Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DCD.C. 20549

 

FORM 10-Q

(Mark one) ☒

 

þQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark one)

For the quarterly period ended June 25, 2022
or

☒     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from       ___    to       ___    .

 

For the quarterly period ended June 26, 2021

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: number 333-115164

 

U.S.U. S. PREMIUM BEEF, LLC

(NameExact name of registrant as specified in its charter)

 

delaware

20-1576986

(State or other jurisdiction of Incorporationincorporation or Organization)organization)(I.R.S. Employer identificationIdentification No.)

12200 North Ambassador Drive

Kansas City, MO

64163

(Address of principal executive offices(Zip Code)

 

12200 North Ambassador Drive

Kansas City, MO64163

(Address of principal executive offices)

Telephone: 866(866)) 877-2525

(Registrant’s telephone number, including area code)

 

______________

(Former name or former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
N/AN/AN/A

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 ☒þ No ☐o

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes ☒þ No ☐o

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smallersmall reporting company, or an emerging growth company. See the definitionsdefinition of “large accelerated filer,”filer”, “accelerated filer,”filer”, “smaller reporting company” and “emerging‘emerging growth company” in Rule 12b-2 of the Exchange Act:Act. (Check one):

 

Large accelerated Filer ☐Accelerated Filer ☐
Non-accelerated Filer ☒Smaller reporting company

Large Accelerated Filer ☐ Accelerated Filer ☐ Non-Accelerated Filer þ Small Reporting Company ☐

Emerging Growth Company o

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐o No ☒þ

 

The registrant’s units are not traded on an exchange or in any public market. As of July 31, 2021,30, 2022, there were735,385 Class A units and755,385 Class B units outstanding.

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each classTrading Symbol(s)Name of each exchanges on which registered
N/AN/AN/A

   

 

 

TABLE OF CONTENTS

 

 

 

Page No.
 
PART I.FINANCIAL INFORMATIONPage No.
   
Item 1.Financial Statements (unaudited).31
   
Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

1110
   
Item 3.Quantitative and Qualitative Disclosures about Market Risk.1413
   
Item 4.Controls and Procedures.1413
   
   
PART II.OTHER INFORMATION 
   
Item 1.Legal Proceedings.1514
   
Item 1A.Risk Factors.15
   
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.15
   
Item 3.Defaults Upon Senior Securities.15
   
Item 4.Mine Safety Disclosures.1615
   
Item 5.Other Information.1615
   
Item 6.Exhibits.1615
   
 Signatures.1716

 

 

Unless the context indicates or otherwise requires, the terms “USPB”, “the Company”, “we”, “our”, and “us” refer to U.S. Premium Beef, LLC. As used in this report, the terms “NBP” and “National Beef” refer to National Beef Packing Company, LLC, a Delaware limited liability company.

 

 

 

 2i 

 

 

PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements (unaudited).

 

U.S. PREMIUM BEEF, LLC

Balance Sheets

(thousands of dollars, except unit information)

 

         
  June 25, 2022  December 25, 2021 
  (unaudited)    
Assets        
Current assets:        
Cash and cash equivalents $76,000  $130,400 
Accounts receivable  444   48 
Due from affiliates  1,110   58 
Other current assets  19   3 
Total current assets  77,573   130,509 
Property, plant, and equipment, at cost  266   243 
Less accumulated depreciation  201   222 
Net property, plant, and equipment  65   21 
Right of use assets, net  141   168 
Investment in National Beef Packing Company, LLC  193,013   213,290 
Other assets  1   2 
Total assets $270,793  $343,990 
        
Liabilities and Members' Capital        
Current liabilities:        
Accounts payable - trade $23  $14 
Due to affiliates  0   7 
Accrued compensation and benefits  1,559   2,106 
Lease obligations  56   54 
Other accrued expenses and liabilities  1,736   1,110 
Distributions Payable  361   833 
Total current liabilities  3,735   4,124 
Long-term liabilities:        
Lease obligations  85   114 
Other liabilities  8,212   7,480 
Total long-term liabilities  8,297   7,594 
Total liabilities  12,032   11,718 
         
Commitments and contingencies  –   – 
         
Members' capital        
Members' contributed capital, 735,385 Class A units and 755,385 Class B units authorized, issued and outstanding  258,761   332,272 
Total members' capital  258,761   332,272 
Total liabilities and members' capital $270,793  $343,990 

 

       
  June 26, 2021  December 26, 2020 
  (unaudited)    
Assets      
Current assets:        
Cash and cash equivalents $62,484  $76,769 
Accounts receivable  1,194   317 
Due from affiliates  40   55 
Other current assets  18   29 
Total current assets  63,736   77,170 
Property, plant, and equipment, at cost  243   243 
Less accumulated depreciation  216   210 
Net property, plant, and equipment  27   33 
Right of use assets, net  193   219 
Investment in National Beef Packing Company, LLC  188,692   131,494 
Other assets  2   12 
Total assets $252,650  $208,928 
Liabilities and Members' Capital        
Current liabilities:        
Accounts payable - trade $15  $17 
Due to affiliates  5   5 
Accrued compensation and benefits  1,338   2,243 
Lease obligations  52   51 
Other accrued expenses and liabilities  382   579 
Distributions Payable  1,220   2 
Total current liabilities  3,012   2,897 
Long-term liabilities:        
Lease obligations  141   168 
Other liabilities  6,024   5,621 
Total long-term liabilities  6,165   5,789 
Total liabilities  9,177   8,686 
         
Commitments and contingencies  –   – 
         
Members' capital        
Members' contributed capital, 735,385 Class A units and 755,385 Class B units authorized, issued and outstanding  243,473   200,242 
Total members' capital  243,473   200,242 
Total liabilities and members' capital $252,650  $208,928 

 

See accompanying notes to financial statements.

 

 

 

 31 

 

 

U.S. PREMIUM BEEF, LLC

Statements of Operations

(thousands of dollars, except unit and per unit data)

 

                 
  13 weeks ended  26 weeks ended 
  June 25, 2022  June 26, 2021  June 25, 2022  June 26, 2021 
  (unaudited)  (unaudited)  (unaudited)  (unaudited) 
Net sales $0  $0  $0  $0 
Costs and expenses:                
Cost of sales  0   0   0   0 
Selling, general, and administrative expenses  1,941   1,065   3,617   2,549 
Depreciation and amortization  6   3   9   6 
Total costs and expenses  1,947   1,068   3,626   2,555 
Operating loss  (1,947)  (1,068)  (3,626)  (2,555)
Other income:                
Interest income  33   2   36   4 
Equity in income of National Beef Packing Company, LLC  52,779   103,198   115,385   139,757 
Other (loss) income, net  (151)  202   (34)  257 
Total other income  52,661   103,402   115,387   140,018 
Net income $50,714  $102,334  $111,761  $137,463 
                 
Income per unit:                
Basic and diluted                
Class A units $6.90  $13.92  $15.20  $18.69 
Class B units $60.42  $121.93  $133.16  $163.78 
                 
Outstanding weighted-average Class A and Class B units:                
Basic and diluted                
Class A units  735,385   735,385   735,385   735,385 
Class B units  755,385   755,385   755,385   755,385 

 

             
  13 weeks ended  26 weeks ended 
  June 26, 2021  June 27, 2020  June 26, 2021  June 27, 2020 
  (unaudited)  (unaudited)  (unaudited)  (unaudited) 
             
Net sales $0  $0  $0  $0 
Costs and expenses:                
Cost of sales  0   0   0   0 
Selling, general, and administrative expenses  1,065   1,221   2,549   2,347 
Depreciation and amortization  3   4   6   9 
Total costs and expenses  1,068   1,225   2,555   2,356 
Operating loss  (1,068)  (1,225)  (2,555)  (2,356)
Other income:                
Interest income  2   7   4   158 
Interest expense  0   0   0   (2)
Equity in income of National Beef Packing Company, LLC  103,198   102,385   139,757   115,484 
Other, net  202   37   257   96 
Total other income  103,402   102,429   140,018   115,736 
Net income $102,334  $101,204  $137,463  $113,380 
                 
Income per unit:                
Basic and diluted                
Class A units $13.92  $13.76  $18.69  $15.42 
Class B units $121.93  $120.58  $163.78  $135.09 
                 
Outstanding weighted-average Class A and Class B units:                
Basic and diluted                
Class A units  735,385   735,385   735,385   735,385 
Class B units  755,385   755,385   755,385   755,385 

 

See accompanying notes to financial statements.

 

 

 

 

 42 

 

 

U.S. PREMIUM BEEF, LLC

Statements of Cash Flows

(thousands of dollars)

  

         
  26 weeks ended 
  June 25, 2022  June 26, 2021 
  (unaudited)  (unaudited) 
Cash flows from operating activities:        
Net income $111,761  $137,463 
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization  9   6 
Equity in net income of National Beef Packing Company, LLC  (115,385)  (139,757)
Distributions from National Beef Packing Company, LLC  135,662   82,559 
Changes in assets and liabilities:        
Accounts receivable  (396)  (877)
Due from affiliates  (1,052)  15 
Other assets  (15)  21 
Accounts payable  9   (2)
Due to affiliates  (7)  0 
Accrued compensation and benefits  185   (502)
Other accrued expenses and liabilities  626   (197)
Net cash provided by operating activities  131,397   78,729 
Cash flows from Investing activities:        
Capital expenditures  (53)  0 
Net cash used in investing activities  (53)  0 
Cash flows from financing activities:        
Member distributions  (185,744)  (93,014)
Net cash used in financing activities  (185,744)  (93,014)
Net decrease in cash  (54,400)  (14,285)
Cash and cash equivalents at beginning of period  130,400   76,769 
Cash and cash equivalents at end of period $76,000  $62,484 

  

       
  26 weeks ended 
  June 26, 2021  June 27, 2020 
  (unaudited)  (unaudited) 
       
Cash flows from operating activities:        
Net income $137,463  $113,380 
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization  6   9 
Equity in net income of National Beef Packing Company, LLC  (139,757)  (115,484)
Distributions from National Beef Packing Company, LLC  82,559   7,853 
Changes in assets and liabilities:        
Accounts receivable  (877)  (272)
Due from affiliates  15   26 
Other assets  21   (164)
Accounts payable  (2)  47 
Due to affiliates  0   (29)
Accrued compensation and benefits  (502)  (775)
Other accrued expenses and liabilities  (197)  (522)
Net cash provided by operating activities  78,729   4,069 
Cash flows from investing activities:        
Capital expenditures, including interest capitalized  0   (6)
Net cash used in investing activities  0   (6)
Cash flows from financing activities:        
Member distributions  (93,014)  (50,129)
Net cash used in financing activities  (93,014)  (50,129)
Net decrease in cash  (14,285)  (46,066)
Cash and cash equivalents at beginning of period  76,769   77,909 
Cash and cash equivalents at end of period $62,484  $31,843 

 

See accompanying notes to financial statements.

 

 

 

 

 53 

 

 

U.S. PREMIUM BEEF, LLC

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

 

(1) Interim Financial Statements

 

Basis of Presentation

 

The accompanying unaudited Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP), for interim financial information; therefore, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included using management’s best estimates and judgments where appropriate. These estimates and judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results could differ materially from these estimates and judgments. For further information, refer to the audited Financial Statements and Notes to Financial Statements, which are included in the Company’s Annual Report on Form 10-K on file with the Securities and Exchange Commission (SEC), for the fiscal year ended December 26, 2020.25, 2021. The results of operations for the interim periods presented are not necessarily indicative of the results for a full fiscal year.

 

(2) Accounting Policies

 

Accounting for Investment in NBPNBP.. USPB’s 15.0729% investment in NBP is accounted for using the equity method of accounting as the Company has the ability to exercise significant influence but does not have financial or operational control.

 

Operating losses, diminished cash flows, economic and industry events, pandemics, such as coronavirus disease (COVID-19), and a variety of other factors may result in a decrease in the value of the investment in NBP, which is other than temporary. Such potential decreases in value, if deemed other than temporary, will cause the Company to record an impairment charge, which may have an impact on the trading values of USPB’s Class A and Class B units. However, NBP’s plants are all operational at the present time and its results of operations are highly profitable, as reflected in Note 6. As a result, we believe the fair value of our investment in NBP exceeds the carrying value.

 

Cash and Cash EquivalentsEquivalents.. The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. As of June 26, 2021,25, 2022, the Company’s balance sheet reflected Cash and cash equivalents of $62.5 $62,48476.0 million. The cash is invested in the CoBank, ACB (CoBank) overnight investment account. Investments are not deposits and are not insured by the Federal Deposit Insurance Corporation or the Farm Credit System Insurance Corporation.

 

Distributions PayableAccrued Expenses.. USPB utilizes a controlled disbursement account to fund cash distribution checks presentedThe Company accrues for payment by the holder. Checksexpenses that have been issuedincurred but have not cleared are reflected on the balance sheet as a reduction in cash. Amounts for checks that have not yet been issued are included in distributions payable and the change in the related balances are reflected in financing activities on the statement of cash flows.invoiced. As of June 26, 2021 and December 26, 2020,25, 2022, the Company had distributions payable of $1.2 accrued approximately $1,2200.2 million for tax and $0.0 2 million, respectively.audit related expenses.

 

(3)Noncompetition Agreements

 

The former CEO’s employment agreement provided for him to receive noncompetition payments in connection with the Leucadia Transaction. He will receive noncompetition payments of approximately $0.4 million during the balance of fiscal year 2021. The amount is included in Accrued compensation and benefits on the balance sheet.

The current CEO’s employment agreement provides for him to receive noncompetition payments for a twelve-month period following his termination of employment with USPB.

 

 

 

 64 

 

 

As of June 26, 202125, 2022 and December 26, 2020,25, 2021, the Company had accrued $0.70.3 million and $1.20.3 million, respectively, for the noncompetition agreements. The current and long-term portion of the accrued amount is included in Accrued compensation and benefits and Other liabilities respectively, on the balance sheet. The table below summarizes the current and long-term portions of the accrued non-compete amounts:

Schedule of non-compete amounts              
 June 26, 2021  December 26, 2020  June 25, 2022 December 25, 2021 
 (thousands of dollars)  (thousands of dollars) 
Current non-compete $424  $849  $0  $0 
Long-term non-compete  315   308   301   323 
Total non-compete $739  $1,157  $301  $323 

 

(4) Employee Compensation Plans

 

In September 2010, USPB’s Board of Directors approved a management phantom unit plan and subsequently awarded phantom units in fiscal years 2010 and 2013. As of June 26, 202125, 2022 and December 26, 2020,25, 2021, the Company had accrued $5.98.8 million and $5.37.9 million, respectively, for the management phantom awards. The accrued amounts are included in Accrued compensation and benefits and Other liabilities on the balance sheet. The table below summarizes the current and long-term portions of the accrued amounts:

Schedule of Accrued Liabilities        
  June 25, 2022  December 25, 2021 
  (thousands of dollars) 
Accrued compensation and benefits $879  $707 
Other liabilities  7,911   7,157 
Total phantom accrual $8,790  $7,864 

 

USPB provides its employees the opportunity to earn cash incentives and bonuses. As of June 26, 202125, 2022 and December 26, 2020,25, 2021, the Company had accrued $0.7 million and $1.4 million, respectively, for the cash incentive and bonus plans. The accrued amounts are included in Accrued compensation and benefits on the balance sheet.

 

(5) Earnings Per Unit

 

Under the LLC structure, earnings of the Company are to be allocated to unitholders based on their proportionate share of underlying equity. Earnings Per Unit (EPU) has been presented in the accompanying Statements of Operations and in the table that follows.

 

Basic EPU excludes dilution and is computed by first allocating a portion of USPB’s net income or net loss to Class A units and the remainder is allocated to Class B units. For the thirteen and twenty-six week periods ended June 26, 202125, 2022 and June 27, 2020,26, 2021, 10% of USPB’s net income was allocated to the Class A’s and 90% to the Class B’s. The net income allocated to the Class A and Class B units were then divided by the weighted-average number of Class A and Class B units outstanding for the period to determine the basic EPU for each respective class of unit.

 

Diluted EPU reflects the potential dilution that could occur to the extent that any outstanding dilutive Class A or Class B units were exercised. There are no potentially dilutive Class A or Class B units outstanding.

Reconciliation of earnings per unit                
Income Per Unit Calculation 13 weeks ended  26 weeks ended 
(thousands of dollars, except unit and per unit data) June 26, 2021  June 27, 2020  June 26, 2021  June 27, 2020 
  (unaudited)  (unaudited)  (unaudited)  (unaudited) 
Basic and diluted earnings per unit:                
Income attributable to USPB available to unitholders (numerator)                
Class A $10,233  $10,120  $13,746  $11,338 
Class B $92,101  $91,084  $123,717  $102,042 
                 
Weighted average outstanding units (denominator)                
Class A  735,385   735,385   735,385   735,385 
Class B  755,385   755,385   755,385   755,385 
                 
Per unit amount                
Class A $13.92  $13.76  $18.69  $15.42 
Class B $121.93  $120.58  $163.78  $135.09 

 

 

 75 

 

 

Schedule of Reconciliation of earnings per unit                
Income Per Unit Calculation 13 weeks ended  26 weeks ended 
(thousands of dollars, except unit and per unit data) June 25, 2022  June 26, 2021  June 25, 2022  June 26, 2021 
  (unaudited)  (unaudited)  (unaudited)  (unaudited) 
Basic and diluted earnings per unit:                
Income attributable to USPB available to unitholders (numerator)                
Class A $5,071  $10,233  $11,176  $13,746 
Class B $45,643  $92,101  $100,585  $123,717 
                 
Weighted average outstanding units (denominator)                
Class A  735,385   735,385   735,385   735,385 
Class B  755,385   755,385   755,385   755,385 
                 
Per unit amount                
Class A $6.90  $13.92  $15.20  $18.69 
Class B $60.42  $121.93  $133.16  $163.78 

(6)Investment in National Beef Packing Company, LLC

 

USPB’s 15.0729% investment in NBP is accounted for using the equity method of accounting as the Company has the ability to exercise significant influence, but does not have financial or operational control. The table below summarizes the changes to USPB’s investment in NBP for the thirteen and twenty-six week periods ended June 26, 202125, 2022 and June 27, 202026, 2021 (thousands of dollars):

Investment roll forward    
Beginning Investment at December 26, 2020 $131,494 
Equity in net income for twenty-six week period  139,757 
Distributions  (82,559)
Ending Investment at June 26, 2021 $188,692 
     
Beginning Investment at December 28, 2019 $131,786 
Equity in net income for twenty-six week period  115,484 
Distributions  (7,853)
Ending Investment at June 27, 2020 $239,417 
Schedule of Investment roll forward    
Investment at December 25, 2021 $213,290 
Equity in net income for thirteen-week period  62,606 
Distributions  (52,755)
Investment at March 26, 2022 $223,141 
Equity in net income for thirteen-week period  52,779 
Distributions  (82,907)
Investment at June 25, 2022 $193,013 
     
Investment at December 26, 2020 $131,494 
Equity in net income for thirteen-week period  36,559 
Distributions  (21,402)
Investment at March 27, 2021 $146,651 
Equity in net income for thirteen-week period  103,198 
Distributions  (61,157)
Investment at June 26, 2021 $188,692 

6

The difference between USPB’s percentage ownership share of NBP earnings and the recorded amount of Equity in income of National Beef Packing Company, LLC is attributable to the amortization of a basis difference related to the purchase accounting for NBP’s acquisition of Ohio Beef in 2019.

 

Below is a summary of the results of operations for NBP for the thirteen-weekthirteen and twenty-six week periods ended June 26, 202125, 2022 and June 27, 202026, 2021 (thousands of dollars):

Schedule of Operations for NBP                         
 13 weeks ended  26 weeks ended  13 weeks ended  26 weeks ended 
 June 26, 2021  June 27, 2020  June 26, 2021  June 27, 2020  June 25, 2022  June 26, 2021  June 25, 2022  June 26, 2021 
 (unaudited) (unaudited) (unaudited) (unaudited)  (unaudited) (unaudited) (unaudited) (unaudited) 
Net sales $2,948,388  $2,677,697  $5,264,003  $4,863,046  $2,949,870  $2,948,388  $5,973,624  $5,264,003 
Costs and expenses:                                
Cost of sales  2,210,339   1,947,262   4,233,893   3,995,881   2,540,322   2,210,339   5,095,022   4,233,893 
Selling, general, and administrative expenses  22,052   20,859   40,917   39,233   23,849   22,052   45,220   40,917 
Depreciation and amortization  28,004   26,795   55,673   53,323   29,873   28,004   59,309   55,673 
Total costs and expenses  2,260,395   1,994,916   4,330,483   4,088,437   2,594,044   2,260,395   5,199,551   4,330,483 
Operating income  687,993   682,781   933,520   774,609   355,826   687,993   774,073   933,520 
Other income (expense):                                
Interest income  12   56   98   137   40   12   67   98 
Interest expense  (2,396)  (2,323)  (4,796)  (6,571)  (2,212)  (2,396)  (3,688)  (4,796)
Income before taxes  685,609   680,514   928,822   768,175   353,654   685,609   770,452   928,822 
Income tax expense  (952)  (1,250)  (1,616)  (2,004)  (1,497)  (952)  (2,940)  (1,616)
Net income $684,657  $679,264  $927,206  $766,171  $352,157  $684,657  $767,512  $927,206 
                
NBP's net income attributable to USPB $103,198  $102,385  $139,757  $115,484 

 

(7)Income Taxes

 

Effective August 29, 2004, the Company converted to an LLC, and under this structure, taxes are not assessed at the Company level as the results of operations are included in the taxable income of the individual members.

 

8

Although income taxes are assessed to the individual members, USPB is required to withhold state income taxes from the cash distributions it makes to it members. As of June 26,25, 2022 and December 25, 2021, Other accrued expenses and liabilities on the Company’s balance sheet reflected state taxes payable of $0.31.5 million.million and $1.0 million, respectively.

 

(8) Long-term Debt and Loan Agreements

 

On July 13, 2020, USPB, and CoBank, ACB (“CoBank”), entered into a Credit Agreement, Amended and Restated Revolving Term Promissory Note (“Promissory Note”), and an Affirmation of Pledge Agreement.

7

 

The Credit Agreement and Promissory Note provide for a $1.0 million Revolving Term Commitment. That commitment carries a term of five years, maturing on June 30, 2025. All of the $1.0million revolving credit commitment was available as of June 26, 2021.25, 2022. The Promissory Note defines Interest as equal to the One-Month LIBOR Index Rate or if LIBOR quotes are no longer available, CoBank will replace the LIBOR Index Rate with a replacement benchmark rate. The Affirmation of Pledge Agreement provides CoBank with a first-priority security interest in USPB’s Membership Interests in, and Distributions from, National Beef Packing Company, LLC.

 

(9) Members’ Capital

 

The following table represents a reconciliation of Members’ Capital for the thirteen and twenty-six week periods ended June 26, 202125, 2022 and June 27, 202026, 2021 (unaudited) (thousands of dollars).

Schedule of Reconciliation of Members' Capital        
Balance at December 25, 2021 $332,272 
Net income for the thirteen-week period ended March 26, 2022  61,047 
Member distributions    
Class A ($16.16 per Class A unit)  (11,888)
Class B ($141.64 per Class B unit)  (106,994)
Balance at March 26, 2022 $274,437 
Net income for the thirteen-week period ended June 25, 2022  50,714 
Member distributions    
Class A ($9.03 per Class A unit)  (6,638)
Class B ($79.10 per Class B unit)  (59,752)
Balance at June 25, 2022 $258,761 
    
Balance at December 26, 2020 $200,242  $200,242 
Allocation of net income for the thirteen-week period ended March 27, 2021  35,129 
Net income for the thirteen-week period ended March 27, 2021  35,129 
Member distributions        
Class A ($6.32 per Class A unit)  (4,646)   (4,646)
Class B ($55.36 per Class B unit)  (41,817)   (41,817)
Balance at March 27, 2021  188,908  $188,908 
Allocation of net income for the thirteen-week period ended June 26, 2021  102,334 
Net income for the thirteen-week period ended June 26, 2021  102,334 
Member distributions        
Class A ($6.49 per Class A unit)  (4,777)   (4,777)
Class B ($56.92 per Class B unit)  (42,992)   (42,992)
Balance at June 26, 2021 $243,473  $243,473 
    
Balance at December 28, 2019 $202,837 
Allocation of net income for the thirteen-week period ended March 28, 2020  12,176 
Balance at March 28, 2020  215,013 
Allocation of net income for the thirteen-week period ended June 27, 2020  101,204 
Member distributions    
Class A ($6.81 per Class A unit)  (5,008)
Class B ($59.67 per Class B unit)  (45,071)
Balance at June 27, 2020 $266,138 

 

 

 

 98 

 

 

(10) Legal Proceedings

 

USPB is not currently involved in any litigation. However, because its ownership interest in NBP is USPB’s largest asset and because of the cattle procurement and distribution relationship between USPB and NBP, litigation involving NBP may impact USPB.

 

NBP is a defendant in four class action antitrust lawsuits in the United States District Court, Minnesota District, allegingand seven single plaintiff antitrust lawsuits in United States District Court, Minnesota District, the United States District Court, Southern District of Florida, the United States District Court, Connecticut, the United States District Court, Northern District of New York, the United States District Court, Northern District of Illinois, and the United States District Court, Southern District of Texas. In addition, NBP is a defendant in class action antitrust lawsuits in the Supreme Court of British Columbia and the Superior Court of Quebec, Montreal District. These lawsuits all allege that itNBP violated the Sherman Antitrust Act or the Canadian Competition Act and some of the lawsuits allege that NBP violated the Packers and Stockyards Act, the Commodity Exchange Act, and various state laws (the “Antitrust Cases”).or provincial laws. The Antitrust Casesclass-action cases are entitled In re Cattle Antitrust Litigation,, which was filed originally on April 23, 2019; Peterson et al. v. JBS USA Food Company Holdings, et al.al., which was filed originally on April 26, 2019; In re DPP Beef Litigation, which was filed originally on April 26, 2019; and Erbert & Gerbert’s, Inc. v. JBS USA Food Company Holdings, et al., which was filed originally on June 18, 2020.2020; Giang Bui v. Cargill, Incorporated, et al. which was filed originally on February 18, 2022; and Sylvie De Bellefeuille v. Cargill, Inc. et al., which was filed originally on March 24, 2022. The single-plaintiff Antitrust Cases are entitled Winn-Dixie Stores, Inc. and Bi-Lo Holding, LLC v. Cargill, Inc., et al., which was filed on August 2, 2021; Cheney Brothers, Inc. v. Cargill, Inc., et al., which was filed on January 31, 2022; Subway v. Cargill, Inc. et al., which was filed on February 22, 2022; Amory Investments LLC v. Cargill, Inc. et al., which was filed originally on March 8, 2022; Associated Grocers, Inc., et al. v. Cargill, Inc., et al., which was filed originally on May 12, 2022; Giant Eagle, Inc. v. Cargill, Inc., et al., which was filed originally on June 8, 2022; and Sysco Corporation v. Cargill, Inc., et al., which was filed originally on June 24, 2022. The plaintiffs in the Antitrust Casesthese cases seek treble damages and other relief under various laws including the Sherman Antitrust Act, the Canadian Competition Act, the Packers & Stockyards Act, and/or the Commodities Exchange Act and attorneys’ fees.  NBP is also a defendant in two class action lawsuits filed on January 7, 2020, alleging that it misrepresented the origin of its products in violation of the New Mexico Unfair Practices Act (the “Labelling Cases”).  The Labelling Cases are entitled Thornton v. Tyson Foods, Inc., et al., filed in the New Mexico Second Judicial District Court, Bernalillo County,various state and Lucero v. Tyson Foods, et al., filed in the New Mexico Thirteenth Judicial District Court, Sandoval County.  The Labelling Cases were subsequently removed to the United States District Court, New Mexico District.  The plaintiffs in the Labelling Cases seek treble damages and other reliefprovincial laws and attorneys’ fees. NBP believes it has meritorious defenses to the claims in the Antitrust Cases and the Labelling Casesthese cases and intends to defend these cases vigorously, although therethem vigorously. There can be no assuranceassurances, however, as to the outcome of these casesmatters or the impact on NBP’s consolidated financial position, results of operations and cash flows.

 

In addition to the antitrust litigation, NBP is subject to investigationsan investigation by the United States Department of Justice and approximately 30 state attorneys general regarding industry cattle procurement practices. NBP is cooperating with these investigations and is working with the Department of Justice and the relevant states to provide information requested in connection with the investigations. NBP believes it has meritorious defenses to any potential claims that might arise out of these government investigations, although there can be no assurance as to the outcome of these investigations or the impact on NBP’s consolidated financial position, results of operations and cash flows.

 

NBP is a party to various other lawsuits and claims arising out of the operation of its business. Management believes the ultimate resolution of such matters should not have a material adverse effect on NPB’sNBP’s financial condition, results of operations or liquidity.

 

USPB is not able to assess what impact, if any, the actions described above will have on NBP or USPB.

 

(11) Subsequent Events

 

USPB has evaluated subsequent events through the date the financial statements were issued and determined there were no such events to report.

 

 

 

 109 

 

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

The following discussion should be read in conjunction with our financial statements and related notes and other financial information appearing elsewhere in this report.

 

Disclosure Regarding Forward-Looking Statements

 

This report contains “forward-looking statements,” which are subject to a number of risks and uncertainties, many of which are beyond our control.  Forward-looking statements are typically identified by the words “believe”, “expect”, “anticipate”, “intend”, “estimate”, and similar expressions.  Actual results could differ materially from those contemplated by these forward-looking statements as a result of many factors, including economic conditions generally and in our principal markets, the availability and prices of live cattle and commodities, food safety, livestock disease, including the identification of cattle with bovine spongiform encephalopathy (BSE), competitive practices and consolidation in the cattle production and processing industries, actions of domestic or foreign governments, hedging risk, changes in interest rates and foreign currency exchange rates, consumer demand and preferences, the cost of compliance with environmental and health laws, loss of key customers, loss of key employees, labor relations, and consolidation among our customers.

 

In light of these risks and uncertainties, there can be no assurance that the results and events contemplated by the forward-looking information contained in this report will in fact transpire. Readers are cautioned not to place undue reliance on these forward-looking statements. We do not undertake any obligation to update or revise any forward-looking statements. All subsequent written or oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors.  Please review Part II. Item 1A. Risk Factors, included in this report, for other important factors that could cause actual results to differ materially from those in any such forward-looking statements.

 

Investment in National Beef Packing Company, LLC

 

NBP processes and markets a comprehensive line of fresh beef, case-ready products, and beef by-products for domestic and international markets.  The largest share of NBP’s revenue is generated from the sale of boxed beef and beef by-products. 

 

NBP has two beef slaughter and processing facilities located in southwest Kansas and a third located in central Iowa.  In addition, NBP operates a leather tannery, three case-ready manufacturing facilities, a fresh and frozen hamburger manufacturing facility and a transportation and logistics company that provides refrigerated and livestock truckingtransportation across the U.S.  

 

NBP’s profitability typically fluctuates seasonally as well as cyclically, based on the availability of fed cattle and the demand for beef and beef by-products.  Its profitability is dependent, in large part, on the spread between its cost for live cattle, the primary raw material for its business, and the value received from selling boxed beef and other products coupled with its overall volume. NBP operates in a large and fast-moving commodity market and does not have much influence over the price it pays for cattle or the selling price it receives for the products it produces. 

 

Revenues in the thirteen-week period ended June 26, 202125, 2022 increased 10.1%approximately 0.1% in comparison to the same period in 2020, primarily due to an increased volume of cattle processed.2021. Cost of salesSales increased 13.5%by approximately 14.9% for the thirteen-week period ended June 26, 2021,25, 2022, as compared to the same period in 2020,2021, primarily due to higher expendituresfed cattle prices, as well as increased costs for cattle resulting from the additional volumelabor, packaging, and from increasedother inputs.  Lower per unit costs.  Despite higher costs, the increasedbeef processing margins, along with a slight decrease in volume, led to an increasea decrease in overall profitability in the 20212022 period, as compared to the 20202021 period.

Revenues in the twenty-six week period ended June 26, 2021 increased 8.2% in comparison to the twenty-six week period in 2020, primarily due increased volume. Cost of sales increased 6.0% for the twenty-six week period ended June 26, 2021, as compared to the first half of fiscal year 2020, primarily due to higher expenditures for cattle resulting from the additional volume and from increased per unit costs.  Despite higher costs, the increased volume led to an increase in overall profitability in the 2021 period, as compared to the 2020 period.

 

 

 

 1110 

 

 

Operating losses, diminished cash flows, economicRevenues in the twenty-six-week period ended June 25, 2022 increased approximately 13.5% in comparison to the same period in 2021. Cost of Sales increased by approximately 20.3% for the twenty-six-week period ended June 25, 2022, as compared to the same period in 2021, primarily due to higher fed cattle prices, as well as increased costs for labor, packaging, and industry events, pandemics, andother inputs.  Lower per unit beef processing margins, along with a variety of other factors may resultslight decrease in volume, led to a decrease in overall profitability in the value of2022 period, as compared to the investment, which is other than temporary. Such potential decreases in value, if deemed other than temporary, will cause the Company to record an impairment charge, which may have an impact on the trading values of USPB’s Class A and Class B units. However, NBP’s plants are all operational at the present time and its results of operations are highly profitable, as reflected in Note 6. As a result, we believe the fair value of our investment in NBP exceeds the carrying value.2021 period.

 

On June 10, 2019, USPB and NBP entered into the First Amended and Restated Cattle Purchase and Sale Agreement (A&R Agreement) with USPB. The terms and conditions of the A&R Agreement are substantially the same as those of the Cattle Purchase and Sale Agreement dated December 30, 2011. Per the terms and conditions of the A&R Agreement, NBP is required to purchase through USPB from its owners and associates, and USPB is required to sell and deliver from its owners and associates to NBP, a base amount of 735,385 (subject to adjustment) head of cattle per year with prices based on those published by the U.S. Department of Agriculture, subject to adjustments for cattle performance.  NBP obtained approximately 25% and 24% of its cattle requirements under this agreement during the twenty-six week periodsweeks ended June 26, 202125, 2022 and June 27, 2020, respectively.26, 2021.

 

USPB Results of Operations

 

Thirteen-weeks ended June 26, 202125, 2022 compared to thirteen-weeks ended June 27, 202026, 2021

Net Sales. There were no Net Sales in the thirteen-week periods ended June 26, 202125, 2022 and June 27, 2020.26, 2021.  

 

Cost of Sales. There were no Cost of Sales in the thirteen-week periods ended June 26, 202125, 2022 and June 27, 2020.26, 2021.  

 

Selling, General and Administrative Expenses. Selling, general and administrative expenses were approximately $1.9 million for the thirteen-weeks ended June 25, 2022 compared to approximately $1.1 million for the thirteen-weeks ended June 26, 2021, compared to approximately $1.2 million for the thirteen-weeks ended June 27, 2020, a decreasean increase of approximately $0.1$0.8 million. The decreaseincrease was primarily the result of lowerhigher phantom plan non-compete and accounting expenses.

 

Operating Loss. Operating loss was approximately $1.9 million for the thirteen-weeks ended June 25, 2022 compared to approximately $1.1 million for the thirteen-weeks ended June 26, 2021 compared to approximately $1.2 million for the thirteen-weeks ended June 27, 2020.2021.  

 

Equity in Net Income of National Beef Packing Company, LLC. Equity in NBP net income was $52.8 million for the thirteen-weeks ended June 25, 2022 compared to $103.2 million for the thirteen-weeks ended June 26, 2021 compared to $102.4 million for the thirteen-weeks ended June 27, 2020.2021. The increasedecrease in fiscal year 20212022 is primarily due to higher gross margins at NBP. USPB carries its 15.0729% investment in NBP under the equity method of accounting.

Other, net. Other income was $0.2 million and approximately $0.0 million for the thirteen-week periods ended June 26, 2021 and June 27, 2020, respectively.

Net income. Net income was $102.3 million and $101.2 million for the thirteen-week periods ended June 26, 2021 and June 27, 2020, respectively.

Twenty-six weeks ended June 26, 2021 compared to twenty-six weeks ended June 27, 2020

Net Sales. There were no Net Sales in the twenty-six week periods ended June 26, 2021 and June 27, 2020.

Cost of Sales. There were no Cost of Sales in the twenty-six week periods ended June 26, 2021 and June 27, 2020.

12

Selling, General and Administrative Expenses. Selling, general and administrative expenses were approximately $2.5 million for the twenty-six weeks ended June 26, 2021 compared to approximately $2.3 million for the twenty-six weeks ended June 27, 2020, an increase of approximately $0.2 million. The increase was the result of higher phantom plan compensation expense, which was partially offset by lower non-compete expenses.

Operating Loss. Operating loss was approximately $2.6 million for the twenty-six weeks ended June 26, 2021 compared to approximately $2.4 million for the twenty-six weeks ended June 27, 2020.  

Equity in Net Income of National Beef Packing Company, LLC. Equity in NBP net income was $139.8 million for the twenty-six weeks ended June 26, 2021 compared to $115.5 million for the twenty-six weeks ended June 27, 2020. The increase in fiscal year 2021 is primarily due to higher gross margins at NBP. USPB carries its 15.0729% investment in NBP under the equity method of accounting.

 

Interest Income. Interest income was $0.0 million for the thirteen-weeks ended June 25, 2022 and June 26, 2021.

Other, net. Other loss was $0.2 million for the thirteen-week period ended June 25, 2022 compared to other income of $0.2 million for the thirteen-week period ended June 26, 2021, respectively. The change from the prior period was due to higher state and local taxes and lower delivery right lease income.

Net income. Net income was $50.7 million and $102.3 million for the thirteen-week periods ended June 25, 2022 and June 26, 2021, respectively.

11

Twenty-six weeks ended June 25, 2022 compared to twenty-six weeks ended June 26, 2021

Net Sales. There were no Net Sales in the twenty-six weeks periods ended June 25, 2022 and June 26, 2021.  

Cost of Sales. There were no Cost of Sales in the twenty-six weeks periods ended June 25, 2022 and June 26, 2021.  

Selling, General and Administrative Expenses. Selling, general and administrative expenses were approximately $0.0$3.6 million for the twenty-six weeks ended June 25, 2022 compared to approximately $2.5 million for the twenty-six weeks ended June 26, 2021, compared to $0.2an increase of approximately $1.1 million. The increase was primarily the result of higher phantom plan expenses.

Operating Loss. Operating loss was approximately $3.6 million for the twenty-six weeks ended June 27, 2020.25, 2022 compared to approximately $2.6 million for the twenty-six weeks ended June 26, 2021.  

Equity in Net Income of National Beef Packing Company, LLC. Equity in NBP net income was $115.4 million for the twenty-six weeks ended June 25, 2022 compared to $139.8 million for the twenty-six weeks ended June 26, 2021. The decrease in fiscal year 2022 is primarily due to lower gross margins at NBP. USPB carries its 15.0729% investment in NBP under the equity method of accounting.

Interest Income. Interest income was $0.0 million for the twenty-six weeks ended June 25, 2022 and June 26, 2021.

 

Other, net. Other loss was $0.0 million compared to other income wasof $0.3 million and $0.1 million for the twenty-six weekweeks periods ended June 25, 2022 and June 26, 2021, respectively. The change from the prior period was due to higher state and June 27, 2020, respectively.local taxes and lower delivery right lease income.

 

Net income. Net income was $137.5$111.8 million and $113.4$137.5 million for the twenty-six weekweeks periods ended June 26, 202125, 2022 and June 27, 2020,26, 2021, respectively.

 

Liquidity and Capital Resources

 

As of June 26, 2021,25, 2022, we had net working capital (the excess of current assets over current liabilities) of approximately $60.7$73.8 million, which included cash and cash equivalents of $62.5$76.0 million. As of December 26, 2020,25, 2021, we had net working capital of approximately $74.3$126.4 million, which included cash and cash equivalents of $76.8$130.4 million. Our primary sources of liquidity for the first two quarters of fiscal year 20212022 and fiscal year 20202021 were cash and available borrowings under the Master Loan Agreement with CoBank.

 

As of June 26, 2021,25, 2022, USPB had no long-term debt outstanding. We had a $1.0 million revolving term credit commitment with CoBank, all of which was available. USPB was in compliance with the financial covenant under its Master Loan Agreement as of June 26, 2021.25, 2022.

 

We believe our cash will be sufficient to support our cash needs for the foreseeable future. For a review of our obligations that affect liquidity, please see the “Cash Payment Obligations” table in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for fiscal year 2020.2021.

12

 

Operating Activities

Net cash provided by operating activities in the twenty-six weeks ended June 26, 202125, 2022 was approximately $78.7$131.4 million compared to approximately $4.1$78.7 million in the twenty-six weeks ended June 27, 2020.26, 2021.  The $74.6$52.7 million change was primarily due to a $74.7$53.1 million increase in distributions received from NBP.National Beef.

 

Investing Activities

Net cash used in investing activities in the twenty-six week periodsweeks ended June 26, 202125, 2022 was $0.0approximately $0.1 million compared to less than $0.0 million in the twenty-six week periodweeks ended June 27, 2020.26, 2021.  The increase was due to the purchase of a new company vehicle.

 

Financing Activities

Net cash used in financing activities was approximately $185.7 million in the twenty-six weeks ended June 25, 2022 compared to approximately $93.0 million in the twenty-six weeks ended June 26, 2021 compared to $50.1 million in the twenty-six weeks ended June 27, 2020 due to an increase inincreased level of member distributions made in the 2021 period.twenty-six weeks of 2022.

13

 

Master Loan Agreement

 

On July 13, 2020, USPB, and CoBank, ACB (“CoBank”), entered into a Credit Agreement, Amended and Restated Revolving Term Promissory Note (“Promissory Note”), and an Affirmation of Pledge Agreement.

 

The Credit Agreement and Promissory Note provide for a $1.0 million Revolving Term Commitment. The commitment carries a term of five years, maturing on June 30, 2025. All of the $1.0 million revolving credit commitment was available as of June 26, 2021.25, 2022. The Promissory Note defines Interest as equal to the One-Month LIBOR Index Rate or if LIBOR quotes are no longer available, CoBank will replace the LIBOR Index Rate with a replacement benchmark rate. The Affirmation of Pledge Agreement provides CoBank with a first-priority security interest in USPB’s Membership Interests in, and Distributions from, National Beef Packing Company, LLC.

 

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

 

The principal market risks affecting USPB’s business are exposure to interest rate risk, to the extent the Company has debt outstanding. As of June 26, 2021,25, 2022, the Company did not have any outstanding debt.

 

Item 4. Controls and Procedures.

 

We maintain a system of controls and procedures designed to provide reasonable assurance as to the reliability of the Financial Statements and other disclosures included in this report, as well as to safeguard assets from unauthorized use or disposition. We evaluated the effectiveness of the design and operation of our disclosure controls and procedures as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e) under supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, as of the end of the period covered by this Quarterly Report on Form 10-Q, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective in alerting them, in a timely manner, to material information required to be included in our periodic Securities and Exchange Commission filings. There have been no changes in our internal controls over financial reporting during the twenty-six weeks ended June 26, 202125, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. The design of any system of controls and procedures is based in part upon certain assumptions about the likelihood of future events.

 

 

 14 

 

 

PART II. OTHER INFORMATION

 

Item 1. Legal Proceedings.

 

USPB is not currently involved in any litigation. However, because its ownership interest in NBP is USPB’s largest asset and because of the cattle procurement and distribution relationship between USPB and NBP, litigation involving NBP may impact USPB.

 

NBP is a defendant in four class action antitrust lawsuits in the United States District Court, Minnesota District, allegingand seven single plaintiff antitrust lawsuits in United States District Court, Minnesota District, the United States District Court, Southern District of Florida, the United States District Court, Connecticut, the United States District Court, Northern District of New York, the United States District Court, Northern District of Illinois, and the United States District Court, Southern District of Texas. In addition, NBP is a defendant in class action antitrust lawsuits in the Supreme Court of British Columbia and the Superior Court of Quebec, Montreal District. These lawsuits all allege that itNBP violated the Sherman Antitrust Act or the Canadian Competition Act and some of the lawsuits allege that NBP violated the Packers and Stockyards Act, the Commodity Exchange Act, and various state laws (the “Antitrust Cases”).or provincial laws. The Antitrust Casesclass-action cases are entitled In re Cattle Antitrust Litigation,, which was filed originally on April 23, 2019; Peterson et al. v. JBS USA Food Company Holdings, et al.al., which was filed originally on April 26, 2019; In re DPP Beef Litigation, which was filed originally on April 26, 2019; and Erbert & Gerbert’s, Inc. v. JBS USA Food Company Holdings, et al., which was filed originally on June 18, 2020.2020; Giang Bui v. Cargill, Incorporated, et al. which was filed originally on February 18, 2022; and Sylvie De Bellefeuille v. Cargill, Inc. et al., which was filed originally on March 24, 2022. The single-plaintiff Antitrust Cases are entitled Winn-Dixie Stores, Inc. and Bi-Lo Holding, LLC v. Cargill, Inc., et al., which was filed on August 2, 2021; Cheney Brothers, Inc. v. Cargill, Inc., et al., which was filed on January 31, 2022; Subway v. Cargill, Inc. et al., which was filed on February 22, 2022; Amory Investments LLC v. Cargill, Inc. et al., which was filed originally on March 8, 2022; Associated Grocers, Inc., et al. v. Cargill, Inc., et al., which was filed originally on May 12, 2022; Giant Eagle, Inc. v. Cargill, Inc., et al., which was filed originally on June 8, 2022; and Sysco Corporation v. Cargill, Inc., et al., which was filed originally on June 24, 2022. The plaintiffs in the Antitrust Casesthese cases seek treble damages and other relief under various laws including the Sherman Antitrust Act, the Canadian Competition Act, the Packers & Stockyards Act, and/or the Commodities Exchange Act and attorneys’ fees. NBP is also a defendant in two class action lawsuits filed on January 7, 2020, alleging that it misrepresented the origin of its products in violation of the New Mexico Unfair Practices Act (the “Labelling Cases”).  The Labelling Cases are entitled Thornton v. Tyson Foods, Inc., et al., filed in the New Mexico Second Judicial District Court, Bernalillo County,various state and Lucero v. Tyson Foods, et al., filed in the New Mexico Twenty-sixth Judicial District Court, Sandoval County. The Labelling Cases were subsequently removed to the United States District Court, New Mexico District.  The plaintiffs in the Labelling Cases seek treble damages and other reliefprovincial laws and attorneys’ fees. NBP believes it has meritorious defenses to the claims in the Antitrust Cases and the Labelling Casesthese cases and intends to defend these cases vigorously, although therethem vigorously. There can be no assuranceassurances, however, as to the outcome of these casesmatters or the impact on NBP’s consolidated financial position, results of operations and cash flows.

 

In addition to the antitrust litigation, NBP is subject to investigationsan investigation by the United States Department of Justice and approximately 30 state attorneys general regarding industry cattle procurement practices. NBP is cooperating with these investigations and is working with the Department of Justice and the relevant states to provide information requested in connection with the investigations. NBP believes it has meritorious defenses to any potential claims that might arise out of these government investigations, although there can be no assurance as to the outcome of these investigations or the impact on NBP’s consolidated financial position, results of operations and cash flows.

 

NBP is a party to various other lawsuits and claims arising out of the operation of its business. Management believes the ultimate resolution of such matters should not have a material adverse effect on NPB’sNBP’s financial condition, results of operations or liquidity.

 

USPB is not able to assess what impact, if any, the actions described above will have on NBP or USPB.

15

 

Item 1A. Risk Factors.

 

The risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended December 26, 202025, 2021 have not materially changed. Please refer to the Company’s report on Form 10-K for the fiscal year ended December 26, 202025, 2021 to consider those risk factors.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

 

None.

 

Item 3. Defaults Upon Senior Securities.

 

None.

15

 

Item 4. Mine Safety Disclosures.

 

Not applicable.

 

Item 5. Other Information.

 

None.

 

Item 6. Exhibits.

 

31.1Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

31.2Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).

32.1Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

32.2Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).

 

101.INSInline 101.INSXBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document)**

101.SCHInline 101.SCHXBRL Taxonomy Extension Schema Document **

101.CALInline

XBRL Taxonomy Extension Calculation Linkbase Document**

101.DEFInline

 XBRL Taxonomy Extension Definition Linkbase Document **

101.LABInline

XBRL Taxonomy Extension Label Linkbase Document **

101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted in IXBRL, and included in exhibit 101). **

 

** Furnished herewith. Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections.

 

 

 16 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 U.S. Premium Beef, LLC
   
By:/s/ Stanley D. Linville
   
  

Stanley D. Linville
Chief Executive Officer

(Principal Executive Officer)

 

   
By:/s/ Scott J. Miller
   
  

Scott J. Miller
Chief Financial Officer

(Principal Financial and Accounting Officer)

 

 

 

Date: August 5, 2021

4, 2022

 

 

 

 

 

 

 17