CORAL GABLES, Fla.–(BUSINESS WIRE)–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 31, 2021.

Financial highlights for the fourth quarter and full fiscal year 2021:

  • Net sales for the fourth quarter of 2021 increased 2% to $1,017.3 million compared with $1,002.3 million in the prior-year period; net sales for the full fiscal year 2021 increased 1% to $4,252.0 million compared with $4,202.3 million in the prior-year period. The company’s full fiscal year cycles were impacted by comparability. The 2021 fiscal year consisted of 52-weeks compared with 53-weeks in 2020. The additional week in the prior-year period contributed an estimated $72.0 million in net sales. On a comparable basis, net sales for 2021 increased $122.0 million, or 3%.
  • Gross profit for the fourth quarter of 2021 increased 9% to $39.8 million compared with $36.4 million in the prior-year period; gross profit for the full fiscal year 2021 increased 21% to $303.8 million compared with $250.9 million in the prior-year period.
  • FDP net loss(1) for the fourth quarter of 2021 was $(11.2) million compared with FDP net income(1) of$0.9 million in the prior-year period; corresponding diluted EPS(2) was $(0.24) compared with $0.02 in the prior-year period. FDP net income(1) for the full fiscal year 2021 was $80.0 million compared with $49.2 million in the prior-year period; corresponding Diluted EPS(2) was $1.68 compared with $1.03 in the prior-year period, a 63% improvement year-over-year.
  • Adjusted EBITDA(3) for the fourth quarter was $14.8 million compared with $23.9 million in the prior-year period, and corresponding Adjusted EBITDA margin(3) decreased to 1.5% from 2.4% in the prior-year period. For the full fiscal year, Adjusted EBITDA was $206.8 million compared with $189.4 million in the prior-year period, and corresponding Adjusted EBITDA margin(3) increased to 4.9% from 4.5% in the prior-year period.
  • The Company’s Board of Directors declared a quarterly cash dividend of $0.15 per share, payable on April 1, 2022, to shareholders of record on March 9, 2022. For full fiscal year 2021, the Company declared four quarterly cash dividends totaling $0.50 per share.

“In 2021 we posted robust double-digit operating income growth compared with 2020. We demonstrated agility and industry leadership in navigating the current challenging macroeconomic environment as we focused on mitigating industry-wide supply and labor headwinds. We implemented inflation-justified price increases toward the end of the year, made investments targeted at automation, and focused relentlessly on productivity,” said Mohammad Abu-Ghazaleh, Chairman and Chief Executive Officer.

“As we move forward, I am confident in our team’s ability to execute our long-term strategy of growing our core business, increasing the reach of higher-margin value-added categories, implementing and leveraging technology solutions as we evolve into an Agritech company, and expanding our customer and brand partnerships throughout our global operations.”

Net sales for the fourth quarter of 2021 increased $15.0 million, or 2%, compared with the prior-year period. For the full fiscal year, net sales increased $49.7 million, or 1%, compared with the prior-year period. In both periods, the increase in net sales was driven by our other products and services segment, which includes third-party freight services and poultry and meats category, and fresh and value-added products segment. Additionally, our fiscal year cycles were impacted by comparability, as the 2021 fiscal year consisted of 52-weeks compared with 53-weeks in 2020. The additional week in the prior-year period contributed an estimated $72.0 million in net sales. On a comparable basis, net sales for 2021 increased $122.0 million, or 3%.

Gross profit for the fourth quarter of 2021 was $39.8 million compared with $36.4 million in the prior-year period. The increase was primarily driven by $12.7 million of other product-related charges in the fourth quarter of 2020 mainly comprised of inventory write-downs, net of insurance recoveries, resulting from damage caused by hurricanes in Central America and write-downs due to supply and demand disruptions caused by the COVID-19 pandemic. Additionally, an inflation-justified price increase, effective towards the latter part of the fourth quarter of 2021, and fluctuations in exchange rates also contributed to the increase. The increase was partially offset by the continuation of inflationary and other cost pressures, which resulted in higher per unit production and distribution costs, including packaging materials, fertilizers, inland freight, labor and fuel. Adjusted gross profit(3) for the fourth quarter of 2021 was $39.8 million compared with $49.1 million in the prior-year period. Adjusted gross profit excludes the above-mentioned $12.7 million of other product-related charges in the prior-year period.

For the full fiscal year, gross profit was $303.8 million compared with $250.9 million in the prior-year period. In the first half of 2021, despite inflationary and other cost pressures, gross profit benefited from strong performance across all our segments. The increase was driven by improved demand on key product categories related to relaxed restrictions on social gatherings in some of our main markets while the banana segment realized higher per unit selling prices compared with the first half of 2020. The higher banana pricing helped offset incremental production and procurement costs following the hurricanes in Central America in the fourth quarter of 2020. Throughout the year, gross profit was also positively impacted by fluctuations in exchange rates and by $33.6 million of other product-related charges in the prior-year period mainly comprised of inventory write-downs, net of insurance recoveries, resulting from damage caused by hurricanes in Central America and write-downs due to supply and demand disruptions caused by the COVID-19 pandemic. The increase was partially offset by inflationary and other cost pressures, which intensified in the second half of 2021, negatively impacting gross profit. For the full fiscal year Adjusted gross profit was $307.3 million compared with $284.0 million in the prior-year period. Adjusted gross profit excludes the above-mentioned $33.6 million of other product-related charges in the prior-year period and $3.5 million of other product-related charges in full fiscal year 2021 mainly related to severe rainstorms in Chile.

Operating loss for the fourth quarter of 2021 was $(9.2) million compared with $(0.9) million in the prior-year period. The increase in operating loss was primarily driven by a $20.7 million gain on sale of non-strategic assets in the fourth quarter of 2020 compared with $2.7 million in the fourth quarter of 2021, partially offset by higher gross profit and lower selling, general and administrative expenses. The asset sales, part of our Optimization Program, are projected to improve our return on assets, reduce costs and drive incremental efficiencies to our operations. Adjusted operating loss(3) for the fourth quarter of 2021 was $(7.1) million compared with $(4.5) million in the prior-year period. In both periods, Adjusted operating loss(3) excludes the above-mentioned gain on sale of non-strategic assets.

For the full fiscal year, operating income was $111.0 million compared with $76.5 million in the prior-year period and Adjusted operating income was $111.5 million compared with $88.5 million in the prior-year period. The increase was primarily driven by higher gross profit and a decrease in selling, general and administrative expenses.

FDP net loss for the fourth quarter was $(11.2) million compared with net income of $0.9 million in the prior-year period and Adjusted FDP net loss(3) was $(8.5) million compared with $(3.7) million in the prior-year period. For the full fiscal year, FDP net income was $80.0 million compared with $49.2 million in the prior-year period and Adjusted FDP net income(3) was $80.6 million compared with $54.8 million in the prior-year period.

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

(2) “Diluted EPS” represents diluted earnings per share and is calculated as FDP net income/loss divided by diluted weighted average shares.

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

Fourth Quarter 2021 Business Segment Performance and Selected Financial Data

(As reported in business segment data)

 

Fresh Del Monte Produce Inc. and Subsidiaries

 

Business Segment Data

 

(U.S. dollars in millions, except for Gross Margin) – (Unaudited)

 

 

 

Quarters ended

 

December 31, 2021

 

January 1, 2021

Segment Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

Gross Profit

 

Gross Margin

 

Net Sales

 

Gross Profit

 

Gross Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fresh and value-added products

$

598.7

 

59

%

 

$

28.1

 

71

%

 

4.7

%

 

$

586.3

 

59

%

 

$

24.9

 

68

%

 

4.2

%

Banana

 

370.9

 

36

%

 

 

9.1

 

23

%

 

2.5

%

 

 

384.2

 

38

%

 

 

10.6

 

29

%

 

2.8

%

Other products and services

 

47.7

 

5

%

 

 

2.6

 

6

%

 

5.5

%

 

 

31.8

 

3

%

 

 

0.9

 

3

%

 

2.8

%

 

$

1,017.3

 

100

%

 

$

39.8

 

100

%

 

3.9

%

 

$

1,002.3

 

100

%

 

$

36.4

 

100

%

 

3.6

%

 

Years ended

 

December 31, 2021

 

January 1, 2021

Segment Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Sales

 

Gross Profit

 

Gross Margin

 

Net Sales

 

Gross Profit

 

Gross Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fresh and value-added products

$

2,504.8

 

59

%

 

$

180.2

 

59

%

 

7.2

%

 

$

2,484.1

 

59

%

 

$

159.1

 

64

%

 

6.4

%

Banana

 

1,581.1

 

37

%

 

 

110.9

 

37

%

 

7.0

%

 

 

1,602.6

 

38

%

 

 

85.6

 

34

%

 

5.3

%

Other products and services

 

166.1

 

4

%

 

 

12.7

 

4

%

 

7.6

%

 

 

115.6

 

3

%

 

 

6.2

 

2

%

 

5.4

%

 

$

4,252.0

 

100

%

 

$

303.8

 

100

%

 

7.1

%

 

$

4,202.3

 

100

%

 

$

250.9

 

100

%

 

6.0

%

Fourth Quarter 2021 Business Segment Performance

Fresh and Value-Added Products

Net sales for the fourth quarter of 2021 increased by $12.4 million, or 2%, when compared with the prior-year period primarily driven by higher net sales of melons and pineapples. The increase was partially offset by lower net sales of fresh-cut vegetables. As it relates to comparability, the fourth quarter of 2021 consisted of 13-weeks compared to 14-weeks in the fourth quarter of 2020. The additional week in the prior-year period contributed an estimated $42.0 million in net sales. On a comparable basis, net sales for the fourth quarter of 2021 increased $54.0 million, or 10% compared with the prior-year period.

The primary drivers of the variance in net sales were:

  • Melon net sales increased in North America driven by higher sales volume and per unit sales prices.
  • Pineapple net sales increased across most regions driven by higher per unit sales prices.
  • Fresh-cut vegetables net sales decreased primarily in North America, including in our Mann Packing operations. The decrease was driven by lower sales volume and lower per unit sales prices related to lower demand from the foodservice channel and lack of sufficient labor availability.

Fourth Quarter 2021 Business Segment Performance and Selected Financial Data (continued)

(As reported in business segment data)

Gross profit for the fourth quarter of 2021 increased $3.2 million, or 13%, when compared with the prior-year period. The increase compared to the prior-year period was primarily driven by $6.8 million of other product-related charges in the fourth quarter of 2020 mainly comprised of write-offs resulting from damages caused by hurricanes in Central America and write-downs due to supply and demand disruptions caused by the COVID-19 pandemic. Additionally, higher per unit selling prices also benefited gross profit compared to the prior-year period. The increase was partially offset by inflationary and other cost pressures, which resulted in higher per unit production and distribution costs. As result of these factors, gross margin increased 50 basis points to 4.7% from 4.2%. As it relates to comparability, the additional week in the prior-year period contributed an estimated $1.8 million in gross profit.

From a product view, the increase was primarily due to higher gross profit on melons, non-tropical fruit and pineapples. The increase was partially offset by lower gross profit on fresh-cut vegetables and avocados.

The primary drivers of the variance in gross profit were:

  • Melon gross profit increased primarily related to $4.9 million of other product-related charges in the fourth quarter of 2020 comprised of inventory write-downs resulting from hurricane damage to our melon operations in Guatemala. The increase was also driven by higher gross profit in North America driven by higher per unit sales prices and sales volume coupled with lower per unit production cost.
  • Non-tropical fruit gross profit increased across all markets primarily driven by higher per unit sales prices coupled with lower per unit distribution costs.
  • Pineapple gross profit increased across most markets primarily driven by higher per unit sales prices.
  • Fresh-cut vegetables gross profit decreased in North America, primarily in our Mann Packing operations, mainly driven by lower net sales coupled with higher per unit production and distribution costs.
  • Avocado gross profit decreased primarily in North America driven by lower sales volume coupled with higher per unit procurement and distribution costs.

Adjusted gross profit(3) in the fresh and value-add products segment for the fourth quarter of 2021 was $28.1 million compared with $31.7 million in the prior-year period. Adjusted gross profit excludes the above-mentioned $6.8 million of other product-related charges in the fourth quarter of 2020.

Banana

Net sales for the fourth quarter of 2021 decreased by $13.3 million, or 3%, compared with the prior-year period primarily driven by North America and Asia. In North America, the decrease was primarily driven by lower sales volume; partially offset by higher per unit sales prices. In Asia, the decrease was primarily driven by lower per unit sales prices; partially offset by higher sales volume. As it relates to comparability, the fourth quarter of 2021 consisted of 13-weeks compared to 14-weeks in the fourth quarter of 2020. The additional week in the prior-year period contributed an estimated $28.0 million in net sales. On a comparable basis, net sales for 2021 increased $15.0 million, or 4% compared to the prior-year period.

Gross profit for the fourth quarter of 2021 decreased $1.5 million, or 14%, primarily driven by North America and Asia. In both regions, the decrease was driven by lower net sales. As it relates to per unit cost, North America gross profit was negatively impacted by higher production and distribution costs while Asia was negatively impacted by higher production and ocean freight costs. The decrease was partially offset by $5.9 million of other product-related charges in the fourth quarter of 2020 mainly comprised of inventory write-downs, net of insurance recoveries, resulting from damage caused by hurricanes in Central America and write-downs due to supply and demand disruptions caused by the COVID-19 pandemic. As a result of these factors, gross margin decreased 30 basis points to 2.5% from 2.8%. As it relates to comparability, the additional week in the prior-year period contributed an estimated $0.8 million in gross profit.

Adjusted gross profit(3) in the banana segment for the fourth quarter of 2021 was $9.1 million compared with $16.5 million in the prior-year period. Adjusted gross profit excludes the above-mentioned $5.9 million of other product-related charges in the fourth quarter of 2020.

Full Fiscal Year 2021 Business Segment Performance and Selected Financial Data (continued)

(As reported in business segment data)

Fresh and Value-Added Products

Net sales for full fiscal 2021 increased by $20.7 million, or 1%, when compared with 2020, primarily as a result of increased net sales of pineapples and fresh-cut fruit. The increase was partially offset by lower net sales of non-tropical fruit, vegetables and fresh-cut vegetables. As it relates to comparability, our 2021 fiscal year consisted of 52-weeks compared to 53-weeks in 2020. The additional week in the prior-year period contributed an estimated $42.0 million in net sales. On a comparable basis, net sales for 2021 increased $63.0 million, or 3% compared to prior-year period.

  • Pineapple net sales increased across all regions, particularly in North America and Europe, driven by higher sales volume and higher per unit sales prices.
  • Fresh-cut fruit net sales increased across most regions, particularly Europe and North America, driven by higher sales volume and higher per unit sales prices.
  • Non-tropical fruit net sales decreased primarily in the Middle East. Overall, this year’s production volume was negatively impacted by the damage caused by severe rainstorms in Chile in the first quarter of 2021.
  • Vegetable and fresh-cut vegetables net sales decreased primarily in North America, including in our Mann Packing operations. The decrease was mainly driven by lower sales volume related to lower demand from the foodservice channel and lack of sufficient labor availability.

Gross profit for full fiscal 2021 increased $21.1 million, or 13%. The increased compared to the prior-year period was primarily driven by $25.4 million of other product-related charges in full fiscal 2020 mainly comprised of inventory write-downs resulting from damage caused by hurricanes in Central America and write-downs due to supply and demand disruptions caused by the COVID-19 pandemic. Additionally, higher per unit selling prices also benefited gross profit compared to the prior-year period. The increase was partially offset by inflationary and other cost pressures, which resulted in higher per unit production and distribution costs. As a result of these factors, gross margin increased 80 basis points to 7.2% in 2021 from 6.4% in 2020. As it relates to comparability, the additional week in the prior-year period contributed an estimated $1.8 million in gross profit.

From a product view, the increase was primarily due to higher gross profit on pineapples, melons, and fresh-cut fruits. The increase was partially offset by fresh-cut vegetables and avocados.

The primary drivers of the variance in gross profit were:

  • Pineapple gross profit increased across all regions driven by higher net sales partially offset by higher production and distribution costs.
  • Melon gross profit increased primarily in North America due to higher per unit sales prices of cantaloupes; partially offset by higher production and distribution costs. Overall, this year’s production volume was negatively impacted by the damages caused by the hurricanes in Guatemala in the fourth quarter of 2020.
  • Fresh-cut fruits gross profit increased across all regions driven by higher net sales, partially offset by higher per unit distribution costs.
  • Fresh-cut vegetables gross profit decreased in North America, primarily in our Mann Packing operations, mainly driven by lower net sales coupled with higher per unit production and distribution costs.
  • Avocado gross profit decreased primarily in North America driven by lower sales volume coupled with higher per unit production and distribution costs.

For full fiscal year, Adjusted gross profit(3) in the fresh and value-add products segment was $184.9 million compared with $184.0 million in the prior-year period. Adjusted gross profit excludes the above-mentioned $25.4 million of other product-related charges in full fiscal 2020 and $4.7 million of other product-related charges in full fiscal 2021 mainly related to severe rainstorms in Chile.

Banana

Net sales for full year 2021 decreased by $21.5 million, or 1%, primarily due to lower sales volume in North America. The decrease was partially offset by higher per unit sales prices in North America and Europe. The higher pricing in North America helped offset incremental production and procurement costs following the hurricanes in Central America in the fourth quarter of 2020. As it relates to comparability, our 2021 fiscal year consisted of 52-weeks compared to 53-weeks in 2020. The additional week in the prior-year period contributed an estimated $28.0 million in net sales. On a comparable basis, net sales for 2021 increased $7.0 million, relatively in line with the prior-year period.

Gross profit for full fiscal year 2021 increased $25.3 million, or 30%, primarily due to our performance in North America and Europe. In both regions, the increase was driven by higher per unit sales prices, partially offset by higher per unit production and distribution costs impacted by inflationary and other cost pressures. Additionally, gross profit in 2020 included $8.0 million of other product-related charges attributable to our banana segment comprised of write-offs, net of insurance recoveries, resulting from damages caused by hurricanes in Central America in the fourth quarter of 2020 and inventory write-offs related to supply and demand disruptions caused by the COVID-19 pandemic. As a result of these factors, gross margin increased 170 basis points to 7.0% in 2021 from 5.3% in 2020. Furthermore, the additional week in the prior-year period contributed an estimated $0.8 million in gross profit.

For the full fiscal year, Adjusted Gross profit(3) in the banana segment was $109.7 million compared with $93.6 million in the prior-year period. Adjusted gross profit excludes the above-mentioned $8.0 million of other product-related charges in full fiscal 2020.

Cash Flows

Net cash provided by operating activities for the full fiscal year 2021 was $128.5 million, compared with $180.6 million in the prior-year period, a decrease of $52.1 million. The decrease was primarily attributable to higher levels of inventories, as we proactively increased inventory of key raw materials to secure costs and availability. Inventory was also impacted by the increase in cost of goods largely related to current cost pressures. Partially offsetting the decrease were higher net income and higher balances of accounts payable and accrued expenses.

Long Term Debt

Long term debt for the fourth quarter of 2021 decreased to $519.1 million compared with $541.7 million in the prior-year period.

Quarterly Cash Dividend

On February 22, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.15 per share, payable on April 1, 2022, to shareholders of record on March 9, 2022.

Fresh Del Monte Produce Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(U.S. dollars in millions, except share and per share data) – (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter ended

 

Year ended

 

 

 

 

 

 

 

 

Statement of Operations:

December 31,
2021

 

January 1,
2021

 

December 31,
2021

 

January 1,
2021

Net sales

$

1,017.3

 

 

$

1,002.3

 

 

$

4,252.0

 

 

$

4,202.3

 

Cost of products sold

 

977.5

 

 

 

953.2

 

 

 

3,944.7

 

 

 

3,917.8

 

Other product-related charges

 

 

 

 

12.7

 

 

 

3.5

 

 

 

33.6

 

Gross profit

 

39.8

 

 

 

36.4

 

 

 

303.8

 

 

 

250.9

 

Selling, general and administrative expenses

 

44.5

 

 

 

53.8

 

 

 

192.9

 

 

 

196.2

 

Gain on disposal of property, plant and equipment, net

 

0.3

 

 

 

20.7

 

 

 

4.6

 

 

 

22.2

 

Asset impairment and other charges, net

 

4.8

 

 

 

4.2

 

 

 

4.5

 

 

 

0.4

 

Operating (loss) income

 

(9.2

)

 

 

(0.9

)

 

 

111.0

 

 

 

76.5

 

Interest expense, net

 

4.7

 

 

 

5.2

 

 

 

19.7

 

 

 

20.7

 

Other expense (income), net

 

3.9

 

 

 

(0.7

)

 

 

9.4

 

 

 

4.5

 

(Loss) income before income taxes

 

(17.8

)

 

 

(5.4

)

 

 

81.9

 

 

 

51.3

 

Income tax (benefit) provision

 

(7.1

)

 

 

(4.4

)

 

 

2.0

 

 

 

5.0

 

Net (loss) income

$

(10.7

)

 

$

(1.0

)

 

$

79.9

 

 

$

46.3

 

Less: Net income (loss) attributable to redeemable and noncontrolling interests

 

0.5

 

 

 

(1.9

)

 

 

(0.1

)

 

 

(2.9

)

Net (loss) income attributable to Fresh Del Monte Produce Inc.

$

(11.2

)

 

$

0.9

 

 

$

80.0

 

 

$

49.2

 

(Loss) earnings per share(1):

 

 

 

 

 

 

 

Basic

$

(0.24

)

 

$

0.02

 

 

$

1.68

 

 

$

1.03

 

Diluted

$

(0.24

)

 

$

0.02

 

 

$

1.68

 

 

$

1.03

 

Dividends declared per ordinary share

$

0.15

 

 

$

0.10

 

 

$

0.50

 

 

$

0.30

 

Weighted average number of ordinary shares:

 

 

 

 

 

 

 

Basic

 

47,550,330

 

 

 

47,369,452

 

 

 

47,508,208

 

 

 

47,569,794

 

Diluted

 

47,550,330

 

 

 

47,462,572

 

 

 

47,701,397

 

 

 

47,660,600

 

Contacts

Ana Miranda
Vice President, Global FP&A and Investor Relations
305-520-8433

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