Pilgrim's Pride Loses Nearly $1B in Fiscal 2008

Pilgrim's Pride Corp., which has filed for Chapter 11 bankruptcy protection, said in its annual report Thursday that it lost nearly $1 billion in fiscal 2008.

The Pittsburg, Texas-based company said late last month that it was delaying filing its fiscal 2008 annual report with the Securities and Exchange Commission due to ongoing talks with its lenders regarding temporary waivers and "related financial uncertainties."

Days later, the nation's largest chicken producer filed for bankruptcy protection, hobbled by debt and volatile commodity costs, as its lenders declined to provide another temporary waiver.

The company said in a filing with the SEC Thursday that it posted a loss of $998.6 million, or $14.40 a share, in the fiscal year that ended Sept. 27. That compared to earnings of $47 million, or 71 cents, the year before.

Sales rose 13.7 percent to $8.53 billion, from $7.5 billion last year.

The results included a loss of 9 cents on discontinued operations. The company took a charge in the fourth quarter of $501.4 million, or $6.77 per share, primarily related to the declining value of Gold Kist Inc., which Pilgrim's Pride acquired for $1.3 billion in early 2007.

The company also posted an income tax valuation allowance of $35 million, or 47 cents per share, against its net operating losses. And it posted a loss of $155.7 million on feed ingredient derivative contracts.

For the fourth quarter, as the company said in an earlier SEC filing, Pilgrim's Pride posted a loss of $802 million, or $10.83 a share on sales of $2.17 billion. In the same period a year earlier, it reported net profit of $33.2 million, or 50 cents a share, on sales of $2.11 billion.

Analysts surveyed by Thomson Reuters had predicted the company would lose $1.04 a share in the fourth quarter. Analysts typically exclude one-time items.

Pilgrim's Pride, like other food producers, has been hurt by both high costs for animal feed -- made with expensive corn and soybeans -- and an oversupply of chicken that has depressed retail prices.

Meat producers have been cutting production, but that hasn't made enough difference to recoup high input costs.

Pilgrim's Pride, which filed for bankruptcy protection Dec. 1, also was saddled by extensive debt.

It expects commodity costs to continue hurting it and has said in SEC filings that it expects losses of $21.8 million in the current quarter on feed ingredient derivative contracts.

The company plans to continue operating during its restructuring.

As of the end of September, the company said, it had 44,750 employees in the U.S. and 5,000 in Mexico, where it is the second-largest chicken producer. That's about 2,300 production employees and 335 non-production employees fewer than usual because the company is trying to cut costs.

Copyright AP - Associated Press
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