Message #2 From:
NewsBot Date: February 27, 2007 03:00:00 AM
FDP News Fresh Del Monte Produce Announces Fourth Quarter and Full Year 2006 Financial Results
CORAL GABLES, Fla.--(BUSINESS WIRE)--Fresh Del Monte Produce Inc. (NYSE:FDP), a leading global producer and distributor of high-quality fresh and fresh-cut fruit and vegetables, and a leading producer and distributor of prepared food in Europe, Africa and the Middle East, today reported financial and operating results for the fourth quarter and year ended December 29, 2006.
Net sales for the 2006 fourth quarter decreased 3 percent to $737.6 million, compared with $757.9 million in the prior year fourth quarter. Net sales for the year declined 1 percent to $3.214 billion, compared with $3.260 billion in 2005. The decrease in net sales for the quarter and full year was the result of continued rationalization in the Company’s “other fresh produce” business segment, primarily in the North America vegetable product line; underperformance of the Company’s prepared food business, resulting from competitive pressures in the United Kingdom and lower supply of canned pineapple during the Christmas holiday in Europe; and lower sales volume and lower selling prices of bananas in Europe.
Gross profit for the 2006 fourth quarter was $56.3 million, compared with gross profit of $40.5 million in the fourth quarter of 2005. Fourth quarter 2006 gross profit includes $3.7 million for charges primarily associated with the accelerated closing of the Company’s Hawaii operations and charges related to the restructuring of a juice facility in Italy. The increase in gross profit for the quarter was due to improved performance in the Company’s North America and Asia fresh produce operations, offset by lower sales in the Company’s prepared food business segment, along with the negative impact of higher production costs. Gross profit for the year was $186.5 million, compared with gross profit of $311.5 million in 2005. Full year gross profit includes $43.0 million for charges associated with the closing of the Company’s operations in Hawaii, the Kenya product withdrawal program and charges associated with restructuring the Company’s facility in Italy. Gross profit for the full year was negatively impacted by higher costs related to fuel, raw materials, packaging, labor, transportation and product procurement as well as the impact of lower sales in the Company’s “other fresh produce” and prepared food business segments.
The Company reported a net loss of $59.9 million in the fourth quarter of 2006, compared with a net loss of $3.5 million in the fourth quarter of 2005. For the full year, there was a net loss of $145.1 million, compared with net income of $106.6 million in 2005. The decrease in net income for the full year is attributable to $148.3 million in asset impairment and restructuring charges; significant increases in procurement and logistics costs; lower sales volume and selling prices of bananas in Europe; and higher advertising and interest expense.
The Company reported a loss per diluted share of $0.04 in the fourth quarter of 2006, excluding asset impairment and restructuring charges associated with further streamlining the Company’s operations, compared with a loss per diluted share of $0.02 in the fourth quarter of 2005. For the full year, the Company reported earnings per diluted share of $0.06, excluding asset impairment and restructuring charges associated with streamlining the Company’s operations, compared with earnings per diluted share of $1.91 in 2005, excluding asset impairment and other charges.
“By every measure, 2006 was the most challenging year in nearly a decade,” said Mohammad Abu-Ghazaleh, Chairman and Chief Executive Officer. “We faced higher input costs, a difficult banana market in Europe, and lingering issues in our prepared food business. We responded to these conditions by implementing a host of strategic measures to lower their negative impact on our business. We closed underperforming operations, eliminated unprofitable products, managed our banana supply in key regions, drove improved performance in our tomato and fresh-cut operations, and leveraged our strengths in emerging markets. During the final month of 2006, these efforts had begun to have a positive effect on our business – an effect that we see continuing. We are optimistic that we will see a significant turnaround in our business in 2007. In the meantime, we continue to manage our business to offset those uncontrollable cost factors that can negatively impact our operations. This includes looking for additional ways to streamline our business, conserve our resources, and address the challenges from our prepared food business. Our goal, as always, is to deliver improved shareholder value over the long-term.”
Fresh Del Monte will host a conference call and simultaneous webcast at 11:00 a.m. Eastern Standard Time today to discuss the 2006 fourth quarter and full-year results and to discuss the Company’s progress and outlook. Interested parties can access the Company’s Investor Relations home page at www.freshdelmonte.com. The call will begin promptly at 11:00 a.m. and will be available for replay on the Company’s web site approximately two hours after the conclusion of the call.
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® brand, a symbol of product innovation, quality, freshness and reliability for over 100 years.
FORWARD-LOOKING INFORMATION This press release contains certain forward-looking statements regarding the intents, beliefs or current expectations of the Company or its officers with respect to various matters.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.The Company’s actual results may differ materially from those in the forward-looking statements as a result of various important factors, including those described under the caption “Key Information – Risk Factors” in Fresh Del Monte Produce Inc.’s Annual Report on Form 20-F for the year ended December 30, 2005.
Note to the Editor: This release and other press releases are available on the Company’s web site, www.freshdelmonte.com.
Fresh Del Monte Produce Inc. and Subsidiaries
Condensed Statements of Operations
(U.S. dollars in millions, except share and per share data) - (Unaudited)
Quarter ended
Year ended
December 29,
December 30,
December 29,
December 30,
2006
2005
2006
2005
Net sales
$ 737.6
$ 757.9
$ 3,214.3
$ 3,259.7
Cost of products sold
677.6
716.1
2,984.8
2,946.9
Restructuring and other charges (2)
3.7
1.3
43.0
1.3
Gross profit
56.3
40.5
186.5
311.5
Selling, general and administrative expenses
49.0
47.2
201.6
190.9
Asset impairment and other charges (3)
53.7
1.0
105.3
3.1
Operating income (loss)
(46.4)
(7.7)
(120.4)
117.5
Interest expense, net
7.7
4.9
25.6
16.1
Other income (expense), net
(7.3)
(0.7)
0.4
(3.1)
Income (loss) before provision for income taxes
(61.4)
(13.3)
(145.6)
98.3
Benefit from income taxes
(1.5)
(9.8)
(0.5)
(8.3)
Net income (loss)
$ (59.9)
$ (3.5)
$ (145.1)
$ 106.6
Net income (loss) per ordinary share - Basic
$ (1.04)
$ (0.06)
$ (2.51)
$ 1.84
Net income (loss) per ordinary share - Diluted
$ (1.04)
$ (0.06)
$ (2.51)
$ 1.84
Dividends declared per ordinary share
$ 0.05
$ 0.20
$ 0.50
$ 0.80
Weighted average number of ordinary shares:
Basic (1)
57,697,834
58,010,146
57,819,416
57,926,466
Diluted (1)
57,697,834
58,010,146
57,819,416
58,077,282
Quarter ended
Year ended
December 29,
December 30,
December 29,
December 30,
2006
2005
2006
2005
Selected Income Statement Data:
Depreciation and amortization
$ 20.1
$ 22.4
$ 83.8
$ 89.0
Net Income per Share Adjustments:
Reported net income (loss) per share - diluted
$ (1.04)
$ (0.06)
$ (2.51)
$ 1.84
Restructuring and other charges (2)
0.07
$ 0.02
0.75
$ 0.02
Asset impairment and other charges (3)
0.93
0.02
1.82
0.05
Adjusted net income (loss) per share - diluted
$ (0.04)
$ (0.02)
$ 0.06
$ 1.91
Gross Profit Adjustments:
Reported gross profit
$ 56.3
$ 40.5
$ 186.5
$ 311.5
Restructuring and other charges (2)
3.7
1.3
43.0
1.3
Adjusted gross profit
$ 60.0
$ 41.8
$ 229.5
$ 312.8
At
December 29,
December 30,
2006
2005
Selected Balance Sheet Data:
Cash
$ 39.8
$ 24.5
Working capital
395.0
416.2
Total assets
2,081.6
2,124.8
Total debt
469.9
360.8
Shareholders' equity
1,010.5
1,152.9
(1) The calculation of diluted earnings per share is anti-dilutive for the fourth quarter of 2005 and 2006 and year ended 2006 so the effect of dilutive securities is zero in each period. Therefore, basic and diluted weighted average number of ordinary shares are equal.
(2) Restructuring and other charges for the 4th quarter and year ended 2006 includes charges and claims related to the previously announced closing of the Hawaii operations and the Kenya product withdrawal and disposal program and restructuring charges for a production facility in Italy. In 2005, restructuring charges related to closures in South Africa and New Orleans.
(3) Asset impairment and other charges for the fourth quarter of 2006 includes charges related the previously announced closing of Hawaii, to the closing of a production facility in Italy, the impairment of the United Kingdom intangible asset and impairment of goodwill resulting from a North America acquisition, and other charges related to the rationalization of the Company's North American potato repack business. In addition, asset impairment and other charges for the year ended 2006 also includes asset impairment charges primarily related to the rationalization of the Company's North America transportation business, underutilized facilities and equipment in Europe and North America and other charges related to facility and operations shutdowns in the United Kingdom and North America. In 2005, asset impairment charges includes facility and operations shutdown charges in North America.
