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Fresh Del Monte Produce Inc. Reports Operating Results (10-Q)

November 02, 2010 | About:
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10qk

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Fresh Del Monte Produce Inc. (FDP) filed Quarterly Report for the period ended 2010-10-01.

Fresh Del Monte Produce Inc. has a market cap of $1.34 billion; its shares were traded at around $21.75 with a P/E ratio of 9 and P/S ratio of 0.4. FDP is in the portfolios of Charles Brandes of Brandes Investment, Chuck Royce of Royce& Associates.

Highlight of Business Operations:

Working capital was $433.2 million at October 1, 2010 compared with working capital of $543.1 million at January 1, 2010. The decrease in working capital of $109.9 million was primarily attributable to lower levels of finished goods inventory, lower levels of accounts receivable and higher balances in accounts payable and accrued expenses.

Net cash used in investing activities for the first nine months of 2010 was $31.3 million compared with $50.8 million for the first nine months of 2009. Net cash used in investing activities for the first nine months of 2010 consisted of capital expenditures of $48.0 million, partially offset by proceeds from sales of property, plant and equipment of $12.5 million and the return of invested capital by one of our unconsolidated subsidiaries of $4.2 million. Capital expenditures for the first nine months of 2010 were primarily for expansion of production facilities in Costa Rica, Guatemala, Brazil, Philippines and Kenya and port facilities in North America related to the banana, other fresh produce and prepared food segments. Proceeds from sales of property, plant and equipment for the first nine months of 2010 consisted primarily of the sale of four refrigerated vessels and a distribution center in Brazil.

Net cash used in financing activities for the first nine months of 2010 was $198.1 million compared with $191.0 million for the first nine months of 2009. Net cash used in financing activities for the first nine months of 2010 consisted of net repayments on long-term debt of $123.5 million and repurchases of our ordinary shares of $78.8 million, partially offset by contributions from noncontrolling interests of $3.4 million and proceeds from stock options exercised of $0.8 million. Net cash used in financing activities for the first nine months of 2009 consisted of net repayments on long-term debt of $204.7 million, partially offset by contributions from noncontrolling interests of $13.0 million and proceeds from stock options exercised of $0.7 million.

As of October 1, 2010, we had $202.2 million of long-term debt and capital lease obligations, including the current portion, consisting of $190.0 million outstanding under the Credit Facility, $4.1 million of capital lease obligations and $8.1 million of other long-term debt and notes payable.

The fair value of our derivatives changed from a net asset of $19.6 million as of January 1, 2010, to a net liability of $16.3 million as of October 1, 2010 related to our foreign currency cash flow hedges and bunker fuel hedges primarily as a result of the weakening of the U.S. dollar relative to the Japanese yen and the strengthening of the U.S. dollar relative to the euro and British pound. The fair value of our bunker fuel hedges have decreased due to the settlement of these contracts. We expect that $7.6 million in net liabilities outstanding will be transferred to earnings during the next 12 months and $8.7 million in 2011 and 2012, along with the earnings effect of the related forecasted transaction for each year.

Cost of Products Sold. Cost of products sold was $741.1 million for the third quarter of 2010 compared with $697.2 million for the third quarter of 2009, an increase of $43.9 million. This increase in cost of products sold was primarily attributable to higher sales volumes of bananas and pineapples and $1.4 million in additional costs associated with flood damage to our Guatemala banana farms, offset by $2.6 million of related insurance reimbursements.

Read the The complete Report

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