Fresh Del Monte Produce (FDP) - 2024 Q2 - Quarterly Results

Financial Performance - Net sales for Q2 2024 were $1,139.7 million, a decrease from $1,180.5 million in the prior-year period, primarily due to lower banana sales volume and prices[1] - Gross profit for Q2 2024 was $113.2 million, down from $116.8 million in the prior-year period, with a gross margin of 9.9%[2] - Operating income for Q2 2024 was $68.2 million, compared to $72.1 million in the prior-year period, reflecting lower gross profit[2] - Net income for Q2 2024 was $53.6 million, an increase from $47.7 million in the prior-year period, with adjusted net income at $50.9 million[3] - Net sales for the quarter ended June 30, 2024, were $1,139.7 million, a decrease of 3.5% compared to $1,180.5 million in the same quarter of 2023[13] - Gross profit for the quarter was $113.2 million, down 3.1% from $116.8 million year-over-year[13] - Operating income decreased to $68.2 million, a decline of 5.4% from $72.1 million in the prior year[13] - Net income attributable to Fresh Del Monte Produce Inc. was $53.6 million, an increase of 12.4% compared to $47.7 million in the same quarter of 2023[13] - Basic earnings per share (EPS) for the quarter was $1.12, up from $0.99 in the same quarter of the previous year[13] - For the six months ended June 28, 2024, net sales reached $2,247.5 million, compared to $2,309.0 million for the same period in 2023, showing a decline of 2.7%[24] - The adjusted gross profit for the quarter was $114.4 million, slightly lower than the $116.8 million reported in the same quarter of the previous year[23] - The gross margin for the quarter was 11.2%, compared to 9.9% in the same quarter last year, reflecting an improvement of 1.3 percentage points[24] - Fresh Del Monte Produce Inc. reported a gross profit of $195.4 million for the six months ended June 28, 2024, down from $213.8 million in the same period of 2023[24] - The company recorded an adjusted gross margin of 9.8% for the six months ended June 28, 2024, consistent with the previous year's margin of 9.3%[24] - EBITDA for the quarter was $92.7 million, up from $89.6 million year-over-year, reflecting a margin of 8.1% compared to 7.6% in the prior year[25] - Adjusted EBITDA for the six months ended June 28, 2024, was $132.5 million, down from $150.5 million for the same period in 2023, indicating a margin decrease from 6.5% to 5.9%[25] Segment Performance - Fresh and value-added products segment net sales increased to $694.1 million in Q2 2024 from $677.6 million in the prior-year period, driven by higher avocado prices[7] - Banana segment net sales decreased to $394.3 million in Q2 2024 from $448.8 million in the prior-year period, impacted by competitive pressures and lower prices in Asia[9] - Other products and services segment net sales were $51.3 million in Q2 2024, down from $54.1 million, primarily due to the sale of the plastic products business[10] Debt and Cash Flow - Long-term debt decreased to $285.0 million at the end of Q2 2024, down approximately 29% from $400.5 million a year earlier[12] - Net cash provided by operating activities for the first six months of 2024 was $143.7 million, an increase from $132.7 million in the prior-year period[11] - The company reported a net increase in cash and cash equivalents of $4.0 million, down from $26.6 million in the prior year[16] Assets and Liabilities - Total assets as of June 28, 2024, were $3,109.1 million, a decrease from $3,184.1 million at the end of 2023[15] - Total liabilities decreased to $1,138.9 million from $1,271.4 million at the end of 2023, reflecting a reduction in long-term debt[15] Future Outlook and Strategy - Future outlook includes continued focus on market expansion and new product development to drive growth[23] - The company anticipates continued focus on operational excellence and cost discipline to improve profitability and shareholder value[31] - Fresh Del Monte aims to enhance its product offerings, particularly in pineapple and avocado segments, to drive demand and volume growth[31] - The company is committed to maximizing the utilization of fruit residues and developing biofertilizers as part of its sustainability efforts[31] - Fresh Del Monte expects to face challenges related to elevated commodity costs and supply chain disruptions impacting its operations[32] Other Notable Items - The company declared a quarterly cash dividend of $0.25 per share, an increase from $0.20 per share in the prior year[13] - The company reported a gain of $3.4 million from the sale of a warehouse in Europe for the quarter ended June 28, 2024[27] - Asset impairment and other charges for the quarter included $2.0 million in insurance recoveries related to fire damage, partially offset by impairment charges in the Philippines[26] - The company incurred other product-related charges of $1.2 million in the quarter, impacting the gross profit[23]