Pilgrim's Corp., previously Pilgrim's Pride, headquartered in Greeley, Colorado,[1] is the largest chicken producer in the United States and Puerto Rico and the second-largest chicken producer in Mexico. It exited bankruptcy in December 2009.
Pilgrim's employs about 56,000 people with sales of $7.0 billion in 2009, and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. They process about 44 million birds per week resulting in almost 9 billion pounds of product per year, as well as 528 million table eggs. [1]
Pilgrim's Pride products are sold to foodservice, retail and frozen entree customers. The company's primary distribution is through retailers, foodservice distributors and restaurants throughout the United States and Puerto Rico and in the Northern and Central regions of Mexico. Pilgrim's Pride operates a separate distribution wing, known as PFS Distribution.
Pilgrim's traces its origins to a feed store opened in 1946 in Pittsburg, Texas by Lonnie "Bo" Pilgrim and his older brother, Aubrey. The brothers were known to give away free chicks with the bags of feed they sold, thereby expanding their business. Bo Pilgrim, wearing traditional Pilgrim dress, with a pet chicken named "Henrietta" under his arm, is featured in Pilgrim's Pride advertisements. Today, Pilgrim's Pride is vertically integrated, meaning the company has its own divisions for every process from "egg to table."
Pilgrim's Pride is a supplier of Kentucky Fried Chicken and was named its "supplier of the year" in 1997. Other customers include Wal-Mart, Publix and Wendy's. Pierce Chicken (formerly of ConAgra Foods and Hester Industries) is a division of Pilgrim's Pride. Pierce Chicken is best known for its brand-name Wing Dings, Wing Zings, and various other prepared food products.
U.S. chicken producer Pilgrim's Pride Corp PGPDQ.PK, which is operating under federal bankruptcy protection, reported a much wider first quarter loss on lower revenue on Thursday.
The company filed for Chapter 11 bankruptcy protection on Dec. 1, 2008, after struggling for nearly a year with high feed costs and low meat prices. Plus it was saddled with debt after buying smaller rival Gold Kist Inc in December 2006.
In a filing with the U.S. Securities Exchange Commission, the nation's largest chicken producer reported a loss of $228.78 million, or $3.09 per share, for the quarter ended Dec. 27 compared with a year-earlier loss of $32.33 million, or 49 cents a share.
The results included $3.7 million in restructuring charges and a $1.3 million adjustment that reduced severance and employee retention costs.
"We continue to review and evaluate various restructuring and other alternatives to streamline our operations," the company said in the filing.
These alternatives may include selling assets, idling facilities, consolidating operations and functions, and relocating or reducing production, it said.
Revenue for the period was $1.88 billion compared with year-ago revenue $2.05 billion.
Since Dec. 1 Pilgrim's Pride has named a new chief executive officer and received court approval for debtor-in-possession financing.
The chicken industry struggled for much of 2008, due to high costs for feed and fuel early in the year and later by a drop in domestic and export sales as global economies weakened.
In January, Tyson Foods Inc (TSN.N) said its chicken unit, the second largest behind Pilgrim's Pride's, had a quarterly operating loss of $286 million due to higher feed costs and losses on hedging grain purchases. A year earlier, the unit had a profit of $48 million.
"This is bad," Ann Gilpin, analyst at Morningstar, said of Pilgrim's Pride's results. "I think it puts pressure on them to cut production even more."
In response to losses, chicken producers have cut production. Tyson said it cut production about 5 percent in December.
Chicken prices have begun to move higher and feed costs have come down from the high levels in early 2008. As a result, conditions should improve for chicken companies, said Paul Aho, economist with Poultry Perspective.
"That should be the worst quarter," he said of the just completed period. "Chicken prices have gone up and grain prices are still low. All the winds are in the right direction."
Pilgrim's Pride Corporation is one the largest chicken companies in the United States ("US"), Mexico and Puerto Rico. Our fresh chicken retail line is sold throughout the US, throughout Puerto Rico, and in the northern and central regions of Mexico. Our prepared chicken products meet the needs of some of the largest customers in the food service industry across the US. Additionally, we export commodity chicken products to approximately 90 countries. As a vertically integrated company, we control every phase of the production of our products. We operate feed mills, hatcheries, processing plants and distribution centers in 15 US states, Puerto Rico and Mexico. We operate in one reportable business segment, as a producer and seller of chicken products we either produce or purchase for resale.
Our fresh chicken products consist of refrigerated (non-frozen) whole or cut-up chicken, either pre-marinated or non-marinated, and pre-packaged chicken in various combinations of freshly refrigerated, whole chickens and chicken parts. Our prepared chicken products include portion-controlled breast fillets, tenderloins and strips, delicatessen products, salads, formed nuggets and patties and bone-in chicken parts. These products are sold either refrigerated or frozen and may be fully cooked, partially cooked or raw. In addition, these products are breaded or non-breaded and either pre-marinated or non-marinated.
The Company emerged from its Chapter 11 bankruptcy proceedings on December 28, 2009 (the "Effective Date"). In connection with its emergence from bankruptcy, the Company's common stock outstanding immediately prior to the Effective Date was cancelled and converted into the right to receive shares of common stock, par value $0.01 per share, of the reorganized Company ("Reorganized PPC") based on a one-for-one exchange ratio, which constitutes 36.0% of the total number of shares of common stock of Reorganized PPC issued pursuant to the Plan (as defined below). The remaining shares of common stock of Reorganized PPC, constituting 64.0% of the total issued and outstanding on the Effective Date, were issued to JBS USA Holdings, Inc. (the "Plan Sponsor" or "JBS USA"), a wholly-owned indirect subsidiary of JBS S.A., a Brazil-based meat producer, for $800.0 million in cash. Upon exiting from bankruptcy on the Effective Date, the Company and certain of its subsidiaries entered into the Exit Credit Facility (as defined below) that provides for an aggregate commitment of $1.75 billion consisting of (i) a revolving loan commitment of $600.0 million, (ii) a Term A loans commitment of $375.0 million and (iii) a Term B loans commitment of $775.0 million. See "-Chapter 11 Bankruptcy Filings and Proceedings" and "-Emergence from Bankruptcy and Acquisition" for additional information regarding the Company's emergency from bankruptcy proceedings, the acquisition of 64.0% of the common stock of Reorganized PPC and the Exit Credit Facility.
On the Effective Date, the Company adopted the Restated Bylaws, which changed the Company's fiscal year end from the Saturday nearest September 30 of each year to the last Sunday in December of each year. This change aligns the Company's reporting cycle with the fiscal calendar of JBS USA. The change was effective with the Company's 2010 fiscal year, which began on September 27, 2009 and will end on December 26, 2010 and resulted in an approximate three-month transition period which began September 27, 2009 and ended December 27, 2009. The Company now operates on the basis of a 52/53-week fiscal year that ends on the Sunday falling on or before December 31. The reader should assume any reference we make to a particular year (for example, 2010) in this report applies to our fiscal year and not the calendar year.
On December 1, 2008, (the "Petition Date"), Pilgrim's Pride Corporation and six of its subsidiaries (collectively, the "Debtors") filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Northern District of Texas, Fort Worth Division (the "Bankruptcy Court"). The cases are being jointly administered under Case No. 08-45664. The Company's subsidiaries in Mexico and certain subsidiaries in the US were not included in the filing (the "Non-filing Subsidiaries") and operated outside of the Chapter 11 process. As described below, on December 10, 2009, the Bankruptcy Court entered an order (the "Confirmation Order") approving and confirming the Joint Plan of Reorganization filed by the Debtors under Chapter 11 of the Bankruptcy Code with the Bankruptcy Court, along with the Disclosure Statement for the Debtors' Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code (as amended and supplemented, the "Plan"). The Company emerged from its Chapter 11 bankruptcy proceedings on the Effective Date.
Pilgrim's employs about 56,000 people with sales of $7.0 billion in 2009, and has major operations in Texas, Alabama, Arkansas, Georgia, Kentucky, Louisiana, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia, Mexico and Puerto Rico, with other facilities in Arizona, Florida, Iowa, Mississippi and Utah. They process about 44 million birds per week resulting in almost 9 billion pounds of product per year, as well as 528 million table eggs. [1]
Pilgrim's Pride products are sold to foodservice, retail and frozen entree customers. The company's primary distribution is through retailers, foodservice distributors and restaurants throughout the United States and Puerto Rico and in the Northern and Central regions of Mexico. Pilgrim's Pride operates a separate distribution wing, known as PFS Distribution.
Pilgrim's traces its origins to a feed store opened in 1946 in Pittsburg, Texas by Lonnie "Bo" Pilgrim and his older brother, Aubrey. The brothers were known to give away free chicks with the bags of feed they sold, thereby expanding their business. Bo Pilgrim, wearing traditional Pilgrim dress, with a pet chicken named "Henrietta" under his arm, is featured in Pilgrim's Pride advertisements. Today, Pilgrim's Pride is vertically integrated, meaning the company has its own divisions for every process from "egg to table."
Pilgrim's Pride is a supplier of Kentucky Fried Chicken and was named its "supplier of the year" in 1997. Other customers include Wal-Mart, Publix and Wendy's. Pierce Chicken (formerly of ConAgra Foods and Hester Industries) is a division of Pilgrim's Pride. Pierce Chicken is best known for its brand-name Wing Dings, Wing Zings, and various other prepared food products.
U.S. chicken producer Pilgrim's Pride Corp PGPDQ.PK, which is operating under federal bankruptcy protection, reported a much wider first quarter loss on lower revenue on Thursday.
The company filed for Chapter 11 bankruptcy protection on Dec. 1, 2008, after struggling for nearly a year with high feed costs and low meat prices. Plus it was saddled with debt after buying smaller rival Gold Kist Inc in December 2006.
In a filing with the U.S. Securities Exchange Commission, the nation's largest chicken producer reported a loss of $228.78 million, or $3.09 per share, for the quarter ended Dec. 27 compared with a year-earlier loss of $32.33 million, or 49 cents a share.
The results included $3.7 million in restructuring charges and a $1.3 million adjustment that reduced severance and employee retention costs.
"We continue to review and evaluate various restructuring and other alternatives to streamline our operations," the company said in the filing.
These alternatives may include selling assets, idling facilities, consolidating operations and functions, and relocating or reducing production, it said.
Revenue for the period was $1.88 billion compared with year-ago revenue $2.05 billion.
Since Dec. 1 Pilgrim's Pride has named a new chief executive officer and received court approval for debtor-in-possession financing.
The chicken industry struggled for much of 2008, due to high costs for feed and fuel early in the year and later by a drop in domestic and export sales as global economies weakened.
In January, Tyson Foods Inc (TSN.N) said its chicken unit, the second largest behind Pilgrim's Pride's, had a quarterly operating loss of $286 million due to higher feed costs and losses on hedging grain purchases. A year earlier, the unit had a profit of $48 million.
"This is bad," Ann Gilpin, analyst at Morningstar, said of Pilgrim's Pride's results. "I think it puts pressure on them to cut production even more."
In response to losses, chicken producers have cut production. Tyson said it cut production about 5 percent in December.
Chicken prices have begun to move higher and feed costs have come down from the high levels in early 2008. As a result, conditions should improve for chicken companies, said Paul Aho, economist with Poultry Perspective.
"That should be the worst quarter," he said of the just completed period. "Chicken prices have gone up and grain prices are still low. All the winds are in the right direction."
Pilgrim's Pride Corporation is one the largest chicken companies in the United States ("US"), Mexico and Puerto Rico. Our fresh chicken retail line is sold throughout the US, throughout Puerto Rico, and in the northern and central regions of Mexico. Our prepared chicken products meet the needs of some of the largest customers in the food service industry across the US. Additionally, we export commodity chicken products to approximately 90 countries. As a vertically integrated company, we control every phase of the production of our products. We operate feed mills, hatcheries, processing plants and distribution centers in 15 US states, Puerto Rico and Mexico. We operate in one reportable business segment, as a producer and seller of chicken products we either produce or purchase for resale.
Our fresh chicken products consist of refrigerated (non-frozen) whole or cut-up chicken, either pre-marinated or non-marinated, and pre-packaged chicken in various combinations of freshly refrigerated, whole chickens and chicken parts. Our prepared chicken products include portion-controlled breast fillets, tenderloins and strips, delicatessen products, salads, formed nuggets and patties and bone-in chicken parts. These products are sold either refrigerated or frozen and may be fully cooked, partially cooked or raw. In addition, these products are breaded or non-breaded and either pre-marinated or non-marinated.
The Company emerged from its Chapter 11 bankruptcy proceedings on December 28, 2009 (the "Effective Date"). In connection with its emergence from bankruptcy, the Company's common stock outstanding immediately prior to the Effective Date was cancelled and converted into the right to receive shares of common stock, par value $0.01 per share, of the reorganized Company ("Reorganized PPC") based on a one-for-one exchange ratio, which constitutes 36.0% of the total number of shares of common stock of Reorganized PPC issued pursuant to the Plan (as defined below). The remaining shares of common stock of Reorganized PPC, constituting 64.0% of the total issued and outstanding on the Effective Date, were issued to JBS USA Holdings, Inc. (the "Plan Sponsor" or "JBS USA"), a wholly-owned indirect subsidiary of JBS S.A., a Brazil-based meat producer, for $800.0 million in cash. Upon exiting from bankruptcy on the Effective Date, the Company and certain of its subsidiaries entered into the Exit Credit Facility (as defined below) that provides for an aggregate commitment of $1.75 billion consisting of (i) a revolving loan commitment of $600.0 million, (ii) a Term A loans commitment of $375.0 million and (iii) a Term B loans commitment of $775.0 million. See "-Chapter 11 Bankruptcy Filings and Proceedings" and "-Emergence from Bankruptcy and Acquisition" for additional information regarding the Company's emergency from bankruptcy proceedings, the acquisition of 64.0% of the common stock of Reorganized PPC and the Exit Credit Facility.
On the Effective Date, the Company adopted the Restated Bylaws, which changed the Company's fiscal year end from the Saturday nearest September 30 of each year to the last Sunday in December of each year. This change aligns the Company's reporting cycle with the fiscal calendar of JBS USA. The change was effective with the Company's 2010 fiscal year, which began on September 27, 2009 and will end on December 26, 2010 and resulted in an approximate three-month transition period which began September 27, 2009 and ended December 27, 2009. The Company now operates on the basis of a 52/53-week fiscal year that ends on the Sunday falling on or before December 31. The reader should assume any reference we make to a particular year (for example, 2010) in this report applies to our fiscal year and not the calendar year.
On December 1, 2008, (the "Petition Date"), Pilgrim's Pride Corporation and six of its subsidiaries (collectively, the "Debtors") filed voluntary petitions for relief under Chapter 11 of Title 11 of the United States Code (the "Bankruptcy Code") in the United States Bankruptcy Court for the Northern District of Texas, Fort Worth Division (the "Bankruptcy Court"). The cases are being jointly administered under Case No. 08-45664. The Company's subsidiaries in Mexico and certain subsidiaries in the US were not included in the filing (the "Non-filing Subsidiaries") and operated outside of the Chapter 11 process. As described below, on December 10, 2009, the Bankruptcy Court entered an order (the "Confirmation Order") approving and confirming the Joint Plan of Reorganization filed by the Debtors under Chapter 11 of the Bankruptcy Code with the Bankruptcy Court, along with the Disclosure Statement for the Debtors' Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code (as amended and supplemented, the "Plan"). The Company emerged from its Chapter 11 bankruptcy proceedings on the Effective Date.
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