Fresh Del Monte Produce Inc. Files 10-Q for Period Ending March 29, 2024

TL;DR

<b>Fresh Del Monte Produce Inc. filed its Q1 2024 10-Q, detailing financial positions as of March 29, 2024.</b>

AI Summary

FRESH DEL MONTE PRODUCE INC (FDP) filed a Quarterly Report (10-Q) with the SEC on May 3, 2024. The filing is a 10-Q report for Fresh Del Monte Produce Inc. for the period ending March 29, 2024. The company's fiscal year ends on December 27. The filing includes data for the periods ending March 29, 2024, December 29, 2023, and March 31, 2023. Key financial statement components like Common Stock, Additional Paid-In Capital, Retained Earnings, and Accumulated Other Comprehensive Income are detailed. The report also specifies Parent and Noncontrolling Interest figures.

Why It Matters

For investors and stakeholders tracking FRESH DEL MONTE PRODUCE INC, this filing contains several important signals. This 10-Q provides a snapshot of Fresh Del Monte's financial health and equity structure at the end of the first quarter of 2024, crucial for investors assessing performance and stability. The detailed breakdown of equity components and interests allows stakeholders to understand the company's capital structure and ownership dynamics.

Risk Assessment

Risk Level: low — FRESH DEL MONTE PRODUCE INC shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain significant new financial data or strategic shifts that would indicate elevated risk.

Analyst Insight

Monitor future 10-Q filings for revenue and net income trends to assess the company's ongoing operational performance.

Key Numbers

• 2024-03-29 — Period End Date (Quarterly report period)
• 2023-12-29 — Previous Period End Date (Prior quarter end)
• 2023-03-31 — Prior Year Quarter End Date (Year-over-year comparison period)

Key Players & Entities

• FRESH DEL MONTE PRODUCE INC (company) — Filer name
• 0001047340-24-000127 (other) — Accession Number
• 2024-03-29 (date) — Period of Report
• 2024-05-03 (date) — Filing Date
• 3055208400 (other) — Business Phone

FAQ

Industry Context

Fresh Del Monte Produce Inc. operates in the agriculture production - crops sector, focusing on fresh fruits and vegetables.

Regulatory Implications

The filing is a standard 10-Q, adhering to SEC regulations for quarterly financial reporting under the Securities Exchange Act of 1934.

What Investors Should Do

1. Review the full 10-Q filing for detailed financial statements and management discussion.
2. Compare the equity balances with previous periods to identify significant changes.
3. Note the company's fiscal year-end date (December 27) for future reporting context.

Key Dates

• 2024-03-29: Quarter End — End of the reporting period for the 10-Q filing.
• 2024-05-03: Filing Date — Date the 10-Q was officially filed with the SEC.

Year-Over-Year Comparison

This filing represents the quarterly report for the period ending March 29, 2024, following previous filings that would have covered earlier periods.

Key Financial Figures

• $0.01 — e on which registered Ordinary Shares, $0.01 Par Value Per Share FDP New York Stock

Filing Documents

• fdp-20240329.htm (10-Q) — 1201KB
• fdp-ex31103x29x2024.htm (EX-31.1) — 12KB
• fdp-ex31203x29x2024.htm (EX-31.2) — 12KB
• fdp-ex3203x29x2024.htm (EX-32) — 10KB
• fdp-20240329_g1.jpg (GRAPHIC) — 83KB
• 0001047340-24-000127.txt (&nbsp;) — 7615KB
• fdp-20240329.xsd (EX-101.SCH) — 50KB
• fdp-20240329_cal.xml (EX-101.CAL) — 65KB
• fdp-20240329_def.xml (EX-101.DEF) — 259KB
• fdp-20240329_lab.xml (EX-101.LAB) — 648KB
• fdp-20240329_pre.xml (EX-101.PRE) — 464KB
• fdp-20240329_htm.xml (XML) — 1143KB

: FINANCIAL INFORMATION

PART I: FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Consolidated Balance Sheets (unaudited) as of March 29, 2 02 4 and December 29 , 202 3 . 1 Consolidated Statements of Operations (unaudited) for the quarters ended March 29 , 202 4 and March 3 1 , 202 3 . 2 Consolidated Statements of Comprehensive Income (unaudited) for the quarters ended March 29 , 202 4 and March 3 1 , 202 3 . 3 Consolidated Statements of Cash Flows (unaudited) for the quarters ended March 29 , 202 4 and March 3 1 , 202 3 . 4 Consolidated Statements of Shareholders' Equity and Redeemable Noncontrolling Interest (unaudited) for the quarters ended March 29 , 202 4 and March 3 1 , 202 3 . 5

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 6

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 23

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 33

Controls and Procedures

Item 4. Controls and Procedures 33

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 34

A . Risk Factors

Item 1 A . Risk Factors 34

Other Information

Item 5. Other Information 35

Exhibits

Item 6. Exhibits 36

Signatures

Signatures 37 Table of Contents

: FINANCIAL INFORMATION

PART I: FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements FRESH DEL MONTE PRODUCE INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) (U.S. dollars in millions, except share and per share data) March 29, 2024 December 29, 2023 Assets Current assets: Cash and cash equivalents $ 42.2 $ 33.8 Trade accounts receivable, net of allowance of $ 23.2 and $ 20.8 , respectively 435.0 387.0 Other accounts receivable, net of allowance of $ 5.8 and $ 5.6 , respectively 94.2 95.1 Inventories, net 575.1 599.9 Assets held for sale 11.7 4.5 Prepaid expenses and other current assets 22.3 24.0 Total current assets 1,180.5 1,144.3 Investments in and advances to unconsolidated companies 26.2 22.2 Property, plant and equipment, net 1,234.8 1,256.4 Operating lease right-of-use assets 201.3 213.8 Goodwill 401.8 401.9 Intangible assets, net 33.2 33.3 Deferred income taxes 53.5 51.5 Other noncurrent assets 68.7 60.7 Total assets $ 3,200.0 $ 3,184.1 Liabilities and shareholders' equity Current liabilities: Accounts payable and accrued expenses $ 484.7 $ 479.0 Current maturities of debt and finance leases 1.4 1.4 Current maturities of operating leases 44.9 48.6 Income taxes and other taxes payable 15.2 11.6 Total current liabilities 546.2 540.6 Long-term debt and finance leases 405.8 406.1 Retirement benefits 83.8 82.3 Deferred income taxes 76.2 72.7 Operating leases, less current maturities 133.9 142.1 Other noncurrent liabilities 26.0 27.6 Total liabilities 1,271.9 1,271.4 Commitments and contingencies (See note 9) Redeemable noncontrolling interest — — Shareholders' equity: Preferred shares, $ 0.01 par value; 50,000,000 shares authorized; none issued or outstanding — — Ordinary shares, $ 0.01 par value; 200,000,000 shares authorized; 47,896,132 and 47,629,018 issued and outstanding, respectively 0.5 0.5 Paid-in capital 598.7 597.7 Retained earnings 1,355.2 1,341.4 Accumulated other comprehensive loss ( 42.7 ) ( 43.3 ) Total Fresh Del Monte Produce Inc. shar

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. General Reference in this Report to "Fresh Del Monte", "we", "our" and "us" and the "Company" refer to Fresh Del Monte Produce Inc. and its subsidiaries, unless the context indicates otherwise. Nature of Business We were incorporated under the laws of the Cayman Islands in 1996. We are 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 marketer of prepared fruit and vegetables, juices, beverages and snacks in Europe, Africa and the Middle East. We market our products worldwide under the Del Monte brand, a symbol of product innovation, quality, freshness and reliability since 1892. Our major sales markets are organized as follows: North America, Europe, the Middle East (which includes North Africa) and Asia. Our global sourcing and logistics system allows us to provide regular delivery of consistently high-quality produce and value-added services to our customers. Our major production operations are located in North, Central and South America, Asia and Africa. Our products are sourced from company-owned operations and through supply contracts with independent growers. Our business is comprised of three reportable segments, two of which represent our primary businesses of fresh and value-added products and banana, and one that represents our other ancillary businesses. Fresh and value-added products - includes pineapples, fresh-cut fruit, fresh-cut vegetables (which includes fresh-cut salads), melons, vegetables, non-tropical fruit (including grapes, apples, citrus, blueberries, strawberries, pears, peaches, plums, nectarines, cherries and kiwis), other fruit and vegetables, avocados, and prepared foods (including prepared fruit and vegetables, juices, other beverages, and meals and snacks). Banana Other products and services - includes our third-party freight and logis

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) Redeemable Noncontrolling Interest As part of the Mann Packing acquisition in 2018, we acquired a put option exercisable by the 25 % shareholder of one of the acquired subsidiaries. The put option allowed the noncontrolling shareholder to sell its 25 % noncontrolling interest to us for a multiple of the subsidiary's adjusted earnings. As the put option was outside of our control, the carrying value of the 25 % noncontrolling interest was presented as a redeemable noncontrolling interest outside of permanent equity on our Consolidated Balance Sheet. At each reporting period, the redeemable noncontrolling interest was recognized at the higher of (1) the initial carrying amount adjusted for accumulated earnings and distributions or (2) the contractually-defined redemption value as of the balance sheet date. During the year ended December 29, 2023, the noncontrolling shareholder exercised its put option right and accordingly, we closed the purchase of the remaining 25 % of this subsidiary for $ 5.2 million in cash consideration. The transaction was accounted for as an equity transaction, with the differential between the redeemable noncontrolling interest carrying amount at the time of closing and the cash purchase price being recognized as a $ 42.7 million increase in paid-in capital within shareholders' equity on our Consolidated Balance Sheet. 2. Recently Issued Accounting Pronouncements New Accounting Pronouncements In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . This ASU amends Accounting Standards Codification (ASC) 280 to enhance the nature and frequency of segment disclosures. Specifically, the update requires disclosure of significant segment expenses regularly provided to the Chief Operating Decision Maker ("CODM") included within the reported measures of a segment's profit or loss, the amount and composi

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) 3. Asset Impairment and Other Charges, Net The following represents a summary of asset impairment and other charges, net recorded during the quarters ended March 29, 2024 and March 31, 2023 (U.S. dollars in millions): Quarter ended Quarter ended March 29, 2024 March 31, 2023 Long-lived and other asset impairment Exit activity and other charges Total Long-lived and other asset impairment Exit activity and other charges Total Banana segment: California Air Resource Board reserve (1) $ — $ 0.5 $ 0.5 $ — $ — $ — Other: Legal settlement (2) — 1.8 1.8 — — — 2023 cybersecurity incident expenses (3) — — — — 2.4 2.4 Total asset impairment and other charges, net $ — $ 2.3 $ 2.3 $ — $ 2.4 $ 2.4 (1) During the three months ended March 29, 2024, we recorded a $ 0.5 million reserve relating to a potential liability arising from our third-party logistics operation. Refer to Note 9, " Commitments and Contingencies. " (2) Subsequent to March 29, 2024, we entered into a settlement agreement with respect to a litigation matter by a former employee. This matter was in the discovery phase until the first quarter of 2024, when the court set the expected trial date and the parties began to discuss settlement. Accordingly, we accrued $ 1.8 million, net of insurance reimbursements, associated with the settlement as of March 29, 2024. (3) During the three months ended March 31, 2023, we incurred cybersecurity expenses of $ 2.4 million, primarily related to the engagement of specialized legal counsel and other incident response advisors. 4. Income Taxes In connection with the examination of the tax returns in two foreign jurisdictions, the taxing authorities have issued income tax deficiencies related to transfer pricing aggregating approximately $ 174.1 million (including interest and penalties) for tax years 2012 through 2016. We strongly disagree with the proposed adjustments and have filed a

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) We will continue to vigorously contest the adjustments and intend to exhaust all administrative and judicial remedies necessary in both jurisdictions to resolve the matters, which could be a lengthy process. Additionally, the European Union (EU) Member States formally adopted the EU's Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development (OECD) Pillar Two Framework. Pursuant to the implementation dates prescribed in the Directive, it is expected the rules will be effective for the Company for the 2025 fiscal year. A significant number of other countries are expected to also implement similar legislation with varying effective dates in the future. We are continuing to evaluate the potential impact on future periods of the Pillar Two Framework, pending legislative adoption by additional individual countries, however, we may not be able to completely mitigate the impact of the legislation which could have an adverse material effect on our financial condition, results of operations and cash flows. Income tax provision was $ 5.3 million for the quarter ended March 29, 2024 compared with $ 9.5 million for the quarter ended March 31, 2023. The decrease in the income tax provision was primarily due to decreased earnings in certain higher tax jurisdictions. 5. Allowance for Credit Losses We estimate expected credit losses on our trade receivables and financing receivables in accordance with Accounting Standards Codification ("ASC") 326 - Financial Instruments - Credit Losses . Trade Receivables Trade receivables as of March 29, 2024 were $ 435.0 million, net of an allowance of $ 23.2 million. Our allowance for trade receivables consists of two components: a $ 8.0 million allowance for credit losses and a $ 15.2 million allowance for customer claims accounted for under the scope of ASC 6

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) Financing Receivables Financing receivables are included in other accounts receivable, net on our Consolidated Balance Sheets and are recognized at amortized cost less an allowance for estimated credit losses. Financing receivables include seasonal advances to growers and suppliers, which are usually short-term in nature, and other financing receivables. A significant portion of the fresh produce we sell is acquired through supply contracts with independent growers. In order to ensure the consistent high quality of our products and packaging, we make advances to independent growers and suppliers. These growers and suppliers typically sell all of their production to us and make payments on their advances as a deduction to the agreed upon selling price of the fruit or packaging material. The majority of the advances to growers and suppliers are for terms less than one year and typically span a growing season. In certain cases, there may be longer term advances with terms of up to five years . We measure the allowance for credit losses on advances to suppliers and growers on a collective (pool) basis when similar risk characteristics exist. We generally pool our advances based on the country to which they relate, and further disaggregate them based on their current or past-due status. We generally consider an advance to a grower to be past due when the advance is not fully paid within the respective growing season. The allowance for advances to growers and suppliers that do not share similar risk characteristics are determined on a case-by-case basis, depending on the expected production for the season and other contributing factors. The advances are typically collateralized by property liens and pled

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