated the “Hometown Strong”
initiative, and are committed to invest $20 million in 2020.
- Strong focus in execution and dedication by our team members,
supported by portfolio strategy of differentiated products, strong
Key Customer relationships, and diversified global presence have
helped us to counter challenging market conditions due to Covid-19
and improve the resiliency in our results.
- Demand in U.S. recovering, with our Retail and QSR business
stronger than a year ago, though volatility and challenging
conditions in commodity segments still remaining. Relative
performance versus the industry continuing to improve, supported by
our agility in adapting mix and Key Customer approach.
- Mexico experienced a significant rebound to record one of the
strongest Q3 in its history despite unfavorable mix impact and
added operating costs. Strong execution, higher economic
activities, better supply/demand balance, a stronger Peso, and our
increased share of non-commodity products contributed to the
strength.
- The legacy European chicken business continued to improve its
results despite Covid-19 impact, with better operational
efficiencies and a commitment to innovation. Momentum of newly
acquired European pork assets in generating positive EBITDA
continuing, while margins also increasing on a consistent
basis.
- Our liquidity position remains strong, supported by the
relentless emphasis on cash flow generation, focus on working
capital management, and disciplined investments in high-return
projects, preserving the opportunity to maintain strategic growth
priorities while strengthening our differentiated global
platforms.
Unaudited
(2) |
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 27, 2020 |
|
September 29, 2019 |
|
Y/Y Change |
|
September 27, 2020 |
|
September 29, 2019 |
|
Y/Y Change |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In millions, except per share and
percentages) |
Net sales |
|
$ |
3,075.1 |
|
|
$ |
2,778.0 |
|
|
+10.7 |
|
% |
|
$ |
8,974.1 |
|
|
$ |
8,345.7 |
|
|
+7.5 |
|
% |
U.S. GAAP EPS |
|
$ |
0.14 |
|
|
$ |
0.44 |
|
|
(68.2 |
) |
% |
|
$ |
0.38 |
|
|
$ |
1.46 |
|
|
(74.0 |
) |
% |
Operating income |
|
$ |
94.3 |
|
|
$ |
188.2 |
|
|
(49.9 |
) |
% |
|
$ |
206.0 |
|
|
$ |
604.8 |
|
|
(65.9 |
) |
% |
Adjusted EBITDA(1) |
|
$ |
305.0 |
|
|
$ |
258.3 |
|
|
+18.1 |
|
% |
|
$ |
582.7 |
|
|
$ |
812.1 |
|
|
(28.2 |
) |
% |
Adjusted EBITDA margin(1) |
|
9.9 |
% |
|
9.3 |
% |
|
+0.6 pts |
|
|
|
6.5 |
% |
|
9.7 |
% |
|
-3.2 pts |
|
|
(1) Reconciliations for non-U.S. GAAP measures are provided in
subsequent sections within this release.(2) Comparisons include
newly acquired European pork assets (Tulip) from 10/15/19
forward.
“Once again we are grateful to our team for their continued
commitment, dedication and hard work, in supporting our ability to
keep our team members safe and healthy, and allowing us the
capability to maintain production and supply to our customers
during this unprecedented crisis. Although conditions have been
improving, the markets have remained volatile and challenging in Q3
as a result of Covid-19. However, our diversified strategy has
continued to mitigate the tough environment and produce the
expected results in relative performance to industry competition,
and deliver more resilient performance regardless of changes in
specific market conditions. For Q3, the U.S. and Mexico rebounded
from a difficult first half, with Mexico recording one of the
strongest Q3 in its history, while Europe also continuing to
improve despite the increase in operating costs related to
Covid-19. We remain agile and are continuing to adapt our
operations to changes in market conditions,” stated Fabio Sandri,
Chief Executive Officer of Pilgrim's.
“During the third quarter, in the U.S. we are continuing to see
demand recovering at our fresh operations, including from some
sectors within foodservice, with more states gradually loosening
travel and movement restrictions. Our Retail and QSR businesses
have been especially strong, and demand from our customers has been
outperforming the industry. Commodity large bird deboning was once
again the most challenged this quarter. Operationally however, we
continue to improve our relative performance versus the industry
across all our business units, including commodity segments. We
also continue to adapt quickly to changes in channel demand by
adjusting the mix of our production capabilities, supported by our
close partnerships with Key Customers, strong focus in execution by
our team members, the geographical diversity of our footprint, and
our presence across all bird size categories.”
“After a very difficult first half in 2020, our Mexican
operations delivered great results in Q3, and we generated one of
the strongest Q3 in the company's history in Mexico despite the
unfavorable mix impact and added operating costs relative to the
same period last year. A normalization in economic activities, an
improved supply/demand balance in the market, a stronger Peso, and
a very good operational performance, all contributed to the
strength. We are continuing to invest in our Del Dia and premium
Pilgrim’s brands (both prepared and fresh), as well as seeking more
market share in the modern channel, which will bring more stable
margins to our operations.”
“Our legacy European chicken operations are continuing to
improve, driven by exposure to retail as well as a recovery in
foodservice demand, particularly from QSR, despite the significant
impact of Covid-19 on the operations. In addition, our strong
internal operating performance and commitment to innovation have
helped in mitigating the difficult environment. The positive
momentum in improvement from the newly acquired European pork
assets has been maintained, with positive EBITDA and margins
continuing to increase. The performance was driven by strong demand
at retail partially offset by a reduction in foodservice,
continuing strength in pork exports especially to China, as well as
the implementations of operational improvements and synergy
capture.”
Conference Call Information
A conference call to discuss Pilgrim’s quarterly results will be
held tomorrow, October 29, 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/ppc201029.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 (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 January 29, 2021.
About Pilgrim’s Pride
Pilgrim’s employs approximately 55,400 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. Without
limiting the foregoing, words such as “anticipates,” “believes,”
“estimates,” “expects,” “intends,” “may,” “plans,” “projects,”
“should,” “targets,” “will” and the negative thereof and similar
words and expressions are intended to identify 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: the impact of the COVID-19 pandemic, efforts to contain
the pandemic and resulting economic downturn on our operations and
financial condition, including the risk that our health and safety
measures at Pilgrim’s Pride production facilities will not be
effective, the risk that we may be unable to prevent the infection
of our employees at these facilities, and the risk that we may need
to temporarily close one or more of our production facilities; the
risk that we may experience decreased production and sales due to
the changing demand for food products; the risk that we may face a
significant increase in delayed payments from our customers; and
additional risks related to COVID-19 set forth in our Form 10-Q
filed with the SEC; 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 and other legal matters
described in our Quarterly Report on Form 10-Q, including the In re
Broiler Chicken Antitrust Litigation, as well as other risks
described under “Risk Factors” in the Company’s Annual Report on
Form 10-K, Quarterly Reports on Form 10-Q and subsequent filings
with the Securities and Exchange Commission. The forward-looking
statements in this release speak only as of the date hereof, and
the Company undertakes no obligation to update any such statement
after the date of this release, whether as a result of new
information, future developments or otherwise, except as may be
required by applicable law.
Contact: |
Dunham Winoto |
|
Investor Relations |
|
IRPPC@pilgrims.com |
|
(970) 506-8192 |
|
www.pilgrims.com |
PILGRIM’S PRIDE CORPORATION |
CONDENSED CONSOLIDATED BALANCE SHEETS |
(Unaudited) |
|
|
September 27, 2020 |
|
December 29, 2019 |
|
|
|
|
|
|
|
(In thousands) |
Cash and cash equivalents |
|
$ |
768,031 |
|
|
$ |
260,568 |
|
Restricted cash and cash
equivalents |
|
17,105 |
|
|
20,009 |
|
Trade accounts and other
receivables, less allowance for doubtful accounts |
|
706,123 |
|
|
741,281 |
|
Accounts receivable from related
parties |
|
616 |
|
|
944 |
|
Inventories |
|
1,328,704 |
|
|
1,383,535 |
|
Income taxes receivable |
|
77,651 |
|
|
60,204 |
|
Prepaid expenses and other
current assets |
|
159,643 |
|
|
131,695 |
|
Total current assets |
|
3,057,873 |
|
|
2,598,236 |
|
Deferred tax assets |
|
4,126 |
|
|
4,426 |
|
Other long-lived assets |
|
15,079 |
|
|
36,325 |
|
Identified intangible assets,
net |
|
566,696 |
|
|
596,053 |
|
Goodwill |
|
955,087 |
|
|
973,750 |
|
Operating lease assets, net |
|
284,820 |
|
|
301,513 |
|
Property, plant and equipment,
net |
|
2,585,818 |
|
|
2,592,061 |
|
Total assets |
|
$ |
7,469,499 |
|
|
$ |
7,102,364 |
|
|
|
|
|
|
Accounts payable |
|
$ |
915,661 |
|
|
$ |
993,780 |
|
Accounts payable to related
parties |
|
5,752 |
|
|
3,819 |
|
Revenue contract liability |
|
57,221 |
|
|
41,770 |
|
Accrued expenses and other
current liabilities |
|
691,329 |
|
|
575,319 |
|
Income taxes payable |
|
— |
|
|
7,075 |
|
Current maturities of long-term
debt |
|
25,485 |
|
|
26,392 |
|
Total current liabilities |
|
1,695,448 |
|
|
1,648,155 |
|
Noncurrent operating lease
liability, less current maturities |
|
215,924 |
|
|
235,382 |
|
Long-term debt, less current
maturities |
|
2,610,668 |
|
|
2,276,029 |
|
Noncurrent income taxes
payable |
|
7,731 |
|
|
7,731 |
|
Deferred tax liabilities |
|
339,051 |
|
|
301,907 |
|
Other long-term liabilities |
|
169,365 |
|
|
97,100 |
|
Total liabilities |
|
5,038,187 |
|
|
4,566,304 |
|
Common stock |
|
2,612 |
|
|
2,611 |
|
Treasury stock |
|
(342,698 |
) |
|
(234,892 |
) |
Additional paid-in capital |
|
1,953,969 |
|
|
1,955,261 |
|
Retained earnings |
|
972,490 |
|
|
877,812 |
|
Accumulated other comprehensive
loss |
|
(165,520 |
) |
|
(75,129 |
) |
Total Pilgrim’s Pride Corporation stockholders’ equity |
|
2,420,853 |
|
|
2,525,663 |
|
Noncontrolling interest |
|
10,459 |
|
|
10,397 |
|
Total stockholders’ equity |
|
2,431,312 |
|
|
2,536,060 |
|
Total liabilities and stockholders’ equity |
|
$ |
7,469,499 |
|
|
$ |
7,102,364 |
|
PILGRIM’S PRIDE CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 27, 2020 |
|
September 29, 2019 |
|
September 27, 2020 |
|
September 29, 2019 |
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except per share data) |
Net sales |
|
$ |
3,075,121 |
|
|
$ |
2,777,970 |
|
|
$ |
8,974,072 |
|
|
$ |
8,345,730 |
|
Cost of sales |
|
2,761,279 |
|
|
2,495,773 |
|
|
8,363,272 |
|
|
7,476,731 |
|
Gross profit |
|
313,842 |
|
|
282,197 |
|
|
610,800 |
|
|
868,999 |
|
Selling, general and
administrative expense |
|
219,554 |
|
|
94,032 |
|
|
404,837 |
|
|
264,313 |
|
Administrative restructuring
activity |
|
— |
|
|
(20 |
) |
|
— |
|
|
(90 |
) |
Operating income |
|
94,288 |
|
|
188,185 |
|
|
205,963 |
|
|
604,776 |
|
Interest expense, net of
capitalized interest |
|
30,564 |
|
|
32,028 |
|
|
95,575 |
|
|
99,184 |
|
Interest income |
|
(1,763 |
) |
|
(4,698 |
) |
|
(4,611 |
) |
|
(11,481 |
) |
Foreign currency transaction
losses (gains) |
|
9,092 |
|
|
3,027 |
|
|
(3,768 |
) |
|
7,923 |
|
Miscellaneous, net |
|
360 |
|
|
1,367 |
|
|
(33,873 |
) |
|
2,521 |
|
Income before income taxes |
|
56,035 |
|
|
156,461 |
|
|
152,640 |
|
|
506,629 |
|
Income tax expense |
|
22,344 |
|
|
46,365 |
|
|
57,900 |
|
|
142,328 |
|
Net income |
|
33,691 |
|
|
110,096 |
|
|
94,740 |
|
|
364,301 |
|
Less: Net income (loss)
attributable to noncontrolling interests |
|
245 |
|
|
331 |
|
|
62 |
|
|
457 |
|
Net income attributable to Pilgrim’s Pride Corporation |
|
$ |
33,446 |
|
|
$ |
109,765 |
|
|
$ |
94,678 |
|
|
$ |
363,844 |
|
|
|
|
|
|
|
|
|
|
Weighted average shares
of common stock outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
244,186 |
|
|
249,467 |
|
|
246,740 |
|
|
249,344 |
|
Effect of dilutive common stock equivalents |
|
190 |
|
|
262 |
|
|
158 |
|
|
308 |
|
Diluted |
|
244,376 |
|
|
249,729 |
|
|
248,308 |
|
|
249,652 |
|
|
|
|
|
|
|
|
|
|
Net income attributable
to Pilgrim's Pride Corporation per share of common
stock outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.14 |
|
|
$ |
0.44 |
|
|
$ |
0.38 |
|
|
$ |
1.46 |
|
Diluted |
|
$ |
0.14 |
|
|
$ |
0.44 |
|
|
$ |
0.38 |
|
|
$ |
1.46 |
|
PILGRIM’S PRIDE CORPORATION AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
|
|
|
Nine Months Ended |
|
|
September 27, 2020 |
|
September 29, 2019 |
|
|
|
|
|
|
|
(In thousands) |
Cash flows from operating
activities: |
|
|
|
|
Net income |
|
$ |
94,740 |
|
|
$ |
364,301 |
|
Adjustments to reconcile net income to cash provided by operating
activities: |
|
|
|
|
Depreciation and amortization |
|
248,641 |
|
|
210,381 |
|
Deferred income tax expense |
|
37,739 |
|
|
2,396 |
|
Gain on property disposals |
|
(8,009 |
) |
|
(9,546 |
) |
Negative adjustment to previously recognized gain on bargain
purchase |
|
3,746 |
|
|
— |
|
Loan cost amortization |
|
3,635 |
|
|
3,609 |
|
Stock-based compensation |
|
(1,291 |
) |
|
7,322 |
|
Accretion of discount related to Senior Notes |
|
737 |
|
|
737 |
|
Amortization of premium related to Senior Notes |
|
(501 |
) |
|
(501 |
) |
Loss (gain) on equity-method investments |
|
297 |
|
|
(48 |
) |
Foreign currency transaction loss related to borrowing
arrangements |
|
— |
|
|
1,259 |
|
Changes in operating assets and liabilities: |
|
|
|
|
Trade accounts and other receivables |
|
44,615 |
|
|
(46,648 |
) |
Inventories |
|
41,292 |
|
|
(108,117 |
) |
Prepaid expenses and other current assets |
|
(29,290 |
) |
|
3,536 |
|
Accounts payable, accrued expenses and other current
liabilities |
|
93,114 |
|
|
67,308 |
|
Income taxes |
|
(30,868 |
) |
|
40,549 |
|
Long-term pension and other postretirement obligations |
|
(823 |
) |
|
(1,578 |
) |
Other operating assets and liabilities |
|
10,561 |
|
|
544 |
|
Cash provided by operating
activities |
|
508,335 |
|
|
535,504 |
|
Cash flows from investing
activities: |
|
|
|
|
Acquisitions of property, plant and equipment |
|
(242,603 |
) |
|
(258,725 |
) |
Proceeds from property disposals |
|
21,715 |
|
|
15,168 |
|
Purchase of acquired business, net of cash acquired |
|
(4,216 |
) |
|
— |
|
Cash used in investing
activities |
|
(225,104 |
) |
|
(243,557 |
) |
Cash flows from financing
activities: |
|
|
|
|
Proceeds from revolving line of credit and long-term
borrowings |
|
386,696 |
|
|
99,638 |
|
Purchase of common stock under share repurchase program |
|
(107,806 |
) |
|
(2,898 |
) |
Payments on revolving line of credit, long-term borrowings and
finance lease obligations |
|
(56,763 |
) |
|
(123,276 |
) |
Payment from equity distribution under Tax Sharing Agreement
between JBS USA Food Company Holdings and Pilgrim’s Pride
Corporation |
|
— |
|
|
(525 |
) |
Payment of capitalized loan costs |
|
— |
|
|
(652 |
) |
Cash provided by financing
activities |
|
222,127 |
|
|
(27,713 |
) |
Effect of exchange rate
changes on cash and cash equivalents |
|
(799 |
) |
|
(808 |
) |
Increase in cash, cash
equivalents and restricted cash |
|
504,559 |
|
|
263,426 |
|
Cash, cash equivalents and
restricted cash, beginning of period |
|
280,577 |
|
|
361,578 |
|
Cash, cash equivalents and
restricted cash, end of period |
|
$ |
785,136 |
|
|
$ |
625,004 |
|
PILGRIM’S PRIDE CORPORATION
Non-GAAP Financial Measures
Reconciliation
(Unaudited)
This earnings release and the following
financial statement tables include several supplemental non-GAAP
financial measures, including EBITDA, Adjusted EBITDA, EBITDA
Margin, Adjusted Operating Income, Adjusted Net Income, and
Adjusted EPS, as further described below.
“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) transaction costs related to acquisitions, (3)
charges or income from restructuring activities, (4) litigation
settlement income or charges, (5) gain on bargain purchase and (6)
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) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 27, 2020 |
|
September 29, 2019 |
|
September 27, 2020 |
|
September 29, 2019 |
|
|
|
|
|
|
|
|
|
(In thousands) |
Net income |
$ |
33,691 |
|
|
$ |
110,096 |
|
|
$ |
94,740 |
|
|
$ |
364,301 |
|
Add: |
|
|
|
|
|
|
|
Interest expense, net |
28,801 |
|
|
27,330 |
|
|
90,964 |
|
|
87,703 |
|
Income tax expense |
22,344 |
|
|
46,365 |
|
|
57,900 |
|
|
142,328 |
|
Depreciation and amortization |
84,265 |
|
|
71,851 |
|
|
248,641 |
|
|
210,381 |
|
EBITDA |
169,101 |
|
|
255,642 |
|
|
492,245 |
|
|
804,713 |
|
Add: |
|
|
|
|
|
|
|
Foreign currency transaction losses (gains) |
9,092 |
|
|
3,027 |
|
|
(3,768 |
) |
|
7,923 |
|
Transaction costs related to acquisitions |
— |
|
|
— |
|
|
134 |
|
|
— |
|
DOJ agreement |
110,524 |
|
|
— |
|
|
110,524 |
|
|
— |
|
Restructuring activity |
— |
|
|
(20 |
) |
|
— |
|
|
(90 |
) |
Hometown Strong commitment |
14,506 |
|
|
— |
|
|
14,506 |
|
|
— |
|
Minus: |
|
|
|
|
|
|
|
Negative adjustment to previously recognized gain on bargain
purchase |
(2,006 |
) |
|
— |
|
|
(3,746 |
) |
|
— |
|
Shareholder litigation settlement |
— |
|
|
— |
|
|
34,643 |
|
|
— |
|
Net income attributable to noncontrolling interest |
245 |
|
|
331 |
|
|
62 |
|
|
457 |
|
Adjusted EBITDA |
$ |
304,984 |
|
|
$ |
258,318 |
|
|
$ |
582,682 |
|
|
$ |
812,089 |
|
The summary unaudited consolidated income
statement data for the twelve months ended September 27, 2020 (the
LTM Period) have been calculated by subtracting the applicable
unaudited consolidated income statement data for the nine months
ended September 29, 2019 from the sum of (1) the applicable audited
consolidated income statement data for the year ended December 29,
2019 and (2) the applicable audited consolidated income statement
data for the nine months ended September 27, 2020.
PILGRIM'S PRIDE CORPORATION |
Reconciliation of LTM Adjusted EBITDA |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
LTM Ended |
|
|
December 29, 2019 |
|
March 29, 2020 |
|
June 28, 2020 |
|
September 27, 2020 |
|
September 27, 2020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
Net income |
|
$ |
92,235 |
|
|
$ |
67,449 |
|
|
$ |
(6,400 |
) |
|
$ |
33,691 |
|
|
$ |
186,975 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
30,650 |
|
|
30,998 |
|
|
31,165 |
|
|
28,801 |
|
|
121,614 |
|
Income tax expense |
|
18,681 |
|
|
38,512 |
|
|
(2,956 |
) |
|
22,344 |
|
|
76,581 |
|
Depreciation and amortization |
|
76,849 |
|
|
79,773 |
|
|
84,603 |
|
|
84,265 |
|
|
325,490 |
|
EBITDA |
|
218,415 |
|
|
216,732 |
|
|
106,412 |
|
|
169,101 |
|
|
710,660 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
Foreign currency transaction losses (gains) |
|
(1,006 |
) |
|
(18,385 |
) |
|
5,525 |
|
|
9,092 |
|
|
(4,774 |
) |
Transaction costs related to acquisitions |
|
1,239 |
|
|
215 |
|
|
(81 |
) |
|
— |
|
|
1,373 |
|
DOJ agreement |
|
— |
|
|
— |
|
|
— |
|
|
110,524 |
|
|
110,524 |
|
Restructuring activity |
|
6 |
|
|
— |
|
|
— |
|
|
— |
|
|
6 |
|
Hometown Strong commitment |
|
— |
|
|
— |
|
|
— |
|
|
14,506 |
|
|
14,506 |
|
Minus: |
|
|
|
|
|
|
|
|
|
|
Gain on bargain purchase |
|
56,880 |
|
|
(1,740 |
) |
|
— |
|
|
(2,006 |
) |
|
53,134 |
|
Shareholder litigation settlement |
|
— |
|
|
34,643 |
|
|
— |
|
|
— |
|
|
34,643 |
|
Net income attributable to noncontrolling interest |
|
155 |
|
|
181 |
|
|
(364 |
) |
|
245 |
|
|
217 |
|
Adjusted EBITDA |
|
$ |
161,619 |
|
|
$ |
165,478 |
|
|
$ |
112,220 |
|
|
$ |
304,984 |
|
|
$ |
744,301 |
|
EBITDA margins have been calculated by taking
the relevant unaudited EBITDA figures, then dividing by net sales
for the applicable period. EBITDA margins are presented because
they are used by management and we believe it is frequently used by
securities analysts, investors and other interested parties, as a
supplement to our results prepared in accordance with U.S. GAAP, to
compare the performance of companies.
PILGRIM'S PRIDE CORPORATION |
Reconciliation of EBITDA Margin |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 27, 2020 |
|
September 29, 2019 |
|
September 27, 2020 |
|
September 29, 2019 |
|
September 27, 2020 |
|
September 29, 2019 |
|
September 27, 2020 |
|
September 29, 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
Net income |
|
$ |
33,691 |
|
|
$ |
110,096 |
|
|
$ |
94,740 |
|
|
$ |
364,301 |
|
|
1.10 |
|
% |
|
3.96 |
% |
|
1.06 |
|
% |
|
4.37 |
% |
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
28,801 |
|
|
27,330 |
|
|
90,964 |
|
|
87,703 |
|
|
0.94 |
|
% |
|
0.98 |
% |
|
1.01 |
|
% |
|
1.05 |
% |
Income tax expense |
|
22,344 |
|
|
46,365 |
|
|
57,900 |
|
|
142,328 |
|
|
0.73 |
|
% |
|
1.67 |
% |
|
0.65 |
|
% |
|
1.71 |
% |
Depreciation and amortization |
|
84,265 |
|
|
71,851 |
|
|
248,641 |
|
|
210,381 |
|
|
2.74 |
|
% |
|
2.59 |
% |
|
2.77 |
|
% |
|
2.53 |
% |
EBITDA |
|
169,101 |
|
|
255,642 |
|
|
492,245 |
|
|
804,713 |
|
|
5.51 |
|
% |
|
9.20 |
% |
|
5.49 |
|
% |
|
9.66 |
% |
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency transaction losses (gains) |
|
9,092 |
|
|
3,027 |
|
|
(3,768 |
) |
|
7,923 |
|
|
0.29 |
|
% |
|
0.11 |
% |
|
(0.04 |
) |
% |
|
0.10 |
% |
Acquisition charges |
|
— |
|
|
— |
|
|
134 |
|
|
— |
|
|
— |
|
% |
|
— |
% |
|
— |
|
% |
|
— |
% |
DOJ agreement |
|
110,524 |
|
|
— |
|
|
110,524 |
|
|
— |
|
|
3.59 |
|
% |
|
— |
% |
|
1.23 |
|
% |
|
— |
% |
Restructuring activity |
|
— |
|
|
(20 |
) |
|
— |
|
|
(90 |
) |
|
— |
|
% |
|
— |
% |
|
— |
|
% |
|
— |
% |
Hometown Strong commitment |
|
14,506 |
|
|
— |
|
|
14,506 |
|
|
— |
|
|
0.47 |
|
% |
|
— |
% |
|
0.16 |
|
% |
|
— |
% |
Minus: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Negative adjustment to previously recognized gain on bargain
purchase |
|
(2,006 |
) |
|
— |
|
|
(3,746 |
) |
|
— |
|
|
(0.07 |
) |
% |
|
— |
% |
|
(0.04 |
) |
% |
|
— |
% |
Shareholder litigation settlement |
|
— |
|
|
— |
|
|
34,643 |
|
|
— |
|
|
— |
|
% |
|
— |
% |
|
0.39 |
|
% |
|
— |
% |
Net income (loss) attributable to noncontrolling interest |
|
245 |
|
|
331 |
|
|
62 |
|
|
457 |
|
|
0.01 |
|
% |
|
0.01 |
% |
|
— |
|
% |
|
0.01 |
% |
Adjusted EBITDA |
|
$ |
304,984 |
|
|
$ |
258,318 |
|
|
$ |
582,682 |
|
|
$ |
812,089 |
|
|
9.92 |
|
% |
|
9.30 |
% |
|
6.49 |
|
% |
|
9.75 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
3,075,121 |
|
|
$ |
2,777,970 |
|
|
$ |
8,974,072 |
|
|
$ |
8,345,730 |
|
|
$ |
3,075,121 |
|
|
|
$ |
2,777,970 |
|
|
$ |
8,974,072 |
|
|
|
$ |
8,345,730 |
|
Adjusted Operating Income is calculated by
adding to Operating Income certain items of expense and deducting
from Operating Income certain items of income. Management believes
that presentation of Adjusted Operating Income provides useful
supplemental information about our operating performance and
enables comparison of our performance between periods because
certain costs shown below are not indicative of our current
operating performance. A reconciliation of GAAP operating income to
adjusted operating income as follows:
PILGRIM'S PRIDE CORPORATION |
Reconciliation of Adjusted Operating Income |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 27, 2020 |
|
September 29, 2019 |
|
September 27, 2020 |
|
September 29, 2019 |
|
|
|
|
|
|
|
|
|
(In thousands) |
GAAP operating income (U.S. operations) |
$ |
2,451 |
|
|
$ |
125,168 |
|
|
$ |
126,951 |
|
|
$ |
426,968 |
|
DOJ agreement |
110,524 |
|
|
— |
|
|
110,524 |
|
|
— |
|
Hometown Strong
commitment |
14,506 |
|
|
— |
|
|
14,506 |
|
|
— |
|
Adjusted operating income
(U.S. operations) |
$ |
127,481 |
|
|
$ |
125,168 |
|
|
$ |
251,981 |
|
|
$ |
426,968 |
|
|
|
|
|
|
|
|
|
Adjusted operating income
margin (U.S. operations) |
6.7 |
% |
|
6.5 |
% |
|
4.5 |
% |
|
7.4 |
% |
Adjusted Operating Income Margin for the U.S. is
calculated by dividing Adjusted operating income by Net Sales.
Management believes that presentation of Adjusted Operating Income
Margin provides useful supplemental information about our operating
performance and enables comparison of our performance between
periods because certain costs shown below are not indicative of our
current operating performance. A reconciliation of GAAP operating
income margin for the U.S. to adjusted operating income margin for
the U.S. is as follows:
PILGRIM'S PRIDE CORPORATION |
Reconciliation of GAAP Operating Income Margin to Adjusted
Operating Income Margin |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 27, 2020 |
|
September 29, 2019 |
|
September 27, 2020 |
|
September 29, 2019 |
|
|
|
|
|
|
|
|
|
(In percent) |
GAAP operating income margin (U.S. operations) |
0.1 |
% |
|
6.5 |
% |
|
2.2 |
% |
|
7.4 |
% |
DOJ agreement |
5.8 |
% |
|
— |
% |
|
2.0 |
% |
|
— |
% |
Hometown Strong
commitment |
0.8 |
% |
|
— |
% |
|
0.3 |
% |
|
— |
% |
Adjusted operating income
margin (U.S. operations) |
6.7 |
% |
|
6.5 |
% |
|
4.5 |
% |
|
7.4 |
% |
Adjusted net income attributable to Pilgrim's Pride Corporation
("Pilgrim's") is calculated by adding to Net Income attributable to
Pilgrim's certain items of expense and deducting from Net Income
attributable to Pilgrim's certain items of income. Management
believes that presentation of Adjusted net income attributable to
Pilgrim's provides useful supplemental information about our
operating performance and enables comparison of our performance
between periods because certain costs shown below are not
indicative of our current operating performance. A reconciliation
of net income attributable to Pilgrim's per common diluted share to
adjusted net income attributable to Pilgrim's per common diluted
share is as follows:
PILGRIM'S PRIDE CORPORATION |
Reconciliation of Adjusted Net Income |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 27, 2020 |
|
September 29, 2019 |
|
September 27, 2020 |
|
September 29, 2019 |
|
|
|
|
|
|
|
|
|
(In thousands, except per share data) |
Net income attributable to Pilgrim's |
$ |
33,446 |
|
|
$ |
109,765 |
|
|
$ |
94,678 |
|
|
$ |
363,844 |
|
Adjustments: |
|
|
|
|
|
|
|
Acquisition charges and restructuring activity |
— |
|
|
43 |
|
|
134 |
|
|
(26 |
) |
DOJ agreement |
110,524 |
|
|
— |
|
|
110,524 |
|
|
— |
|
Hometown Strong commitment |
14,506 |
|
|
— |
|
|
14,506 |
|
|
— |
|
Foreign currency transaction losses (gains) |
9,092 |
|
|
3,027 |
|
|
(3,768 |
) |
|
7,923 |
|
Net tax expense (benefit) of adjustments(a) |
(5,916 |
) |
|
(747 |
) |
|
(9,158 |
) |
|
(1,923 |
) |
Adjusted net income attributable to Pilgrim's |
$ |
161,652 |
|
|
$ |
112,088 |
|
|
$ |
206,916 |
|
|
$ |
369,818 |
|
Weighted average diluted
shares of common stock outstanding |
244,376 |
|
|
249,729 |
|
|
248,308 |
|
|
249,652 |
|
Adjusted net income
attributable to Pilgrim's per common diluted share |
$ |
0.66 |
|
|
$ |
0.45 |
|
|
$ |
0.83 |
|
|
$ |
1.48 |
|
(a) Net tax expense (benefit) of adjustments represents the tax
impact of all adjustments shown above with the exclusion of the DOJ
antitrust fine as this item is non-deductible for tax purposes.
Adjusted EPS is calculated by dividing the adjusted net income
attributable to Pilgrim's stockholders by the weighted average
number of diluted shares. Management believes that Adjusted EPS
provides useful supplemental information about our operating
performance and enables comparison of our performance between
periods because certain costs shown below are not indicative of our
current operating performance. A reconciliation of U.S. GAAP to
non-U.S. GAAP financial measures is as follows:
PILGRIM'S PRIDE CORPORATION |
Reconciliation of GAAP EPS to Adjusted EPS |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
September 27, 2020 |
|
September 29, 2019 |
|
September 27, 2020 |
|
September 29, 2019 |
|
|
|
|
|
|
|
|
|
(In thousands, except per share data) |
GAAP EPS |
$ |
0.14 |
|
|
$ |
0.44 |
|
|
$ |
0.38 |
|
|
$ |
1.46 |
|
Adjustments: |
|
|
|
|
|
|
|
Acquisition charges and restructuring activity |
— |
|
|
— |
|
|
— |
|
|
— |
|
DOJ agreement |
0.45 |
|
|
— |
|
|
0.45 |
|
|
— |
|
Hometown Strong commitment |
0.06 |
|
|
— |
|
|
0.06 |
|
|
— |
|
Foreign currency transaction losses (gains) |
0.04 |
|
|
0.01 |
|
|
(0.02 |
) |
|
0.03 |
|
Net tax impact of adjustments(a) |
(0.02 |
) |
|
— |
|
|
(0.04 |
) |
|
(0.01 |
) |
Adjusted EPS |
$ |
0.66 |
|
|
$ |
0.45 |
|
|
$ |
0.84 |
|
|
$ |
1.48 |
|
|
|
|
|
|
|
|
|
Weighted average diluted
shares of common stock outstanding |
244,376 |
|
|
249,729 |
|
|
246,898 |
|
|
249,652 |
|
(a) Net tax impact of adjustments represents the tax impact of
all adjustments shown above with the exclusion of the DOJ antitrust
fee as this item is non-deductible for tax purposes.
PILGRIM'S PRIDE CORPORATION |
Supplementary Selected Segment and Geographic
Data |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 27, 2020 |
|
September 29, 2019 |
|
September 27, 2020 |
|
September 29, 2019 |
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
Sources of net sales by
geographic region of origin: |
|
|
|
|
|
|
|
|
US |
|
$ |
1,894,222 |
|
|
$ |
1,931,657 |
|
|
$ |
5,619,791 |
|
|
$ |
5,732,201 |
|
Europe |
|
845,677 |
|
|
517,531 |
|
|
2,425,140 |
|
|
1,568,396 |
|
Mexico |
|
335,222 |
|
|
328,782 |
|
|
929,141 |
|
|
1,045,133 |
|
Total net sales |
|
$ |
3,075,121 |
|
|
$ |
2,777,970 |
|
|
$ |
8,974,072 |
|
|
$ |
8,345,730 |
|
|
|
|
|
|
|
|
|
|
Sources of cost of sales by
geographic region of origin: |
|
|
|
|
|
|
|
|
US |
|
$ |
1,711,089 |
|
|
$ |
1,739,474 |
|
|
$ |
5,210,534 |
|
|
$ |
5,123,278 |
|
Europe |
|
785,347 |
|
|
474,490 |
|
|
2,256,034 |
|
|
1,452,254 |
|
Mexico |
|
265,078 |
|
|
281,833 |
|
|
897,163 |
|
|
901,271 |
|
Elimination |
|
(235 |
) |
|
(24 |
) |
|
(459 |
) |
|
(72 |
) |
Total cost of sales |
|
$ |
2,761,279 |
|
|
$ |
2,495,773 |
|
|
$ |
8,363,272 |
|
|
$ |
7,476,731 |
|
|
|
|
|
|
|
|
|
|
Sources of gross profit by
geographic region of origin: |
|
|
|
|
|
|
|
|
US |
|
$ |
183,133 |
|
|
$ |
192,183 |
|
|
$ |
409,257 |
|
|
$ |
608,923 |
|
Europe |
|
60,330 |
|
|
43,041 |
|
|
169,106 |
|
|
116,142 |
|
Mexico |
|
70,144 |
|
|
46,949 |
|
|
31,978 |
|
|
143,862 |
|
Elimination |
|
235 |
|
|
24 |
|
|
459 |
|
|
72 |
|
Total gross profit |
|
$ |
313,842 |
|
|
$ |
282,197 |
|
|
$ |
610,800 |
|
|
$ |
868,999 |
|
|
|
|
|
|
|
|
|
|
Sources of operating income by
geographic region of origin: |
|
|
|
|
|
|
|
|
US |
|
$ |
2,451 |
|
|
$ |
125,168 |
|
|
$ |
126,951 |
|
|
$ |
426,968 |
|
Europe |
|
29,949 |
|
|
25,325 |
|
|
76,324 |
|
|
62,233 |
|
Mexico |
|
61,653 |
|
|
37,668 |
|
|
2,229 |
|
|
115,503 |
|
Elimination |
|
235 |
|
|
24 |
|
|
459 |
|
|
72 |
|
Total operating income |
|
$ |
94,288 |
|
|
$ |
188,185 |
|
|
$ |
205,963 |
|
|
$ |
604,776 |
|
Pilgrims Pride (NASDAQ:PPC)
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From Aug 2024 to Sep 2024
Pilgrims Pride (NASDAQ:PPC)
Historical Stock Chart
From Sep 2023 to Sep 2024