Pilgrim’s Pride Corporation (NASDAQ: PPC), one of the world's
largest poultry producers, reports its first quarter 2023 financial
results.
First Quarter Highlights
- Net Sales of $4.2 billion.
- GAAP Net Income of $5.6 million and GAAP EPS of $0.02. Adjusted
Net Income of $19.0 million or Adjusted EPS of $0.08.
- Consolidated GAAP operating income margin of 0.8%.
- Adjusted EBITDA of $151.9 million, or a 3.6% margin, with
adjusted EBITDA margins of 1.8% in the U.S., 5.3% in the U.K. &
Europe, and 8.5% in Mexico.
- Our U.S. business improved relative to prior quarter due to our
diversified portfolio across bird sizes and branded offerings,
operational excellence improvements, and Key Customer growth
despite elevated grain pricing, depressed commodity values, and
continued inflation.
- Prepared Foods business continued its momentum in branded fully
cooked products as Just Bare® and Pilgrim’s® collectively grew over
68% year over year. E-commerce remains a key contributor to our
branded sales with 19% share.
- The U.K. and Europe business continued to recover given
benefits from back office integration, manufacturing network
optimization, and growth and innovation with Key Customers.
- Mexico business rebounded as previous challenges in live
operations diminished and overall market fundamentals returned to
more balanced levels during the quarter.
- We successfully executed a $1 Billion bond offering in
unsecured investment grade debt, with great market support, being
significantly oversubscribed.
- We continued to grow and diversify our portfolio, support our
Key Customer growth and operational excellence efforts as our
expansion at Athens, Georgia facility, automation improvements, and
our new protein conversion plant in south Georgia all remain on
track.
- Our journey to be a Sustainability leader continued as we
recently unveiled an advanced poultry farm in our U.K. & Europe
region that can eliminate nearly all its greenhouse gas emissions
as we work with our entire supply chain to achieve our ambitious
Sustainability targets.
(Unaudited) |
|
Three Months Ended |
|
|
March 26,2023 |
|
March 27,2022 |
|
Y/Y Change |
|
|
(In millions, except per share and
percentages) |
Net sales |
|
$ |
4,165.6 |
|
|
$ |
4,240.4 |
|
|
(1.8)% |
U.S. GAAP EPS |
|
$ |
0.02 |
|
|
$ |
1.15 |
|
|
(98.3)% |
Operating income |
|
$ |
31.3 |
|
|
$ |
402.0 |
|
|
(92.2)% |
Adjusted EBITDA(1) |
|
$ |
151.9 |
|
|
$ |
501.8 |
|
|
(69.7)% |
Adjusted EBITDA margin(1) |
|
|
3.6 |
% |
|
|
11.8 |
% |
|
-8.2pts |
(1)
Reconciliations for
non-U.S. GAAP measures are provided in subsequent sections within
this release.
“Our strategy of fostering our partnerships with Key Customers,
operational excellence and growing our diversified portfolio of
businesses, has demonstrated its resilience to a variety of market
challenges over the last few years,” said Fabio Sandri, Chief
Executive Officer.
“Despite improving market fundamentals during the quarter,
business conditions remained difficult given elevated input costs,
persistent inflation, and ample protein availability. Nonetheless,
our team members’ relentless determination supported an improvement
in margins relative to the prior quarter in all geographies,” said
Fabio Sandri.
The U.S. business improved on the strength of both Small Birds
and Prepared Foods. Case Ready continued to drive growth above
industry averages with Key Customers, whereas Big Bird Debone made
operational improvements throughout the quarter.
“Our U.S. commodity business continued to face exceptionally
challenging circumstances, especially in January. Nevertheless, our
diverse portfolio across bird sizes and branded offerings mitigated
market impacts, whereas our intense focus on operational excellence
enhanced our performance. Our commitment to profitable growth
continues as our automation projects, plant expansion at Athens,
Georgia, and construction of a new protein conversion plant in
south Georgia all remain on track,” remarked Fabio Sandri.
Although the U.K. and Europe business also faced continued
inflationary headwinds and seasonal changes in demand, investments
in network optimization and key customer partnerships alleviated
these impacts as adjusted EBITDA margins continue to improve.
“Our U.K. and Europe team worked diligently of over the past
year to mitigate inflationary supply chain pressures. Their
relentless focus on driving scale and cost synergies across our
businesses enhanced our ability to work and grow with Key
Customers”, said Fabio Sandri.
The Mexico business rebounded solidly throughout the quarter as
live operations improved and market fundamentals stabilized. As a
result, margins returned to historical levels.
“I’m proud of the Mexico team to quickly remediate pressing
issues in live operations to meet Key Customer needs, drive
operational excellence to alleviate the impact from demanding
business conditions, and diversify our portfolio through innovation
and branded growth,” remarked Fabio Sandri.
Pilgrim’s also continues to drive its Sustainability efforts as
it recently unveiled a state-of-the-art poultry farm in the U.K.
that can reduce emissions by nearly 100% from the redesign of
housing along with the application of solar and heating
technologies.
“Throughout the past year, we’ve had an intense focus on
reducing energy intensity at our processing plants. I’m pleased
that we’ve extended our efforts throughout our supply chain to
create ways to further reduce our greenhouse gas emissions
footprint, creating a better future for all team members,” said
Fabio Sandri.
Conference Call Information
A conference call to discuss Pilgrim’s quarterly results will be
held tomorrow, April 27, 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/ppc230427.html
You may also reach the pre-registration link by logging in
through the investor section of our website
at https://ir.pilgrims.com in the “Events &
Presentations” section.
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.”
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.
About Pilgrim’s Pride
Pilgrim’s employs approximately 62,000 people and operates
protein processing plants and prepared-foods facilities in 14
states, Puerto Rico, Mexico, the U.K, the Republic of Ireland 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 channels, including, but not limited to,
the impacts of the Russia-Ukraine conflict; the risk of
cyber-attacks, natural disasters, power losses, unauthorized
access, telecommunication failures, and other problems on our
information systems; 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: |
Andrew Rojeski |
|
Head of Strategy, Investor
Relations, & Net Zero Programs |
|
IRPPC@pilgrims.com |
|
www.pilgrims.com |
PILGRIM’S PRIDE CORPORATION |
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
March 26, 2023 |
|
December 25, 2022 |
|
|
(In thousands) |
Cash and cash equivalents |
|
$ |
150,687 |
|
|
$ |
400,988 |
|
Restricted cash and restricted cash equivalents |
|
|
33,879 |
|
|
|
33,771 |
|
Trade
accounts and other receivables, less allowance for credit
losses |
|
|
1,237,366 |
|
|
|
1,097,212 |
|
Accounts
receivable from related parties |
|
|
2,125 |
|
|
|
2,512 |
|
Inventories |
|
|
2,022,110 |
|
|
|
1,990,184 |
|
Income
taxes receivable |
|
|
143,974 |
|
|
|
155,859 |
|
Prepaid
expenses and other current assets |
|
|
232,453 |
|
|
|
211,092 |
|
Total current assets |
|
|
3,822,594 |
|
|
|
3,891,618 |
|
Deferred
tax assets |
|
|
7,955 |
|
|
|
1,969 |
|
Other
long-lived assets |
|
|
16,978 |
|
|
|
41,574 |
|
Operating lease assets, net |
|
|
290,175 |
|
|
|
305,798 |
|
Intangible assets, net |
|
|
848,895 |
|
|
|
846,020 |
|
Goodwill |
|
|
1,243,613 |
|
|
|
1,227,944 |
|
Property, plant and equipment, net |
|
|
2,997,295 |
|
|
|
2,940,846 |
|
Total assets |
|
$ |
9,227,505 |
|
|
$ |
9,255,769 |
|
|
|
|
|
|
Accounts
payable |
|
$ |
1,517,470 |
|
|
$ |
1,587,939 |
|
Accounts
payable to related parties |
|
|
20,481 |
|
|
|
12,155 |
|
Revenue
contract liabilities |
|
|
47,766 |
|
|
|
34,486 |
|
Accrued
expenses and other current liabilities |
|
|
862,753 |
|
|
|
850,899 |
|
Income
taxes payable |
|
|
18,951 |
|
|
|
58,411 |
|
Current
maturities of long-term debt |
|
|
26,326 |
|
|
|
26,279 |
|
Total current liabilities |
|
|
2,493,747 |
|
|
|
2,570,169 |
|
Noncurrent operating lease liabilities, less current
maturities |
|
|
219,350 |
|
|
|
230,701 |
|
Long-term debt, less current maturities |
|
|
3,196,615 |
|
|
|
3,166,432 |
|
Deferred
tax liabilities |
|
|
347,166 |
|
|
|
364,184 |
|
Other
long-term liabilities |
|
|
64,107 |
|
|
|
71,007 |
|
Total liabilities |
|
|
6,320,985 |
|
|
|
6,402,493 |
|
Common
stock |
|
|
2,619 |
|
|
|
2,617 |
|
Treasury
stock |
|
|
(544,687 |
) |
|
|
(544,687 |
) |
Additional paid-in capital |
|
|
1,971,038 |
|
|
|
1,969,833 |
|
Retained
earnings |
|
|
1,754,686 |
|
|
|
1,749,499 |
|
Accumulated other comprehensive loss |
|
|
(290,042 |
) |
|
|
(336,448 |
) |
Total Pilgrim’s Pride Corporation stockholders’ equity |
|
|
2,893,614 |
|
|
|
2,840,814 |
|
Noncontrolling interest |
|
|
12,906 |
|
|
|
12,462 |
|
Total stockholders’ equity |
|
|
2,906,520 |
|
|
|
2,853,276 |
|
Total liabilities and stockholders’ equity |
|
$ |
9,227,505 |
|
|
$ |
9,255,769 |
|
PILGRIM’S PRIDE CORPORATION |
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
(Unaudited) |
|
|
|
|
|
|
|
Three Months Ended |
|
|
March 26, 2023 |
|
March 27, 2022 |
|
|
(In thousands, except per share data) |
Net sales |
|
$ |
4,165,628 |
|
|
$ |
4,240,395 |
|
Cost of
sales |
|
|
3,992,581 |
|
|
|
3,698,415 |
|
Gross profit |
|
|
173,047 |
|
|
|
541,980 |
|
Selling,
general and administrative expense |
|
|
133,678 |
|
|
|
139,967 |
|
Restructuring activities |
|
|
8,026 |
|
|
|
— |
|
Operating income |
|
|
31,343 |
|
|
|
402,013 |
|
Interest
expense, net of capitalized interest |
|
|
42,662 |
|
|
|
36,296 |
|
Interest
income |
|
|
(3,600 |
) |
|
|
(1,274 |
) |
Foreign
currency transaction losses |
|
|
18,143 |
|
|
|
11,536 |
|
Miscellaneous, net |
|
|
(22,653 |
) |
|
|
(324 |
) |
Income (loss) before income taxes |
|
|
(3,209 |
) |
|
|
355,779 |
|
Income
tax expense (benefit) |
|
|
(8,840 |
) |
|
|
75,219 |
|
Net income |
|
|
5,631 |
|
|
|
280,560 |
|
Less:
Net income attributable to noncontrolling interests |
|
|
444 |
|
|
|
122 |
|
Net income attributable to Pilgrim’s Pride Corporation |
|
$ |
5,187 |
|
|
$ |
280,438 |
|
|
|
|
|
|
Weighted average shares of Pilgrim's Pride Corporation
common stock outstanding: |
|
|
|
|
Basic |
|
|
236,585 |
|
|
|
243,670 |
|
Effect of dilutive common stock equivalents |
|
|
579 |
|
|
|
630 |
|
Diluted |
|
|
237,164 |
|
|
|
244,300 |
|
|
|
|
|
|
Net income attributable to Pilgrim's Pride Corporation per
share of common stock outstanding: |
|
|
|
|
Basic |
|
$ |
0.02 |
|
|
$ |
1.15 |
|
Diluted |
|
$ |
0.02 |
|
|
$ |
1.15 |
|
PILGRIM’S PRIDE CORPORATION AND SUBSIDIARIES |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(Unaudited) |
|
|
|
Three Months Ended |
|
|
March 26, 2023 |
|
March 27, 2022 |
|
|
(In thousands) |
Cash flows from operating
activities: |
|
|
|
|
Net income |
|
$ |
5,631 |
|
|
$ |
280,560 |
|
Adjustments to reconcile net income to cash provided by operating
activities: |
|
|
|
|
Depreciation and amortization |
|
|
98,257 |
|
|
|
102,142 |
|
Deferred income tax benefit |
|
|
(26,309 |
) |
|
|
(21,917 |
) |
Gain on property disposals |
|
|
(9,333 |
) |
|
|
1,855 |
|
Loan cost amortization |
|
|
1,333 |
|
|
|
1,280 |
|
Stock-based compensation |
|
|
1,200 |
|
|
|
1,963 |
|
Accretion of discount related to Senior Notes |
|
|
429 |
|
|
|
429 |
|
Adjustment to previously recognized asset impairment |
|
|
(130 |
) |
|
|
— |
|
Loss (gain) on equity-method investments |
|
|
(4 |
) |
|
|
8 |
|
Changes in operating assets and liabilities: |
|
|
|
|
Trade accounts and other receivables |
|
|
(132,791 |
) |
|
|
(66,669 |
) |
Inventories |
|
|
(30,267 |
) |
|
|
(146,035 |
) |
Prepaid expenses and other current assets |
|
|
(20,268 |
) |
|
|
(5,889 |
) |
Accounts payable, accrued expenses and other current
liabilities |
|
|
(43,662 |
) |
|
|
(2,454 |
) |
Income taxes |
|
|
3,149 |
|
|
|
84,780 |
|
Long-term pension and other postretirement obligations |
|
|
949 |
|
|
|
(1,101 |
) |
Other operating assets and liabilities |
|
|
(9,888 |
) |
|
|
(1,956 |
) |
Cash provided by (used in)
operating activities |
|
|
(161,704 |
) |
|
|
226,996 |
|
Cash flows from investing
activities: |
|
|
|
|
Acquisitions of property, plant and equipment |
|
|
(131,701 |
) |
|
|
(81,578 |
) |
Proceeds from property disposals |
|
|
12,631 |
|
|
|
849 |
|
Proceeds from insurance recoveries |
|
|
1,599 |
|
|
|
— |
|
Purchase of acquired business, net of cash acquired |
|
|
— |
|
|
|
(4,847 |
) |
Cash used in investing
activities |
|
|
(117,471 |
) |
|
|
(85,576 |
) |
Cash flows from financing
activities: |
|
|
|
|
Proceeds from revolving line of credit and long-term
borrowings |
|
|
35,000 |
|
|
|
228,505 |
|
Payments on revolving line of credit, long-term borrowings and
finance lease obligations |
|
|
(6,527 |
) |
|
|
(32,093 |
) |
Payment of equity distribution under Tax Sharing Agreement between
JBS USA Holdings and Pilgrim’s Pride Corporation |
|
|
(1,592 |
) |
|
|
(1,961 |
) |
Purchase of common stock under share repurchase program |
|
|
— |
|
|
|
(27,023 |
) |
Payments of capitalized loan costs |
|
|
— |
|
|
|
(1,098 |
) |
Payments on early extinguishment of debt |
|
|
— |
|
|
|
— |
|
Cash provided by financing
activities |
|
|
26,881 |
|
|
|
166,330 |
|
Effect of exchange rate
changes on cash and cash equivalents |
|
|
2,101 |
|
|
|
(2,073 |
) |
Increase (decrease) in cash,
cash equivalents and restricted cash |
|
|
(250,193 |
) |
|
|
305,677 |
|
Cash, cash equivalents and
restricted cash, beginning of period |
|
|
434,759 |
|
|
|
450,121 |
|
Cash, cash equivalents and
restricted cash, end of period |
|
$ |
184,566 |
|
|
$ |
755,798 |
|
PILGRIM’S PRIDE CORPORATION
Non-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 losses, (2) costs related to
litigation settlements, (3) restructuring activities losses,
(4) transaction costs related to acquisitions, (5) property
insurance recoveries for Mayfield, Kentucky tornado property damage
losses, and (6) 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 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 26, 2023 |
|
March 27, 2022 |
|
(In thousands) |
Net income |
$ |
5,631 |
|
|
$ |
280,560 |
Add: |
|
|
|
Interest expense, net(a) |
|
39,062 |
|
|
|
35,022 |
Income tax expense (benefit) |
|
(8,840 |
) |
|
|
75,219 |
Depreciation and amortization |
|
98,257 |
|
|
|
102,142 |
EBITDA |
|
134,110 |
|
|
|
492,943 |
Add: |
|
|
|
Foreign currency transaction losses(b) |
|
18,143 |
|
|
|
11,536 |
Litigation settlements(c) |
|
11,200 |
|
|
|
500 |
Restructuring activities losses(d) |
|
8,026 |
|
|
|
— |
Transaction costs related to acquisitions(e) |
|
— |
|
|
|
717 |
Minus: |
|
|
|
Property insurance recoveries for Mayfield tornado losses(f) |
|
19,086 |
|
|
|
3,815 |
Net income attributable to noncontrolling interest |
|
444 |
|
|
|
122 |
Adjusted EBITDA |
$ |
151,949 |
|
|
$ |
501,759 |
(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
losses in the Condensed Consolidated Statements of Income. |
(c) |
This represents expenses recognized in anticipation of probable
settlements in ongoing litigation. |
(d) |
Restructuring charges is primarily related to restructuring
initiatives at multiple production facilities throughout our U.K.
and Europe reportable segment. |
(e) |
Transaction costs related to acquisitions includes those charges
that are incurred in conjunction with business acquisitions. |
(f) |
This represents property insurance recoveries for the property
damage losses incurred as a result of the tornado in Mayfield, KY
in December 2021. |
|
|
The summary unaudited consolidated income
statement data for the twelve months ended March 26, 2023 (the LTM
Period) have been calculated by subtracting the applicable
unaudited consolidated income statement data for the three months
ended March 27, 2022 from the sum of (1) the applicable audited
consolidated income statement data for the year ended December 25,
2022 and (2) the applicable unaudited consolidated income statement
data for the three months ended March 26, 2023.
PILGRIM'S PRIDE CORPORATION |
Reconciliation of LTM Adjusted EBITDA |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
LTM Ended |
|
|
June 26,2022 |
|
September 25,2022 |
|
December 25,2022 |
|
March 26,2023 |
|
March 26,2023 |
|
|
(In thousands) |
Net income (loss) |
|
$ |
362,021 |
|
|
$ |
258,999 |
|
$ |
(155,042 |
) |
|
$ |
5,631 |
|
|
$ |
471,609 |
Add: |
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
37,102 |
|
|
|
34,222 |
|
|
37,298 |
|
|
|
39,062 |
|
|
|
147,684 |
Income tax expense (benefit) |
|
|
112,711 |
|
|
|
65,749 |
|
|
25,256 |
|
|
|
(8,840 |
) |
|
|
194,876 |
Depreciation and amortization |
|
|
99,854 |
|
|
|
98,966 |
|
|
102,148 |
|
|
|
98,257 |
|
|
|
399,225 |
EBITDA |
|
|
611,688 |
|
|
|
457,936 |
|
|
9,660 |
|
|
|
134,110 |
|
|
|
1,213,394 |
Add: |
|
|
|
|
|
|
|
|
|
|
Foreign currency transaction losses |
|
|
2,758 |
|
|
|
54 |
|
|
16,469 |
|
|
|
18,143 |
|
|
|
37,424 |
Litigation settlements |
|
|
8,482 |
|
|
|
19,300 |
|
|
5,804 |
|
|
|
11,200 |
|
|
|
44,786 |
Restructuring activities losses |
|
|
— |
|
|
|
— |
|
|
30,466 |
|
|
|
8,026 |
|
|
|
38,492 |
Transaction costs related to acquisitions |
|
|
255 |
|
|
|
— |
|
|
(24 |
) |
|
|
— |
|
|
|
231 |
Minus: |
|
|
|
|
|
|
|
|
|
|
Property insurance recoveries for Mayfield tornado losses |
|
|
— |
|
|
|
16,182 |
|
|
(417 |
) |
|
|
19,086 |
|
|
|
34,851 |
Net income (loss) attributable to noncontrolling interest |
|
|
(95 |
) |
|
|
647 |
|
|
(66 |
) |
|
|
444 |
|
|
|
930 |
Adjusted EBITDA |
|
$ |
623,278 |
|
|
$ |
460,461 |
|
$ |
62,858 |
|
|
$ |
151,949 |
|
|
$ |
1,298,546 |
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 26, 2023 |
|
March 27, 2022 |
|
March 26, 2023 |
|
March 27, 2022 |
|
|
(In thousands) |
Net income |
|
$ |
5,631 |
|
|
$ |
280,560 |
|
|
0.14 |
% |
|
|
6.62 |
% |
Add: |
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
39,062 |
|
|
|
35,022 |
|
|
0.94 |
% |
|
|
0.83 |
% |
Income tax expense (benefit) |
|
|
(8,840 |
) |
|
|
75,219 |
|
(0.21)% |
|
|
1.77 |
% |
Depreciation and amortization |
|
|
98,257 |
|
|
|
102,142 |
|
|
2.35 |
% |
|
|
2.40 |
% |
EBITDA |
|
|
134,110 |
|
|
|
492,943 |
|
|
3.22 |
% |
|
|
11.62 |
% |
Add: |
|
|
|
|
|
|
|
|
Foreign currency transaction losses |
|
|
18,143 |
|
|
|
11,536 |
|
|
0.43 |
% |
|
|
0.27 |
% |
Litigation settlements |
|
|
11,200 |
|
|
|
500 |
|
|
0.27 |
% |
|
|
0.01 |
% |
Restructuring activities losses |
|
|
8,026 |
|
|
|
— |
|
|
0.19 |
% |
|
|
— |
% |
Transaction costs related to business acquisitions |
|
|
— |
|
|
|
717 |
|
|
— |
% |
|
|
0.02 |
% |
Minus: |
|
|
|
|
|
|
|
|
Property insurance recoveries for Mayfield tornado losses |
|
|
19,086 |
|
|
|
3,815 |
|
|
0.46 |
% |
|
|
0.09 |
% |
Net income attributable to noncontrolling interest |
|
|
444 |
|
|
|
122 |
|
|
0.01 |
% |
|
|
— |
% |
Adjusted EBITDA |
|
$ |
151,949 |
|
|
$ |
501,759 |
|
|
3.64 |
% |
|
|
11.83 |
% |
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
4,165,628 |
|
|
$ |
4,240,395 |
|
$ |
4,165,628 |
|
|
$ |
4,240,395 |
|
Adjusted EBITDA by segment figures s are presented because they
are used by management and we believe they are 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 Adjusted EBITDA |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
|
March 26, 2023 |
|
March 27, 2022 |
|
U.S. |
|
U.K. &Europe |
|
Mexico |
|
Total |
|
U.S. |
|
U.K. &Europe |
|
Mexico |
|
Total |
|
(In thousands) |
|
(In thousands) |
Net income (loss) |
$ |
(53,590 |
) |
|
$ |
20,813 |
|
|
$ |
38,408 |
|
|
$ |
5,631 |
|
|
$ |
234,467 |
|
$ |
(11,849 |
) |
|
$ |
57,942 |
|
|
$ |
280,560 |
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net(a) |
|
41,365 |
|
|
|
(198 |
) |
|
|
(2,105 |
) |
|
|
39,062 |
|
|
|
35,366 |
|
|
582 |
|
|
|
(926 |
) |
|
|
35,022 |
Income tax expense (benefit) |
|
(16,822 |
) |
|
|
5,923 |
|
|
|
2,059 |
|
|
|
(8,840 |
) |
|
|
70,858 |
|
|
(9,631 |
) |
|
|
13,992 |
|
|
|
75,219 |
Depreciation and amortization |
|
60,237 |
|
|
|
32,277 |
|
|
|
5,743 |
|
|
|
98,257 |
|
|
|
60,392 |
|
|
35,555 |
|
|
|
6,195 |
|
|
|
102,142 |
EBITDA |
|
31,190 |
|
|
|
58,815 |
|
|
|
44,105 |
|
|
|
134,110 |
|
|
|
401,083 |
|
|
14,657 |
|
|
|
77,203 |
|
|
|
492,943 |
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency transaction losses (gains)(b) |
|
20,313 |
|
|
|
(616 |
) |
|
|
(1,554 |
) |
|
|
18,143 |
|
|
|
13,301 |
|
|
(4 |
) |
|
|
(1,761 |
) |
|
|
11,536 |
Litigation settlements(c) |
|
11,200 |
|
|
|
— |
|
|
|
— |
|
|
|
11,200 |
|
|
|
500 |
|
|
— |
|
|
|
— |
|
|
|
500 |
Restructuring activities(d) |
|
— |
|
|
|
8,026 |
|
|
|
— |
|
|
|
8,026 |
|
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
— |
Transaction costs related to acquisitions(e) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
592 |
|
|
125 |
|
|
|
— |
|
|
|
717 |
Minus: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property insurance recoveries for Mayfield tornado losses(f) |
|
19,086 |
|
|
|
— |
|
|
|
— |
|
|
|
19,086 |
|
|
|
3,815 |
|
|
— |
|
|
|
— |
|
|
|
3,815 |
Net income attributable to noncontrolling interest |
|
— |
|
|
|
— |
|
|
|
444 |
|
|
|
444 |
|
|
|
— |
|
|
— |
|
|
|
122 |
|
|
|
122 |
Adjusted EBITDA |
$ |
43,617 |
|
|
$ |
66,225 |
|
|
$ |
42,107 |
|
|
$ |
151,949 |
|
|
$ |
411,661 |
|
$ |
14,778 |
|
|
$ |
75,320 |
|
|
$ |
501,759 |
(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
losses in the Condensed Consolidated Statements of Income. |
(c) |
This represents expenses recognized in anticipation of probable
settlements in ongoing litigation. |
(d) |
Restructuring charges is primarily related to restructuring
initiatives at multiple production facilities throughout our U.K.
and Europe reportable segment. |
(e) |
Transaction costs related to acquisitions includes those charges
that are incurred in conjunction with business acquisitions. |
(f) |
This represents property insurance recoveries for the property
damage losses incurred as a result of the tornado in Mayfield, KY
in December 2021. |
|
|
Adjusted net income attributable to Pilgrim's
Pride Corporation (“Pilgrim's”) is calculated by adding to Net
income (loss) attributable to Pilgrim's certain items of expense
and deducting from Net income (loss) 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 (loss) 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 26, 2023 |
|
March 27, 2022 |
|
(In thousands, except per share data) |
Net income attributable to Pilgrim's |
$ |
5,187 |
|
|
$ |
280,438 |
|
Add: |
|
|
|
Foreign currency transaction losses |
|
18,143 |
|
|
|
11,536 |
|
Litigation settlements |
|
11,200 |
|
|
|
500 |
|
Restructuring activities losses |
|
8,026 |
|
|
|
— |
|
Transaction costs related to acquisitions |
|
— |
|
|
|
717 |
|
Minus: |
|
|
|
Property insurance recoveries for Mayfield tornado losses |
|
19,086 |
|
|
|
3,815 |
|
Adjusted net income
attributable to Pilgrim's before tax impact of adjustments |
|
23,470 |
|
|
|
289,376 |
|
Net tax impact of
adjustments(a) |
|
(4,424 |
) |
|
|
(2,226 |
) |
Adjusted net income
attributable to Pilgrim's |
$ |
19,046 |
|
|
$ |
287,150 |
|
Weighted average diluted
shares of common stock outstanding |
|
237,164 |
|
|
|
244,300 |
|
Adjusted net income
attributable to Pilgrim's per common diluted share |
$ |
0.08 |
|
|
$ |
1.18 |
|
(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 26, 2023 |
|
March 27, 2022 |
|
(In thousands, except per share data) |
GAAP EPS |
$ |
0.02 |
|
|
$ |
1.15 |
|
Add: |
|
|
|
Foreign currency transaction losses |
|
0.08 |
|
|
|
0.06 |
|
Litigation settlements |
|
0.05 |
|
|
|
— |
|
Restructuring activities losses |
|
0.03 |
|
|
|
— |
|
Transaction costs related to acquisitions |
|
— |
|
|
|
— |
|
Minus: |
|
|
|
Property insurance recoveries for Mayfield tornado losses |
|
0.08 |
|
|
|
0.02 |
|
Adjusted EPS before tax impact
of adjustments |
|
0.10 |
|
|
|
1.19 |
|
Net tax impact of
adjustments(a) |
|
(0.02 |
) |
|
|
(0.01 |
) |
Adjusted EPS |
$ |
0.08 |
|
|
$ |
1.18 |
|
|
|
|
|
Weighted average diluted
shares of common stock outstanding |
|
237,164 |
|
|
|
244,300 |
|
(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 26, 2023 |
|
March 27, 2022 |
|
|
(In thousands) |
Sources of net sales by geographic region of origin: |
|
|
|
|
U.S. |
|
$ |
2,432,568 |
|
|
$ |
2,581,208 |
|
U.K. and Europe |
|
|
1,239,264 |
|
|
|
1,191,982 |
|
Mexico |
|
|
493,796 |
|
|
|
467,205 |
|
Total net sales |
|
$ |
4,165,628 |
|
|
$ |
4,240,395 |
|
|
|
|
|
|
Sources of cost of sales by geographic region of origin: |
|
|
|
|
U.S. |
|
$ |
2,394,239 |
|
|
$ |
2,159,204 |
|
U.K. and Europe |
|
|
1,155,071 |
|
|
|
1,152,903 |
|
Mexico |
|
|
443,284 |
|
|
|
386,322 |
|
Elimination |
|
|
(13 |
) |
|
|
(14 |
) |
Total cost of sales |
|
$ |
3,992,581 |
|
|
$ |
3,698,415 |
|
|
|
|
|
|
Sources of gross profit by geographic region of origin: |
|
|
|
|
U.S. |
|
$ |
38,329 |
|
|
$ |
422,004 |
|
U.K. and Europe |
|
|
84,193 |
|
|
|
39,079 |
|
Mexico |
|
|
50,512 |
|
|
|
80,883 |
|
Elimination |
|
|
13 |
|
|
|
14 |
|
Total gross profit |
|
$ |
173,047 |
|
|
$ |
541,980 |
|
|
|
|
|
|
Sources of operating income (loss) by geographic region of
origin: |
|
|
|
|
U.S. |
|
$ |
(28,106 |
) |
|
$ |
355,075 |
|
U.K. and Europe |
|
|
25,261 |
|
|
|
(21,640 |
) |
Mexico |
|
|
34,175 |
|
|
|
68,564 |
|
Elimination |
|
|
13 |
|
|
|
14 |
|
Total operating income |
|
$ |
31,343 |
|
|
$ |
402,013 |
|
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