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What changed in FRESH DEL MONTE PRODUCE INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of FRESH DEL MONTE PRODUCE INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+348 added−338 removedSource: 10-K (2025-02-24) vs 10-K (2024-02-26)

Top changes in FRESH DEL MONTE PRODUCE INC's 2024 10-K

348 paragraphs added · 338 removed · 274 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

77 edited+11 added−18 removed88 unchanged
Biggest changeOur results in 2023 were consistent with historical trends. 11 Table of Contents Year ended December 29, 2023 December 30, 2022 Net sales: First quarter $ 1,128.5 $ 1,136.9 Second quarter 1,180.5 1,211.9 Third quarter 1,003.1 1,053.5 Fourth quarter 1,008.6 1,040.0 Total $ 4,320.7 $ 4,442.3 Gross profit: First quarter $ 97.0 $ 89.8 Second quarter 116.8 80.7 Third quarter 74.4 88.0 Fourth quarter 62.5 81.7 Total* $ 350.7 $ 340.2 *Due to rounding, the sum of the quarterly amounts may not equal the reported amounts for the full year.
Biggest changeYear ended December 27, 2024 December 29, 2023 Net sales: First quarter $ 1,107.9 $ 1,128.5 Second quarter 1,139.7 1,180.5 Third quarter 1,019.5 1,003.1 Fourth quarter 1,013.2 1,008.6 Total $ 4,280.2 $ 4,320.7 Gross profit: First quarter $ 82.3 $ 97.0 Second quarter 113.2 116.8 Third quarter 93.8 74.4 Fourth quarter 68.7 62.5 Total* $ 357.9 $ 350.7 *Due to rounding, the sum of the quarterly amounts may not equal the reported amounts for the full year. 11 Table of Contents Human Capital Management We believe in nurturing people, from consumers eating our products to our employees, suppliers, customers and the communities in which we live and work.
Workforce Governance Our Board of Directors currently oversees all human capital resources. Our Governance Committee currently oversees our policies and programs related to sustainability, risk management, cybersecurity oversight, corporate social responsibility and the environment. Additionally, our Compensation Committee is dedicated to carrying out incentive programs and working with our employees to strategically align talent within the Company.
Workforce Governance Our Board of Directors (the "Board") currently oversees all human capital resources. Our Governance Committee currently oversees our policies and programs related to sustainability, risk management, cybersecurity oversight, corporate social responsibility and the environment. Additionally, our Compensation Committee is dedicated to carrying out incentive programs and working with our employees to strategically align talent within the Company.
We have leading market positions in the following product categories and we believe we are: • the largest marketer of fresh pineapples in the United States, and a leading marketer in other markets worldwide; • the third-largest marketer of bananas in the United States, and a leading marketer in other markets worldwide; and • a leading marketer of: ◦ fresh-cut fruit in the United States, Canada, Japan, South Korea, and the United Kingdom; ◦ fresh-cut vegetables in North America, South Korea, Kuwait, United Arab Emirates, Japan, and Saudi Arabia; ◦ avocados in the United States; and ◦ canned fruit in Europe, Africa, and the Middle East.
We have leading market positions in the following product categories and we believe we are: • the largest marketer of fresh pineapples in the United States, and a leading marketer in other markets worldwide; • the third-largest marketer of bananas in the United States, and a leading marketer in other markets worldwide; and • a leading marketer of: ◦ fresh-cut fruit in the United States, Japan, South Korea, and the United Kingdom; ◦ fresh-cut vegetables in North America, South Korea, Kuwait, United Arab Emirates, Japan, and Saudi Arabia; ◦ avocados in the United States; and ◦ canned fruit in Europe, Africa, and the Middle East.
Our strategy is founded on six goals: 1 Table of Contents Our business is comprised of three reportable segments, two of which represent our primary businesses of fresh and value-added products and banana, and one that represents our other ancillary businesses. • Fresh and value-added products - includes pineapples, fresh-cut fruit, fresh-cut vegetables (which includes fresh-cut salads), melons, vegetables, non-tropical fruit (which includes grapes, apples, citrus, blueberries, strawberries, pears, peaches, plums, nectarines, cherries and kiwis), other fruit and vegetables, avocados, and prepared foods (which includes prepared fruit and vegetables, juices, other beverages, and meals and snacks). • Banana • Other products and services - includes our third-party freight and logistic services business and our Jordanian poultry and meats business.
Our strategy is founded on six goals: 1 Table of Contents Our business is comprised of three reportable segments, two of which represent our primary businesses of fresh and value-added products and banana, and one that represents our other ancillary businesses. • Fresh and value-added products - includes pineapples, fresh-cut fruit, fresh-cut vegetables (which includes fresh-cut salads), melons, vegetables, non-tropical fruit (which includes grapes, apples, citrus, blueberries, strawberries, pears, peaches, plums, nectarines, cherries and kiwis), other fruit and vegetables, avocados, and prepared foods (which includes prepared fruit and vegetables, juices, other beverages, and meals and snacks). • Banana • Other products and services - includes our third-party freight and logistic services business, our Jordanian poultry and meats business and our biomass initiatives.
Our prepared food products include prepared pineapple, peaches, fruit cocktail, pears, tomatoes, and other fruits and vegetables, as well as fruit juices, various meals and snacks, and industrial products such as fruit in the form of purees, pulps and concentrates for further processing.
Our prepared food products include prepared pineapple, peaches, fruit cocktail, pears, tomatoes, and other fruits and vegetables, as well as fruit juices, various meals and snacks, guacamole, and industrial products such as fruit in the form of purees, pulps and concentrates for further processing.
In addition, our logistics network enables us to continuously monitor and maintain the quality of our produce, ensure timely and regular distribution to customers on a year-round basis, and manage our inventory among distribution centers, as needed, to effectively respond to changes in market demand. 6 Table of Contents Sales and Marketing The Del Monte ® brand has been used to identify premium produce products for over 125 years and is recognized by consumers worldwide for quality, freshness and reliability.
In addition, our logistics network enables us to continuously monitor and maintain the quality of our produce, ensure timely and regular distribution to customers on a year-round basis, and manage our inventory among distribution centers, as needed, to effectively respond to changes in market demand. 6 Table of Contents Sales and Marketing The Del Monte ® brand has been used to identify premium produce products for over 130 years and is recognized by consumers worldwide for quality, freshness and reliability.
We strive to expand this status by increasing our leading position in fresh-cut produce, expanding our fresh fruit and vegetable business, continuing to grow these value-added products and diversifying our other fresh produce selections. 2 Table of Contents Sourcing and Production A graphic depicting our geographic sales and sourcing operations as of the end of 2023 is shown below.
We strive to expand this status by increasing our leading position in fresh-cut produce, expanding our fresh fruit and vegetable business, continuing to grow these value-added products and diversifying our other fresh produce selections. 2 Table of Contents Sourcing and Production A graphic depicting our geographic sales and sourcing operations as of the end of 2024 is shown below.
Our position as a volume shipper of bananas has also allowed us to make regular shipments of a wide array of other fresh produce, such as pineapples, melons and plantains, and has enabled us to expand our third-party ocean freight services, thereby reducing our average per-box logistics costs and maintaining higher quality produce with a longer shelf life.
Our position as a volume shipper of bananas has also allowed us to make regular shipments of a wide array of other fresh produce, such as pineapples, melons and plantains, and has positioned us to expand our third-party ocean freight services, thereby reducing our average per-box logistics costs and maintaining higher quality produce with a longer shelf life.
We also produce, distribute and market prepared fruits and vegetables, juices, beverages and snacks under the Del Monte ® brand, as well as other proprietary brands, such as Just Juice ® , Fruitini ® , Pinkglow ® , Del Monte Zero ™ , Honeyglow ® , Rubyglow ® , Honey Miniglow ® , Bananinis ® , and other regional trademarks in Europe, Africa and the Middle East.
We also produce, distribute and market prepared fruits and vegetables, juices, beverages and snacks under the Del Monte ® brand, as well as other proprietary brands, such as Just Juice ® , Fruitini ® , Pinkglow ® , Del Monte Zero ®™ , Honeyglow ® , Rubyglow ® , Honey Miniglow ® , Bananinis ® , and other regional trademarks in North America, Europe, Africa and the Middle East.
Other Products and Services Included in our other products and services segment is our third-party freight and logistic services business and our Jordanian poultry and meats business. 5 Table of Contents Our third-party freight and logistic services business leverages our supply chain assets, including our shipping vessels, warehouses and cold storage infrastructure as part of our efforts to expand our portfolio of services.
Other Products and Services Included in our other products and services segment is our third-party freight and logistic services business, our Jordanian poultry and meats business and our biomass initiatives. 5 Table of Contents Our third-party freight and logistic services business leverages our supply chain assets, including our shipping vessels, warehouses and cold storage infrastructure as part of our efforts to expand our portfolio of services.
Our net sales by region for the year 2023 are depicted in the chart below. We produce, source, distribute and market a broad array of fresh produce, primarily under the Del Monte ® brand, as well as under other proprietary brands, such as UTC ® and Rosy ® .
Our net sales by region for the year 2024 are depicted in the chart below. We produce, source, distribute and market a broad array of fresh produce, primarily under the Del Monte ® brand, as well as under other proprietary brands, such as UTC ® and Rosy ® .
Although we prioritize a “bottom-up” approach that gives our operating regions the responsibility for responding to the specific issues of local concern, our Community Fresh Team steers our community outreach strategy with a focus on five key pillars: (1) access to healthcare, (2) education, (3) clean water and related infrastructure, (4) disaster relief, and (5) ending hunger and providing access to healthy foods.
Although we prioritize a “bottom-up” approach that gives our operating regions the responsibility for responding to the specific issues of local concern, our Community Fresh 12 Table of Contents Team steers our community outreach strategy with a focus on five key pillars: (1) access to healthcare, (2) education, (3) clean water and related infrastructure, (4) disaster relief, and (5) ending hunger and providing access to healthy foods.
We make available, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements on Schedule 14A and amendments to those materials 13 Table of Contents filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), on our website under “Investor Relations - SEC Filings,” as soon as reasonably practicable after we file electronically such material with, or furnish it to, the United States Securities and Exchange Commission (the “Commission”).
We make available, free of charge, our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements on Schedule 14A and amendments to those materials filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), on our website under “Investor Relations - SEC Filings,” as soon as reasonably practicable after we file electronically such material with, or furnish it to, the United States Securities and Exchange Commission (the “SEC”).
Our products are sourced from company-controlled operations and through supply contracts with independent producers. In 2023, 49% of the fresh produce we sold was grown on company-controlled farms and the remaining 51% was acquired primarily through supply contracts with independent growers.
Our products are sourced from company-controlled operations and through supply contracts with independent producers. In 2024, 51% of the fresh produce we sold was grown on company-controlled farms and the remaining 49% was acquired primarily through supply contracts with independent growers.
We produce bananas on company-controlled farms in Costa Rica, Guatemala, the Philippines, Panama and Brazil, and we purchase bananas from independent growers in Guatemala, the Philippines, Ecuador, and Colombia. In 2023, we produced approximately 47% of the banana volume we sold on company-controlled farms, and we purchased the remainder from independent growers.
We produce bananas on Company-controlled farms in Costa Rica, Guatemala, the Philippines, Panama and Brazil, and we purchase bananas from independent growers in Guatemala, the Philippines, Ecuador, and Colombia. In 2024, we produced approximately 47% of the banana volume we sold on Company-controlled farms, and we purchased the remainder from independent growers.
In Saudi Arabia, through our 60%-owned joint venture, we lease two distribution centers with fresh-cut fruit, vegetable and salad operations, and prepared foods manufacturing of frozen potatoes, ultra-fresh juices, and freshly prepared sandwiches.
In Saudi Arabia, through our 60%-owned joint venture, we lease two distribution centers with fresh-cut fruit, vegetable and salad operations, and prepared foods manufacturing of frozen potatoes, and ultra-fresh juices.
Where appropriate, we cool the fresh produce at our packing facilities to maximize quality and optimize shelf life. As an indication of our worldwide commitment to quality, food safety, and sustainability, many of our operations are third party certified in globally recognized standards developed for the safe and sustainable production and distribution of quality foods.
Where appropriate, we cool the fresh produce at our packing facilities to maximize quality and optimize shelf life. 8 Table of Contents As an indication of our worldwide commitment to quality, food safety, and sustainability, many of our operations are third party certified in globally recognized standards developed for the safe and sustainable production and distribution of quality foods.
We also utilize a centralized employee intranet to reach out to employees and allow them to stay connected, remain informed and communicate their thoughts and values. 12 Table of Contents Health We support the health and well-being of our employees by offering health care benefits. While these benefits vary across our different regions, we are competitive with local practices.
We also utilize a centralized employee intranet to reach out to employees and allow them to stay connected, remain informed and communicate their thoughts and values. Health We support the health and well-being of our employees by offering health care benefits. While these benefits vary across our different regions, we are competitive with local practices.
We have the exclusive right to use the Del Monte ® brand for fresh fruit, fresh vegetables and other fresh and fresh-cut produce and certain other specified products on a royalty-free basis under a worldwide, perpetual license from Del Monte Corporation, an unaffiliated company that owns the Del Monte ® trademark.
We have the exclusive right to use the Del Monte ® brand for fresh fruit, fresh vegetables and other fresh and fresh-cut produce and certain other specified products on a royalty-free basis under a worldwide, perpetual license from Del Monte Foods Corporation II Inc., an unaffiliated company that owns the Del Monte ® trademark.
Except as otherwise indicated, volume data contained in this Annual Report on Form 10-K is shown in millions of 40-pound equivalent boxes. 14 Table of Contents
Except as otherwise indicated, volume data contained in this Annual Report on Form 10-K is shown in millions of 40-pound equivalent boxes. 13 Table of Contents
We believe that our experience in this market coupled with our sourcing and logistics capabilities and the Del Monte ® brand have enabled us to become a leading supplier of fresh-cut fruit to the supermarket, convenience and club store channels in the United States.
We believe that our experience in this market coupled with our sourcing and logistics capabilities and the Del Monte ® brand have enabled 3 Table of Contents us to become a leading supplier of fresh-cut fruit to the supermarket, convenience and club store channels in the United States.
Fresh and value-added products Our fresh and value-added products segment includes sales of the following product categories: Fresh-cut produce (fresh-cut fruit and fresh-cut vegetables) Our fresh-cut produce sales in 2023 represented 20% of our total net sales.
Fresh and value-added products Our fresh and value-added products segment includes sales of the following product categories: Fresh-cut produce (fresh-cut fruit and fresh-cut vegetables) Our fresh-cut produce sales in 2024 represented 20% of our total net sales.
We market and distribute our products to retail stores, club stores, convenience stores, wholesalers, distributors and foodservice operators in more than 80 countries around the world. North America is our largest market, accounting for 60% of our net sales in 2023. Our other major markets are Europe, the Middle East (which includes North Africa) and Asia.
We market and distribute our products to retail stores, club stores, convenience stores, wholesalers, distributors and foodservice operators in more than 80 countries around the world. North America is our largest market, accounting for 59% of our net sales in 2024. Our other major markets are Europe, the Middle East (which includes North Africa) and Asia.
Banana Bananas are the leading internationally traded fresh fruit in terms of volume and dollar sales and one of the best-selling fresh fruits in the United States. According to a 2023 publication by The Packer, bananas were the most popular item in the produce department, purchased by 63% of consumers in the U.S. over the past twelve months.
Banana Bananas are the leading internationally traded fresh fruit in terms of volume and dollar sales and one of the best-selling fresh fruits in the United States. According to a 2024 publication by The Packer, bananas were the most popular item in the produce department, purchased by 83% of consumers in the U.S. over the past twelve months.
In North America, we also produce and market an array of prepared vegetable offerings such as vegetable trays with dip, salad kids, Nourish Bowls ®, and ready-to-use veggie kits created for air fryers.
In North America, we also produce and market an array of prepared vegetable offerings such as vegetable trays with dip, salad kits, and ready-to-use veggie kits created for air fryers.
In this region, we distribute our products through independent distributors and company-operated distribution facilities. Our leased distribution and manufacturing center in Dubai, UAE has just-in-time delivery capabilities and includes fresh-cut fruit and vegetable operations, an ultra-fresh juice manufacturing operation and prepared foods distribution.
In this region, we distribute our products through independent distributors and company-operated distribution facilities. 7 Table of Contents Our leased distribution and manufacturing center in Dubai, UAE has just-in-time delivery capabilities and includes fresh-cut fruit and vegetable operations, an ultra-fresh juice manufacturing operation and prepared foods distribution.
We also operated 25 fresh-cut facilities in the United States, the United Kingdom, Japan, South Korea, the United Arab Emirates, Kuwait, and Saudi Arabia, some of which are located within our distribution centers. In addition, we own or lease other related equipment, including approximately 355 trucks and refrigerated trailers used to transport our fresh produce in the United States.
We also operated 18 fresh-cut facilities in the United States, the United Kingdom, Japan, South Korea, the UAE, Kuwait, and Saudi Arabia, some of which are located within our distribution centers. In addition, we own or lease other related equipment, including approximately 355 trucks and refrigerated trailers used to transport our fresh produce in the United States.
During 2023, one customer, Walmart, Inc. (including its affiliates), accounted for approximately 9% of our total net sales. These sales are reported in our banana and fresh and value-added products segments. No customer accounted for 10% or more of our net sales in 2023. In 2023, our top 10 customers accounted for approximately 31% of our net sales.
During 2024, one customer, Walmart, Inc. (including its affiliates), accounted for approximately 9% of our total net sales. These sales are reported in our banana and fresh and value-added products segments. No customer accounted for 10% or more of our net sales in 2024. In 2024, our top 10 customers accounted for approximately 32% of our net sales.
We also service these customers, as well as an increasing number of smaller regional chains and independent grocers, through our distribution centers. Europe In 2023, 19% of our net sales were in Europe where we distribute our fresh produce and prepared food products.
We also service these customers, as well as an increasing number of smaller regional chains and independent grocers, through our distribution centers. Europe In 2024, 20% of our net sales were in Europe where we distribute our fresh produce and prepared food products.
Our largest selling market for our fresh-cut products was North America which accounted for 71% of our fresh-cut fruit sales and 83% of our fresh-cut vegetable sales in 2023. We also sold fresh-cut produce in Europe, Asia, and the Middle East.
Our largest selling market for our fresh-cut products was North America, which accounted for 71% of our fresh-cut fruit sales and 81% of our fresh-cut vegetable sales in 2024. We also sold fresh-cut produce in Europe, Asia, and the Middle East.
In the Philippines, we purchase the majority of our bananas through long-term contracts with independent growers. Approximately 84% of our Philippine-sourced bananas are supplied by one grower, representing 12% of the Philippines banana industry volume in 2023.
In the Philippines, we purchase the majority of our bananas through long-term contracts with independent growers. Approximately 95% of our Philippine-sourced bananas are supplied by one grower, representing 12% of the Philippines banana industry volume in 2024.
We are proud of the diversity throughout our organization and especially in our leadership team, of which 62% identify as Hispanic, 31% identify as Middle Eastern, and 8% identify as Caucasian. We embrace diversity throughout our company as we have employees across multiple generations and many different backgrounds.
We are proud of the diversity throughout our organization and especially in our leadership team, of which 42% identify as Hispanic, 25% identify as Middle Eastern, 25% identify as Caucasian, and 8% identify as Asian. We embrace diversity throughout our company as we have employees across multiple generations and many different backgrounds.
North America In 2023, 60% of our net sales were in North America where we have established a highly integrated sales and marketing network that builds on our ability to control transportation and distribution throughout our extensive logistics network. We operate a total of 27 distribution centers and fresh-cut facilities within North America.
North America In 2024, 59% of our net sales were in North America where we have established a highly-integrated sales and marketing network that builds on our ability to control transportation and distribution throughout our extensive logistics network. We operate a total of 22 distribution centers and fresh-cut facilities within North America.
Our prepared foods activity in Germany and France has been performed via direct sales to the retail channel through our own sales and marketing entity. 7 Table of Contents Middle East and North Africa In 2023, 9% of our net sales were in the Middle East and North Africa.
Our prepared foods activity in Germany and France has been performed via direct sales to the retail channel through our own sales and marketing entity. Middle East and North Africa In 2024, 9% of our net sales were in the Middle East and North Africa.
We are an exempted holding company, incorporated under the laws of the Cayman Islands on August 29, 1996. At December 29, 2023, the close of our most recent fiscal year, members of the Abu-Ghazaleh family directly owned approximately 28.6% of our outstanding Ordinary Shares. Our principal executive office is located at P.O.
We are an exempted holding company, incorporated under the laws of the Cayman Islands on August 29, 1996. At December 27, 2024, the close of our most recent fiscal year, members of the Abu-Ghazaleh family directly owned approximately 30.7% of our outstanding Ordinary Shares. Our principal executive office is located at P.O.
Our licenses allow us to use the trademark “ Del Monte ® ” and the words “ Del Monte ® ” in association with any design or logotype associated with the brand.
Our licenses allow us to use the trademark “ Del Monte ® ” and 10 Table of Contents the words “ Del Monte ” in association with any design or logotype associated with the brand.
Costa Rica is our most significant sourcing location representing approximately 36% of our total sales volume of fresh produce products and where 36% of our property, plant and equipment was located in 2023.
Costa Rica is our most significant sourcing location representing approximately 37% of our total sales volume of fresh produce products and where 38% of our property, plant and equipment was located in 2024.
We operated 38 distribution centers globally, generally with cold storage and banana ripening facilities in our key markets worldwide, including the United States, Canada, South Korea, the United Arab Emirates, Saudi Arabia and Hong Kong.
We operated 33 distribution centers globally, generally with cold storage and banana ripening facilities in our key markets worldwide, including the United States, South Korea, the UAE, Saudi Arabia and Hong Kong.
We provide our employees with competitive fixed and/or variable pay, and for eligible employees, we currently provide access to health and retirement benefits. In each of our regions, we work with local officials to calculate fair wages for our team members.
Approximately 81% of our workforce is employed in production locations. We provide our employees with competitive fixed and/or variable pay, and for eligible employees, we currently provide access to health and retirement benefits. In each of our regions, we work with local officials to calculate fair wages for our team members.
Our six refrigerated container vessels, which were delivered in 2020 and 2021, have allowed us to continue expanding this ancillary business, and provide meaningful contribution to our profitability in 2022 and 2023 which we expect to continue in future periods.
Our six refrigerated container vessels, which were delivered in 2020 and 2021, have allowed us to continue expanding this ancillary business, and provide meaningful contribution to our profitability.
Our principal markets in this region are Japan, South Korea, mainland China and Hong Kong. • In Japan, we distributed 100% of the products we sold in 2023 through our own direct sales and marketing organization and we operate three fresh-cut facilities.
We distribute our products in Asia through direct marketing and large distributors. Our principal markets in this region are Japan, South Korea, mainland China and Hong Kong. • In Japan, we distributed 100% of the products we sold in 2024 through our own direct sales and marketing organization and we operated three fresh-cut facilities.
We also distribute under the Mann Packing family of brands in North America including Mann ™ , Mann's Logo ® , Arcadian Harvest ® , Nourish Bowls ® , Broccolini ® , Caulilini ® , Better Burger Leaf ® and Romaleaf ® .
We also distribute under the Mann Packing family of brands in North America including Mann ®™ , Mann's Logo ® , Nourish Bowls ® , Broccolini ® and Caulilini ® .
In France, since late 2021, we have outsourced our fresh-cut production and banana ripening activities to third-parties, while our sales and marketing function is performed internally. Similarly, in Germany, our sales and marketing function is performed internally and our ripening operations were outsourced to a service provider beginning in 2022.
In France we outsource our banana ripening activities to third-parties, while our sales and marketing function is performed internally. Similarly, in Germany, our sales and marketing function is performed internally and our ripening operations were outsourced to a service provider beginning in 2022.
In Turkey, our sales office located in Mersin is responsible for sourcing various types of fruit serving our units across the region in addition to selling and distributing a range of prepared food products to distributors.
In Qatar, we have a sales and marketing office to serve the expanding brand presence in the country. In Turkey, our sales office located in Mersin is responsible for sourcing various types of fruit serving our units across the region in addition to selling and distributing a range of prepared food products to distributors.
We also sell products under the Mann Packing family of brands including Mann ™ , Mann's Logo ™ , Arcadian Harvest ® , Nourish Bowls ® , Broccolini ® , Caulilini ® , Better Burger Leaf ® and Romaleaf ® .
We also sell products under the Mann Packing family of brands including Mann ® , Mann's Logo ® , Nourish Bowls ® , Broccolini ® and Caulilini ® .
Box 698, 4th Floor, Apollo House, 87 Mary Street, George Town, Grand Cayman, KY1-1107, Cayman Islands. The address of our U.S. executive office is c/o Del Monte Fresh Produce Company, 241 Sevilla Avenue, Coral Gables, Florida 33134. Our telephone number at our U.S. executive office is (305) 520-8400. Our Internet address is www.freshdelmonte.com.
Box 1569, 6th Floor, Athena Tower, 71 Fort Street, George Town, Grand Cayman, KY1-1110, Cayman Islands. The address of our U.S. executive office is c/o Del Monte Fresh Produce Company, 241 Sevilla Avenue, Coral Gables, Florida 33134. Our telephone number at our U.S. executive office is (305) 520-8400. Our Internet address is www.freshdelmonte.com.
We also obtain our supply of avocados from independent growers in the United States and Peru. 4 Table of Contents Prepared Foods We have a royalty-free, perpetual license to use the Del Monte ® trademark in connection with the production, manufacture, sale and distribution of prepared food, including beverages, in over 100 countries throughout Europe, Africa, the Middle East and certain Central Asian countries.
We have a royalty-free, perpetual license to use the Del Monte ® trademark in connection with the production, manufacture, sale and distribution of prepared food, including beverages, in over 100 countries throughout Europe, Africa, the Middle East and certain Central Asian countries.
We transport our fresh produce using our fleet of two chartered refrigerated ships and ten owned ships and also transport our products to destinations around the world using third-party container lines that cover destinations that we do not service directly with our own fleet.
We also transport our products to destinations around the world using third-party container lines that cover destinations that we do not service directly with our own fleet. Included in our ten owned ships are six refrigerated container ships that we received in 2020 and 2021.
Our pineapple net sales in 2023 represented 14% of our total net sales, and were primarily concentrated in North America (accounting for 61% of our total pineapple sales), followed by Europe (22%), Asia (11%), and the Middle East (6%).
Our pineapple net sales in 2024 represented 15% of our total net sales, and were primarily concentrated in North America (accounting for 60% of our total pineapple sales), followed by Europe (22%), Asia (10%), and the Middle East (8%).
Our banana net sales in 2023 represented 38% of our total net sales, and were primarily concentrated in North America (accounting for 49% of our total banana sales), followed by Europe (23%), Asia (18%), and the Middle East (8%).
Our banana net sales in 2024 represented 34% of our total net sales, and were primarily concentrated in North America (accounting for 46% of our total banana sales), followed by Europe (25%), Asia (18%), and the Middle East (9%).
Included in our ten owned ships are six refrigerated container ships that we received in 2020 and 2021. These fuel-efficient vessels have allowed us to continue generating logistics cost savings, expanding our third-party ocean freight business, and ensuring the freshness and quality of our products. We also operate a fleet of approximately 11,000 refrigerated containers.
These fuel-efficient vessels have allowed us to continue generating logistics cost savings, expanding our third-party ocean freight business, and ensuring the freshness and quality of our products. In addition, we operated a fleet of approximately 11,000 refrigerated containers.
This allows us to manage the timing of our sales to optimize our margins. Our ability to off-load shipments for cold storage and distribution throughout our network also improves ship utilization by minimizing in-port docking time.
Our ability to off-load shipments for cold storage and distribution throughout our network also improves ship utilization by minimizing in-port docking time.
Accordingly, we monitor our independent growers to ensure that their produce will meet our agricultural and quality control standards, offer technical assistance on certain aspects of production and packing and, in some cases, manage the farms. The quality assurance process begins on the farms and continues as harvested 8 Table of Contents products enter our packing facilities.
We insist that all produce supplied by our independent growers meet the same stringent quality requirements as the produce grown on our farms. Accordingly, we monitor our independent growers to ensure that their produce will meet our agricultural and quality control standards, offer technical assistance on certain aspects of production and packing and, in some cases, manage the farms.
We believe that our control of the logistics process is a competitive advantage, including from a sales and marketing perspective. For example, because we are able to maintain the quality of our fresh produce in a continuous temperature-controlled environment, we are under less pressure to fully sell a shipment prior to its arrival at port.
For example, because we are able to maintain the quality of our fresh produce in a continuous temperature-controlled environment, we are under less pressure to fully sell a shipment prior to its arrival at port. This allows us to manage the timing of our sales to optimize our margins.
Taken together, these certifications reflect our commitment to quality and the strictest standards of food safety. Competition The global fresh produce industry is a highly competitive business, and the effect of competition is intensified because of the perishable nature of the products.
Competition The global fresh produce industry is a highly competitive business, and the effect of competition is intensified because of the perishable nature of the products.
Our objective is to maximize use of our logistics network to lower our average per-box logistics cost, while remaining sufficiently flexible to redeploy capacity or shipments to meet fluctuations in demand in our key markets. Because logistics costs are also our largest expense other than our cost of products, we devote substantial resources to optimizing our logistics network.
Our logistics system is supported by various information systems. Our objective is to maximize use of our logistics network to lower our average per-box logistics cost, while remaining sufficiently flexible to redeploy capacity or shipments to meet fluctuations in demand in our key markets.
We can also produce, market and distribute certain prepared food products in North America based on an agreement with Del Monte Pacific utilizing the Del Monte ® brand. We sell produce under several other brands for which we have obtained registered trademarks, including UTC ® , Rosy ® , Just Juice ® , Fruitini ® and other regional brands.
We can also produce, market and distribute certain prepared food products in North America based on an agreement with Del Monte Pacific utilizing the Del Monte ® brand.
We have an F&B store in Kuwait in addition to a leased facility to service the Kuwaiti market with our fresh produce products and fresh-cut fruit, fresh-cut vegetables and salads. In Tunisia, we have an office giving us presence in the North Africa region, which imports fresh produce products to sell in the local market.
We have a leased facility to service the Kuwaiti market with our fresh produce products and fresh-cut fruit, fresh-cut vegetables and salads. We also have an office in Morocco, which distributes our products locally and exports locally-sourced fresh produce, allowing us to further expand our coverage in the North Africa Region.
Our efforts, to date, include: • Planting and donating more than 1.6 million trees in our operations and our communities; • Supporting 35,000 students and adult learners with educational opportunities since 2018; • Aiding in sanitation and health efforts across the globe, including recently supporting COVID-19 vaccination efforts in Kenya, Guatemala, and Costa Rica; and • Donating resources to install electrical meters in Kenya which provided daytime electricity access to more than 1,800 housing units in the community.
Our efforts, to date, include: • Planting and donating more than 2.5 million trees in our operations and our communities; • Supporting 53,000 students and adult learners with educational opportunities since 2018; • Aiding in sanitation and health efforts across the globe, including conducting medical service events by providing medical consultations, free medicines, eye check-ups and other services; • Distributing food and non-food relief items to families effected by severe tropical storms in the Philippines; and • Donating resources to install electrical meters in Kenya which provided daytime electricity access to more than 1,800 housing units in the community.
As a result, D&I helps us meet the needs of our customers around the world. Engagement and Opportunities Evolving our culture to increase employee engagement and productivity is a primary focus of our strategic plan as we believe an engaged workforce leads to a more innovative, productive and profitable company.
Engagement and Opportunities Evolving our culture to increase employee engagement and productivity is a primary focus of our strategic plan as we believe an engaged workforce leads to a more innovative, productive and profitable company. Our employees are supported with training and development opportunities to pursue their careers and support compliance with our policies.
As of the year ended 2023, we transported our fresh produce to markets using our fleet of two chartered and ten owned ships, and four port facilities in the United States.
Because logistics costs are also our largest expense other than our cost of products, we devote substantial resources to optimizing our logistics network. As of the year ended 2024, we transported our fresh produce to markets using our fleet of one chartered and ten owned ships, and four port facilities in the United States.
We are able to maintain the high quality of our products by growing a substantial portion of our own produce and working closely with our independent growers. We insist that all produce supplied by our independent growers meet the same stringent quality requirements as the produce grown on our farms.
Our goal is that only fresh produce meeting our stringent quality specifications is sold under the Del Monte ® and Mann ® brands. We are able to maintain the high quality of our products by growing a substantial portion of our own produce and working closely with our independent growers.
Our current workforce is comprised of approximately 6,402 full-time, salaried employees and 25,485 full-time, hourly employees. Additionally, as of December 29, 2023, we employed over 7,000 seasonal, hourly employees, who enable us to pack our in-season fruits and vegetables. Approximately 81% of our workforce is employed in production locations.
Employees Our employees are our greatest asset and are directly responsible for our success in delivering fresh, quality products to consumers. Our current workforce is comprised of approximately 7,499 full-time, salaried employees and 26,299 full-time, hourly employees. Additionally, as of December 27, 2024, we employed over 6,088 seasonal, hourly employees, who enable us to pack our in-season fruits and vegetables.
In the Middle East, we own or lease approximately 94 trucks used to deliver fresh produce and prepared food products to customers.
In the Middle East, we own or lease approximately 161 trucks used to deliver fresh produce, prepared food, and poultry products to customers. We believe that our control of the logistics process is a competitive advantage, including from a sales and marketing perspective.
In January 2024, we launched our Rubyglow ® pineapple, debuting exclusively in China, which features a red exterior and bright yellow flesh as part of our expansion into the market. Pineapples are grown in tropical and sub-tropical locations. The principal production and procurement areas for our pineapples are Costa Rica, the Philippines, and Kenya.
This new pineapple product line extension is grown in Costa Rica and has been certified as sustainably grown by a third-party certification body. In January 2024, we launched our Rubyglow ® pineapple, debuting exclusively in China and later in the United States, which features a red exterior and bright yellow flesh as part of our expansion into the market.
During 2022 and 2023, we continued our efforts in the area of avocado predictability, combining the use of artificial intelligence and our data library to develop technology that can help forecast avocado pricing. Our avocados are sourced principally from Mexico where we have our own sourcing operations and sorting and packing facility, ensuring a consistent supply of high-quality avocados year-round.
We believe opportunity exists to expand our avocado net sales in international markets. Our avocados are sourced principally from Mexico where we have our own sourcing operations and sorting and packing facility, ensuring a consistent supply of high-quality avocados year-round.
We have an integrated logistics network, which includes land and sea transportation through a broad range of refrigerated environments on ships, port facilities, containers, trucks and warehouses. Our logistics system is supported by various information systems.
Consistent with our reputation for high-quality fresh produce, we must preserve our fresh produce in a continuous temperature-controlled environment, from the harvest through to distribution. We have an integrated logistics network, which includes land and sea transportation through a broad range of refrigerated environments on ships, port facilities, containers, trucks and warehouses.
Utilizing our extensive knowledge of this region, we plan to continue capitalizing on this opportunity with increased focus in these markets. Asia In 2023, 10% of our net sales were in Asia. We distribute our products in Asia through direct marketing and large distributors.
We believe that the Middle East, North Africa and Central Asian countries represent an area for sales growth and development of our fresh and prepared food products. Utilizing our extensive knowledge of this region, we plan to continue capitalizing on this opportunity with increased focus in these markets. Asia In 2024, 10% of our net sales were in Asia.
Quality Assurance To ensure the consistent high quality of our products, we have quality assurance operations placed throughout our global operations under the direction of our corporate quality assurance team. This quality assurance team maintains and enforces detailed quality specifications for all our products so that they meet or exceed our high-quality standards and any applicable regulatory requirements.
Quality Assurance To ensure the consistent high quality of our products, we have quality assurance operations placed throughout our global operations under the guidance of our corporate quality assurance team and the direction of our regional quality assurance leadership.
All of our operations that produce or handle high risk foods (tomatoes, melons or leafy greens) apply Hazard Analysis & Critical Control Points (“HACCP”) principles.
In the United States, our operations are in compliance with the requisite programs defined by the Food and Drug Administration’s (FDA) Food Safety Modernization Act. All of our operations that produce or handle high risk foods (tomatoes, melons or leafy greens) apply Hazard Analysis & Critical Control Points (“HACCP”) and Good Manufacturing Practice (GMP) principles.
Our specifications require extensive sampling of our fresh produce at each stage of the production and distribution process using external appearance, internal quality, size, color, porosity, translucency, sweetness and other criteria. Our goal is that only fresh produce meeting our stringent quality specifications is sold under the Del Monte ® and Mann ™ brands.
These quality assurance teams maintain and enforce detailed quality specifications for all our products so that they meet or exceed our high-quality standards and any applicable regulatory requirements. Our specifications require extensive sampling of our fresh produce at each stage of the production and distribution process using external appearance, internal quality, size, color, porosity, translucency, sweetness and other criteria.
Given the complexity of pineapple cultivation relative to our bananas, a higher percentage of the fresh pineapples we sell (74% by volume in 2023) is produced on company-controlled farms. Avocados Avocado net sales represented 6% of our total net sales during 2023. Avocados are one of the fastest growing produce items in the United States.
Growing pineapple requires a higher level of capital investment, as well as greater agricultural expertise as compared to bananas. Given the complexity of pineapple cultivation relative to our bananas, a higher percentage of the fresh pineapples we sell (77% by volume in 2024) is produced on company-controlled farms.
HACCP is a management system in which food safety is addressed through the analysis and control of biological, chemical and physical hazard from raw material production, procurement and handling, to manufacturing, distribution and consumption of the finished product.
HACCP is a management system in which food safety is addressed through the analysis and control of biological, chemical and physical hazard from raw material harvesting, packing, cooling; processing and handling, storage and distribution. Our certification also includes SCS Global Services’ Sustainably Grown Certified and the Sustainable Agriculture Network’s Rain Forest Alliance for sustainable agriculture and food production.
The majority of fresh-cut produce is sold to consumers through retail and club store settings, as well as non-conventional settings such as e-commerce, convenience stores, and airports. We believe that outsourcing by food retailers will increase, particularly as food safety regulations become more stringent and retailers demand more value-added services.
We believe that outsourcing by food retailers will increase, particularly as food safety regulations become more stringent and retailers demand more value-added services.
Maintaining fresh produce at the appropriate temperature is an important factor in preventing premature ripening and optimizing product quality and freshness. Consistent with our reputation for high-quality fresh produce, we must preserve our fresh produce in a continuous temperature-controlled environment, from the harvest through to distribution.
Logistics Operations We conduct complex logistics operations on a global basis, transporting our products from the countries in which they are grown to the many markets in which they are sold worldwide. Maintaining fresh produce at the appropriate temperature is an important factor in preventing premature ripening and optimizing product quality and freshness.
Our Jordanian poultry and meats business includes a vertically integrated poultry business, including poultry farms, hatcheries, a feed mill, a slaughterhouse and a meat processing plant. Logistics Operations We conduct complex logistics operations on a global basis, transporting our products from the countries in which they are grown to the many markets in which they are sold worldwide.
Our Jordanian poultry and meats business includes a vertically-integrated poultry business, including poultry farms, hatcheries, a feed mill, a slaughterhouse and a meat processing plant. Our biomass initiatives include a Kenyan biofertilizer plant, which will use residues from the Company's pineapple cannery to create different types of biomass products for internal use and third-party sales to other growers.
According to a USDA report, the quantity of avocados available per person, a proxy for consumption, has tripled over the past two decades. Additionally, publications by The Packer over the most recent three years indicate that an average of approximately 39% of consumers in the U.S. purchased avocados over the same time period.
Additionally, The Packer, a leading fresh produce publication, reported over the most recent three years that an average of approximately 42% of consumers in the U.S. purchased avocados over the same time period. During 2024, our largest selling market for avocados was North America, which made up 98% of our avocado net sales.
Removed
Our offerings in North America also include a broad variety of fresh and fresh-cut vegetable products since our acquisition of Mann Packing in 2018. During 2022, we completed our integration of Mann Packing, providing the business with full access to 3 Table of Contents our North America resources and logistics network.
Added
Our offerings in North America also include a broad variety of fresh-cut vegetable products. The majority of fresh-cut produce is sold to consumers through retail and club store settings, as well as non-conventional settings such as e-commerce, convenience stores, and airports.
Removed
We believe the completed integration will allow us to leverage our existing distribution network and infrastructure to expand the market reach of our Mann Packing family of products, while enhancing our ability to better serve our integrated customers and address consumers' needs for healthier foods.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFor example, the FDA issued a final rule on additional traceability recordkeeping requirements, which will be effective January 20, 2026, designed to facilitate faster identification and rapid removal of potentially contaminated food from the market; • Regulations on imports and exports by the United States Department of Agriculture (the “USDA”); • Food and safety laws issued by member states of the European Union (the "EU"), pursuant to the General Food Law Regulation (EC No. 178/2002); • Laws and regulations associated with the European Green Deal and EU’s General Food Law Regulation effort to create sustainable food systems, which could result in increased costs for our business associated with compliance with new laws and regulations; and • Laws and regulations implemented by the Canadian Food Inspection Agency and other Canadian governmental departments, which could disrupt our Canadian business, including, for example, requirements relating to import licenses, traceability and food testing.
Biggest changeFor example, the FDA issued a final rule on additional traceability recordkeeping requirements, which will be effective January 20, 2026, designed to facilitate faster identification and rapid removal of potentially contaminated food.
Our business is multinational and subject to the political, economic and other risks that are inherent in operating in numerous countries, including: • a change in laws and regulations or imposition of currency restrictions and other restraints; • the imposition of import and export duties and quotas; • the risk that the government may expropriate assets; • the imposition of burdensome tariffs and quotas; • political changes and economic crises that may lead to changes in the business environment where we operate; • international conflicts and terrorist acts, which could impact our business, financial condition and results of operations; • potential criminal activities targeting our employees, property or business activities, such as theft, vandalism, or physical attacks; • public health epidemics, such as COVID-19, which could impact employees and the global economy; • economic sanctions, which could disrupt our products, even if we do not sell directly into a sanctioned country; • potential violations or alleged violations of laws, regulations, safety codes, employment practices, human rights standards, anti-corruptions laws and other obligations, norms and ethical standards associated with our operations that may result in litigation costs and damage to our reputation, even if we are ultimately not found responsible; • changes in governmental agricultural policies such as price supports and acreage set aside programs in the jurisdictions where we conduct our significant growing operations; and • economic downturns, political instability, boycotts and war or civil disturbances that may disrupt our, our third-party suppliers' and our customers' production and distribution logistics or limit sales in individual markets.
Our business is multinational and subject to the political, economic and other risks that are inherent in operating in numerous countries, including: • a change in laws and regulations or imposition of currency restrictions and other restraints; • the imposition of import and export duties and quotas; • the risk that the government may expropriate assets; • the imposition of burdensome tariffs and quotas; • political changes and economic crises that may lead to changes in the business environment where we operate; • international conflicts and terrorist acts, which could impact our business, financial condition and results of operations; 21 Table of Contents • potential criminal activities targeting our employees, property or business activities, such as theft, vandalism, or physical attacks; • public health epidemics, such as COVID-19, which could impact employees and the global economy; • economic sanctions, which could disrupt our products, even if we do not sell directly into a sanctioned country; • potential violations or alleged violations of laws, regulations, safety codes, employment practices, human rights standards, anti-corruptions laws and other obligations, norms and ethical standards associated with our operations that may result in litigation costs and damage to our reputation, even if we are ultimately not found responsible; • changes in governmental agricultural policies such as price supports and acreage set aside programs in the jurisdictions where we conduct our significant growing operations; and • economic downturns, political instability, boycotts and war or civil disturbances that may disrupt our, our third-party suppliers' and our customers' production and distribution logistics or limit sales in individual markets.
Cybersecurity attacks may also result in the unauthorized access to or release of intellectual property, trade secrets and confidential business or otherwise protected information and corruption of our data. Such information could be leaked to competitors or the public which may result in loss of competitive position and market share.
Cybersecurity attacks may also result in the unauthorized access to or release of intellectual property, trade secrets and confidential business or otherwise protected information and corruption of our data. Such information could be leaked to competitors or the public which may result in a loss of competitive position and market share.
There can be no assurance, however, that our efforts will prevent breakdowns or breaches to our information technologies or the third party providers’ databases or systems that could adversely affect our business. Our operations and reputation may be impaired if our information technology systems fail to perform adequately. Our information technology systems are critical to our business.
There can be no assurance, however, that our efforts will prevent breakdowns or breaches to our information systems or the third-party technology providers’ databases or systems that could adversely affect our business. Our operations and reputation may be impaired if our information technology systems fail to perform adequately. Our information technology systems are critical to our business.
We periodically utilize forward contracts to hedge against a portion of our exposure to currency fluctuations, but we may at times be unable to agree to favorable terms or agree to terms that do not adequately offset currency fluctuations.
We periodically utilize forward or collar contracts to hedge against a portion of our exposure to currency fluctuations, but we may at times be unable to agree to favorable terms or agree to terms that do not adequately offset currency fluctuations.
Based on their increased size and buying leverage as a result of consolidation, these entities (i) can exert significant downward pricing pressure on marketers and/or distributors, such as us, which inhibits our ability to adequately respond to inflationary changes, (ii) can impose additional costs on us that are the type typically borne by the retailer, wholesaler or distributor and (iii) have the ability to launch private label food products that compete with us.
Based on the increased size and buying leverage as a result of consolidation, entities (i) can exert significant downward pricing pressure on marketers and/or distributors, such as us, which inhibits our ability to adequately respond to inflationary changes, (ii) can impose additional costs on us that are the type typically borne by the retailer, wholesaler or distributor and (iii) have the ability to launch private label food products that compete with us.
In addition, many of these types of materials and costs are subject to price fluctuations related to a number of factors, other than inflation, such as market conditions, weather, energy costs, currency fluctuations, supplier capacities, regulatory changes, governmental actions, import and export requirements (including tariffs), regulatory changes and acts of war or international conflict (such as the ongoing conflict between Russia and Ukraine and shipping disruptions in the Red Sea).
In addition, many of these types of materials and costs are subject to price fluctuations related to a number of factors, other than inflation, such as market conditions, weather, energy costs, currency fluctuations, supplier capacities, regulatory changes, governmental actions, import and export requirements (including tariffs), regulatory changes and acts of war or international conflict (such as the ongoing conflict in the Middle East, between Russia and Ukraine and shipping disruptions in the Red Sea).
Various provisions of our organizational documents and Cayman Islands law may delay, deter or prevent a change in control of us that is not approved by our board of directors.
Various provisions of our organizational documents and Cayman Islands law may delay, deter or prevent a change in control of us that is not approved by our Board.
We also hold the sensitive personal data of our current and former employees, as well as proprietary information of our business, including strategic plans and intellectual property.
We also hold the sensitive personal data of our current and former employees, as well as proprietary information about our business, including strategic plans and intellectual property.
We have in the past and in 2021 received notices from the California Air Resource Board alleging violations of certain California anti-air pollution regulations by ships that were subject to a time charter by us from an unrelated non-U.S. third party.
We have in the past received notices from the California Air Resource Board alleging violations of certain California anti-air pollution regulations by ships that were subject to a time charter by us from an unrelated non-U.S. third party.
These provisions include: 27 Table of Contents • a classified board of directors; • a prohibition on shareholder action through written consents; • a requirement that general meetings of shareholders be called only by a majority of the Board or by the Chairman of the Board; • advance notice requirements for shareholder proposals and nominations; • limitations on the ability of shareholders to amend, alter or repeal our organizational documents; and • the authority of the Board to issue preferred shares on such terms that are determined by the Board itself.
These provisions include: • a classified board of directors; • a prohibition on shareholder action through written consents; • a requirement that general meetings of shareholders be called only by a majority of the Board or by the Chairman of the Board; • advance notice requirements for shareholder proposals and nominations; • limitations on the ability of shareholders to amend, alter or repeal our organizational documents; and • the authority of the Board to issue preferred shares on such terms that are determined by the Board itself.
Any damage by unforeseen events or system failure which causes interruptions to the input, retrieval and transmission of data or increase in the service time, whether caused by human error, natural disasters, power loss, computer viruses, intentional acts of vandalism, various forms of cybercrimes including and not limited to hacking, ransomware, 25 Table of Contents intrusions and malware or otherwise, could disrupt our normal operations.
Any damage by unforeseen events or system failure which causes interruptions to the input, retrieval and transmission of data or increase in the service time, whether caused by human error, natural disasters, power loss, computer viruses, intentional acts of vandalism, various forms of cybercrimes including and not limited to hacking, ransomware, intrusions and malware or otherwise, could disrupt our normal operations.
We rely on these systems to, among other things, facilitate communications with our growers, distributors and customers; receive, process and ship orders on a timely basis, and to maintain accurate and up-to-date operating and financial data for the compilation of management information. The cyber threat landscape is growing increasingly complex and rapidly evolving, particularly in light of growing geopolitical tensions.
We rely on these systems to, among other things, facilitate communications with our growers, distributors and customers; receive, process and ship orders on a timely basis, and to maintain accurate and up-to-date operating and financial data for the compilation of management information. The cyber threat landscape is growing increasingly complex and rapidly evolving, particularly considering growing geopolitical tensions.
We may lose all or part of our investment relating to such companies if their value decreases as a result of their financial performance or for any other reason. A sustained lack of profitability could cause us to incur impairment charges of our intangible and long-lived assets and/or record valuation allowances against our deferred tax assets.
We may lose all or part of our investment relating to such companies if their value decreases as a result of their financial performance or for any other reason. 18 Table of Contents A sustained lack of profitability could cause us to incur impairment charges of our intangible and long-lived assets and/or record valuation allowances against our deferred tax assets.
Even when not merited, these class action claims and legal actions can be expensive to defend and could adversely affect our reputation, brand image, business and operating results. 22 Table of Contents The packaging and labeling of our products, and their distribution and marketing, are also subject to regulation by governmental authorities in each jurisdiction where our products are marketed.
Even when not merited, these class action claims and legal actions can be expensive to defend and could adversely affect our reputation, brand image, business and operating results. The packaging and labeling of our products, and their distribution and marketing, are also subject to regulation by governmental authorities in each jurisdiction where our products are marketed.
Additionally, we record impairments on 19 Table of Contents long-lived assets, including definite-lived intangible assets, when indicators of impairment are present and the estimated undiscounted cash flows of those assets are less than the assets’ carrying amount. Certain definite-lived intangible assets related to our fresh and value-added products segment are sensitive to changes in estimated cash flows.
Additionally, we record impairments on long-lived assets, including definite-lived intangible assets, when indicators of impairment are present and the estimated undiscounted cash flows of those assets are less than the assets’ carrying amount. Certain definite-lived intangible assets related to our fresh and value-added products segment are sensitive to changes in estimated cash flows.
Moreover, actual or anticipated attacks may require us to incur incremental costs to hire additional personnel, purchase additional protection technologies, maintain cyber incident insurance, replace existing software and hardware, train employees and engage third-party experts and consultants, which could negatively impact our operating income.
Moreover, actual or anticipated attacks may require us to incur incremental costs to hire additional personnel, purchase additional protection technologies, maintain or pay deductibles under our cyber incident insurance, replace existing software and hardware, train employees and engage third-party experts and consultants, which could negatively impact our operating income.
We also share the Del Monte ® 18 Table of Contents brand with unaffiliated companies that manufacture, distribute and sell canned or processed fruit and vegetables, dried fruit, snacks and other products. Acts or omissions by these companies, including an instance of food-borne contamination or disease, may adversely affect the value of the Del Monte ® brand.
We also share the Del Monte ® brand with unaffiliated companies that manufacture, distribute and sell canned or processed fruit and vegetables, dried fruit, snacks and other products. Acts or omissions by these companies, including an instance of food-borne contamination or disease, may adversely affect the value of the Del Monte ® brand.
When severe weather, natural disasters, and other adverse environmental conditions (i) destroy crops planted on our farms or our suppliers’ farms or (ii) prevent us from exporting these crops on a timely basis, we may lose our investment in those crops and/or our costs of purchased fruit may increase.
When severe weather, natural disasters, and other adverse environmental conditions (i) destroy crops planted on our farms or our suppliers’ farms or (ii) prevent us from exporting these crops on a timely basis, we may lose our investment in those crops 23 Table of Contents and/or our costs of purchased fruit may increase.
In the event of water scarcity or deterioration, we may incur increased production costs or face production constraints that may materially and adversely affect our financial condition, results of operations and cash flows. The effects of climate change and climate change laws could have a material adverse impact on our financial condition and results of operations.
In the event of water scarcity or deterioration, we may incur increased production costs or face production constraints that may materially and adversely affect our financial condition, results of operations and cash flows. 24 Table of Contents The effects of climate change and climate change laws could have a material adverse impact on our financial condition and results of operations.
Customers may also reduce their purchases from us because of price increases. Additionally, our customers may face financial difficulties, including bankruptcy, or disruptions to their operations which may cause them to reduce their level of purchases from us or render them unable to satisfy their outstanding credit balances on a timely basis.
Customers may also reduce their purchases from us because of price increases. Additionally, our customers may face financial difficulties, including bankruptcy, or disruptions to their operations which may cause them to reduce their level of purchases from us or render them unable to satisfy their 15 Table of Contents outstanding credit balances on a timely basis.
For example, allegations regarding human rights violations have been made regarding our Kenya subsidiary. Any media coverage resulting therefrom, could create a negative public perception of our business, which in turn could have a negative impact on our products’ acceptance by consumers or customers.
For example, allegations regarding human rights violations have been made regarding our Kenya 17 Table of Contents subsidiary. Any media coverage resulting therefrom, could create a negative public perception of our business, which in turn could have a negative impact on our products’ acceptance by consumers or customers.
However, retail price increases may not sufficiently reverse the reduced profit margins and could result in loss of sales if our competitors do not also increase their prices. These cost pressures will likely continue to negatively impact our profitability in the future, and we cannot predict their extent or duration.
Additionally, any retail price increases realized may not sufficiently reverse the reduced profit margins and could result in loss of sales if our competitors do not also increase their prices. These cost pressures will likely continue to negatively impact our profitability in the future, and we cannot predict their extent or duration.
We depend on independent growers and key suppliers to obtain products and raw materials. In the Philippines, we purchase most of our bananas through long-term contracts with independent growers. Approximately 13% of our banana net sales in 2023 were supplied by one grower in the Philippines. Termination of our relationships with our key suppliers could adversely affect our business.
We depend on independent growers and key suppliers to obtain products and raw materials. In the Philippines, we purchase most of our bananas through long-term contracts with independent growers. Approximately 12% of our banana net sales in 2024 were supplied by one grower in the Philippines. Termination of our relationships with our key suppliers could adversely affect our business.
Consequently, our results of operations, as expressed in U.S. dollars, may vary significantly because of fluctuations in currency exchange rates. Such disparities are particularly crucial to our business because we incur a significant portion of our costs and our net sales in foreign currencies (nearly 34% of our sales in fiscal 2023).
Consequently, our results of operations, as expressed in U.S. dollars, may vary significantly because of fluctuations in currency exchange rates. Such disparities are particularly crucial to our business because we incur a significant portion of our costs and our net sales in foreign currencies (nearly 32% of our sales in fiscal 2024).
For example, in 2020 we launched our proprietary Pinkglow ® pineapple, which is sourced from genetically modified pineapple plants. The success of these products will in large part depend on the market acceptance of these products in the areas that we operate.
For example, our proprietary Pinkglow ® pineapple is sourced from genetically modified pineapple plants. The success of these products will in large part depend on the market acceptance of these products in the areas that we operate.
If we are unable to successfully develop and integrate the diversified product lines in our fresh-cut and value-added vegetable categories or if demand for these products does not meet expectations, we may not realize all the anticipated synergies and benefits of our Mann Packing investments which could have an adverse effect on our growth and our results of operations.
If we are unable to successfully develop and integrate the diversified product lines in our fresh-cut and value-added vegetable categories or use of fruit residues or if demand for these products does not meet expectations, we may not realize all the anticipated synergies and benefits of our investments which could have an adverse effect on our growth and our results of operations.
If we do not allocate and effectively manage the resources necessary to build, sustain and protect appropriate information technology systems and infrastructure, or we do not 26 Table of Contents effectively implement system upgrades or oversee third-party service providers, our business or financial results could be negatively impacted.
If we do not allocate and effectively manage the resources necessary to build, sustain and protect appropriate information technology systems and infrastructure, or we do not effectively implement system upgrades or oversee third-party service providers, our business or financial results could be negatively impacted.
Sales to Walmart, Inc., our largest customer, amounted to approximately 9% of our total net sales in fiscal 2023, and our top 10 customers collectively accounted for approximately 31% of our total net sales. We expect that a significant portion of our revenues will continue to be derived from a small number of customers.
Sales to Walmart, Inc., our largest customer, amounted to approximately 9% of our total net sales in fiscal 2024, and our top 10 customers collectively accounted for approximately 32% of our total net sales. We expect that a significant portion of our revenues will continue to be derived from a small number of customers.
In the past four years, we have been impacted by severe weather conditions such as hurricanes, severe rainstorms and flooding that have resulted in inventory write-offs and asset impairment changes ranging from $1.4 million to $3.4 million, and we could incur similar or greater costs in the future due to such events.
In the past four years, we have been impacted by severe weather conditions such as hurricanes, severe rainstorms and flooding that have resulted in inventory write-offs and asset impairment charges ranging from $1.4 million to $2.7 million, and we could incur similar or greater costs in the future due to such events.
We utilize interest rate swaps to hedge against our exposure to interest rate fluctuations, but we may at times be unable to agree to favorable terms or agree to terms that do not adequately offset interest rate fluctuations.
We have previously utilized interest rate swaps to hedge against our exposure to interest rate fluctuations, but we may at times be unable to agree to favorable terms or agree to terms that do not adequately offset interest rate fluctuations.
Increased product prices may result in reductions in sales volume if consumers are less willing to pay a price differential for our branded products and instead elect to purchase lower-priced offerings or forgo some purchases altogether, during an economic downturn.
Increased product prices may result in reductions in sales volume if consumers are less willing to pay a price differential for our branded products and instead elect to purchase lower-priced offerings or forgo some purchases altogether, during an economic downturn especially if inflation further reduces consumer purchasing power.
In addition, our ability to implement some initiatives or achieve some goals is dependent on external factors. For example, our ability to meet certain environmental sustainability goals or initiatives will depend in part on third-party collaboration, the availability of suppliers that can satisfy new requirements, mitigation innovations and/or the availability of economically feasible solutions at scale.
For example, our ability to meet certain environmental sustainability goals or initiatives will depend in part on third-party collaboration, the availability of suppliers that can satisfy new requirements, mitigation innovations and/or the availability of economically feasible solutions at scale.
During 2023 and 2022, we made investments in unconsolidated companies within the food, nutrition, and agricultural technology sectors, as well as in other minority investments. In the future, we may continue investing in similar companies that align with our long-term strategy and vision.
During recent years, including 2024, we have made investments in unconsolidated companies within the food, nutrition, and agricultural technology sectors, as well as in other minority investments. In the future, we may continue investing in similar companies that align with our long-term strategy and vision.
We may not be successful in 17 Table of Contents anticipating the demand for these value-added products and services, in establishing the requisite infrastructure to meet customer demand or the provision of these value-added services.
There may not be significant demand for these products and services, we may not be successful in anticipating such demand for these value-added products and services or in establishing the requisite infrastructure to meet customer demand or the provision of these value-added services.
Consequently, increases in these costs materially and adversely affect our margins for these products, including increases due to the inflationary pressures discussed above. If we are unable to increase our pricing to reflect these increased costs our profit margins will be adversely affected. We have increased certain retail prices as a result of these increased costs.
Consequently, increases in these costs materially and adversely affect our margins for these products, including increases due to the inflationary pressures discussed above. If we are unable to increase our pricing to reflect these increased costs our profit margins will be adversely affected.
For example, in connection with a current examination of the tax returns in two of these foreign jurisdictions, the taxing authorities have issued income tax deficiencies related to transfer pricing aggregating approximately $165.4 million (including interest and penalties) for tax years 2012 through 2016.
For example, in connection with a current examination of the tax returns in three of these foreign jurisdictions, the taxing authorities have issued income tax deficiencies primarily related to transfer pricing aggregating approximately $231.9 million (including interest and penalties) for tax years 2012 through 2021.
Increases in interest rates could increase the cost of servicing our indebtedness and have an adverse effect on our results of operations and cash flows. Our current credit facility bears interest at a variable rate, which will generally change as interest rates change.
Additional sales of our equity capital could substantially dilute the ownership interest of existing shareholders. Increases in interest rates could increase the cost of servicing our indebtedness and have an adverse effect on our results of operations and cash flows. Our current credit facility bears interest at a variable rate, which will generally change as interest rates change.
During recent years we have experienced elevated commodity and supply chain costs, including the costs of raw materials, packaging materials, labor, energy, fuel, transportation and other inputs necessary for the production and distribution of our products, and we expect continued inflationary pressure on these costs in 2024.
During recent years we have experienced elevated commodity and supply chain costs, including the costs of raw materials, packaging materials, labor, energy, fuel, transportation and other inputs necessary for the production and distribution of our products.
Adverse information about our brand, whether or not true, may be instantly and easily posted on social media platforms at any time. The harm may be immediate without affording us an opportunity for redress or correction.
Adverse information about our brand, whether or not true, may be instantly and easily posted on social media platforms at any time, especially given the rise of influencer marketing in the food industry. The harm may be immediate without affording us an opportunity for redress or correction.
We also have various leases, and may enter into future equipment leases, with costs that increase as interest rates increase. Interest rates rose significantly in 2022 and 2023 in response to inflationary pressures in the U.S. and world economies.
We also have various leases, and may enter into future equipment leases, with costs that increase as interest rates increase. Interest rates rose significantly in 2022 and 2023 in response to inflationary pressures in the U.S. and world economies. While inflationary pressures eased to some extent in 2024, the Federal Reserve decreased interest rates as compared to 2023.
As of February 16, 2024, they together directly owned 28.6% of our outstanding Ordinary Shares, and our Chairman and Chief Executive Officer holds, and is expected to continue to hold, an irrevocable proxy to vote all of these shares.
As of February 14, 2025, they together directly owned 30.7% of our outstanding Ordinary Shares, and our Chairman and Chief Executive Officer holds, and is expected to continue to hold, an irrevocable proxy to vote all of these shares.
Department of Transportation, as well as its agencies, the Surface Transportation Board, the Federal Highway Administration, the Federal Motor Carrier Safety Administration, and the National Highway Traffic Safety Administration, which collectively regulate our trucking business through the regulation of operations, safety, insurance and hazardous materials.
Our business and employment practices are also subject to regulation by the U.S. Department of Transportation, as well as its agencies, the Surface Transportation Board, the Federal Highway Administration, the Federal Motor Carrier Safety Administration, and the National Highway Traffic Safety Administration, which collectively regulate our trucking business through the regulation of operations, safety, insurance and hazardous materials.
If future developments result in estimated cash flows that are less than currently estimated levels, these assets could be impaired. If incurred, future impairment of our intangible and/or long-lived assets could have a material adverse effect on our results of operations.
If future developments result in estimated cash flows that are less than currently estimated levels, these assets could be impaired. If incurred, future impairment of our intangible and/or long-lived assets could have a material adverse effect on our results of operations. During 2024, we incurred impairment charges to goodwill in our vegetable reporting unit of $1.4 million.
Such injuries may result from tampering by unauthorized personnel or quality issues such as product contamination or spoilage, including the presence of foreign objects, substances, chemicals or residues introduced during the growing, packing, storage, handling or transportation phases.
The sale of food products for human consumption involves the risk of injury to consumers. Such injuries may result from tampering by unauthorized personnel or quality issues such as product contamination or spoilage, including the presence of foreign objects, substances, chemicals or residues introduced during the growing, packing, storage, handling or transportation phases.
During 2023, we incurred impairment charges in our fresh and value-added products assets and prepared foods reporting unit of $109.6 million and $21.6 million, respectively, as a result of a decline in actual and projected performance and cash flows.
Similarly, during 2023 we incurred impairment charges to intangible and long-lived assets in our fresh and value-added segment of $109.6 million and to goodwill in our prepared foods reporting unit of $21.6 million. These impairment charges were incurred as a result of a decline in actual and projected performance and cash flows.
The prepared foods markets are mature markets characterized by high levels of competition and consumer awareness. In addition, our profitability has depended significantly on the sale of our Del Monte Gold ® Extra Sweet pineapples. Increased competition in the production and sale of Del Monte Gold ® Extra Sweet pineapples or our other product categories could adversely affect our results.
In addition, our profitability has depended significantly on the sale of our Del Monte Gold ® Extra Sweet pineapples. Increased competition in the production and sale of Del Monte Gold ® Extra Sweet pineapples or our other product categories could adversely affect our results.
For instance, in January 2024, we announced the offering of our Rubyglow ® pineapple, a red-shelled pineapple, which is first being launched in China. In addition, we have made significant investments in distribution centers, growing operations and prepared foods facilities through capital expenditures, and have expanded our business into new geographic markets.
For instance, in 2024, we announced the offering of our Rubyglow ® pineapple, a red-shelled pineapple, which began selling in China and later North America during the year. 16 Table of Contents In addition, we have made significant investments in distribution centers, growing operations and prepared foods facilities through capital expenditures, and have expanded our business into new geographic markets.
The occurrence of any of these risks could materially adversely affect our business, financial condition and operating results. Regulatory Risks We are subject to the risk of product contamination and product liability claims which could materially and adversely affect our results and financial condition. The sale of food products for human consumption involves the risk of injury to consumers.
The occurrence of any of these risks could materially adversely affect our business, financial condition and operating results. 19 Table of Contents Regulatory Risks We are subject to the risk of product contamination and product liability claims which could materially and adversely affect our results and financial condition.
Our failure to comply with these laws and regulations, or to obtain required approvals, could result in fines, as well as a ban or temporary suspension on the production of our products or limit or bar their distribution, and affect our development of new products, and thus materially adversely affect our business and operating results.
Our failure to comply with these laws and regulations, or to obtain required approvals, could result in fines, as well as a ban or temporary suspension on the production of our products or limit or bar their distribution, and affect our development of new products, and thus materially adversely affect our business and operating results. 20 Table of Contents We are subject to legal and environmental risks arising from the transportation of our products and our commercial shipping and logistics business that could result in significant cash outlays.
Competition for these individuals is intense and our business may be adversely affected if we are not effective in filling critical leadership positions or in assimilating new executive talent into our organization. Item 1B. Unresolved Staff Comments None.
Our business may be negatively affected if we are unable to retain our existing senior management personnel or attract additional qualified senior management personnel. Competition for these individuals is intense and our business may be adversely affected if we are not effective in filling critical leadership positions or in assimilating new executive talent into our organization. Item 1B.
In addition, we are seeking to develop a replacement to the Cavendish variety of banana that appeals broadly to consumers and is resistant to these diseases through our partnership with Queensland University of Technology.
For example, through our partnership with Queensland University of Technology we are seeking to develop a replacement to the Cavendish variety of banana that appeals broadly to consumers and is resistant to TR4. However, this research is still on-going.
The extent of competition generally varies by product and is influenced by various factors including price, product quality, brand recognition and customer loyalty, effectiveness of marketing and promotional activity, and the ability to identify and satisfy evolving consumer preferences. 15 Table of Contents In the banana and pineapple markets, we primarily compete with a limited number of multinational and large regional producers.
The extent of competition generally varies by product and is 14 Table of Contents influenced by various factors including price, product quality, brand recognition and customer loyalty, effectiveness of marketing and promotional activity, and the ability to identify and satisfy evolving consumer preferences.
The Company is continuing to evaluate the potential impact on future periods of the Pillar Two Framework, pending legislative adoption by additional individual countries. The Company may not be able to completely mitigate the impact of the legislation, which could have an adverse material effect on our financial condition, results of operations and cash flows.
The Company may not be able to completely mitigate the impact of the legislation, which could have an adverse material effect on our financial condition, results of operations and cash flows.
Future actions regarding the availability and use of pesticides could have an adverse effect on us by increasing our production costs, restricting our ability to import certain products, or imposing substantial penalties or bans due to noncompliance. 24 Table of Contents We may be subject to liability and/or increased costs for environmental damage from the use of herbicides, pesticides and other substances or environmental contamination of our owned or leased property.
Future actions regarding the availability and use of pesticides could have an adverse effect on us by increasing our production costs, restricting our ability to import certain products, or imposing substantial penalties or bans due to noncompliance.
(“CCPA”). A cybersecurity incident that resulted in the disclosure of personal confidential information could lead to state or federal enforcement actions or private causes of action which could result in fines, penalties, judgments or other liabilities. Although we strive to comply with all applicable privacy laws, it is possible we could be subject to enforcement actions and litigation alleging non-compliance.
(“CCPA”). A cybersecurity incident that resulted in the disclosure of personal confidential information could lead to state or federal enforcement actions or private causes of action which could result in fines, penalties, judgments or other liabilities.
In addition, it is unclear whether the courts of the Cayman Islands would enforce, either in an original action or in an action for enforcement of judgments of U.S. courts, liabilities that are predicated upon U.S. federal securities laws.
In addition, it is unclear whether the courts of the Cayman Islands would enforce, either in an original action or in an action for enforcement of judgments of U.S. courts, liabilities that are predicated upon U.S. federal securities laws. 27 Table of Contents General Risks Our success depends on the services of our senior executives, the loss of any one of which could disrupt our operations.
There is no assurance that these modifications and improvements and any fines or penalties would not have an adverse effect on our business, financial condition and results of operations.
Changes to our processes and procedures could impose unanticipated costs and/or materially impact our business. Violations of these laws and regulations can result in substantial fines or penalties. There is no assurance that these modifications and improvements and any fines or penalties would not have an adverse effect on our business, financial condition and results of operations.
For other fresh fruit and vegetable products, we compete with several small producers and regional competitors. The fresh-cut produce market is highly fragmented, and we compete with multiple local and regional distributors of branded and unbranded fresh-cut produce and, for certain fresh-cut vegetables, a small number of large, branded producers and distributors.
The fresh-cut produce market is highly fragmented, and we compete with multiple local and regional distributors of branded and unbranded fresh-cut produce and, for certain fresh-cut vegetables, a small number of large, branded producers and distributors. The prepared foods markets are mature markets characterized by high levels of competition and consumer awareness.
If sales of our products to one or more of our largest customers are reduced or we are unable to collect payment, our business, financial condition and results of operations may be adversely affected. 16 Table of Contents Shortages of qualified labor, increases in wage and benefit costs, changes in laws and other labor regulations, and labor disruptions could impact our financial results and decrease our profitability.
If sales of our products to one or more of our largest customers are reduced or we are unable to collect payment, our business, financial condition and results of operations may be adversely affected.
U.S. and international regulators, investors and other stakeholders are increasingly focused on environmental, social and governance matters. For example, new domestic and international laws and regulations relating to environmental, social and governance matters, including environmental sustainability and climate change, human capital management and cybersecurity, are under consideration or being adopted, which may include specific, target-driven disclosure requirements or obligations.
For example, new domestic and international laws and regulations relating to environmental, social and governance matters, including environmental sustainability and climate change, human capital management and cybersecurity, are under consideration or being adopted, such as the European Union's CSRD, California's Climate Corporate Data Accountability Act and Climate Related Financial Risk Act, and the SEC's Enhancement and Standardization of Climate-Related Disclosures, which include or may include specific, target-driven disclosure requirements or obligations.
There is no assurance that our initiatives will achieve their intended outcomes or that we will achieve any of these goals. Our reputation could be impacted by stakeholders’ perceptions of our sustainability initiatives. Should we not meet stakeholders’ expectations or communicate our efforts sufficiently, our reputation may be negatively impacted.
Our reputation could be impacted by stakeholders’ perceptions of our sustainability initiatives. Should we not meet stakeholders’ expectations or communicate our efforts sufficiently, our reputation may be negatively impacted. In addition, our ability to implement some initiatives or achieve some goals is dependent on external factors.
General Risks Our success depends on the services of our senior executives, the loss of any one of which could disrupt our operations. Our ability to maintain our competitive position is dependent to a large degree on the services of our senior management team and other key employees.
Our ability to maintain our competitive position is dependent to a large degree on the services of our senior management team and other key employees. Our future success depends upon our ability to attract and retain executive officers and other senior management, especially to support our current operations and business strategy.
We have and will continue to incur costs to improve our prevention strategies and to identify solutions to the spread of the disease, which may adversely impact our operating profit. In our farming operations in Central America and Asia, we have and continue to incur costs to prevent and control the spread of TR4.
We are working with agricultural experts and qualified agencies to monitor and prevent the spread of TR4 and develop contingency plans and as a result we have incurred, and will continue to incur, costs to improve our prevention strategies and to identify solutions to the spread of the disease, which may adversely impact our operating profit.
In 2019, we detected Banana Fusarium Wilt Tropical Race 4 (“TR4”), a serious vascular crop disease, infecting one of our principal products, the Cavendish variety of bananas, in some areas of Southeast Asia where we source our products. TR4 and other vascular crop diseases cause low-yielding banana crops, which has and may in the future result in impairment charges.
For example, we previously ceased pineapple production in Brazil due to the Pineapple Fusariosis disease that became widespread in the region and in 2019, we detected Banana Fusarium Wilt Tropical Race 4 (“TR4”), a serious vascular crop disease, infecting one of our principal products, the Cavendish variety of bananas, in some areas of Southeast Asia where we source our products.
If we were unable to meet our financial obligations, we would be forced to pursue one or more alternative strategies, such as selling assets, restructuring or refinancing our indebtedness or seeking additional equity capital, strategies which could be unsuccessful. Additional sales of our equity capital could substantially dilute the ownership interest of existing shareholders.
The payment of dividends or other distributions to us by our subsidiaries may be limited by the provisions of our credit agreements and other contractual requirements and by applicable legal restrictions on payment of dividends and other distributions. 26 Table of Contents If we were unable to meet our financial obligations, we would be forced to pursue one or more alternative strategies, such as selling assets, restructuring or refinancing our indebtedness or seeking additional equity capital, strategies which could be unsuccessful.
A long-term reduction in the supply of bananas could lead to increased costs, decreased revenue, and charges to earnings that may adversely affect our business, financial condition and results of operations. Adverse weather, natural disasters and other conditions affecting the environment, including the effects of climate change, could result in substantial losses and weaken our financial condition.
Despite our efforts, we may be unable to prevent the spread of TR4. A long-term reduction in the supply of bananas or other important crops could lead to increased costs, decreased revenue, and charges to earnings that may adversely affect our business, financial condition and results of operations.
We remain concerned that these crop diseases could affect Southeast Asia and other growing regions like Latin America, which could lead to the destruction of all or a portion of the banana crops. 23 Table of Contents We are working with agricultural experts and qualified agencies to monitor and prevent the spread of TR4 and develop contingency plans.
TR4 and other vascular crop diseases cause low-yielding banana crops, which has and may in the future result in impairment charges. We remain concerned that these crop diseases could affect Southeast Asia and other growing regions like Latin America, which could lead to the destruction of all or a portion of the banana crops.
In such cases, the cost to remediate any damages to our information technology systems that we may suffer in connection with a cyber attack could be significant.
Although we strive to comply with all applicable privacy laws, it is possible we could be subject to enforcement actions and 25 Table of Contents litigation alleging non-compliance. In such cases, the cost to remediate any damages to our information technology systems that we may suffer in connection with a cyber-attack could be significant.
Our insurance may not be adequate to cover such costs or damages or may not continue to be available at a price or under terms that are satisfactory to us. In such cases, payment of such costs or damages could have an adverse effect on our business, financial condition or results of operations.
In such cases, payment of such costs or damages could have an adverse effect on our business, financial condition or results of operations.
We are also subject to the laws and regulations in the jurisdictions where our facilities are located and where our products are distributed, including, but not limited to, the following: • Rules and regulations implemented by the FDA, pursuant to the Federal Food, Drug and Cosmetic Act, as amended by the Food Safety Modernization Act (“FSMA”), which has been active in implementing regulations to reduce the risk of contamination in food manufacturing, such as the Foreign Supplier Verification program, and enforcing such regulations.
We are also subject to the laws and regulations in the jurisdictions where our facilities are located and where our products are distributed, including, but not limited to, the following: • Rules and regulations implemented by the FDA, pursuant to the Federal Food, Drug and Cosmetic Act, as amended by the Food Safety Modernization Act (“FSMA”), which has been active in implementing regulations to reduce the risk of contamination in food manufacturing, such as the Foreign Supplier Verification program, and enforcing such regulations. • Regulations on imports and exports by the USDA; • Food and safety laws issued by member states of the European Union (the "EU"), pursuant to the General Food Law Regulation (EC No. 178/2002); • Laws and regulations associated with the European Green Deal and EU’s General Food Law Regulation effort to create sustainable food systems, which could result in increased costs for our business associated with compliance with new laws and regulations; and • Laws and regulations implemented by the Canadian Food Inspection Agency and other Canadian governmental departments, which could disrupt our Canadian business, including, for example, requirements relating to import licenses, traceability and food testing.
Our 21 Table of Contents response will require increased costs to comply, the implementation of new reporting processes, entailing additional compliance risk, a skilled workforce and other incremental investments. In addition, we have undertaken or announced a number of sustainability related goals and initiatives, such as investing in traceability technology, which will require changes to operations and ongoing investments.
In addition, we have undertaken or announced a number of sustainability related goals and initiatives, such as investing in traceability technology, which will require changes to operations and ongoing investments. There is no assurance that our initiatives will achieve their intended outcomes or that we will achieve any of these goals.
We use herbicides, pesticides and other potentially hazardous substances in the operation of our business. We may have to pay for the costs or damages associated with any improper application, accidental release or the use or misuse of such substances.
We may have to pay for the costs or damages associated with any improper application, accidental release or the use or misuse of such substances. Our insurance may not be adequate to cover such costs or damages or may not continue to be available at a price or under terms that are satisfactory to us.
The imposition of any penalties and costs of litigation, regardless of an eventual favorable ruling, in connection with current or future tax disputes related to our international operations could materially adversely affect our business, financial condition and operating results.
The imposition of any penalties and costs of litigation, regardless of an eventual favorable ruling, in connection with current or future tax disputes related to our international operations could materially adversely affect our business, financial condition and operating results. 22 Table of Contents Additionally, the European Union (EU) Member States formally adopted the EU’s Pillar Two Directive, which generally provides for a minimum effective tax rate of 15%, as established by the Organization for Economic Co-operation and Development (OECD) Pillar Two Framework which will be effective for the Company for the 2025 fiscal year.
Pursuant to the implementation dates prescribed in the Directive, it is expected the rules will be effective for the Company for the 2025 fiscal year. A significant number of other countries are expected to also implement similar legislation with varying effective dates in the future.
A significant number of other countries are expected to also implement similar legislation with varying effective dates in the future. The Company is continuing to evaluate the potential impact on future periods of the Pillar Two Framework, pending legislative adoption by additional individual countries.
Removed
Our attempts to offset these cost pressures, such as through increases in the selling prices of some of our products, may not be successful. If we are unable to increase prices on products to offset elevated costs, our profitability will suffer.
Added
Further, while it is uncertain what actions the second term of the Trump administration may adopt or steps that may be implemented, President Trump has signaled an intent to proceed with the imposition of tariffs on countries with which the U.S. trades, which could lead to corresponding punitive actions and retaliatory tariffs by such countries.
Removed
For example, in October 2022, Kroger and Albertsons entered into an agreement to merge and in August 2023 Aldi announced its agreement to acquire Winn-Dixie and Harveys Supermarket.
Added
These actions may further boost U.S. inflation, resulting in an increase in the cost of manufacturing food produce, reduced customer purchasing power, increased price pressure, and reduced or cancelled orders and increased supply chain costs.
Removed
Changes to our processes and procedures could impose unanticipated costs and/or materially impact our business. Violations of 20 Table of Contents these laws and regulations can result in substantial fines or penalties.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

9 edited+1 added−0 removed4 unchanged
Biggest changeOur approach to cybersecurity is grounded in the NIST Cybersecurity Framework v1.1, a nationally recognized and adaptable model that aligns with our goals, and addresses the following key areas: ◦ Cross-Functional Approach: We have implemented a cross-functional approach to identifying, preventing and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of cybersecurity incidents so that decisions regarding the disclosure and reporting of such material incidents may be made by management in a timely manner. ◦ Identify, Protect and Detect: We have designed and implemented an industry standard security architecture, policies and procedures applying least privilege, and third-party monitoring of security controls of our core enterprise systems. 28 Table of Contents ◦ Response and Recovery: Working with our third-party security operations center, we maintain an incident response plan to timely, consistently and compliantly address any cyber event that may occur and have a designated Incident Response Team consisting of representatives from select business functions which is led by our Vice President of Information Technology ("CISO").
Biggest changeCybersecurity incidents are reported to the Company's Management Disclosure Committee to review and assess the materiality of the cybersecurity incident. ◦ Identify, Protect and Detect: We have designed and implemented an industry standard security architecture, policies and procedures applying least privilege, and third-party monitoring of security controls of our core enterprise systems. ◦ Response and Recovery: Working with our third-party security operations center, we maintain an incident response plan to timely, consistently and compliantly address any cyber event that may occur and have a designated Incident Response Team consisting of representatives from select business functions which is led by our Vice President of Information Technology ("VP of IT"), who is also in charge of information security, and our Chief Global Privacy Officer ("CPO").
We regularly test our incident response plan, conduct compliance audits, periodic tabletop exercises, vulnerability assessments, and where necessary engage third parties to assist with these audits and assessments, as well as mitigation and remediation options and plans. ◦ Third-Party Risk Management : We rely on the representations and certifications of key partnerships with suppliers recognizing these third-party relationships introduce additional cybersecurity risks.
We regularly test our incident response plan, conduct compliance audits, annual tabletop exercises, vulnerability assessments, and where necessary engage third parties to assist with these audits and assessments, as well as mitigation and remediation options and plans. ◦ Third-Party Risk Management : We rely on the representations and certifications of key partnerships with suppliers recognizing these third-party relationships introduce additional cybersecurity risks.
Potential cybersecurity incidents come to the attention of the Incident Response Team, which then responds to such incidents in accordance with our incident response plan. When appropriate, cybersecurity incidents are reported to the Company's Management Disclosure Committee to review and assess the materiality of the cybersecurity incident.
Potential cybersecurity incidents come to the attention of the Incident Response Team, which then responds to such incidents in accordance with our incident response plan. Cybersecurity incidents are reported to the Company's Management Disclosure Committee to review and assess the materiality of the cybersecurity incident.
Future incidents may interrupt our operations, cause reputational harm, subject us to increased operating costs or expose us to litigation. For additional discussion of the risks posed by cybersecurity threats, see Part I, Item 1A. Risk Factors – Risks Related to our Information Systems of this Annual Report on Form 10-K. 29 Table of Contents
Future incidents may interrupt our operations, cause reputational harm, subject us to increased operating costs or expose us to litigation. For additional discussion of the risks posed by cybersecurity threats, see Part I, Item 1A. Risk Factors – Risks Related to our Information Systems of this Annual Report on Form 10-K.
The CISO and various members of the Incident Response Team report on cybersecurity threats, incidents, plans and responses to the Governance Committee and/or the entire Board on at least a quarterly basis, and more often as needed.
The VP of IT and various members of the Incident Response Team report on cybersecurity threats, incidents, plans and responses to the Governance Committee and/or the entire Board on at least a quarterly basis, and more often as needed.
Management Oversight Our COO, CISO, Chief Global Privacy Officer ("CPO"), our General Counsel ("GC") and various members of the Incident Response Team play an important role in managing the Company's cybersecurity-related risks and maintaining an ongoing dialogue with the Board, the Governance Committee and the Company's Disclosure Committee.
Management Oversight Our Chief Operating Officer ("COO"), Chief Financial Officer ("CFO"), VP of IT, CPO, General Counsel ("GC") and various members of the Incident Response Team play an important role in managing the Company's cybersecurity-related risks and maintaining an ongoing dialogue with our Board, the Governance Committee and the Company's Disclosure Committee.
The members of the Disclosure Committee, which is responsible for addressing the Company's public disclosures and internal controls, include the GC, CISO, CPO, our Chief Operating Officer, certain members of the Incident Response Team, and other members of senior management from legal, finance, risk management, internal audit and communications.
The members of the Disclosure Committee, which is responsible for addressing the Company's public disclosures and internal controls, include the GC, VP of IT, CPO, CFO, COO, certain members of the Incident Response Team, and other members of senior management from legal, finance, risk management, internal audit and communications.
To address these third-party risks, we have established strict criteria for supplier selection and conduct security risk assessments to mitigate potential impacts on our business. ◦ Education and Awareness : We provide regular, mandatory training for personnel regarding cybersecurity threats to educate and empower our workforce to be vigilant against threat actors and actively participate in cybersecurity efforts.
To address these third-party risks, we have established strict criteria for technology supplier selection. ◦ Education and Awareness : We provide regular, mandatory training for personnel regarding cybersecurity threats to educate and empower our workforce to be vigilant against threat actors and actively participate in cybersecurity efforts. 28 Table of Contents Cybersecurity governance Board Oversight Our Board believes a strong cybersecurity strategy is vital to protect our business operations, sustain our control environment and honor our data protection obligations.
Cybersecurity governance Board Oversight Our Board believes a strong cybersecurity strategy is vital to protect our business operations, sustain our control environment and honor our data protection obligations. The Board has delegated to its Governance Committee the responsibility for monitoring the effectiveness of the Company's internal cybersecurity program and coordinates its finding with the company Audit Committee.
Our Board has delegated to its Governance Committee the responsibility for monitoring the effectiveness of the Company's internal cybersecurity program and coordinates its findings with the company Audit Committee.
Added
Our approach to cybersecurity is grounded in the NIST Cybersecurity Framework v2.0, a nationally recognized and adaptable model that aligns with our goals, and addresses the following key areas: ◦ Cross-Functional Approach and Disclosure Committee: We have implemented a cross-functional approach to identifying, preventing and mitigating cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of cybersecurity incidents so that decisions regarding the disclosure and reporting of such material incidents may be made by management in a timely manner.

Item 2. Properties

Properties — owned and leased real estate

9 edited+0 added−2 removed3 unchanged
Biggest changeIn Uruguay, we own approximately 6,400 acres which is leased to a third party. In Chile, we own approximately 6,400 acres of land, of which approximately 2,000 acres are primarily used for production of non-tropical fruits. We also lease approximately 1,300 acres in Chile for non-tropical fruit production.
Biggest changeIn Chile, we own approximately 6,400 acres of land, of which approximately 2,000 acres are primarily used for production of non-tropical fruits. We also lease approximately 1,300 acres in Chile for non-tropical fruit production. Africa In Thika, Kenya, we own and operate a warehouse, a pineapple cannery, a fresh pineapple packing facility, and a juice production facility.
In Jordan, we also own a 25 acre hydroponic greenhouse on leased land where we have a fresh-cut processing center. In the UAE, we lease a combined distribution and manufacturing center in Dubai. This facility includes fresh-cut fruit and vegetable operations, an ultra fresh juice manufacturing operation and prepared foods manufacturing.
In Jordan, we also own a 25 acre hydroponic greenhouse for lettuce on leased land where we have a fresh-cut processing center. In the UAE, we lease a combined distribution and manufacturing center in Dubai. This facility includes fresh-cut fruit and vegetable operations, an ultra-fresh juice manufacturing operation and prepared foods manufacturing.
Properties The following table summarizes the approximate plantation acreage under production that are owned or leased by us and the principal products grown on such plantations by location as of the end of 2023: Acres Under Production Location Acres Owned Acres Leased Products Costa Rica 45,996 5,007 Bananas, Pineapples, Melons Philippines — 17,622 Bananas, Pineapples Guatemala 8,446 5,805 Bananas, Melons Kenya — 11,362 Pineapples Chile 2,073 1,366 Non-Tropical Fruit Panama — 1,025 Bananas Brazil 2,282 2,083 Bananas, Other Crops United States 600 — Melons Our significant properties include the following, which all relate to our fresh and value-added products or banana segments unless otherwise noted: North America We operate a total of 27 distribution centers in the United States and Canada, of which 15 are also fresh-cut facilities.
Properties The following table summarizes the approximate plantation acreage under production that are owned or leased by us and the principal products grown on such plantations by location as of the end of 2024: Acres Under Production Location Acres Owned Acres Leased Products Costa Rica 45,508 5,013 Bananas, Pineapples, Melons Philippines — 17,124 Bananas, Pineapples Guatemala 8,973 5,436 Bananas, Melons Kenya — 11,362 Pineapples Chile 2,073 1,366 Non-Tropical Fruit Panama — 2,533 Bananas Brazil 2,282 — Bananas, Other Crops United States 600 — Melons Our significant properties include the following, which all relate to our fresh and value-added products or banana segments unless otherwise noted: 29 Table of Contents North America We operate a total of 22 distribution centers in the United States, of which 10 are also fresh-cut facilities.
All of our distribution centers have ripening capabilities and/or other value-added services. We own an avocado packing facility in Uruapan, Mexico. We also lease five port facilities that include cold storage capabilities. Europe We own and operate a fresh-cut fruit facility in Wisbech, England.
The remaining 13 distribution centers are leased from third parties. All of our distribution centers have ripening capabilities and/or other value-added services. We own an avocado packing facility in Uruapan, Mexico. We also operate in four port facilities that include cross-docking and cold storage capabilities. Europe We own and operate a fresh-cut fruit facility in Wisbech, England.
We own 12 of our distribution centers including our distribution center in Houston, Texas, a 200,000 square foot distribution center in Dallas, Texas, distribution centers in Plant City, Florida; Goodyear, Arizona; Kankakee, Illinois; Portland, Oregon, and a repack facility in Winder, Georgia.
We own 9 of our distribution centers including our distribution center in Houston, Texas, a 200,000 square foot distribution center in Dallas, Texas, distribution centers in Plant City, Florida; Goodyear, Arizona; Kankakee, Illinois; Portland, Oregon, and a repack facility in Winder, Georgia. In Yuma, Arizona, we also have cooling facility while in California, we own production facilities in Gonzales.
In Panama, we have a banana operation on leased land; approximately 2,500 acres of this leased land were under production at the end of 2023. 30 Table of Contents South America In Brazil, we own approximately 27,000 acres of land of which 2,200 acres are under production.
In Panama, we have a banana operation on leased land; approximately 2,500 acres of this leased land were under production at the end of 2024. South America In Brazil, we own approximately 21,000 acres of land of which 2,200 acres are under production. In Uruguay, we own approximately 6,400 acres which are leased to a third party.
Our remaining office space in North America, Europe, Asia, Central and South America and the Middle East is leased from third parties.
We own office space in Guatemala City, Guatemala, San Jose, Costa Rica and Amman, Jordan. Our remaining office space in North America, Europe, Asia, Central and South America and the Middle East is leased from third parties. 30 Table of Contents
Africa In Thika, Kenya, we own and operate a warehouse, a pineapple cannery, a fresh pineapple packing facility, and a juice production facility. Middle East In Jordan, we own an integrated poultry business including poultry farms, hatcheries, a feed mill, a poultry slaughterhouse and a meat processing plant which relate to our other products and services segment.
Additionally, during 2024 we opened a factory that will use our biomass products from our canning facility to produce biofertilizer and other related products. Middle East In Jordan, we own an integrated poultry business including poultry farms, hatcheries, a feed mill, a poultry slaughterhouse and a meat processing plant which relate to our other products and services segment.
In Saudi Arabia, we own 60% of a joint venture that leases two strategically located distribution centers in Jeddah and Riyadh as of year end 2023. In Kuwait, we have an F&B store and we lease a facility for manufacturing and/or distribution of fresh-cut and fresh produce, and ultra-fresh juices.
In Saudi Arabia, we own 60% of a joint venture that leases two strategically located distribution centers in Jeddah and Riyadh as of year end 2024. Other Properties We own our U.S. executive headquarters building in Coral Gables, Florida and our South America regional headquarters building in Santiago, Chile.
Removed
In Yuma, Arizona, we also have a manufacturing facility and a cooling facility while in California, we own production facilities in Gonzales as well as in the Salinas valley. We also operate a distribution center with a fresh-cut facility in Ontario, Canada on owned land. The remaining 15 distribution centers are leased from third parties.
Removed
Other Properties We own our U.S. executive headquarters building in Coral Gables, Florida, our Central America regional headquarters building in San Jose, Costa Rica and our South America regional headquarters building in Santiago, Chile. We own our office space in Guatemala City, Guatemala and Amman, Jordan.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

7 edited+5 added−2 removed0 unchanged
Biggest changeWe timely appealed the denial of the injunction, and on August 10, 2022 the appellate court overturned the denial and granted our injunction for the 2012-2015 audit years. Pursuant to local law, we registered real estate collateral with an approximate fair market value of $7.0 million in connection with the grant of the 2016 audit year injunction.
Biggest changePursuant to local law, we registered real estate collateral with an approximate fair market value of $7.2 million in connection with the grant of the 2016 audit year injunction. This real estate collateral has a net book value of $3.8 million as of the year ended December 27, 2024.
In addition, we have filed a request for an injunction to the judicial court to stay the tax authorities' collection efforts for these two tax assessments, pending final judicial decisions. The court granted our injunction with respect to the 2016 audit year, however denied our injunction with respect to the 2012-2015 audit years.
In addition, we have filed a request for injunction to the judicial court to stay the tax authorities' collection efforts for these two tax assessments, pending final judicial decisions. The court granted our injunction with respect to the 2016 audit year, however denied our injunction with respect to the 2012-2015 audit years.
In addition, in connection with the grant of the 2012-2015 audit year injunction, we registered real estate collateral with an approximate fair market value of $28.5 million, and a net book value of $4.6 million as of the year ended December 29, 2023. The registration of this real estate collateral does not affect our operations in the country.
In addition, in connection with the grant of the 2012-2015 audit year injunction, we registered real estate collateral with an approximate fair market value of $30.0 million, and a net book value of $4.6 million as of the year ended December 27, 2024. The registration of this real estate collateral does not affect our operations in the country.
During 2019 and 2020, we filed actions contesting the tax assessment in the administrative office. Our initial challenge to each of these tax assessments was rejected, and we subsequently lost our appeals at the administrative court. We have subsequently filed actions to contest each of these tax assessments in the country’s judicial courts.
Our initial challenge to each of these tax assessments was rejected, and we subsequently lost our appeals at the administrative court. We have subsequently filed actions to contest each of these tax assessments in the country’s judicial courts.
In the other foreign jurisdiction, the administrative court denied our appeal, and on March 4, 2020 we filed an action in the judicial court to contest the administrative court's decision. The case is still pending.
In a separate foreign jurisdiction where we are contesting tax assessments, the administrative court denied our appeal, and on March 4, 2020 we filed an action in the judicial court to contest the administrative court's decision. The case is still pending.
We will continue to vigorously contest the adjustments and to exhaust all administrative and judicial remedies necessary in both jurisdictions to resolve the matters, which could be a lengthy process. 31 Table of Contents Item 4. Mine Safety Disclosures Not applicable. PART II
We will continue to vigorously contest the adjustments and to exhaust all administrative and judicial remedies necessary in both jurisdictions to resolve the matters, which could be a lengthy process.
We strongly disagree with the proposed adjustments and have filed a protest with each of the taxing authorities. In one of the foreign jurisdictions, we are currently contesting tax assessments related to the 2012-2015 audit years and the 2016 audit year in both the administrative court and the judicial court.
Item 3. Legal Proceedings Tax related matters In one of our foreign jurisdictions, we are currently contesting tax assessments related to the 2012-2015 audit years and the 2016 audit year in both the administrative court and the judicial court. During 2019 and 2020, we filed actions contesting the tax assessment in the administrative office.
Removed
Item 3. Legal Proceedings Tax related matters In connection with the examination of the tax returns in two foreign jurisdictions, the taxing authorities have issued income tax deficiencies related to transfer pricing aggregating approximately $165.4 million (including interest and penalties) for tax years 2012 through 2016.
Added
We timely appealed the denial of the injunction, and on August 10, 2022 the appellate court overturned the denial and granted our injunction for the 2012-2015 audit years with a trial date set for July 4, 2025.
Removed
This real estate collateral has a net book value of $3.8 million as of the year ended December 29, 2023.
Added
California Air Resource Board On December 21, 2022, the California Air Resource Board ("CARB") issued a Notice of Violation ("NOV") to the Company regarding violations of certain California anti-air pollution regulations by three non-shore capable vessels that were subject to a time charter by us from an unrelated non-U.S. third party.
Added
We are cooperating with and assisted CARB in its audits for the alleged violations during 2021. During 2024, we accrued expenses of $0.5 million as a contingent reserve which are included in asset impairments and other charges (credits), net in the Consolidated Statements of Operations.
Added
This amount is in addition to a $0.4 million contingent reserve accrued as of December 29, 2023 related to this matter. On February 12, 2025, we entered into a settlement agreement regarding the matter. Consistent with the terms of the settlement agreement, we agreed to pay approximately $0.9 million in civil penalties associated with the NOV.
Added
Consequently, we do not expect to accrue any additional amounts. For more information, see Note 16 " Commitments and Contingencies " to the Consolidated Financial Statements included in Part II, Item 8. Financial Statements and Supplementary Data of this Annual Report on Form 10-K. Item 4. Mine Safety Disclosures Not applicable. 31 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe declaration, amount and payment of future dividends, if any, will be at the discretion of our Board of Directors and will depend upon many factors, including our results of operations, financial condition, capital requirements, restrictions in our debt agreements and other factors that our Board of Directors deem relevant.
Biggest changeThe declaration, amount and payment of future dividends, if any, will be at the discretion of our Board and will depend upon many factors, including our results of operations, financial condition, capital requirements, restrictions in our debt agreements and other factors that our Board deem relevant. 32 Table of Contents Performance Graph The following graph compares the cumulative five-year total return of holders of FDP ordinary shares with the cumulative total returns of the S&P Smallcap 600 and S&P 600 Food Products indexes.
As of February 16, 2024, we had 381 shareholders of record, which excludes shareholders whose shares were held by brokerage firms, depositories and other institutional firms. Dividends Holders of our Ordinary Shares are entitled to receive dividends when and if they are declared by our Board of Directors.
As of February 14, 2025, we had 392 shareholders of record, which excludes shareholders whose shares were held by brokerage firms, depositories and other institutional firms. Dividends Holders of our Ordinary Shares are entitled to receive dividends when and if they are declared by our Board.
The graph tracks the performance of a $100 investment in our common stock and in each of the indexes (with the reinvestment of all dividends) from December 28, 2018 to December 29, 2023. 12/28/2018 12/27/2019 1/1/2021 12/31/2021 12/30/2022 12/29/2023 Fresh Del Monte Produce Inc. 100.00 125.18 86.88 101.24 98.22 101.25 S&P Smallcap 600 100.00 122.78 136.64 173.29 145.39 168.73 S&P 600 Food Products 100.00 116.36 114.12 126.04 121.94 133.07 The stock price performance included in this graph is not necessarily indicative of future stock price performance. 33 Table of Contents Item 6.
The graph tracks the performance of a $100 investment in our common stock and in each of the indexes (with the reinvestment of all dividends) from December 27, 2019 to December 27, 2024. 12/27/2019 1/1/2021 12/31/2021 12/30/2022 12/29/2023 12/27/2024 Fresh Del Monte Produce Inc. 100.00 69.40 80.88 78.46 80.88 105.78 S&P Smallcap 600 100.00 111.29 141.13 118.41 137.42 149.37 S&P 600 Food Products 100.00 98.07 108.31 104.79 114.36 124.27 The stock price performance included in this graph is not necessarily indicative of future stock price performance. 33 Table of Contents Item 6.
In addition, on February 23, 2024, our Board of Directors declared a cash dividend of $0.25 per share, payable on March 29, 2024 to shareholders of record on March 7, 2024.
Our Board declared and paid a cash dividend of $0.25 per share during the first, second, third, and fourth quarters of 2024. In addition, on February 21, 2025, our Board declared a cash dividend of $0.30 per share, payable on March 28, 2025 to shareholders of record on March 10, 2025.
Removed
Our Board of Directors declared and paid a cash dividend of $0.15 per share during the first quarter of 2023 and a cash dividend of $0.20 per share during the second, third, and fourth quarters of 2023.
Removed
Issuer Purchases of Equity Securities Our share repurchase activity in the three months ended December 29, 2023 was: Period Total Number of Shares Purchased (1) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs September 30, 2023 to October 27, 2023 — $ — — October 28, 2023 to November 24, 2023 500,000 $ 23.66 500,000 November 25, 2023 to December 29, 2023 — $ — — Total 500,000 $ — (1) On November 2, 2023, our Board of Directors approved a share repurchase plan (the "Share Repurchase Plan") pursuant to which we may purchase up to 500,000 of our Ordinary Shares.
Removed
During the fourth quarter of 2023, the Company completed the purchase of the 500,000 Ordinary Shares authorized under the Share Repurchase Plan for $11.8 million. 32 Table of Contents Performance Graph The following graph compares the cumulative five-year total return of holders of FDP ordinary shares with the cumulative total returns of the S&P Smallcap 600 and S&P 600 Food Products indexes.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

81 edited+39 added−29 removed66 unchanged
Biggest changeWe intend to use funds borrowed under the Second A&R Credit Agreement from time to time for general corporate purposes, working capital, capital expenditures and other permitted investment opportunities As of December 30, 2022, amounts borrowed under the Revolving Credit Facility accrued interest, at our election, at either (i) the Eurocurrency Rate (as defined in the Second A&R Credit Agreement) plus a margin that ranged from 1.0% to 1.5% or (ii) the Base Rate (as defined in the Second A&R Credit Agreement) plus a margin that ranged from 0% to 0.5%, in each case based on our Consolidated Leverage Ratio (as defined in the Second A&R Credit Agreement).
Biggest changeWe intend to use funds borrowed under the Amended Revolving Credit Facility from time to time for general corporate purposes, working capital, capital expenditures and other permitted investment opportunities.
Sea transportation cost is the most significant component of logistics costs and is comprised of: • Ship operating expenses - includes operations, maintenance, depreciation, insurance, fuel (the cost of which is subject to commodity price fluctuations), and port charges. 35 Table of Contents • Chartered ship costs - includes the cost of chartering the ships, fuel and port charges. • Container equipment-related costs - includes leasing expense and in the case of owned equipment, also depreciation expense. • Third-party containerized shipping costs - includes the cost of using third-party shipping in our logistics operations.
Sea transportation cost is the most significant component of logistics costs and is comprised of: 35 Table of Contents • Ship operating expenses - includes operations, maintenance, depreciation, insurance, fuel (the cost of which is subject to commodity price fluctuations), and port charges. • Chartered ship costs - includes the cost of chartering the ships, fuel and port charges. • Container equipment-related costs - includes leasing expense and in the case of owned equipment, also depreciation expense. • Third-party containerized shipping costs - includes the cost of using third-party shipping in our logistics operations.
Net cash provided by investing activities for 2023 primarily consisted of proceeds from the sale of property, plant and equipment and subsidiary of $119.9 million, primarily relating to the sale of two distribution centers in Saudi Arabia, an idle production facility in North America, land assets in South and Central America, and proceeds from the sale of our plastics business subsidiary in South America for total purchase consideration of $16.5 million, of which we received $14.0 million.
Net cash provided by investing activities for 2023 primarily consisted of proceeds from the sale of property, plant and equipment and subsidiary of $119.9 million, primarily relating to the sale of two distribution centers in Saudi Arabia, an idle production facility in North America, land in South and Central America, and proceeds from the sale of our plastics business subsidiary in South America for total purchase consideration of $16.5 million, of which we received $14.0 million.
We believe that our cash on hand, borrowing capacity available under our Revolving Credit Facility, and cash flows from operations for the next twelve months will be sufficient to service our outstanding debt during the next twelve months. However, we cannot predict whether future developments associated with the current economic environment will materially adversely affect our long-term liquidity position.
We believe that our cash on hand, borrowing capacity available under our Amended Revolving Credit Facility, and cash flows from operations for the next twelve months will be sufficient to service our outstanding debt during the next twelve months. However, we cannot predict whether future developments associated with the current economic environment will materially adversely affect our long-term liquidity position.
Gain (loss) on disposal of property, plant and equipment, net and subsidiary - The gain on disposal of property, plant and equipment, net and subsidiary of $37.9 million during 2023 primarily related to the sales of two distribution centers and related assets in Saudi Arabia, an idle facility in North America, our plastics business subsidiary in South America, and two carrier vessels.
The gain on disposal of property, plant and equipment, net and subsidiary of $37.9 million during 2023 primarily related to the sales of two distribution centers and related assets in Saudi Arabia, an idle facility in North America, our plastics business subsidiary in South America, and two carrier vessels.
During 2023 and 2022, capital expenditures primarily related to (1) improvements and enhancements to our production facilities in North America, Europe, Asia, and the Middle East; (2) improvements to our pineapple operations in Central America and Kenya; and (3) operational investments in automation and data-driven technology, mainly in North America.
During 2023, capital expenditures primarily related to (1) improvements and enhancements to our production facilities in North America, Europe, Asia, and the Middle East; (2) improvements to our pineapple operations in Central America and Kenya; and (3) operational investments in automation and data-driven technology, mainly in North America.
Specifically, costs of packaging materials, fertilizers, labor, fuel, and ocean and inland freight were significantly impacted, and continued to adversely affect our profitability and operating cash flows during 2022 and to a lesser extent during 2023.
Specifically, costs of packaging materials, fertilizers, labor, fuel, and ocean and inland freight were significantly impacted, and continued to adversely affect our profitability and operating cash flows during 2022 and to a lesser extent during 2023 and 2024.
Our business is comprised of three reportable segments, two of which represent our primary businesses of fresh and value-added products and banana, and one that represents our other ancillary businesses. • Fresh and value-added products - includes pineapples, fresh-cut fruit, fresh-cut vegetables (which includes fresh-cut salads), melons, vegetables, non-tropical fruit (which includes grapes, apples, citrus, blueberries, strawberries, pears, peaches, plums, nectarines, cherries and kiwis), other fruit and vegetables, avocados, and prepared foods (which includes prepared fruit and vegetables, juices, other beverages, and meals and snacks). • Banana • Other products and services - includes our third-party freight and logistic services business and our Jordanian poultry and meats business.
Our business is comprised of three reportable segments, two of which represent our primary businesses of fresh and value-added products and banana, and one that represents our other ancillary businesses. • Fresh and value-added products - includes pineapples, fresh-cut fruit, fresh-cut vegetables (which includes fresh-cut salads), melons, vegetables, non-tropical fruit (which includes grapes, apples, citrus, blueberries, strawberries, pears, peaches, plums, nectarines, cherries and kiwis), other fruit and vegetables, avocados, and prepared foods (which includes prepared fruit and vegetables, juices, other beverages, and meals and snacks). • Banana • Other products and services - includes our third-party freight and logistic services business, our Jordanian poultry and meats business and our biomass initiatives.
The aggregate amount of Incremental Increases can be further increased to the extent that after giving effect to the proposed increase in revolving credit facility commitments or term loans, our Consolidated Leverage Ratio, on a pro forma basis, would not exceed 2.50 to 1.00.
The aggregate amount of Incremental Increases can be further increased to the extent that after giving effect to the proposed increase in revolving credit facility commitments or term loans our Consolidated Leverage Ratio, on a pro forma basis, would not exceed 2.75 to 1.00.
Specifically, it requires us to maintain a 1) Consolidated Leverage Ratio of not more than 3.50 to 1.00 at any time during any period of four consecutive fiscal quarters, subject to certain exceptions and 2) a minimum Consolidated Interest Coverage Ratio of not less than 2.25 to 1.00 as of the end of any fiscal quarter.
Specifically, it requires us to maintain 1) a Consolidated Leverage Ratio of not more than 3.75 to 1.00 at any time during any period of four consecutive fiscal quarters, subject to certain exceptions and 2) minimum Consolidated Interest Coverage Ratio of not less than 2.25 to 1.00 as of the end of any fiscal quarter.
The impact of seasonality on our financial results was atypical during fiscal year 2022, particularly in our banana segment, where market conditions led to a more significant portion of our gross profit being generated in the second half of the year when compared with historical results and the results of our fiscal year 2023.
The impact of seasonality on our financial results was atypical during fiscal year 2022, particularly in our banana segment, where market conditions led to a more significant portion of our gross profit being generated in the second half of the year when compared with historical results and the results of our fiscal years 2023 and 2024.
Refer to the “ Current Macroeconomic Environment and Inflation Impact " section above for further discussion regarding the impact of inflationary cost pressures on our fiscal years 2022 and 2023 financial results.
Refer to the “ Current Macroeconomic Environment and Inflation Impact " section above for further discussion regarding the impact of inflationary cost pressures on our fiscal years 2023 and 2024 financial results.
Changes in these estimates, many of which fall under Level 3 within the fair value measurement hierarchy, 43 Table of Contents could change our conclusion regarding the impairment of goodwill assets and potentially reduce the carrying value of goodwill on our balance sheet and reduce our income in the year in which it is recorded.
Changes in these estimates, many of which fall under Level 3 within the fair value measurement hierarchy, could change our conclusion regarding the impairment of goodwill assets and potentially reduce the carrying value of goodwill on our balance sheet and reduce our income in the year in which it is recorded.
Gross profit for 2023 included $3.8 million of other product-related charges primarily related to $1.5 million of inventory write-off due to the sale of two distribution centers in Saudi Arabia and $1.4 million of inventory write-off and clean-up cost, net of insurance recoveries, tied to the flooding of a seasonal production facility in Greece.
Gross profit for 2023 included $3.8 million of other product-related charges primarily related to $1.5 million of inventory write-off due to the sale of two distribution centers in Saudi Arabia and $1.4 million of inventory write-off and clean-up cost, net of insurance recoveries, tied to the flooding in Greece.
Our liquidity assumptions, the adequacy of our available funding sources, and 41 Table of Contents our ability to meet our Revolving Credit Facility covenants are dependent on many additional factors, including those set forth in Part I. Item 1A, “ Risk Factors ” of this Annual Report on Form 10-K.
Our liquidity assumptions, the adequacy of our available funding sources, and our ability to meet our Amended Revolving Credit Facility covenants are dependent on many additional factors, including those set forth in Part I. Item 1A, “ Risk Factors ” of this Annual Report on Form 10-K.
The impairment test for assets held for use requires a comparison of the estimated undiscounted cash 44 Table of Contents flows expected to be generated over the useful life of the significant asset of an asset group to the carrying amount of the asset group.
The impairment test for assets held for use requires a comparison of the estimated undiscounted cash flows expected to be generated over the useful life of the significant asset of an asset group to the carrying amount of the asset group.
New Accounting Pronouncements For a description of new applicable accounting pronouncements, refer to Note 2, “ Summary of Significant Accounting Policies ” to the Consolidated Financial Statements included in Part II, Item 8. Financial Statements and Supplementary Data . Off-Balance Sheet Arrangements We are not involved in any off-balance sheet arrangements. 45 Table of Contents
Financial Statements and Supplementary Data for additional discussion. New Accounting Pronouncements For a description of new applicable accounting pronouncements, refer to Note 2, “ Summary of Significant Accounting Policies ” to the Consolidated Financial Statements included in Part II, Item 8. Financial Statements and Supplementary Data . Off-Balance Sheet Arrangements We are not involved in any off-balance sheet arrangements.
The following table highlights the sensitivities of the goodwill and indefinite-lived intangible assets at risk as of December 29, 2023 (U.S. dollars in millions): Banana Reporting Unit Goodwill Prepared Foods Reporting Unit Goodwill Prepared Foods Reporting Unit Del Monte ® Trade Names and Trademarks Carrying value of indefinite-lived intangible assets $ 64.4 $ 27.2 $ 30.8 Approximate percentage by which the fair value exceeds the carrying value based on the annual impairment test 23.2 % — % 6.2 % Amount that a one percentage point increase in the discount rate and a 5% decrease in cash flows would cause the carrying value to exceed the fair value and trigger an (additional) impairment $ 8.9 $ 27.2 $ 2.3 As of December 29, 2023, we are not aware of any additional items or events, other than the impairment recorded in our prepared foods reporting unit during the fourth quarter of 2023, that would cause an adjustment to the carrying value of our goodwill and indefinite-lived intangible assets.
The following table highlights the sensitivities of the goodwill and indefinite-lived intangible assets at risk as of December 27, 2024 (U.S. dollars in millions): Banana Reporting Unit Goodwill Prepared Foods Reporting Unit Goodwill Prepared Foods Reporting Unit Del Monte ® Trade Names and Trademarks Carrying value of indefinite-lived intangible assets $ 64.2 $ 27.1 $ 31.7 Approximate percentage by which the fair value exceeds the carrying value based on the annual impairment test 17.7 % 8.6 % 40.9 % Amount that a one percentage point increase in the discount rate and a 5% decrease in cash flows would cause the carrying value to exceed the fair value and trigger an impairment $ 57.5 $ 27.1 $ — As of December 27, 2024, we are not aware of any additional items or events, other than the impairment recorded in our vegetable reporting unit during the fourth quarter of 2024, that would cause an adjustment to the carrying value of our goodwill and indefinite-lived intangible assets.
We expect to fund these capital expenditures which primarily relate to our fresh and value-added and banana segments through operating cash flows and borrowings under our credit facility. Financing Activities Net cash used in financing activities was $213.5 million for 2023 and $12.0 million for 2022.
We expect to fund these capital expenditures which primarily relate to our fresh and value-added and banana segments through operating cash flows and borrowings under our credit facility. Financing Activities Net cash used in financing activities was $209.9 million for 2024 and $213.5 million for 2023.
Liquidity and Capital Resources - For the Year Ended December 30, 2022, Compared to the Year Ended December 31, 2021 For a comparison of our liquidity and capital resources for the year ended December 30, 2022, compared to the year ended December 31, 2021, see “ Part II, Item 7.
Liquidity and Capital Resources - For the Year Ended December 29, 2023, Compared to the Year Ended December 30, 2022 For a comparison of our liquidity and capital resources for the year ended December 29, 2023, compared to the year ended December 30, 2022, see “ Part II, Item 7.
Asset impairment and other charges (credits), net - Asset impairment and other charges (credits), net of $143.4 million in 2023 primarily consisted of (1) $109.6 million impairment charges related to customer list and trade name intangible assets and building, land, and land improvements assets in North America related to our fresh and value added segment (2) a $21.6 million impairment charge related to goodwill in our prepared foods reporting unit, (3) a $3.7 million impairment charge related to low-yielding banana farms in the Philippines, (4) $2.6 million impairment charge related to low-yielding deciduous farms in Chile, (5) $1.8 million impairment charges due to low productivity grape vines in South America, and (6) $1.3 million of expenses, net of insurance reimbursements, incurred in connection with a cybersecurity incident.
Asset impairment and other charges, net of $143.4 million in 37 Table of Contents 2023 primarily consisted of (1) $109.6 million impairment charges related to customer list and trade name intangible assets and building, land, and land improvements assets in North America related to our fresh and value-added products segment (2) a $21.6 million impairment charge related to goodwill in our prepared foods reporting unit, (3) a $3.7 million impairment charge related to low-yielding banana farms in the Philippines, (4) a $4.4 million impairment charge related to low-yielding deciduous farms in Chile, and (5) $1.3 million of expenses, net of insurance reimbursements, incurred in connection with a cybersecurity incident.
The Second A&R Credit Agreement provides for an accordion feature that permits us, without the consent of the other lenders, to request that one or more lenders provide us with increases in revolving credit facility or term loans up to an aggregate of $300 million (“Incremental Increases”).
The 2024 Amended Credit Facility provides for an accordion feature that permits us, without the consent of the other lenders, to request that one or more lenders provide us with increases in revolving credit facility or term loans up to an aggregate of $300 million (“Incremental Increases”).
Results of Operations - For the Year Ended December 30, 2022, Compared to the Year Ended December 31, 2021 For a comparison of our results of operations for the year ended December 30, 2022, compared to the year ended December 31, 2021, see “ Part II, Item 7.
Results of Operations - For the Year Ended December 29, 2023, Compared to the Year Ended December 30, 2022 For a comparison of our results of operations for the year ended December 29, 2023, compared to the year ended December 30, 2022, see “ Part II, Item 7.
The fair value of our derivatives related to our foreign currency cash flow hedges was a liability position of $0.3 million as of December 29, 2023 compared to a net liability position of $6.7 million as of December 30, 2022 due to the relative strengthening or weakening of exchange rates when compared to the contracted rates.
The fair value of our derivatives related to our foreign currency cash flow hedges was a net asset position of $0.3 million as of December 27, 2024 compared to a net liability position of $0.3 million as of December 29, 2023 due to the relative strengthening or weakening of exchange rates when compared to the contracted rates.
The fair value of the derivatives related to our interest rate swap cash flow hedges was an asset position of $7.9 million as of December 29, 2023 compared to an asset position of $15.8 million as of December 30, 2022.
The fair value of the derivatives related to our interest rate swap cash flow hedges was an asset position of $7.9 million as of December 29, 2023.
We have agreements to purchase the entire or partial production of certain products of our independent growers primarily in Guatemala, Ecuador, Philippines, Costa Rica, Colombia, and United Kingdom that meet our quality standards. Total purchases under these agreements amounted to $631.6 million for 2023, $625.9 million for 2022, and $683.2 million for 2021.
We have agreements to purchase the entire or partial production of certain products of our independent growers primarily in Guatemala, Ecuador, Philippines, Costa Rica, Colombia, and Chile that meet our quality standards. Total purchases under these agreements amounted to $643.4 million for 2024, $631.6 million for 2023, and $625.9 million for 2022.
As of the date of our impairment testing, the related cash flows were discounted using rates ranging from 9.0% to 12.0% for our reporting units and we used a long-term growth rates from 0.0% to 3.0%.
As of the date of our 2024 impairment testing, the related cash flows were discounted using rates ranging from 8.0% to 11.0% for our reporting units and we used long-term growth rates from 0.0% to 3.0%.
In connection with the examination of the tax returns in two foreign jurisdictions, the taxing authorities have issued income tax deficiencies related to transfer pricing aggregating approximately $165.4 million (including interest and penalties) for tax years 2012 through 2016. We strongly disagree with the proposed adjustments and have filed a protest with each of the taxing authorities.
In connection with the examination of the tax returns in three foreign jurisdictions, the taxing authorities have issued income tax deficiencies primarily related to transfer pricing aggregating approximately $231.9 million (including interest and penalties) for tax years 2012 through 2021. We strongly disagree with the proposed adjustments and have filed a protest with each of the taxing authorities.
Our determinations regarding the recognition of income tax benefits are made in consultation with outside tax and legal counsel, where appropriate, and are based upon the merits of our tax positions in consideration of applicable tax statutes in the associated jurisdictions.
Our determinations regarding the recognition of income tax expenses or benefits as a result of these matters are made in consultation with outside tax and legal counsel, where appropriate, and are based upon the merits of our tax positions in consideration of applicable tax statutes in the associated jurisdictions.
Additionally, it requires us to comply with certain other covenants, including limitations on capital expenditures, stock repurchases, the amount of dividends that can be paid in the future, the amount and types of liens and indebtedness, material asset sales, and mergers.
Additionally, it requires us to comply with certain other covenants, including limitations on capital investments, the amount of dividends that can be paid in the future, the 41 Table of Contents amounts and types of liens and indebtedness, material asset sales, and mergers.
The tax benefits ultimately realized by the Company may differ from those recognized in our future financial statements based on a number of factors, including the Company’s success in supporting its filing positions with taxing authorities. See Note 9, “ Income Taxes ” to the Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data for additional discussion.
Given the uncertainties associated with these matters, the tax benefits ultimately realized by the Company may differ from those recognized in our future financial statements based on a number of factors, including the Company’s success in supporting its filing positions with taxing authorities. See Note 9, “ Income Taxes ” to the Consolidated Financial Statements in Item 8.
Financial Results by Segment The following table presents net sales and gross profit by segment (U.S. dollars in millions) and gross margin percentage: Year ended December 29, 2023 December 30, 2022 December 31, 2021 Segments Net Sales Gross Profit Gross Margin Net Sales Gross Profit Gross Margin Net Sales Gross Profit Gross Margin Fresh and value-added products $ 2,477.8 $ 167.3 6.8 % $ 2,581.8 $ 183.0 7.1 % $ 2,504.8 $ 180.2 7.2 % Banana 1,638.2 163.3 10.0 % 1,619.8 120.7 7.5 % 1,581.1 110.9 7.0 % Other products and services 204.7 20.1 9.8 % 240.7 36.5 15.2 % 166.1 12.7 7.6 % $ 4,320.7 $ 350.7 8.1 % $ 4,442.3 $ 340.2 7.7 % $ 4,252.0 $ 303.8 7.1 % Fresh and value-added products Net sales for 2023 were $2,477.8 million compared with $2,581.8 million in 2022.
Financial Results by Segment The following table presents net sales and gross profit by segment (U.S. dollars in millions) and gross margin percentage: Year ended December 27, 2024 December 29, 2023 December 30, 2022 Segments Net Sales Gross Profit Gross Margin Net Sales Gross Profit Gross Margin Net Sales Gross Profit Gross Margin Fresh and value-added products $ 2,606.9 $ 243.3 9.3 % $ 2,477.8 $ 167.3 6.8 % $ 2,581.8 $ 183.0 7.1 % Banana 1,475.9 86.8 5.9 % 1,638.2 163.3 10.0 % 1,619.8 120.7 7.5 % Other products and services 197.4 27.8 14.1 % 204.7 20.1 9.8 % 240.7 36.5 15.2 % $ 4,280.2 $ 357.9 8.4 % $ 4,320.7 $ 350.7 8.1 % $ 4,442.3 $ 340.2 7.7 % Fresh and value-added products Net sales for 2024 were $2,606.9 million compared with $2,477.8 million in 2023.
Fiscal year 2021 had 52 weeks and ended on December 31, 2021. Current Macroeconomic Environment and Inflation Impact Starting in fiscal year 2021, we began experiencing inflationary and cost pressures due to volatility and disruption in the global economy.
Fiscal year 2023 had 52 weeks and ended on December 29, 2023. Fiscal year 2022 had 52 weeks and ended on December 30, 2022. Current Macroeconomic Environment and Geopolitical Environment Starting in fiscal year 2021, we began experiencing inflationary and cost pressures due to volatility and disruption in the global economy.
Our ability to request such increases in the Revolving Credit Facility or term loans is subject to its compliance with customary conditions set forth in the Second A&R Credit Agreement including compliance, on a pro forma basis, with the financial covenants and ratios set forth therein.
Our ability to request such increases or term loans is subject to our compliance with customary conditions set forth in the 2024 Amended Credit Facility including compliance, on a pro forma basis, with certain financial covenants and ratios.
Gross profit in the fresh and value-added products segment included $3.7 million of other product-related charges in 2023 primarily related to $1.5 million of inventory write-off due to the sale of two distribution centers in Saudi Arabia and $1.4 million of inventory write-off and clean-up cost, net of insurance recoveries, tied to the flooding of a seasonal production facility in Greece.
Gross profit in the fresh and value-added products segment included $3.7 million of other product-related charges in 2023 primarily related to $1.5 million of inventory write-off due to the sale of two distribution centers in Saudi Arabia and $1.4 million of inventory write-off and clean-up cost, net of insurance recoveries, tied to the flooding of a seasonal production facility in Greece. 38 Table of Contents Banana Net sales for 2024 were $1,475.9 million compared with $1,638.2 million in 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations ” of our annual report on Form 10-K for the year ended December 30, 2022, filed with the Securities and Exchange Commission on February 22, 2023, which is incorporated herein by reference.
Management’s Discussion and Analysis of Financial Condition and Results of Operations ” of our annual report on Form 10-K for the year ended December 29, 2023, filed with the SEC on February 26, 2024, which is incorporated herein by reference.
Management’s Discussion and Analysis of Financial Condition and Results of Operations ” of our annual report on Form 10-K for the year ended December 30, 2022, filed with the Securities and Exchange Commission on February 22, 2023, which is incorporated herein by reference.
Management’s Discussion and Analysis of Financial Condition and Results of Operations ” of our annual report on Form 10-K for the year ended December 29, 2023, filed with the SEC on February 26, 2024, which is incorporated herein by reference.
Year ended December 29, 2023 December 30, 2022 December 31, 2021 Net sales $ 4,320.7 $ 4,442.3 $ 4,252.0 Gross profit 350.7 340.2 303.8 Selling, general and administrative expenses 186.7 186.8 192.9 Operating income 58.5 156.3 111.0 Net sales - Net sales for 2023 were $4,320.7 million compared with $4,442.3 million in 2022.
Year ended December 27, 2024 December 29, 2023 December 30, 2022 Net sales $ 4,280.2 $ 4,320.7 $ 4,442.3 Gross profit 357.9 350.7 340.2 Selling, general and administrative expenses 196.9 186.7 186.8 Operating income 196.3 58.5 156.3 Net sales - Net sales for 2024 were $4,280.2 million compared with $4,320.7 million in 2023.
Capital expenditures related to the fresh and value-added products segment accounted for $31.3 million, or 54%, of our 2023 capital expenditures and $29.1 million, or 61%, of our 2022 capital expenditures.
Capital expenditures related to the fresh and value-added products segment accounted for $35.5 million, or 69%, of our 2024 capital expenditures and $31.3 million, or 54%, of our 2023 capital expenditures.
Under the Second A&R Credit Agreement, we are permitted to declare or pay cash dividends in any fiscal year up to an amount that does not exceed the greater of (i) an amount equal to the greater of (A) 50% of the Consolidated Net Income (as defined in the Second A&R Credit Agreement) for the immediately preceding fiscal year or (B) $25 million or (ii) the greatest amount which would not cause the Consolidated Leverage Ratio (determined on a pro forma basis) to exceed 3.25 to 1.00.
Under the 2024 Amended Credit Facility, we are permitted to declare or pay cash dividends in any fiscal year up to an amount that does not exceed the greater of (i) an amount equal to (1) the greater of (A) 50% of the Consolidated Net Income (as defined in the 2024 Amended Credit Facility) for the immediately preceding fiscal year or (B) $25 million (the "Base Dividend Basket") plus (2) commencing in the fiscal year ending December 26, 2025 any portion of the Base Dividend Basket not used in the immediately preceding fiscal year, or (ii) the greatest amount which would not cause the Consolidated Leverage Ratio (determined on a pro forma basis as of the date of declaration or payment) to exceed 3.50 to 1.00.
Including the effect of our foreign currency hedges, net sales in 2023 were negatively impacted by $39.9 million primarily due to fluctuations in exchange rates versus the euro, Japanese yen, Korean won, Kenyan shilling and British pound.
Including the effect of our foreign currency hedges, net sales in 2024 were negatively impacted by $19.0 million primarily due to fluctuations in exchange rates versus the Japanese yen and Korean won.
Accordingly, as of December 29, 2023, our principal sources of liquidity are (i) cash generated from operations of our subsidiaries, (ii) our combined $956 million of credit facilities with an available capacity of approximately $526 million and (iii) existing cash and cash equivalents of $33.8 million.
Accordingly, as of December 27, 2024, our principal sources of liquidity are (i) cash generated from operations of our subsidiaries, (ii) our combined $806 million of credit facilities with an available capacity of approximately $539 million and (iii) existing cash and cash equivalents of $32.6 million.
Upon our request, each lender may decide, in its sole discretion, whether to increase all or a portion of its revolving credit facility commitment or provide term loans. The Second A&R Credit Agreement requires us to comply with certain financial and other covenants.
Upon our request, each lender may decide, in its sole discretion, whether to increase all or a portion of its revolving credit facility commitment or provide term loans. The 2024 Amended Credit Facility contains similar financial covenants to those included within the Second A&R Credit Agreement.
The remaining $2.5 million, which includes $0.5 million of post-closing adjustments, will be received in three successive semi-annual installments. Partially offsetting the net cash provided by investing activities were capital expenditures of $57.7 million and $5.3 million in investments in unconsolidated companies in the food and nutrition sector that align with our long-term strategy and vision.
Partially offsetting the net cash provided by investing activities were capital expenditures of $57.7 million and $5.3 million in investments in unconsolidated companies in the food and nutrition sector that align with our long-term strategy and vision.
During 2023, cost of products sold was negatively impacted by approximately $40.0 million, primarily driven by fluctuations in exchange rates versus the Costa Rican colon, Mexican peso, euro and British pound. Income Taxes The provision for income taxes in 2023 was $18.1 million.
During 2024, cost of products sold was negatively impacted by approximately $8 million, primarily driven by fluctuations in exchange rates versus the Costa Rican colon. Income Taxes The provision for income taxes in 2024 was $29.1 million.
As of December 29, 2023, we were in compliance with all of the financial and other covenants contained in the Second A&R Credit Agreement. On February 21, 2024, we entered into Amendment No. 2 to the Second Amended and Restated Credit Agreement (the "2024 Amended Credit Facility") which amends and restates the Second A&R Credit Agreement.
On February 21, 2024, we entered into Amendment No. 2 to the Second Amended and Restated Credit Agreement (the "2024 Amended Credit Facility") which amends and restates the Second A&R Credit Agreement.
Capital expenditures related to the other products and services segment accounted for $13.6 million, or 24%, of our 2023 capital expenditures and $3.9 million, or 8%, of our 2022 capital expenditures. During 2023 and 2022, these capital expenditures primarily related to improvements to our Jordanian poultry operations.
During 2023, these capital expenditures primarily related to improvements to our production operations in Central America. Capital expenditures related to the other products and services segment accounted for $2.5 million, or 5%, of our 2024 capital expenditures and $13.6 million, or 24%, of our 2023 capital expenditures. During 2024 these capital expenditures primarily related to our biomass initiatives.
Based on our projections, the carrying amount of our prepared foods reporting unit exceeded its fair value as of the date of our annual impairment test and we recorded a non-cash goodwill impairment charge of $21.6 million. The remaining carrying value of the prepared reporting unit goodwill after impairment is $27.2 million.
Based on our projections, the carrying amount of our vegetable reporting unit exceeded its fair value as of the date of our 2024 annual impairment test and we recorded a non-cash goodwill impairment charge of $1.4 million, representing the entire goodwill assigned to the vegetable reporting unit.
Income Taxes Deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year end, based on enacted tax laws and statutory tax rates applicable to the year in which the differences are expected to affect taxable income.
To the extent that future developments result in estimated cash flows that are less than currently estimated levels, it could lead to further impairment of these or other long-lived assets. 45 Table of Contents Income Taxes Deferred income taxes are recognized for the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year end, based on enacted tax laws and statutory tax rates applicable to the year in which the differences are expected to affect taxable income.
These were partially offset by higher per unit selling prices of banana and fresh and value-added products segments. Gross profit - Gross profit for 2023 increased by 3% to $350.7 million from $340.2 million in 2022.
These were partially offset by higher per unit selling prices and sales volume in our fresh and value-added products segment, primarily related to avocado and pineapple. Gross profit - Gross profit for 2024 increased by 2% to $357.9 million from $350.7 million in 2023.
A summary of our cash flows is as follows (U.S. dollars in millions): Year ended December 29, 2023 December 30, 2022 December 31, 2021 Summary cash flow information: Net cash provided by operating activities $ 177.9 $ 61.8 $ 128.5 Net cash provided by (used in) investing activities 56.4 (49.1) (82.5) Net cash used in financing activities (213.5) (12.0) (53.2) Effect of exchange rate changes on cash (4.2) 0.4 6.8 Net increase (decrease) in cash and cash equivalents 16.6 1.1 (0.4) Cash and cash equivalents, beginning 17.2 16.1 16.5 Cash and cash equivalents, ending $ 33.8 $ 17.2 $ 16.1 Operating activities Net cash provided by operating activities was $177.9 million for 2023 compared with $61.8 million for 2022, an increase of $116.1 million.
We may also, from time to time, prepay outstanding indebtedness on our credit facilities, repurchase and retire ordinary shares of our common stock or acquire assets or businesses that we believe are complementary to our operations. 39 Table of Contents A summary of our cash flows is as follows (U.S. dollars in millions): Year ended December 27, 2024 December 29, 2023 December 30, 2022 Summary cash flow information: Net cash provided by operating activities $ 182.5 $ 177.9 $ 61.8 Net cash provided by (used in) investing activities 20.4 56.4 (49.1) Net cash used in financing activities (209.9) (213.5) (12.0) Effect of exchange rate changes on cash 5.8 (4.2) 0.4 Net (decrease) increase in cash and cash equivalents (1.2) 16.6 1.1 Cash and cash equivalents, beginning 33.8 17.2 16.1 Cash and cash equivalents, ending $ 32.6 $ 33.8 $ 17.2 Operating activities Net cash provided by operating activities was $182.5 million for 2024 compared with $177.9 million for 2023, an increase of $4.6 million.
Legal Proceedings and Note 16, “ Commitments and Contingencies ” to the Consolidated Financial Statements included in Part II, Item 8. Financial Statements and Supplementary Data of this Annual Report on Form 10-K. Commitments and Contractual Obligations The following details information with respect to our contractual obligations as of December 29, 2023.
See Part I, Item 1. Business Overview under “ Environmental Proceedings ” and Part I, Item 3. Legal Proceedings and Note 16, “ Commitments and Contingencies ” to the Consolidated Financial Statements included in Part II, Item 8. Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
Although we believe that our estimates and judgments used in performing our impairment tests are reasonable, if our reporting units do not perform to expected levels, the related goodwill and the Del Monte ® trade names and trademarks may be at risk for additional impairment in the future.
As a result of the relative fair value calculation, $4.0 million of goodwill was allocated to the disposal group and included in the carrying basis of the assets sold during the fourth quarter of 2024. 44 Table of Contents Although we believe that our estimates and judgments used in performing our impairment tests are reasonable, if our reporting units do not perform to expected levels, the related goodwill and the Del Monte ® trade names and trademarks may be at risk for additional impairment in the future.
Capital expenditures for 2024 are expected to be approximately $76 million, primarily consisting of (1) investments in our operations and production facilities in North America, including expenditures related to automation and technology initiatives and the relocation of one of our port facilities, (2) upgrades to our pineapple and banana production operations in Central America, and (3) investments to improve and expand our fresh-cut and prepared foods operations in Africa.
During 2023, these capital expenditures primarily related to improvements to our Jordanian poultry operations. Capital expenditures for 2025 are expected to be approximately $80 million to $90 million, primarily consisting of (1) upgrades to our pineapple production operations in Central America and the Philippines and (2) investments to improve and expand our fresh-cut and prepared foods operations in Africa.
During 2018, we entered into interest rate swaps in order to hedge the risk of the fluctuation on future interest payments related to a portion of our variable rate LIBOR-based borrowings through 2028.
During 2018, we entered into interest rate swaps in order to hedge the risk of the fluctuation on future interest payments related to a portion of our variable rate borrowings through 2028. On July 19, 2024, we agreed to terminate our outstanding interest rate swap agreement in exchange for $7.3 million, net of fees of $0.2 million.
Net sales were primarily impacted by lower sales volumes and the negative impact of exchange rate fluctuations, primarily versus the Japanese yen, Korean won, and British pound compared with the prior-year periods. The negative impact of fluctuations in exchange rates was partially mitigated by our foreign currency hedges.
Net sales were primarily impacted by lower sales volumes and per unit selling prices of banana and the negative impact of exchange rate fluctuations, primarily versus the Japanese yen and Korean won compared with the prior-year period.
The 2024 Amended Credit Facility provides for a five-year, $750 million syndicated senior unsecured revolving credit facility ("Amended Revolving Credit Facility") and extends the existing maturity date to February 21, 2029. The 2024 Amended Credit Facility permits, under certain conditions, the ability to add an option for $200 million of receivables financing.
The 2024 Amended Credit Facility provides for a five-year, $0.75 billion syndicated senior unsecured revolving credit facility ("Amended Revolving Credit Facility") and extends the existing maturity date to February 21, 2029.
Legal Proceedings , of this Annual Report on Form 10-K for more information regarding these matters. 36 Table of Contents RESULTS OF OPERATIONS Consolidated Financial Results For the Year Ended December 29, 2023, Compared to the Year Ended December 30, 2022 The following summarizes the more significant factors impacting our operating results for the fiscal year ended December 29, 2023 as compared with the fiscal year ended December 30, 2022.
RESULTS OF OPERATIONS Consolidated Financial Results For the Year Ended December 27, 2024, Compared to the Year Ended December 29, 2023 The following summarizes the more significant factors impacting our operating results for the fiscal year ended December 27, 2024 as compared with the fiscal years ended December 29, 2023 and December 30, 2022.
Partially offsetting this decrease in working capital was a decrease in (a) accounts payable and accrued expenses, (b) a higher cash balance on hand and (c) an increase in trade accounts receivable. 39 Table of Contents Investing activities Net cash provided by (used in) investing activities was $56.4 million for 2023 compared with $(49.1) million for 2022.
Partially offsetting this decrease in working capital was a (a) decrease in current maturities of operating leases, (b) an increase in trade accounts receivable and (c) growing crops inventory. Investing activities Net cash provided by investing activities was $20.4 million for 2024 compared with $56.4 million for 2023.
Fiscal Year Our fiscal year end is the last Friday of the calendar year or the first Friday subsequent to the end of the calendar year, whichever is closest to the end of the calendar year. Fiscal year 2023 had 52 weeks and ended on December 29, 2023. Fiscal year 2022 had 52 weeks and ended on December 30, 2022.
Fiscal Year Our fiscal year end is the last Friday of the calendar year, unless the first Friday subsequent to the end of the calendar year is January 1st (in which case our year end is January 1st). Fiscal year 2024 had 52 weeks and ended on December 27, 2024.
Capital expenditures related to the banana segment accounted for $12.8 million, or 22%, of total 2023 capital expenditures and $15.1 million, or 31%, of total 2022 capital expenditures. During 2023, these capital expenditures primarily related to improvements to our production operations in Central America. During 2022, these capital expenditures also included improvements to our distribution centers and information technology initiatives.
Capital expenditures related to the banana segment accounted for $13.7 million, or 26%, of total 2024 capital expenditures and $12.8 million, or 22%, of total 2023 capital expenditures. During 2024, these capital expenditures primarily related to 40 Table of Contents improvements to our production operations in Central America and port facilities in North America.
All of our significant accounting policies are discussed in Note 2, “ Summary of Significant Accounting Policies ” in the Notes to the Consolidated Financial Statements under Part II, Item 8 Financial Statements and Supplementary Data of this Annual Report on Form 10-K.
All of our significant accounting policies are discussed in Note 2, “ Summary of Significant Accounting Policies ” in the Notes to the Consolidated Financial Statements under Part II, Item 8 Financial Statements and Supplementary Data of this Annual Report on Form 10-K. 43 Table of Contents Goodwill and Indefinite-Lived Intangible Assets Goodwill represents the excess of the purchase price of an acquired entity over the fair value of the net tangible and identifiable intangible assets acquired and liabilities assumed in a business combination.
The increase in gross profit was driven by higher selling prices in our fresh and value-added products segments and lower distribution cost, partially offset by higher per unit production cost driven by the negative impact of fluctuations in exchange rates, principally versus a stronger Costa Rican colon, which were partially mitigated due to improved cost management.
The increase in gross profit was driven by higher net sales in our fresh and value-added products segment and lower ocean freight costs, partially offset by lower net sales in our banana segment, higher per unit production and procurement costs, and the negative impact of fluctuations in exchange rates, primarily related to the Costa Rican colon and Japanese yen.
Gross profit for 2023 was $167.3 million compared with $183.0 million in 2022. Gross profit was negatively impacted by lower net sales and the negative fluctuations of exchange rates versus the Costa Rican colon and Mexican peso, partially offset by lower distribution, fuel, and ocean and inland freight costs.
Gross profit for 2024 was $86.8 million compared with $163.3 million in 2023. The decrease in gross profit was primarily driven by lower net sales, higher per unit production costs, and the negative impact of fluctuations in exchange rates due to a stronger Costa Rican colon, partially offset by lower per unit ocean freight and distribution costs.
We expect that $2.3 million of the net fair value of designated hedges recognized as a net gain in accumulated other comprehensive loss will be transferred to earnings during the next 12 months, and the remaining net gain of $2.1 million over the following 5 years, along with the earnings effect of the related forecasted transactions.
We expect that $0.3 million of the net fair value of designated hedges recognized as a net gain in accumulated other comprehensive loss will be transferred to earnings during the next 12 months along with the earnings effect of the related forecasted transactions. 42 Table of Contents Other We are involved in several legal and environmental matters that, if not resolved in our favor, could require significant cash outlays and could have a material adverse effect on our results of operations, financial condition and liquidity.
Similarly, recent shipping disruptions in the Red Sea and surrounding waterways have created logistical pressures which have negatively impacted our business. 34 Table of Contents Based on the stabilization of inflation in certain key markets during the latter part of 2023, we do not anticipate further inflation-justified price increases and surcharges.
Based on the stabilization of inflation in certain key markets during the latter part of 2023, we have not established further inflation-justified price increases and surcharges in 2024.
Amounts outstanding under the Amended Revolving Credit Facility accrue interest at a rate equal to based on the Term SOFR rate (as defined in the 2024 Amended Credit Facility) plus a margin ranging from 1.0% to 1.6%. As of December 29, 2023, we had $525.5 million of borrowing availability under committed working capital facilities, primarily under the Revolving Credit Facility.
Amounts borrowed under the revolving credit facility accrue interest at a rate equal to the Term SOFR rate plus a margin that ranges from 1.0% to 1.625% based on our Consolidated Leverage Ratio (as defined in the 2024 Amended Credit Facility).
The fair value of our prepared foods reporting unit declined as a result of higher discount rates and lower projections for revenue streams in North America and Europe as a result of recent underperformance of the reporting unit.
The fair value of our vegetable reporting unit declined as a result of underperformance in our vegetable business in North America and reduction in forecasted cash flows as a result of recent underperformance of the reporting unit.
(U.S. dollars in millions) Contractual obligations by period Total Less than 1 year 1 - 3 years 3 - 5 years More than 5 years Fruit purchase agreements $ 1,189.2 $ 310.2 $ 576.0 $ 303.0 $ — Purchase obligations 222.2 191.7 15.2 3.6 11.7 Operating leases and charter agreements 238.5 59.5 75.1 51.8 52.1 Finance lease obligations 7.9 1.6 3.2 3.1 — Long-term debt (1) 400.0 — — — 400.0 Interest on long-term debt (2) 114.4 26.1 45.0 41.5 1.8 Retirement benefits 119.2 13.7 24.4 23.9 57.2 Uncertain tax positions 9.6 0.8 7.0 0.1 1.7 Totals $ 2,301.0 $ 603.6 $ 745.9 $ 427.0 $ 524.5 (1) Contractual obligations related to our long-term debt reflect the renewal of our Second A&R Credit Agreement dated February 21, 2024. 42 Table of Contents (2) We utilize a variable interest rate on our long-term debt, and for presentation purposes we have used an assumed average rate of 4.4%.
(U.S. dollars in millions) Contractual obligations by period Total Less than 1 year 1 - 3 years 3 - 5 years More than 5 years Fruit purchase agreements $ 1,211.5 $ 435.6 $ 513.1 $ 262.8 $ — Purchase obligations 261.3 237.1 9.8 4.3 10.1 Operating leases and charter agreements 194.5 44.7 71.5 43.7 34.6 Finance lease obligations 6.3 1.6 3.2 1.5 — Long-term debt 244.1 — — 244.1 — Interest on long-term debt (1) 53.1 13.5 25.6 14.0 — Retirement benefits 124.5 16.5 23.4 24.5 60.1 Uncertain tax positions 7.4 1.1 3.3 0.5 2.5 Totals $ 2,102.7 $ 750.1 $ 649.9 $ 595.4 $ 107.3 (1) We utilize a variable interest rate on our long-term debt, and for presentation purposes we have used an assumed average rate of 4.3%.
Other expense, net - Other expense, net, was $19.3 million in 2023 compared with $14.8 million in 2022. The increase in expense of $4.5 million was mainly driven by higher foreign currency related losses. Income tax provision - Income tax provision was $18.1 million in 2023 compared with $20.1 million in 2022.
Other expense, net - Other expense, net, was $8.4 million in 2024 compared with $19.3 million in 2023. The decrease in expense of $10.9 million was mainly driven by equity earnings of unconsolidated companies within the food and nutrition sector. Income tax provision - Income tax provision was $29.1 million in 2024 compared with $18.1 million in 2023.
Upon the closing of the sale of the Saudi Arabian assets in the first quarter of 2023, we completed the 2020 Optimization Program. Net Sales Our net sales are affected by numerous factors, including mainly the balance between the supply of and demand for our products and competition from other fresh produce companies.
We believe these actions will allow us to streamline operations, reduce overhead costs, and enhance efficiency. Net Sales Our net sales are affected by numerous factors, including mainly the balance between the supply of and demand for our products and competition from other fresh produce companies.
The Second A&R Credit Agreement provides for a five-year, $0.9 billion syndicated senior unsecured revolving credit facility (the “Revolving Credit Facility”) maturing on October 1, 2024.
The Second A&R Credit Agreement provided for a five-year, $0.9 billion syndicated senior unsecured revolving credit facility maturing on October 1, 2024. The Second A&R Credit Agreement was subsequently amended on December 30, 2022, to replace the Eurocurrency Rate with the Term Secured Overnight Financing Rate ("Term SOFR") effective January 3, 2023.
The increase in net cash provided by operating activities was principally attributable to current year working capital fluctuations, primarily a reduction in inventories as compared to the prior year, largely driven by lower levels of purchases of key raw materials and packaging supplies in order to secure costs and availability during that period.
The increase in net cash provided by operating activities was principally attributable to current year working capital fluctuations, primarily a result of higher levels of accounts payable and accrued expenses compared to the prior year due to the timing of period end payments to suppliers.
Operating income - Operating income decreased by $97.8 million in 2023 when compared against 2022, mainly due to higher asset impairment and other charges (credits), partially offset by higher gross profit and larger gains on the disposal of property, plant and equipment when compared to a loss on disposal of property, plant and equipment in 2022. 37 Table of Contents Interest expense - Interest expense decreased by $0.3 million in 2023 when compared against 2022, due to higher interest rates, partially offset by lower average debt balances.
Operating income - Operating income increased by $137.8 million in 2024 when compared with 2023, mainly due to lower asset impairment charges and higher gross profit, partially offset by higher selling, general and administrative expenses. Interest expense - Interest expense decreased by $5.7 million in 2024 when compared with 2023, primarily due to lower average debt balances.
The decrease in working capital was mainly due to lower levels of (i) assets held for sale due to the end of the 2020 Optimization Program during 2023 and (ii) raw materials and packaging supplies inventory.
Working capital was $599.8 million at December 27, 2024 compared with $603.7 million at December 29, 2023, a decrease of $3.9 million. The decrease in working capital was mainly due to lower levels of (i) other accounts receivable and (ii) raw materials and packaging supplies inventory.
There were no other product-related charges in 2022. Selling, general and administrative expenses - Selling, general and administrative expenses decreased by $0.1 million when compared against the prior-year period.
Selling, general and administrative expenses - Selling, general and administrative expenses increased by $10.2 million when compared with the prior-year period.
It also provides an allowance for stock repurchases to be an amount not exceeding the greater of (i) $150 million in the aggregate or (ii) the amount that, after giving pro forma effect thereto and any related borrowings, will not cause the Consolidated Leverage Ratio to exceed 3.25 to 1.00.
It also provides an allowance for stock repurchases to be an amount not exceeding the greater of (i) (A) $50,000,000 (the "Base Redemption Basket") plus (B) commencing in the fiscal year ending December 26, 2025, any portion of the Base Redemption Basket not used in the immediately preceding fiscal year or (ii) the greatest amount which would not cause the Consolidated Leverage Ratio (determined on a pro forma basis as of the date of such repurchase) to exceed 3.50 to 1.00.
As a result of the 2024 Amended Credit Facility, availability under committed working capital facilities was reduced by approximately $150 million due to the reduction in the size of our revolving credit facility during February 2024.
As of December 27, 2024, we had $539.2 million of borrowing availability under committed working capital facilities, primarily under the Amended Revolving Credit Facility.
Partially offsetting the increase in gross profit was higher per unit production cost mainly due to negative fluctuation in exchanges rates in Costa Rica. Gross margin increased to 10.0% compared with 7.5% in the prior-year period.
The increase in gross profit was primarily driven by higher net sales and lower per unit production costs of pineapple, fresh-cut fruit and fresh-cut vegetables, partially offset by the negative impact of fluctuations in exchange rates, primarily due to a stronger Costa Rican colon. Gross margin increased to 9.3% compared with 6.8% in the prior-year period.
The decrease in the income tax provision of $2.0 million is primarily due to decreased earnings in certain higher tax jurisdictions offset by the tax effect related to the sale of our plastics business subsidiary in the second quarter of the year, and asset sales in Saudi Arabia and North America during the first quarter of the year.
The increase in the income tax provision of $11.0 million is primarily due to increased earnings in certain higher tax jurisdictions.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

12 edited+2 added−2 removed19 unchanged
Biggest changeSpecifically, this Annual Report on Form 10-K contains forward-looking statements including, but not limited to the following: • our beliefs regarding our market positions in our different product categories and the contributing factors to such market positions; • our beliefs regarding our opportunity to be a preferred supplier to large retail, convenience store chain, and food service customers and our methods to expand or establish such status; • our beliefs regarding the growth of the fresh-cut produce category and fresh produce industry and differentiation within the industry; • our expectation to continue investing in new product development to increase revenue and maintain our premium price position and market leadership in our product categories; • our beliefs regarding increases in outsourcing by food retailers, the drivers of that trend, and the beneficiaries of such increases; • our beliefs regarding our ability to leverage our existing distribution network and infrastructure to expand the market reach of our Mann Packing products; • our beliefs regarding our competitive advantages and the reasons for those advantages; • our beliefs and expectations of our ability to generate cost savings, expand our cargo business, and improve the quality of our products; • our beliefs regarding the barriers to entry in the pineapple and non-tropical fruit markets; • our expectations regarding the competitive pressures in the markets that we operate in; • our beliefs regarding our positioning to increase market share and our strategies to do so; • our beliefs regarding the materiality of our legal proceedings; • our beliefs regarding the benefits of diversity and inclusion within our workforce; • our beliefs related to the sufficiency of our capital resources; • our beliefs regarding the impacts of consolidation in our industry; • our beliefs regarding the adequacy of our insurance coverage; • our beliefs regarding the sufficiency of our information technology protections and practices; • our expectations and estimates regarding certain legal, tax and accounting matters, including our litigation strategy, plans and beliefs regarding the ultimate outcome of income tax adjustments assessed by foreign taxing authorities; • our belief that we will be successful in our contests of certain proposed adjustments by taxing authorities; • our belief that our cash on hand, capacity available under our Revolving Credit Facility, and cash flows from operations will be sufficient to service our outstanding debt during the next twelve months; • our expectations regarding fluctuations in the financial performance of our business due to seasonality; • our plans and strategies to expand various categories of our business in our geographic markets; • our beliefs regarding opportunities for sales growth and development of our fresh and prepared food products in the Middle East, North Africa and Central Asian countries and the drivers of continued net sales growth across our segments; • our expectations and strategies for net sales growth in our respective geographic markets, including new product offerings and expansion of existing product offerings, increased sales volumes of existing products, expansion in various markets and targeting of convenience stores and foodservice trades in selected markets; • our expectation that a significant portion of our revenues will continue to be derived from a relatively small number of customers and our beliefs regarding the factors that go into the purchase decisions of such customers; • our expectations regarding the expansion of our third-party ocean freight services and other new logistic services to provide a meaningful contribution to our profitability and operating results; 47 Table of Contents • our beliefs regarding compliance with applicable laws and regulations; • our expectations regarding our further equity investments in companies; • our beliefs regarding the increasing emphasis on food safety issues; • our expectations regarding capital expenditures in 2024, including for research and development; • our expectations regarding inflationary pressures and the impacts to our future operating results; • our expectations relating to sales growth; • our expectations regarding share repurchases; • our expectations regarding estimated liabilities and expenditures related to environmental cleanup; • our expectations regarding voting practices of our principal shareholders; • our beliefs regarding trends in consumer demand and factors that provide differentiation; • our expectations regarding our derivative instruments, including our counterparties’ credit ratings and the anticipated impacts on our financial statements; • our expectations concerning the fair value of hedges, including the timing and impact to our results; and • our strategic plans and future performance.
Biggest changeSpecifically, this Annual Report on Form 10-K contains forward-looking statements including, but not limited to the following: • our ability to successfully navigate the competitive pressures in the markets in which we operate, the impact of consolidation and the barriers to entry in the pineapple and non-tropical fruit markets; • our strategic plans and future performance, including plans to expand avocados into additional international markets and to continue to expand our pineapple offerings; • our market positions in our different product categories and expectations regarding our growth potential in such categories; 47 Table of Contents • opportunities for sales growth and development of our fresh and prepared food products in the Middle East, North Africa and Central Asian countries and the drivers of continued net sales growth across our segments; • trends in consumer demand and our ability to capitalize on such trends to deliver future growth; • our intent to invest in our bioass initiative and the potential impact on future results; • our opportunity to be a preferred supplier to large retail, convenience store chain, and food service customers and our methods to expand or establish such status; • the ability of investments in new product development to increase revenue and maintain our premium price position and market leadership in our product categories; • the impact of outsourcing by food retailers and our ability to capitalize on such trend; • our ability to streamline operations, reduce overhead costs, enhance efficiency and expand the market reach of Mann Packing business; • the impact of geopolitical conflicts, including the Red Sea conflict, on our business operations; • our ability to generate cost savings; • our intend to expand our cargo business; • our expectations regarding the expansion of our third-party ocean freight services and other new logistic services to provide a meaningful contribution to our profitability and operating results; • our ability to continue to maintain compliance with applicable laws and regulations; • our intent to continue to make further equity investments in companies; • inflationary pressures and the impacts to our future operating results; • our financial condition, including sales growth, estimated liabilities and expenditures related to environmental cleanup; • capital expenditures in 2025, including for research and development; • our expectations regarding share repurchases; • the adequacy of our insurance coverage; • the sufficiency of our information technology protections and practices; • legal, tax and accounting matters, including our litigation strategy, plans and beliefs regarding the ultimate outcome of income tax adjustments assessed by foreign taxing authorities; • the sufficiency of our capital resources and sufficiency of our liquidity to service our outstanding debt during the next twelve months; • the impact of seasonality on our financial results; and • accounting estimates, including the impact of our hedges and other derivative instruments on our results of operations.
Our costs are also affected by fluctuations in the value, relative to U.S. dollar, of the currencies of the countries in which we have significant production operations, such as the Costa Rican colon, Guatemalan quetzal, Chilean peso, Kenya shilling, and Mexican peso. A weaker U.S. dollar may result in increased costs of production abroad.
Our costs are also affected by 46 Table of Contents fluctuations in the value, relative to U.S. dollar, of the currencies of the countries in which we have significant production operations, such as the Costa Rican colon, Guatemalan quetzal, Chilean peso, Kenya shilling, and Mexican peso. A weaker U.S. dollar may result in increased costs of production abroad.
Approximately 34% and 28% of our net sales and a significant portion of our costs and expenses in each of 2023 and 2022 were denominated in currencies other than the dollar. We generally are unable to adjust our non-dollar local currency sales prices to reflect changes in exchange rates between the dollar and the relevant local currency.
Approximately 32% and 34% of our net sales and a significant portion of our costs and expenses in each of 2024 and 2023 were denominated in currencies other than the dollar. We generally are unable to adjust our non-dollar local currency sales prices to reflect changes in exchange rates between the dollar and the relevant local currency.
The results of a hypothetical 10% strengthening in the average value of the dollar during 2023 and 2022 relative to the other currencies in which a significant portion of our net sales are denominated would have resulted in a decrease in net sales of approximately $146.0 million and $126.0 million for the years ended December 29, 2023 and December 30, 2022.
The results of a hypothetical 10% strengthening in the average value of the dollar during 2024 and 2023 relative to the other currencies in which a significant portion of our net sales are denominated would have resulted in a decrease in net sales of approximately $137.0 million and $146.0 million for the years ended December 27, 2024 and December 29, 2023.
A 10% increase in the interest rate for 2023 and 2022 would have resulted in a negative impact of approximately $2.8 million on our results of operations for each of the years ended December 29, 2023 and December 30, 2022.
A 10% increase in the interest rate for 2024 and 2023 would have resulted in a negative impact of approximately $1.7 million and $2.8 million on our results of operations for each of the years ended December 27, 2024 and December 29, 2023.
At year end December 29, 2023 and December 30, 2022, total variable rate debt had carrying values of $400.0 million and $519.1 million. The fair value of the debt approximates the carrying value because the variable rates approximate market rates.
At year end December 27, 2024 and December 29, 2023, total variable rate debt had carrying values of $244.1 million and $400.0 million. The fair value of the debt approximates the carrying value because the variable rates approximate market rates.
To reduce interest rate risk, during 2018, we entered into interest rate swaps in order to hedge the risk of the fluctuation on future interest expense related to a portion of our variable rate, LIBOR-based borrowings under our Credit Facility through 2028; however, we may decide not to enter into these contracts during any particular period.
To reduce interest rate risk, during 2018, we entered into interest rate swaps in order to hedge the risk of the fluctuation on future interest expense related to a portion of our variable rate borrowings under our Credit Facility through 2028.
Various factors could prevent us from achieving our goals, and cause the assumptions underlying forward-looking statements and the actual results and performance to differ materially from those expressed in or implied by the forward-looking statements include, but are not limited to, the following: • the impact of inflationary pressures on raw materials and other costs; • the impact of increased costs for many of our products, including bananas, pineapples, avocados and other fresh produce; • the impact of pricing and other actions by competitors, particularly during periods of low consumer confidence and spending levels; • our ability to successfully compete in the markets in which we do business; • the impact on our business of the consolidation of retailers, wholesalers and distributors in the food industry; • the impact of foreign currency fluctuations and currency exchange risks because of our international business; • the impact on our sales and profits if we lose one or more of our largest customers or such customers reduce their purchases from us; • the availability of sufficient labor during peak growing and harvesting seasons; • the continued ability of our distributors and suppliers to have access to sufficient liquidity to fund their operations; • the impact of governmental trade restrictions, including adverse governmental regulation that may impact our ability to access certain markets; • our anticipated cash needs in light of our liquidity; • trends and other factors affecting our financial condition or results of operations from period to period, including changes in product mix, consumer preferences or consumer demand for branded products such as ours; anticipated price and expense levels; • the impact of crop disease, such as vascular diseases, one of which is known as Tropical Race 4, or TR4 (also known as Panama Disease); • our ability to improve our existing quarantine policies and other prevention strategies, as well as find contingency plans, to protect our and our suppliers’ banana crops from vascular diseases; • global or local disruptions or issues that impact our production facilities or complex logistics network; • our inability to realize expected benefits on plans for expansion of our business (including through acquisitions); • our ability to successfully integrate acquisitions and new product lines into our operations; • the impact of impairment or other charges associated with exit activities, crop or facility damage or otherwise, • the timing and cost of resolution of pending and future legal and environmental proceedings or investigation; • the impact of changes in tax accounting or tax laws (or interpretations thereof), the impact of claims or adjustments proposed by the Internal Revenue Service or other taxing authorities, including the EU, in connection with our tax audits and our ability to successfully contest such tax claims and pursue necessary remedies; • the success of our joint ventures; • the impact of severe weather conditions and natural disasters, such as flooding and earthquakes, on crop quality and yields and on our ability to grow, procure or export our products; • the adequacy of our insurance coverage; • the cost and other implications of changes in regulations applicable to our business, including potential legislative or regulatory initiatives in the United States or elsewhere directed at mitigating the effects of climate change; • damage to our reputation or brand names or negative publicity about our products; 48 Table of Contents • exposure to product liability claims and associated regulatory and legal actions, product recalls, or other legal proceedings relating to our business; • our ability to continue to comply with covenants and the terms of our credit instruments and our ability to obtain additional financing to fund our capital expenditures; • our ability to successfully manage the risks associated with international operations, including risks relating to political or economic conditions, inflation, tax laws, currency restrictions and exchange rate fluctuations, legal or judicial systems.
Various factors could prevent us from achieving our goals, and cause the assumptions underlying forward-looking statements and the actual results and performance to differ materially from those expressed in or implied by the forward-looking statements include, but are not limited to, the following: • the impact of inflationary pressures on raw materials and other costs, as well as the impact of increased costs for many of our products; • the impact of tariffs and other governmental trade restrictions; • changes in consumer preferences or consumer demand for branded products such as ours; • macroeconomic factors that could adversely affect demand for our premium products or that could result in pricing pressures, such as inflation, lower discretionary income or reduction in consumer confidence; • our ability to successfully compete in the markets in which we do business; • the impact of the consolidation of retailers, wholesalers and distributors in the food industry; • the availability of sufficient labor during peak growing and harvesting seasons; • the continued ability of our distributors and suppliers to have access to sufficient liquidity to fund their operations; • the impact of crop diseases as well as our ability to improve our existing quarantine policies and other prevention strategies, as well as find contingency plans, to protect our and our suppliers’ banana crops from vascular diseases; • global or local disruptions or issues that impact our production facilities or complex logistics network; • our ability to successfully integrate acquisitions and new product lines into our operations; • the timing and cost of resolution of pending and future legal and environmental proceedings or investigation; • the impact of changes in tax accounting or tax laws (or interpretations thereof), the impact of claims or adjustments proposed by the Internal Revenue Service or other taxing authorities, including the EU, in connection with our tax audits and our ability to successfully contest such tax claims and pursue necessary remedies; • the success of our joint ventures; • the impact of severe weather conditions and natural disasters, and the impact that may have on our business and financial condition; 48 Table of Contents • damage to our reputation or brand names or negative publicity about our products; • product liability claims and associated regulatory and legal actions, product recalls, or other legal proceedings relating to our business; • our ability to continue to comply with covenants and the terms of our credit instruments and our ability to obtain additional financing to fund our capital expenditures; and • our ability to successfully manage the risks associated with international operations, including risks relating to political or economic conditions, inflation, tax laws, currency restrictions and exchange rate fluctuations, legal or judicial systems.
We periodically enter into currency forward contracts as a hedge against a portion of our currency exchange rate exposures; however, we may decide not to enter into these contracts during any particular period.
We periodically enter into currency forward or collar contracts as a hedge against a portion of our currency exchange rate exposures; however, we may decide not to enter into these contracts during any particular period. We had one foreign currency cash flow hedge outstanding at December 27, 2024 and three outstanding at December 29, 2023.
The analysis methods we used to assess and mitigate risk discussed above should not be considered projections of future events or losses.
Actual results in the future may differ materially from these estimated results due to actual developments in the global financial markets. The analysis methods we used to assess and mitigate risk discussed above should not be considered projections of future events or losses.
We had several foreign currency cash flow hedges outstanding, and the fair value of these hedges was a net liability of $0.3 million as of December 29, 2023 and $6.7 million as of December 30, 2022.
The fair value of these hedges was a net asset of $0.3 million as of December 27, 2024 and a net liability of $0.3 million as of December 29, 2023.
The above discussion of our procedures to monitor market risk and the estimated changes in fair value resulting from our sensitivity analysis are forward-looking statements of market risk assuming certain adverse market conditions occur. Actual results in the future may differ materially from these estimated results due to actual developments in the global financial markets.
At year end December 29, 2023, the fair value of the interest rate swap contracts were in a net asset position of $7.9 million. The above discussion of our procedures to monitor market risk and the estimated changes in fair value resulting from our sensitivity analysis are forward-looking statements of market risk assuming certain adverse market conditions occur.
Removed
We amended our Second A&R Credit Agreement and our interest rate swaps to transition from LIBOR to SOFR as a reference rate effective January 3, 2023.
Added
On July 19, 2024, we agreed to terminate our remaining outstanding interest rate swap in exchange for $7.3 million, net of fees of approximately $0.2 million.
Removed
At year end December 29, 2023, the fair value of the interest rate swap contracts were in a net asset position of $7.9 million compared to a net asset position of $15.8 million as of December 30, 2022. 46 Table of Contents At December 29, 2023, the notional value of interest rate contracts outstanding was $400 million, with $200 million maturing in 2024 and the remaining $200 million maturing in 2028.
Added
Based on our assessment that the originally hedged cash flows associated with our variable rate borrowings remain probable, the proceeds received as a result of terminating our interest rate swap were recorded in accumulated other comprehensive loss and are reclassified to earnings as a reduction in interest expense over the remaining life of the hedged outstanding debt.

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