Overview



We are one of the world's leading vertically integrated producers, marketers and
distributors of high-quality fresh and fresh-cut
fruit and vegetables, as well as a leading producer and marketer of prepared
fruit and vegetables, juices, beverages and snacks in Europe, Africa and the
Middle East. We market our products worldwide under the Del Monte® brand, a
symbol of product innovation, quality, freshness and reliability since 1892. Our
global sourcing and logistics system allows us to provide regular delivery of
consistently high-quality produce and value-added services to our customers. Our
major producing operations are located in North, Central and South America, Asia
and Africa.

Our operations are organized into two reportable segments that represent our primary businesses and one reportable segment that represents our ancillary businesses:



•Fresh and value-added products - includes pineapples, melons, non-tropical
fruit (including grapes, apples, citrus, blueberries, strawberries, pears,
peaches, plums, nectarines, cherries and kiwis), other fruit and vegetables,
avocados, fresh-cut fruit and vegetables, prepared fruit and vegetables, juices,
other beverages, prepared meals and snacks.

•Banana



•Other products and services - includes our ancillary businesses consisting of
sales of poultry and meat products, a plastic product business, and third-party
freight services

Our vision is to inspire healthy lifestyles through wholesome and convenient products. Our strategy is founded on six goals:


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COVID-19 Pandemic Impact



In December 2019, a novel strain of coronavirus, COVID-19, was identified in
Wuhan, China. This virus continues to spread globally and in March 2020, the
World Health Organization declared COVID-19 a pandemic. We have taken various
preventative and protective measures in response to the COVID-19 pandemic to
support our team members, customers, suppliers, and local communities. At our
production facilities where food safety has always been a top priority, we
introduced additional operating procedures and safety protocols to include
social distancing, thermal screenings and increased cleaning cycles to protect
our production teams. We activated our supply chain contingency plans to
mitigate any disruptions in our ability to service our customers. Additionally,
we implemented remote working arrangements across various of our administrative
locations, having as many global employees as possible working remotely. These
measures have allowed us to maintain our commitment to providing healthy,
convenient and safe Del Monte® branded products around the world during this
critical time.
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The COVID-19 pandemic has negatively impacted the global economy, disrupted
global supply chains and created significant volatility and disruption of
financial markets. The COVID-19 pandemic has had a material adverse impact on
our results of operations during the quarter and six months ended June 26, 2020.
Government imposed mandatory closures and restrictions across various of our key
global markets have resulted in volatile supply and demand conditions,
particularly of our higher price point products such as pineapples, avocados,
and fresh-cut fruit and vegetables, as well as reduced demand in our foodservice
distribution channel and shifting demand in retail. We continue to work
collaboratively with our network of third-party growers and suppliers to
mitigate the impact of COVID-19 on our supply chain and costs. Additionally, in
the six months ended June 26, 2020, our results were negatively impacted by
service cancellations and containers that were unable to clear at certain of our
Chinese ports. As a result, we had to redirect our products to markets such as
Japan, Korea, and Hong Kong which had a negative impact on our financial
performance due to oversupply in these markets. During the quarter ended June
26, 2020, some of our workers contracted the COVID-19 virus, which resulted in
temporary facility closures, reduced production hours, increased cleaning and
logistical costs, as well as an adverse impact on our net sales due to the
perishability of our products. While we expect the COVID-19 pandemic to continue
to negatively impact our operating results, the extent of the impact will depend
on future developments, including the duration and spread of the pandemic and
related government restrictions, all of which are uncertain and cannot be
predicted.

In addition, we cannot predict whether future developments associated with the
COVID-19 pandemic will materially adversely affect our long-term liquidity
position. During the quarter ended June 26, 2020, we began taking several steps
to conserve our liquidity position including reducing our interim cash dividend
from ten cents ($0.10) per share in the first quarter of 2020 to five cents
($0.05) per share in the second and third quarters of 2020 and delaying certain
of our planned capital expenditures to the second half of 2020 and 2021.

Refer to the "Results of Operations" and "Liquidity and Capital Resources" sections below, as well as Part II. Item 1A, "Risk Factors" for further discussion.

Income Taxes



Member States of the European Union in which our European distributors operate
have enacted, or are in the process of drafting, anti-hybrid legislation which
may impact our ability to deduct the cost of certain purchases in those
jurisdictions. We are actively analyzing the enacted and proposed draft
legislation to assess whether, and to what extent, these provisions impact the
Company.


Results of Operations

The following tables present for each of the periods indicated (i) net sales by
geographic region and (ii) net sales and gross profit by segment, and in each
case, the percentage of the total represented thereby (U.S. dollars in
millions):

Net sales by geographic region:



                                                Quarter ended                                                                                                       Six months ended
 Region                       June 26, 2020                                           June 28, 2019                                         June 26, 2020                        June 28, 2019
North America        $      667.1              61  %       $   816.8                66  %       $ 1,372.7              62  %       $ 1,565.6                  65  %
Europe                      164.0              15  %           171.2                14  %           335.2              15  %           342.5                  14  %
Asia                        134.1              12  %           131.1                10  %           247.3              11  %           251.8                  10  %
Middle East                 114.2              11  %           109.3                 9  %           226.6              10  %           207.1                   9  %
Other                        12.9               1  %            11.0                 1  %            28.5               2  %            26.6                   2  %
Totals               $    1,092.3             100  %       $ 1,239.4               100  %       $ 2,210.3             100  %       $ 2,393.6                 100  %



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Net sales and gross profit by segment:

                                                                                        Quarter ended
                                                     June 26, 2020                                                                                                  June 28, 2019
 Segment                             Net Sales                                           Gross Profit                                         Net Sales                        Gross Profit

Fresh and value-added
products                    $   636.2              58  %       $  37.1                47  %       $   764.3              62  %       $  57.5                59  %
Banana                          429.6              39  %          39.0                50  %           440.0              35  %          36.9                38  %
Other products and services      26.5               3  %           2.6                 3  %            35.1               3  %           3.2                 3  %
Totals                      $ 1,092.3             100  %       $  78.7               100  %       $ 1,239.4             100  %       $  97.6               100  %

                                                                                      Six months ended
                                                     June 26, 2020                                                                                                  June 28, 2019
                                     Net Sales                                           Gross Profit                                         Net Sales                        Gross Profit
Fresh and value-added
products                    $ 1,297.2              59  %       $  79.6                54  %       $ 1,454.3              61  %       $ 119.0                62  %
Banana                          856.6              39  %          63.5                43  %           871.5              36  %          71.6                37  %
Other products and services      56.5               2  %           4.1                 3  %            67.8               3  %           2.1                 1  %
Totals                      $ 2,210.3             100  %       $ 147.2               100  %       $ 2,393.6             100  %       $ 192.7               100  %

Second Quarter of 2020 Compared with Second Quarter of 2019

Net Sales. Net sales for the second quarter of 2020 were $1,092.3 million
compared with $1,239.4 million for the second quarter of 2019. The decrease in
net sales of $147.1 million was attributable to lower net sales in all of our
business segments. The COVID-19 pandemic negatively impacted our net sales
during the second quarter of 2020 by an estimated $132.0 million in our fresh
and value-added products and banana segments, as compared to our original
expectations for these segments which were developed prior to the pandemic.
These negative impacts were primarily the result of volatile supply and demand
conditions resulting from the pandemic, as well as reduced demand in our
foodservice distribution channel and shifting demand in retail due to government
imposed mandatory closures and restrictions across various of our key global
markets. The effect of government imposed mandatory closures and restrictions
and the lack of family gatherings for Easter, Mother's Day, Father's Day, school
graduations and summer events specifically in North America has significantly
reduced demand for many of our fresh and value-added products.

•Fresh and value-added products - Net sales in the fresh and value-added
products segment decreased $128.1 million, primarily as a result of lower net
sales of fresh-cut fruit and vegetables, avocados, pineapples, and prepared
foods. The COVID-19 pandemic negatively affected our net sales of fresh and
value-added products by an estimated $117.0 million in the quarter ended June
26, 2020 when compared with our original expectations which were developed prior
to the pandemic.
•Net sales of fresh-cut fruit decreased principally due to lower sales volumes
to our retail store distribution channel. These lower sales volumes were
primarily the result of reduced demand caused by the COVID-19 pandemic and
related government imposed social distancing initiatives.
•Net sales of fresh-cut vegetables decreased principally due to the effect of
the COVID-19 pandemic which resulted in the elimination of most of our
foodservice business during the second quarter of 2020. In addition, our
voluntary product recall in the fourth quarter of 2019 continued to negatively
impact our fresh-cut vegetable net sales during the quarter as volumes have not
returned to pre-recall levels.
•Net sales of avocados decreased primarily due to the effect of COVID-19 in
North America which resulted in significantly lower per unit sales prices and
lower sales volumes. Also contributing to lower selling prices was excess
industry supply.
•Net sales of pineapples decreased primarily due to lower per unit sales prices
and sales volumes in North America and Europe primarily as a result of the
COVID-19 pandemic which resulted in lower demand for pineapples.
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Partially offsetting this decrease were higher sales volumes in Asia and higher
per unit sales prices in the Middle East principally due to improved demand.
Worldwide pineapple sales volume decreased 5% during the second quarter of 2020.
•Net sales of prepared food products decreased principally due to a decrease in
sales of meals and snacks as a result of the COVID-19 pandemic, the continuing
impact of the 2019 product recall, and product rationalization efforts in our
Mann Packing operations in North America which led to the discontinuance of low
margin products. Partially offsetting this decrease were higher sales volumes
and per unit sales prices of canned pineapple products due to increased customer
demand and higher sales prices of pineapple concentrate due to lower industry
supply.

•Banana - Net sales of bananas decreased by $10.4 million principally due to
lower net sales in North America and Europe, partially offset by higher net
sales in the Middle East and Asia. We estimate that COVID-19 negatively affected
our banana net sales by $15.0 million during the second quarter of 2020 when
compared to our original expectations which were developed prior to the
pandemic. Worldwide banana sales volume decreased 1%.
•North America banana net sales decreased due to lower sales volumes,
principally the result of lower demand due to the COVID-19 pandemic.
•Europe banana net sales decreased due to lower sales volumes and lower per unit
sales prices primarily as a result of lower demand driven by the COVID-19
pandemic.
•Middle East banana net sales increased due to higher sales volumes as a result
of increased shipments from Latin America to new markets in the region.
Partially offsetting this increase were slightly lower per unit sales prices.
•Asia banana net sales increased primarily as a result of higher sales volumes
in Japan due to improved customer demand and favorable exchange rates.

Cost of Products Sold. Cost of products sold was $1,013.6 million for the second
quarter of 2020 compared with $1,141.8 million for the second quarter of 2019, a
decrease of $128.2 million. The decrease was primarily attributable to lower
sales volumes in our fresh and value-added products and banana business
segments. Partially offsetting this decrease were higher ocean freight costs and
$10.6 million of other product-related charges which principally include $9.0
million of inventory write-offs attributable to our fresh and value-added
products segment, primarily consisting of write-offs of pineapples, melons, and
fresh-cut vegetables, and $1.6 million of inventory write-offs related to our
banana segment. These inventory write-offs were due to lower demand in our
foodservice distribution channel, shifting demand in retail, and volatile supply
and demand conditions caused by the COVID-19 pandemic.

Gross Profit. Gross profit was $78.7 million for the second quarter of 2020
compared with $97.6 million for the second quarter of 2019, a decrease of $18.9
million. This decrease was attributable to lower gross profit in our fresh and
value-added products segment, partially offset by higher gross profit in our
banana segment.

•Fresh and value-added products - Gross profit in the fresh and value-added
products segment decreased $20.4 million principally due to lower gross profit
on pineapples and fresh-cut fruit and vegetables, partially offset by higher
gross profit on prepared food products and avocados.
•Gross profit on pineapples decreased due to lower sales volumes and per unit
sales prices in North America and Europe combined with the impact of inventory
write-offs. Also contributing to the decrease in gross profit were higher ocean
freight and distribution costs.
•Gross profit on fresh-cut fruit decreased primarily due to lower sales volumes
in North America and Europe as a result of lower demand and higher distribution
costs, partially offset by higher per unit sales prices.
•Gross profit on fresh-cut vegetables decreased primarily due to lower sales
volumes in North America as a result of lower demand combined with higher costs,
principally consisting of inventory write-offs related to the COVID-19 pandemic.
Partially offsetting this decrease were higher per unit sales prices.
•Gross profit on avocados increased primarily due to lower product procurement
costs resulting from favorable exchange rates and increased efficiencies due to
our new packing plant in Mexico which opened in December 2019. Partially
offsetting these increases were lower sales volumes and per unit sales prices as
a result of the COVID-19 pandemic.
•Gross profit on prepared food products increased due to lower production costs
and higher sales volumes and per unit sales prices of canned pineapple products
combined with higher sales prices for pineapple concentrate products. Partially
offsetting this increase were lower sales volumes of meals and snacks.

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•Banana - Gross profit in the banana segment increased $2.1 million primarily
due to lower fruit cost, principally lower procurement and packaging material
costs. Partially offsetting this increase in gross profit were lower sales
volumes, lower per unit sales prices and inventory write-offs driven by the
COVID-19 pandemic. Worldwide banana per unit sale prices decreased 1% and per
unit costs decreased 2%.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses of $45.6 million for the second quarter of 2020 were in
line with the $45.3 million in expenses for the second quarter of 2019. The
decrease in travel, administrative, and promotional expenses in most of our
regions was offset by an increase in selling and marketing expenses recognized
in the quarter.

Gain on Disposal of Property, Plant and Equipment, Net. The gain on disposal of
property, plant and equipment, net, of $1.4 million during the second quarter of
2020 related primarily to the sale of surplus land in Chile. The gain on
disposal of property, plant and equipment during the first quarter of 2019 of
$5.7 million related primarily to the sale of a refrigerated vessel and other
surplus equipment.

Asset Impairment and Other Charges (Credits), Net. Asset impairment and other
charges (credits), net, was $1.4 million during the second quarter of 2020, as
compared with $0.8 million during the second quarter of 2019.

Asset impairment and other charges (credits), net, for the second quarter of
2020 were comprised of the following:
•$(2.0) million insurance recovery related to a voluntary product recall in our
fresh and value-added products segment;
•a $0.8 million reserve relating to a potential liability arising from our
third-party shipping logistics operation, related to the banana and fresh and
value-added products segments;
•$1.1 million in asset impairment charges of production facilities in North
America and Europe related to our fresh and value-added products segment;
•$0.7 million in severance expense for the reorganization of the sales and
marketing function in North America related to the fresh and value-added
products and banana segments;
•$0.7 million in asset impairment charges relating to low-yielding banana plants
in the Philippines.

Asset impairment and other charges (credits), net, for the second quarter of
2019 were comprised of the following:
•$0.3 million in contract termination charges related to our decision to abandon
certain low-yield areas of our banana operations in the Philippines;
•$0.4 million in asset impairment charges related to our Chilean non-tropical
fruit operation; and
•$0.1 million in asset impairment charges related to our equity investment in
Purple Carrot, made in 2018.

Operating Income. Operating income for the second quarter of 2020 decreased by
$24.1 million from $57.2 million in the second quarter of 2019 to $33.1 million
in the second quarter of 2020.  This decrease was due to lower gross profit,
lower gains on disposal of property, plant and equipment, net, and higher asset
impairment and other charges (credits), net.

Interest Expense.  Interest expense was $5.6 million for the second quarter of
2020 as compared with $6.9 million for the second quarter of 2019. The decrease
was due to lower interest rates combined with lower average loan balances.

Other (Expense) Income, Net. Other (expense) income, net, was $(5.2) million for
the second quarter of 2020 as compared to $(2.9) million for the second quarter
of 2019. The increase in other expense of $2.3 million was principally
attributable to higher foreign exchange losses during the second quarter of 2020
as compared with the second quarter of 2019.

Provision for Income Taxes. Provision for income taxes was $4.2 million for the
second quarter of 2020 compared to $8.5 million for the second quarter of 2019.
The decrease in the provision for income taxes of $4.3 million is primarily due
to lower earnings in certain taxable jurisdictions.
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First Six Months of 2020 Compared with First Six Months of 2019

Net Sales. Net sales for the first six months of 2020 were $2,210.3 million
compared with $2,393.6 million for the first six months of 2019. The decrease in
net sales of $183.3 million is due to lower net sales in all of our business
segments. The COVID-19 pandemic negatively impacted our net sales during the
first six months of 2020 by an estimated $159.0 million in our fresh and
value-added products and banana segments, as compared to our original
expectations for these segments which were developed prior to the pandemic.

•Fresh and value-added products - Net sales in the fresh and value-added
products segment decreased $157.1 million principally as a result of lower net
sales of fresh-cut fruit and vegetables, avocados, pineapples and prepared food
products. The COVID-19 pandemic negatively affected our net sales of fresh and
value-added products by an estimated $138.0 million in the six months ended June
26, 2020 as compared to our original expectations which were developed prior to
the pandemic.
•Net sales of fresh-cut fruit decreased principally due to lower sales volumes
to our retail store distribution channel. These lower sales volumes were
primarily the result of reduced demand caused by the COVID-19 pandemic and
related government imposed social distancing initiatives.
•Net sales of fresh-cut vegetables decreased principally due to the effect of
the COVID-19 pandemic which resulted in the elimination of most of our
foodservice business since March of this year. In addition, our voluntary
product recall in the fourth quarter of 2019 continued to negatively impact our
fresh-cut vegetable net sales during the first six months of 2020 as volumes
have not returned to pre-recall levels.
•Net sales of avocados decreased primarily due to the effect of COVID-19 in
North America which resulted in lower sales volumes. Also contributing to lower
selling prices was excess industry supplies during the second quarter of 2020.
•Net sales of pineapples decreased primarily due to lower sales volumes in North
America and Europe primarily as a result of the impact of the COVID-19 pandemic
which resulted in lower demand for pineapples. Partially offsetting this
decrease were higher sales volumes and higher per unit sales prices in the
Middle East principally due to improved demand and sales to new markets in the
region. Worldwide pineapple sales volume decreased 10%.
•Net sales of prepared food products decreased due to lower sales of meals and
snacks which was primarily driven by the impact of the COVID-19 pandemic, the
continuing impact of the 2019 product recall, and product rationalization
efforts in our Mann Packing operations in North America which resulted in the
discontinuance of low margin products. Partially offsetting this decrease was an
increase in net sales of traditional prepared products primarily due to higher
sales volumes and per unit sales prices of canned pineapple products as a result
of improved customer demand.

•Banana - Net sales of bananas decreased by $14.9 million principally due to
lower net sales in North America, Europe and Asia, partially offset by higher
net sales in the Middle East. We estimate that COVID-19 negatively affected our
banana net sales by $21.0 million during the first six months of 2020 when
compared to our original expectations which were developed prior to the
pandemic. Worldwide banana sales volume was flat as compared with the prior
year.
•North America banana net sales decreased due to lower sales volumes,
principally the result of COVID-19 related lower demand.
•Europe banana net sales decreased due to lower sales volumes and lower per unit
sales prices primarily as a result of COVID-19 related lower demand.
•Asia banana net sales decreased primarily as a result lower sales volumes and
per unit sales prices, principally the result of COVID-19 related lower demand.
•Middle East banana net sales increased due to higher sales volumes as a result
of increased shipments from Latin America to new markets in the region.
Partially offsetting this increase were slightly lower per unit sales prices.

Cost of Products Sold. Cost of products sold was $2,063.1 million for the first
six months of 2020 compared with $2,200.9 million for the first six months of
2019, a decrease of $137.8 million. The decrease was primarily attributable to
lower sales volumes in our fresh and value-added products business segment and
lower banana fruit and distribution costs. Partially offsetting this decrease
were higher ocean freight costs and $18.6 million of other product-related
charges which principally include $16.8 million of inventory write-offs
attributable to our fresh and value-added products segment, primarily consisting
of
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write-offs of pineapples, fresh-cut vegetables, and melons, and $1.8 million of
inventory write-offs related to our banana segment. These inventory write-offs
were due to lower demand in our foodservice distribution channel, shifting
demand in retail, and volatile supply and demand conditions caused by the
COVID-19 pandemic.

Gross Profit. Gross profit was $147.2 million for the first six months of 2020
compared with $192.7 million for the first six months of 2019, a decrease of
$45.5 million. This decrease was attributable to lower gross profit in our fresh
and value-added products and banana business segments.

•Fresh and value-added products - Gross profit in the fresh and value-added
products segment decreased $39.4 million principally due to lower gross profit
on fresh-cut fruit and vegetables products, pineapples and melons, partially
offset by higher gross profit on prepared food products.
•Gross profit fresh-cut fruit decreased primarily due to lower sales volumes in
North America and Europe as a result of lower demand and higher distribution
costs. Partially offsetting this decrease in gross profit were improved
operating margins in our fresh-cut fruit products in North America as a result
of lower production costs.
•Gross profit on fresh-cut vegetables decreased primarily due to lower sales
volumes in North America as a result of lower demand combined with higher costs,
principally consisting of inventory write-offs related to the COVID-19 pandemic.
•Gross profit on pineapples decreased due to lower sales volumes in North
America and Europe combined with inventory write-offs related to the COVID-19
pandemic. Also contributing to the decrease in gross profit were higher ocean
freight and distribution costs.
•Gross profit on melons decreased primarily due to lower sales volumes in North
America and Europe as a result of lower demand combined with higher costs,
principally consisting of inventory write-offs related to the COVID-19 pandemic.
•Gross profit on prepared food products increased primarily due to lower
production costs and higher sales volumes and per unit sales prices of canned
pineapple products combined with higher sales prices for pineapple concentrate
products. Partially offsetting this increase were lower sales volumes of meals
and snacks.

•Banana - Gross profit in the banana segment decreased by $8.1 million
principally due to lower sales volumes in North America, Europe and Asia. Also
contributing to the decrease in gross profit were lower per unit sales prices in
Europe and Asia, higher ocean freight costs and inventory write-offs related to
the COVID-19 pandemic. Worldwide banana per unit sales prices decreased 1% and
per unit cost decreased 1%.

Selling, General and Administrative Expenses. Selling, general and
administrative expenses decreased $1.3 million from $99.6 million for the first
six months of 2019 to $98.3 million for the first six months of 2020. The
decrease was due to lower advertising and promotional expenses in Europe and
North America, lower travel expenses and lower executive compensation.

Gain on Disposal of Property, Plant and Equipment, Net. The gain on disposal of
property, plant and equipment, net, was $1.6 million during the first six months
of 2020 and was primarily related to the sale of surplus land in Chile. During
the first six months of 2019, the gain on disposal of property, plant and
equipment of $9.2 million consisted primarily of the sale of a refrigerated
vessel and surplus land in Florida.

Asset Impairment and Other Charges (Credits), Net. Asset impairment and other
charges (credits), net was $(0.4) million during the first six months of 2020
and $3.8 million during the first six months of 2019.

Asset impairments and other charges (credits), net, for the first six months of
2020 were comprised of the following:
•$(6.0) million insurance recovery related to a voluntary product recall in our
fresh and value-added products segment;
•$2.0 million reserve relating to a potential liability arising from our
third-party shipping logistics operation, related to the banana and fresh and
value-added products segments;
•$2.1 million in asset impairment charges of production facilities in North
America and Europe related to our fresh and value-added products segment;
•$0.7 million in severance expense for the reorganization of the sales and
marketing function in North America related to the fresh and value-added
products and banana segments;
•$0.7 million in asset impairment charges relating to low-yielding banana plants
in the Philippines.

Asset impairments and other charges (credits), net, for the first six months of 2019 were comprised of the following:


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•$0.5 million in contract termination charges related to our decision to abandon
certain low-yield areas in our banana operations in the Philippines;
•$0.4 million in asset impairment related to our Chilean non-tropical fruit
operation; and
•$2.9 million in asset impairment charges related to our equity investment in
Purple Carrot.

Operating Income. Operating income decreased by $47.6 million from $98.5 million
in the first six months of 2019 to $50.9 million for the first six months of
2020. The decrease in operating income was due to lower gross profit and lower
gain on disposal of property, plant and equipment, partially offset by lower
selling, general and administrative expenses and lower asset impairments and
other charges (credits), net.

Interest Expense. Interest expense decreased by $2.8 million from $13.8 million
for the first six months of 2019 to $11.0 million for the first six months of
2020 principally due to lower interest rates and lower average debt balances.

Other (Expense) Income, Net. Other (expense) income, net, was expense of $(4.4)
million for the first six months of 2020 as compared with other income of $8.4
million for the first six months of 2019. The change in other (expense) income,
net, of $12.8 million was principally attributable to a net gain of $16.7
million as a result of the settlement of a business transaction litigation that
was recorded during the first six months of 2019. Partially offsetting the
increase in other expense were higher foreign exchange losses during the first
six months of 2019 as compared with the first six months of 2020.

Provision for Income Taxes. Provision for income taxes was $4.5 million for the
first six months of 2020 as compared with $17.1 million for the first six months
of 2019. The decrease in the provision for income taxes of $12.6 million is
primarily due to lower earnings in certain taxable jurisdictions. The tax
provision for the six months ended June 26, 2020 also includes a $1.7 million
benefit relating to the NOL carryback provision of the Coronavirus Aid, Relief
and Economic Security Act (CARES) Act, which was enacted on March 27, 2020.





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Liquidity and Capital Resources



We are a holding company with limited business operations of our own. Our only
significant asset is 100% of the outstanding capital stock of our subsidiaries
that directly or indirectly own all of our assets. We conduct all of our
business operations through our subsidiaries. Accordingly, our only source of
cash to pay our obligations, other than financings, depends primarily on the net
earnings and cash flow generated by these subsidiaries.

Our primary sources of cash flow are net cash provided by operating activities
and borrowings under our credit facility. Our primary uses of net cash flow are
capital expenditures to increase and expand our product offerings and geographic
reach, investments to increase our productivity and investments in businesses
such as Mann Packing.

A summary of our cash flows is as follows:

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