Fresh Del Monte Produce Inc. Reports Fourth Quarter and Full Fiscal Year 2024 Financial Results

Business Wire 24-Feb-2025 6:15 AM

Fresh and Value-Added Products for Fiscal 2024: Net Sales 5% Higher, Gross Margin 9.3% versus 6.8% in the Prior Year

Long-Term Debt Reduced by $156 Million or 39% to $244 Million at the End of Fiscal Year 2024

Company Increased Quarterly Dividend for the Third Consecutive Year

Fresh Del Monte Produce Inc. (NYSE:FDP), ("Fresh Del Monte" or the "Company") today reported financial results for the fourth quarter and the full fiscal year ended December 27, 2024.

"Our full-year 2024 results reflect the effectiveness of our strategic focus and operational improvements. This success, achieved despite facing several challenges in 2024, was primarily driven by the exceptional performance of our fresh and value-added products segment, particularly pineapples, avocados, and fresh-cut fruit, which continue to fuel our growth and deliver strong gross margins for the Company," said Mohammad Abu-Ghazaleh, Fresh Del Monte's Chairman and Chief Executive Officer. "Other notable 2024 performance highlights include a reduction in long-term debt, driven by strong cash flow, and a quarterly dividend increase for the third consecutive year. Building on this momentum and focusing on our core strengths, we remain committed to expanding key segments and delivering sustainable value for our shareholders."

Financial highlights for the fourth quarter 2024:

Net sales for the fourth quarter of 2024 were $1,013.2 million compared with $1,008.6 million in the prior-year period. The increase in net sales was driven by higher net sales in the Company's fresh and value-added products segment, primarily due to higher per unit selling prices. The increase was partially offset by a decrease in net sales in the banana segment due to lower per unit selling prices and reduced sales volume, as well as lower net sales in the Company's other products and services segment.

Gross profit for the fourth quarter of 2024 was $68.7 million compared with $62.5 million in the prior-year period. The increase in gross profit was principally driven by higher net sales in the Company's fresh and value-added products segment, partially offset by lower per unit selling prices and reduced sales volume in the banana segment, along with higher per unit production and procurement costs.

Adjusted gross profit⁽¹⁾ for the fourth quarter of 2024 was $68.9 million compared with $56.2 million in the prior-year period. Adjusted gross profit for the fourth quarter excludes $0.2 million of other product-related charges, primarily related to inventory write-offs incurred due to flood damage at the Company's melon farms in Costa Rica. In the prior-year period, Adjusted gross profit excluded other product-related charges (credits), which primarily consisted of $6.9 million of insurance recoveries related to severe flooding in the Company's Greece production facility in 2023, partially offset by inventory write-offs of $0.6 million due to rerouting of shipments as a result of the conflict in the Red Sea.

Operating income for the fourth quarter of 2024 was $30.3 million compared with an operating loss of $113.4 million in the prior-year period. The notable change in operating income is primarily attributable to a $133.8 million non-cash asset impairment charge in the prior-year period, primarily pertaining to long-lived assets in the Company's Mann Packing operations and goodwill in its prepared foods reporting unit. The one-time accounting adjustment significantly impacted the prior year's results.

Adjusted operating income⁽¹⁾ for the fourth quarter of 2024 was $17.1 million compared with $12.0 million in the prior-year period.

⁽¹⁾ Non-GAAP financial measure. Reconciliations and other information required by Regulation G can be found below under "Non-GAAP Measures."

Adjusted operating income excludes the above-mentioned $0.2 million other product-related charges, $2.9 million in asset impairment and other charges, net, primarily due to impairments related to damaged and unused housing at farms in Costa Rica and goodwill associated with the Company's vegetable reporting unit, and a gain on asset sales of $16.3 million, primarily related to the sale of a Canadian distribution center and certain assets of Fresh Leaf Farms in the Company's North America operations. In the prior-year period, Adjusted operating income excluded the above-mentioned non-cash impairment of $133.8 million, a $6.3 million other product-related credit, and a gain on an asset sale of $2.1 million related to the sale of vehicles in the Middle East.

FDP net income⁽²⁾ for the fourth quarter of 2024 was $20.4 million compared with FDP net loss of $106.4 million in the prior-year period and Adjusted FDP net income⁽¹⁾ was $12.3 million compared with $11.8 million in the prior-year period. Adjusted FDP net income for the fourth quarter of 2024, and prior-year period, excludes the above-mentioned other product-related charges, asset impairment and other charges, net, and gain on sale of assets, net of tax effect.

Financial highlights for the full fiscal year 2024:

For full fiscal year 2024, net sales were $4,280.2 million compared with $4,320.7 million in the prior-year period. The decrease in net sales was primarily due to lower sales volume and per unit selling prices in the Company's banana segment, as well as the negative impact of exchange rate fluctuations, primarily versus the Japanese yen and Korean won, compared with the prior-year period. The decrease was partially offset by higher per unit selling prices and sales volume in the Company's fresh and value-added products segment.

For full fiscal year 2024, gross profit was $357.9 million compared with $350.7 million in the prior-year period. The increase in gross profit was primarily driven by higher net sales in the Company's fresh and value-added products segment, along with lower ocean freight costs, partially offset by lower net sales in the Company's banana segment, higher production and procurement costs, and the negative impact of fluctuations in exchange rates, primarily related to the Costa Rican colon and Japanese yen.

For full fiscal year 2024, Adjusted gross profit was $358.9 million compared with $354.5 million in the prior-year period. Adjusted gross profit for full fiscal year 2024 excludes $1.0 million of other product-related charges, primarily related to $1.2 million of severance charges from the outsourcing of certain functions in the Company's fresh and value-added operations, and $1.0 million of additional logistic costs and inventory write-offs incurred as a result of Hurricane Beryl during July 2024. These were partially offset by a $1.7 million insurance recovery associated with severe flooding in the Company's Greece production facility in 2023. Adjusted gross profit in the prior-year period excluded other product-related charges of $3.8 million, primarily related to $1.5 million of inventory write-offs due to the sale of two distribution centers in Saudi Arabia, $1.4 million of inventory write-offs and clean-up costs, net of insurance recoveries, tied to the flooding in Greece, and $0.6 million of inventory write-offs due to rerouting of shipments as a result of the conflict in the Red Sea.

For the full fiscal year 2024, operating income was $196.3 million compared with $58.5 million in the prior-year period. The increase in operating income was primarily driven by lower asset impairment charges and higher gross profit, partially offset by higher selling, general and administrative expenses compared to the prior-year period.

For the full fiscal year 2024, Adjusted operating income was $158.6 million compared with $165.3 million in the prior-year period. The comparison excludes the above-mentioned other product-related charges, asset impairment charges, and gains on asset sales. The year-over-year decrease in Adjusted operating income was primarily driven by higher selling, general and administrative expenses.

For the full fiscal year 2024, FDP net income was $142.2 million compared with a net loss of $11.4 million in the prior-year period and Adjusted FDP net income was $116.2 million compared with $101.7 million in the prior-year period. Adjusted FDP net income for the full fiscal year 2024, and prior-year period, excludes the above-mentioned other product-related charges, asset impairment and other charges and gain on sale of assets, net of tax effect.

⁽²⁾ "FDP net income/loss" as referenced throughout this release is defined as Net income/loss attributable to Fresh Del Monte Produce Inc.

Fourth Quarter 2024 Business Segment Performance

Fresh and Value-Added Products

Net sales for the fourth quarter of 2024 increased $29.5 million, or 5%, to $612.3 million compared with $582.8 million in the prior-year period. The increase in net sales was primarily driven by higher per unit selling prices and sales volume in the Company's avocado product line, as well as higher per unit selling prices in its pineapple product line due to increased demand of the specialty pineapples, Honeyglow^® and Pinkglow^®. Additionally, there was higher sales volume and higher per unit selling prices in the Company's fresh-cut fruit product line. The increase was partially offset by lower net sales in its prepared food and vegetable product lines due to lower sales volume, as well as lower per unit selling prices in the Company's fresh-cut vegetable product line.

Gross profit for the fourth quarter of 2024 was $46.1 million compared with $22.0 million in the prior-year period. The increase in gross profit was primarily driven by higher net sales and lower per unit production costs in the Company's pineapple and fresh-cut product lines, partially offset by higher distribution and ocean freight costs. Gross margin increased to 7.5% compared with 3.8% in the prior-year period.

Banana

Net sales for the fourth quarter of 2024 were $356.8 million compared with $379.6 million in the prior-year period. The decrease in net sales was primarily driven by lower sales volume in North America, partially offset by higher sales volume in the Middle East.

Gross profit for the fourth quarter of 2024 was $14.0 million compared with $37.6 million in the prior-year period. The decrease in gross profit was primarily due to lower net sales and higher per unit production and procurement costs, offset by lower distribution and ocean freight costs. Gross margin decreased to 3.9% compared with 9.9% in the prior-year period.

Other Products and Services

Net sales for the fourth quarter of 2024 were $44.1 million compared with $46.2 million in the prior-year period. The decrease in net sales was primarily due to lower net sales in the Company's third-party ocean freight services business.

Gross profit for the fourth quarter of 2024 was $8.6 million compared with $2.9 million in the prior-year period. The increase in gross profit was primarily due to lower per unit production costs in the Company's poultry and meats business. Gross margin increased to 19.5% compared with 6.3% in the prior-year period.

Full Fiscal Year 2024 Business Segment Performance and Selected Financial Data (continued)

(As reported in business segment data)

Fresh and Value-Added Products

Net sales for full fiscal year 2024 were $2,606.9 million compared with $2,477.8 million in the prior-year period. The increase in net sales was primarily a result of higher per unit selling prices and sales volume in the Company's avocado and pineapple product lines due to stronger demand, as well as higher sales volume in the Company's melon product line. The increase was partially offset by lower net sales in the Company's vegetable and fresh-cut fruit product lines due to lower sales volume, and the unfavorable impact of fluctuations in exchange rates, primarily due to a weaker Japanese yen and Korean won.

Gross profit for full fiscal year 2024 was $243.3 million compared with $167.3 million in the prior-year period. The increase in gross profit was primarily driven by higher net sales and lower per unit production costs in the Company's pineapple, fresh-cut fruit and fresh-cut vegetables product lines, partially offset by the negative impact of fluctuations in exchange rates, primarily due to a stronger Costa Rican colon. Gross margin increased to 9.3% compared with 6.8% in the prior-year period.

Banana

Net sales for full fiscal year 2024 were $1,475.9 million compared with $1,638.2 million in the prior-year period. The decrease in net sales was primarily due to lower sales volume in North America, driven by competitive market pressures, lower sales volume in Asia due to decreased supply from the Philippines as a result of weather-related events, and the negative impact of exchange rate fluctuations, primarily due to a weaker Japanese yen and Korean won.

Gross profit for full fiscal year 2024 was $86.8 million compared with $163.3 million in the prior-year period. The decrease in gross profit was primarily due to lower net sales, higher per unit production and procurement costs, and the negative impact of fluctuations in exchange rates due to a stronger Costa Rican colon, partially offset by lower per unit ocean freight and distribution costs. Gross margin decreased to 5.9% compared with 10.0% in the prior-year period.

Other Products and Services

Net sales for full fiscal year 2024 were $197.4 million compared with $204.7 million in the prior-year period. The decrease in net sales was primarily due to the sale of the Company's plastics subsidiary during the prior-year period, partially offset by higher net sales in the poultry and meats business, driven by an increase in per unit selling prices.

Gross profit for full fiscal year 2024 was $27.8 million compared with $20.1 million in the prior-year period. The increase in gross profit was primarily due to higher net sales and lower per unit production costs in the Company's poultry and meats business, partially offset by lower net sales in its third-party ocean freight services business. Gross margin increased to 14.1% compared with 9.8% in the prior-year period.

Cash Flows

Net cash provided by operating activities for full fiscal year 2024 was $182.5 million, compared with $177.9 million in the prior-year period. The increase in net cash provided by operating activities was principally attributable to current year working capital fluctuations, primarily from higher levels of accounts payable and accrued expenses compared to the prior year, due to the timing of period-end payments to suppliers.

Long Term Debt

Long term debt as of the end of 2024 decreased to $244.1 million from $400.0 million as of the prior-year end.

Quarterly Cash Dividend

On February 21, 2025, the Company's Board of Directors declared an increase to the quarterly cash dividend to $0.30 per share, payable on March 28, 2025, to shareholders of record on March 10, 2025.

Non-GAAP Measures

The Company's results are determined in accordance with U.S. generally accepted accounting principles (GAAP). Certain information presented in this press release reflects adjustments to GAAP measures such as amounts related to asset impairment and other charges, net, gain on disposal of property, plant and equipment, net, and subsidiary, and other product-related charges. These adjustments result in non-GAAP financial measures and are referred to in this press release as Adjusted gross profit, Adjusted gross margin, Adjusted operating income, Adjusted FDP net income (loss), and Adjusted diluted EPS. Management believes these adjustments provide a more comparable analysis of the underlying operating performance of the business.

This press release also includes non-GAAP measures such as EBITDA, Adjusted EBITDA, EBITDA margin, and Adjusted EBITDA margin. EBITDA is defined as net income (loss) attributable to Fresh Del Monte Produce Inc. excluding interest expense, interest income, provision (benefit) for income taxes, depreciation and amortization, and share-based compensation expense. Adjusted EBITDA represents EBITDA with additional adjustments for non-recurring items, including asset impairment and other charges (credits), net, gain on disposal of property, subsidiary and other product-related charges. EBITDA margin represents EBITDA as a percentage of net sales, and Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of net sales.

Adjusted gross profit, Adjusted operating income, Adjusted FDP net income (loss), and Adjusted EBITDA provide the Company with an understanding of the results from the primary operations of its business. The Company uses these metrics because management believes they provide more comparable measures to evaluate period-over-period operating performance since they exclude special items that are not indicative of the Company's core business or operations. These measures may be useful to an investor in evaluating the underlying operating performance of the Company's business because these measures:

1. Are used by investors to measure a company's comparable operating performance;
2. Are financial measurements that are used by lenders and other parties to evaluate creditworthiness; and
3. Are used by the Company's management for various purposes, including as measures of performance of its operating entities, as a basis of strategic planning and forecasting, and in certain cases as a basis for incentive compensation.

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. Reconciliations of non-GAAP financial measures to the most directly comparable GAAP financial measures are provided in the financial tables that accompany this release.

Conference Call and Webcast Data

Fresh Del Monte will host a conference call and simultaneous webcast at 11:00 a.m. Eastern Time today to discuss the fourth quarter and full fiscal year 2024 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 https://investorrelations.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 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 Produce Inc. markets its products worldwide under the DEL MONTE® brand (under license from Del Monte Foods Corporation II Inc.), a symbol of product innovation, quality, freshness, and reliability for over 135 years. The company also markets its products under the MANN® 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. Fresh Del Monte Produce Inc. is the first global marketer of fruits and vegetables to commit to the "Science Based Targets" initiative. In 2022, 2023, and 2024 Fresh Del Monte Produce was ranked as one of "American's Most Trusted Companies" by Newsweek based on an independent survey rating companies on three different touchpoints, including customer trust, investor trust, and employee trust. The company was also named a Humankind 100 Company for two consecutive years by Humankind Investments, which recognizes companies that substantially impact areas such as access to food and clean water, healthcare, and digital services. Fresh Del Monte Produce Inc. is traded on the NYSE under the symbol FDP.

Forward-looking Information

This press release and the related earnings call contain certain forward-looking statements regarding the intent, beliefs or current expectations of the Company. These statements include statements that are preceded by, followed by or include the words "believes", "expects", "anticipates", "may" or similar expressions with respect to various matters. Specifically, this presentation and the earnings call contain forward-looking statements regarding the Company's: focus on high-margin products that align with market demands and the Company's business model; ability to solidify its position as a global leader of pineapples, including with respect to its pineapple varieties and related innovations; five-year growth strategy, as well as the Company's strategy to build its fresh-cut program into a key profit center; ability to expand and diversify global sourcing through various partnerships; expectations regarding the banana segment, as well as the Company's ability to penetrate the market; expectations regarding its ability as well as its timing to achieve compliance with FSMA 204; ongoing commitment to maximize the full utilization of its biomass, as well as the intended use and timing of such biofertilizers and the impact on the Company's sustainability efforts; the impact of any potential international business on the business, as well as the Company's ability to mitigate potential disruptions; ability to streamline operations and the impact that may have on its profitability and future growth; ability to generate value for shareholders; expectations regarding the Mann Packing business, and any impact on its profitability and financial condition; ongoing commitment to future growth, operational excellence and meeting evolving customer and consumer demands; future weather-related events on the Company's business, and its ability to recover insurance proceeds, if any, to cover any damage or expenses; expectations for the tax rate; expected SG&A expenses, debt management, capital expenditures and cash flow in 2025 and expected segment results for the first six months of 2025. It is important to note that these forward-looking statements are not guarantees of future performance and involve risks and uncertainties. The Company's actual plans and performance may differ materially from those in the forward-looking statements as a result of various factors, including (i) ongoing elevated commodity and supply chain costs, (ii) the cost and other implications of changes in regulations applicable to the Company's business, including potential domestic and international legislative or regulatory initiatives; (iii) ability to successfully execute on its strategic growth plans, including the use of biofertilizers and other technology, (iv) the impact of foreign currency fluctuations, (v) the impact of asset impairment or other charges, including those associated with exit activities, crop or facility damage or otherwise, (vi) the impact of any disruptions in the Company's supply chain, (vii) trends and other factors affecting consumer preferences, including customers' reception of new product offerings and innovation, (viii) the impact of severe weather conditions and natural disasters, such as flooding, hurricanes, earthquakes, (ix) competitive pressures and ability to realize the full benefits of the inflation driven price increases implemented, (x) the impact of claims and adjustments proposed by the IRS or other foreign taxing authorities in connection with any tax audits and the Company's ability to successfully contest such tax claims and pursue necessary remedies, (xi) damage to the Company's reputation or brand names or negative publicity about the Company's products, (xii) the Company's ability to successfully manage the risks associated with international operations and (xiii) the adequacy of insurance coverage. In addition, these forward-looking statements and the information in this presentation and the earnings call are qualified in their entirety by cautionary statements and risk factor disclosures contained in the Company's Securities and Exchange Commission filings, including the Company's most recently filed Annual Report on Form 10-K. All forward-looking statements in this presentation are based on information available to us on the date hereof, and we assume no obligation to update such statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250224960898/en/

Investors: Christine Cannella Vice President, Investor Relations 305-520-8433 Investors@freshdelmonte.com

Media: Claudia Pou Vice President, Global Head of Corporate Communications Communications@freshdelmonte.com