Pilgrim’s Pride Corporation (NASDAQ: PPC) reports first quarter
2021 financial results.
First Quarter Highlights
- Net Sales of $3.27 billion.
- GAAP Net Income of $100.2 million. Adjusted Net Income of
$103.0 million or adjusted EPS of $0.42.
- Consolidated Operating Income margin of 4.8% with Operating
Income margins of 3.4% in U.S., 19.0% in Mexico and 1.2% in
Europe.
- Adjusted EBITDA of $253.8 million, or a 7.8% margin, 53.4%
higher than a year ago.
- Throughout the global COVID-19 pandemic, we remain 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 during these unprecedented times.
- Strong focus in execution and dedication by our team members,
supported by our portfolio strategy of differentiated products,
strong Key Customer relationships, and diversified global
operations have helped us to mitigate challenging market conditions
due to COVID-19 and improve the resiliency in our results.
- Demand in U.S. continues to recover, with our foodservice
business improving while Retail and QSR business maintaining
strength despite higher input and operating costs, volume
disruptions because of weather events, and less than optimal mix
due to significant labor shortages. Commodity large bird deboning
experienced a rapid increase in prices throughout the quarter,
achieving the largest improvement relative to Q1 a year ago.
- Mexico maintained the strength from the second half of 2020.
Strong execution, improved overall economic conditions, better
supply/demand balance, and our increased share of non-commodity
products contributed to the strength.
- Our combined European business continues to achieve operational
improvements, offsetting high feed costs, not yet reflected in
prices, lower year-over-year foodservice volume due to lockdowns,
and COVID-19 mitigation costs.
- Our commitment to achieve net-zero GHG emissions by 2040
demonstrates our leadership in ESG as a responsible steward of the
environment and a good corporate citizen. In support, last month we
successfully issued a $1 billion sustainability-linked bond tied to
efforts to reduce greenhouse gas emission intensity across our
global operations. The bond is the first of its kind to be issued
by a global meat and poultry company, and aligns with our vision to
be the best and most respected company in our industry.
Unaudited |
|
Three Months Ended |
|
|
March 28,2021 |
|
March 29,2020 |
|
Y/Y Change |
|
|
(In millions, except per share and
percentages) |
Net sales |
|
$ |
3,273.4 |
|
|
$ |
3,074.9 |
|
|
+6.5 |
% |
U.S. GAAP EPS |
|
$ |
0.41 |
|
|
$ |
0.27 |
|
|
+51.9 |
% |
Operating income |
|
$ |
158.5 |
|
|
$ |
84.4 |
|
|
+87.8 |
% |
Adjusted EBITDA(1) |
|
$ |
253.8 |
|
|
$ |
165.5 |
|
|
+53.4 |
% |
Adjusted EBITDA margin(1) |
|
7.8 |
% |
|
5.4 |
% |
|
+2.4 |
pts |
(1) Reconciliations for non-U.S. GAAP measures are provided in
subsequent sections within this release.
“While overall demand conditions have incrementally improved, we
are still faced with market specific volatility and challenges
across our global operations. Throughout the COVID-19 pandemic, our
team has continued to maintain their commitment, dedication and
hard work, in supporting our ability to keep a safe and healthy
working environment while allowing us the capability to maintain
production and supply to our customers during this unprecedented
crisis. Our diversified portfolio and strategy has continued to
mitigate the difficult environment and produce the expected results
in relative performance to the competition, while delivering more
resilient performance regardless of changes in specific market
conditions. During Q1, the U.S. generated a solid performance
despite challenges from weather events and higher input costs;
while Mexico maintained its strong results from the second half of
2020. In Europe, more expensive feed ingredients, COVID-19
mitigation costs, lower foodservice volumes due to pandemic
restrictions, and export constraints to China presented a
challenging environment. Nevertheless, 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 Q1, the market environment in the U.S. improved
throughout the quarter, including a challenging February in part
due to the significant weather event in the southeast, before a
very strong recovery as we exited the quarter. With gradual
loosening of restrictions, as a result of the increase in
vaccinations, the market has been incrementally improving,
especially in foodservice. The market for commodity large bird
deboning experienced the largest improvement relative to the same
period a year ago. Our retail and QSR results have remained solid
due to strong demand across our customer base despite higher input
and operating costs, and less than optimal mix due to significant
labor shortages and COVID-19. Our Prepared Foods business remained
resilient considering the challenging demand environment. The
business continues to grow its sales in the branded segment,
reflecting the investments made over the past few years, and we
anticipate stronger results as COVID-19 restrictions are gradually
lifted throughout 2021.”
“Compared to a very challenging Q1 last year, Mexico had another
strong quarter following a robust performance during the second
half 2020, driven by a balanced supply/demand and continuous
improvements in operational performance. We adapted the operations
well to generate strong performance despite volumes in the fresh
segment that were below those of 2020. Our Prepared Foods also
performed well, with improved demand. We maintain the pursuit of
our strategy to invest in our brands, in both fresh and prepared
food business, seeking to establish strong differentiated brands
and products, and at the same time increase our share in modern
channels with more stable margins over time, consistent with our
vision for growth in Mexico.”
“In Q1, our Moy Park operations experienced some headwinds due
to significant changes in the cost of feed ingredients, the
year-over-year impact of lockdown restrictions on demand and
COVID-19 mitigation costs, but are continuing to evolve as we
strengthen its ability to manage the stability by adapting a sales
model to better moderate future input cost challenges. In addition,
our strong internal operating performance and commitment to
innovation have helped in mitigating the difficult environment.
Integration of Pilgrim’s UK is on track, and the business has
continued to contribute positively to our results. During the
quarter, we experienced a reduction in volume of exports to China
due to the suspension of our export license at two plants as a
result of COVID-19. We work diligently with the applicable
authorities to reinstate these licenses. In addition, pig prices in
the EU and UK were under pressure because of ASF in Germany;
however, prices have already started to recover.”
Conference Call Information
A conference call to discuss Pilgrim’s quarterly results will be
held tomorrow, April 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/ppc210429.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 July 29, 2021.
About Pilgrim’s Pride
Pilgrim’s employs approximately 54,900 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 most recent
Form 10-K and 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 most recent Form 10-K and 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) |
|
|
|
|
March 28, 2021 |
|
December 27, 2020 |
|
|
(In thousands) |
Cash and cash equivalents |
|
$ |
367,015 |
|
|
$ |
547,624 |
|
Restricted cash and cash
equivalents |
|
43,225 |
|
|
782 |
|
Trade accounts and other
receivables, less allowance for doubtful accounts |
|
800,838 |
|
|
741,992 |
|
Accounts receivable from related
parties |
|
1,227 |
|
|
1,084 |
|
Inventories |
|
1,439,915 |
|
|
1,358,793 |
|
Income taxes receivable |
|
59,026 |
|
|
69,397 |
|
Prepaid expenses and other
current assets |
|
164,744 |
|
|
183,039 |
|
Total current assets |
|
2,875,990 |
|
|
2,902,711 |
|
Deferred tax assets |
|
5,358 |
|
|
5,471 |
|
Other long-lived assets |
|
25,744 |
|
|
24,780 |
|
Operating lease assets, net |
|
279,795 |
|
|
288,886 |
|
Identified intangible assets,
net |
|
592,182 |
|
|
589,913 |
|
Goodwill |
|
1,019,323 |
|
|
1,005,245 |
|
Property, plant and equipment,
net |
|
2,682,369 |
|
|
2,657,491 |
|
Total assets |
|
$ |
7,480,761 |
|
|
$ |
7,474,497 |
|
|
|
|
|
|
Accounts payable |
|
$ |
1,025,249 |
|
|
$ |
1,028,710 |
|
Accounts payable to related
parties |
|
9,556 |
|
|
9,650 |
|
Revenue contract liabilities |
|
35,334 |
|
|
65,918 |
|
Accrued expenses and other
current liabilities |
|
606,759 |
|
|
807,847 |
|
Income taxes payable |
|
9,204 |
|
|
— |
|
Current maturities of long-term
debt |
|
25,457 |
|
|
25,455 |
|
Total current liabilities |
|
1,711,559 |
|
|
1,937,580 |
|
Noncurrent operating lease
liability, less current maturities |
|
208,152 |
|
|
217,432 |
|
Long-term debt, less current
maturities |
|
2,350,429 |
|
|
2,255,546 |
|
Deferred tax liabilities |
|
360,015 |
|
|
339,831 |
|
Other long-term liabilities |
|
114,850 |
|
|
148,761 |
|
Total liabilities |
|
4,745,005 |
|
|
4,899,150 |
|
Common stock |
|
2,613 |
|
|
2,612 |
|
Treasury stock |
|
(345,134 |
) |
|
(345,134 |
) |
Additional paid-in capital |
|
1,956,375 |
|
|
1,954,334 |
|
Retained earnings |
|
1,072,777 |
|
|
972,569 |
|
Accumulated other comprehensive
income (loss) |
|
37,279 |
|
|
(20,620 |
) |
Total Pilgrim’s Pride Corporation stockholders’ equity |
|
2,723,910 |
|
|
2,563,761 |
|
Noncontrolling interest |
|
11,846 |
|
|
11,586 |
|
Total stockholders’ equity |
|
2,735,756 |
|
|
2,575,347 |
|
Total liabilities and stockholders’ equity |
|
$ |
7,480,761 |
|
|
$ |
7,474,497 |
|
PILGRIM’S PRIDE CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
(Unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 28, 2021 |
|
March 29, 2020 |
|
|
(In thousands, except per share data) |
Net sales |
|
$ |
3,273,425 |
|
|
$ |
3,074,928 |
|
Cost of sales |
|
3,012,182 |
|
|
2,897,829 |
|
Gross profit |
|
261,243 |
|
|
177,099 |
|
Selling, general and
administrative expense |
|
102,779 |
|
|
92,713 |
|
Operating income |
|
158,464 |
|
|
84,386 |
|
Interest expense, net of
capitalized interest |
|
30,334 |
|
|
32,688 |
|
Interest income |
|
(2,366 |
) |
|
(1,690 |
) |
Foreign currency transaction loss
(gain) |
|
2,514 |
|
|
(18,385 |
) |
Miscellaneous, net |
|
(7,844 |
) |
|
(34,188 |
) |
Income before income taxes |
|
135,826 |
|
|
105,961 |
|
Income tax expense |
|
35,358 |
|
|
38,512 |
|
Net income |
|
100,468 |
|
|
67,449 |
|
Less: Net income attributable to
noncontrolling interests |
|
260 |
|
|
181 |
|
Net income attributable to Pilgrim’s Pride Corporation |
|
$ |
100,208 |
|
|
$ |
67,268 |
|
|
|
|
|
|
Weighted average shares
of Pilgrim's Pride Corporation common stock
outstanding: |
|
|
|
|
Basic |
|
243,580 |
|
|
249,347 |
|
Effect of dilutive common stock equivalents |
|
278 |
|
|
275 |
|
Diluted |
|
243,858 |
|
|
249,622 |
|
|
|
|
|
|
Net income attributable
to Pilgrim's Pride Corporation per share of common
stock outstanding: |
|
|
|
|
Basic |
|
$ |
0.41 |
|
|
$ |
0.27 |
|
Diluted |
|
$ |
0.41 |
|
|
$ |
0.27 |
|
PILGRIM’S PRIDE CORPORATION AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
|
|
|
Three Months Ended |
|
|
March 28, 2021 |
|
March 29, 2020 |
|
|
(In thousands) |
Cash flows from operating
activities: |
|
|
|
|
Net income |
|
$ |
100,468 |
|
|
$ |
67,449 |
|
Adjustments to reconcile net income to cash provided by operating
activities: |
|
|
|
|
Depreciation and amortization |
|
86,532 |
|
|
79,773 |
|
Deferred income tax expense |
|
12,483 |
|
|
17,023 |
|
Gain on property disposals |
|
(2,396 |
) |
|
(521 |
) |
Stock-based compensation |
|
2,042 |
|
|
676 |
|
Loan cost amortization |
|
1,215 |
|
|
1,212 |
|
Accretion of discount related to Senior Notes |
|
246 |
|
|
246 |
|
Amortization of premium related to Senior Notes |
|
(167 |
) |
|
(167 |
) |
Loss (gain) on equity-method investments |
|
(4 |
) |
|
309 |
|
Negative adjustment to previously recognized gain on bargain
purchase |
|
— |
|
|
1,740 |
|
Changes in operating assets and liabilities: |
|
|
|
|
Trade accounts and other receivables |
|
(54,892 |
) |
|
(26,296 |
) |
Inventories |
|
(82,550 |
) |
|
9,333 |
|
Prepaid expenses and other current assets |
|
20,228 |
|
|
(22,419 |
) |
Accounts payable, accrued expenses and other current
liabilities |
|
(240,183 |
) |
|
(108,004 |
) |
Income taxes |
|
25,440 |
|
|
(16 |
) |
Long-term pension and other postretirement obligations |
|
(10,841 |
) |
|
(6,282 |
) |
Other operating assets and liabilities |
|
(1,172 |
) |
|
7,008 |
|
Cash provided by operating
activities |
|
(143,551 |
) |
|
21,064 |
|
Cash flows from investing
activities: |
|
|
|
|
Acquisitions of property, plant and equipment |
|
(102,167 |
) |
|
(77,168 |
) |
Proceeds from property disposals |
|
13,074 |
|
|
632 |
|
Purchase of acquired business, net of cash acquired |
|
— |
|
|
(1,740 |
) |
Cash used in investing
activities |
|
(89,093 |
) |
|
(78,276 |
) |
Cash flows from financing
activities: |
|
|
|
|
Proceeds from revolving line of credit and long-term
borrowings |
|
328,932 |
|
|
356,547 |
|
Payments on revolving line of credit, long-term borrowings and
finance lease obligations |
|
(235,292 |
) |
|
(13,396 |
) |
Payment of equity distribution under Tax Sharing Agreement between
JBS USA Food Company Holdings and Pilgrim’s Pride Corporation |
|
(650 |
) |
|
— |
|
Purchase of common stock under share repurchase program |
|
— |
|
|
(27,906 |
) |
Cash provided by financing
activities |
|
92,990 |
|
|
315,245 |
|
Effect of exchange rate
changes on cash and cash equivalents |
|
1,488 |
|
|
(2,193 |
) |
Increase in cash, cash
equivalents and restricted cash |
|
(138,166 |
) |
|
255,840 |
|
Cash, cash equivalents and
restricted cash, beginning of period |
|
548,406 |
|
|
280,577 |
|
Cash, cash equivalents and
restricted cash, end of period |
|
$ |
410,240 |
|
|
$ |
536,417 |
|
PILGRIM’S PRIDE
CORPORATIONNon-GAAP Financial Measures
Reconciliation(Unaudited)
“EBITDA” is defined as the sum of net income
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) foreign currency transaction loss (gain), (2) transaction
costs from business acquisitions, (3) DOJ agreement &
litigation settlements, (4) negative adjustment to previously
recognized gain on bargain purchase, (5) shareholder litigation
settlement, (6) deconsolidation of subsidiary and (7) net income
attributable to noncontrolling interest. 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 applicable to
continuing operations. 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. EBITDA
and Adjusted EBITDA have limitations as analytical tools and should
not be considered in isolation or as substitutes for an analysis of
our results as reported under U.S. GAAP. In addition, other
companies in our industry may calculate these measures differently
limiting their usefulness as a comparative measure. Because of
these limitations, EBITDA and Adjusted EBITDA should not be
considered as an alternative to net income as indicators of our
operating performance or any other measures of performance derived
in accordance with U.S. GAAP. These limitations should be
compensated for by relying primarily on our U.S. GAAP results and
using EBITDA and Adjusted EBITDA only on a supplemental basis.
PILGRIM'S PRIDE CORPORATION |
Reconciliation of Adjusted EBITDA |
(Unaudited) |
|
|
|
|
|
Three Months Ended |
|
March 28, 2021 |
|
March 29, 2020 |
|
(In thousands) |
Net income |
$ |
100,468 |
|
|
$ |
67,449 |
|
Add: |
|
|
|
Interest expense, net(a) |
27,968 |
|
|
30,998 |
|
Income tax expense |
35,358 |
|
|
38,512 |
|
Depreciation and amortization |
86,532 |
|
|
79,773 |
|
EBITDA |
250,326 |
|
|
216,732 |
|
Add: |
|
|
|
Foreign currency transaction loss (gain)(b) |
2,514 |
|
|
(18,385 |
) |
Transaction costs related to acquisitions(c) |
— |
|
|
215 |
|
DOJ agreement & litigation settlements(d) |
2,399 |
|
|
— |
|
Minus: |
|
|
|
Negative adjustment to previously recognized gain on bargain
purchase(e) |
— |
|
|
(1,740 |
) |
Shareholder litigation settlement(f) |
— |
|
|
34,643 |
|
Deconsolidation of subsidiary(g) |
1,131 |
|
|
— |
|
Net income attributable to noncontrolling interest |
260 |
|
|
181 |
|
Adjusted EBITDA |
$ |
253,848 |
|
|
$ |
165,478 |
|
(a) Interest expense, net, consists of
interest expense less interest income.(b) The Company measures the
financial statements of its Mexico reportable segment as if the
U.S. dollar were the functional currency. Accordingly, we remeasure
assets and liabilities, other than nonmonetary assets, of the
Mexico reportable segment at current exchange rates. We remeasure
nonmonetary assets using the historical exchange rate in effect on
the date of each asset’s acquisition. Currency exchange gains or
losses resulting from these remeasurements, as well as, from our
U.K. and Europe reportable segment are included in the line item
Foreign currency transaction loss (gain) in the Condensed
Consolidated Statements of Income.(c) Transaction costs related to
acquisitions includes those charges that are incurred in
conjunction with business acquisitions.(d) On October 13, 2020,
Pilgrims announced that we have entered into a plea agreement (the
“Plea Agreement”) with the DOJ. As a result of the Plea Agreement,
we recognized a fine of $110,524,140. On February 23, 2021, the
Colorado Court approved the Plea Agreement and assessed a fine of
$107.9 million. The difference from prior accrual to updated amount
was recognized during the three months ended March 28, 2021. This
difference recognized in the three months ended March 28, 2021 was
offset by an amount recognized in anticipation of a probable
settlement in ongoing litigation.(e) The gain on bargain purchase
was recognized as a result of the PPL acquisition in October 2019.
The amount shown above represents a working capital adjustment to
the previously recorded gain on bargain purchase.(f) Shareholder
litigation settlement is income received as a result of a
settlement in the first quarter of 2020. (g) This represents a gain
recognized as a result of deconsolidation of a
subsidiary.
The summary unaudited consolidated income
statement data for the twelve months ended March 28, 2021 (the LTM
Period) have been calculated by subtracting the applicable
unaudited consolidated income statement data for the three months
ended March 29, 2020 from the sum of (1) the applicable audited
consolidated income statement data for the year ended December 27,
2020 and (2) the applicable unaudited consolidated income statement
data for the three months ended March 28, 2021.
PILGRIM'S PRIDE CORPORATION |
Reconciliation of LTM Adjusted EBITDA |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
LTM Ended |
|
|
June 28,2020 |
|
September 27,2020 |
|
December 27,2020 |
|
March 28,2021 |
|
March 28,2021 |
|
|
(In thousands) |
Net income |
|
$ |
(6,400 |
) |
|
$ |
33,691 |
|
|
$ |
330 |
|
|
$ |
100,468 |
|
|
$ |
128,089 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
31,165 |
|
|
28,801 |
|
|
27,849 |
|
|
27,968 |
|
|
115,783 |
|
Income tax expense |
|
(2,956 |
) |
|
22,344 |
|
|
8,855 |
|
|
35,358 |
|
|
63,601 |
|
Depreciation and amortization |
|
84,603 |
|
|
84,265 |
|
|
88,463 |
|
|
86,532 |
|
|
343,863 |
|
EBITDA |
|
106,412 |
|
|
169,101 |
|
|
125,497 |
|
|
250,326 |
|
|
651,336 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
Foreign currency transaction losses |
|
5,525 |
|
|
9,092 |
|
|
4,528 |
|
|
2,514 |
|
|
21,659 |
|
Transaction costs related to acquisitions |
|
(81 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(81 |
) |
DOJ agreement & litigation settlements |
|
— |
|
|
110,524 |
|
|
75,000 |
|
|
2,399 |
|
|
187,923 |
|
Restructuring charges |
|
— |
|
|
— |
|
|
123 |
|
|
— |
|
|
123 |
|
Hometown Strong commitment |
|
— |
|
|
14,506 |
|
|
494 |
|
|
— |
|
|
15,000 |
|
Minus: |
|
|
|
|
|
|
|
|
|
|
Negative adjustment to previously recognized gain on bargain
purchase |
|
— |
|
|
(2,006 |
) |
|
— |
|
|
— |
|
|
(2,006 |
) |
Deconsolidation of subsidiary |
|
— |
|
|
— |
|
|
— |
|
|
1,131 |
|
|
1,131 |
|
Net income (loss) attributable to noncontrolling interest |
|
(364 |
) |
|
245 |
|
|
251 |
|
|
260 |
|
|
392 |
|
Adjusted EBITDA |
|
$ |
112,220 |
|
|
$ |
304,984 |
|
|
$ |
205,391 |
|
|
$ |
253,848 |
|
|
$ |
876,443 |
|
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 |
|
Three Months Ended |
|
|
March 28, 2021 |
|
March 29, 2020 |
|
March 28, 2021 |
|
March 29, 2020 |
|
(In thousands) |
Net income |
|
$ |
100,468 |
|
|
$ |
67,449 |
|
|
3.07 |
% |
|
2.19 |
% |
Add: |
|
|
|
|
|
|
|
|
Interest expense, net |
|
27,968 |
|
|
30,998 |
|
|
0.85 |
% |
|
1.01 |
% |
Income tax expense |
|
35,358 |
|
|
38,512 |
|
|
1.08 |
% |
|
1.25 |
% |
Depreciation and amortization |
|
86,532 |
|
|
79,773 |
|
|
2.64 |
% |
|
2.59 |
% |
EBITDA |
|
250,326 |
|
|
216,732 |
|
|
7.64 |
% |
|
7.04 |
% |
Add: |
|
|
|
|
|
|
|
|
Foreign currency transaction losses (gains) |
|
2,514 |
|
|
(18,385 |
) |
|
0.07 |
% |
|
(0.59 |
)% |
Transaction costs related to acquisitions |
|
— |
|
|
215 |
|
|
— |
% |
|
0.01 |
% |
DOJ agreement & litigation settlements |
|
2,399 |
|
|
— |
|
|
0.07 |
% |
|
— |
% |
Minus: |
|
|
|
|
|
|
|
|
Negative adjustment to previously recognized gain on bargain
purchase |
|
— |
|
|
(1,740 |
) |
|
— |
% |
|
(0.06 |
)% |
Shareholder litigation settlement |
|
— |
|
|
34,643 |
|
|
— |
% |
|
1.13 |
% |
Deconsolidation of subsidiary |
|
1,131 |
|
|
— |
|
|
0.03 |
% |
|
— |
% |
Net income attributable to noncontrolling interest |
|
260 |
|
|
181 |
|
|
0.01 |
% |
|
0.01 |
% |
Adjusted EBITDA |
|
$ |
253,848 |
|
|
$ |
165,478 |
|
|
7.74 |
% |
|
5.38 |
% |
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
3,273,425 |
|
|
$ |
3,074,928 |
|
|
$ |
3,273,425 |
|
|
$ |
3,074,928 |
|
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, as shown below in the table. Adjusted net income
attributable to Pilgrim’s Pride Corporation per common diluted
share 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 U.S. GAAP, to compare the performance
of companies. Management also believe that this non-U.S. GAAP
financial measure, in combination with our financial results
calculated in accordance with U.S. GAAP, provides investors with
additional perspective regarding the impact of such charges on net
income attributable to Pilgrim’s Pride Corporation per common
diluted share. Adjusted net income attributable to Pilgrim’s Pride
Corporation per common diluted share is not a measurement of
financial performance under U.S. GAAP, has limitations as an
analytical tool and should not be considered in isolation or as a
substitute for an analysis of our results as reported under U.S.
GAAP. 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 Pride
Corporation per common diluted share to adjusted net income
attributable to Pilgrim’s Pride Corporation per common diluted
share is as follows:
PILGRIM'S PRIDE CORPORATION |
Reconciliation of Adjusted Net Income |
(Unaudited) |
|
|
|
|
|
Three Months Ended |
|
March 28, 2021 |
|
March 29, 2020 |
|
(In thousands, except per share data) |
Net income attributable to Pilgrim's |
$ |
100,208 |
|
|
$ |
67,268 |
|
Add: |
|
|
|
Foreign currency transaction losses (gains) |
2,514 |
|
|
(18,385 |
) |
Transaction costs related to acquisitions |
— |
|
|
215 |
|
DOJ agreement & litigation settlements |
2,399 |
|
|
— |
|
Minus: |
|
|
|
Negative adjustment to previously recognized gain on bargain
purchase |
— |
|
|
(1,740 |
) |
Shareholder litigation settlement |
— |
|
|
34,643 |
|
Deconsolidation of subsidiary |
1,131 |
|
|
— |
|
Adjusted net income
attributable to Pilgrim's before tax impact of adjustments |
103,990 |
|
|
16,195 |
|
Net tax impact of
adjustments(a) |
(942 |
) |
|
12,722 |
|
Adjusted net income
attributable to Pilgrim's |
$ |
103,048 |
|
|
$ |
28,917 |
|
Weighted average diluted
shares of common stock outstanding |
243,858 |
|
|
249,622 |
|
Adjusted net income
attributable to Pilgrim's per common diluted share |
$ |
0.42 |
|
|
$ |
0.12 |
|
(a) Net tax expense (benefit) of adjustments
represents the tax impact of all adjustments shown above.
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 |
|
March 28, 2021 |
|
March 29, 2020 |
|
(In thousands, except per share data) |
GAAP EPS |
$ |
0.41 |
|
|
$ |
0.27 |
|
Add: |
|
|
|
Foreign currency transaction losses (gains) |
0.01 |
|
|
(0.07 |
) |
Transaction costs related to acquisitions |
— |
|
|
— |
|
DOJ agreement & litigation settlements |
— |
|
|
— |
|
Minus: |
|
|
|
Negative adjustment to previously recognized gain on bargain
purchase |
— |
|
|
(0.01 |
) |
Shareholder litigation settlement |
— |
|
|
0.14 |
|
Deconsolidation of subsidiary |
— |
|
|
— |
|
Adjusted EPS before tax impact
of adjustments |
0.42 |
|
|
0.07 |
|
Net tax impact of
adjustments(a) |
— |
|
|
0.05 |
|
Adjusted EPS |
$ |
0.42 |
|
|
$ |
0.12 |
|
|
|
|
|
Weighted average diluted
shares of common stock outstanding |
243,858 |
|
|
249,622 |
|
(a) Net tax impact of adjustments represents the tax impact of
all adjustments shown above.
PILGRIM'S PRIDE CORPORATION |
Supplementary Selected Segment and Geographic
Data |
(Unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 28, 2021 |
|
March 29, 2020 |
|
|
(In thousands) |
Sources of net sales by
geographic region of origin: |
|
|
|
|
U.S. |
|
$ |
1,999,559 |
|
|
$ |
1,926,880 |
|
U.K. and Europe |
|
854,734 |
|
|
822,262 |
|
Mexico |
|
419,132 |
|
|
325,786 |
|
Total net sales |
|
$ |
3,273,425 |
|
|
$ |
3,074,928 |
|
|
|
|
|
|
Sources of cost of sales by
geographic region of origin: |
|
|
|
|
U.S. |
|
$ |
1,866,700 |
|
|
$ |
1,788,777 |
|
U.K. and Europe |
|
816,926 |
|
|
770,134 |
|
Mexico |
|
328,570 |
|
|
338,942 |
|
Elimination |
|
(14 |
) |
|
(24 |
) |
Total cost of sales |
|
$ |
3,012,182 |
|
|
$ |
2,897,829 |
|
|
|
|
|
|
Sources of gross profit by
geographic region of origin: |
|
|
|
|
U.S. |
|
$ |
132,859 |
|
|
$ |
138,103 |
|
U.K. and Europe |
|
37,808 |
|
|
52,128 |
|
Mexico |
|
90,562 |
|
|
(13,156 |
) |
Elimination |
|
14 |
|
|
24 |
|
Total gross profit |
|
$ |
261,243 |
|
|
$ |
177,099 |
|
|
|
|
|
|
Sources of operating income by
geographic region of origin: |
|
|
|
|
U.S. |
|
$ |
68,125 |
|
|
$ |
85,052 |
|
U.K. and Europe |
|
10,495 |
|
|
23,190 |
|
Mexico |
|
79,830 |
|
|
(23,880 |
) |
Elimination |
|
14 |
|
|
24 |
|
Total operating income |
|
$ |
158,464 |
|
|
$ |
84,386 |
|
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