-Company announces $100 million asset sales
program and increases quarterly cash dividend-
-Generated improved cash flow, and reduced
long-term debt by $76.0 million since the end of 2019-
-Strides in the growth of the fresh and
value-added products business segment-
Fresh Del Monte Produce Inc. (NYSE: FDP), ("Fresh Del Monte" or
the "Company") today reported financial results for the third
quarter ended September 25, 2020. The Company reported net income
per diluted share of $0.37 for the third quarter of 2020, compared
with net income per diluted share of $0.38 in the third quarter of
2019. Adjusted net income per diluted share was $0.35 in the third
quarter of 2020, compared with adjusted net income per diluted
share of $0.38 in the third quarter of 2019.
The Company's Board of Directors declared a quarterly cash
dividend of ten cents $(0.10) per share, payable on December 4,
2020 to shareholders of record on November 11, 2020. This is an
increase of five cents $(0.05) per share from the quarterly cash
dividend of five cents $(0.05) per share paid on September 4,
2020.
“We were especially pleased to see an improvement in our fresh
and value-added products business segment, through rapid
adjustments to all aspects of our business, from farm to customer
to meet the challenges caused by the pandemic disruption,
particularly to adapt to the restaurant and foodservice markets
during the third quarter, said Mohammad Abu-Ghazaleh, Chairman and
Chief Executive Officer. "Swift implementation of working capital
measures led to improved cash flow and our ability to reduce our
debt. As a result we will double our dividends in the fourth
quarter of 2020. We also continued to take every precaution to
ensure the health and safety of our team members and their families
allowing us to maintain the necessary workforce to continue to
provide uninterrupted healthy, safe, and convenient products to our
customers."
Mr. Abu-Ghazaleh added, "During the quarter, as part of our
recently announced optimization program, we underwent a
comprehensive review of all aspects of our business. We made the
decision to sell non-strategic and under-utilized assets for a
total anticipated cash amount of approximately $100 million, which
we expect to achieve over the next 12 to 18 months. These assets
consist primarily of underutilized facilities and land across
multiple regions. In the meantime, we remain aggressively focused
on optimizing our current cost structure, improving our
profitability, and prioritizing our capital investments.”
Net sales for the third quarter of 2020 were $989.7 million,
compared with $1,070.2 million in the third quarter of 2019. The
decrease in net sales of $80.5 million was attributable to lower
net sales in all of the Company's business segments. The COVID-19
pandemic impacted net sales during the third quarter by an
estimated $73.0 million, in the Company's fresh and value-added
products and banana business segments, as compared with the
Company's third quarter of 2019 performance for these segments. The
estimated impact in net sales is primarily attributable to volatile
supply and demand conditions resulting from the pandemic, as well
as reduced demand in the Company's foodservice business and
shifting demand at retail, as a result of continued government
imposed mandatory restrictions and social distancing initiatives
associated with the pandemic.
Gross profit for the third quarter of 2020 was $67.3 million,
compared with $76.2 million in the third quarter of 2019. Adjusted
gross profit in the third quarter of 2020 was $69.1 million,
compared with $76.4 million in the third quarter of 2019. The
decrease in gross profit was principally due to lower gross profit
in the Company's banana and other products and services business
segments, partially offset by higher gross profit in the Company's
fresh and value-added products segment. Gross profit was also
impacted by incremental costs, mainly related to other
product-related charges of $2.3 million. These charges primarily
consist of inventory write-offs due to volatile supply and demand
conditions caused by the COVID-19 pandemic as well as incremental
costs incurred for cleaning and social distancing protocols, also
associated with the pandemic.
Operating income for the third quarter of 2020 was $26.6
million, compared with operating income of $27.1 million in the
third quarter of 2019. Adjusted operating income was $25.3 million
in the third quarter of 2020, compared with adjusted operating
income of $25.1 million in the third quarter of 2019. The slight
decrease in operating income was partially offset by lower selling,
general and administrative expenses and lower asset impairment and
other charges, net.
Net income attributable to Fresh Del Monte Produce Inc. for the
third quarter of 2020 was $17.4 million, compared with net income
attributable to Fresh Del Monte Produce Inc. of $18.1 million in
the third quarter of 2019. Adjusted net income was $16.4 million in
the third quarter of 2020, compared with adjusted net income of
$18.3 million in the third quarter of 2019. The decrease was
primarily the result of lower operating income and higher provision
for income taxes, partially offset by lower interest expense.
More disclosures related to the COVID-19 pandemic and
optimization program are available in the Company's Securities and
Exchange Commission filings.
Fresh Del Monte Produce Inc.
and Subsidiaries
Condensed Consolidated
Statements of Operations
(U.S. dollars in millions) -
(Unaudited)
Quarter ended
Nine months ended
Statement of Operations:
September 25,
2020
September 27,
2019
September 25,
2020
September 27,
2019
Net sales
$
989.7
$
1,070.2
$
3,200.0
$
3,463.8
Cost of products sold
920.1
993.8
2,964.6
3,194.1
Other product-related charges
2.3
0.2
20.9
0.8
Gross profit
67.3
76.2
214.5
268.9
Selling, general and administrative
expenses
44.1
51.3
142.4
150.9
Gain (loss) on disposal of property, plant
and equipment, net
(0.1)
6.9
1.5
16.1
Asset impairment and other (credits)
charges, net
(3.5)
4.7
(3.8)
8.5
Operating income
26.6
27.1
77.4
125.6
Interest expense, net
4.7
5.5
15.5
19.1
Other (expense) income, net
(0.8)
(0.5)
(5.2)
7.9
Income before income taxes
21.1
21.1
56.7
114.4
Provision for income taxes
4.9
2.9
9.4
20.0
Net income
$
16.2
$
18.2
$
47.3
$
94.4
Less: Net (loss) income attributable to
redeemable and noncontrolling interests
(1.2)
0.1
(1.0)
2.1
Net income attributable to Fresh Del Monte
Produce Inc.
$
17.4
$
18.1
$
48.3
$
92.3
Net income per ordinary share attributable
to
Fresh Del Monte Produce Inc. - Basic
$
0.37
$
0.38
$
1.01
$
1.91
Net income per ordinary share attributable
to
Fresh Del Monte Produce Inc. - Diluted
$
0.37
$
0.38
$
1.01
$
1.90
Dividends declared per ordinary share
$
0.05
$
0.06
$
0.20
$
0.06
Weighted average number of ordinary
shares:
Basic
47,355,918
48,069,733
47,641,712
48,383,625
Diluted
47,427,723
48,116,989
47,731,747
48,483,762
Selected Statement of Operations
Data:
Depreciation and amortization
$
23.8
$
24.5
$
70.9
$
73.5
Fresh Del Monte Produce Inc.
and Subsidiaries
Condensed Consolidated Balance
Sheets
(U.S. dollars in millions) -
(Unaudited)
September 25,
2020
December 27,
2019
Assets
Current assets:
Cash and cash equivalents
$
14.0
$
33.3
Trade and other accounts receivable,
net
413.4
439.0
Inventories, net
500.5
551.8
Other current assets
62.1
27.4
Total current assets
990.0
1,051.5
Investment in and advances to
unconsolidated companies
1.9
1.9
Property, plant and equipment, net
1,398.6
1,403.2
Operating lease right-of-use assets
165.6
162.1
Goodwill
423.6
423.7
Intangible assets, net
152.3
158.2
Other noncurrent assets
149.4
149.3
Total assets
$
3,281.4
$
3,349.9
Liabilities and shareholders'
equity
Current liabilities:
Accounts payable and accrued expenses
$
504.7
$
522.2
Current maturities of debt and finance
leases
0.3
0.3
Current maturities of operating leases
30.4
32.5
Other current liabilities
13.8
7.9
Total current liabilities
549.2
562.9
Long-term debt and finance leases
510.8
586.8
Operating leases, less current
maturities
107.3
102.7
Other noncurrent liabilities
322.2
298.5
Total liabilities
1,489.5
1,550.9
Redeemable noncontrolling interest
50.5
55.3
Total Fresh Del Monte Produce Inc.
shareholders' equity
1,718.1
1,719.2
Noncontrolling interests
23.3
24.5
Total shareholders' equity
1,741.4
1,743.7
Total liabilities, redeemable
noncontrolling interest and shareholders' equity
$
3,281.4
$
3,349.9
Fresh Del Monte Produce Inc.
and Subsidiaries
Condensed Consolidated
Statements of Cash Flows
(U.S. dollars in millions) -
(Unaudited)
Nine months ended
September 25,
2020
September 27,
2019
Operating activities:
Net income
$
47.3
$
94.4
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
70.5
72.7
Amortization of debt issuance costs
0.4
0.8
Asset impairments
2.9
8.0
Share-based compensation expense
6.2
7.0
Deferred income taxes
(2.9)
6.2
Gain on disposal of property, plant and
equipment, net
(1.5)
(16.1)
Foreign currency translation
adjustment
1.6
(3.8)
Changes in operating assets and
liabilities:
Receivables
21.9
27.9
Inventories
46.0
25.6
Prepaid expenses and other current
assets
(6.8)
3.0
Accounts payable and accrued expenses
(18.0)
(88.5)
Other noncurrent assets and
liabilities
6.3
(7.1)
Net cash provided by operating
activities
173.9
130.1
Investing activities:
Capital expenditures
(92.9)
(93.5)
Proceeds from sales of property, plant and
equipment
9.8
48.0
Other investing activities
0.6
0.7
Net cash used in investing
activities
(82.5)
(44.8)
Financing activities:
Net repayments on debt
(74.1)
(72.5)
Distributions to noncontrolling interests,
net
(6.3)
(2.4)
Net payments related to share-based
awards
(0.6)
(0.6)
Dividends paid
(9.6)
(2.9)
Repurchase and retirement of ordinary
shares
(20.8)
(17.9)
Net cash used in financing
activities
(111.4)
(96.3)
Effect of exchange rate changes on
cash
0.7
6.0
Net decrease in cash and cash
equivalents
(19.3)
(5.0)
Cash and cash equivalents, beginning
33.3
21.3
Cash and cash equivalents, ending
$
14.0
$
16.3
Fresh Del Monte Produce Inc.
and Subsidiaries
Non-GAAP Measures (per
share)(1):
Quarter ended
Nine months ended
September 25,
2020
September 27,
2019
September 25,
2020
September 27,
2019
Reported net income - Diluted
$
0.37
$
0.38
$
1.01
$
1.90
Other product-related charges
0.05
—
0.44
0.02
Asset impairment and other (credits)
charges, net
(0.07)
0.10
(0.08)
0.18
(Gain) on disposal of property, plant and
equipment, net
—
(0.14)
(0.03)
(0.33)
(Gain) loss on settlement of
litigation
—
0.01
—
(0.33)
Other adjustments
—
—
—
—
Tax effect of all adjustments and other
tax-related items
—
0.03
(0.11)
0.12
Adjusted net income - Diluted
$
0.35
$
0.38
$
1.23
$
1.56
(1) Refer to Non-GAAP measures section for
further reconciliation of Non-GAAP measures.
Fresh Del Monte Produce Inc.
and Subsidiaries
Business Segment Data
(U.S. dollars in millions) -
(Unaudited)
Quarter ended
September 25, 2020
September 27, 2019
Segment Data:
Net Sales
Gross Profit
Net Sales
Gross Profit
Fresh and value-added products
$
600.6
61
%
$
54.2
81
%
$
652.9
61
%
$
53.3
(1)
70
%
Banana
361.8
36
%
10.8
16
%
385.8
36
%
18.6
(1)
24
%
Other products and services
27.3
3
%
2.3
3
%
31.5
3
%
4.3
6
%
$
989.7
100
%
$
67.3
100
%
$
1,070.2
100
%
$
76.2
100
%
(1) The Company's segment data disclosures
for the year 2019 have been revised to reflect certain
reclassification adjustments affecting cost of products sold. These
reclassification adjustments resulted in an increase to gross
profit in the Company's banana segment of $2.1 million and a
decrease to gross profit of $0.6 million in the fresh and
value-added products segment in the third quarter of 2019. These
reclassification adjustments also increased selling, general and
administrative expenses by $1.5 million for the quarter ended
September 27, 2019.
Quarter ended
Net Sales by Geographic Region:
September 25,
2020
September 27,
2019
North America
$
619.4
63
%
$
720.8
67
%
Europe
150.0
15
%
140.4
13
%
Asia
107.9
11
%
99.6
9
%
Middle East
102.7
10
%
103.4
10
%
Other
9.7
1
%
6.0
1
%
$
989.7
100
%
$
1,070.2
100
%
Third Quarter 2020 Business Segment Performance and Selected
Financial Data
(As reported in business segment data)
Fresh and Value-Added Products
Net sales for the third quarter of 2020 decreased to $600.6
million, compared with $652.9 million in the third quarter of 2019.
The decrease in net sales was primarily due to lower net sales in
the Company's fresh-cut vegetables, avocado, fresh-cut fruit,
vegetable and prepared food product lines, partially offset by
higher sales in the Company's pineapple and non-tropical fruit
product lines. The Company has estimated that the COVID-19 pandemic
has impacted net sales in the fresh and value-added products
segment during the third quarter of 2020 by an estimated $56.0
million, as compared with the Company's third quarter of 2019
performance for the segment. The estimated impact in net sales is
attributable to reduced demand in the Company's foodservice
business and shifting demand at retail, as a result of continued
government imposed mandatory restrictions and social distancing
initiatives associated with the pandemic. In addition, the impact
of the Company's voluntary product recall in the fourth quarter of
2019 continued to negatively impact its fresh-cut vegetable net
sales during the quarter as volumes have not returned to pre-recall
levels. Gross profit for the third quarter of 2020 increased to
$54.2 million, compared with gross profit of $53.3 million in the
third quarter of 2019. Other product-related charges represented
$1.9 million for the segment, primarily related to inventory
write-offs of pineapples due to volatile supply and demand
conditions caused by the COVID-19 pandemic as well as incremental
costs incurred for cleaning and social distancing protocols
associated with the pandemic.
Gold pineapple - Net sales were $115.9 million, compared with
$102.0 million in the prior year period. Volume increased 15%.
Pricing decreased 1%. Unit cost decreased 1%.
Fresh-cut fruit - Net sales were $130.4 million, compared with
$144.5 million in the prior year period. Volume decreased 11%.
Pricing increased 1%. Unit cost increased 3%.
Fresh-cut vegetables - Net sales were $95.6 million, compared
with $122.0 million in the prior year period. Volume decreased 27%.
Pricing increased 7%. Unit cost increased 15%.
Avocados - Net sales were $76.5 million, compared with $98.0
million in the prior year period. Volume increased 13%. Pricing
decreased 31%. Unit cost decreased 37%.
Vegetables - Net sales were $41.7 million, compared with $45.6
million in the prior year period. Volume decreased 13%. Pricing
increased 5%. Unit cost increased 26%.
Non-tropical fruit - Includes the Company's grape, apple,
citrus, berry, pear, peach, plum, nectarine, cherry and kiwi
product lines. Net sales were $38.1 million, compared with $32.2
million in the prior year period. Volume increased 13%. Pricing
increased 4%. Unit cost increased 7%.
Prepared food products - Includes the Company's prepared
traditional products, and meals and snacks product lines. The
decrease in net sales was primarily the result of lower sales in
the Company's meals and snacks product line, due to the impact of
the COVID-19 pandemic, the continuing impact of the 2019 product
recall and product rationalization efforts in the Company's Mann
Packing operations in North America. The decrease was partially
offset by increased per unit selling prices of pineapple
concentrate due to lower industry supply and higher per unit
selling prices of canned pineapple products due to increased
customer demand.
Banana
Net sales for the third quarter of 2020 decreased to $361.8
million, compared with $385.8 million in the third quarter of 2019,
principally due to lower net sales in North America, Europe and the
Middle East, partially offset by higher net sales in Asia. The
Company has estimated that the COVID-19 pandemic has impacted net
sales in the banana segment during the third quarter of 2020 by an
estimated $17.0 million, as compared with the Company's third
quarter of 2019 performance for the segment. The estimated impact
in net sales is attributable to reduced demand in the Company's
foodservice business and shifting demand at retail, as a result of
continued government imposed mandatory restrictions and social
distancing initiatives associated with the pandemic. Volume
decreased 4% and worldwide pricing decreased 3% compared with the
prior year. Gross profit for the third quarter of 2020 decreased to
$10.8 million, compared with $18.6 million in the third quarter of
2019, primarily due to lower selling prices in North America, as a
result of decreased demand, partially offset by lower ocean freight
costs. Other product-related charges represented $0.4 million for
the segment, primarily related to inventory write-offs due to
volatile supply and demand conditions as well as additional
cleaning and transportation costs associated with the pandemic.
Unit cost decreased 1% compared with the prior year period.
Cash Flows
Net cash provided by operating activities for the first nine
months of 2020 was $173.9 million, compared with net cash provided
by operating activities of $130.1 million in the same period of
2019. The increase was primarily attributable to lower payments of
accounts payable and accrued expenses and lower levels of
inventory, due to the Company's optimization efforts on working
capital. Partially offsetting this increase was lower net income
and higher levels of prepaid expenses and other current assets.
Total Debt
Total debt decreased from $587.1 million at the end of 2019 to
$511.1 million at the end of the third quarter of 2020.
Interest Expense, Net
Interest expense, net for the third quarter of 2020 was $4.7
million, compared with $5.5 million in the third quarter of 2019.
Interest expense decreased due to lower interest rates combined
with lower average loan balances.
Non-GAAP Measures
The Company's results are determined in accordance with U.S.
generally accepted accounting principles (GAAP). Some of the
information presented in this press release reflects adjustments to
GAAP measures such as amounts related to restructuring, asset
impairment and other (credits) charges, net, gain (loss) on
disposal of property, plant and equipment, net, other
product-related charges and certain other non-recurring items, if
any. Management believes these adjustments provide a more
comparable analysis of the underlying operating performance of the
business. These adjustments result in non-GAAP financial measures
and are referred to in this press release as adjusted gross profit,
adjusted operating income, adjusted net income and adjusted net
income per diluted share. 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.
Adjusted gross profit, adjusted operating income and adjusted
net income provide the Company with an understanding of the results
from the primary operations of its business. The Company uses
adjusted operating income and adjusted net income to evaluate its
period-over-period operating performance because management
believes they provide more comparable measures of the Company's
underlying operating performance as they adjust for special items
to provide greater clarity to management and investors. 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 and
as a basis of strategic planning and forecasting.
Fresh Del Monte Produce Inc. and
Subsidiaries
Non-GAAP Reconciliation
(U.S. dollars in millions, except
per-share amounts) - (Unaudited)
Quarter ended
September 25,
2020
September 27,
2019
Gross profit
Operating income
Net income attributable to Freshe
Del Monte Produce Inc.
Net income attributable to Fresh
Del Monte Produce Inc. per diluted share
Gross profit
Operating income
Net income attributable to Fresh
Del Monte Produce Inc.
Net income attributable to Fresh
Del Monte Produce Inc. per diluted share
As reported
$
67.3
$
26.6
$
17.4
$
0.37
$
76.2
$
27.1
$
18.1
$
0.38
Adjustments:
Other product-related charges (1)
2.3
2.3
2.3
0.05
0.2
0.2
0.2
—
Asset impairment and other (credits)
charges, net (2)
—
(3.5)
(3.5)
(0.07)
—
4.7
4.7
0.10
(Gain) loss on disposal of property, plant
and equipment, net (3)
—
0.1
0.1
—
—
(6.9)
(6.9)
(0.14)
Loss on settlement of litigation (4)
—
—
—
—
—
—
0.7
0.01
Other adjustments (5)
(0.5)
(0.2)
(0.2)
—
—
—
—
—
Tax effects of all adjustments (6)
—
—
0.3
—
—
—
1.5
0.03
As adjusted
$
69.1
$
25.3
$
16.4
$
0.35
$
76.4
$
25.1
$
18.3
$
0.38
Nine months ended
September 25,
2020
September 27,
2019
Gross profit
Operating income
Net income attributable to Fresh
Del Monte Produce Inc.
Net income attributable to Fresh
Del Monte Produce Inc. per diluted share
Gross profit
Operating income
Net income attributable to Fresh
Del Monte Produce Inc.
Net income attributable to Fresh
Del Monte Produce Inc. per diluted share
As reported
$
214.5
$
77.4
$
48.3
$
1.01
$
268.9
$
125.6
$
92.3
$
1.90
Adjustments:
Other product-related charges (1)
20.9
20.9
20.9
0.44
0.8
0.8
0.8
0.02
Asset impairment and other (credits)
charges, net (2)
—
(3.8)
(3.8)
(0.08)
—
8.5
8.5
0.18
(Gain) loss on disposal of property, plant
and equipment, net (3)
—
(1.5)
(1.5)
(0.03)
—
(16.1)
(16.1)
(0.33)
(Gain) on settlement of litigation (4)
—
—
—
—
—
—
(16.0)
(0.33)
Other adjustments (5)
(0.5)
—
—
—
—
—
—
—
Tax effects of all adjustments and other
tax-related items (6)
—
—
(5.4)
(0.11)
—
—
6.3
0.12
As adjusted
$
234.9
$
93.0
$
58.5
$
1.23
$
269.7
$
118.8
$
75.8
$
1.56
(1)
Other product-related charges for the
quarter and nine months ended September 25, 2020 primarily related
to inventory write-offs resulting from lower demand for certain of
the Company's products due to the COVID-19 pandemic. The COVID-19
pandemic led to volatile supply and demand conditions across the
Company's key global markets in the nine months ended September 25,
2020 which negatively affected the pricing and demand for its
products, including higher price point products such as pineapples,
avocados and fresh-cut fruit and vegetables. The inventory
write-offs are also related to reduced demand in the Company's
foodservice distribution channel and shifting demand at retail as
the result of government imposed mandatory closures and social
distancing initiatives. Also included in other product-related
charges for the quarter and nine months ended September 25, 2020
are incremental costs incurred for cleaning and social distancing
protocols associated with the COVID-19 pandemic. Other
product-related charges for the quarter and nine months ended
September 27, 2019 related to inclement weather in Central
America.
(2)
Asset impairment and other (credits)
charges, net for the quarter ended September 25, 2020 primarily
related to a $4.4 million insurance recovery associated with the
voluntary recall of vegetable products which was announced in the
fourth quarter of 2019 and $0.8 million in severance expense
related to the reorganization of the North America sales and
marketing function. Asset impairment and other (credits) charges,
net for the nine months ended September 25, 2020 primarily related
to (1) a $10.4 million insurance recovery related to the 2019
product recall, (2) a $2.0 million charge relating to a settlement
with the California Air Resource Board (refer to the Form 10-Q for
the quarter ended September 25, 2020 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) $1.5 million in severance expense related
to the reorganization of the North America sales and marketing
function, and (5) $0.8 million in asset impairment charges
associated with low-yielding banana plants in the Philippines.
Asset impairment and other (credits) charges, net for the quarter
ended September 27, 2019 primarily related to asset impairments of
low-yielding banana plants in the Philippines. Asset impairment and
other (credits) charges, net for the nine months ended September
27, 2019 also included impairment of an equity investment and
contract termination charges related to our decision to abandon
certain low-yield areas in the Philippines.
(3)
Gain (loss) on disposal of property, plant
and equipment, net for the quarter ended September 25, 2020 related
to a $0.4 million loss on disposal of certain production assets in
North America which was partially offset by a $0.3 million gain on
the sale of surplus land in Chile. Gain (loss) on disposal of
property, plant and equipment, net for the nine months ended
September 25, 2020 primarily related to gains on the sale of
surplus land in Chile. Gain (loss) on disposal of property, plant
and equipment, net for the quarter and nine months ended September
27, 2019 primarily related to the sale of surplus land in Florida.
Gain (loss) on disposal of property, plant and equipment, net for
the nine months ended September 27, 2019 also includes the sale of
a refrigerated vessel.
(4)
Gain on settlement of litigation for the
nine months ended September 27, 2019 was $16.0 million consisting
of proceeds of $17.0 million, net of expenses of $1.0 million. Loss
on settlement of litigation for the quarter ended September 27,
2019 was $0.7 million related to other miscellaneous expenses.
(5)
Other adjustments for the quarter and nine
months ended September 25, 2020 include a $0.5 million reversal of
customer credit claims, reflected in net sales, associated with the
2019 voluntary product recall due to the realization of less claims
than originally estimated. Other adjustments for the quarter ended
September 25, 2020 also include $0.3 million of estimated trade
receivable credit losses, reflected in selling, general, and
administrative expenses, primarily relating to the Company's
foodservice customer base as a direct result of the COVID-19
pandemic. For the nine months ended September 25, 2020, these
estimated credit losses associated with the COVID-19 pandemic were
$0.5 million.
(6)
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 tax effects of all adjustments were not
included in the prior presentation for the quarter and nine months
ended September 27, 2019. We reevaluated the presentation of
non-GAAP adjusted net income and adjusted net income per share and
made these changes to facilitate the evaluation of the Company's
current operating performance and the comparability of the
Company's current operating performance to past performance.
Non-GAAP adjusted net income and adjusted net income per share have
been recast for the quarter and nine months ended September 27,
2019 to conform to the current presentation. The nine months ended
September 25, 2020 also included a $1.7 million tax benefit
associated with the Coronavirus Aid, Relief, and Economic Security
("CARES") Act.
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 third
quarter 2020 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 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 125 years. The Company also markets its products under the
MANNTM 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.
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 the Company’s (i) intentions to sell
certain identified assets over the next 12 to 18 months and the
anticipated cash proceeds of such sales, (ii) intentions to
optimize its current cost structure, improve its profitability, and
prioritize its capital investments and (iii) 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
such as uncertainty surrounding the withdrawal of the United
Kingdom from the European Union (often referred as Brexit),
including spillover effects to other Eurozone countries, (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), which can destroy banana crops and
was recently discovered in Latin America banana plantations, 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 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 Item 1A. - “Risk Factors” in Fresh Del Monte Produce
Inc.’s Quarterly Report on Form 10-Q for the quarter ended
September 25, 2020 and its Annual Report on Form 10-K for the year
ended December 27, 2019, 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/20201028005252/en/
Christine Cannella Vice President, Investor
Relations 305-520-8433
Fresh Del Monte Produce (NYSE:FDP)
Historical Stock Chart
From Aug 2024 to Sep 2024
Fresh Del Monte Produce (NYSE:FDP)
Historical Stock Chart
From Sep 2023 to Sep 2024