Fresh Del Monte Produce Inc. (NYSE: FDP), ("Fresh Del Monte" or
the "Company") today reported financial results for the second
quarter ended July 2, 2021.
Financial highlights for the second quarter of 2021:
- Net sales increased 5% to $1,141.6 million for the second
quarter of 2021, compared with $1,092.3 million in the prior-year
period;
- Gross profit was $110.0 million for the second quarter of 2021,
which represents an increase of 40%, compared with the prior-year
period, and gross profit margin increased from 7.2% in the
prior-year period to 9.6% in the second quarter of 2021;
- FDP net income(1) for the second quarter of 2021 was $47.2
million, compared with $17.9 million in the prior-year period, and
Diluted EPS(2) was $0.99 for the second quarter of 2021, compared
with $0.38 in the prior-year period;
- Adjusted Diluted EPS(3) was $0.98 for the second quarter of
2021, compared with $0.54 in the prior-year period; and
- Adjusted EBITDA(3) was $83.6 million for the second quarter of
2021, compared with $63.5 million in the prior-year period.
“Our strong performance during the second quarter of 2021
reflects relaxed restrictions on social gatherings in some of our
key markets, compared to the prior-year period,” said Mohammad
Abu-Ghazaleh, Chairman and Chief Executive Officer. “Our pineapple,
fresh-cut fruit and prepared food products led sales and
profitability growth, despite inflationary and cost pressures,
which are expected to continue.”
Net sales for the second quarter of 2021 increased $49.3
million, or 5%, compared with the prior-year period. The increase
in net sales was primarily driven by higher net sales in the
Company's fresh and value-added products and other products and
services business segments.
Gross profit for the second quarter of 2021 increased $31.3
million, or 40%, and Adjusted Gross profit(3), which excludes
other-product related charges of $2.0 million, increased $22.7
million, or 25%, compared with the prior-year period. The overall
increase in gross profit was partially offset by higher per unit
fuel, labor, inland freight, packaging, production and procurement
costs which were negatively impacted by inflationary market
pressures and other unfavorable economic conditions, including lack
of sufficient labor availability, in the second quarter of 2021.
Gross margin increased 240 basis points from 7.2% in the second
quarter of 2020 to 9.6% in the second quarter of 2021.
Operating income for the second quarter of 2021 increased $26.2
million, or 79%, and Adjusted Operating income(3) increased $16.9
million, or 39%, compared with the prior-year period. The increase
in operating income was primarily due to higher gross profit,
partially offset by higher selling, general and administrative
expenses.
FDP net income for the second quarter of 2021 increased $29.3
million, or 164%, and Adjusted FDP Net income(3) increased $21.1
million, or 82%, compared with the prior-year period. The increase
was primarily the result of higher operating income.
Adjusted EBITDA(3) for the second quarter of 2021 increased
$20.1 million, or 32%, and the Adjusted EBITDA margin(3) increased
150 basis points from 5.8% in the second quarter of 2020 to 7.3% in
the second quarter of 2021.
(1)
"FDP net income" as referenced throughout
this release is defined as Net income attributable to Fresh Del
Monte Produce Inc.
(2)
"Diluted EPS" represents diluted earnings
per share and is calculated as FDP net income divided by diluted
weighted average shares.
(3)
Non-GAAP financial measure.
Reconciliations and other information required by Regulation G can
be found below under "Non-GAAP Measures."
Second Quarter 2021 Business Segment
Performance and Selected Financial Data
(As reported in business segment data)
Fresh Del Monte Produce Inc.
and Subsidiaries
Business Segment Data
(U.S. dollars in millions) -
(Unaudited)
Quarter ended
July 2, 2021
June 26, 2020
Segment Data:
Net Sales
Gross Profit
Net Sales
Gross Profit
Fresh and value-added products
$
674.0
59
%
$
57.3
52
%
$
636.2
58
%
$
37.1
47
%
Banana
426.7
37
%
46.7
43
%
429.6
39
%
39.0
50
%
Other products and services
40.9
4
%
6.0
5
%
26.5
3
%
2.6
3
%
$
1,141.6
100
%
$
110.0
100
%
$
1,092.3
100
%
$
78.7
100
%
Fresh and Value-Added Products
Net sales for the second quarter of 2021 increased $37.8
million, or 6%, compared with the prior-year period, mainly due to
higher net sales of pineapples, fresh-cut fruits and fresh-cut
vegetables as a result of less restrictions on social gatherings in
certain key markets which had a positive impact on demand when
compared to the prior-year period. Partially offsetting the
increase were decreases in net sales of non-tropical fruit and
avocados. The primary drivers of the variance in net sales
were:
- Higher net sales in the Company's pineapple product line in all
regions, driven by an increase in per unit sales prices and sales
volumes.
- Higher net sales in its fresh-cut fruit product line, primarily
in Europe and North America, driven by an increase in sales volumes
and per unit sales prices.
- Higher net sales in the Company's fresh-cut vegetable product
line, primarily in the Middle East and in its Mann Packing business
in North America, driven by an increase in sales volumes and per
unit sales prices.
- Lower net sales in the Company's non-tropical fruit product
line, primarily in the Middle East, and to a lesser extent, North
America and Asia. Severe rainstorms in Chile at the beginning of
2021 negatively impacted the Company's non-tropical fruit
crops.
- Lower net sales in its avocado product line, principally due to
lower sales volumes and per unit sales prices, primarily as a
result of excess supply in the market.
Gross profit for the second quarter of 2021 increased $20.2
million, or 54%, compared with the prior year period, primarily due
to higher gross profit in the Company's pineapple, prepared food,
melon, and fresh-cut fruit product lines. Gross margin increased
270 basis points from 5.8% in the prior year period to 8.5% in the
second quarter of 2021. Gross profit in the second quarter of 2020
included $9.0 million of inventory write-offs attributable to the
Company's fresh and value-added products segment caused by the
COVID-19 pandemic. The primary drivers of the variance in gross
profit were:
- Increased gross profit in the Company's pineapple product line
across all regions. North America realized the largest increase due
to higher per unit sales prices and sales volumes coupled with
lower per unit ocean freight costs. This increase was partially
offset by higher per unit fuel, labor, inland freight, packaging,
production and procurement costs.
- Increased gross profit in its prepared food product line in
Europe and North America. In Europe, the increase was driven by
higher per unit sales prices while North America realized lower per
unit costs.
- Increased gross profit in its melon product line, primarily in
North America due to higher per unit sales prices, partially offset
by higher per unit product costs primarily as a result of lower
volumes due to the negative impact of hurricanes Eta and Iota on
our harvest in the fourth quarter of 2020.
- Increased gross profit in the Company's fresh-cut fruit product
line, driven by higher per unit sales prices and sales
volumes.
- Decreased gross profit in its fresh-cut vegetable product line
in the Company's Mann Packing business in North America, driven by
higher per unit product and distribution costs.
- Decreased gross profit in the Company's avocado product line,
primarily the result of lower per unit sales prices, coupled with
higher per unit distribution costs as a result of lower sales
volume.
Adjusted Gross profit(3) in the fresh and value-add products
segment for the second quarter of 2021 increased $12.8 million, or
28%, compared with the prior-year period.
Banana
Net sales for the second quarter of 2021 decreased $2.9 million,
or 1%, compared with the prior-year period, principally due to
lower net sales in the Middle East, and to a lesser extent in North
America, partially offset by higher net sales in Europe and
Asia.
Gross profit for the second quarter of 2021 increased $7.7
million, or 20%, compared with the prior-year period, primarily
driven by North America and Europe. Gross margin increased 180
basis points from 9.1% in the second quarter of 2020 to 10.9% in
the second quarter of 2021. Gross profit in the same period last
year included $1.6 million of inventory write-offs caused by the
COVID-19 pandemic. The primary drivers of the variance were:
- Higher per unit sales prices in North America and Europe and
lower per unit ocean freight costs.
- These improvements were partially offset by higher fuel, labor,
inland freight, packaging, production and procurement costs.
Adjusted Gross profit(3) in the banana business segment for the
second quarter of 2021 increased $6.5 million, or 16%, compared
with the prior-year period.
Cash Flows
Net cash provided by operating activities for the second quarter
of 2021 was $139.5 million, compared with $110.5 million in the
prior-year period, an increase of $29.0 million. The increase was
primarily attributable to higher net income and lower cash outflows
associated with accounts payable and accrued expenses.
Total Debt
Total debt decreased from $542.0 million at the end of 2020 to
$473.5 million at the end of the second quarter of 2021.
Quarterly Cash Dividend
On August 3, 2021, the Company's Board of Directors declared a
quarterly cash dividend of $0.15 per share, payable on September
10, 2021, to shareholders of record on August 18, 2021. This is an
increase of $0.05 per share from the quarterly cash dividend of
$0.10 paid to shareholders on June 11, 2021.
Fresh Del Monte Produce Inc.
and Subsidiaries
Condensed Consolidated
Statements of Operations
(U.S. dollars in millions,
except share and per share data) - (Unaudited)
Quarter ended
Six months ended
Statement of Operations:
July 2, 2021
June 26, 2020
July 2, 2021
June 26, 2020
Net sales
$
1,141.6
$
1,092.3
$
2,229.9
$
2,210.3
Cost of products sold
1,029.6
1,003.0
2,011.3
2,044.5
Other product-related charges
2.0
10.6
3.5
18.6
Gross profit
110.0
78.7
215.1
147.2
Selling, general and administrative
expenses
51.4
45.6
100.3
98.3
Gain on disposal of property, plant and
equipment, net
1.1
1.4
3.8
1.6
Asset impairment and other charges
(credits), net
0.4
1.4
(0.4
)
(0.4
)
Operating income
59.3
33.1
119.0
50.9
Interest expense, net
5.2
5.6
10.4
10.9
Other expense, net
1.6
5.2
3.7
4.4
Income before income taxes
52.5
22.3
104.9
35.6
Provision for income taxes
4.8
4.2
15.8
4.5
Net income
$
47.7
$
18.1
$
89.1
$
31.1
Less: Net income (loss) attributable to
redeemable and noncontrolling interests
0.5
0.2
(0.8
)
0.2
Net income attributable to Fresh Del Monte
Produce Inc.
$
47.2
$
17.9
$
89.9
$
30.9
Earnings per share(1):
Basic
$
0.99
$
0.38
$
1.89
$
0.65
Diluted
$
0.99
$
0.38
$
1.89
$
0.64
Dividends declared per ordinary share
$
0.10
$
0.05
$
0.20
$
0.15
Weighted average number of ordinary
shares:
Basic
47,518,668
47,557,820
47,473,315
47,818,922
Diluted
47,699,536
47,614,553
47,619,704
47,918,071
(1)
Earnings per share ("EPS") is calculated
based on Net income attributable to Fresh Del Monte Produce
Inc.
Fresh Del Monte Produce Inc.
and Subsidiaries
Condensed Consolidated Balance
Sheets
(U.S. dollars in millions) -
(Unaudited)
July 2, 2021
January 1, 2021
Assets
Current assets:
Cash and cash equivalents
$
19.6
$
16.5
Trade and other accounts receivable,
net
461.5
435.2
Inventories, net
495.9
507.7
Other current assets
55.0
52.9
Total current assets
1,032.0
1,012.3
Investment in and advances to
unconsolidated companies
2.5
1.9
Property, plant and equipment, net
1,429.9
1,420.3
Operating lease right-of-use assets
181.4
170.5
Goodwill
424.0
424.0
Intangible assets, net
146.5
150.4
Other noncurrent assets
158.7
163.9
Total assets
$
3,375.0
$
3,343.3
Liabilities and shareholders'
equity
Current liabilities:
Accounts payable and accrued expenses
$
515.8
$
511.8
Current maturities of debt and finance
leases
0.1
0.2
Current maturities of operating leases
30.4
28.8
Other current liabilities
17.0
14.0
Total current liabilities
563.3
554.8
Long-term debt and finance leases
473.4
541.8
Operating leases, less current
maturities
124.0
114.4
Other noncurrent liabilities
318.7
332.4
Total liabilities
1,479.4
1,543.4
Redeemable noncontrolling interest
49.5
50.2
Total Fresh Del Monte Produce Inc.
shareholders' equity
1,824.9
1,728.0
Noncontrolling interests
21.2
21.7
Total shareholders' equity
1,846.1
1,749.7
Total liabilities, redeemable
noncontrolling interest and shareholders' equity
$
3,375.0
$
3,343.3
Fresh Del Monte Produce Inc.
and Subsidiaries
Condensed Consolidated
Statements of Cash Flows
(U.S. dollars in millions) -
(Unaudited)
Six months ended
July 2, 2021
June 26, 2020
Operating activities:
Net income
$
89.1
$
31.1
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
46.9
46.8
Amortization of debt issuance costs
0.3
0.3
Asset impairments
—
2.8
Share-based compensation expense
3.7
4.7
Deferred income taxes
0.5
(3.2
)
Gain on disposal of property, plant and
equipment, net
(3.8
)
(1.6
)
Foreign currency translation
adjustment
0.7
(1.2
)
Other, net
(1.3
)
—
Changes in operating assets and
liabilities:
Receivables
(28.8
)
(9.9
)
Inventories
11.4
53.6
Prepaid expenses and other current
assets
3.7
(3.0
)
Accounts payable and accrued expenses
18.5
(12.6
)
Other noncurrent assets and
liabilities
(1.4
)
2.7
Net cash provided by operating
activities
139.5
110.5
Investing activities:
Capital expenditures
(70.4
)
(35.9
)
Proceeds from sales of property, plant and
equipment
11.0
2.2
Cash received from derivatives not
designated as hedges
4.6
—
Other investing activities
0.3
0.5
Net cash used in investing
activities
(54.5
)
(33.2
)
Financing activities:
Net repayments on debt
(68.4
)
(51.7
)
Distributions to noncontrolling interests,
net
(4.3
)
(1.1
)
Net payments related to share-based
awards
(0.3
)
(0.5
)
Dividends paid
(9.5
)
(7.2
)
Repurchase and retirement of ordinary
shares
—
(20.8
)
Other financing activities
—
1.9
Net cash used in financing
activities
(82.5
)
(79.4
)
Effect of exchange rate changes on
cash
0.6
0.3
Net increase (decrease) in cash and cash
equivalents
3.1
(1.8
)
Cash and cash equivalents, beginning
16.5
33.3
Cash and cash equivalents, ending
$
19.6
$
31.5
Non-GAAP Measures
The Company's results are determined in accordance with U.S.
generally accepted accounting principles (GAAP). Certain
information presented in this press release reflects adjustments to
GAAP measures such as amounts related to restructuring, asset
impairment and other charges (credits), net, gain on disposal of
property, plant and equipment, net, other product-related charges
and certain other non-recurring items, if any. These adjustments
result in non-GAAP financial measures and are referred to in this
press release as Adjusted Gross profit, Adjusted Operating income,
Adjusted FDP Net income, and Adjusted Diluted EPS. Management
believes these adjustments provide a more comparable analysis of
the underlying operating performance of the business.
This press release also includes non-GAAP measures such as
EBITDA, Adjusted EBITDA, EBITDA margin, and Adjusted EBITDA margin.
EBITDA is defined as net income attributable to Fresh Del Monte
Produce Inc. excluding interest expense, net, provision for income
taxes, depreciation and amortization, and share-based compensation
expense. Adjusted EBITDA represents EBITDA with additional
adjustments for non-recurring items. EBITDA margin represents
EBITDA as a percentage of net sales, and adjusted EBITDA margin
represents adjusted EBITDA as a percentage of net sales.
Adjusted Gross profit, Adjusted Operating income, Adjusted FDP
Net income, and Adjusted EBITDA provide the Company with an
understanding of the results from the primary operations of its
business. The Company uses these metrics because management
believes they provide more comparable measures to evaluate
period-over-period operating performance since they exclude special
items that are not indicative of the Company's core business or
operations. These measures may be useful to an investor in
evaluating the underlying operating performance of the Company's
business because these measures:
- Are used by investors to measure a company's comparable
operating performance;
- Are financial measurements that are used by lenders and other
parties to evaluate creditworthiness; and
- Are used by the Company's management for various purposes,
including as measures of performance of its operating entities, as
a basis of strategic planning and forecasting, and in certain cases
as a basis for incentive compensation.
Because all companies do not use identical calculations, the
Company's presentation of these non-GAAP financial measures may not
be comparable to similarly titled measures used by other companies.
Reconciliations of non-GAAP financial measures to the most directly
comparable GAAP financial measures are provided in the financial
tables that accompany this release.
Fresh Del Monte Produce Inc.
and Subsidiaries
Non-GAAP
Reconciliation
(U.S. dollars in millions,
except per-share amounts) - (Unaudited)
Quarter ended
July 2, 2021
June 26, 2020
Gross profit
Operating income
Net income attributable to Fresh
Del Monte Produce Inc.
Diluted EPS
Gross profit
Operating income
Net income attributable to Fresh
Del Monte Produce Inc.
Diluted EPS
As reported
$
110.0
$
59.3
$
47.2
$
0.99
$
78.7
$
33.1
$
17.9
$
0.38
Adjustments:
Other product-related charges (1)
2.0
2.0
2.0
0.04
10.6
10.6
10.6
0.22
Asset impairment and other charges
(credits), net (2)
—
0.4
0.4
0.01
—
1.4
1.4
0.03
(Gain) on disposal of property, plant and
equipment, net (3)
—
(1.1
)
(1.1
)
(0.02
)
—
(1.4
)
(1.4
)
(0.03
)
Other adjustments (4)
—
—
(0.1
)
—
—
—
—
—
Tax effects of all adjustments and other
tax-related items (5)
—
—
(1.6
)
(0.04
)
—
—
(2.8
)
(0.06
)
As adjusted
$
112.0
$
60.6
$
46.8
$
0.98
$
89.3
$
43.7
$
25.7
$
0.54
Six months ended
July 2, 2021
June 26, 2020
Gross profit
Operating income
Net income attributable to Fresh
Del Monte Produce Inc.
Diluted EPS
Gross profit
Operating income
Net income attributable to Fresh
Del Monte Produce Inc.
Diluted EPS
As reported
$
215.1
$
119.0
$
89.9
$
1.89
$
147.2
$
50.9
$
30.9
$
0.64
Adjustments:
Other product-related charges (1)
3.5
3.5
3.5
0.07
18.6
18.6
18.6
0.39
Asset impairment and other charges
(credits), net (2)
—
(0.4
)
(0.4
)
(0.01
)
—
(0.4
)
(0.4
)
(0.01
)
(Gain) loss on disposal of property, plant
and equipment, net (3)
—
(3.8
)
(3.8
)
(0.08
)
—
(1.6
)
(1.6
)
(0.03
)
Other adjustments (4)
—
—
(0.1
)
—
—
0.2
0.2
—
Tax effects of all adjustments and other
tax-related items (5)
—
—
(0.7
)
(0.01
)
—
—
(5.7
)
(0.11
)
As adjusted
$
218.6
$
118.3
$
88.4
$
1.86
$
165.8
$
67.7
$
42.0
$
0.88
Fresh Del Monte Produce Inc.
and Subsidiaries
Segment Gross Profit Non-GAAP
Reconciliation
(U.S. dollars in millions) -
(Unaudited)
Quarter ended
July 2, 2021
June 26, 2020
Fresh and value-added
products
Banana
Other products and services
Fresh and value-added
products
Banana
Other products and services
Gross profit (as reported)
$
57.3
$
46.7
$
6.0
$
37.1
$
39.0
$
2.6
Adjustments:
Other product-related charges (1)
1.6
0.4
—
9.0
1.6
—
Adjusted Gross profit
$
58.9
$
47.1
$
6.0
$
46.1
$
40.6
$
2.6
Six months ended
July 2, 2021
June 26, 2020
Fresh and value-added
products
Banana
Other products and services
Fresh and value-added
products
Banana
Other products and services
Gross profit (as reported)
$
108.9
$
95.9
$
10.3
$
79.6
$
63.5
$
4.1
Adjustments:
Other product-related charges (1)
4.7
(1.2)
—
16.6
1.8
0.2
Adjusted Gross profit
$
113.6
$
94.7
$
10.3
$
96.2
$
65.3
$
4.3
Fresh Del Monte Produce Inc.
and Subsidiaries
Reconciliation of EBITDA and
Adjusted EBITDA
(U.S. dollars in millions) -
(Unaudited)
Quarter ended
Six months ended
July 2, 2021
June 26, 2020
July 2, 2021
June 26, 2020
Net income attributable to Fresh Del Monte
Produce Inc.
$
47.2
$
17.9
$
89.9
$
30.9
Interest expense, net
5.2
5.6
10.4
10.9
Provision for income taxes
4.8
4.2
15.8
4.5
Depreciation & amortization
23.1
23.2
46.9
46.8
Share-based compensation expense
2.1
2.0
3.7
4.7
EBITDA
$
82.4
$
52.9
$
166.7
$
97.8
Adjustments:
Other product-related charges (1)
2.0
10.6
3.5
18.6
Asset impairment and other charges
(credits), net (2)
0.4
1.4
(0.4
)
(0.4
)
(Gain) on disposal of property, plant and
equipment, net (3)
(1.1
)
(1.4
)
(3.8
)
(1.6
)
Other adjustments (4)
(0.1
)
—
(0.1
)
0.2
Adjusted EBITDA
$
83.6
$
63.5
$
165.9
$
114.6
Net sales
$
1,141.6
$
1,092.3
$
2,229.9
$
2,210.3
EBITDA margin(a)
7.2
%
4.8
%
7.5
%
4.4
%
(a) Calculated as EBITDA as a percentage
of net sales.
Adjusted EBITDA margin(b)
7.3
%
5.8
%
7.4
%
5.2
%
(b) Calculated as Adjusted EBITDA as a
percentage of net sales.
(1)
Other product-related charges for the
quarter ended July 2, 2021 primarily included (1) a $1.3 million
inventory write-off incurred in connection with the contracted sale
of production equipment in the Middle East, which will be
recognized in a future quarter (2) $0.4 million in additional
repair expenses related to hurricane damage to the Company's
Guatemala banana operations in the fourth quarter of 2020, and (3)
$0.3 million in incremental inventory write-offs related to
inclement weather in Chile which affected the Company's
non-tropical fruit crops in the first quarter of 2021. For the six
months ended July 2, 2021, other product-related charges primarily
consisted of (1) $3.4 million of non-tropical fruit inventory
write-offs due to inclement weather in Chile, (2) $1.4 million in
repair expenses related to hurricane damage in Guatemala, and (3) a
$1.3 million inventory write-off due to the contracted sale of
certain production equipment. Partially offsetting these other
product-related charges for the six months ended July 2, 2021 was a
$2.5 million insurance recovery associated with the Guatemala
hurricane damage. Other product-related charges for the quarter and
six months ended June 26, 2020 primarily related to inventory
write-offs resulting from lower demand for certain of the Company's
products due to the COVID-19 pandemic, principally related to the
fresh and value-added products segment. The COVID-19 pandemic led
to volatile supply and demand conditions across the Company's key
global markets in the first six months of 2020 which negatively
affected the pricing and demand for its products, including within
its foodservice distribution channel.
(2)
Asset impairment and other charges
(credits), net for the quarter ended July 2, 2021 primarily related
to severance expenses incurred in connection with the exit from a
facility in Europe. Asset impairment and other charges (credits),
net for the six months ended July 2, 2021 also included a $0.8
million insurance recovery associated with damages to fixed assets
in Guatemala caused by two hurricanes in the fourth quarter of
2020. Asset impairment and other charges (credits), net for the six
months ended June 26, 2020 primarily consisted of (1) a $6.0
million insurance recovery related to the 2019 voluntary product
recall, (2) a $2.0 million charge relating to a settlement with the
California Air Resource Board (refer to the Form 10-K for the year
ended January 1, 2021 for further information on this matter), (3)
$2.1 million in impairments of property, plant, and equipment
associated with production facilities in North America and Europe,
(4) $0.7 million in severance expense related to the reorganization
of the North America sales and marketing function, and (5) $0.7
million in asset impairment charges associated with low-yielding
banana plants in the Philippines.
(3)
Gain on disposal of property, plant and
equipment, net for the quarter ended July 2, 2021, primarily
related to a $1.1 million gain on the sale of vacant land in the
Middle East. For the six months ended July 2, 2021, gain on
disposal of property, plant and equipment, net also included a $2.4
million gain on the sale of a refrigerated vessel. Gain on disposal
of property, plant and equipment, net for the six months ended June
26, 2020 primarily related to gains on the sale of surplus land in
Chile and marine equipment.
(4)
Other adjustments for the quarter and six
months ended July 2, 2021, primarily related to the portions of the
gain on disposal of property, plant, and equipment, net and other
product-related charges which were attributable to a minority
interest partner, reflected in net income (loss) attributable to
redeemable and noncontrolling interests. Other adjustments for the
six months ended June 26, 2020 related to estimated trade
receivable credit losses, reflected in selling, general, and
administrative expenses, primarily associated with the Company's
foodservice customer base as a direct result of the COVID-19
pandemic.
(5)
Tax effects are calculated in accordance
with ASC 740, Income Taxes, using the same methodology as the GAAP
provision of income taxes. Income tax effects of non-GAAP
adjustments are calculated based on the applicable statutory tax
rate for each jurisdiction in which such charges were incurred,
except for those items which are non-taxable for which the tax
provision (benefit) was calculated at 0%. Certain non-GAAP
adjustments were subject to valuation allowances and therefore were
calculated at 0%. The quarter and six months ended July 2, 2021
included a $0.8 million tax benefit associated with the Coronavirus
Aid, Relief, and Economic Security (CARES) Act, while the six
months ended June 26, 2020 included a $1.7 million CARES Act tax
benefit.
Conference Call and Webcast Data
Fresh Del Monte will host a conference call and simultaneous
webcast at 10:00 a.m. Eastern Time today to discuss the second
quarter 2021 financial results and to review the Company’s progress
and outlook. The webcast can be accessed on the Company’s Investor
Relations home page at www.freshdelmonte.com. The call will be
available for re-broadcast on the Company’s website approximately
two hours after the conclusion of the call for a period of one
year.
About Fresh Del Monte Produce Inc.
Fresh Del Monte Produce Inc. is one of the world's leading
vertically integrated producers, marketers and distributors of
high-quality fresh and fresh-cut fruit and vegetables, as well as a
leading producer and distributor of prepared food in Europe, Africa
and the Middle East. Fresh Del Monte markets its products worldwide
under the DEL MONTE® brand (under license from Del Monte Foods,
Inc.), a symbol of product innovation, quality, freshness and
reliability for over 135 years. The Company also markets its
products under the MANN™ brand and other related trademarks. Fresh
Del Monte Produce Inc. is not affiliated with certain other Del
Monte companies around the world, including Del Monte Foods, Inc.,
the U.S. subsidiary of Del Monte Pacific Limited, Del Monte Canada,
or Del Monte Asia Pte. Ltd. Fresh Del Monte is the first global
marketer of fruits and vegetables to commit to the “Science Based
Targets” initiative. Fresh Del Monte Produce is traded on the NYSE
under the symbol FDP. To learn more about the company, sign up for
alerts at
http://investorrelations.freshdelmonte.com/overview/default.aspx
Forward-looking Information
This press release contains certain forward-looking statements
regarding the intent, beliefs or current expectations of the
Company or its officers with respect to the Company’s plans and
future performance, including (i) the impact of the COVID-19
pandemic and related restrictions on the Company operations and
results, (ii) expectations regarding inflationary pressures and the
impacts to the Company's operating results, and (iii) the Company’s
anticipated dividend payment. In this press release, these
statements are preceded by, followed by or include the words
“believes”, “expects”, “anticipates” or similar expressions with
respect to various matters. It is important to note that these
forward-looking statements are not guarantees of future performance
and involve risks and uncertainties. Fresh Del Monte’s actual plans
and performance may differ materially from those in the
forward-looking statements as a result of various factors,
including (i) the impact of the COVID-19 outbreak on our business,
suppliers, customers, consumers, employees, and communities, (ii)
disruptions or inefficiencies in our operations or supply chain,
including any impact of the COVID-19 outbreak, (iii) the duration
and spread of the pandemic and related government restrictions and
our ability to maintain the safety of our workforce, (iv) our
ability to successfully execute our plan to stabilize our core
business, diversify our business and transform our business to a
value-added business, particularly in light of COVID-19, (v) the
impact of governmental trade restrictions, including adverse
governmental regulation that may impact our ability to access
certain markets, (vi) our anticipated cash needs in light of our
liquidity and the impact of COVID-19 on our liquidity, (vii) the
continued ability of our distributors and suppliers to have access
to sufficient liquidity to fund their operations, (viii) trends and
other factors affecting our financial condition or results of
operations from period to period, including changes in product mix,
consumer preferences or consumer demand for branded products such
as ours; anticipated price and expense levels; the impact of crop
disease, such as vascular diseases, one of which is known as
Tropical Race 4, or TR4 (also known as Panama Disease), severe
weather conditions, such as flooding, or natural disasters, such as
earthquakes, on crop quality and yields and on our ability to grow,
procure or export our products; our ability to improve our existing
quarantine policies and other prevention strategies, as well as
find contingency plans, to protect our and our suppliers’ banana
crops from vascular diseases; disruptions or issues that impact our
production facilities or complex logistics network; the impact of
prices for petroleum-based products and packaging materials; and
the availability of sufficient labor during peak growing and
harvesting seasons, (ix) the impact of pricing and other actions by
our competitors, particularly during periods of low consumer
confidence and spending levels, (x) the impact of inflation and
foreign currency fluctuations, (xi) our plans for expansion of our
business (including through acquisitions) and cost savings, (xii)
our ability to successfully integrate acquisitions into our
operations, (xiii) the impact of impairment or other charges
associated with exit activities, crop or facility damage or
otherwise, (xiv) the timing and cost of resolution of pending and
future legal and environmental proceedings or investigations, (xv)
the impact of changes in tax accounting or tax laws (or
interpretations thereof), the impact of claims or adjustments
proposed by the Internal Revenue Service or other taxing
authorities in connection with our tax audits and our ability to
successfully contest such tax claims and pursue necessary remedies,
(xvi) the cost and other implications of changes in regulations
applicable to our business, including potential legislative or
regulatory initiatives in the United States or elsewhere directed
at mitigating the effects of climate change, (xvii) damage to our
reputation or brand names or negative publicity about our products,
(xviii) exposure to product liability claims and associated
regulatory and legal actions, product recalls, including the
continuing impact of the 2019 Mann packing recall, or other legal
proceedings relating to our business, (xix) our ability to
successful implement our optimization program and to realize its
expected benefits within the anticipated timeframe, and (xx) our
ability to successfully manage the risks associated with
international operations. All forward-looking statements in this
press release are based on information available to us on the date
hereof, and we assume no obligation to update any such
forward-looking statements. The Company’s plans and performance may
also be affected by the factors described in in Fresh Del Monte
Produce Inc.’s Quarterly Report on Form 10-Q for the quarter ended
July 2, 2021 and its Annual Report on Form 10-K for the year ended
January 1, 2021, along with other reports that the Company has on
file with the Securities and Exchange Commission.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210804005309/en/
Christine Cannella Vice President, Investor
Relations 305-520-8433
Fresh Del Monte Produce (NYSE:FDP)
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