Pilgrims Pride Sells Plant
Pilgrim's Pride Corporation, which filed voluntary Chapter 11 petitions on 1 December 2008, has announced that it has agreed to sell its chicken complex in Farmerville, Louisiana, to Foster Farms for $80 million. The transaction is subject to the parties entering into a purchase agreement, as well as approval by the US Bankruptcy Court.
The Farmerville operations include a processing facility, cook plant, hatchery, feed mill, protein conversion plant and any associated inventory.
Pilgrims Pride Reports Hefty Q1 Loss
Pilgrim's Pride Corp., the largest chicken producer in the US which filed for Chapter 11 bankruptcy protection in December, has reported a Q1 loss of $228.78 million, or $3.09 per share, compared to a year-earlier loss of $32.33 million, or 49 cents a share.
Revenue for the period was $1.88 billion compared with year-ago revenue $2.05 billion.
The news comes just a day after rival firm Tyson Foods Inc., reported Q1 losses of $286 million from it's chicken operations.
Pilgrim's Pride Hopes To Sell Grain Elevators To ADM
Bankrupt chicken processor Pilgrim’s Pride Corp is seeking court approval of the sale of three grain elevators to ADM, which it expects would generate income of around $5 million, according to papers filed in U.S. Bankruptcy Court in Fort Worth, Texas.
Two elevators are in Brookston and Parr in northwest Indiana, and the third is in Hoopeston, Illinois, just across the Indiana border, according to reports.
Pilgrim's Pride Files For Chapter 11
Embattled US chicken producer Pilgrim's Pride, the nation's largest, has finally bitten the bullet and filed for chapter 11 bankruptcy protection Monday.
A Pilgrim's spokesman said the company was reorganizing and not liquidating its assets. It also said it has received a commitment for up to $450 million in debtor-in-possession financing, arranged by the Bank of Montreal.
The company controls about 24 percent of the US market, and is a large chicken producer in Mexico, where it also has three production facilities.
Pilgrim's, which employs around 50,000 people, has been struggling along weighed down by high feed costs, falling meat prices and $2.72 billion in debts. It had been forced to negotiate a waiver from it's creditors three times in the last few months. The last waiver expired today.
A company that files for Chapter 11 gets 18 months of court-supervised protection from its creditors while it reorganises.
Pilgrim's Expects USD802 Million Loss In Q4 As Deadline Approaches
Pilgrim’s Pride Corp., the largest U.S. chicken producer, said it expects to report a monster fiscal fourth-quarter loss of $802 million partly because of an impairment charge from the purchase of Gold Kist Inc., reports Bloomberg.
For the full 2008 fiscal year, Pilgrim's Pride anticipates reporting a net loss of $998.6 million, or $14.40 per share, on net sales of $8.5 billion.
Pilgrim's secured a third temporary waiver from it's lenders last week, which expires noon (CDT) today.
On Friday Pilgrim's filed a formal Notification of Late Filing with the Securities and Exchange Commission (SEC) that its annual 10-K report will be late.
The 10-K is a comprehensive summary report of a company's performance that must be submitted annually to SEC.
Typically, the 10-K contains much more detail than the annual report. It includes information such as company history, organizational structure, equity, holdings, earnings per share, subsidiaries, etc.
Pilgrim's Pride Pull A Rabbit From The Hat
Troubled US chicken producer Pilgrim's Pride pulled a short-term rabbit from the hat Wednesday by getting an unexpected third temporary waiver from it's lenders.
The new waiver expires next week, allowing it a few more days to develop plans to address the financial challenges the company is facing.
"Pilgrim's Pride Corporation today announced that it has reached an agreement with its lenders to extend the temporary waiver under its credit facilities through noon (CDT) on December 1, 2008," the company said in a statement.
Given that tomorrow is Thanksgiving Day, and many market participants are expected to be missing Friday, it seems like Pilgrim's top execs won't be seeing much of the family over the next few days.
I'm starting to feel a kind of warmth towards Pilgrim's Pride. They're a bit like Wimbledon winning the FA Cup or Foinavon in the Grand National (for the benefit of my American readers both those victories were long-shots). Shares in the company almost doubled on the news, up 89% to $1.02.
Come on you Pilgrims!
Right, The Chicken Sh*t Is In Place, Pass Me The Fan
Pilgrim's Pride Inc. is facing a crucial deadline that analysts say will determine if the nation's largest chicken producer can stay out of bankruptcy court, according to a report in Dallas News.
A waiver from its major lenders expires today, and analysts expect the troubled company to seek an extension – its third.
Without it, Pilgrim's Pride could be in default of major loan provisions.
The company, which issued a warning on, but has yet to report fourth-quarter financial results, got a waiver from lenders that pushed the deadline to late October. A second extension for the Pittsburg, Texas-based company runs out today.
To make matters worse, earlier this month, Russia – a major export market for US poultry – said it plans to cut 2009 import quotas on poultry by 300,000 tons.
And if that lot wasn't enough, the company faces at least two lawsuits alleging securities law violations for "false and misleading" statements it allegedly made about its finances, the newspaper reports.
Pilgrim's Progress
It's a big week ahead for troubled US chicken producer Pilgrim's Pride Corp., with another debt deadline rapidly approaching Wednesday.
Some analysts are predicting that the company's creditors may be less willing this time round to grant a waiver than they have on two previous occasions.
As the pressure mounts, the company is also due to pay a $25.7 million interest payment next week.
Pilgrim's has done what it can, by cutting production and slashing costs, but may lack the resources to ride out the current storm to see the benefits of these cuts, according to some analysts.
Despite posting a monster $91 million loss in it's latest quarter, more diverse rival Tyson Foods said recently that it would not be cutting chicken production at it's US facilities.
Unlike Tyson, Pilgrim's only produces chicken and has 32 facilities in the US and a further 3 in Mexico.
Pressure Mounting On Pilgrim's Pride
Pilgrim's Pride, the largest chicken producer in the US, has announced it is to cut some 335 jobs from its US operations in a desperate bid to reduce costs.
It is understood the lay-offs will take place by the end of the month. Employees affected will be notified within the next week. Pilgrim’s Pride said the job cuts come because of the toughest operating environments in decades.
The company’s share price has plummeted from a high earlier this year of US$29.55 to just 33 cents yesterday.
Analysts Fitch Ratings said yesterday that Pilgrim’s bonds were trading as though the market was expecting bankruptcy. Pilgrim’s failed to make a US$25 million interest payment on 3 November and is exercising a 30-day grace period to meet the debt, they say.
After a disastrous year coping with the volatility in the grains markets, the company was put under further pressure last week following the announcement by arch rivals Tyson Foods that it would not cut its poultry output despite the sector posting huge losses.
Pilgrim's Pride Battered
Investment research firm Morningstar has lowered its estimated value for the US's largest chicken producer by volume, Pilgrim's Pride Corp, to $0 per share, down from a previous estimate of $7.50, Reuters report.
The reduction follows news released Monday that rival firm Tyson Foods will not reduce output despite falling profits in the chicken sector. See previous story here
"After taking into account Tyson's recent announcement that it is maintaining production levels, we are changing our fair value estimate for Pilgrim's Pride to $0," Morningstar analyst Ann Gilpin said in a note to clients.
Ms. Gilpin has long had a downer on Pilgrim's see here
Shares in Pilgrim's Pride closed at just 33 cents each Thursday night, a year ago they were almost thirty dollars, that's a drop of almost 99% in the last twelve months.
Now here's a thought. Is the US government going to bail Pilgrim's Pride out? If not, why not? Because they're not part of the financial services industry? Neither are Ford, GM and Chrysler.
According to Wikipedia Pilgrim's Pride employs around 56,000 people, add onto that employees indirectly affected in associated service industries, and that's a lot more people on the dole.
Whats more important for the average unemployed American who has just had his house foreclosed on, something to eat or deciding what colour metalic paint to have on his next SUV?
Is there a line, and if so where has it been drawn?
Tyson On The Ropes But Not Chickening Out
Tyson Foods Inc. reports it has lost $118 million in the chicken industry over the past 12 months. Despite the losses, the company is not going to cut production levels.
Oversupply in the market and the high costs of fuel, have made the poultry trade extremely difficult on a global basis.
Dick Bond, chairman and CEO of the poultry division of Tyson, said, “that poultry customers have expressed concern about the financial health of some suppliers”.
The Russian poultry import quota for 2009 will be cut by 300,000 tons it has been announced this week, making the outlook in the poultry sector appear hazardous for the near future.
The good news for Tyson is that unlike its arch rival Pilgrim's Pride, it also sells beef and pork. Profits from these sectors helped Tyson report a $48 million fiscal fourth-quarter profit Monday, compared with $32 million for the same period in 2007.
Beef sales were $3.1 billion, which was an increase in revenue of 4.6%.
Meanwhile, Pilgrim's Pride, the No. 1 U.S. chicken processor by volume, last month had to obtain a temporary waiver under its credit facilities to give the company time to land a financing package.
Tyson shares dropped 10% Monday, to close at $6.69, 66% down on their 52-week high of $19.50.
Meanwhile Pilgrim's Pride fell 19% to 68c Monday, down 97.7% from a 52 week high of $29.59.
Pilgrims Pride To Idle Another Facility
Just days after announcing the closure of two facilities in Clinton, Arkansas and in Bossier City, Louisiana, Pligrims Pride has announced the closure of another facility in Atkins, Arkansas.
The plant will close in 60 days, leaving workers without a job and many poultry farmers in dire straits.
Rodney Wyllia, a poultry farmer near Atkins, found out on 11 August that his contract with Pilgrim's Pride would soon end.
He said, "I was devastated because this is my main source of income for my family. It was just devastating to us. I was physically ill, literally. I just thought I was going to pass out. Once these chickens are shipped out in about four weeks this chicken farm will basically be out of business."
His wife, Amanda explained, "You get loans on your chicken houses to build them. We owe probably $400,000 at least on the chicken houses so if there is no chicken to supply them we have no income to pay that payment or live off of so it's very scary."
Pilgrim's Pride expects to close its facility in Atkins indefinitely around 10 October. The corporation says the decision comes as a result of soaring feed costs and an over-supply of chicken on the market.
Production may be resumed at some time in the future if market conditions improve the company stated.
Pilgrim's Pride Makes Two More Plants Idle
Pilgrim's Pride Corporation announced Monday that it will make idle its chicken processing plant in Clinton, Arkansas and its further-processing facility in Bossier City, Louisiana.
Both moves, which are expected to be completed within 60 days, are part of the company's ongoing effort to operate more efficiently and return to profitability amid high feed costs and an oversupply of chicken on the market.
Pilgrim's Pride plans to keep both plants idle until it believes that industry margins can be sustained at more normalized levels of profitability should these or our other production cutbacks be reversed.
The idling of the two plants will eliminate a total of approximately 600 positions. Pilgrim's Pride will provide transition programs to employees whose positions are eliminated to assist them in securing new employment, filing for unemployment and obtaining other applicable benefits.
The company attributed today's announcement to the continued imbalance in supply and demand in the US chicken industry, which has led to market prices for breast meat that are unusually weak for the peak summer grilling season. Market pricing for breast meat is currently at $1.33 per pound, well below the prior five-year average for August of approximately $1.63 per pound, and significantly below the average price of more than $1.80 just four years ago.
"Over the past six months, Pilgrim's Pride has taken a number of proactive steps to strengthen our competitive position amid a very difficult operating environment," said Clint Rivers, president and chief executive officer.
"These steps include the production cutbacks for the second half of fiscal 2008, the closure of a plant in North Carolina and seven distribution centers, and the consolidation of our tray-pack operations in El Dorado, Ark., to six other case-ready sites. Those changes, when combined with today's announcement, will result in the elimination of nearly 2,300 positions.
"With Labor Day approaching and no indication that the actions taken to date by Pilgrim's Pride or other industry members are having a positive effect on selling prices for our products, it is now clear that more significant, decisive action is necessary.
"In addition, EPA's disappointing decision to reject the request for a partial waiver of the 2008 Renewable Fuel Standard for corn-based ethanol assures that high grain prices are here to stay for the foreseeable future.
Pilgrim's Pride struggles with feed prices
Pilgrim's Pride, the largest chicken producer in the US, has posted a significant net loss in its 3rd quarter earnings, which it says is a result of rising feed costs.
The company reported a net loss from continuing operations of $48.3 mln on net sales of $2.2 bln for the quarter which ended 28 June, compared to a net profit of $63.3 mln on total sales of $2.1 bln during the same quarter in 2007.
"Like other producers, we simply have not been able to keep pace with the extreme price volatility in the grain markets," said Pilgrim's Pride president and CEO Clint Rivers.
Total feed ingredient costs in the quarter rose $266 mln (41%) compared to 2007, estimating that its total feed ingredient costs for fiscal 2008 will rise $900 mln.
"Over the past six months, we have made some very tough, but necessary, decisions to position our company as a stronger, more efficient competitor," said Rivers, but adding that at present there are no further plans consolidate or sell any other facilities. He did acknowledge, however, that such decisions may be necessary in the future.
In March the company axed 1,100 jobs and closed seven US facilities.
