Fresh Del Monte Produce Announces 2Q 2008 Results; Top Line Grows 5%
|
Source: Fresh Del Monte Produce Inc
29/07/2008
|
|
Coral Gable, 29 July, 2008 - Fresh Del Monte Produce Inc. today reported financial results for the second quarter ended June 27, 2008.
The Company reported earnings per diluted share of $0.87, excluding asset impairment and other charges, net, compared with earnings per diluted share of $1.18 in the second quarter of 2007, excluding asset impairment and other charges, net. The 2008 second quarter results exclude asset impairment and other charges totaling $13.7 million, or $0.21 per diluted share, primarily related to flooding at the Company’s banana operations in Brazil and the closure of underutilized distribution centers in the United Kingdom. Earnings per diluted share for the first six months of 2008, excluding asset impairment and other charges, net, were $1.94, compared with earnings per diluted share of $2.03 for the prior year’s first six month period, excluding asset impairment and other charges, net.
Fresh Del Monte’s Chairman and Chief Executive Officer, Mohammad Abu-Ghazaleh said, “The second quarter was an exciting period for Fresh Del Monte in setting the stage for future growth. As we announced on June 9th we completed the largest acquisition in our history. The acquisition of Caribana dramatically boosts our banana and gold pineapple production. Additionally, in a separate transaction, we acquired the melon production assets from our 50 percent joint-venture partner in Costa Rica.
"We continued to improve the performance of our prepared food business as we further penetrated exciting new markets and explored new sourcing regions. The second quarter was also a challenging period, with significantly higher costs that were only partially offset by strong price increases, as well as several adverse weather-related events. Going forward, the Caribana acquisition will generate significant synergies, while at the same time we are aggressively pursuing price increases. We firmly believe in our business — today more than ever — and we are extremely enthusiastic about the opportunities we see ahead.”
| Fresh Del Monte Produce Inc. and Subsidiaries |
| Condensed Consolidated Statements of Income |
|
(U.S. dollars in millions, except share and per share data)-(Unaudited) |
|
|
|
|
|
|
|
|
|
Quarter ended |
|
Six months ended |
| Income Statement: |
June 27,
2008 |
|
June 29,
2007 |
|
June 27,
2008 |
|
June 29,
2007 |
|
|
|
|
| Net sales |
$ |
972.2 |
|
$ |
924.2 |
|
$ |
1,867.1 |
|
$ |
1,760.2 |
| Cost of products sold |
|
870.5 |
|
|
804.6 |
|
|
1,668.5 |
|
|
1,541.5 |
| Other charges (1) |
|
2.1 |
|
|
- |
|
|
2.1 |
|
|
- |
| Gross profit |
|
99.6 |
|
|
119.6 |
|
|
196.5 |
|
|
218.7 |
|
|
|
|
|
|
|
|
| Selling, general and administrative expenses |
|
42.8 |
|
|
47.4 |
|
|
82.2 |
|
|
89.6 |
| Asset impairment and other charges, net (2) |
|
11.6 |
|
|
4.9 |
|
|
16.2 |
|
|
2.0 |
| Operating income |
|
45.2 |
|
|
67.3 |
|
|
98.1 |
|
|
127.1 |
|
|
|
|
|
|
|
|
| Interest expense, net |
|
2.0 |
|
|
7.4 |
|
|
5.1 |
|
|
16.4 |
| Other income, net |
|
2.4 |
|
|
0.2 |
|
|
14.9 |
|
|
4.1 |
|
|
|
|
|
|
|
|
| Income before income taxes |
|
45.6 |
|
|
60.1 |
|
|
107.9 |
|
|
114.8 |
|
|
|
|
|
|
|
|
| Provision for (benefit from) income taxes |
|
3.7 |
|
|
(3.8) |
|
|
2.4 |
|
|
(0.7) |
| Net income |
$ |
41.9 |
|
$ |
63.9 |
|
$ |
105.5 |
|
$ |
115.5 |
|
|
|
|
|
|
|
|
| Net income per ordinary share - Basic |
$ |
0.66 |
|
$ |
1.11 |
|
$ |
1.67 |
|
$ |
2.00 |
|
|
|
|
|
|
|
|
| Net income per ordinary share - Diluted |
$ |
0.66 |
|
$ |
1.10 |
|
$ |
1.66 |
|
$ |
2.00 |
|
|
|
|
|
|
|
|
| Weighted average number of ordinary shares: |
|
|
|
|
|
|
|
| Basic |
|
63,455,713 |
|
|
57,769,054 |
|
|
63,157,388 |
|
|
57,734,471 |
| Diluted |
|
63,804,052 |
|
|
58,026,291 |
|
|
63,581,121 |
|
|
57,886,434 |
|
|
|
|
|
|
|
|
|
Selected Income Statement Data: |
|
|
|
|
|
|
|
| Depreciation and amortization |
$ |
21.2 |
|
$ |
19.4 |
|
$ |
41.8 |
|
$ |
38.7 |
|
|
|
|
|
|
|
|
| Net Income per Share Adjustments: |
|
|
|
|
|
|
|
| Reported net income per share - Diluted |
$ |
0.66 |
|
$ |
1.10 |
|
$ |
1.66 |
|
$ |
2.00 |
| Other charges (1) |
|
0.03 |
|
|
- |
|
|
0.03 |
|
|
- |
| Asset impairment and other charges, net (2) |
|
0.18 |
|
|
0.08 |
|
|
0.25 |
|
|
0.03 |
| Adjusted net income per share - Diluted (3) |
$ |
0.87 |
|
$ |
1.18 |
|
$ |
1.94 |
|
$ |
2.03 |
|
|
|
|
|
|
|
|
| Gross Profit Adjustments: |
|
|
|
|
|
|
|
| Reported gross profit |
$ |
99.6 |
|
$ |
119.6 |
|
$ |
196.5 |
|
$ |
218.7 |
| Other charges (1) |
|
2.1 |
|
|
- |
|
|
2.1 |
|
|
- |
| Adjusted gross profit |
$ |
101.7 |
|
$ |
119.6 |
|
$ |
198.6 |
|
$ |
218.7 |
|
|
|
|
|
|
(1) Other charges recorded during the second quarter of 2008 are related to wages paid to idle workers and write-offs of packaging material inventory incurred as a result of extensive flood damage in our banana farms in Brazil. |
|
|
|
(2) Asset impairment and other charges, net, for the second quarter and six months ended June 27, 2008, relates principally to the flood damage at our banana farms in Brazil, the closure of under-utilized distribution centers in the U.K. and the previously announced closure of a beverage production operation in the U.K. Asset impairment and other charges, net, for the second quarter and six months ended June 29, 2007 includes asset impairment charges related to assets held for sale in Europe and a net benefit related to the previously announced closing of our Hawaii pineapple operations. |
|
|
|
(3) Management reviews adjusted net income per share and considers this measure relevant to investors because management believes it better represents the underlying business trends and performance of the Company. |
| Fresh Del Monte Produce Inc. and Subsidiaries |
| Business Segment Data |
| (U.S. dollars in millions) - (Unaudited) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended |
|
|
|
June 27, 2008 |
|
June 29, 2007 |
| Segment Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Sales |
|
Gross Profit |
|
Net Sales |
|
Gross Profit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Bananas |
$ |
381.5 |
|
39 |
% |
|
$ |
41.7 |
|
42 |
% |
|
$ |
324.8 |
|
35 |
% |
|
$ |
31.5 |
|
|
26 |
% |
| Other Fresh Produce |
|
444.5 |
|
46 |
% |
|
|
40.9 |
|
41 |
% |
|
|
472.5 |
|
51 |
% |
|
|
73.8 |
|
|
62 |
% |
| Prepared Food |
|
114.5 |
|
12 |
% |
|
|
15.3 |
|
15 |
% |
|
|
100.4 |
|
11 |
% |
|
|
16.9 |
|
|
14 |
% |
| Other Products and Services |
|
31.7 |
|
3 |
% |
|
|
1.7 |
|
2 |
% |
|
|
26.5 |
|
3 |
% |
|
|
(2.6 |
) |
|
-2 |
% |
|
|
Total |
$ |
972.2 |
|
100 |
% |
|
$ |
99.6 |
|
100 |
% |
|
$ |
924.2 |
|
100 |
% |
|
$ |
119.6 |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended |
|
|
|
June 27, 2008 |
|
June 29, 2007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Segment Data: |
Net Sales |
|
Gross Profit |
|
Net Sales |
|
Gross Profit |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Bananas |
$ |
721.6 |
|
39 |
% |
|
$ |
71.8 |
|
36 |
% |
|
$ |
612.6 |
|
35 |
% |
|
$ |
52.2 |
|
|
24 |
% |
| Other Fresh Produce |
|
863.5 |
|
46 |
% |
|
|
94.0 |
|
48 |
% |
|
|
899.5 |
|
51 |
% |
|
|
138.3 |
|
|
63 |
% |
| Prepared Food |
|
216.4 |
|
12 |
% |
|
|
25.3 |
|
13 |
% |
|
|
190.3 |
|
11 |
% |
|
|
27.5 |
|
|
13 |
% |
| Other Products and Services |
|
65.6 |
|
3 |
% |
|
|
5.4 |
|
3 |
% |
|
|
57.8 |
|
3 |
% |
|
|
0.7 |
|
|
0 |
% |
|
|
Total |
$ |
1,867.1 |
|
100 |
% |
|
$ |
196.5 |
|
100 |
% |
|
$ |
1,760.2 |
|
100 |
% |
|
$ |
218.7 |
|
|
100 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended |
|
Six months ended |
|
|
|
June 27,
2008 |
|
June 29,
2007 |
|
June 27,
2008 |
|
June 29,
2007 |
| Net Sales by Geographic Region: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| North America |
$ |
443.2 |
|
46 |
% |
|
$ |
426.9 |
|
46 |
% |
|
$ |
854.1 |
|
46 |
% |
|
$ |
843.3 |
|
|
48 |
% |
| Europe |
|
299.4 |
|
31 |
% |
|
|
305.8 |
|
33 |
% |
|
|
599.2 |
|
32 |
% |
|
|
571.3 |
|
|
32 |
% |
| Asia |
|
126.2 |
|
13 |
% |
|
|
111.4 |
|
12 |
% |
|
|
217.6 |
|
12 |
% |
|
|
206.5 |
|
|
12 |
% |
| Middle East |
|
75.6 |
|
8 |
% |
|
|
54.4 |
|
6 |
% |
|
|
134.8 |
|
7 |
% |
|
|
84.7 |
|
|
5 |
% |
| Other |
|
27.8 |
|
2 |
% |
|
|
25.7 |
|
3 |
% |
|
|
61.4 |
|
3 |
% |
|
|
54.4 |
|
|
3 |
% |
|
|
Total |
$ |
972.2 |
|
100 |
% |
|
$ |
924.2 |
|
100 |
% |
|
$ |
1,867.1 |
|
100 |
% |
|
$ |
1,760.2 |
|
|
100 |
% |
| Fresh Del Monte Produce Inc. and Subsidiaries |
| Condensed Consolidated Statements of Cash Flows |
| (U.S. dollars in millions) - (Unaudited) |
|
|
|
|
|
Six months ended |
|
June 27,
2008 |
|
June 29,
2007 |
|
|
| Operating activities: |
|
|
|
| Net income |
$ |
105.5 |
|
$ |
115.5 |
| Adjustments to reconcile net income to net cash |
|
|
|
| provided by operating activities: |
|
|
|
| Depreciation and amortization |
|
41.8 |
|
|
38.7 |
| Asset impairment charges |
|
12.6 |
|
|
5.1 |
| Gain on sale of assets |
|
(5.7) |
|
|
(5.3) |
| Other |
|
2.6 |
|
|
0.4 |
| Changes in operating assets and liabilities: |
|
|
|
| Receivables |
|
(21.6) |
|
|
(33.2) |
| Inventories |
|
29.4 |
|
|
(2.4) |
| Other current assets |
|
(10.6) |
|
|
(2.7) |
| Accounts payable and accrued expenses |
|
60.7 |
|
|
33.6 |
| Other noncurrent assets and liabilities |
|
(5.8) |
|
|
(18.2) |
| Net cash provided by operating activities |
|
208.9 |
|
|
131.5 |
|
|
|
|
| Investing activities: |
|
|
|
| Capital expenditures |
|
(43.3) |
|
|
(46.0) |
| Proceeds from sales of assets |
|
8.6 |
|
|
7.8 |
| Purchase of subsidiaries, net of cash acquired |
|
(400.6) |
|
|
- |
| Other investing activities, net |
|
- |
|
|
0.5 |
| Net cash used in investing activities |
|
(435.3) |
|
|
(37.7) |
|
|
|
|
| Financing activities: |
|
|
|
|
Net proceeds from (payments on) long-term debt |
|
209.8 |
|
|
(96.6) |
| Proceeds from stock options exercised |
|
21.3 |
|
|
1.8 |
| Net cash provided by (used in) financing activities |
|
231.1 |
|
|
(94.8) |
|
|
|
|
| Effect of exchange rate changes on cash |
|
(1.3) |
|
|
(0.3) |
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents |
|
3.4 |
|
|
(1.3) |
|
Cash and cash equivalents, beginning |
|
30.2 |
|
|
39.8 |
|
Cash and equivalents, ending |
$ |
33.6 |
|
$ |
38.5 |
| Fresh Del Monte Produce Inc. and Subsidiaries |
| Condensed Consolidated Balance Sheets |
| (U.S. dollars in millions) - (Unaudited) |
|
|
|
|
|
June 27,
2008 |
|
December 28,
2007 |
|
|
|
|
|
|
| Assets: |
|
|
|
| Current assets: |
|
|
|
| Cash and cash equivalents |
$ |
33.6 |
|
$ |
30.2 |
| Trade accounts receivable |
|
382.3 |
|
|
343.3 |
| Other accounts receivables |
|
58.4 |
|
|
70.6 |
| Inventories |
|
399.3 |
|
|
406.9 |
| Other current assets |
|
39.7 |
|
|
36.9 |
| Total current assets |
|
913.3 |
|
|
887.9 |
|
|
|
|
| Property, plant and equipment, net |
|
1,025.0 |
|
|
851.8 |
| Goodwill |
|
452.0 |
|
|
253.2 |
| Other non-current assets |
|
213.5 |
|
|
192.8 |
| Total assets |
$ |
2,603.8 |
|
$ |
2,185.7 |
|
|
|
|
| Liabilities and shareholders' equity: |
|
|
|
| Current liabilities: |
|
|
|
| Accounts payable and accrued expenses |
$ |
434.3 |
|
$ |
358.5 |
| Current portion of long-term debt and capital lease obligations |
|
7.2 |
|
|
6.9 |
| Other current liabilities |
|
33.5 |
|
|
31.3 |
| Total current liabilities |
|
475.0 |
|
|
396.7 |
|
|
|
|
| Long-term debt and capital lease obligations |
|
441.4 |
|
|
231.7 |
| Other noncurrent liabilities |
|
184.5 |
|
|
177.7 |
| Total liabilities |
|
1,100.9 |
|
|
806.1 |
|
|
|
|
| Minority interests |
|
16.7 |
|
|
14.8 |
|
|
|
|
| Total shareholders' equity: |
|
1,486.2 |
|
|
1,364.8 |
| Total liabilities and shareholders' equity |
$ |
2,603.8 |
|
$ |
2,185.7 |
|
|
|
|
|
|
|
|
| Selected Balance Sheet Data: |
|
|
|
| Working capital |
$ |
438.3 |
|
$ |
491.2 |
| Total debt |
$ |
448.6 |
|
$ |
238.6 |
Second Quarter 2008 Results
Asset impairment and other charges, net, for the second quarter ended June 27, 2008, relates principally to the flood damage at our banana farms in Brazil and the closure of underutilized distribution centers in the U.K. Asset impairment and other charges, net, for the second quarter ended June 29, 2007, includes asset impairment charges related to assets held for sale in Europe and a net benefit related to the previously announced closing of our Hawaii pineapple operations.
Net sales for the quarter were $972.2 million, compared with $924.2 million in the second quarter of 2007. The increase was driven by the strong performance in the Company’s global banana business segment, the result of higher banana selling prices in North America, the Middle East and Europe, due to industry-wide volume shortages and growing demand; continued strong demand for canned pineapple in Europe, a result of industry shortages; increased sales of Del Monte Gold® pineapple; and favorable exchange rates.
|