Good day everyone and welcome to the Fresh Del Monte Produce Fourth Quarter and Full Fiscal Year 2021 Conference Call. Today's conference call is being broadcast live over the internet and is also being recorded for playback purposes. All lines have been placed on mute to prevent any background noise.

After the speaker remarks there will be a question-and-answer session. For opening remarks and introductions, I'd like to turn today's call over to Vice President of Global FP&A and Investor Relations with Fresh Del Monte Produce, Ana Miranda. Please go ahead, Ms. Miranda..

Thank you, Chantal. Good morning, everyone. Thank you for joining our fourth quarter and full fiscal year 2021 conference call. As Chantel on tell mentioned I am Ana Miranda, Vice President Global FP&A, and investor relations with Fresh Del Monte Produce.

Joining me in today's discussions are Mohammad Abu-Ghazaleh, Chairman and Chief Executive Officer and Eduardo , Senior Vice President and Chief Financial Officer. I hope you've had a chance to review the press release that was issued earlier this morning via Business Wire.

You may also visit the company's website @ freshdelmonte.com for a copy of today's release and investor relations presentation. On the site you can also register for future distributions. This conference call is being webcast live on our website and will be available for replay after this call.

Please note that our press release and our call today include non-GAAP measures. Reconciliations of these non-GAAP financial measures are set forth in the press release we issued today and on the company's website at freshdelmonte.com under the Investor Relations tab.

I will like to remind you, that much of the information we'll be seeking to today, including the answers we give in response to your questions, may include forward-looking statements within the provisions of the Federal Securities Safe Harbor laws.

In today's press release and in our SEC filing, we detailed material risks that may cause our future results to differ from these forward-looking statements. Our statements are as of today, February 23, and we have no obligation to update any forward-looking statements we may make. With that, I'm pleased to turn today's call over to Mohammad..

Thank you, Anna. Good morning, everyone. In 2021, we posted double-digit operating income growth compared with 2020. We are most derated agility and industry leadership in navigating the current challenging macroeconomic environment as we focus on mitigating industry-wide supply and labor headwinds.

We have divested inflation justified pricing increases towards the end of year made investments targeted at the information and focus relentlessly on productivity. In the first half of 2021, despite these pressures, gross profit benefited from strong performance across all of our segments.

Particularly higher that unit selling prices in our banana segment. This higher pricing has offset incremental production and procurement costs, following the hurricanes in Central America in the fourth quarter of 2020.

And higher demand on key product categories related to relax these strictures on social gatherings in some of our domain markets compared with 2020. However, in the second half of 2021 inflation -- inflationary and other post pressures and intensified negatively impacting gross profit.

The price increase, which took effect towards the later part of the year, resulted in improved performance as we move through the end of the fourth quarter. Overall, during the year, we increased adjusted EBITDA to $207 million from $189 million in 2020. As a result, adjusted EBITDA margin increased 4 basis points to 4.9 from 4.5.

As a brief recap during the year, we made significant progress on our strategic initiatives, and I would like to focus on that. We added to state of the art is generated for tender vessels in the first half of the year,bringing our fleet to a total of 13 vessels.

As previously mentioned, six out of onset investors are new booking us and a stronger, more position. As we continue to try to provide reliable, quality service to our customers. It lives also enabled us to expand our third-party street services.

In keeping with our shareholder accretion approach in the second half, we increased our quarterly cash dividend from $0.10 per share to $0.15 per share, bringing our total dividend payout for the year to $0.50 per share and the same approach we continue in 2022. In 2021, we reduced long-term debt by approximately $23 million.

Throughout the year, we also made progress on our strategic partnerships. We successfully implemented a licensing agreement with one of Europe's top frozen good retailers. The name is Iceland, whereby we offer a broad product mix, generating consistent income too.

In June, we invested in Square Capital Global MetraTech funds, the firm innovative growth stage companies applying technology in various infrastructure sectors, including logistics, supply chain, and agriculture, which are incrementally or adjacent to our business.

In November, through a partnership with project equity, we invested in leaving organic consumer products, brand. That product offerings include granola, oat meal and pancakes fixes.

Department -- the partnership is an opportunity to expand our business in the convenience category, providing the platform for us to work together on the development of unique and innovative products. Additionally, we are excited to leverage our vertical integration to support our partners with supply chain and logistics services.

Carrying our progress to 2022, we announced today, another brand partnership with Good Culture founded in 2014. The company focuses on high-quality culture of dairy products, specifically packaged cheese and sour cream. They have been an innovative and disruptive in the space, gaining significant market share since its inception.

Both investments fuelling elicited and group culture, where facilitated by semi-cap, food and nutrition whom surges -- centers for progress that has proven that sense in the market and ready to scale up that business through strategic alliances. And we are excited to announce a partnership with McCormick and Company, a global leader in the flavors.

This agriculture products align very closely with our vision and strategy. With this project, we are leveraging technology and coupled with our agriculture expertise to grow products, while minimizing costs and preserving the environment. At this moment, both companies have decided to keep the location and products and production undisclosed.

In 2021, we made great progress on our sustainability journey. We were the first global marketer of fruits and vegetables, to commit, to design based target on systems with the levels required to meet the goals of the carriage agreement.

Designed based targets initiative has since validated that our emissions reduction targets conform with its criteria and recommendation. Really our 2020 sustainability reports. On the people front last month we announced the appointment of Mohammad Abbas as Executive Vice President and Chief Operating Officer.

Mohammad joined the company in 2009 and has served in various leadership roles, including head of Asia and Middle East Asia. I'm excited to have him in his new role where I am said that it would add significant side to our operations.

Having said that, am confident in our team's ability to continue to execute on our long-term strategy of growing our core business, increasing the reach of higher-margin value-added categories. Implementing a leveraging technology solutions.

As we evolve Agri -tech company and expanding our customer and brand partnerships through our -- throughout our global operations. At this point, I would like to move the call to Eduardo (ph.) to talk about the financial results. Eduardo..

Thank you, Mohammad and good morning. I will start with our fourth quarter performance by product lines, followed by consolidated overview of our full fiscal year 2021. Net sales for the fourth quarter of 2021 increased $50 million or 2%, compared with the prior-year period.

The increase was driven by higher net sales in our other products and service segment, which includes third-party freight services, and those are in meats categories. And our Fresh and value-added product segment.

As it relates to comparability between periods, the fourth-quarter of 2021 consisted of 13 weeks compared with 14 weeks in the fourth quarter of 2020. The additional week in the fourth quarter of 2020 contributed an estimated $72 million in net sales.

On a comparable basis, net sales increased $87 million or 9% Adjusted Gross Profit for the fourth quarter of 2021 was almost $40 million compared with $49 million in the previous year.

The decrease was primarily driven by the continuation of inflectionary and other cost pressures which resulted in higher per unit production and distribution costs, including packaging materials, fertilizers, inland ferries, labor, and field.

The decrease was partially offset by an inflation justified price increase effective towards the latter part of the fourth quarter. The increase was implemented in an effort to maintain our continuous supply and service levels with our business partners.

Having said that during the fourth quarter, we have realized sequential improvements in gross profit, specifically in December. And in addition to pricing gross profit benefited from fluctuations in exchange rates.

Adjusted operating income for the fourth quarter was a loss of $7 million compared with a loss of $4.5 million in the prior-year period, primarily related to lower adjusted gross profit, partially offset by a decrease in selling general and administrative expenses.

And adjusted net loss was $8.5 million compared with a loss of $3.7 million in the prior-year period. Our diluted earnings per share for the fourth-quarter was a loss of $0.24, compared with earnings of $0.02 in the prior year period, adjusted diluted earnings per share was a loss of $0.18, compared with a loss of $0.08 in the prior year period.

Adjusted EBITDA for the fourth quarter was $15 million compared with $24 million in the prior-year period and corresponding adjusted EBITDA margin decreased to 1.45% from 2.4% in the prior-year period. Let me now turn to segment results beginning with our fresh and value-added drawbridge segment.

Net sales for the fourth quarter of 2021 increased by $12 million or 2% when compared with the prior year period. As previously noted, the fourth-quarter of 2021 consisted of 13 weeks compared with 14 weeks in the fourth quarter of 2020. The additional week in the prior-year period contributes an estimated $42 million in net sales.

On a comparable basis, net sales for the fourth quarter of 2021 increased $54 million or 10%, compared with the prior year period. The primary drivers more increases in our Mellon and financial products line. Melon net sales increased in North America, driven by higher sales volume and per unit sales prices.

And by natural net sales increased across most regions, driven by higher per unit sales price. As an offset, sales off fresh-cut vegetables decreased during the fourth quarter compared with the prior-year period. Fresh-cuts vegetables net sales decreased primarily in North America, including in our main packing operations.

The decrease was driven by lower sales volume and lower per unit sales prices, related to lower demand from food service channels and lack of sufficient labor availability. For the quarter, adjusted gross profit in the fresh and value-added produce segment was $28 million, compared with $32 million in the prior-year period.

The decrease was driven by inflation area and other cost pressures which resulted in higher per unit production and distribution costs as it related to comparability, the additional week in the prior year, contribute to an estimated $2 million in gross profit.

From a broader view, the primary drivers of the variants were in avocados gross profit decreased primarily in North America driven by lower sales volume coupled with higher per unit procurement and distribution costs.

Fresh-cuts, vegetables, gross profit decreased in North America primarily in our manufacturing operation many driven by lower net sales coupled with higher per unit production and distribution costs.

The decrease was partially offset by higher gross profits across most of our other key product categories, including non-tropical fruits, melons, and thorn apples. Moving to our banana segments for the fourth quarter of 2021, net sales decreased by $13 million or 3% compared with the prior-year period, primarily driven by North America and Asia.

The additional weakening prior year periods contributed an estimated $28 million in net sales on a comparable basis, net sales for 2021 increased $15 million or 4% compared to prior-year periods.

Adjusted Gross Profit for the fourth quarter of 2021 was $9 million compared with $17 million in the prior-year period, primarily driven by North America and Asia. In both regions, the decrease was driven by lower net sales.

As this relates to per unit costs, North America gross profit was negatively impacted by higher production and distribution costs. While in Asia was negatively impacted by higher production and ocean freight costs. Now, moving through selected financial data.

Selling, General and Administrative expenses worth $44.5 million, compared with the $54 million in the previous year. The decrease was driven by lower provision for credit losses and lower promotional and administrative expenses. Net interest expense was lower related to lower interest rates and lower average debt balance.

Income tax were a benefit of approximately $7 million during the quarter compared with a benefit of $4 million in the prior-year period, primarily due to the release of valuation allowance. As it was determined, deferred tax assets will be utilized. Now, turning to our full-year 2021 results.

For the full-year 2021, net sales increased $50 million or 1% compared with the prior-year period.

In both periods, the increase in net sales was driven by higher net sales, and now there are other products and services segments, which includes third-party freight services and full trend needs category and by our fresh and value-added product segment. The additional week in the prior-year periods contributed an estimated $72 million in net sales.

On a comparable basis, net sales for 2021 increased $122 million or 3%. Adjusted gross profit was $307 million compared to the $284 million in the prior-year period. As previously mentioned by Mohammad in the first half of 2021, starting fresh and normal cost pressures, gross profit benefited from strong performance across all of our segments.

segments we aligned higher per unit price -- selling prices. The higher pricing helped the offset incremental production for costs following the hurricanes in Central America in the fourth-quarter of 2020. In the second half of 2021, inflationary and other cost pressures, intensified coupled with seasonality, negatively impacting gross profit.

As it relates to exchange rates, gross profit was favorably impacted by fluctuations versus the Euro, Costa Rican colon, and British pound, partially offset by a stronger Mexican business. Four to two weeks fiscal year, adjusted operating net Income was $112 million compared with $89 million in the prior-year periods.

May increase was primarily driven by higher gross profit and a decrease in selling general and administrative expenses. Adjusted net income was $81 million compared with $55 million in the prior-year period. Diluted earnings per share was a $1.68 compared with a $1.03 in the prior-year period.

While adjusted diluted earnings per share was $1.69 compared with a $1.15 in the prior-year period, a 47% improvement year-over-year. Moving onto cash flow for the year, we generated $129 million in cash flow from operating activity compared with $181 million in 2020.

The decrease was primarily attributable to higher levels of inventories, as we proactively increased inventory of key raw materials to secure costs and availability. Inventory was also impacted by the increasing cost of goods largely related to current cost pressures.

Partially offsetting the decrease, were higher net income and higher balances of accounts payable and accrued expenses. In the second half of 2020, we announced our optimization program. The program involves selling non-strategic and underutilized assets, including land and facilities.

The program use, improving our return on assets, shoring up our balance sheet, and reducing operational costs. Since the program was announced, we generated $67 million in cash proceeds, out of which $17 million came in 2021. We express -- we expect progress towards achieving our target of $100 million in cash proceeds to continue in 2022.

As it relates to capital spending, we invested $99 million in capital expenditures in 2021, compared with $150 million in 2020. The share of the spend relates to the last two new container vessels added to our fleet, investments in Asia, North America, and Europe, and improvements to our banana and pineapple operations in Central America.

As mentioned by Mohammad, our CapEx investments are heavily focused on automation. Turning to long term debt, we've repaid approximately $23 million bringing our balance from $542 million at the end of 2020 to $519 million in 2021. Based on a trailing 12-month periods our total debt stands at 2.5 times adjusted EBITDA.

As announced this morning in our financial results press release, we declared a quarterly cash dividend of $0.15 per share payable on April 4th 2022 to shareholders of record on March 09, 2022. For full fiscal year 2021, we declared four quarterly cash dividends totaling $0.50 per share.

These concludes our financial review, we can now turn the call over for Q&A; Chantel..

At this time, I'd like to remind everyone in order to ask a question. , we'll pause for just a moment to compile the Q and A roster. Again, At this time. I'll turn the call back over to you..

Thank you very much. I appreciate the attendance of our investors and others on the call and look forward to speak to you on our next quarterly call. Thank you very much. Have a good day..

This concludes today's conference call; you may now disconnect..