February 16, 2011

Pilgrim's Pride reports Q4 financial results

Pilgrim's Pride Corporation reported net earnings of US$41.8 million, or US$0.20 per share, on net sales of US$1.8 billion for the fourth quarter ended December 26, 2010.

For the comparable quarter a year ago, the company reported net earnings of US$33.6 million, or US$0.44 per diluted share, on total sales of US$1.6 billion. Pilgrim's currently has 214.3 million shares outstanding, compared to approximately 77.1 million diluted shares outstanding in the year-ago period. Adjusted EBITDA, which excludes restructuring and reorganisation charges, was US$124.8 million for the fourth quarter of fiscal 2010, versus US$64.9 million for the same period a year ago.

"We were pleased with the progress in our financial performance in the fourth quarter, particularly in light of the challenges posed by sharply higher grain prices," said Bill Lovette, Pilgrim's president and chief executive. "Our continuing focus on operating efficiencies, cost control, and sales and product mix improvements helped generate positive results during a difficult time in the industry."

Lovette said customer demand improved in the fourth quarter, with Pilgrim's reporting higher volume in its retail and foodservice segments compared to a year ago. Pilgrim's reported double-digit volume increases in some areas of its foodservice business and the company has picked up additional retail business for 2011 from several of its largest customers.

Lovette said the company began deboning operations at its idled processing plant in Douglas, Ga., last November and re-started slaughter operations in mid-January. The company expects the plant to reach full capacity later this year. Pilgrim's is committed to balancing production with customer needs and will target further expansion based on that demand.

"We are cautiously optimistic about the outlook for chicken this year," Lovette said. "While all of us are concerned about sharply higher grain prices and the uncertain economy, there are a number of positive signs as we enter 2011. Based on the negotiations we have completed with most of our foodservice and retail customers, our pricing should be improved year over year. In addition, given the projected reduction in beef supply this year and the higher prices that are expected for beef and pork in 2011, chicken should be attractively positioned with budget-conscious consumers. We are seeing increased demand from foodservice accounts and exports should strengthen this year, particularly as we pursue new market opportunities through our partnership with JBS."

For the full 2010 fiscal year, the company reported net income of US$87.1 million, or US$0.41 per share, on sales of US$6.9 billion. For the comparable 12-month period in the previous year, Pilgrim's reported net income of US$110.8 million, or US$1.44 per diluted share, on sales of US$6.8 billion. The fiscal 2010 results include nonrecurring restructuring charges and reorganisation expenses of US$88.9 million pre-tax, or US$55.3 million after tax, or US$0.26 per share, compared to nonrecurring restructuring charges and reorganisation expenses of US$120.3 million pre-tax, or US$74.9 million after tax, or US$0.97 per diluted share for the comparable period in 2009. Adjusted EBITDA for fiscal 2010 was US$481.9 million, compared to US$495.4 million for the comparable period in 2009.