U. S. Premium Beef (USPB) 10-Q 17 Aug 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 28, 2018
Entity Registrant Name	U. S. Premium Beef, LLC
Entity Central Index Key	1,289,237
Document Type	10-Q
Document Period End Date	Jun. 30, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-29
Entity a Well-known Seasoned Issuer	No
Entity a Voluntary Filer	No
Entity's Reporting Status Current	Yes
Entity Filer Category	Non-accelerated Filer
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2,018
Class A Units [Member]
Entity Common Stock, Shares Outstanding		735,385
Class B Units [Member]
Entity Common Stock, Shares Outstanding		755,385

Balance Sheets (Unaudited)

Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 30, 2017
Current assets:
Cash and cash equivalents	$ 81,641	$ 119,074
Due from affiliates	4	137
Other current assets	19	35
Total current assets	81,664	119,246
Property, plant, and equipment, at cost	230	223
Less accumulated depreciation	207	201
Net property, plant, and equipment	23	22
Investment in National Beef Packing Company, LLC	121,774	140,030
Other assets	69	103
Total assets	203,530	259,401
Current liabilities:
Accounts payable - trade	32	58
Due to affiliates	4	388
Accrued compensation and benefits	1,742	2,250
Other accrued expenses and liabilities	111	284
Distributions payable	1,942	28,328
Total current liabilities	3,831	31,308
Long-term liabilities:
Other liabilities	3,919	3,946
Total long-term liabilities	3,919	3,946
Total liabilities	7,750	35,254
Capital shares and equities:
Members' capital, 735,385 Class A units and 755,385 Class B units authorized, issued and outstanding	195,780	224,147
Total capital shares and equities	195,780	224,147
Total liabilities and capital shares and equities	$ 203,530	$ 259,401

Balance Sheets (Unaudited) (Par

Balance Sheets (Unaudited) (Parenthetical) - shares	Jun. 30, 2018	Dec. 30, 2017
Class A Units [Member]
Members' capital, units authorized	735,385	735,385
Members' capital, units issued	735,385	735,385
Members' capital, units outstanding	735,385	735,385
Class B Units [Member]
Members' capital, units authorized	755,385	755,385
Members' capital, units issued	755,385	755,385
Members' capital, units outstanding	755,385	755,385

Statements of Operations (Unaud

Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 24, 2017	Jun. 30, 2018	Jun. 24, 2017
Net sales	$ 0	$ 0	$ 0	$ 0
Costs and expenses:
Cost of sales	0	0	0	0
Selling, general, and administrative expenses	1,089	837	2,531	1,901
Depreciation and amortization	3	3	6	6
Total costs and expenses	1,092	840	2,537	1,907
Operating loss	(1,092)	(840)	(2,537)	(1,907)
Other income (expense):
Interest income	265	61	458	71
Interest expense	(3)	(3)	(6)	(6)
Equity in income of National Beef Packing Company, LLC	28,338	11,748	38,684	20,375
Other, net	280	(12)	390	(2)
Total other expense	28,880	11,794	39,526	20,438
Comprehensive income	$ 27,788	$ 10,954	$ 36,989	$ 18,531
Class A Units [Member]
Earnings per unit:
Basic and diluted	$ 3.78	$ 1.49	$ 5.03	$ 2.52
Outstanding weighted-average Class A and Class B units:
Basic and diluted	735,385	735,385	735,385	735,385
Class B Units [Member]
Earnings per unit:
Basic and diluted	$ 33.11	$ 13.05	$ 44.07	$ 22.08
Outstanding weighted-average Class A and Class B units:
Basic and diluted	755,385	755,385	755,385	755,385

Statements of Cash Flows (Unaud

Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 24, 2017
Cash flows from operating activities:
Comprehensive income	$ 36,989	$ 18,531
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	6	6
Equity in net income of National Beef Packing Company, LLC	(38,684)	(20,375)
Distributions from National Beef Packing Company, LLC	38,684	0
Changes in assets and liabilities:
Due from affiliates	133	(214)
Other assets	50	50
Accounts payable	(26)	(63)
Due to affiliates	(384)	(12)
Accrued compensation and benefits	(535)	(588)
Other accrued expenses and liabilities	(173)	(61)
Net cash provided by (used in) operating activities	36,060	(2,726)
Cash flows from investing activities:
Capital expenditures, including interest capitalized	(7)	0
Distribution from National Beef Packing Company, LLC	18,256	12,216
Net cash provided by investing activities	18,249	12,216
Cash flows from financing activities:
Change in overdraft balances	(26,386)	(1,128)
Partnership distributions and redemptions	(65,356)	(25,895)
Net cash used in financing activities	(91,742)	(27,023)
Net decrease in cash	(37,433)	(17,533)
Cash and cash equivalents at beginning of the period	119,074	85,230
Cash and cash equivalents at end of the period	$ 81,641	$ 67,697

1. Interim Financial Statements

1. Interim Financial Statements	6 Months Ended
	Jun. 30, 2018
Quarterly Financial Information Disclosure [Abstract]
Interim Financial Statements	(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 30, 2017. The results of operations for the interim periods presented are not necessarily indicative of the results for a full fiscal year. 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.

2. Members' Capital

2. Members' Capital	6 Months Ended
	Jun. 30, 2018
Members' Equity [Abstract]
Members' Capital	(2) Members’ Capital The following table represents a reconciliation of Members’ Capital for the twenty-six week period ended June 30, 2018 (thousands of dollars). Balance at December 30, 2017 $ 224,147 Allocation of comprehensive income for the twenty-six week period ended June 30, 2018 36,989 Member distributions (65,356) Balance at June 30, 2018 $ 195,780

3. Earnings Per Unit

3. Earnings Per Unit	6 Months Ended
	Jun. 30, 2018
Earnings per unit:
Earnings Per Unit	(3) 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 comprehensive income or comprehensive loss to Class A units and the remainder is allocated to Class B units. For the thirteen and twenty-six week periods ended June 30, 2018 and thirteen and twenty-five week periods ended June 24, 2017, 10% of USPB’s comprehensive income allocated to the Class A’s and 90% to the Class B’s. The comprehensive 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. Comprehensive Income Per Unit Calculation 13 weeks ended 13 weeks ended 26 weeks ended 25 weeks ended (thousands of dollars, except unit and per unit data) June 30, 2018 June 24, 2017 June 30, 2018 June 24, 2017 Basic and diluted earnings per unit: Comprehensive income attributable to USPB available to unitholders (numerator) Class A $ 2,779 $ 1,095 $ 3,699 $ 1,853 Class B $ 25,009 $ 9,859 $ 33,290 $ 16,678 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 $ 3.78 $ 1.49 $ 5.03 $ 2.52 Class B $ 33.11 $ 13.05 $ 44.07 $ 22.08

4. Investment in National Beef

4. Investment in National Beef Packing Company, LLC	6 Months Ended
	Jun. 30, 2018
Investments in and Advances to Affiliates, Schedule of Investments [Abstract]
Investment in National Beef Packing Company, LLC	(4) Investment in National Beef Packing Company, LLC USPB’s 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. Below is a summary of the results of operations for NBP for the thirteen and twenty-six week periods ended June 30, 2018 and thirteen and twenty-five week periods ended June 24, 2017 (thousands of dollars): 13 weeks ended 13 weeks ended 26 weeks ended 25 weeks ended June 30, 2018 June 24, 2017 June 30, 2018 June 24, 2017 (unaudited) (unaudited) (unaudited) (unaudited) Net sales $ 1,942,690 $ 1,874,494 $ 3,724,609 $ 3,433,517 Costs and expenses: Cost of sales 1,706,825 1,750,570 3,377,599 3,214,409 Selling, general, and administrative expenses 19,116 19,810 37,151 36,111 Depreciation and amortization 25,805 24,460 51,324 46,858 Total costs and expenses 1,751,746 1,794,840 3,466,074 3,297,378 Operating income 190,944 79,654 258,535 136,139 Other income (expense): Interest income 78 57 146 173 Interest expense (3,370) (2,256) (5,478) (4,070) Other, net 984 970 4,326 3,286 Income before taxes 188,636 78,425 257,529 135,528 Income tax expense (629) (483) (883) (351) Net income $ 188,007 $ 77,942 $ 256,646 $ 135,177 NBP's net income attributable to USPB $ 28,338 $ 11,748 $ 38,684 $ 20,375

2. Members' Capital (Tables)

2. Members' Capital (Tables)	6 Months Ended
	Jun. 30, 2018
Members' Equity [Abstract]
Schedule of Reconciliation of Members' Capital	Balance at December 30, 2017 $ 224,147 Allocation of comprehensive income for the twenty-six week period ended June 30, 2018 36,989 Member distributions (65,356) Balance at June 30, 2018 $ 195,780

3. Earnings Per Unit (Tables)

3. Earnings Per Unit (Tables)	6 Months Ended
	Jun. 30, 2018
Limited Liability Company (LLC) Members' Equity [Abstract]
Schedule of Income (Loss) Per Unit Calculation	Comprehensive Income Per Unit Calculation 13 weeks ended 13 weeks ended 26 weeks ended 25 weeks ended (thousands of dollars, except unit and per unit data) June 30, 2018 June 24, 2017 June 30, 2018 June 24, 2017 Basic and diluted earnings per unit: Comprehensive income attributable to USPB available to unitholders (numerator) Class A $ 2,779 $ 1,095 $ 3,699 $ 1,853 Class B $ 25,009 $ 9,859 $ 33,290 $ 16,678 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 $ 3.78 $ 1.49 $ 5.03 $ 2.52 Class B $ 33.11 $ 13.05 $ 44.07 $ 22.08

4. Investment in National Bee12

4. Investment in National Beef Packing Company, LLC (Tables)	6 Months Ended
	Jun. 30, 2018
Investments in and Advances to Affiliates, Schedule of Investments [Abstract]
Schedule of Operations for NBP	13 weeks ended 13 weeks ended 26 weeks ended 25 weeks ended June 30, 2018 June 24, 2017 June 30, 2018 June 24, 2017 (unaudited) (unaudited) (unaudited) (unaudited) Net sales $ 1,942,690 $ 1,874,494 $ 3,724,609 $ 3,433,517 Costs and expenses: Cost of sales 1,706,825 1,750,570 3,377,599 3,214,409 Selling, general, and administrative expenses 19,116 19,810 37,151 36,111 Depreciation and amortization 25,805 24,460 51,324 46,858 Total costs and expenses 1,751,746 1,794,840 3,466,074 3,297,378 Operating income 190,944 79,654 258,535 136,139 Other income (expense): Interest income 78 57 146 173 Interest expense (3,370) (2,256) (5,478) (4,070) Other, net 984 970 4,326 3,286 Income before taxes 188,636 78,425 257,529 135,528 Income tax expense (629) (483) (883) (351) Net income $ 188,007 $ 77,942 $ 256,646 $ 135,177 NBP's net income attributable to USPB $ 28,338 $ 11,748 $ 38,684 $ 20,375

1. Interim Financial Statemen13

1. Interim Financial Statements (Details Narrative)	Jun. 30, 2018
Quarterly Financial Information Disclosure [Abstract]
Remaining membership interests in National Beef Packing Company, LLC (NBP)	15.0729%

2. Members' Capital (Details)

2. Members' Capital (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2018USD ($)
Members' Equity [Abstract]
Beginning balance	$ 224,147
Allocation of comprehensive income	36,989
Member distributions	(65,356)
Ending balance	$ 195,780

3. Earnings Per Unit (Details)

3. Earnings Per Unit (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 24, 2017	Jun. 30, 2018	Jun. 24, 2017
Basic and diluted earnings per unit
Comprehensive income attributable to USPB unitholders (numerator)			$ 36,989
Class A Units [Member]
Basic and diluted earnings per unit
Comprehensive income attributable to USPB unitholders (numerator)	$ 2,779	$ 1,095	$ 3,699	$ 1,853
Weighted average outstanding units (denominator)	735,385	735,385	735,385	735,385
Per unit amount	$ 3.78	$ 1.49	$ 5.03	$ 2.52
Class B Units [Member]
Basic and diluted earnings per unit
Comprehensive income attributable to USPB unitholders (numerator)	$ 25,009	$ 9,859	$ 33,290	$ 16,678
Weighted average outstanding units (denominator)	755,385	755,385	755,385	755,385
Per unit amount	$ 33.11	$ 13.05	$ 44.07	$ 22.08

3. Earnings Per Unit (Details N

3. Earnings Per Unit (Details Narrative)	6 Months Ended
	Jun. 30, 2018
Class A Units [Member]
Class of Stock [Line Items]
Ownership percentage	10.00%
Class B Units [Member]
Class of Stock [Line Items]
Ownership percentage	90.00%

4. Investment in National Bee17

4. Investment in National Beef Packing Company, LLC (Details) - National Beef Packing Company, LLC [Member] - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 24, 2017	Jun. 30, 2018	Jun. 24, 2017
Investment in National Beef Packing
Net sales	$ 1,942,690	$ 1,874,494	$ 3,724,609	$ 3,433,517
Costs and expenses:
Cost of sales	1,706,825	1,750,570	3,377,599	3,214,409
Selling, general, and administrative expenses	19,116	19,810	37,151	36,111
Depreciation and amortization	25,805	24,460	51,324	46,858
Total costs and expenses	1,751,746	1,794,840	3,466,074	3,297,378
Operating income	190,944	79,654	258,535	136,139
Other income (expense):
Interest income	78	57	146	173
Interest expense	(3,370)	(2,256)	(5,478)	(4,070)
Other, net	984	970	4,326	3,286
Income before taxes	188,636	78,425	257,529	135,528
Income tax expense	(629)	(483)	(883)	(351)
Net income	188,007	77,942	256,646	135,177
NBP's net income attributable to USPB	$ 28,338	$ 11,748	$ 38,684	$ 20,375