Pilgrim's Pride (PPC) 8-K/A Pilgrim’s Pride Reports EBITDA of $222.5 Million with a Margin of 10.4% for the Third Quarter of 2013

CORRECTED

Pilgrim’s Pride Reports EBITDA of $222.5 Million with a Margin of 10.4% for the Third Quarter of 2013

GREELEY, Colo., October 30, 2013 – Pilgrim’s Pride Corporation (NASDAQ: PPC) reports third quarter 2013 financial results with net sales of $2.14 billion, $74 million higher than the $2.07 billion reported in the third quarter of 2012. Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) of $222.5 million increased 116% compared to the $103 million generated in the prior year. Net income of $160.9 million reflected an improvement of 275% compared to the $42.9 million reported in the same period in 2012, with diluted earnings per share reaching $0.62 compared to $0.17 in the third quarter of 2012.

“We are pleased to see continued improvement reflected in our results based on the consistent execution of our strategy. Our engagement with key customers continues to reflect the value they expect from Pilgrim’s and is driving growth and success for our customers. We’ve also seen improvements in our margins as a result of the processes we’ve transformed through our commitment to operational excellence. We are close to achieving our operational improvement targets for the year and envision capturing even greater efficiencies in 2014. Our export model has enabled us to attain our goal of achieving 30% growth in value-added products year to date,” stated Bill Lovette, Pilgrim’s Chief Executive Officer.

“While we saw some volatility in the Mexican market this quarter, we believe the fundamentals of the business and growth opportunities remain intact. Market prices in the region softened during the quarter; however, we continue to view Mexico as a tremendous opportunity for profitability and growth.

Cash flows from operations were $285.8 million for the quarter, enabling us to reduce our debt by $252 million. Our ending net debt position was $582.1 million, which is 0.87 times our trailing twelve months’ EBITDA. This stronger capital structure is reflective of our effective operational execution and cash management strategy.”

Conference Call Information

A conference call to discuss Pilgrim’s quarterly results will be held tomorrow, October 31 at 7:00 a.m. Mountain (9 a.m. Eastern). 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:
http://services.choruscall.com/links/ppc131031.html

You may also reach the pre-registration link by logging in through the investor section of our website atwww.pilgrims.com 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 (877) 270-2148 within the US or +1 (412) 902-6510 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 www.pilgrims.com. The webcast will be available for replay through February 13, 2014.

About Pilgrim’s Pride

Pilgrim’s Pride Corporation employs approximately 37,500 people and operates chicken processing plants and prepared-foods facilities in 12 states, Puerto Rico and Mexico. The Company’s primary distribution is through retailers and foodservice distributors.

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. 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: 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 as well as other risks described under “Risk Factors” in the Company’s Annual Report on Form 10-K and subsequent filings with the Securities and Exchange Commission. Pilgrim’s Pride Corporation undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact:	Rosemary Geelan
	Pilgrim’s Pride Corp Investor Relations
	Rosemary.geelan@pilgrims.com
	(970) 506-8192
	www.pilgrims.com

PILGRIM’S PRIDE CORPORATION
Condensed Consolidated Balance Sheets

	September 29,			December 30,
	2013			2012
	(Unaudited)
	(In thousands)
Cash and cash equivalents	$	330,316		$	68,180
Trade accounts and other receivables, less allowance
for doubtful accounts		407,002			384,930
Account receivable from JBS USA, LLC		4,454			1,514
Inventories		911,086			950,296
Income taxes receivable		66,649			54,719
Prepaid expenses and other current assets		72,825			56,047
Assets held for sale		25,320			27,042
Total current assets		1,817,652			1,542,728
Deferred tax assets		59,620			97,431
Other long-lived assets		38,831			45,523
Identified intangible assets, net		33,960			38,266
Property, plant and equipment, net		1,159,358			1,189,921
Total assets	$	3,109,421		$	2,913,869
Accounts payable	$	370,034		$	312,365
Account payable to JBS USA, LLC		5,893			13,436
Accrued expenses and other current liabilities		302,095			283,540
Income taxes payable		-			468
Current deferred tax liabilities		80,849			104,482
Current maturities of long-term debt		396			15,886
Total current liabilities		759,267			730,177
Long-term debt, less current maturities		912,019			1,148,870
Other long-term liabilities		84,566			125,825
Total liabilities		1,755,852			2,004,872
Common stock		2,590			2,590
Additional paid-in capital		1,644,418			1,642,003
Accumulated deficit		(263,507	)		(669,711	)
Accumulated other comprehensive loss		(32,397	)		(68,511	)
Total Pilgrim’s Pride Corporation stockholders’ equity		1,351,104			906,371
Noncontrolling interest		2,465			2,626
Total stockholders’ equity		1,353,569			908,997
Total liabilities and stockholders' equity	$	3,109,421		$	2,913,869

PILGRIM'S PRIDE CORPORATION
Condensed Consolidated Statements of Operations
(Unaudited)

	Thirteen Weeks Ended						Thirty-Nine Weeks Ended
	September 29,			September 23,			September 29,			September 23,
	2013			2012			2013			2012
	(In thousands, except per share data)						(In thousands, except per share data)
Net sales	$	2,142,815		$	2,068,478		$	6,363,863		$	5,931,720
Cost of sales		1,906,242			1,962,343			5,726,348			5,571,431
Gross profit		236,573			106,135			637,515			360,289
Selling, general and administrative expense		43,797			41,782			131,888			131,477
Administrative restructuring charges, net		3,658			2,647			4,622			5,921
Operating income		189,118			61,706			501,005			222,891
Interest expense		20,413			25,260			68,199			78,430
Interest income		(571	)		(256	)		(1,494	)		(886	)
Foreign currency transaction losses, net		2,682			(7,701	)		4,771			(5,417	)
Miscellaneous, net		(8	)		413			(730	)		(272	)
Income before income taxes		166,602			43,990			430,259			151,036
Income tax expense (benefit)		5,578			1,049			24,216			(656	)
Net income		161,024			42,941			406,043			151,692
Less: Net income (loss) attributable to
noncontrolling interests		107			10			(161	)		230
Net income attributable to
Pilgrim’s Pride Corporation	$	160,917		$	42,931		$	406,204		$	151,462
Weighted average shares of common stock
outstanding:
Basic		258,826			258,726			258,825			247,005
Diluted		259,386			258,837			259,166			247,103
Net income per share of common
stock outstanding:
Basic	$	0.62		$	0.17		$	1.57		$	0.61
Diluted	$	0.62		$	0.17		$	1.57		$	0.61

PILGRIM'S PRIDE CORPORATION
Condensed Consolidated Statements of Cash Flows

	Thirty-Nine Weeks Ended
	September 29			September 23
	2013			2012
	(In thousands)
Cash flows from operating activities:
Net income	$	406,043		$	151,692
Adjustments to reconcile net income attributable to Pilgrim’s Pride
Corporation to cash provided by operating activities:
Depreciation and amortization		113,853			108,411
Foreign currency transaction losses (gains)		3,734			(5,620	)
Accretion of bond discount		342			342
Asset impairment		3,457			1,342
Loss (gain) on property disposals		(509	)		5,134
Share-based compensation		2,415			465
Changes in operating assets and liabilities:
Restricted cash and cash equivalents		-			8,153
Trade accounts and other receivables		(25,458	)		(3,172	)
Inventories		39,421			(94,972	)
Prepaid expenses and other current assets		(17,304	)		(1,120	)
Accounts payable and accrued expenses and other current liabilities		69,895			9,636
Income taxes		(1,818	)		(14,428	)
Deposits		1,898			734
Long-term pension and other postretirement obligations		(3,174	)		(7,120	)
Other operating assets and liabilities		3,921			(3,516	)
Cash provided by operating activities		596,716			155,961
Cash flows from investing activities:
Acquisitions of property, plant and equipment		(76,293	)		(62,110	)
Purchases of investment securities		-			(162	)
Proceeds from sale or maturity of investment securities		-			688
Proceeds from property sales and disposals		3,330			28,687
Cash used in investing activities		(72,963	)		(32,897	)
Cash flows from financing activities:
Proceeds from revolving line of credit		505,600			595,800
Payments on revolving line of credit, long-term borrowings and capital lease
obligations		(758,283	)		(853,008	)
Payment of note payable to JBS USA		-			(50,000	)
Proceeds from sale of common stock		-			198,282
Payment of capitalized loan costs		(5,006	)		-
Cash used in financing activities		(257,689	)		(108,926	)
Effect of exchange rate changes on cash and cash equivalents		(3,928	)		(717	)
Increase in cash and cash equivalents		262,136			13,421
Cash and cash equivalents, beginning of period		68,180			41,609
Cash and cash equivalents, end of period		330,316			55,030

PILGRIM'S PRIDE CORPORATION
Selected Financial Information
(Unaudited)

“EBITDA” is defined as the sum of net income (loss) plus interest, taxes, depreciation and amortization. “Adjusted EBITDA” is defined as the sum of EBITDA plus restructuring charges, reorganization items and loss on early extinguishment of debt less net income attributable to noncontrolling interests. 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 US (“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 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 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 GAAP.

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	September 29,		September 23,		September 29,			September 23,
	2013		2012		2013			2012
	(In thousands)				(In thousands)
Net income	$	161,024	$	42,941	$	406,043		$	151,692
Add:
Income tax expense (benefit)		5,578		1,049		24,216			(656	)
Interest expense, net		19,842		25,004		66,705			77,544
Depreciation and amortization		37,914		36,431		113,853			108,408
Asset impairments		361		-		361			-
Minus:
Amortization of capitalized loan costs		2,204		2,469		7,238			7,405
EBITDA		222,515		102,956		603,940			329,583
Add:
Restructuring charges		3,658		2,647		4,622			5,921
Minus:
Net income (loss) attributable to noncontrolling
interest		106		10		(162	)		230
Adjusted EBITDA	$	226,067	$	105,593	$	608,724		$	335,274

The summary unaudited consolidated income statement data for the twelve months ended September 29, 2013 (the LTM Period) have been calculated by subtracting the applicable unaudited consolidated income statement data for the nine months ended September 23, 2012 from the sum of (1) the applicable audited consolidated income statement data for the year ended December 30, 2012 and (2) the applicable unaudited consolidated income statement data for the nine months ended September 29, 2013.

Reconciliation of LTM EBITDA	Fourteen			Thirteen			Thirteen		Thirteen
	Weeks Ended			Weeks Ended			Weeks Ended		Weeks Ended		LTM Ended
	December 30,			March 31,			June 30,		September 29,		September 29,
	2012			2013			2013		2013		2013
	(In thousands)			(In thousands)
Net income	$	22,350		$	54,228		$	190,791	$	161,024	$	428,393
Add:
Income tax expense (benefit)		(20,325	)		2,754			15,884		5,578		3,891
Interest expense, net		25,985			24,605			22,258		19,842		92,690
Depreciation and amortization		39,088			37,790			38,149		37,914		152,941
Asset impairments		-			-			-		361		361
Minus:
Amortization of capitalized loan costs		2,658			2,516			2,518		2,204		9,896
EBITDA		64,440			116,861			264,564		222,515		668,380
Add:
Restructuring charges		2,528			484			480		3,658		7,150
Minus:
Net income (loss) attributable to noncontrolling
interest		(423	)		(354	)		86		106		(585	)
Adjusted EBITDA	$	67,391		$	117,699		$	264,958	$	226,067		676,115

Net debt is defined as total long term debt, less current maturities, plus current maturities of long term debt minus cash and cash equivalents. Net debt is presented because it is used by us, and we believe it is frequently used by securities analysts, investors and other parties, in addition to and not in lieu of debt as presented under GAAP, to compare the indebtedness of companies. A reconciliation of net debt is as follows:

PILGRIM'S PRIDE CORPORATION
Reconciliation of Net Debt

			Thirty-Nine Weeks Ended
	2011	2012	September 23, 2012	September 29, 2013
			(in Thousands)
Long term debt, less current maturities	1,458,001	1,148,870	1,151,127	912,019
Add: Current maturities of long term debt	15,611	15,886	15,619	396
Minus: Cash and cash equivalents	41,609	68,180	59,556	330,316
Net debt	1,432,003	1,096,576	1,107,190	582,099

PILGRIM'S PRIDE CORPORATION
Supplementary Selected Segment and Geographic Data

	Thirteen Weeks Ended				Thirty-Nine Weeks Ended
	September 29,		September 23,		September 29,		September 23,
	2013		2012		2013		2012
	(In thousands)				(In thousands)
Sources of net sales by country of origin:			CORRECTED				CORRECTED
US:	$	1,932,634	$	1,850,934	$	5,662,991	$	5,312,278
Mexico:		210,181		217,544		700,872		619,442
Total net sales:	$	2,142,815	$	2,068,478	$	6,363,863	$	5,931,720
Sources of cost of sales by country of origin:
US:	$	1,702,791	$	1,772,550	$	5,139,883	$	5,023,704
Mexico:		203,451		189,793		586,465		547,727
Total cost of sales:	$	1,906,242	$	1,962,343	$	5,726,348	$	5,571,431
Sources of gross profit by country of origin:
US:	$	229,843	$	78,384	$	523,108	$	288,574
Mexico:		6,730		27,751		114,407		71,715
Total gross profit:	$	236,573	$	106,135	$	637,515	$	360,289