Pilgrim’s Pride Corporation (NYSE: CHX, CHX.A) yesterday announced a net loss of $9.8 million, or $.24 per share, for the second fiscal quarter ended March 31, 2001, a $18.8 million decrease, compared to net income in the prior year’s second quarter of $9.0 million, or $.22 per share. The reported results are slightly better than the earnings guidance previously released by the Company, which projected a loss of $.25 – $.28 per share for the quarter. The Company also announced second quarter net sales of $541.6 million, a 45.1% increase, compared to the $373.3 million for the same period last year, with the increase resulting primarily from the acquisition of WLR Foods, Inc., which was effective January 27, 2001.
For the first six months of fiscal 2001, the Company reported net income of $2.9 million, or $.07 per share, a $21.0 million decrease when compared to the prior fiscal year’s first six months net income of $23.9 million, or $.58 per share. Net sales for the first six months of fiscal 2001 were $927.6 million, a 27.4% increase, compared to $728.1 million for the same period last year, with the increase again resulting primarily from the acquisition of WLR Foods, Inc., which was effective January 27, 2001.
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“The quarter was most significantly affected by losses realized in our Mexico operations caused by an oversupply of chicken in Mexico which negatively affected sales prices. The quarter was also negatively impacted by January ice storms in Arkansas, higher energy costs, acquisition integration costs and losses experienced in the former WLR Foods, Inc,” stated David Van Hoose, Chief Executive Officer, President and Chief Operating Officer for the Company. Mr. Van Hoose further stated that, “despite the poor results realized in the current quarter, we remain confident that overall our long-term business strategy will enable our Company to continue to be one of the industry’s best performers in the years to come.”
Pilgrim’s Pride Corporation is currently the third largest chicken and fourth largest turkey company in the United States and second largest chicken company in Mexico. Pilgrim’s Pride employs more than 22,500 persons and operates processing and further processing plants, distribution centers, hatcheries and feed mills in Texas, Arkansas, Arizona, North Carolina, Pennsylvania, Oklahoma, Virginia and West Virginia and Mexico.
Products are sold under the “Pilgrim’s Pride®” and “Wampler Foods®” labels to foodservice, retail and frozen entree customers. The Company’s primary distribution is through retailers and restaurants throughout the United States and in the Northern and Central regions of Mexico and to the foodservice industry nation-wide in both countries.
Statements contained in this press release that state the intentions, hopes, beliefs, anticipations, expectations or predictions of the future of Pilgrim’s Pride Corporation and its management are forward-looking statements. It is important to note that the actual results could differ materially from those projected in such forward-looking statements. For example, factors that could cause actual results to differ materially from those projected in such forward-looking statements include: changes in the commodity prices of feed ingredients, chicken and turkey; the Company’s indebtedness; risks associated with the Company’s foreign operations, including currency exchange rate fluctuations, trade barriers, exchange controls and expropriation; the impact of current and future laws and regulations; risks associated with the Company’s integration of WLR Foods, Inc. into the Company; and the other risks described in the Company’s SEC filings.
For further information:
Richard A. Cogdill
Chief Financial Officer
903/855-4205
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By GlobalData PILGRIM’S PRIDE CORPORATION
Consolidated Statements of Income [Loss]
[In thousands, except share and per share amounts]
Three Months Ended March 31, 2001 April 1, 2000
Net Sales $ 541,593 $ 373,260
Costs and Expenses:
Cost of sales 512,377 339,231
Selling, general and administrative 34,488 20,747
546,865 359,978
Operating [loss] income [5,272] 13,282
Other Expenses [Income]:
Interest expense, net 7,085 4,699
Foreign exchange loss [gain] 42 [76]
Miscellaneous, net [281] [519]
Total other expenses, net 6,846 4,104
[Loss] Income Before Income Taxes [12,118] 9,178
Income Tax [Benefit] Expense [2,316] 155
Net [Loss] Income $ [9,802] $ 9,023
Net [Loss] Income per Common Share –
Basic and Diluted $ [.24] $ .22
Dividends Declared per Share $ .015 $ .015
Weighted Average Shares Outstanding 41,112,679 41,383,779
Six Months Ended March 31, 2001 April 1,2000
Net Sales $ 927,625 $ 728,085
Costs and Expenses:
Cost of sales 851,243 648,580
Selling, general and administrative 58,442 41,001
909,685 689,581
Operating income 17,940 38,504
Other Expenses [Income]:
Interest expense, net 11,226 8,602
Foreign exchange loss [gain] 163 [66]
Miscellaneous, net [403] [717]
Total other expenses, net 10,986 7,819
Income Before Income Taxes 6,954 30,685
Income Tax Expense 4,019 6,804
Net Income $ 2,935 $ 23,881
Net Income per Common Share –
Basic and Diluted $ 0.07 $ 0.58
Dividends Declared per Share $ .03 $ .03
Weighted Average Shares Outstanding 41,112,679 41,383,779
PILGRIM’S PRIDE CORPORATION
Condensed Consolidated Balance Sheets
[In thousands]
March 31, September 30,
2001 2000
ASSETS
Total Current Assets $ 433,623 $ 268,970
Other Assets 23,695 18,576
Property, Plant and Equipment, net 718,943 417,874
Total Assets $ 1,176,261 $ 705,420
LIABILITIES AND STOCKHOLDERS’ EQUITY
Total Current Liabilities $ 267,166 $ 144,439
Long-Term Debt, Less Current Maturities 460,346 165,037
Deferred Income Taxes 103,599 52,496
Minority Interest in Subsidiary 889 889
Total Stockholders’ Equity 344,261 342,559
Total Liabilities and Stockholders’ Equity $ 1,176,261 $ 705,420
PILGRIM’S PRIDE CORPORATION
Condensed Consolidated Statements of Cash Flows
[In thousands]
Six Months Ended March 31, 2001 April 1, 2000
Cash [Used in] Provided by Operating
Activities $ [31,486] $ 43,408
Investing Activities:
Acquisitions of property, plant
and equipment [60,400] [35,368]
Business acquisitions [239,539] —
Proceeds from property disposals 856 2,121
Other, net [364] [6,448]
Cash Used in Investing Activities [299,447] [39,695]
Financing Activities:
Net borrowings on notes payable 59,000 —
Net borrowings [payments] on long-term debt 10,323 [7,793]
Borrowings for acquisition 285,071 —
Repayment of WLR Foods, Inc. debt [45,532] —
Cash dividends paid [1,233] [1,242]
Cash Used in [Provided by] Financing Activities 307,629 [9,035]
Effect of exchange rate changes on cash
and cash equivalents [11] 90
Decrease in cash and cash equivalents $ [23,315] $ [5,232]
PILGRIM’S PRIDE CORPORATION
Note to Consolidated Condensed Financial Statements
[In thousands]
Pro Forma Financial Information: The unaudited pro forma financial information has been presented as if the acquisition of WLR Foods, Inc. had occurred as of the first of each period presented. In addition, certain reclassifications have been made to the WLR historical financial statements to conform to the presentation used by Pilgrim’s Pride Corporation.
Three Months Ended March 31, 2001 April 1, 2000
Net Sale $ 592,697 $ 572,442
Operating [loss] income $ [9,396] $ 2,539
Interest expense, net $ 9,466 $ 12,128
Depreciation $ 14,625 $ 17,067
Six Months Ended March 31, 2001 April 1,2000
Net Sales $ 1,201,676 $ 1,146,070
Operating income $ 18,266 $ 32,213
Interest expense, net $ 21,468 $ 23,300
Depreciation $ 31,363 $ 33,810
