Fresh Del Monte Produce Inc. Reports Operating Results (10-Q)
Fresh Del Monte Produce Inc. has a market cap of $1.38 billion; its shares were traded at around $21.69 with a P/E ratio of 8.2 and P/S ratio of 0.4. FDP is in the portfolios of Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:Net cash used in investing activities for the quarter of 2010 was $8.2 million compared with $25.3 million for the first quarter of 2009. Net cash used in investing activities for the first quarter of 2010 consisted of capital expenditures of $14.5 million, partially offset by proceeds from sales of assets of $2.1 million and return of capital by one of our Costa Rica unconsolidated subsidiaries of $4.2 million. Capital expenditures for the first quarter of 2010 were primarily for expansion of production facilities in Costa Rica, Guatemala and Brazil and port facilities in North America related to the banana and other fresh produce segments. Proceeds from sales of assets for the first quarter of 2010 consisted primarily of the sale of a refrigerated vessel that was scrapped.
Net cash used in financing activities for the first quarter of 2010 was $27.2 million compared with net cash used in financing activities of $19.9 for the first quarter of 2009. Net cash used in financing activities for the first three months of 2010 consisted primarily of net repayments on long-term debt of $11.9 million and $16.4 million for the repurchase of 802,655 of our Ordinary Shares, partially offset by contributions from non-controlling interests of $0.9 million and proceeds from stock options exercised of $0.2 million. Net cash provided by financing activities for the first three months of 2009 consisted primarily of net repayments of long-term debt of $24.3 million, partially offset by contributions from non-controlling interests of $4.4 million.
At April 2, 2010, we had $201.9 million available under committed working capital facilities, primarily under the Credit Facility. At April 2, 2010, we applied $18.1 million to the letter of credit facility, comprised primarily of certain contingent obligations and other governmental agencies guarantees, combined with guarantees for purchases of raw materials and equipment. We also had $8.8 million in other letters of credit and bank guarantees not included in the letter of credit facility.
As of April 2, 2010, we had $309.1 million of long-term debt and capital lease obligations, including the current portion, consisting of $295.2 million outstanding under the Credit Facility, $5.0 million of capital lease obligations and $8.9 million of other long-term debt.
The fair value of our derivatives changed from a net asset of $19.6 million as of January 1, 2010, to a net asset of $30.0 million as of April 2, 2010 related to our foreign currency cash flow hedges primarily as a result of the strengthening of the U.S. dollar relative to the euro and British pound. We expect that $26.2 million and $3.8 million in net assets outstanding will be transferred to earnings in 2010 and 2011, respectively, along with the earnings effect of the related forecasted transaction for each year.
Cost of Products Sold. Cost of products sold was $845.3 million for the first quarter of 2010 compared with $795.9 million for the first quarter of 2009, an increase of $49.4 million. This increase in cost of products sold was primarily attributable to higher sales volume, combined with higher ocean freight rates that resulted from higher fuel costs.
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