SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For quarter ended JUNE 27, 1998 Commission file number 1-9273 PILGRIM'S PRIDE CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 75-1285071 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 110 SOUTH TEXAS, PITTSBURG, TX 75686-0093 (Address of principal executive offices) (Zip code) (903) 855-1000 (Telephone number of principle executive offices) Not Applicable Former name, former address and former fiscal year, if changed since last report. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date. CLASS A COMMON STOCK $.01 PAR VALUE--- -0- SHARES AS OF JULY 31, 1998 CLASS B COMMON STOCK $.01 PAR VALUE--- 27,589,250 SHARES AS OF JULY 31, 1998
INDEX PILGRIM'S PRIDE CORPORATION AND SUBSIDIARIES PART I. FINANCIAL INFORMATION Item 1: Consolidated Financial Statements (Unaudited): Condensed consolidated balance sheets: June 27, 1998 and September 27, 1997 Consolidated statements of income: Three months and nine months ended June 27, 1998 and June 28, 1997 Consolidated statements of cash flows: Nine months ended June 27, 1998 and June 28, 1997 Notes to condensed consolidated financial statements--June 27, 1998 Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations. PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K SIGNATURES
PART I. FINANCIAL INFORMATION PILGRIM'S PRIDE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ITEM 1: FINANCIAL STATEMENTS : <TABLE> <CAPTION> JUNE 27, 1998 SEPTEMBER 27, 1997 (Unaudited) <S> <C> <C> ASSETS Current Assets: Cash and cash equivalents $ 5,866 $ 20,338 Trade accounts and other receivables, less allowance for doubtful accounts 83,221 77,967 Inventories 139,478 146,180 Deferred income taxes 3,716 3,998 Prepaid expenses 5,069 2,353 Other current assets 311 311 Total Current Assets 237,661 251,147 Other Assets 15,884 18,094 Property, Plant and Equipment 548,302 510,661 Less accumulated depreciation 223,306 200,778 324,996 309,883 $ 578,541 $ 579,124 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 49,019 $ 71,225 Accrued expenses 37,291 34,784 Current maturities of long-term debt 11,638 11,596 Total Current Liabilities 97,948 117,605 Long-Term Debt, less current maturities 216,741 224,743 Deferred Income Taxes 52,594 53,418 Minority Interest in Subsidiary 889 842 Stockholders' Equity: Common stock; $.01 par value 276 276 Additional paid-in capital 79,763 79,763 Retained earnings 130,330 102,477 Total Stockholders' Equity 210,369 182,516 $ 578,541 $ 579,124 </TABLE> See notes to condensed consolidated financial statements.
PILGRIM'S PRIDE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) <TABLE> <CAPTION> THREE MONTHS ENDED NINE MONTHS ENDED JUNE 27, 1998 JUNE 28, 1997 JUNE 27, 1998 JUNE 28, 1997 (in thousands, except share and per share data) <S> <C> <C> <C> <C> Net Sales $328,500 $335,168 $990,833 $936,375 Costs and Expenses: Cost of sales 295,764 307,883 901,856 855,738 Selling, general and administrative 13,693 14,658 43,166 42,035 309,457 322,541 945,022 897,773 Operating income 19,043 12,627 45,811 38,602 Other Expense (Income): Interest expense, net 5,195 5,572 15,325 16,305 Foreign exchange loss 413 112 1,515 648 Miscellaneous, net (535) (128) (1,487) (3,034) 5,073 5,556 15,353 13,919 Income before taxes 13,970 7,071 30,458 24,683 Income tax (benefit) expense 2,135 (215) 739 2,337 Net income $ 11,835 $ 7,286 $ 29,719 $ 22,346 Net income per common share $ .43 $ .26 $ 1.08 $ .81 Dividends per common share $.015 $.015 $ .045 $ .045 Weighted average shares outstanding 27,589,250 27,589,250 27,589,250 27,589,250 </TABLE> See Notes to condensed consolidated financial statements.
PILGRIM'S PRIDE CORPORATION AND SUBSIDIARIES June 27, 1998 <TABLE> <CAPTION> PILGRIM'S PRIDE CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) NINE MONTHS ENDED JUNE 27, 1998 JUNE 28, 1997 <S> <C> <C> Cash Flows From Operating Activities: (In thousands) Net income $ 29,719 $ 22,346 Adjustments to reconcile net income to cash provided by operating activities: Depreciation and amortization 24,493 21,746 Gain on property disposals 16 (165) Provision for losses on accounts receivable (335) (395) Deferred income taxes (542) 1,429 Changes in operating assets and liabilities: Accounts and other receivable (4,920) (11,918) Inventories 6,702 (9,140) Prepaid expenses (2,723) 27 Accounts payable and accrued expenses (19,699) 1,132 Other (479) (157) Cash Flows Provided By Operating Activities 32,232 24,905 Investing Activities: Acquisitions of property, plant and equipment (39,434) (40,775) Proceeds from property disposals 840 374 Other, net 1,472 (157) Net Cash Used In Investing Activities (37,122) (40,558) Financing Activities: Proceeds from notes payable to banks 35,500 49,500 Re-payments of notes payable to banks (35,500) (56,500) Proceeds from long-term debt 21,125 20,661 Payments on long-term debt (29,196) (6,716) Cash dividends paid (1,241) (1,241) Cash (Used In) Provided By Financing Activities (9,312) 5,704 Effect of exchange rate changes on cash and cash equivalents (271) (15) Decrease in cash and cash equivalents ( 14,473) (9,964) Cash and cash equivalents at beginning of year 20,339 18,040 Cash and cash equivalents at end of period $ 5,866 $ 8,076 Supplemental disclosure information: Cash paid during the period for Interest (net of amount capitalized) $ 13,043 $ 13,807 Income Taxes $ 1,006 $ 1,933 See notes to condensed consolidated financial statements. </TABLE>
PILGRIM'S PRIDE CORPORATION AND SUBSIDIARIES June 27, 1998 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE A--BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the period ended June 27, 1998 are not necessarily indicative of the results that may be expected for the year ended September 26, 1998. For further information, refer to the consolidated financial statements and footnotes thereto included in Pilgrim's annual report on Form 10-K for the year ended September 27, 1997. The consolidated financial statements include the accounts of Pilgrim's Pride Corporation and its wholly and majority owned subsidiaries. Significant intercompany accounts and transactions have been eliminated. The assets and liabilities of the foreign subsidiaries are translated at end-of-period exchange rates, except for non-monetary assets, which are translated at equivalent dollar costs at dates of acquisition using historical rates. Operations of foreign subsidiaries are translated at average exchange rates in effect during the period. NOTE B--NET INCOME PER COMMON SHARE Earnings per share for the periods ended June 27, 1998 and June 28, 1997 are based on the weighted average shares outstanding for the periods. NOTE C--INVENTORIES Inventories consist of the following: JUNE 27, 1998 SEPTEMBER 27, 1997 (in thousands) Live chickens and hens $ 61,880 $ 68,034 Feed, eggs and other 40,816 43,878 Finished chicken products 36,782 34,268 $ 139,478 $ 146,180 NOTE D - NEW CLASS OF COMMON STOCK On June 30, 1998, the Company's shareholders approved an amendment to its certificate of incorporation that reclassified the Company's existing Common Stock as Class B Common Stock and created a new class of common stock designated as Class A Common Stock. Following the amendment, each outstanding share of the Company's existing Common Stock was reclassified into one share of Class B Common Stock. Each share of Class B Common Stock has substantially the same rights, powers and limitations as the Company's Common Stock outstanding immediately prior to such amendment, except that each share of Class B Common Stock entitles the holder thereof to 20 votes per share except as otherwise provided by law. Each share of the new Class A Common Stock is substantially identical to the shares of Class B Common Stock, except that each share of Class A Common Stock entitles the holder thereof to one vote per share on any matter submitted for a stockholder vote. In connection with the authorization of the new class A Common Stock, the shareholders authorized an increase of the Company's existing Class B Common Stock from 45 million shares to 60 million shares and authorized 100 million shares of the new Class A Common Stock at a par value of $.01. ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS GENERAL. Profitability in the chicken industry can be materially affected by the commodity prices of feed grains and the commodity prices of chicken and chicken parts, each of which are determined largely by supply and demand. As a result, the chicken industry as a whole has been characterized by cyclical earnings. Cyclical fluctuations in earnings of individual chicken companies can be mitigated somewhat by: (i) business strategy; (ii) product mix; (iii) sales and marketing plans; and (iv) operating efficiencies. In an effort to reduce price volatility and to generate higher, more consistent profit margins, the Company has concentrated on the production and marketing of prepared food products, which generally have higher margins than the Company's other products. Additionally, the production and sale in the U.S. of prepared food products reduces the impact of feed grain costs on the Company's profitability. As further processing is performed, feed grain costs become a decreasing percentage of a products total production cost. The following table presents certain information regarding the Company's U.S. and Mexican operations. <TABLE> <CAPTION> Net Sales Net Sales Three Months Ended Nine Months Ended June 27, June 28, June 27, June 28, 1998 1997 1998 1997 <S> <C> <C> <C> <C> Sales to unaffiliated customers: United States $261,375 $260,730 $775,294 $734,491 Mexico 67,125 74,438 215,539 201,884 Total $328,500 $335,168 $990,833 $936,375 Operating Income: United States $ 8,435 $4,622 $14,011 $19,022 Mexico 10,608 8,005 31,800 19,580 Total $19,043 $12,627 $45,811 $38,602 </TABLE> The following table presents certain items as a percentage of net sales for the periods indicated. <TABLE> <CAPTION> Percentage of Net Sales Percentage of Net Sales Three Months Ended Nine Months Ended June 27, June 28, June 27, June 28, 1998 1997 1998 1997 <S> <C> <C> <C> <C> Net Sales 100.0% 100.0% 100.0% 100.0% Cost of Sales 90.0 91.9 91.0 91.4 Gross Profit 10.0 8.1 9.0 8.6 Selling, General and Administrative 4.2 4.4 4.4 4.5 Operating Income 5.8 3.8 4.6 4.1 Interest Expense 1.6 1.7 1.5 1.7 Income before Income Taxes 4.3 2.1 3.1 2.6 Net Income 3.6 2.2 3.0 2.4 </TABLE> THIRD QUARTER 1998, COMPARED TO THIRD QUARTER 1997 NET SALES. Consolidated net sales were $328.5 million for the third quarter of fiscal 1998, a decrease of $6.7 million, or 2.0%, over the third quarter of fiscal 1997. The decrease in consolidated net sales resulted from a $7.3 million decrease in Mexican chicken sales to $67.1 million, a $1.3 million decrease of sales of other U.S. products to $32.7 million offset partially by a $1.9 million increase in U.S. chicken sales to $228.7 million. The decrease in Mexican chicken sales was primarily due to a 14.2% decrease in dressed pounds produced offset partially by a 5.1% increase in total revenue per dressed pound produced. The decrease in sales of other U.S. products was primarily the result of decreased sales of the Company's poultry by-products group. The increase in U.S. chicken sales was primarily due to a 4.3% increase in total revenue per dressed pound offset partially by a 3.3% decrease in dressed pounds produced. The increase in U.S. total revenue per dressed pound was primarily the result of higher selling prices for chicken caused by an overall improvement in the chicken markets compared to the same period last year. The decrease in U.S. and Mexican dressed pounds produced was primarily the result of lower egg production and the unusually hot weather experienced in the southern United States during the quarter. COST OF SALES. Consolidated cost of sales was $295.8 million in the third quarter of fiscal 1998, a decrease of $12.1 million, or 3.9%, over the third quarter of fiscal 1997. The decrease primarily resulted from a $9.3 million decrease in cost of sales of Mexican operations, and a $2.9 million decrease in the cost of sales of U.S. operations. The $9.3 million cost of sales decrease in Mexican operations was primarily due to a 14.2% decrease in dressed pounds produced. The cost of sales decrease in U.S. operations of $2.9 million was due to a 3.3% decrease in dressed pounds produced and a 23.0% decrease in feed ingredient costs per pound, offset partially by increased production of higher cost and margin products in prepared foods. The decrease in dressed pounds produced in our Mexico and U.S. operations was primarily the result of lower egg production by breeder stock and the unusually hot weather experienced in the southern United States during the quarter. GROSS PROFIT. Gross profit was $32.7 million in the third quarter of fiscal 1998, an increase of $5.5 million, or 20.0%, over the third quarter of fiscal 1997. Gross profit as a percentage of sales increased to 10.0% in the third quarter of fiscal 1998 from 8.1% in the third quarter of fiscal 1997. The increased gross profit resulted mainly from higher margins in Mexico. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Consolidated selling, general and administrative expenses were $13.7 million in the third quarter of fiscal 1998 and $14.7 million in fiscal 1997. Consolidated selling, general and administrative expenses as a percentage of sales decreased slightly in the third quarter of fiscal 1998 to 4.2% compared to 4.4% in the third quarter of fiscal 1997. OPERATING INCOME. Consolidated operating income was $19.0 million for the third quarter of fiscal 1998, an increase of $6.4 million, or 50.8%, when compared to the third quarter of fiscal 1997, resulting primarily from higher margins experienced in the Mexican operations. INTEREST EXPENSE. Consolidated net interest expense decreased to $5.2 million, or 6.8% in the third quarter of fiscal 1998, when compared to $5.6 million in the third quarter of fiscal 1997, due to lower outstanding debt levels. As a percentage of sales, interest expense decreased to 1.6% in the third quarter of fiscal 1998 compared to 1.7% in the third quarter of fiscal 1997. INCOME TAX EXPENSE. Consolidated income tax expense increased in the third quarter of fiscal 1998 to $2.1 million compared to a benefit of $.2 million in the third quarter of fiscal 1997. This increase resulted from higher taxable U.S. earnings in the third quarter of fiscal 1998 than in the third quarter of fiscal 1997. While Mexican earnings were also higher in the third quarter of fiscal 1998 than in the third quarter of fiscal 1997, Mexican earnings are not currently subject to income taxes. NINE MONTHS ENDED JUNE 27, 1998, COMPARED TO NINE MONTHS ENDED JUNE 28, 1997 NET SALES. Consolidated net sales were $990.8 million for the first nine months of fiscal 1998, an increase of $54.5 million, or 5.8%, over the first nine months of fiscal 1997. The increase in consolidated net sales resulted from a $41.7 million increase in U.S. chicken sales to $665.6 million and a $13.7 million increase in Mexican chicken sales to $215.5 million offset partially by a $.9 million decrease of sales of other U.S. products to $109.7 million. The increase in U.S. chicken sales was primarily due to a 7.7% increase in dressed pounds produced resulting primarily from the Company's expansion of existing facilities and the purchase of poultry assets capable of producing 650,000 chickens per week from Green Acre Foods, Inc., on April 15, 1997, offset partially by a 1.0% decrease in total revenue per dressed pound produced. The increase in Mexican chicken sales was primarily due to a 7.8% increase in total revenue per dressed pound offset partially by a .9% decrease in dressed pounds produced. Increased revenues per dressed pound produced in Mexico were primarily the result of higher sales prices as well as generally improved economic conditions in Mexico compared to the prior year. COST OF SALES. Consolidated cost of sales was $901.9 million in the first nine months of fiscal 1998, an increase of $46.1 million, or 5.4%, over the first nine months of fiscal 1997. The increase resulted primarily from a $46.3 million increase in cost of sales of U.S. operations, offset partially by a $.2 million decrease in the cost of sales in Mexican operations. The cost of sales increase in U.S. operations of $46.3 million was due to a 7.7% increase in dressed pounds produced and increased production of higher cost and margin products in prepared foods offset partially by a 13.1% decrease in feed ingredient costs per pound experienced during the period. The $.2 million cost of sales decrease in Mexican operations was primarily due to a .9% decrease in dressed pounds produced and a 15.1% decrease in feed ingredients cost per pound offset partially by a .8% increase in average costs of sales per dressed pound produced. GROSS PROFIT. Gross profit was $89.0 million for the first nine months of fiscal 1998, an increase of $8.3 million, or 10.3%, over the same period last year. Gross profit as a percentage of sales increased to 9.0% in the first nine months of fiscal 1998 from 8.6% in the first nine months of fiscal 1997. The increased gross profit resulted mainly from significantly higher margins in Mexico. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Consolidated selling, general and administrative expenses were $43.2 million in the first nine months of fiscal 1998 and $42.0 million in the first nine months of fiscal 1997. Consolidated selling, general and administrative expenses as a percentage of sales remained relatively stable decreasing slightly in the first nine months of fiscal 1998 to 4.4% compared to 4.5% in the first nine months of fiscal 1997. OPERATING INCOME. Consolidated operating income was $45.8 million for the first nine months of fiscal 1998, an increase of $7.2 million, or 18.7%, when compared to the first nine months of fiscal 1997, resulting primarily from higher margins experienced in the Mexican operations. INTEREST EXPENSE. Consolidated net interest expense decreased to $15.3 million, or 6.0%, in the first nine months of fiscal 1998, when compared $16.3 million for the first nine months of fiscal 1997, due to lower outstanding debt levels. As a percentage of sales interest expense decreased to 1.5% for the first nine months of fiscal 1998 compared to 1.7% in the first nine months of fiscal 1997. MISCELLANEOUS, NET. Consolidated miscellaneous, net, a component of Other Expense (Income), was ($1.5) million in the first nine months of fiscal 1998, a $1.5 million decrease, or 51.0%, when compared to ($3.0) million for the first nine months of fiscal 1997, which included a $2.2 million final settlement of claims resulting from the January 8, 1992 fire at the Company's prepared foods plant in Mt. Pleasant, Texas. INCOME TAX EXPENSE. Consolidated income tax expense in the first nine months of fiscal 1998 decreased to $.7 million compared to an expense of $2.3 million in the first nine months of fiscal 1997. This reduction resulted from an increase in the Company's Mexican operations as a percentage of consolidated earnings. Mexican earnings are not currently subject to income taxes. LIQUIDITY AND CAPITAL RESOURCES At June 27, 1998, the Company's working capital increased to $139.7 million and its current ratio increased to 2.43 to 1 compared with working capital of $133.5 million and a current ratio of 2.14 to 1 at September 27, 1997. Strong profits continue to improve financial ratios in the first nine months of fiscal 1998. Trade accounts and other receivables were $83.2 million at June 27, 1998, a $ 5.3 million increase from September 27, 1997. The 6.7%, increase was due primarily to seasonal fluctuations in trade receivables and increased sales of prepared foods products, which normally have longer terms. Inventories were $139.5 million at June 27, 1998, compared to $146.2 million at September 27, 1997. The $6.7 million, or 4.6%, decrease was due primarily to lower costs in the live chicken and hen inventories due primarily to the reduction of feed costs in these inventories. Accounts payable were $49.0 million at June 27, 1998, a 31.2%, decrease from September 27, 1997, due primarily to the reduction in costs of feed ingredients and normal seasonal fluctuations. Accrued expenses were $37.3 million at June 27, 1998, a $2.5 million increase from September 27, 1997. The 7.2% increase was primarily due to normal seasonal variations in expense accruals. Capital expenditures for the first nine months of fiscal 1998 were $39.4 million and were primarily incurred to improve efficiencies, reduce costs and for the routine replacement of equipment. The Company anticipates that it will spend approximately $55 million for capital expenditures in fiscal year 1998 and expects to finance such expenditures with available operating cash flows and long-term financing. At June 27, 1998, the company's stockholder's equity increased to $210.4 million from $182.5 million at September 27, 1997. Total debt to capitalization decreased to 52.1% at June 27, 1998 compared to 56.4% at September 27, 1997. On June 26, 1998, the Company entered into an asset sale agreement to sell up to $60 million of accounts receivable. Under this agreement, as the sold accounts receivable are collected, new qualifying accounts can be substituted thus maintaining the maximum balance allowed to be outstanding at a rate approximating .425% over commercial paper. As of June 27, 1998 no accounts receivable had been sold under this agreement. The Company also maintains $70 million in revolving credit facilities and $45 million in secured term borrowing facilities. The credit facilities provide for interest at rates ranging from LIBOR plus one and five-eighths percent to LIBOR plus two percent and are secured by inventory and fixed assets or are unsecured. As of July 31, 1998, $62.4 million was available under the revolving credit facilities and $15 million was available under the term borrowing facilities. IMPACT OF YEAR 2000 The Year 2000 Issue is the result of computer programs being written using two digits rather than four to define the applicable year. Any of the Company's computer programs that have date-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in a system failure or miscalculations causing disruptions of operations, including among other things, a temporary inability to process transactions, send invoices, or engage in similar normal business activities. The Company has determined that it will be required to modify or replace portions of its software so that its computer systems will function properly with respect to dates in the year 2000 and thereafter. The company presently believes that with modifications to existing software and conversion to new software, the Year 2000 Issue will not pose significant operational problems for its computer systems. The Company will utilize both internal and external resources to reprogram, or replace, and test the software for Year 2000 modifications. The Company anticipates completing the Year 2000 project prior to any anticipated impact on its operating systems. The total cost of the Year 2000 project is not expected to have a material effect on the Company's results of operations. The Company will be initiating communications with all of its significant suppliers and large customers to determine the extent to which the Company's interface systems are vulnerable to those third parties' failure to remediate their own Year 2000 Issues. However, there can be no assurance that the systems of other parties upon which the Company relies will be converted on a timely basis. The Company's business, financial condition, or results of operations could be materially adversely impacted by the failure of its systems and applications or those operated by others to properly operate or manage dates beyond 1999. IMPACT OF MEXICO PESO EXCHANGE RATE. In December 1994, the Mexican government changed its policy of defending the peso against the U.S. dollar and allowed it to float freely on the currency markets. These events resulted in the Mexican peso exchange rate declining from 3.39 to 1 U.S. dollar at October 3, 1994 to a low of 9.06 to 1 U.S. dollar at June 12, 1998. The decline in the Mexican peso exchange rate affected the Company's operations directly and indirectly as a result of the related economic recession in Mexico in fiscal 1995. Similarly, the Company's results of operations were adversely affected by: (i) the continuation of the economic recession in Mexico in fiscal 1996, as well as, (ii) significantly higher feed grain costs in fiscal 1996, (which included record high corn prices). In fiscal 1997 and the first nine months of fiscal 1998, however, the Company benefited substantially from: (i) a rebounding economy in Mexico when compared to fiscal 1996 and 1995, and (ii) the adjustment in the supply of poultry products in Mexico to the levels of demand existing after the economic recession. On July 30, 1998 the Mexican peso closed at 8.92 to 1 U.S. dollar. No assurance can be given as to the future valuation of the Mexican peso and how further movement in the Mexican peso could affect future earnings positively or negatively. PART II OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K EXHIBIT NUMBER 10.33 Receivables Purchase Agreement between Pilgrim's Pride Funding Corporation, as Seller, Pilgrim's Pride Corporation, as Servicer, Pooled Accounts Receivable Capital Corporation, as Purchaser, and Nesbitt Burns Securities Inc., as Agent. 10.34 Purchase and Contribution Agreement Dated as of June 26, 1998 between Pilgrim's Pride Funding Corporation and Pilgrim's Pride Corporation. 10.35 Second Amendment to Security Agreement Re: Accounts Receivable, Farm Products and Inventory between Pilgrim's Pride Corporation and Harris Trust and Savings Bank. 10.36 First Amendment to Amended and Restated Secured Credit Agreement between Pilgrim's Pride Corporation and Harris Trust and Savings Bank, U.S. Bancorp Ag Credit, Inc., CoBank, ACB, ING (U.S.) Capital Corporation ("ING"), Wells Fargo Bank, N.A. and Credit Agricole Indosuez. On June 30, 1998 the company filed a Current Report on Form 8-K related to the reclassification of its common stock. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PILGRIM'S PRIDE CORPORATION /s/ Richard A. Cogdill Date JULY 31, 1998 Richard A. Cogdill Executive Vice President and Chief Financial Officer and Secretary and Treasurer In his respective capacity a such 3