November 1, 2010

Pilgrim's Pride reports financial results for third quarter of fiscal 2010

Pilgrim's Pride Corporation reported net earnings of US$57.9 million, or US$0.27 per share, on net sales of US$1.7 billion for the third quarter ended September 26, 2010.

For the comparable quarter a year ago, the company reported net earnings of US$82.7 million, or US$1.07 per diluted share, on total sales of US$1.7 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$170.0 million for the third quarter of fiscal 2010, as compared to US$185.3 million for the same period a year ago.

"When compared to the second quarter of 2010, our financial performance in the third quarter reflects continued improvement in operating efficiencies and cost control," said Don Jackson, Pilgrim's president and chief executive. "Our operational focus on improving yields, labour and other plant-related costs is driving better efficiencies, and we remain focused on sales mix and price improvement."

Pilgrim's said sales volumes rose across its retail and foodservice segments when compared to a year ago and the company succeeded in bringing in new, higher-margin business during the quarter. When compared to the second quarter of 2010, gross margin as a percentage of sales in the third quarter increased across the company's retail, foodservice and commodity channels.

Jackson said the company is on track to restart deboning operations at its idled processing plant in Douglas, Ga., in mid-November 2010 to support other plants, with slaughter operations to begin in January 2011. The company continues to target further expansion later in 2011 and 2012.

"We are optimistic about the outlook for chicken heading into 2011," Jackson said. "While all of us are concerned about higher grain prices and the uncertain economy, there are several encouraging signs heading into next year. Given the reduction in beef supply and the higher prices that are expected for beef and pork, chicken should be attractively positioned with consumers who are looking for the best value. As a result, many of our customers are planning to feature chicken more prominently on their menus or in their stores next year. We are already seeing an increase in foodservice demand for next year."

For the first three quarters of fiscal 2010, the company reported net income of US$45.3 million, or US$0.21 per share, on sales of nearly US$5.1 billion. These results include nonrecurring restructuring charges and reorganisation expenses of US$72.8 million pre-tax, or US$45.3 million after tax, or US$0.21 per diluted share. For the same period a year ago, Pilgrim's reported net income of US$77.2 million, or US$1.00 per diluted share, on sales of US$5.2 billion. Adjusted EBITDA for the first nine months of fiscal 2010 was US$357.1 million, compared to US$430.5 million for the same period a year ago.