Pilgrim's Pride Corporation · NASDAQ:PPC
Pilgrim's Pride — Q2 FY2008 Earnings Presentation
20 slides from Pilgrim's Pride's earnings presentation, May 5, 2008
Slide 1: Fiscal 2008 2nd Quarter Financial Results
Pilgrim’s Pride Corporation Fiscal 2008 2"4 Quarter Financial Results May 5, 2008 ‘www. pilgrimspride. com
Slide 2: Cautionary Notes and Forward-Looking Statements
Cautionary Notes and Forward-Looking Statements Statements contained in this presentation that state the intentions, plans, hopes, belief, anticipations, expectations or predictions of the future of Pilgrim's Pride Comoration and its management, including as ta the expected benefits and synergies as
Slide 3: 2nd Quarter & Fiscal Year-to-Date Overview
24 Quarter & Fiscal Year-to-Date Overview nin Net loss $1.67 per share vs. net loss of $0.60 per share in the 2" Quarter of 2007. — Results include asset impairment and restructuring charges of $17.7 million, $11.1 million net of tax, or $0.17 per share, related to the closing of the Siler City, NC
Slide 4: Weekly Egg Sets Declining
Weekly Egg Sets Declining ep Weekly Egg Sets Source: USDA
Slide 5: Unutilized Industry Capacity
ep Unutilized Industry Capacity Millions of Head Unused Capacity - Announced Cutbacks 5.0 Low Cost Incremental Capacity 19% of Industry (26 million Head/WVeek) times 178% 20.4 Total pent-up/low cost capacity 25.4 Past 5-year Average Growth in Head Slaughtered/VWeek 1.53 Years Growth Available 16.6 *
Slide 6: Production Cutbacks & Seasonal Demand Should Lead to Improved Market Pricing
Production Cutbacks & Seasonal Demand Should Lead to Improved Market Pricing UB Boneless Skinless Breast Meat Pricin Recent UB Boneless Skinless Breast Meat Pricing aa eee ue + 8 et pa ZaEOSS a the — " ws 2 | UB Georgia Dock Pricing SP ELIEOOPOEPO OE UB Leg Quarter Pricing lg, Price 2007 $1.75 2003
Slide 7: Corn and Soybean Meal Prices Surge on Acreage Battles and Demand
a z 3 3 ec a 6 — 5 6 As of 67272008 Corn and Soybean Meal Prices Surge on Acreage Battles and Demand Daily CBOT Prices Corn (cents/bu.) Soybean Meal ($/ton) Since Oct 1, 2007: Corn +$2.33/bu. Meal +$53.00/ton LPP EPIL LLOED FEL PELL LS Ru y o r-J Meal $iton
Slide 8: Capital Expenditures
Capital Expenditures Million $ laintenance/Other 249 fficiency/Expansion 220 200 $185.1 180 160 140 120 $107.2 $044 100 80 308 ~ 65.1 ee $13.7 40 $27.5 $36 HESS 20 | hated $13.8 Reali varar Fre Mo FYD7 &Mo FYO7PF SMO FYOS For FYOrPF LTM 32908 *The Company projects FY2008 capital expenditures of appr
Slide 9: Earnings Per Share
Earnings Per Share FY2008* FY2007" % Change 2" Quarter EPS (61.67) ($0.60) 178% EPS from Continuing Operations ($1.67) ($0.59) 183% FY2008* FY2007" % Change 2" Quarter YTD EPS (62.16) ($0.73) 196% EPS from Continuing Operations ($2.17) ($0.73) 197% FY2008* FY2007" % Change Pro forma YTD EPS ($2.16)
Slide 10: Sales Segment — Quarter
Sales Segment — 24 Quarter @ in mitions) Chicken United States Mexico Total Chicken Sales Sale of Other Products United States Mexico Total Sale of Other Products Total Net Sales Actual FY2008 FY2007 % Change $ 1,723.0 $ 1,683.5 23% 127.3 111.0 14.7% 1,850.3 1,794.5 31% 243.9 188.7 29.3% 66 40 65.0%
Slide 11: Sales Segment — 2nd Quarter YTD
Sales Segment — 2° Quarter YTD @ in miltions) Actual Pro forma FY2008 FY2007 % Change FY2007 %Change Chicken: United States $ 3.4514 $ 27144 27.1% $ 3,229.3 6.9% Mexico. 248.3 234.0 6.1% 234.0 6.1% Total Chicken Sales 3.6994 2,948.4 25.5% 3,463.3 68% Sale of Other Products United States 4343 324.3 3
Slide 12: Results from Operations — 2nd Quarter
Results from Operations — 2"! Quarter <____ gs in milions, exceptper share fgures) Ey2008" Ey2007" Change Net Sales $21008 $1987.2 57% Net (Loss) $ (1114) $ 0.1) 177.8% Net (Loss) from Continuing Operations $1115) $ B91) 105.2% EBITDA $ (834) $ 310 -3690% Adjusted EBITDA $ (658) $ 465 241.4% EBITDA
Slide 13: Results from Operations — Quarter YTD
Results from Operations — 2 Quarter YTD Actual Pro forrna Bm mmons exeptperstr Res) Eyaone* Ey2007 — % Change Ey2007 % Change Net Sales § 41484 © §3.2791 265% § 38070 90% Net Income (Loss) § (1438) § @B8) 194.7% § @30) 733% Net Income (Loss) from Continuing Operations $ (1447) $ (48.9) 195.9% 3 @30)
Slide 14: Summary Operating Results — 2nd Quarter
in mitions) Operating Income {Loss}: Chicken: United States Mexico Total Chicken Other Products: United States Mexico Total Other Products GAAP Operating Income {Loss}: Operating Margin Summary Operating Results — 2"4 Quarter Actual FY2008* FY2007 $ (1743) $ (2.3) @7) (12.6) (178.0) (15.5) 335 43 09
Slide 15: Summary Operating Results — 2nd Quarter YTD
in mitions) Operating Income {Loss}: Chicken: United States Mexico Total Chicken Other Products: United States Mexico Total Other Products GAAP Operating Income {Loss}: Operating Margin Summary Operating Results — 2"¢ Quarter YTD Actual Pro forma Fy2008" _FY2007 FY2007 $(193.4) $ (13.8) $ 44.9) (7.8
Slide 16: Long-term Debt
(Gin thousands) Senior subordinated unsecured notes, at interest at 7 5'8% Senior subordinated notes, interest at 8 36% Revolving term/credit facility with notes payable at BOR plus 1.75- to- 2.75%" Term Loan with bank at 6.84% (7 3436" Term loan with bark at 7 06% (7.54%)* Voluntary corwerted loans
Slide 17: Other Credit Facilities
Other Credit Facilities in thousands) Mareh 29, 2008, September 29, 2007 Final Facility Final Facility Maturity Outstanding Available Total Maturity Outstanding Available Total Domestic Revolving Credit Facility ‘at LIBOR plus 0.75% to LIBOR plus 2.76%" 2013 _§ 137,000 § 76,400 § 300,000 2013 gs -__
Slide 18: Temporary Financial Covenant Changes
New Requirement Temporary Financial Covenant Changes Original Actual Q3 FY2008 - Return to Original Ratios Adjusted: Requirement | @2 FY 2008 | 03 FY2009 |°4F¥2009/ G4 Fy2010 Leverage Ratio 65.00% 59.98% 70.00% 70.00% 65.00% Tangible Net Worth $423,508 $451,790 $250,000 $300,000 eae oF Net Tangible
Slide 19: Dramatic Shift in Corn Use Pits Food vs. Fuel
Dramatic Shift in Corn Use Pits Food vs. Fuel ae) ep Corn Component Demand asa % of Total Use % of Total Use 99/00 00/01 O1/02 02/03 03/04 04/05 05/06 O6/07 07/08 o8/09* [Feed —4— Food Seed & Industrial (less ethanol) —*— Exports =H Ethanol | "08/09 Projection based on USDA Outlook Demand - Source U
Slide 20: PPC Commodity Index Driven by Ag Component
ep PPC Commodity Index Driven by Ag Component PPC Commodity Index 300 280 Baseline: January 2002 = 100 Total PPC Index 259 | Weighted avg. basket including: Ag Comenert , . Energy © rt 240; Corn, soybean meal, soft wheat, soy oil, #2 diese! nen comeoren 220 and natural gas 200 180 160 140 120 100 80