Fresh Del Monte Files 10-Q

TL;DR

**FDEL 10-Q FILED: Quarterly financials out, check for performance updates.**

AI Summary

Fresh Del Monte Produce Inc. filed its 10-Q for the period ending September 27, 2024. The company reported financial results and provided updates on its business operations. Specific financial figures and operational details are available within the full filing.

Why It Matters

This filing provides investors with a quarterly update on Fresh Del Monte's financial health and operational performance, crucial for investment decisions.

Risk Assessment

Risk Level: medium — As a publicly traded company, Fresh Del Monte Produce Inc. is subject to market fluctuations and industry-specific risks that can impact its financial performance.

Key Numbers

• 2024-09-27 — Reporting Period End (This date marks the end of the fiscal quarter covered by the 10-Q filing.)
• 2024-10-31 — Filing Date (This is the date the 10-Q report was officially submitted to the SEC.)

Key Players & Entities

• FRESH DEL MONTE PRODUCE INC (company) — Filer
• 2024-09-27 (date) — Reporting period end date
• 2024-10-31 (date) — Filing date
• 3055208400 (dollar_amount) — Business phone number

FAQ

Key Financial Figures

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

Filing Documents

• fdp-20240927.htm (10-Q) — 1697KB
• fdp-ex31109x27x2024.htm (EX-31.1) — 12KB
• fdp-ex31209x27x2024.htm (EX-31.2) — 12KB
• fdp-ex3209x27x2024.htm (EX-32) — 10KB
• fdp-20240927_g1.jpg (GRAPHIC) — 83KB
• 0001047340-24-000261.txt ( ) — 9139KB
• fdp-20240927.xsd (EX-101.SCH) — 51KB
• fdp-20240927_cal.xml (EX-101.CAL) — 69KB
• fdp-20240927_def.xml (EX-101.DEF) — 272KB
• fdp-20240927_lab.xml (EX-101.LAB) — 677KB
• fdp-20240927_pre.xml (EX-101.PRE) — 490KB
• fdp-20240927_htm.xml (XML) — 1562KB

: FINANCIAL INFORMATION

PART I: FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Consolidated Balance Sheets (unaudited) as of September 27 , 2 024 and December 29, 2023. 1 Consolidated Statements of Operations (unaudited) for the quarters and nin e months ended September 27, 2 024 and September 2 9 , 2 02 3. 2 Consolidated Statements of Comprehensive Income (unaudited) for the quarters and nine months ended September 27, 2 024 and September 2 9 , 2 02 3 . 3 Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 27, 2 024 and September 2 9 , 2 02 3 . 4 Consolidated Statements of Shareholders' Equity and Redeemable Noncontrolling Interest (unaudited) for the quarters and nine months ended September 27, 2 024 and September 2 9 , 2 02 3 . 5

Notes to Consolidated Financial Statements (unaudited)

Notes to Consolidated Financial Statements (unaudited) 7

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 26

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 39

Controls and Procedures

Item 4. Controls and Procedures 39

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 40

Other Information

Item 5. Other Information 40

Exhibits

Item 6. Exhibits 41

Signatures

Signatures 42 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) September 27, 2024 December 29, 2023 Assets Current assets: Cash and cash equivalents $ 50.8 $ 33.8 Trade accounts receivable, net of allowance of $ 29.4 and $ 20.8 , respectively 390.3 387.0 Other accounts receivable, net of allowance of $ 7.5 and $ 5.6 , respectively 82.0 95.1 Inventories, net 588.7 599.9 Assets held for sale 25.6 4.5 Prepaid expenses and other current assets 28.9 24.0 Total current assets 1,166.3 1,144.3 Investments in and advances to unconsolidated companies 36.2 22.2 Property, plant and equipment, net 1,203.2 1,256.4 Operating lease right-of-use assets 194.7 213.8 Goodwill 402.2 401.9 Intangible assets, net 33.2 33.3 Deferred income taxes 52.6 51.5 Other noncurrent assets 68.5 60.7 Total assets $ 3,156.9 $ 3,184.1 Liabilities and shareholders' equity Current liabilities: Accounts payable and accrued expenses $ 489.6 $ 479.0 Current maturities of debt and finance leases 1.5 1.4 Current maturities of operating leases 38.8 48.6 Income taxes and other taxes payable 27.0 11.6 Total current liabilities 556.9 540.6 Long-term debt and finance leases 274.8 406.1 Retirement benefits 83.5 82.3 Deferred income taxes 77.3 72.7 Operating leases, less current maturities 130.5 142.1 Other noncurrent liabilities 26.3 27.6 Total liabilities 1,149.3 1,271.4 Commitments and contingencies (See note 9) Redeemable noncontrolling interests — — 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; 47,939,120 and 47,629,018 issued and outstanding, respectively 0.5 0.5 Paid-in capital 602.9 597.7 Retained earnings 1,427.0 1,341.4 Accumulated other comprehensive loss ( 39.2 ) ( 43.3 ) Total Fresh Del Monte Produce Inc.

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 (credits) charges, net recorded during the quarters and nine months ended September 27, 2024 and September 29, 2023 (U.S. dollars in millions): Quarter ended Nine months ended September 27, 2024 September 27, 2024 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 Philippines impairment of banana-related fixed assets — — — 1.2 — 1.2 Fresh and value-added products segment: Insurance recovery related to South American warehouse — — — — ( 2.0 ) ( 2.0 ) Reduction in repair reserves related to 2023 flooding in Greece (2) — — — ( 0.5 ) — ( 0.5 ) Chile property and equipment damage due to rain and windstorms 0.2 0.2 — 0.2 0.2 Other: Legal settlement (3) — — — — 1.8 1.8 Total asset impairment and other charges, net $ — $ 0.2 $ 0.2 $ 0.7 $ 0.5 $ 1.2 Quarter ended Nine months ended September 29, 2023 September 29, 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: Impairment of low-yielding banana farms in the Philippines $ 3.7 $ — $ 3.7 $ 3.7 $ — $ 3.7 Fresh and value-added products segment: Impairment and write-off of property and equipment due to flooding in Greece (4) 0.9 — 0.9 0.9 — 0.9 Impairment of low productivity grape vines in South America and related costs — — — 1.7 0.1 1.8 Other: 2023 cybersecurity incident expenses (5) — ( 2.8 ) ( 2.8 ) — 1.3 1.3 Impairment of assets related to idle land in Central and South America 0.7 — 0.7 1.8 — 1.8 Total asset impairment and other charges, net $ 5.3 $ ( 2.8 ) $ 2.5 $ 8.1 $ 1.4 $ 9.5 (1) During the nine months

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued) (Unaudited) (3) During the nine months ended September 27, 2024, we entered into a settlement agreement with respect to a litigation matter by a former employee regarding a legacy claim stemming from the 1970s. Accordingly, we incurred charges of $ 1.8 million, net of insurance reimbursements, associated with the settlement as of September 27, 2024. Refer to Note 9, " Commitments and Contingencies. " (4) During the nine months ended September 29, 2023, we incurred costs related to property and equipment damage of $ 0.9 million, primarily related to severe flooding caused by heavy rainstorms in Greece. (5) During the nine months ended September 29, 2023, we incurred cybersecurity expenses of $ 1.3 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 $ 173.9 million (including interest and penalties) for tax years 2012 through 2016. We strongly disagree with the proposed adjustments and have filed a protest with each of the taxing authorities. In one of the foreign jurisdictions, we are currently contesting tax assessments related to the 2012-2015 audit years and the 2016 audit year in both the administrative court and the judicial court. During 2019 and 2020, we filed actions contesting the tax assessment in the administrative office. Our initial challenge to each of these tax assessments was rejected, and we subsequently lost our appeals at the administrative court. We have subsequently filed actions to contest each of these tax assessments in the country's judicial courts. In addition, we have filed a request for injunction to the judicial court to stay the tax authorities' collection efforts for these two tax assessments, pending f

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