Adjusted EBITDA for the quarter was $22.6M, and operating cash flows were positive for the same period. The Company recognized a net loss of $85.4M for the fourth quarter, resulting in a $0.40 loss per share.
"While 2011 was an extremely challenging year, it was also transformational with respect to Pilgrim's operating model," stated Bill Lovette, Pilgrim's Chief Executive Officer.
Lovette identified some of the challenges Pilgrim's faced in 2011, including the impact of extreme grain volatility and increased cost inputs. "The industry had burdensome levels of finished goods inventories and overproduction in the first half of the year. Additionally, very weak chicken prices relative to costs continued throughout the year."
"The company's operating model changes include realignment of strategy and management structure becoming a lean and agile team focused on operational excellence, joint value creation with key customers, growth of value added exports and driving ownership and accountability deeper in the organisation. This transformation brings forth a goal of more effective working capital management, an improved cost structure, and a more profitable sales mix. Pilgrim's also changes its pricing strategy creating less dependence on one-year fixed price contracts and more reflective of markets," he added.
External impacts on the full year results stemmed from the company's focused inventory reduction efforts in the first half, as well as non-cash write offs of fixed assets, and impairments related to breeder stock during the first three quarters.
Year over year net sales increased 9.5% to $7.5B in 2011, with net income for the year resulting in a loss of $496.8M.
Source: Pilgrim's Pride
