UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended April 3, 2004
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File number 1-9273
PILGRIM’S PRIDE CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 75-1285071 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| 110 South Texas, Pittsburg, TX | 75686-0093 | |
| (Address of principal executive offices) | (Zip code) | |
(903) 855-1000
(Registrant’s telephone number, including area code)
Not Applicable
Former name, former address and former fiscal year, if changed since last report.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
Number of shares outstanding of issuer’s common stock, as of April 30, 2004, was 66,555,733.
INDEX
PILGRIM’S PRIDE CORPORATION AND SUBSIDIARIES
2
Pilgrim’s Pride Corporation and Subsidiaries
Consolidated Balance Sheets
| April 3, 2004 |
September 27, 2003 |
|||||||
| (Unaudited) | ||||||||
| (in thousands except share data) |
||||||||
| Assets |
||||||||
| Current Assets: |
||||||||
| Cash and cash equivalents |
$ | 47,151 | $ | 16,606 | ||||
| Trade accounts and other receivables, less allowance for doubtful accounts |
209,699 | 127,020 | ||||||
| Inventories |
605,562 | 340,881 | ||||||
| Other current assets |
10,641 | 6,201 | ||||||
| Total Current Assets |
873,053 | 490,708 | ||||||
| Other Assets |
108,991 | 31,302 | ||||||
| Property, Plant and Equipment: |
||||||||
| Land |
54,607 | 38,708 | ||||||
| Buildings, machinery and equipment |
1,535,333 | 1,085,281 | ||||||
| Autos and trucks |
61,660 | 55,239 | ||||||
| Construction-in-progress |
34,225 | 21,209 | ||||||
| 1,685,825 | 1,200,437 | |||||||
| Less accumulated depreciation |
519,821 | 464,963 | ||||||
| 1,166,004 | 735,474 | |||||||
| $ | 2,148,048 | $ | 1,257,484 | |||||
| Liabilities and Stockholders’ Equity |
||||||||
| Current Liabilities: |
||||||||
| Notes payable to banks |
$ | 4,000 | $ | — | ||||
| Accounts payable |
303,361 | 159,164 | ||||||
| Accrued expenses |
221,516 | 107,503 | ||||||
| Current deferred income tax |
10,242 | 10,242 | ||||||
| Current maturities of long-term debt |
8,331 | 2,680 | ||||||
| Total Current Liabilities |
547,450 | 279,589 | ||||||
| Long-Term Debt, Less Current Maturities |
643,298 | 415,965 | ||||||
| Deferred Income Taxes |
115,905 | 113,988 | ||||||
| Minority Interest in Subsidiary |
1,202 | 1,246 | ||||||
| Commitments and Contingencies |
— | — | ||||||
| Stockholders’ Equity: |
||||||||
| Preferred stock, $.01 par value, 5,000,000 authorized shares; none issued |
— | — | ||||||
| Common stock – $.01 par value, 160,000,000 authorized shares; 66,826,833 and 41,383,779 issued and outstanding, respectively |
668 | 414 | ||||||
| Additional paid-in capital |
431,662 | 79,625 | ||||||
| Retained earnings |
409,431 | 368,195 | ||||||
| Accumulated other comprehensive income |
— | 30 | ||||||
| Less treasury stock, 271,100 shares |
(1,568 | ) | (1,568 | ) | ||||
| Total Stockholders’ Equity |
840,193 | 446,696 | ||||||
| $ | 2,148,048 | $ | 1,257,484 | |||||
See notes to consolidated financial statements.
3
Pilgrim’s Pride Corporation and Subsidiaries
Consolidated Income Statements
(Unaudited)
| Three Months Ended |
Six Months Ended |
|||||||||||||||
| April 3, 2004 |
March 29, 2003 |
April 3, 2004 (27 Weeks) |
March 29, 2003 (26 Weeks) |
|||||||||||||
| (in thousands, except share and per share data) | ||||||||||||||||
| Net Sales |
$ | 1,384,907 | $ | 630,592 | $ | 2,429,275 | $ | 1,257,997 | ||||||||
| Costs and Expenses: |
||||||||||||||||
| Cost of sales |
1,257,816 | 604,919 | 2,225,080 | 1,204,325 | ||||||||||||
| Non-recurring recoveries |
(68 | ) | (11,312 | ) | (76 | ) | (25,700 | ) | ||||||||
| Selling, general and administrative |
65,649 | 35,576 | 111,952 | 67,621 | ||||||||||||
| 1,323,397 | 629,183 | 2,336,956 | 1,246,246 | |||||||||||||
| Operating income |
61,510 | 1,409 | 92,319 | 11,751 | ||||||||||||
| Other Expense (Income): |
||||||||||||||||
| Interest expense, net |
13,524 | 9,942 | 25,968 | 19,418 | ||||||||||||
| Foreign exchange (gain) loss |
185 | 217 | 263 | (132 | ) | |||||||||||
| Miscellaneous, net |
1,256 | (26,896 | ) | 936 | (28,662 | ) | ||||||||||
| 14,965 | (16,737 | ) | 27,167 | (9,376 | ) | |||||||||||
| Income before income taxes |
46,545 | 18,146 | 65,152 | 21,127 | ||||||||||||
| Income tax expense |
13,594 | 7,381 | 21,915 | 7,606 | ||||||||||||
| Net income |
$ | 32,951 | $ | 10,765 | $ | 43,237 | $ | 13,521 | ||||||||
| Net income per common share – basic and diluted |
$ | 0.50 | $ | 0.26 | $ | 0.73 | $ | 0.33 | ||||||||
| Dividends per common share |
$ | 0.015 | $ | 0.015 | $ | 0.030 | $ | 0.030 | ||||||||
| Weighted average shares outstanding |
66,555,733 | 41,112,679 | 58,882,431 | 41,112,679 | ||||||||||||
See notes to consolidated financial statements.
4
Pilgrim’s Pride Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
| Six Months Ended |
||||||||
| April 3, 2004 (27 Weeks) |
March 29, 2003 (26 Weeks) |
|||||||
| (in thousands) | ||||||||
| Cash Flows From Operating Activities: |
||||||||
| Net income |
$ | 43,237 | $ | 13,521 | ||||
| Adjustments to reconcile net income to cash provided by operating activities: |
||||||||
| Depreciation and amortization |
58,998 | 35,312 | ||||||
| Gain on property disposals |
(365 | ) | (132 | ) | ||||
| Deferred income taxes |
1,917 | 9,804 | ||||||
| Changes in operating assets and liabilities: |
||||||||
| Accounts and other receivables |
43,425 | (24,739 | ) | |||||
| Inventories |
(68,131 | ) | (18,563 | ) | ||||
| Other current assets |
(1,102 | ) | (1,094 | ) | ||||
| Accounts payable and accrued expenses |
81,953 | (28,764 | ) | |||||
| Other |
(73 | ) | (1,345 | ) | ||||
| Cash provided by (used in) operating activities |
159,859 | (16,000 | ) | |||||
| Investing Activities: |
||||||||
| Acquisitions of property, plant and equipment |
(39,981 | ) | (25,024 | ) | ||||
| Business acquisition, net of equity consideration |
(304,054 | ) | — | |||||
| Proceeds from property disposals |
706 | 292 | ||||||
| Other, net |
262 | (589 | ) | |||||
| Cash used in investing activities |
(343,067 | ) | (25,321 | ) | ||||
| Financing Activities: |
||||||||
| Borrowing for acquisition |
300,767 | — | ||||||
| Proceeds from notes payable to banks |
70,000 | 206,000 | ||||||
| Repayments of notes payable to banks |
(66,000 | ) | (206,000 | ) | ||||
| Proceeds from long-term debt |
205,166 | 108,133 | ||||||
| Payments on long-term debt |
(288,949 | ) | (65,681 | ) | ||||
| Equity and debt issue cost |
(5,185 | ) | — | |||||
| Cash dividends paid |
(2,001 | ) | (1,237 | ) | ||||
| Cash Provided By Financing Activities |
213,798 | 41,215 | ||||||
| Effect of exchange rate changes on cash and cash equivalents |
(45 | ) | (410 | ) | ||||
| Increase (decrease) in cash and cash equivalents |
30,545 | (516 | ) | |||||
| Cash and cash equivalents at beginning of year |
16,606 | 14,913 | ||||||
| Cash and Cash Equivalents at End of Period: |
$ | 47,151 | $ | 14,397 | ||||
| Supplemental Non-cash Disclosure Information: |
||||||||
| Business acquisition, equity consideration (before cost of issuance) |
$ | 357,475 | $ | — | ||||
See notes to consolidated financial statements.
5
PILGRIM’S PRIDE CORPORATION AND SUBSIDIARIES
April 3, 2004