Pilgrim's Pride reports net loss in 1st quarter fiscal 2010

But adjusted EBITDA was $59.5 million

May 10, 2010

Pilgrim's Pride reported a net loss of $45.5 million, or $0.21 per diluted share, on net sales of $1.6 billion for the first quarter ended March 28.

These results include nonrecurring administrative restructuring charges and reorganization expenses of $56.5 million pre-tax, or $32.7 million after tax, or $0.16 per diluted share. For the comparable quarter a year earlier, the company reported a net loss of $58.8 million, or $0.79 per share, on total sales of nearly $1.7 billion.

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA), which excludes restructuring and reorganization charges, was a positive $59.5 million for the first quarter of fiscal 2010.

"While I am encouraged by the progress we have made in several areas of our business, our overall performance in the first quarter of fiscal 2010 was below our expectations," said Don Jackson, Pilgrim's Pride president and chief executive.

The company said several factors contributed to the loss for the quarter, including: restructuring and reorganization costs; a delay in the addition of new further-processed volume which forced the company to sell commodity meat at lower prices; a loss of approximately $11 million related to grain hedges; and lower-than-anticipated market prices for dark meat.

Jackson said the further-processed volume should be onboard before the end of June.

"Our single largest opportunity to create value is through improved product mix both in retail and foodservice," he said. "... I am confident that our financial results in the second quarter will show significant improvement. Based on preliminary results, we were profitable for the month of April."

The company plans to reopen its chicken processing plant in Douglas, Ga., by January 2011, and to reopen two other idled facilities, one by mid-2011 and the other by spring 2012. The reopening of these three plants will result in a production increase of 10%, or approximately 3.5 million birds per week, according to Pilgrim's.