Del Monte Foods Co. on Monday, April 2, said an arbitrator has ruled it must reimburse a former trucking services provider for additional haul and fuel charges. The payout to Pacer Global Logistics is expected to hurt per-share earnings in 2007, the company said.
The canned fruit and vegetables company said it will reimburse Pacer an undisclosed amount to cover costs incurred on Del Monte’s behalf between May 1, 2005, and April 30, 2006, that were above benchmarked rates set in a contract, plus interest.
The payout is expected to reduce 2007 per-share earnings by 2 cents and cash flow by $6 million, reflecting the amounts by which the award topped what the company previously had set aside to cover its liability in the matter.
On March 1, Del Monte estimated per-share profit would range from 50 cents to 53 cents per share in 2007 and targeted cash flow of $150 million to $170 million. The guidance does not include charges for the arbitration award.
