Edgar Filing: PILGRIMS PRIDE CORP

form10-q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2007

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

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.)

	4845 US Hwy 271 N, Pittsburg, TX		75686-0093
	(Address of principal executive offices)		(Zip code)

Registrant’s telephone number, including area code: (903) 434-1000

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 period 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 by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

Number of shares outstanding of the issuer’s common stock, as of July 30, 2007, was 66,555,733.

INDEX PILGRIM’S PRIDE CORPORATION AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION

	Item 1.	Financial Statements (Unaudited)
		Consolidated Balance SheetsJune 30, 2007 and September 30, 2006
		Consolidated Statements of OperationsThree months and nine months ended June 30, 2007 and July 1, 2006
		Consolidated Statements of Cash FlowsNine months ended June 30, 2007 and July 1, 2006
		Notes to Consolidated Financial Statements as of June 30, 2007
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk
	Item 4.	Controls and Procedures

PART II. OTHER INFORMATION
	Item 1.	Legal Proceedings
	Item 1A.	Risk Factors
	Item 6.	Exhibits

SIGNATURES
EXHIBIT INDEX

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Pilgrim’s Pride Corporation
Consolidated Balance Sheets
(Unaudited)
	June 30, 2007			September 30, 2006
	(In thousands, except share and per share data)
Assets
Current Assets:
Cash and cash equivalents	$	57,390		$	156,404
Investments in available for sale securities		13,782			21,246
Trade accounts and other receivables, less allowance for doubtful accounts		450,635			263,149
Inventories		944,593			585,940
Income taxes receivable		37,724			39,167
Current deferred income taxes		92,835			7,288
Prepaid expenses		22,993			10,307
Other current assets		29,968			22,173
Total Current Assets		1,649,920			1,105,674

Investment in Available for Sale Securities		44,003			115,375
Other Assets		87,765			50,825
Goodwill		509,059			--
Property, Plant and Equipment:
Land		107,927			52,493
Buildings, machinery and equipment		2,439,250			1,702,949
Autos and trucks		54,121			57,177
Construction-in-progress		143,958			63,853
		2,745,256			1,876,472
Less accumulated depreciation		(848,453	)		(721,478	)
		1,896,803			1,154,994
	$	4,187,550		$	2,426,868
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	405,033		$	293,685
Accrued expenses		540,102			272,830
Current maturities of long-term debt		3,134			10,322
Total Current Liabilities		948,269			576,837

Long-Term Debt, Less Current Maturities		1,718,774			554,876
Deferred Income Taxes		308,797			175,869
Other Long-Term Liabilities		79,747			--
Minority Interest in Subsidiary		1,929			1,958
Commitments and Contingencies		--			--

Stockholders’ Equity:
Preferred stock, $.01 par value, 5,000,000 authorized shares; none issued		--			--
Common stock, $.01 par value, 160,000,000 authorized shares; 66,555,733 issued		665			665
Additional paid-in capital		469,779			469,779
Retained earnings		656,086			646,750
Accumulated other comprehensive loss		3,504			134
Total Stockholders’ Equity		1,130,034			1,117,328
	$	4,187,550		$	2,426,868

See notes to consolidated financial statements.

Pilgrim’s Pride Corporation and Subsidiaries Consolidated Statements of Operations (Unaudited)

	Three Months Ended						Nine Months Ended
	June 30, 2007			July 1, 2006			June 30, 2007			July 1, 2006
	(in thousands, except share and per share data)
Net sales	$	2,118,386		$	1,287,646		$	5,449,483		$	3,897,167
Cost of sales		1,883,148			1,244,950			5,064,776			3,698,870
Gross profit		235,238			42,696			384,707			198,297
Selling, general and administrative		98,461			69,433			262,534			216,772
Operating income (loss)		136,777			(26,737	)		122,173			(18,475	)
Other expense (income):
Interest expense		40,921			12,736			94,130			38,402
Interest income		(198	)		(1,268	)		(3,190	)		(8,429	)
Loss on early extinguishment of debt		--			--			14,475			--
Foreign exchange (gain) loss		(264	)		1,822			1,250			1,012
Miscellaneous, net		(2,605	)		(2,053	)		(8,799	)		(1,025	)
Total other expenses, net		37,854			11,237			97,866			29,960

Income (loss) before income taxes		98,923			(37,974	)		24,307			(48,435	)
Income tax expense (benefit)		36,282			(17,501	)		10,478			(21,686	)
Net income (loss)	$	62,641		$	(20,473	)	$	13,829		$	(26,749	)

Net income (loss) per common share– basic and diluted	$	0.94		$	(0.31	)	$	0.21		$	(0.40	)
Dividends declared per common share	$	0.0225		$	0.0225		$	0.0675		$	1.0675

Weighted average shares outstanding		66,555,733			66,555,733			66,555,733			66,555,733

Net income (loss)	$	62,641		$	(20,473	)	$	13,829		$	(26,749	)
Other comprehensive income (loss)		44			(523	)		3,370			(939	)
Comprehensive income (loss)	$	62,685		$	(20,996	)	$	17,199		$	(27,688	)
See notes to consolidated financial statements.

Pilgrim’s Pride Corporation and Subsidiaries Consolidated Statements of Cash Flows (Unaudited)

	Nine Months Ended
	June 30, 2007			July 1, 2006
	(in thousands)
Cash flows from operating activities:
Net income (loss)	$	13,829		$	(26,749	)
Adjustments to reconcile net income (loss) to cash provided by operating activities
Depreciation and amortization		145,678			100,052
Loss on early extinguishment of debt		7,099			--
Impairment of assets		--			3,767
Gain (loss) on property disposals		(492	)		988
Deferred income taxes		1,395			(8,065	)
Changes in operating assets and liabilities, net of effect of businesses acquired:
Accounts and other receivables		(56,857	)		97,242
Income taxes receivable		32,474			(30,007	)
Inventories		(112,353	)		(74,792	)
Other current assets		(7,984	)		(9,280	)
Accounts payable and accrued expenses		25,466			(40,214	)
Other		4,647			(2,421	)
Cash provided by operating activities		52,902			10,521

Cash flows frominvesting activities:
Acquisitions of property, plant and equipment		(136,160	)		(101,314	)
Business acquisitions		(1,108,817	)		--
Purchases of investment securities		(360,485	)		(238,763	)
Proceeds from sale/maturity of investment securities		441,987			343,120
Proceeds from property disposals		5,184			3,709
Other, net		4,288			295
Cash provided by (used for) investing activities		(1,154,003	)		7,047

Cash flows from financing activities:
Borrowing for acquisition		1,230,000			--
Proceeds from notes payable to banks		--			226,000
Repayments on notes payable to banks		--			(226,000	)
Proceeds from long-term debt		774,791			(34,728	)
Payments on long-term debt		(982,723	)		--
Debt issue costs		(15,565	)		--
Cash dividends paid		(4,493	)		(71,048	)
Cash provided by (used for) financing activities		1,002,010			(105,776	)

Effect of exchange rate changes on cash and cash equivalents		77			(290	)
Decrease in cash and cash equivalents		(99,014	)		(88,498	)
Cash and cash equivalents at beginning of year		156,404			132,567
Cash and cash equivalents at end of period	$	57,390		$	44,069


See notes to consolidated financial statements.

PILGRIM'S PRIDE CORPORATION

June 30, 2007

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTE A—BASIS OF PRESENTATION

These unaudited consolidated financial statements include Pilgrim’s Pride Corporation and its majority-owned subsidiaries (together, “Pilgrim’s,” “the Company,” “we,” “us,” “our,” or similar terms). We eliminate all significant intercompany accounts and transactions in consolidation.

These consolidated financial statements:

·	Were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission, and

·	Do not include all of the information or footnotes required by GAAP for complete financial statements, but

·	Include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the financial statements.

Operating results for the period ended June 30, 2007, are not necessarily indicative of the results that may be expected for the year ending September 29, 2007. These consolidated financial statements should be read in conjunction with the consolidated financial statements and supplementary data contained in our Annual Report on Form 10-K for the year ended September 30, 2006.

For international operations with currencies other than the United States dollar, we translate assets and liabilities, other than non-monetary assets, using current exchange rates. We translate non-monetary assets using the historical rates in effect on the dates of acquisition. We translate income and expenses using average exchange rates in effect during the period.

In June 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation (“FIN”) No. 48, Accounting for Uncertainty in Income Taxes—an interpretation of FASB Statement No. 109. This Interpretation clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. FIN No. 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company must adopt this Interpretation in the first quarter of fiscal 2008. The Company has not completed its evaluation as to the impact that adoption will have on its consolidated financial statements.

In September 2006, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 157, Fair Value Measurements. This Statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles, and expands disclosures about fair value measurements. SFAS No. 157 does not require any new fair value measurements. However, for some enterprises, the application of this Statement will change current practice. The Company must adopt SFAS No. 157 in the first quarter of fiscal 2009. Although the Company has not completed its evaluation as to the impact that adoption will have on its consolidated financial statements, it currently believes the adoption of SFAS No. 157 will not require material modification of its fair value measurements and will be substantially limited to expanded disclosures in the notes to its consolidated financial statements.

PILGRIM'S PRIDE CORPORATION

June 30, 2007

In September 2006, the FASB issued SFAS No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans—an amendment of FASB Statements No. 87, 88, 106, and 132(R). This Statement requires us to recognize the funded status of each of our benefit plans—measured as the difference between plan assets at fair value and the benefit obligation—in our statement of financial position, recognize as a component of other comprehensive income, the tax-effected gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit cost, and measure defined benefit plan assets and obligations as of the date of our fiscal year-end statement of financial position. We must adopt the recognition and disclosure requirements of SFAS No. 158 no later than September 29, 2007. We must measure plan assets and obligations as of the date of our fiscal year-end statement of financial position as of September 26, 2009. We are currently in the process of evaluating the impact that adoption of this Statement will have on our consolidated financial statements.

In January 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities. This Statement permits an enterprise to choose to measure many financial instruments and certain other items at fair value. SFAS No. 159 will become effective for the Company in the first quarter of fiscal 2009. The Company is currently evaluating the impact that use of the fair value measurement option on its financial instruments and other applicable items would have on its consolidated financial statements.

NOTE B – BUSINESS ACQUISITION

On December 27, 2006, we acquired 45,343,812 shares, representing 88.9% of shares outstanding, of Gold Kist Inc. (“Gold Kist”) common stock through a tender offer. We subsequently purchased all remaining Gold Kist shares and, on January 9, 2007, Gold Kist became a wholly owned subsidiary of the Company. Gold Kist, based in Atlanta, Georgia, was the third largest chicken company in the United States, accounting for more than nine percent of chicken produced in the United States in recent years. Gold Kist operated a fully-integrated chicken production business that included live production, processing, marketing and distribution.

For financial reporting purposes, we have included the operating results and cash flows of Gold Kist in our consolidated financial statements as of December 31, 2006. The operating results and cash flows of Gold Kist from December 27, 2006 to December 31, 2006 were not material. We have included the acquired assets and assumed liabilities in our June 30, 2007 balance sheet using a preliminary allocation of the purchase price as we have not completed certain appraisals and other purchase price adjustments.

The following summarizes our purchase price at December 27, 2006 (in thousands):


Purchase 50,146,368 shares at $21.00 per share	$	1,053,074
Premium paid on retirement of debt		22,208
Retirement of various share-based compensation awards		25,677
Various costs and fees		45,639
Total purchase price	$	1,146,598

PILGRIM'S PRIDE CORPORATION

June 30, 2007

In the second quarter of fiscal 2007, we retired the Gold Kist 10 1/4% Senior Notes due 2014 with a book value of $128.5 million at a cost of $149.8 million plus accrued interest and the Gold Kist Subordinated Capital Certificates of Interest at par plus accrued interest and a premium of one year’s interest. We also paid acquisition transaction costs and funded change in control payments to certain Gold Kist employees. This acquisition was initially funded by (1) $780 million borrowed under our revolving-term secured credit facility and (2) $450 million borrowed under our $450 million Senior Unsecured Term Loan Agreement (“Bridge Loan”) (see Note D– “Notes Payable and Long Term Debt” below).

In connection with the acquisition, we elected to freeze certain of the Gold Kist benefit plans with the intent to ultimately terminate them. We recorded a purchase price adjustment of $82.5 million representing the current estimated cost of these plan terminations. We do not anticipate any material net periodic benefit costs (income) related to these plans in fiscal 2007. Additionally, we conformed Gold Kist’s accounting policies to our accounting policies and provided for deferred income taxes on all related purchase adjustments.

The following summarizes our current estimates of the fair value of the assets acquired and liabilities assumed at the date of acquisition. The purchase price allocation is preliminary and will be finalized after completion of the independent appraisal of certain of the assets acquired and additional analysis of the liabilities assumed, which is currently underway. Upon completion of our analysis, significant adjustments may be required.

Purchase price allocation:
(In thousands):

Current assets	$	431,999
Property, plant and equipment		755,434
Goodwill		509,059
Other assets		64,332
Total assets acquired		1,760,824
Current liabilities		309,733
Long-term debt, less current maturities		140,674
Deferred income taxes		85,203
Other long-term liabilities		78,616
Total liabilities assumed		614,226
Total purchase price	$	1,146,598

Goodwill represents the purchase price in excess of the value assigned to identifiable tangible and intangible assets. We elected to acquire Gold Kist at a price that resulted in the recognition of goodwill because of the following strategic and financial benefits:

·	The combined company is now positioned as the world's leading chicken producer and that position has provided us with enhanced abilities to:

o	Compete more efficiently and provide even better customer service;

o	Expand our geographic reach and customer base;

o	Further pursue value-added and prepared foods opportunities; and

o	Offer long-term growth opportunities for our shareholders, employees, and growers.

·	The combined company is better positioned to compete in the industry both internationally and in the United States as additional consolidation occurs.

PILGRIM'S PRIDE CORPORATION

June 30, 2007

The following unaudited pro forma financial information has been presented as if the acquisition had occurred at the beginning of each period presented.

In thousands, except share and per share data	Three Months Ended					Nine Months Ended
	June 30, 2007 (Actual)		July 1, 2006 (Pro forma)			June 30, 2007 (Pro forma)			July 1, 2006 (Pro forma)
Net sales	$	2,118,386	$	1,791,070		$	5,977,293		$	5,471,272
Depreciation and amortization	$	58,005	$	57,947		$	170,781		$	167,893
Operating income (loss)	$	136,777	$	(47,724	)	$	91,741		$	(79,214	)
Interest expense, net	$	40,723	$	32,642		$	116,761		$	93,935
Income (loss) before taxes	$	98,923	$	(78,908	)	$	(30,508	)	$	(169,309	)
Net income (loss)	$	62,641	$	(45,284	)	$	(20,279	)	$	(100,357	)
Net income (loss) per common share	$	0.94	$	(0.68	)	$	(0.30	)	$	(1.51	)
Weighted average shares outstanding		66,555,733		66,555,733			66,555,733			66,555,733

NOTE C—INVENTORIES

	June 30,		September 30,
(In thousands)	2007		2006
Chicken:
Live chicken and hens	$	353,198	$	196,284
Feed and eggs		224,808		132,309
Finished chicken products		301,865		201,516
		879,871		530,109
Turkey:
Live turkey and hens	$	8,239	$	7,138
Feed and eggs		3,935		4,740
Finished turkey products		33,221		26,685
		45,395		38,563
Other Products:
Commercial feed, table eggs, and retail farm store	$	9,124	$	7,080
Distribution inventories (other than chicken & turkey products)		10,203		10,188
		19,327		17,268

Total Inventories	$	944,593	$	585,940

PILGRIM'S PRIDE CORPORATION

June 30, 2007

NOTE D—NOTES PAYABLE AND LONG-TERM DEBT

(in thousands)	Final Maturity	June 30, 2007			September 30, 2006

Senior unsecured notes, at 9 5/8%	2011	$	299,286		$	299,601
Senior subordinated unsecured notes, at 9 1/4%	2013		5,135			82,640
Senior unsecured notes, at 7 5/8%	2015		400,000			--
Senior unsecured notes, at 8 3/8%	2017		250,000			--
Secured revolving credit facility with notes payable at LIBOR plus 1.25% to LIBOR plus 2.75%	2011		51,560			74,682
Note payable to an insurance company at 6.68%	2012		--			50,115
Notes payable to an insurance company at LIBOR plus 2.2075%	2013		--			41,333
Revolving-term secured credit facility with notes payable at US Treasuries, plus a spread	2016		--			--
Term credit facility, with notes payable at LIBOR plus 1.75%	2016		488,650			--
Term loan payable at 7.06%	2016		109,725			--
Term loan payable at 6.84%	2016		99,500			--
Other	Various		18,052			16,827
			1,721,908			565,198
Less current maturities			(3,134	)		(10,322	)
Total		$	1,718,774		$	554,876

On December 15, 2006, the Company borrowed $100 million at 6.84% under our term credit facility using the majority of the funds to retire the notes payable to an insurance company maturing in 2012 and 2013.

In January 2007, the Company borrowed (1) $780 million under our revolving-term secured credit agreement and (2) $450 million under our Bridge Loan agreement. On January 24, 2007, the Company closed on the sale of $400 million of 7 5/8% Senior Notes due 2015 (the “Senior Notes”) and $250 million of 8 3/8% Senior Subordinated Notes due 2017 (the “Subordinated Notes”), sold at par. Interest is payable on May 1 and November 1 of each year, beginning November 1, 2007. We may redeem all or part of the Senior Notes on or after May 1, 2011. We may redeem all or part of the Subordinated Notes on or after May 1, 2012. Before May 1, 2010, we also may redeem up to 35% of the aggregate principal amount of each of the Senior Notes and the Subordinated Notes with the proceeds of certain equity offerings. Each of these optional redemptions is at a premium as described in the indentures under which the notes were issued. The proceeds from the sale of the notes, after underwriting discounts, were used to (1) retire the Bridge Loan, (2) repurchase $75.7 million of the Company’s 9 1/4% Senior Subordinated Notes due 2013 at a premium of $7.4 million plus accrued interest of $1.3 million and (3) reduce the balance owed under our revolving-term secured agreement. Early extinguishment of debt of $14.5 million includes the $7.4 million premium along with unamortized loan costs of $7.1 million.

PILGRIM'S PRIDE CORPORATION

June 30, 2007

NOTE E—RELATED PARTY TRANSACTIONS

Lonnie “Bo” Pilgrim, the Senior Chairman and, through certain related entities, the major stockholder of the Company (collectively, the “major stockholder”), owns an egg laying and a chicken growing operation. In addition, at certain times during previous years, the major stockholder purchased from the Company live chickens and hens and certain feed inventories during the grow-out process and then, by contract with the Company, would resell the birds at maturity using a market-based formula, with price subject to a ceiling price calculated at his cost plus two percent. No purchases have been made by the Company under this agreement since the first quarter of fiscal 2006 when the major stockholder recognized an operating margin of $4,539 on gross amounts paid by the Company to the major stockholder as described below in “Live chicken purchases from major stockholder.”

Much of the Company’s debt obligations have been guaranteed by an entity controlled by the Company’s major stockholders. In consideration of such guarantees, the Company has paid to Pilgrim Interests, Ltd., an affiliate of Lonnie “Bo” Pilgrim, the amounts described below in “Loan Guaranty Fees.”

Transactions with related parties are summarized as follows:

	Three Months Ended				Nine Months Ended
	June 30,		July 1,		June 30,		July 1,
	2007		2006		2007		2006
	(in thousands)
Lease payments on commercial egg property	$	188	$	188	$	563	$	563
Contract grower pay	$	250	$	276	$	651	$	748
Other sales to major stockholder	$	148	$	223	$	460	$	596
Live chicken purchases from major stockholder	$	--	$	--	$	--	$	231
Loan guaranty fees	$	1,081	$	468	$	2,582	$	1,245
Lease payments and operating expenses on airplane	$	121	$	129	$	371	$	380

NOTE F—COMMITMENTS and CONTINGENCIES

At June 30, 2007, the Company had $84.9 million in letters of credit outstanding relating to normal business transactions.

Listed below are certain claims made against the Company and its subsidiaries. In the Company’s opinion, it has made appropriate and adequate reserves, accruals and disclosures where necessary and the Company believes the probability of a material loss beyond the amounts accrued to be remote; however, the ultimate liability for these matters is uncertain, and if accruals and reserves are not adequate, an adverse outcome, if significant could have a material effect on the consolidated financial condition or results of operations of the Company. The Company believes it has substantial defenses to the claims made and intends to vigorously defend these cases.

Among the claims presently pending against the Company are claims brought by current and former employees seeking compensation for the time spent donning and doffing work equipment. The plaintiffs generally purport to bring a collective action for unpaid wages, unpaid

PILGRIM'S PRIDE CORPORATION

June 30, 2007

overtime wages, liquidated damages, costs, attorneys' fees, and declaratory and/or injunctive relief and generally allege that they are not paid for the time it takes to either clear security, walk to their respective workstations, don and doff protective clothing, and/or sanitize clothing and equipment. We are aware of an industry-wide investigation by the Wage and Hour Division of the U.S. Department of Labor to ascertain compliance with various wage and hour issues, including the compensation of employees for the time spent on activities such as donning and doffing work equipment. Due, in part, to the government investigation and the recent U.S. Supreme Court decision in IBP, Inc. v. Alvarez, it is possible that we may be subject to additional employee claims. We intend to assert vigorous defenses to the litigation. Nonetheless, there can be no assurances that other similar claims may not be brought against the Company. The ultimate liability with respect to these claims cannot be determined at this time.

On December 31, 2003, we were served with a purported class action complaint styled “Angela Goodwin, Gloria Willis, Johnny Gill, Greg Hamilton, Nathan Robinson, Eddie Gusby, Pat Curry, Persons Similarly Situated v. ConAgra Poultry Company and Pilgrim’s Pride, Incorporated” in the United States District Court, Western District of Arkansas, El Dorado Division, alleging racial and age discrimination at one of the facilities we acquired from ConAgra. Two of the named plaintiffs, Greg Hamilton and Gloria Willis, were voluntarily dismissed from this action. On May 15, 2007, the Court denied plaintiff’s motion for class certification and as the plaintiffs subsequently withdrew their appeal to the Eight Circuit Court of Appeals, the Court’s ruling denying class certification stands as a final judgment. We believe we have meritorious defenses to the individual claims and we intend to vigorously defend these claims. After considering our available resources, we do not expect these cases to have a material impact on our financial position or results of operations.

We are subject to various other legal proceedings and claims which arise in the ordinary course of our business. In the opinion of management, the amount of ultimate liability with respect to these actions will not materially affect the financial position or results of operations of the Company.

NOTE G—BUSINESS SEGMENTS

We operate in three reportable business segments as (1) a producer and seller of chicken products, (2) a producer and seller of turkey products and (3) and seller of other products.

The following table presents certain information regarding our segments:

PILGRIM'S PRIDE CORPORATION

June 30, 2007

	Three Months Ended						Nine Months Ended
	June 30, 2007^(a)			July 1, 2006			June 30, 2007^(a)		July 1, 2006
	(In thousands)
Net Sales to Customers:
Chicken:
United States	$	1,809,317		$	1,019,918		$	4,523,729	$	3,039,292
Mexico		131,636			106,996			365,591		303,430
Sub-total		1,940,953			1,126,914			4,889,320		3,342,722
Turkey		18,915			15,753			83,021		94,772
Other Products:
United States		152,766			137,997			464,935		445,610
Mexico		5,752			6,982			12,207		14,063
Sub-total		158,518			144,979			477,142		459,673
Total	$	2,118,386		$	1,287,646		$	5,449,483	$	3,897,167
Operating Income (Loss):
Chicken:
United States	$	116,749		$	(20,158	)	$	101,155	$	(4,012	)
Mexico		14,427			(4,951	)		3,151		(10,177	)
Sub-total		131,176			(25,109	)		104,306		(14,189	)
Turkey^(b)		(1,915	)		(3,598	)		852		(15,956	)
Other Products:
United States		6,668			1,597			15,080		10,501
Mexico		848			373			1,935		1,169
Sub-total		7,516			1,970			17,015		11,670
Total	$	136,777		$	(26,737	)	$	122,173	$	(18,475	)
Depreciation and Amortization^(c):
Chicken:
United States	$	53,629		$	29,400		$	130,120	$	79,911
Mexico		2,754			2,752			8,306		8,470
Sub-total		56,383			32,152			138,426		88,381
Turkey		404			705			1,179		6,025
Other Products:
United States		1,160			2,060			5,917		5,527
Mexico		58			43			156		119
Sub-total		1,218			2,103			6,073		5,646
Total	$	58,005		$	34,960		$	145,678	$	100,052

	June 30, 2007^(a)		September 30, 2006
	(in thousands)
Total Assets:
Chicken
United States	$	3,619,620	$	1,897,763
Mexico		381,982		361,887
Sub-total		4,001,602		2,259,650
Turkey		68,521		76,908
Other Products
United States		113,727		88,650
Mexico		3,700		1,660
Sub-total		117,427		90,310
Total	$	4,187,550	$	2,426,868

PILGRIM'S PRIDE CORPORATION

June 30, 2007

(a)	The Company acquired Gold Kist on December 27, 2006. The net assets acquired have been included in our consolidated financial position since December 27, 2006, and the Gold Kist results of operations have been included in our consolidated results of operations since December 31, 2006. See Note B – “Business Acquisition” above.

(b)	Included in the operating losses for the turkey segment for the nine months ended July 1, 2006 are charges of $3.8 million to write certain assets down to estimated realizable value. These assets are held for sale and are related to the Franconia, Pennsylvania turkey cooking facility at which the Company ceased production of certain products in March 2006. Also included in the operating losses for the turkey segment for the same nine month period are accrued severance expenses totaling $0.2 million and charges of $2.5 million to reduce certain packaging and supplies, bringing the total charges for the nine months ended July 1, 2006 to $6.5 million.

(c)	Includes amortization of capitalized financing costs of approximately $1.1 million and $0.5 million for the three month periods and $2.9 million and $2.0 million for the nine month periods ending June 30, 2007 and July 1, 2006, respectively.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Description of the Company

Pilgrim’s Pride Corporation is the largest chicken company in the United States and Puerto Rico, is the second-largest chicken company in Mexico, and has one of the best-known brand names in the poultry industry. In the United States, we produce both prepared and fresh chicken and fresh turkey. In Mexico and Puerto Rico, we exclusively produce fresh chicken. Through vertical integration, we control the breeding, hatching and growing of chickens. Our products are sold to foodservice, retail, and frozen entrée customers primarily through foodservice distributors, retailers, and restaurants throughout the United States and Puerto Rico and in the northern and central regions of Mexico. We operate in three business segments and two geographical areas.

Business Acquisition

On December 27, 2006, we acquired 88.9% of all outstanding common shares of Atlanta-based Gold Kist Inc. Gold Kist was the third largest chicken company in the United States, accounting for approximately 9% of all chicken produced domestically in recent years. On January 9, 2007, we acquired the remaining Gold Kist common shares, making Gold Kist a wholly owned subsidiary of Pilgrim’s Pride Corporation. The assets and liabilities of Gold Kist have been included in the accompanying balance sheet using an allocation based on preliminary valuations and purchase price adjustments. See Note B – “Business Acquisition” of the notes to our consolidated financial statements included elsewhere in this Quarterly Report.

We are in the process of fully integrating the operations of Gold Kist into the Company. We intend to do this as rapidly as possible without interrupting the business. We expect the acquisition and its integration will result in significant cost saving opportunities and enhanced growth. We are currently preparing an optimization plan for all production and distribution facilities and determining and implementing a “best practice” approach across all operations.

PILGRIM'S PRIDE CORPORATION

June 30, 2007

Executive Summary

Although industry production numbers have increased on a year-over-year basis in the last few weeks, industry-wide production cutbacks implemented earlier in 2007 along with strong demand for our products created an improved pricing environment for our products in the third quarter of fiscal 2007 when compared to the same prior year period. This allowed the Company to return to profitability in spite of increases in the cost of feed ingredients during the quarter. Average selling prices achieved in the third quarter of fiscal 2007 increased by 3.0% over those achieved in the second quarter of fiscal 2007 and by 17.5% over those achieved in the third quarter of fiscal 2006. Average feed ingredients costs incurred in the third quarter of fiscal 2007 increased by 1.7% over those incurred in the second quarter of the fiscal 2007 and by 39.2% over those incurred in the third quarter of fiscal 2006.

Net income for the third quarter of fiscal 2007 increased $83.1 million to $62.6 million compared to the net loss of $20.5 million for the third quarter of fiscal 2006. This improvement is primarily driven by:

§	A 21.2% increase in our U.S. chicken selling prices on top of a 46.4% increase in volumes due to the acquisition of Gold Kist.

Offsetting the price and volume improvements were the following:

§	Increased cost of sales due to higher feed costs between the two periods, as feed ingredients costs rose 41.4% and 27.6% in the U.S. and Mexico chicken divisions, respectively, due primarily to corn and soybean meal prices.

§	Net interest expense increased $29.3 million between the periods due primarily to the financing of the acquisition of Gold Kist.

Net income for the first nine months of fiscal 2007 increased $40.5 million to $13.8 million compared to the net loss of $26.7 million for the first nine months of fiscal 2006. This increase is primarily driven by the following:

§	A 9.8% increase in our U.S. chicken selling prices on top of a 35.6% increase in volumes due to the acquisition of Gold Kist.

Offsetting the price and volume improvements were the following:

§	Increased cost of sales due to higher feed costs between the two periods. Feed ingredients costs rose 38.1% and 31.8% in the U.S. and Mexico chicken divisions, respectively, due primarily to corn and soybean meal prices.

§	Net interest expense increased $61.0 million in the first nine months of fiscal 2007, when compared to the same period in fiscal 2006, due primarily to the financing of the acquisition of Gold Kist.

§	A $14.5 million loss on the early extinguishment of debt during the second quarter of fiscal 2007.

PILGRIM'S PRIDE CORPORATION

June 30, 2007

Business Environment

Profitability in the poultry industry is materially affected by the commodity prices of feed ingredients, chicken and turkey, which are determined by supply and demand factors. As a result, the chicken and turkey industries are subject to cyclical earnings fluctuations. Cyclical earnings fluctuations can be mitigated somewhat by:

- Business strategy;

- Product mix;

- Sales and marketing plans; and

- Operating efficiencies.

In an effort to reduce price volatility and to generate higher, more consistent profit margins, we have concentrated on the production and marketing of prepared foods products. Prepared foods products generally have higher profit margins than our other products. Also, the production and sale in the U.S. of prepared foods products reduces the impact of the costs of feed ingredients on our profitability. Feed ingredient purchases are the single largest component of our cost of sales, representing approximately 33.5% of our consolidated cost of sales in the first nine months of fiscal 2007. The production of feed ingredients is positively or negatively affected primarily by weather patterns throughout the world, the global level of supply inventories and demand for feed ingredients, and the agricultural policies of the U.S. and foreign governments. As further processing is performed, feed ingredient costs become a decreasing percentage of a product’s total production cost, thereby reducing their impact on our profitability. Products sold in this form enable us to charge a premium, reduce the impact of feed ingredient costs on our profitability and improve and stabilize our profit margins. However, prepared foods products are often sold pursuant to longer-term (i.e., generally with one-year durations), fixed price contract arrangements. Accordingly, input cost fluctuations may positively or negatively affect the comparative margins for these products versus commodity product types to the extent such costs are not fully or effectively hedged.

As a significant portion of the U.S. chicken production is exported, the commodity prices of chicken and turkey can be, and in the first six months of fiscal 2006 were, adversely affected by disruptions in export markets. Disruptions of international demand for chicken products in the first six months of fiscal 2006 were created by the focus and concern of foreign markets over avian influenza. Disruptions were also caused by the need to reroute products in transit to locations other than those intended as these concerns materialized. Disruptions at times may also be caused by restrictions on imports of U.S.-produced poultry products imposed by foreign governments for a variety of reasons, including the protection of their domestic poultry producers and allegations of consumer health issues. For example, Russia, China and Japan have restricted the importation of U.S.-produced poultry for both of these reasons in recent periods. In July 2003, the U.S. and Mexico entered into a safeguard agreement with regard to imports into Mexico of chicken leg quarters from the U.S. Under this agreement, a tariff rate for chicken leg quarters of 98.8% of the sales price was established. This tariff rate was reduced on January 1, 2007 to 19.8% and is scheduled to be eliminated on January 1, 2008. The tariff was imposed due to concerns that the duty-free importation of such products as provided by the North American Free Trade Agreement would injure Mexico’s chicken industry. As such tariffs are reduced, we expect greater amounts of chicken to be imported into Mexico from the U.S., which could negatively affect the profitability of Mexican chicken producers and positively affect the profitability of U.S. exporters of chicken to Mexico. Although this could have a negative impact on our Mexican chicken operations, we believe that this will be mitigated by the close proximity of our U.S. operations to the Mexico border. We have the largest U.S. production and distribution capacities near the Mexican border, which gives us a strategic advantage to capitalize on exports of U.S. chicken to Mexico. Because these disruptions in chicken export markets are often political, no assurances can be given as to when the existing disruptions will be alleviated or that new ones will not arise.

PILGRIM'S PRIDE CORPORATION

June 30, 2007

Business Segments

We operate in three reportable business segments as (1) a producer and seller of chicken products, (2) a producer and seller of turkey products and (3) seller of other products.

The following table presents certain information regarding our segments:

PILGRIM'S PRIDE CORPORATION

June 30, 2007

	Three Months Ended						Nine Months Ended
	June 30, 2007^(a)			July 1, 2006			June 30, 2007^(a)		July 1, 2006
	(In thousands)
Net Sales to Customers:
Chicken:
United States	$	1,809,317		$	1,019,918		$	4,523,729	$	3,039,292
Mexico		131,636			106,996			365,591		303,430
Sub-total		1,940,953			1,126,914			4,889,320		3,342,722
Turkey		18,915			15,753			83,021		94,772
Other Products:
United States		152,766			137,997			464,935		445,610
Mexico		5,752			6,982			12,207		14,063
Sub-total		158,518			144,979			477,142		459,673
Total	$	2,118,386		$	1,287,646		$	5,449,483	$	3,897,167
Operating Income (Loss):
Chicken:
United States	$	116,749		$	(20,158	)	$	101,155	$	(4,012	)
Mexico		14,427			(4,951	)		3,151		(10,177	)
Sub-total		131,176			(25,109	)		104,306		(14,189	)
Turkey^(b)		(1,915	)		(3,598	)		852		(15,956	)
Other Products:
United States		6,668			1,597			15,080		10,501
Mexico		848			373			1,935		1,169
Sub-total		7,516			1,970			17,015		11,670
Total	$	136,777		$	(26,737	)	$	122,173	$	(18,475	)
Depreciation and Amortization^(c)
Chicken:
United States	$	53,629		$	29,400		$	130,120	$	79,911
Mexico		2,754			2,752			8,306		8,470
Sub-total		56,383			32,152			138,426		88,381
Turkey		404			705			1,179		6,025
Other Products:
United States		1,160			2,060			5,917		5,527
Mexico		58			43			156		119
Sub-total		1,218			2,103			6,073		5,646
Total	$	58,005		$	34,960		$	145,678	$	100,052

(a)	The Company acquired Gold Kist on December 27, 2006. The acquisition has been accounted for as a purchase and the Gold Kist results of operations have been included in our consolidated results of operations since December 31, 2006. See Note B – “Business Acquisition” of the notes to the consolidated financial statements included elsewhere in the Quarterly Report.

(b)	Included in the operating losses for the turkey segment for the nine months ended July 1, 2006 are charges of $3.8 million to write certain assets down to estimated realizable value. These assets are held for sale and are related to the Franconia, Pennsylvania turkey cooking facility at which the Company ceased production of certain products in March 2006. Also included in the operating losses for the turkey segment for the same nine month period are accrued severance expenses totaling $0.2 million and charges of $2.5 million to reduce certain packaging and supplies, bringing the total charges for the nine months ended July 1, 2006 to $6.5 million.

(c)	Includes amortization of capitalized financing costs of approximately $1.1 million and $0.5 million for the three month periods and $2.9 million and $2.0 million for the nine month periods ending June 30, 2007 and July 1, 2006, respectively.

PILGRIM'S PRIDE CORPORATION

June 30, 2007

The following table presents certain items as a percentage of net sales for the periods indicated:

	Percentage of Net Sales
	Three Months Ended						Nine Months Ended
	June 30, 2007			July 1, 2006			June 30, 2007			July 1, 2006
Net Sales		100.0	%		100.0	%		100.0	%		100.0	%
Costs and Expenses:
Cost of sales		88.9	%		96.7	%		92.9	%		94.9	%
Gross profit		11.1	%		3.3	%		7.1	%		5.1	%
Selling, general and administrative		4.6	%		5.4	%		4.8	%		5.6	%
Operating Income (Loss)		6.5	%		(2.1	)%		2.2	%		(0.5	)%
Interest expense		1.9	%		1.0	%		1.7	%		1.0	%
Interest income		--	%		(0.1	)%		(0.1	)%		(0.2	)%

Income (loss) before income taxes		4.7	%		(2.9	)%		0.4	%		(1.2	)%
Net income (loss)		3.0	%		(1.6	)%		0.3	%		(0.7	)%

Results of Operations

The changes in our results of operations for the three-month and nine-month periods ending June 30, 2007, as compared to the same periods in fiscal 2006 are impacted greatly as a result of the acquisition of Gold Kist on December 27, 2006 as discussed in Note B – “Business Acquisition” of the notes to the consolidated financial statements included elsewhere in this Quarterly Report. The acquisition resulted in significant increases in net sales and related costs, including interest expense.

Fiscal Third Quarter 2007 Compared to Fiscal Third Quarter 2006

Net Sales. Net Sales for the third quarter of fiscal 2007 increased $830.8 million, or 64.5%, over the third quarter of fiscal 2006. The following table provides additional information regarding net sales (in millions):

			Change from
	Quarter Ended		Quarter Ended			Percentage
Source	June 30, 2007		July 1, 2006			Change

Chicken-
United States	$	1,809.4	$	789.5			77.4	%	(a)
Mexico		131.6		24.6			23.0	%	(b)
	$	1,941.0	$	814.1			72.2	%

Turkey	$	18.9	$	3.1			19.6	%	(c)

Other Products-
United States	$	152.7	$	14.8			10.7	%
Mexico		5.8		(1.2	)		(17.1	)%
	$	158.5	$	13.6			9.4	%	(d)
	$	2,118.4	$	830.8			64.5	%

PILGRIM'S PRIDE CORPORATION

June 30, 2007

(a)	U.S. chicken sales for the quarter increased compared to the same quarter last fiscal year due primarily to the acquisition of Gold Kist Inc., whose results are included for the full quarter, offset in part by a reduction in sales resulting from our previously announced 5% year-over-year production cuts. Also, sales rose due to a 21.2% increase in net revenue per pound sold.

(b)	Mexico chicken sales increased compared to the third quarter of last fiscal year because of a 28.7% increase in revenue per pound sold partially offset by a 4.4% decrease in pounds sold.

(c)	Turkey sales increased compared to the third quarter of the last fiscal year due to a 13.9% increase in pounds sold resulting from an acceleration of product orders, a 1.8% increase in pounds produced and a 5.5% increase in revenue per pound sold.

(d)	Other product sales increased due to the addition of the distribution centers added through the Gold Kist acquisition offset somewhat by reduced Mexico non-poultry sales.

Gross Profit. Gross profit increased $192.5 million in the third quarter of fiscal 2007 compared to the third quarter of fiscal 2006

The following table provides gross profit information (in millions):

								Percentage			Percentage
	Quarter		Change From					of Net Sales			of Net Sales
	Ended		Quarter Ended		Percentage			Quarter Ended			Quarter Ended
Components	June 30, 2007		July 1, 2006		Change			June 30, 2007			July 1, 2006

Net sales	$	2,118.4	$	830.8		64.5	%		100.0	%		100.0	%
Cost of sales		1,883.2		638.3		51.3	%		88.9	%		96.7	%	(a)

Gross profit	$	235.2	$	192.5		450.8	%		11.1	%		3.3	%	(b)

(a)	Cost of sales increased compared to the same quarter last fiscal year due to the acquisition of Gold Kist and a 39.2% increase in the cost of feed.

(b)	Gross profit increased $192.5 million due to increased selling prices and the acquisition of Gold Kist offset in part by increased cost of feed.

PILGRIM'S PRIDE CORPORATION

June 30, 2007

Operating Income (Loss). Operating income for the third quarter of fiscal 2007 increased $163.5 million when compared to the third quarter of fiscal 2006.

The following tables provide operating income (loss) information (in millions):

				Change from
	Quarter Ended			Quarter Ended		Percentage
Source	June 30, 2007			July 1, 2006		Change

Chicken
United States	$	116.8		$	136.9		681.1	%
Mexico		14.4			19.4		388.0	%
	$	131.2		$	156.3		622.7	%

Turkey	$	(1.9	)	$	1.7		47.2	%

Other Products
United States	$	6.7		$	5.1		318.8	%
Mexico		0.8			0.4		100.0	%
	$	7.5		$	5.5		275.0	%
Operating Income (Loss)	$	136.8		$	163.5		612.4	%

								Percentage			Percentage
			Change from					of Net Sales			of Net Sales
	Quarter Ended		Quarter Ended		Percentage			Quarter Ended			Quarter Ended
Components	June 30, 2007		July 1, 2006		Change			June 30, 2007			July 1, 2006

Gross profit	$	235.2	$	192.5		450.8	%		11.1	%		3.3	%
Selling, general and administrative expense		98.4		29.0		41.8	%		4.6	%		5.4	%	(a)

Operating income (loss)	$	136.8	$	163.5		612.4	%		6.5	%		(2.1	)%	(b)

(a)	Selling, general and administrative expense decreased as a percentage of net sales due primarily to added revenue from the Gold Kist acquisition. However, overall selling, general and administrative expense increased $29.0 million, primarily due to the Gold Kist acquisition and costs associated with our profit-based retirement and compensation plans.

(b)	Increased operating income is primarily due to the items discussed above under gross profit offset by the increase in selling, general and administrative expense.

Interest Expense. Interest expense increased $28.2 million to $40.9 million in the third quarter of fiscal 2007, when compared to $12.7 million for the third quarter of fiscal 2006, due primarily to the funds borrowed to complete the Gold Kist acquisition. As a percentage of sales, interest expense in the third quarter of fiscal 2007 increased to 1.9% from 1.0% in the third quarter of fiscal 2006.

PILGRIM'S PRIDE CORPORATION

June 30, 2007

Interest Income. Interest income decreased to $0.2 million in the third quarter of fiscal 2007 from $1.3 million in the third quarter of fiscal 2006 due to reduced investments.

Miscellaneous, Net. Consolidated miscellaneous, net expense (income) of $(2.6) million for the third quarter of fiscal 2007 consisted mainly of investment and dividend income. Miscellaneous, net was $(2.1) million for the third quarter of fiscal 2006.

Income Tax Expense (Benefit). Consolidated income tax expense in the third quarter of fiscal 2007 was $36.3 million, compared to a benefit of $(17.5) million in the third quarter of fiscal 2006. This change resulted principally from the improvement in our profitability in the current period.

First Nine Months of Fiscal 2007 Compared to First Nine Months of Fiscal 2006

Net Sales. Net Sales for the first nine months of fiscal 2007 increased $1.55 billion, or 39.8%, versus the first nine months of fiscal 2006. The following table provides additional information regarding net sales (in millions):

	Nine Months		Change from Nine Months
	Ended		Ended			Percentage
Source	June 30, 2007		July 1, 2006			Change

Chicken-
United States	$	4,523.7	$	1,484.4			48.8	%	(a)
Mexico		365.6		62.2			20.5	%	(b)
	$	4,889.3	$	1,546.6			46.3	%

Turkey	$	83.0	$	(11.8	)		(12.4	)%	(c)

Other Products-
United States	$	465.0	$	19.4			4.4	%	(d)
Mexico		12.2		(1.9	)		(13.5	)%
	$	477.2	$	17.5			3.8	%
	$	5,449.5	$	1,552.3			39.8	%

(a)	U.S. chicken sales for the first nine months of fiscal 2007 were 48.8% more than the first nine months of fiscal 2006 because of a 35.6% increase in pounds sold resulting from the Gold Kist acquisition and a 9.8% increase in net revenue per pound sold, offset in part by a reduction in sales resulting from our previously announced 5% year-over-year production cuts which became fully effective in January 2007.

(b)	Mexico chicken sales increased due to a 19.5% increase in net revenue per pound sold during the first nine months of fiscal 2007 versus the first nine months of fiscal 2006 and a 0.8% increase in pounds sold.

(c)	Turkey sales declined because of the March 2006 discontinuation of certain products.

(d)	Other product sales increased primarily because of the addition of legacy Gold Kist distribution centers offset somewhat by reduced Mexico non-poultry sales.

PILGRIM'S PRIDE CORPORATION

June 30, 2007

Gross Profit. Gross profit increased $186.4 million, or 94.0%, in the first nine months of fiscal 2007 compared to the first nine months of fiscal 2006.

The following table provides gross profit information (in millions):

								Percentage			Percentage
			Change From					of Net Sales			of Net Sales
	Nine		Nine					Nine			Nine
	Months Ended		Months Ended		Percentage			Months Ended			Months Ended
Components	June 30, 2007		July 1, 2006		Change			June 30, 2007			July 1, 2006

Net sales	$	5,449.5	$	1,552.3		39.8	%		100.0	%		100.0	%
Cost of sales		5,064.8		1,365.9		36.9	%		92.9	%		94.9	%	(a)

Gross profit	$	384.7	$	186.4		94.0	%		7.1	%		5.1	%	(b)

(a)	Cost of sales increased $1.37 billion due primarily to the Gold Kist acquisition and a 36.3% increase in feed costs. These increases were offset by a $24.5 million decrease in the cost of sales in the turkey division due to the decision to cease production on March 3, 2006, of certain products at our Franconia, Pennsylvania turkey cooking facility. Included in cost of sales for the first nine months of fiscal 2006 was a charge of $3.8 million to impair the carrying value of certain equipment currently held for sale and formerly used in our turkey division, a charge of $2.5 million to reduce the carrying value of certain packaging and supplies associated with those products and $0.2 million for severance costs.

(b)	Gross profit increased $186.4 million due to increased selling prices and the acquisition of Gold Kist offset in part by increased cost of feed.

PILGRIM'S PRIDE CORPORATION

June 30, 2007

Operating Income (Loss). Operating income (loss) for the first nine months of fiscal 2007 increased $140.7 million when compared to the first nine months of fiscal 2006.

The following tables provide operating income (loss) information (in millions):

Change from

Nine

Months Ended

Percentage

Source

June 30, 2007

July 1, 2006

Change