Fresh Del Monte results for 4th quarter - BusinessWire

Fresh Del Monte results for 4th quarter - BusinessWire

CORAL GABLES, Fla., Mar 02, 2010 (BUSINESS WIRE) -- Fresh Del Monte Produce Inc. /quotes/comstock/13*!fdp/quotes/nls/fdp (FDP 19.58, -1.57, -7.42%) today reported financial results for the fourth quarter and year ended January 1, 2010. Excluding asset impairment and other charges, net, the Company reported earnings per diluted share of $0.36 for the fourth quarter of 2009, compared with earnings per diluted share of $0.41 in the fourth quarter of 2008. Excluding asset impairment and other charges, net, earnings per diluted share for the full year were $2.63, compared with earnings per diluted share of $2.82 for the full year of 2008.

"We delivered a solid fourth quarter, particularly in the face of a prolonged economic slowdown which affected profitability in our Europe and Asia banana businesses," said Mohammad Abu-Ghazaleh, Chairman and Chief Executive Officer at Fresh Del Monte Produce. "Our performance was driven by strong sales in our gold pineapple and fresh-cut product lines. Moving forward, our primary objectives for 2010 are to continue expanding our core product lines, controlling costs, and maintaining our commitment to increase shareholder value over the long-term."

Net sales for the quarter were $872.1 million, compared with $831.0 million in the fourth quarter of 2008. The increase in net sales was primarily driven by improved performance in the Company's gold pineapple and fresh-cut product lines, along with higher net sales for the Company's banana business segment. Net sales were negatively impacted by lower sales of the Company's other products and services and prepared food business segments. The Company also benefited from a 14-week fourth quarter in 2009, compared with a 13-week fourth quarter in 2008.

Gross profit for the quarter was $65.1 million, compared with gross profit of $69.4 million in the fourth quarter of 2008, excluding other charges, net, for both periods. The decrease in gross profit was due to significantly lower profitability in the Company's banana business segment in Europe and Asia.

Operating income for the quarter was $28.9 million, compared with $30.2 million in the prior year, excluding asset impairment and other charges, net, for both periods. The decline was principally due to the decrease in gross profit.

Net income for the quarter was $22.8 million, compared with $26.2 million in the fourth quarter of 2008, excluding asset impairment and other charges, net. The decrease in net income was primarily attributable to lower gross profit, higher selling, general and administrative expenses, partially offset by lower interest expense.



Fourth Quarter 2009 Business Segment Performance

(As reported in business segment data)

Bananas

Net sales increased 5% to $385.5 million during the quarter, compared to the prior year. The increase was primarily driven by higher sales in the Company's Europe, Middle East and North America regions. Volume was up 7%. Worldwide pricing decreased $0.15 or 1% to $12.98 per unit. The slight decrease in worldwide banana selling prices was principally due to considerably lower banana selling prices in Asia. Gross profit decreased by $18.6 million to $3.7 million. Banana gross profit included a $2.1 million insurance reimbursement for flood damage at the Company's farms in Brazil. Unit costs increased 4%.

Other Fresh Produce

Net sales for the quarter increased 10% to $375.4 million, primarily attributable to higher volume and selling prices in the Company's gold pineapple and fresh-cut product lines. Gross profit increased $18.2 million to $49.9 million, primarily due to lower unit costs and higher selling prices.

-- Gold pineapple -- Net sales increased 19% to $137.6 million. Volume increased 18%. Pricing increased 1%. Unit cost decreased 7%, primarily due to higher volume.

-- Melon -- Net sales increased 15% to $69.5 million, principally the result of a 23% increase in volume. Pricing decreased 7%, due to higher industry supply in the marketplace. Unit cost was in line with the prior year period.

-- Fresh-cut -- Net sales increased 15% to $76.5 million. The growth in net sales in the quarter was primarily due to further expansion of our fresh-cut fruit product line in retail grocery stores, club stores and convenience stores. Volume was 8% higher. Pricing increased 7%. Unit cost decreased 6%, mainly due to lower fruit cost and ongoing operational efficiencies and improvements.

-- Non-tropical -- Net sales decreased 6% to $35.4 million. Volume decreased 2%. Pricing was 5% lower. Unit cost decreased 10%.

-- Tomato -- Net sales decreased 2% to $29.4 million. Volume was 1% lower. Pricing decreased 2%. Unit cost increased 2%.

Prepared Food

Net sales decreased 5% to $89.3 million for the fourth quarter, primarily the result of lower sales of the Company's canned pineapple and beverage product lines, partially offset by higher sales in the Company's Middle East poultry and processed meat businesses and favorable exchange rates. Gross profit for the quarter was $10.3 million, compared with $13.2 million in the fourth quarter of 2008.

Other Products and Services

Net sales decreased 26% to $21.9 million for the quarter, due to lower net sales in the Company's third-party freight and Argentine grain businesses. Gross profit was $3.1 million, compared with $1.3 million in the prior year period.

Income Taxes

Income tax expense recorded in the fourth quarter was $1.0 million. Tax expense included a tax benefit of $5.3 million related to the reduction of valuation allowances.

Cash Flows for the Full-Year

Net cash provided by operating activities for the full-year of 2009 was $256.1 million, compared with $205.0 million for 2008. The increase was primarily due to lower accounts receivable and inventory balances, offset by lower net income, and higher payments for accounts payable and accrued expenses.

Total Debt

Total debt decreased from $512.8 million at the end of 2008 to $325.2 million at the end of 2009, a $187.6 million decrease.

Conference Call and Web Cast Data

Fresh Del Monte will host a conference call and simultaneous web cast at 10:00 a.m. Eastern Time today to discuss the fourth quarter and Full-Year 2009 financial results and to review the Company's progress and outlook. The Web cast 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 Web site approximately two hours after the conclusion of the call.

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(R) brand, a symbol of product innovation, quality, freshness and reliability for more than 100 years.

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. These forward-looking statements are based on information currently available to the Company and the Company assumes no obligation to update these statements. It is important to note that these forward-looking statements are not guarantees of future performance and involve risks and uncertainties. In this press release, these statements appear in a number of places and include statements regarding the intent, belief or current expectations of the Company or its officers (including statements preceded by, followed by or that include the words "believes," "expects," "anticipates" or similar expressions). The Company's plans and performance may differ materially from those in the forward-looking statements as a result of various factors, including (i) the uncertain global economic environment and the timing and strength of a recovery in the markets we serve, and the extent to which adverse economic conditions continue to affect the Company's sales, volume and results, including its ability to command premium prices for certain of the Company's principal products, or increase competitive pressures within the industry, (ii) the impact of governmental initiatives in the United States and abroad to spur economic activity, including the effects of significant government monetary or other market interventions on inflation, price controls and foreign exchange rates, (iii) the Company's anticipated cash needs in light of its liquidity, (iv) the continued ability of the Company's distributors and suppliers to have access to sufficient liquidity to fund their operations, (v) trends and other factors affecting the Company's financial condition or results of operations from period to period, including changes in product mix or consumer demand for branded products such as the Company's, particularly as consumers remain price-conscious in the current economic environment, as well as anticipated price and expense levels, the impact of weather on crop quality and yields, the impact of prices for petroleum based products and packaging materials and the availability of sufficient labor during peak growing and harvesting seasons, (vi) the impact of pricing and other actions by our competitors, particularly during periods of low consumer confidence and spending levels, (vii) the impact of foreign currency fluctuations, (viii) the Company's plans for expansion of its business (including through acquisitions) and cost savings, (ix) the Company's ability to successfully integrate acquisitions into its operations, (x) the timing and cost of resolution of pending legal and environmental proceedings, (xi) the impact of changes in tax accounting or tax laws (or interpretations thereof), and the impact of settlements of adjustments proposed by the Internal Revenue Service or other taxing authorities in connection with the Company's tax audits, and (xii) the cost and other implications of changes in regulations applicable to our business, including potential legislative or regulatory initiatives in the Unites States or elsewhere directed at mitigating the effects of climate change. 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 Annual Report on Form 10-K/A for the year ended December 26, 2008 along with other reports that the Company has on file with the Securities and Exchange Commission.

SOURCE: Fresh Del Monte Produce Inc.