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Form 8-K PILGRIMS PRIDE CORP For: Jul 27

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July 28, 2016 6:02 AM EDT


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): July 27, 2016
PILGRIM'S PRIDE CORPORATION
(Exact Name of registrant as specified in its charter)
 
Delaware
1-9273
75-1285071
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
 
 
 
1770 Promontory Circle
Greeley, CO
80634-9038
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code: (970) 506-8000
 
Not Applicable
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))





Item 2.02. Results of Operations and Financial Condition.
On July 27, 2016 the Registrant issued a press release, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.
Exhibit 99.1    Press release dated July 27, 2016





SIGNATURE  
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
PILGRIM’S PRIDE CORPORATION
 
 
 
 
Date:
July 27, 2016
 
/s/ Fabio Sandri
 
 
 
Fabio Sandri
 
 
 
Chief Financial Officer





Exhibit Index
Exhibit 99.1    Press release dated July 27, 2016






Pilgrim’s Pride Reports Operating Income of $237 Million with an Operating Margin of 11.7% for the Second Quarter of 2016

GREELEY, Colo., July 27, 2016 (GLOBE NEWSWIRE) - Pilgrim’s Pride Corporation (NASDAQ: PPC) reports second quarter 2016 financial results.

Second Quarter Highlights
•
Net Sales of $2.03 billion.
•
Net Income of $152.9 million, GAAP EPS of $0.60.
•
Operating Income margins of 9.8% in U.S. and 20.5% in Mexico operations, respectively.
•
Adjusted EBITDA of $282.7 million (or a 13.9% margin).
•
Cash Flow From Operations of $111.1 million.
•
Prepared Foods to launch new ABF veg-fed chicken sausage products, leveraging our leadership in ABF veg-fed Fresh Chicken and entry into organic.
•
Operational improvements in Prepared Foods operations impacting production in short-term but preparing facilities for long-term growth.

Unaudited, In Millions, Except Per Share and Percentages
 
Thirteen Weeks Ended
 
June 26, 2016
 
June 28, 2015
 
Change
Net Sales
$2,028.3
 
$2,053.9
 
-1.2%
GAAP EPS
$0.60
 
$0.93
 
-35.5%
Operating Income
$236.6
 
$378.4
 
-37.5%
Adjusted EBITDA (1)
$282.7
 
$425.8
 
-33.6%
Adjusted EBITDA Margin (1)
13.9%
 
20.7%
 
-6.8pts
 
 
 
 
 
 
(1)
Reconciliations for non-GAAP measures are provided in subsequent sections within this release.

“During Q2, our results further improved sequentially compared to the last two quarters. While our portfolio strategy of a well-balanced exposure to different bird sizes was an important factor, the diversity of our product and broad customer mix, as well as geographic exposure were also important contributors. We structured our portfolio to capture the strong commodity markets while lessening the impact of weaker markets to generate lower volatility and higher margins over the mid to long-term. We are generating the intended results and created a unique and meaningful advantage over competitors with less breadth in their portfolio,” stated Bill Lovette, Chief Executive Officer of Pilgrim's.


1


“To demonstrate our commitment to growing our Prepared Foods operations and to further leverage our leadership in the ABF market as well as our recent announcement to enter into organic Fresh Chicken, we will launch new ABF veg-fed artisanal chicken sausages. These products will be fully cooked, minimally processed using all natural and no artificial ingredients or nitrites. Similar to our ABF veg-fed and organic Fresh Chicken programs, this represents our effort to better resonate with new consumer trends for more natural products while adding further value to our portfolio. While the announced investments in our Moorefield, WV plant, and the operational improvements we are promoting in our other facilities pose an impact to volumes in the short run, they signify our commitment to Prepared Foods as an important source of future earnings growth while lessening the impact of volatile commodity markets in the long run.”

“Our operations in Mexico were a strong contributor to the Q2 results driven by an improved supply/demand environment, better operating performance, and increased synergies with the newly acquired assets. We are continuing to close and have meaningfully narrowed the gap in performance between our legacy and the newly acquired Northern Mexico operations. To further diversify our Mexico operations and grow our value-added segment, we are initiating a strategy to leverage our premium Pilgrim’s name while continuing to pursue opportunities through the popular Del Dia brand.”

Conference Call Information

A conference call to discuss Pilgrim’s quarterly results will be held tomorrow, July 28, 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: http://services.choruscall.com/links/ppc160728

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 October 28, 2016.

About Pilgrim’s Pride

Pilgrim’s employs approximately 37,700 people and operates chicken processing plants and prepared-foods facilities in 12 states, Puerto Rico and Mexico. The Company’s primary distribution is through retailers and foodservice distributors. 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. It is important to note that actual results could differ materially from those projected in such forward-looking statements. Factors that could cause actual results to differ materially from those projected in such forward-looking statements include: matters affecting the poultry industry generally; the ability to execute the Company’s business plan to achieve desired cost savings and profitability; future pricing for feed ingredients and the Company’s products; outbreaks of avian influenza or other diseases, either in Pilgrim’s Pride’s flocks or

2


elsewhere, affecting its ability to conduct its operations and/or demand for its poultry products; contamination of Pilgrim’s Pride’s products, which has previously and can in the future lead to product liability claims and product recalls; exposure to risks related to product liability, product recalls, property damage and injuries to persons, for which insurance coverage is expensive, limited and potentially inadequate; management of cash resources; restrictions imposed by, and as a result of, Pilgrim’s Pride’s leverage; changes in laws or regulations affecting Pilgrim’s Pride’s operations or the application thereof; new immigration legislation or increased enforcement efforts in connection with existing immigration legislation that cause the costs of doing business to increase, cause Pilgrim’s Pride to change the way in which it does business, or otherwise disrupt its operations; competitive factors and pricing pressures or the loss of one or more of Pilgrim’s Pride’s largest customers; currency exchange rate fluctuations, trade barriers, exchange controls, expropriation and other risks associated with foreign operations; disruptions in international markets and distribution channel, including anti-dumping proceedings and countervailing duty proceedings; and the impact of uncertainties of litigation as well as other risks described under “Risk Factors” in the Company’s Annual Report on Form 10-K and subsequent filings with the Securities and Exchange Commission. Pilgrim’s Pride Corporation undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.








Contact:
Dunham Winoto
 
Director, Investor Relations
 
 
(970) 506-8192
 
www.pilgrims.com


3



PILGRIM’S PRIDE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
 
 
 
June 26, 2016
 
December 27, 2015
 
 
(Unaudited)
 
 
 
 
(In thousands)
Cash and cash equivalents
 
$
41,047

 
$
439,638

Trade accounts and other receivables, less allowance for doubtful accounts
 
343,255

 
348,994

Account receivable from related parties
 
1,797

 
2,668

Inventories
 
832,565

 
801,357

Income taxes receivable
 
88,358

 
71,410

Prepaid expenses and other current assets
 
95,420

 
75,602

Assets held for sale
 
6,549

 
6,555

Total current assets
 
1,408,991

 
1,746,224

Other long-lived assets
 
15,954

 
15,672

Identified intangible assets, net
 
42,503

 
47,453

Goodwill
 
125,607

 
156,565

Property, plant and equipment, net
 
1,414,895

 
1,352,529

Total assets
 
$
3,007,950

 
$
3,318,443

 
 
 
 
 
Notes payable to banks
 
$
—

 
$
28,726

Accounts payable
 
466,783

 
482,954

Account payable to related parties
 
4,053

 
7,000

Accrued expenses and other current liabilities
 
314,925

 
314,966

Income taxes payable
 
38,771

 
13,228

Current maturities of long-term debt
 
90

 
86

Total current liabilities
 
824,622

 
846,960

Long-term debt, less current maturities
 
1,117,979

 
985,509

Deferred tax liabilities
 
144,876

 
131,882

Other long-term liabilities
 
101,780

 
92,282

Total liabilities
 
2,189,257

 
2,056,633

Common stock
 
2,597

 
2,597

Treasury stock
 
(106,561
)
 
(99,233
)
Additional paid-in capital
 
1,677,543

 
1,675,674

Accumulated deficit
 
(689,910
)
 
(261,252
)
Accumulated other comprehensive loss
 
(67,726
)
 
(58,930
)
Total Pilgrim’s Pride Corporation stockholders’ equity
 
815,943

 
1,258,856

Noncontrolling interest
 
2,750

 
2,954

Total stockholders’ equity
 
818,693

 
1,261,810

Total liabilities and stockholders’ equity
 
$
3,007,950

 
$
3,318,443



4



PILGRIM’S PRIDE CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
 
 
 
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
 
June 26, 2016
 
June 28, 2015
 
June 26, 2016
 
June 28, 2015
 
 
(In thousands, except per share data)
Net sales
 
$
2,028,315

 
$
2,053,876

 
$
3,991,252

 
$
4,106,795

Cost of sales
 
1,742,184

 
1,621,856

 
3,467,559

 
3,297,655

Gross profit
 
286,131

 
432,020

 
523,693

 
809,140

Selling, general and administrative expense
 
49,520

 
48,834

 
98,308

 
98,341

Administrative restructuring charges
 
—

 
4,813

 
—

 
4,813

Operating income
 
236,611

 
378,373

 
425,385

 
705,986

Interest expense, net of capitalized interest
 
11,548

 
11,514

 
23,581

 
16,369

Interest income
 
(683
)
 
(1,277
)
 
(1,376
)
 
(2,767
)
Foreign currency transaction loss (gain)
 
(4,744
)
 
2,059

 
(4,979
)
 
11,033

Miscellaneous, net
 
(950
)
 
(4,651
)
 
(3,896
)
 
(5,064
)
Income before income taxes
 
231,440

 
370,728

 
412,055

 
686,415

Income tax expense
 
78,398

 
129,104

 
141,002

 
240,598

Net income
 
153,042

 
241,624

 
271,053

 
445,817

Less: Net income (loss) attributable to noncontrolling interests
 
156

 
135

 
(204
)
 
113

Net income attributable to Pilgrim’s Pride Corporation
 
$
152,886

 
$
241,489

 
$
271,257

 
$
445,704

 
 
 
 
 
 
 
 
 
Weighted average shares of common stock outstanding:
 
 
 
 
 
 
 
 
Basic
 
254,554

 
259,685

 
254,681

 
259,669

Effect of dilutive common stock equivalents
 
390

 
212

 
364

 
226

Diluted
 
254,944

 
259,897

 
255,045

 
259,895

 
 
 
 
 
 
 
 
 
Net income attributable to Pilgrim's Pride Corporation per share of
     common stock outstanding:
 
 
 
 
 
 
 
 
Basic
 
$
0.60

 
$
0.93

 
$
1.07

 
$
1.72

Diluted
 
$
0.60

 
$
0.93

 
$
1.06

 
$
1.71



5


PILGRIM’S PRIDE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
 
 
Twenty-Six Weeks Ended
 
 
June 26, 2016
 
June 28, 2015
 
 
(In thousands)
Cash flows from operating activities:
 
 
 
 
Net income
 
$
271,053

 
$
445,817

Adjustments to reconcile net income to cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
88,683

 
75,070

Impairment expense
 
—

 
4,813

Loss (gain) on property disposals
 
(6,755
)
 
(1,331
)
Share-based compensation
 
1,869

 
1,268

Deferred income tax benefit
 
(700
)
 
(4,781
)
Changes in operating assets and liabilities:
 
 
 
 
Trade accounts and other receivables
 
6,610

 
35,014

Inventories
 
(31,208
)
 
3,192

Prepaid expenses and other current assets
 
(19,817
)
 
7,236

Accounts payable, accrued expenses and other current liabilities
 
(23,028
)
 
53,960

Income taxes
 
6,967

 
(35,554
)
Long-term pension and other postretirement obligations
 
(3,952
)
 
966

Other operating assets and liabilities
 
(738
)
 
2,433

Cash provided by operating activities
 
288,984

 
588,103

Cash flows from investing activities:
 
 
 
 
Acquisitions of property, plant and equipment
 
(93,978
)
 
(87,694
)
Proceeds from property disposals
 
8,097

 
2,115

Cash provided by (used in) investing activities
 
(85,881
)
 
(85,579
)
Cash flows from financing activities:
 
 
 
 
Proceeds from note payable to bank
 
36,838

 
—

Payments on note payable to bank
 
(65,564
)
 
—

Proceeds from revolving line of credit
 
351,089

 
1,680,000

Payments on revolving line of credit, long-term borrowings and capital lease obligations
 
(219,812
)
 
(683,705
)
Proceeds from equity contribution under Tax Sharing Agreement between JBS USA Food Company Holdings and Pilgrim's Pride Corporation
 
3,691

 
—

Tax benefit related to share-based compensation
 
—

 
7,834

Payment of capitalized loan costs
 
(693
)
 
(10,132
)
Purchase of treasury stock
 
(7,328
)
 
—

Cash dividends
 
(699,915
)
 
(1,498,470
)
Cash used in financing activities
 
(601,694
)
 
(504,473
)
Increase (decrease) in cash and cash equivalents
 
(398,591
)
 
(1,949
)
Cash and cash equivalents, beginning of period
 
439,638

 
576,143

Cash and cash equivalents, end of period
 
$
41,047

 
$
574,194


6


PILGRIM’S PRIDE CORPORATION
Selected Financial Information
(Unaudited)

“EBITDA” is defined as the sum of net income (loss) plus interest, taxes, depreciation and amortization. “Adjusted EBITDA” is 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: (i) income (loss) attributable to non-controlling interests, (ii) restructuring charges, (iii) reorganization items, (iv) losses on early extinguishment of debt and (v) 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 US (“GAAP”), to compare the performance of companies. We believe investors would be interested in our Adjusted EBITDA because this is how our management analyzes EBITDA. The Company also believes that Adjusted EBITDA, in combination with the Company’s financial results calculated in accordance with GAAP, provides investors with additional perspective regarding the impact of certain significant items on EBITDA and facilitates a more direct comparison of its performance with its competitors. EBITDA and Adjusted EBITDA are not measurements of financial performance under GAAP. They should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net income as indicators of our operating performance or any other measures of performance derived in accordance with GAAP.

PILGRIM'S PRIDE CORPORATION
Reconciliation of Adjusted EBITDA
 
(Unaudited)
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
June 26, 2016
 
June 28, 2015
 
June 26, 2016
 
June 28, 2015
 
(In thousands)
Net income
$
153,042

 
$
241,624

 
$
271,053

 
$
445,817

Add:
 
 
 
 
 
 
 
Interest expense, net
10,865

 
10,237

 
22,205

 
13,602

Income tax expense (benefit)
78,398

 
129,104

 
141,002

 
240,598

Depreciation and amortization
46,293

 
38,918

 
88,683

 
75,070

Minus:
 
 
 
 
 
 
 
Amortization of capitalized financing costs
962

 
864

 
1,889

 
1,589

EBITDA
287,636

 
419,019

 
521,054

 
773,498

Add:
 
 
 
 
 
 
 
Foreign currency transaction losses (gains)
(4,744
)
 
2,059

 
(4,979
)
 
11,033

Restructuring charges
—

 
4,813

 
—

 
4,813

Minus:
 
 
 
 
 
 
 
   Net income (loss) attributable to noncontrolling interest
156

 
135

 
(204
)
 
113

Adjusted EBITDA
$
282,736

 
$
425,756

 
$
516,279

 
$
789,231



7


The summary unaudited consolidated income statement data for the twelve months ended June 26, 2016 (the LTM Period) have been calculated by subtracting the applicable unaudited consolidated income statement data for the six months ended June 28, 2015 from the sum of (1) the applicable audited consolidated income statement data for the year ended December 27, 2015 and (2) the applicable audited consolidated income statement data for the six months ended June 26, 2016.

PILGRIM'S PRIDE CORPORATION
Reconciliation of LTM Adjusted EBITDA
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
 
Thirteen Weeks Ended
 
Thirteen Weeks Ended
 
Thirteen Weeks Ended
 
Thirteen Weeks Ended
 
LTM Ended
 
 
September 27,
2015
 
December 27,
2015
 
March 27,
2016
 
June 26,
2016
 
June 26,
2016
 
(In thousands)
Net income
 
$
137,095

 
$
63,050

 
$
118,011

 
$
153,042

 
$
471,198

Add:
 
 
 
 
 
 
 
 
 
 
Interest expense, net
 
10,182

 
10,091

 
11,340

 
10,865

 
42,478

Income tax expense (benefit)
 
73,153

 
33,045

 
62,604

 
78,398

 
247,200

Depreciation and amortization
 
41,415

 
42,490

 
42,391

 
46,293

 
172,589

Minus:
 
 
 
 
 
 
 
 
 
 
Amortization of capitalized financing costs
 
1,119

 
930

 
928

 
962

 
3,939

EBITDA
 
260,726

 
147,746

 
233,418

 
287,636

 
929,526

Add:
 
 
 
 
 
 
 
 
 
 
Foreign currency transaction losses (gains)
 
12,773

 
2,134

 
(235
)
 
(4,744
)
 
9,928

Restructuring charges
 
792

 
—

 
—

 
—

 
792

Minus:
 
 
 
 
 
 
 
 
 
 
   Net income (loss) attributable to noncontrolling interest
 
33

 
(98
)
 
(360
)
 
156

 
(269
)
Adjusted EBITDA
 
$
274,258

 
$
149,978

 
$
233,543

 
$
282,736

 
$
940,515



8


EBITDA margins have been calculated by taking the relevant unaudited EBITDA figures, then dividing by Net Revenue for the applicable period.

PILGRIM'S PRIDE CORPORATION
Reconciliation of EBITDA Margin
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
 
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
 
June 26, 2016
 
June 28, 2015
 
June 26, 2016
 
June 28, 2015
 
June 26, 2016
 
June 28, 2015
 
June 26, 2016
 
June 28, 2015
 
(In thousands)
Net income from continuing operations
 
$
153,042

 
$
241,624

 
$
271,053

 
$
445,817

 
7.55
 %
 
11.76
%
 
6.79
 %
 
10.86
%
Add:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense, net
 
10,865

 
10,237

 
22,205

 
13,602

 
0.54
 %
 
0.50
%
 
0.56
 %
 
0.33
%
Income tax expense (benefit)
 
78,398

 
129,104

 
141,002

 
240,598

 
3.87
 %
 
6.29
%
 
3.53
 %
 
5.86
%
Depreciation and amortization
 
46,293

 
38,918

 
88,683

 
75,070

 
2.28
 %
 
1.89
%
 
2.22
 %
 
1.83
%
Minus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of capitalized financing costs
 
962

 
864

 
1,889

 
1,589

 
0.05
 %
 
0.04
%
 
0.05
 %
 
0.04
%
EBITDA
 
287,636

 
419,019

 
521,054

 
773,498

 
14.18
 %
 
20.40
%
 
13.05
 %
 
18.83
%
Add:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency transaction losses (gains)
 
(4,744
)
 
2,059

 
(4,979
)
 
11,033

 
(0.23
)%
 
0.10
%
 
(0.12
)%
 
0.27
%
Restructuring charges
 
—

 
4,813

 
—

 
4,813

 
—
 %
 
0.23
%
 
—
 %
 
0.12
%
Minus:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Net income (loss) attributable to noncontrolling interest
 
156

 
135

 
(204
)
 
113

 
0.01
 %
 
0.01
%
 
(0.01
)%
 
—
%
Adjusted EBITDA
 
$
282,736

 
$
425,756

 
$
516,279

 
$
789,231

 
13.94
 %
 
20.73
%
 
12.94
 %
 
19.22
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Revenue:
 
$
2,028,315

 
$
2,053,876

 
$
3,991,252

 
$
4,106,795

 
$
2,028,315

 
$
2,053,876

 
$
3,991,252

 
$
4,106,795



9


A reconciliation of net income (loss) attributable to Pilgrim's Pride Corporation per common diluted share to adjusted net income (loss) attributable to Pilgrim's Pride Corporation per common diluted share is as follows:
PILGRIM'S PRIDE CORPORATION
Reconciliation of Adjusted Earnings
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
 
June 26,
2016
 
June 28,
2015
 
June 26,
2016
 
June 28,
2015
 
 
(In thousands, except per share data)
Net income (loss) attributable to Pilgrim's Pride Corporation
 
$
152,886

 
$
241,489

 
$
271,257

 
$
445,704

Loss on early extinguishment of debt
 
—

 
68

 
—

 
68

Foreign currency transaction losses (gains)
 
(4,744
)
 
2,059

 
(4,979
)
 
11,033

Income (loss) before loss on early extinguishment of debt and foreign currency transaction losses (gains)
 
148,142

 
243,616

 
266,278

 
456,805

Weighted average diluted shares of common stock outstanding
 
254,944

 
259,897

 
255,045

 
259,895

Income (loss) before loss on early extinguishment of debt and foreign currency transaction losses (gains)
     per common diluted share
 
$
0.58

 
$
0.94

 
$
1.04

 
$
1.76



10


A reconciliation of GAAP earnings per share (EPS) to adjusted earnings per share (EPS) is as follows:

PILGRIM'S PRIDE CORPORATION
Reconciliation of GAAP EPS to Adjusted EPS
(Unaudited)
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
June 26, 2016
 
June 28, 2015
 
June 26, 2016
 
June 28, 2015
 
(In thousands, except per share data)
GAAP EPS
$
0.60

 
$
0.93

 
$
1.06

 
$
1.71

Loss on early extinguishment of debt
—

 
—

 
—

 
—

Foreign currency transaction losses (gains)
(0.02
)
 
0.01

 
(0.02
)
 
0.04

Adjusted EPS
$
0.58

 
$
0.94

 
$
1.04

 
$
1.76

 
 
 
 
 
 
 
 
Weighted average diluted shares of common stock outstanding
254,944

 
259,897

 
255,045

 
259,895



11


Net debt is defined as total long term debt less current maturities, plus current maturities of long term debt and notes payable, minus cash, cash equivalents and investments in available-for-sale securities.  Net debt is presented because it is used by management, and we believe it is frequently used by securities analysts, investors and other parties, in addition to and not in lieu of debt as presented under GAAP, to compare the indebtedness of companies.  A reconciliation of net debt is as follows:
PILGRIM'S PRIDE CORPORATION
Reconciliation of Net Debt
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 29,
2013
 
December 28,
2014
 
December 27,
2015
 
June 28,
2015
 
June 26,
2016
 
(In thousands)
Long term debt, less current maturities
$
501,999

 
$
3,980

 
$
985,509

 
$
1,000,420

 
$
1,117,979

Add:  Current maturities of long term debt and notes payable
410,234

 
262

 
28,812

 
117

 
90

Minus:  Cash and cash equivalents
508,206

 
576,143

 
439,638

 
574,194

 
41,047

Minus:  Available-for-sale securities
96,902

 
—

 
—

 
—

 
—

Net debt (cash position)
$
307,125

 
$
(571,901
)
 
$
574,683

 
$
426,343

 
$
1,077,022



12


PILGRIM'S PRIDE CORPORATION
Supplementary Selected Segment and Geographic Data
 
 
 
 
 
 
 
 
 
 
 
Thirteen Weeks Ended
 
Twenty-Six Weeks Ended
 
 
June 26, 2016
 
June 28, 2015
 
June 26, 2016
 
June 28, 2015
 
 
(Unaudited)
 
 
 
 
 
 
 
 
(In thousands)
Sources of net sales by country of origin:
 
 
 
 
 
 
 
 
US:
 
$
1,677,445

 
$
1,838,859

 
$
3,347,726

 
$
3,681,617

Mexico:
 
350,870

 
215,017

 
643,526

 
425,178

Total net sales:
 
$
2,028,315

 
$
2,053,876

 
$
3,991,252

 
$
4,106,795

 
 
 
 
 
 
 
 
 
Sources of cost of sales by country of origin:
 
 
 
 
 
 
 
 
US:
 
$
1,471,269

 
$
1,454,669

 
$
2,925,224

 
$
2,958,876

Mexico:
 
270,939

 
167,211

 
542,383

 
338,827

Elimination:
 
(24
)
 
(24
)
 
(48
)
 
(48
)
Total cost of sales:
 
$
1,742,184

 
$
1,621,856

 
$
3,467,559

 
$
3,297,655

 
 
 
 
 
 
 
 
 
Sources of gross profit by country of origin:
 
 
 
 
 
 
 
 
US:
 
$
206,176

 
$
384,190

 
$
422,502

 
$
722,742

Mexico:
 
79,931

 
47,806

 
101,143

 
86,350

Elimination:
 
24

 
24

 
48

 
48

Total gross profit:
 
$
286,131

 
$
432,020

 
$
523,693

 
$
809,140

 
 
 
 
 
 
 
 
 
Sources of operating income by country of origin:
 
 
 
 
 
 
 
 
US:
 
$
164,494

 
$
335,783

 
$
339,084

 
$
629,437

Mexico:
 
72,093

 
42,566

 
86,253

 
76,501

Elimination:
 
24

 
24

 
48

 
48

Total operating income:
 
$
236,611

 
$
378,373

 
$
425,385

 
$
705,986




13

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