GREELEY, Colo., July 29, 2020 (GLOBE NEWSWIRE) -- Pilgrim’s Pride Corporation (NASDAQ: PPC) reports second quarter 2020 financial results.

Second Quarter Highlights

  • Net Sales of $2.82 billion.
  • Net GAAP loss of $(6.0) million.
  • Operating Income margins of 2.2% in U.S., -13.3% in Mexico and 3.1% in Europe operations, respectively.
  • Adjusted EBITDA of $112.2 million, or a 4.0% margin.
  • Faced with the global Covid-19 pandemic, we remain guided by our principles of an uncompromising commitment to the safety of our team members, our duty to provide quality food globally, and our responsibility to provide continued employment opportunities and benefits for our team.
  • Strong focus in execution and dedication by our team members, supported by portfolio strategy of differentiated products, strong Key Customer relationships, and diversified global presence helped us to reduce volatility of market conditions, especially under unexpected and unprecedented Covid-19 impact.
  • After significant impact as we started the quarter, performance improved, and during June 2020 the U.S. was similar, Europe slightly ahead and Mexico in-line compared to June 2019, despite significant disruptions, sub-optimal mix, and added costs.
  • Volatility and challenging conditions in the U.S. remained, partially offset by improvement in relative performance versus the industry, further supported by our business model and agility in changing mix.
  • In Mexico, challenging macro environment, impacting overall demand, and a weak Peso were partially offset by the stability in Branded and Prepared Foods. Supply and demand in balance at quarter end with markets re-opening.
  • The legacy European business (Moy Park) delivered comparable operating results to last year despite Covid-19 impact, with better operational efficiencies and input cost mitigation. Momentum of newly acquired assets in generating positive EBITDA continuing, and on track to achieve performance comparable to leading companies with similar portfolio in next few years.
  • Our liquidity position remains strong, supported by the emphasis on cash flow generation, focus on working capital management, and disciplined investments in high-return projects, preserving the opportunity to maintain strategic growth priorities while strengthening our differentiated global platforms.
Unaudited (2) Three Months Ended Six Months Ended
  June 28,
 June 30,
 Y/Y Change June 28,
 June 30,
 Y/Y Change
  (In millions, except per share and percentages)
Net sales $2,824.0  $2,843.1  (0.7)% $5,899.0  $5,567.8  +5.9%
U.S. GAAP EPS $(0.02) $0.68  (102.9)% $0.25  $1.02  (75.5)%
Operating income $27.3  $279.6  (90.2)% $111.7  $416.6  (73.2)%
Adjusted EBITDA(1) $112.2  $349.3  (67.9)% $277.7  $553.8  (49.9)%
Adjusted EBITDA margin(1) 4.0% 12.3% -8.3 pts  4.7% 9.9% -5.2 pts 

(1) Reconciliations for non-U.S. GAAP measures are provided in subsequent sections within this release.
(2) Comparisons include Tulip from 10/15/19 forward.

“We are once again extremely proud of our team for their continued commitment, dedication and hard work, in supporting our ability to keep our team members safe and healthy, and allowing us the capability to maintain production and supply to our customers during this unprecedented crisis. Despite the continuing volatility and very challenging markets in Q2 due to Covid-19, our diversified strategy has continued to produce respectable results in relative performance to industry competition, and deliver more resilient performance regardless of changes in specific market conditions. For the entire Q2, Europe generated operating results similar to a year ago but were more than offset by tough market dynamics in the U.S. and Mexico. After a very challenging beginning of the quarter, markets have adapted. During the month of June, results were quite encouraging and showing a noticeable improvement globally. Compared to June of last year, the U.S. was roughly the same, Europe slightly better and Mexico in-line, even when considering all the disruptions, less than optimal product mix, and added operating costs because of Covid-19,” stated Fabio Sandri, interim Chief Executive Officer of Pilgrim's.

“In the U.S., the first half of Q2 the market was significantly challenged before a gradual loosening of travel and movement restrictions due to Covid-19 drove an improvement in channel demand, especially from foodservice. Similar to Q1, large bird deboning was once again the most volatile this quarter, with quick moves between the lows and the highs, and remained challenging compared to 2019. Operationally however, we continue to improve our relative performance versus the industry across all our business units, including in large bird deboning. We also continue to adapt quickly to changes in channel demand by adjusting the mix of our production capabilities, supported by our close partnerships with Key Customers, strong focus in execution by our team members, the geographical diversity of our footprint, and our presence across all bird size categories.”

“In continuation from Q1, Mexico remained challenged as the effects of weak macro conditions, which added to uncertainties in consumer spending, have persisted. In addition, the Peso continued to be weak putting additional pressure on the results. Industry prices were also below seasonality, driven by much better than expected growing conditions, before reverting closer to normal levels by the end of the quarter. Our increased share of non-commodity products, strong execution, and growth in Prepared Foods, have also helped to partially offset the softness.”

“Our legacy European operations performed in-line with last year, driven by strong retail demand and despite the significant impact of Covid-19 on the operations, as our strong internal operating performance and improved SG&A management helped in mitigating the difficult environment. The improvement in results from the newly acquired European assets has been maintained, with positive EBITDA continuing to increase. The performance was driven by strong demand at retail partially offset by a reduction in foodservice, continuing strength in pork exports especially to China, as well as the implementations of operational improvements and synergy capture.”

Conference Call Information

A conference call to discuss Pilgrim’s quarterly results will be held tomorrow, July 30, 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:

You may also reach the pre-registration link by logging in through the investor section of our website at 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 The webcast will be available for replay through October 30, 2020.

About Pilgrim’s Pride

Pilgrim’s employs approximately 58,200 people and operates protein processing plants and prepared-foods facilities in 14 states, Puerto Rico, Mexico, the U.K, and continental Europe. The Company’s primary distribution is through retailers and foodservice distributors. For more information, please visit

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 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 channel, including anti-dumping proceedings and countervailing duty proceedings; and the impact of uncertainties of litigation and other legal matters described in our Quarterly Report on Form 10-Q, including the In re Broiler Chicken Antitrust Litigation and ongoing federal antitrust investigation into alleged price fixing, 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:Dunham Winoto
 Investor Relations
 (970) 506-8192

  June 28, 2020 December 29, 2019
  (In thousands)
Cash and cash equivalents $507,442  $260,568 
Restricted cash and cash equivalents 27,031  20,009 
Trade accounts and other receivables, less allowance for doubtful accounts 694,845  741,281 
Accounts receivable from related parties 1,109  944 
Inventories 1,347,141  1,383,535 
Income taxes receivable 73,886  60,204 
Prepaid expenses and other current assets 151,532  131,695 
Total current assets 2,802,986  2,598,236 
Deferred tax assets 4,607  4,426 
Other long-lived assets 29,896  36,325 
Identified intangible assets, net 558,491  596,053 
Goodwill 929,518  973,750 
Operating lease assets, net 282,528  301,513 
Property, plant and equipment, net 2,548,555  2,592,061 
Total assets $7,156,581  $7,102,364 
Accounts payable $884,423  $993,780 
Accounts payable to related parties 7,404  3,819 
Revenue contract liability 39,425  41,770 
Accrued expenses and other current liabilities 528,256  575,319 
Income taxes payable 291  7,075 
Current maturities of long-term debt 25,566  26,392 
Total current liabilities 1,485,365  1,648,155 
Noncurrent operating lease liability, less current maturities 213,829  235,382 
Long-term debt, less current maturities 2,615,951  2,276,029 
Noncurrent income taxes payable 7,731  7,731 
Deferred tax liabilities 310,338  301,907 
Other long-term liabilities 148,968  97,100 
Total liabilities 4,782,182  4,566,304 
Common stock 2,612  2,611 
Treasury stock (312,771) (234,892)
Additional paid-in capital 1,958,727  1,955,261 
Retained earnings 939,044  877,812 
Accumulated other comprehensive loss (223,427) (75,129)
Total Pilgrim’s Pride Corporation stockholders’ equity 2,364,185  2,525,663 
Noncontrolling interest 10,214  10,397 
Total stockholders’ equity 2,374,399  2,536,060 
Total liabilities and stockholders’ equity $7,156,581  $7,102,364 

  Three Months Ended Six Months Ended
  June 28, 2020 June 30, 2019 June 28, 2020 June 30, 2019
  (In thousands, except per share data)
Net sales $2,824,023  $2,843,085  $5,898,951  $5,567,760 
Cost of sales 2,704,164  2,475,221  5,601,993  4,980,957 
Gross profit 119,859  367,864  296,958  586,803 
Selling, general and administrative expense 92,570  88,357  185,283  170,281 
Administrative restructuring activity   (43)   (70)
Operating income 27,289  279,550  111,675  416,592 
Interest expense, net of capitalized interest 32,323  33,594  65,011  67,156 
Interest income (1,158) (3,444) (2,848) (6,784)
Foreign currency transaction losses (gains) 5,525  2,260  (12,860) 4,896 
Miscellaneous, net (45) 1,513  (34,233) 1,156 
Income before income taxes (9,356) 245,627  96,605  350,168 
Income tax expense (2,956) 75,547  35,556  95,963 
Net income (6,400) 170,080  61,049  254,205 
Less: Net income (loss) attributable to noncontrolling interests (364) 12  (183) 126 
Net income attributable to Pilgrim’s Pride Corporation $(6,036) $170,068  $61,232  $254,079 
Weighted average shares of common stock outstanding:        
Basic 246,687  249,400  248,017  249,283 
Effect of dilutive common stock equivalents 331  236  291  320 
Diluted 247,018  249,636  248,308  249,603 
Net income attributable to Pilgrim's Pride Corporation per share of
  common stock outstanding:
Basic $(0.02) $0.68  $0.25  $1.02 
Diluted $(0.02) $0.68  $0.25  $1.02 

  Six Months Ended
  June 28, 2020 June 30, 2019
  (In thousands)
Cash flows from operating activities:    
Net income $61,049  $254,205 
Adjustments to reconcile net income to cash provided by operating activities:    
Depreciation and amortization 164,376  138,530 
Deferred income tax expense (benefit) 25,255  (3,354)
Share-based compensation 3,467  5,217 
Loan cost amortization 2,422  2,401 
Negative adjustment to previously recognized gain on bargain purchase 1,740   
Loss (gain) on property disposals (1,587) 230 
Accretion of discount related to Senior Notes 491  491 
Amortization of premium related to Senior Notes (334) (334)
Loss (gain) on equity-method investments 304  (32)
Foreign currency transaction gain related to borrowing arrangements   37 
Changes in operating assets and liabilities:    
Trade accounts and other receivables 29,920  (20,385)
Inventories 16,350  (27,212)
Prepaid expenses and other current assets (22,072) (1,339)
Accounts payable, accrued expenses and other current liabilities (122,191) 20,664 
Income taxes (27,350) 34,013 
Long-term pension and other postretirement obligations (1,908) (1,121)
Other operating assets and liabilities 10,794  1,353 
Cash provided by operating activities 140,726  403,364 
Cash flows from investing activities:    
Acquisitions of property, plant and equipment (148,175) (177,609)
Proceeds from property disposals 9,894  1,740 
Purchase of acquired business, net of cash acquired (4,216)  
Cash used in investing activities (142,497) (175,869)
Cash flows from financing activities:    
Proceeds from revolving line of credit and long-term borrowings 356,547  99,636 
Purchase of common stock under share repurchase program (77,879) (2,898)
Payments on revolving line of credit, long-term borrowings and finance lease  obligations (20,105) (113,079)
Payment from equity distribution under Tax Sharing Agreement between JBS USA Food Company Holdings and Pilgrim’s Pride Corporation   (525)
Payment of capitalized loan costs   (596)
Cash provided by financing activities 258,563  (17,462)
Effect of exchange rate changes on cash and cash equivalents (2,896) (5)
Increase in cash, cash equivalents and restricted cash 253,896  210,028 
Cash, cash equivalents and restricted cash, beginning of period 280,577  361,578 
Cash, cash equivalents and restricted cash, end of period $534,473  $571,606 

Selected Financial Information

“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: (1) income (loss) attributable to noncontrolling interests, (2) charges or income from restructuring activities, (3) reorganization items, (4) transaction costs related to acquisitions, (5) gain on bargain purchase and (6) 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 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. 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. 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 U.S. GAAP.

Reconciliation of Adjusted EBITDA
 Three Months Ended Six Months Ended
 June 28, 2020 June 30, 2019 June 28, 2020 June 30, 2019
 (In thousands)    
Net income$(6,400) $170,080  $61,049  $254,205 
Interest expense, net31,165  30,150  62,163  60,372 
Income tax expense(2,956) 75,547  35,556  95,963 
Depreciation and amortization84,603  71,348  164,376  138,530 
EBITDA106,412  347,125  323,144  549,070 
Foreign currency transaction losses (gains)5,525  2,260  (12,860) 4,896 
Transaction costs related to acquisitions(81)   134   
Restructuring activity  (43)   (70)
Negative adjustment to previously recognized gain on bargain purchase    (1,740)  
Shareholder litigation settlement    34,643   
Net income attributable to noncontrolling interest(364) 12  (183) 126 
Adjusted EBITDA$112,220  $349,330  $277,698  $553,770 

The summary unaudited consolidated income statement data for the twelve months ended June 28, 2020 (the LTM Period) have been calculated by subtracting the applicable unaudited consolidated income statement data for the six months ended June 30, 2019 from the sum of (1) the applicable audited consolidated income statement data for the year ended December 29, 2019 and (2) the applicable audited consolidated income statement data for the six months ended June 28, 2020.

Reconciliation of LTM Adjusted EBITDA
(Unaudited) Three Months Ended LTM Ended
  September 29,
 December 29,
 March 29,
 June 28,
 June 28,
  (In thousands)
Net income $110,096  $92,235  $67,449  $(6,400) $263,380 
Interest expense, net 27,330  30,650  30,998  31,165  120,143 
Income tax expense 46,365  18,681  38,512  (2,956) 100,602 
Depreciation and amortization 71,851  76,849  79,773  84,603  313,076 
EBITDA 255,642  218,415  216,732  106,412  797,201 
Foreign currency transaction losses
 3,027  (1,006) (18,385) 5,525  (10,839)
Transaction costs related to acquisitions 63  1,239  215  (81) 1,436 
Restructuring activity (20) 6      (14)
Gain on bargain purchase   56,880  (1,740)   55,140 
Shareholder litigation settlement     34,643    34,643 
Net income attributable to
  noncontrolling interest
 331  155  181  (364) 303 
Adjusted EBITDA $258,381  $161,619  $165,478  $112,220  $697,698 

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

Reconciliation of EBITDA Margin
(Unaudited) Three Months Ended Six Months Ended Three Months Ended Six Months Ended
  June 28, 2020 June 30, 2019 June 28, 2020 June 30, 2019 June 28, 2020 June 30, 2019 June 28, 2020 June 30, 2019
  (In thousands)    
Net income $(6,400) $170,080  $61,049  $254,205  (0.23)% 5.98% 1.03% 4.57%
Interest expense, net 31,165  30,150  62,163  60,372  1.10% 1.06% 1.05% 1.08%
Income tax expense (2,956) 75,547  35,556  95,963  (0.10)% 2.66% 0.60% 1.72%
Depreciation and amortization 84,603  71,348  164,376  138,530  2.99% 2.51% 2.78% 2.49%
EBITDA 106,412  347,125  323,144  549,070  3.76% 12.21% 5.46% 9.86%
Foreign currency transaction losses (gains) 5,525  2,260  (12,860) 4,896  0.19% 0.08% (0.21)% 0.09%
Acquisition charges (81)   134    % % % %
Restructuring activity   (43)   (70) % % % %
Negative adjustment to previously recognized gain on bargain purchase     (1,740)   % % (0.03)% %
Shareholder litigation settlement     34,643    % % 0.59% %
Net income (loss) attributable
  to noncontrolling interest
 (364) 12  (183) 126  (0.01)% % % %
Adjusted EBITDA $112,220  $349,330  $277,698  $553,770  3.96% 12.29% 4.69% 9.95%
Net sales $2,824,023  $2,843,085  $5,898,951  $5,567,760  $2,824,023  $2,843,085  $5,898,951  $5,567,760 

A reconciliation of net income (loss) attributable to Pilgrim's Pride Corporation (“Pilgrim's”) per common diluted share to adjusted net income (loss) attributable to Pilgrim's per common diluted share is as follows:

Reconciliation of Adjusted Net Income
 Three Months Ended Six Months Ended
 June 28, 2020 June 30, 2019 June 28, 2020 June 30, 2019
 (In thousands, except per share data)
Net income (loss) attributable to Pilgrim's$(6,036) $170,068  $61,232  $254,079 
Adjustments, net of tax:       
Transaction costs related to acquisitions
  and restructuring activities net loss
(81) (43) 134 (70)
Foreign currency transaction loss (gain)5,525  2,260  (12,860) 4,896 
Income before acquisition charges and restructuring
  activity, and foreign currency
  transaction losses (gains)
$(592) $172,285  $48,506  $258,905 
Weighted average diluted shares of common stock outstanding247,018  249,636  248,308  249,603 
Income before acquisition charges and restructuring activity,
  and foreign currency transaction losses (gains) per
  common diluted share
$  $0.69  $0.20  $1.04 

A reconciliation of U.S. GAAP to non-U.S. GAAP financial measures. Net income (loss) per share is calculated by dividing the net income (loss) attributable to Pilgrim's Pride Corporation stockholders by the weighted average number of diluted shares.

Reconciliation of GAAP EPS to Adjusted EPS
 Three Months Ended Six Months Ended
 June 28, 2020 June 30, 2019 June 28, 2020 June 30, 2019
 (In thousands, except per share data)
GAAP EPS$(0.02) $0.68  $0.25  $1.02 
Adjustments, net of tax:       
Acquisition charges and restructuring activity       
Foreign currency transaction losses (gains)0.02  0.01  (0.05) 0.02 
Adjusted EPS$  $0.69  $0.20  $1.04 
Weighted average diluted shares of common stock outstanding247,018  249,636  248,308  249,603 

Supplementary Selected Segment and Geographic Data
(Unaudited) Three Months Ended Six Months Ended
  June 28, 2020 June 30, 2019 June 28, 2020 June 30, 2019
  (In thousands)
Sources of net sales by geographic region of origin:        
US $1,798,689  $1,916,954  $3,725,569  $3,800,544 
Europe 757,201  535,902  1,579,463  1,050,865 
Mexico 268,133  390,229  593,919  716,351 
Total net sales $2,824,023  $2,843,085  $5,898,951  $5,567,760 
Sources of cost of sales by geographic region of origin:        
US $1,710,668  $1,670,384  $3,499,445  $3,383,803 
Europe 700,553  492,386  1,470,687  977,764 
Mexico 293,143  312,475  632,085  619,438 
Elimination (200) (24) (224) (48)
Total cost of sales $2,704,164  $2,475,221  $5,601,993  $4,980,957 
Sources of gross profit by geographic region of origin:        
US $88,021  $246,570  $226,124  $416,741 
Europe 56,648  43,516  108,776  73,101 
Mexico (25,010) 77,754  (38,166) 96,913 
Elimination 200  24  224  48 
Total gross profit $119,859  $367,864  $296,958  $586,803 
Sources of operating income by geographic region of origin:        
US $39,448  $186,959  $124,500  $301,800 
Europe 23,185  24,195  46,375  36,908 
Mexico (35,544) 68,372  (59,424) 77,836 
Elimination 200  24  224  48 
Total operating income $27,289  $279,550  $111,675  $416,592