Dole Food Company, Inc. Announces Third Quarter 2012 Results

  Dole Food Company, Inc. Announces Third Quarter 2012 Results

Business Wire

WESTLAKE VILLAGE, Calif. -- November 15, 2012

Dole Food Company, Inc. (NYSE: DOLE) today announced financial and operating
results for the third quarter ended October 6, 2012. Dole reported third
quarter of 2012 Adjusted EBITDA of $62.4 million compared to $61.1 million in
the third quarter of 2011. GAAP loss from continuing operations for the third
quarter of 2012 improved to $(13.6) million, or $(0.16) per share, compared to
a loss of $(47) million, or $(0.54) per share, in the third quarter of 2011.
Comparable Income from continuing operations for the third quarter of 2012
improved to a loss of $(5.3) million, or $(0.06) per share, compared to a loss
of $(12.1) million, or $(0.14) per share, in the third quarter of 2011 (see
Exhibit 3).

For the first three quarters of 2012, Adjusted EBITDA was $266.7 million
compared to $333 million in the first three quarters of 2011. GAAP income from
continuing operations for the first three quarters of 2012 was $69.1 million,
or $0.78 per share, compared to $37.5 million, or $0.43 in the first three
quarters of 2011. Comparable Income from continuing operations for the first
three quarters of 2012 was $79.6 million, or $0.90 per share, compared to $123
million, or $1.40 per share, in the first three quarters of 2011 (see Exhibit
3).

“During the third quarter we announced that Dole had signed an exclusive
definitive agreement with ITOCHU Corporation for the sale of Dole’s worldwide
Packaged Foods and Asia Fresh businesses for $1.685 billion in cash,” said
David A. DeLorenzo, Dole’s President and CEO. “We are pleased to say that this
transaction is continuing on track, including the required regulatory approval
process, and we do not foresee any issues in obtaining all required regulatory
approvals as well as approval of our shareholders. We remain optimistic that
the sale will be completed by the end of this year.”

“The third quarter was challenging on a number of fronts, including the
continued quarantine issue between China and the Philippines, as well as
adverse growing conditions and foreign exchange rates,” continued DeLorenzo.
“We are pleased that despite these events, we were able to improve
performance, compared to last year, in most of our operating groups.”

Strategic Business Review

As a result of the strategic business review that Dole announced on May 3,
2012, on September 17, 2012, Dole signed an exclusive definitive agreement
with ITOCHU Corporation for the sale of Dole’s worldwide packaged foods and
Asia fresh produce businesses for $1.685 billion in cash. The transaction is
subject to Dole stockholder approval and customary regulatory approvals, and
is expected to close by December 31, 2012.

Selected Financial Data (Unaudited)

                   Quarter Ended                 Three Quarters Ended
                    October 6,    October 8,      October 6,   October 8,
                     2012            2011            2012           2011
                     (In millions)
Revenues             $ 1,957.1       $ 2,086.0       $  5,302.2     $  5,687.9
Operating income       18.2            10.3             162.7          211.6
Adjusted EBITDA        62.4            61.1             266.7          333.0
Comparable             (5.3    )       (12.1   )        79.6           123.0
Income (loss)
                                                                       

See “Non-GAAP Measurements” below for discussion of EBIT and Adjusted EBITDA.

Revenues

Revenues decreased 6% to $2 billion during the third quarter ended October 6,
2012, primarily as a result of the divestitures of two of our fresh fruit
subsidiaries (German subsidiary and Dole Spain). Excluding third quarter 2011
revenues of $186 million from these divested businesses as well as third
quarter 2012 sales of $13 million from the fourth quarter 2011 berry business
acquisition, third quarter sales increased 2%. Fresh fruit revenues, excluding
the impact from the divestitures, increased slightly primarily as a result of
improved pricing and higher volumes in Europe and improved pricing for Chilean
deciduous fruit and other fresh fruit sold in Asia. Lower pricing and volumes
for bananas in North America and Asia somewhat offset these increases. Fresh
vegetables revenues increased 10%, primarily due to improved pricing for
fresh-packed vegetables and packaged salads, and the berry business
acquisition. Excluding the berry acquisition, fresh vegetables revenue
improved 6%. Packaged foods revenues increased 3%, primarily due to higher
sales of frozen fruit and healthy snacks in North America, partially offset by
lower volumes of packaged fruit products sold in North America.

Adjusted EBITDA

Adjusted EBITDA was $62.4 million in the third quarter of 2012 compared to
$61.1 million in the prior year. Packaged foods Adjusted EBITDA increased as a
result of lower product and distribution costs in North America and improved
pricing for frozen fruit. Fresh fruit Adjusted EBITDA decreased primarily due
to lower pricing for bananas in North America and Asia as well as higher fruit
and distribution costs in Asia, partially offset by lower shipping and fruit
costs in Europe. Disruptions from delays related to China quarantine
regulations contributed to lower pricing and higher costs in the Asia market.
Fresh vegetables Adjusted EBITDA decreased 5%. Lower earnings in the
strawberry and packaged salads businesses were partially offset by higher
pricing in the fresh-packed vegetables business. Strawberry earnings were
impacted by poor growing conditions resulting in higher costs. Packaged salads
earnings were impacted by approximately $4.6 million of costs related to the
precautionary recall of a limited number of packaged salad products.

Segment Information (Unaudited)

                 Quarter Ended                 Three Quarters Ended
                   October 6,      October 8,      October         October 8,
                  2012          2011            6,            2011
                                                   2012
Revenues from
external           (In millions)
customers:
Fresh fruit        $ 1,254.5       $ 1,422.8       $ 3,516.7       $ 3,998.1
Fresh                326.6           297.4         851.1             786.5
vegetables
Packaged foods      375.9         365.6        934.1            902.7   
                   $ 1,957.0      $ 2,085.8      $ 5,301.9       $ 5,687.3 
                                                                   
                                                                   
                   Quarter Ended                   Three Quarters Ended
                  October 6,      October 8,      October 6,    October 8,
                   2012            2011            2012          2011
EBIT:              (In millions)
Fresh fruit        $ 10.1          $ 4.8           $  136.5      $ 178.3
EBIT
Fresh
vegetables           3.2             6.1              20.5       24.0
EBIT
Packaged foods      29.3          24.1           63.1      62.1        
EBIT
Total
operating            42.6            35.0             220.1      264.4
segments
Corporate:
Unrealized
loss on cross        -               -                -          (3.8        )
currency swap
Net gain
(loss) on
long-term            0.9             2.4              0.3        (20.2       )
Japanese yen
hedges
Net unrealized
gain (loss) on
foreign              (2.9    )       1.8              0.2        (4.6        )
denominated
instruments
Share-based          (2.4    )       (1.8    )        (5.8   )   (4.4        )
compensation
Refinancing
charges and
loss on early        -               (26.2   )        (0.4   )   (26.2       )
retirement of
debt
Strategic
review               (7.2    )       -                (8.3   )   -
transaction
costs
Operating and       (12.7   )      (16.7   )       (35.7  )   (37.2       )
other expenses
Corporate           (24.3   )      (40.5   )       (49.7  )   (96.4       )
Total EBIT
before disc.       $ 18.3         $ (5.5    )     $  170.4      $ 168.0     
ops.
                                                                             

See Exhibit 2 for further detailed information on segments.

Cash and Debt (Unaudited)

                                October 6,   December 31,
                                 2012           2011
Cash:                            (In millions)
Cash and cash equivalents*       $  82.0        $   128.6
Total Debt:
Revolving credit facility        $  76.6        $   69.3
Term loan facilities                867.7           895.5
Senior notes and debentures         644.9           644.9
Other debt, net of debt discount   100.9          70.1
Total Debt                       $  1,690.1     $   1,679.8
Net Debt                         $  1,608.1     $   1,551.2
                                                

* includes $0 million and $6.2 million of restricted cash at October 6, 2012
and December 31, 2011, respectively.

Conference Call

The company will hold a conference call for investors to discuss its third
quarter results at 4:45 p.m. ET today. Access to a live audio webcast is
available at http://investors.dole.com under “Webcasts.” Toll-free telephone
access will be available by dialing 1-866-804-6929 in the United States and
1-857-350-1675 from international locations and providing the conference code
96944794. A replay of the call will be available until November 22, 2012. To
access the telephone replay, dial 1-888-286-8010 from the United States and
617-801-6888 from international locations and enter the confirmation code
62717892. A replay of the webcast will be archived and available on
www.dole.com.

Non-GAAP Measurements

Earnings before interest, taxes and discontinued operations (“EBIT before
discontinued operations”), Adjusted EBITDA and Comparable Income from
continuing operations (total and per share) are measures commonly used by
financial analysts in evaluating the performance of companies. EBIT before
discontinued operations is calculated from net income by adding interest
expense and income tax expense, and adding the loss or subtracting the income
from discontinued operations, net of income taxes. Adjusted EBITDA is
calculated from EBIT before discontinued operations by: (1) adding
depreciation and amortization; (2) adding the net unrealized loss or
subtracting the net unrealized gain on foreign currency and bunker fuel hedges
and the cross currency swap which do not have a more than insignificant
financing element present at contract inception; (3) adding the net loss or
subtracting the net gain on the long-term Japanese yen hedges; (4) adding the
foreign currency loss or subtracting the foreign currency gain on the vessel
obligations; (5) adding the net unrealized loss or subtracting the net
unrealized gain on foreign denominated instruments; (6) adding share-based
compensation expense; (7) adding charges for restructuring and long-term
receivables; (8) adding strategic review transaction costs; (9) adding
refinancing charges and loss on early retirement of debt and (10) subtracting
the gain on asset sales. Due to the fact that the long-term Japanese yen
hedges had more than an insignificant financing element at inception, the
liability is treated as similar to a debt instrument and the associated cash
flows are classified as a financing activity. As a result, both the realized
and unrealized gains and losses related to these hedges are subtracted from or
added back to EBIT before discontinued operations when calculating Adjusted
EBITDA. Comparable Income from continuing operations is calculated from income
from continuing operations by adding charges for restructuring and long-term
receivables, net of income taxes, adding the net unrealized loss or
subtracting the net unrealized gain on foreign currency and bunker fuel hedges
and the cross currency swap, net of income taxes, adding the net loss or
subtracting the net gain on the long-term Japanese yen hedges, net of income
taxes, adding the foreign currency loss or subtracting the foreign currency
gain on the vessel obligations, net of income taxes, adding the net unrealized
loss or subtracting the net unrealized gain on foreign denominated
instruments, net of income taxes, adding share-based compensation expense, net
of income taxes, adding strategic review transaction costs, net of income
taxes, adding refinancing charges and the loss on early retirement of debt,
net of income taxes, and subtracting the gain on asset sales, net of income
taxes. These items have been adjusted because management excludes these
amounts when evaluating the performance of Dole. Net debt is calculated as
total debt less cash.

EBIT before discontinued operations, Adjusted EBITDA and Comparable Income
from continuing operations (total and per share) are not calculated or
presented in accordance with U.S. GAAP and are not a substitute for net income
attributable to Dole Food Company, Inc., net income, income from continuing
operations, cash flows from operating activities or any other measure
prescribed by U.S. GAAP. Further, EBIT before discontinued operations,
Adjusted EBITDA and Comparable Income from continuing operations (total and
per share) as used herein are not necessarily comparable to similarly titled
measures of other companies. However, Dole has included these three measures
herein because management believes that they are useful performance measures
for Dole and for securities analysts, investors and others in the evaluation
of Dole.

Dole, with 2011 net revenues of $7.2 billion, is the world’s largest producer
and marketer of high-quality fresh fruit and fresh vegetables, and is the
leading producer of organic bananas. Dole markets a growing line of packaged
and frozen fruit and is a produce industry leader in nutrition education and
research.

This release contains "forward-looking statements," within the meaning of the
Private Securities Litigation Reform Act of 1995 that involve a number of
risks and uncertainties. Forward looking statements, which are based on
management's current expectations, are generally identifiable by the use of
terms such as "may," "will," "expects," "believes," "intends," "anticipates"
and similar expressions. The potential risks and uncertainties that could
cause actual results to differ materially from those expressed or implied
herein include weather-related phenomena; market responses to industry volume
pressures; product and raw materials supplies and pricing; energy supply and
pricing; changes in interest and currency exchange rates; economic crises and
security risks in developing countries; international conflict; and quotas,
tariffs and other governmental actions. Further information on the factors
that could affect Dole's financial results is included in its SEC filings,
including its Annual Report on Form 10-K.

Exhibit 1 - Reconciliation of Net income (loss) to EBIT before discontinued
operations and Adjusted EBITDA (Unaudited)

                     Quarter Ended               Three Quarters Ended
                       October 6,     October 8,     October 6,     October 8,
                                                              
                       2012           2011           2012           2011
                       (In millions)
Net income (loss)      $  (13.9 )     $  (47.0 )     $  68.8        $  38.1
Discontinued              0.3            -              0.3            (0.6  )
operations, net
Interest expense          39.9           41.4           101.5          111.7
Income taxes             (8.0  )       0.1          (0.2  )       18.8  
Earnings before
interest, taxes
and discontinued          18.3           (5.5  )        170.4          168.0
operations (“EBIT
before disc. ops”)
Depreciation and          31.7           31.7           80.2           79.1
amortization
Net unrealized
(gain) loss on            (0.1  )        2.5            0.7            8.4
derivative
instruments
Net (gain) loss on
long-term Japanese        0.9            (2.3  )        1.8            20.1
yen hedges
Foreign currency
exchange (gain)           2.2            (2.6  )        2.7            (0.1  )
loss on vessel
obligations
Net unrealized
(gain) loss on
foreign                   3.5            (1.7  )        0.6            5.8
denominated
instruments
Share-based               3.7            2.9            9.4            6.9
compensation
Charges for
restructuring and         0.8            13.2           4.1            21.9
long-term
receivables
Strategic review          7.2            -              8.3            -
transaction costs
Refinancing
charges and loss          -              26.2           0.4            26.2
on early
retirement of debt
Gain on asset            (5.8  )       (3.3  )       (11.9 )       (3.3  )
sales
Adjusted EBITDA        $  62.4       $  61.1       $  266.7      $  333.0 
                                                                             

Exhibit 2 - Items Eliminated to Calculate Adjusted EBITDA (Unaudited)

EBIT was impacted by charges for restructuring and long-term receivables,
unrealized non-cash foreign currency exchange gains and losses, share-based
compensation, strategic review transaction costs, and gain on asset sales,
which are detailed in the tables below. These items are eliminated for
purposes of calculating Adjusted EBITDA.

                     Quarter Ended               Three Quarters Ended
                       October 6,     October 8,     October 6,     October 8,
                                                              
                       2012           2011           2012           2011
Fresh Fruit            (In millions)
Unrealized gain
(loss) on foreign      $  0.2         $  (1.5  )     $  (1.3  )     $  (2.1  )
currency and fuel
hedges
Net gain (loss) on
long-term Japanese        (1.8  )        (0.1  )        (2.1  )        0.1
yen hedges
Foreign currency
exchange gain             (2.2  )        2.6            (2.7  )        0.1
(loss) on vessel
obligations
Net unrealized
loss on foreign           (0.2  )        (0.1  )        (0.4  )        (0.2  )
denominated
instruments
Share-based               (0.9  )        (0.7  )        (2.2  )        (1.5  )
compensation
Charges for
restructuring and         (0.8  )        (13.2 )        (4.1  )        (21.9 )
long-term
receivables
Gain on asset            5.8          3.3          11.9         3.3   
sales
Total                  $  0.1        $  (9.7  )     $  (0.9  )     $  (22.2 )
                                                                             
                                                                             
                       Quarter Ended                 Three Quarters Ended
                       October 6,     October 8,     October 6,     October 8,

                       2012           2011           2012           2011
Fresh Vegetables       (In millions)
Share-based            $  (0.2  )     $  (0.2  )     $  (0.6  )     $  (0.5  )
compensation
Total                  $  (0.2  )     $  (0.2  )     $  (0.6  )     $  (0.5  )
                                                                             
                                                                             
                       Quarter Ended                 Three Quarters Ended
                       October 6,     October 8,     October 6,     October 8,

                       2012           2011           2012           2011
Packaged Foods         (In millions)
Unrealized gain
(loss) on foreign      $  (0.1  )     $  (1.0  )     $  0.6         $  (2.5  )
currency hedges
Unrealized loss on
foreign                   (0.4  )        -              (0.4  )        (1.0  )
denominated
instruments
Share-based              (0.2  )       (0.2  )       (0.8  )       (0.5  )
compensation
Total                  $  (0.7  )     $  (1.2  )     $  (0.6  )     $  (4.0  )
                                                                             
                                                                             
                       Quarter Ended                 Three Quarters Ended
                       October 6,     October 8,     October 6,     October 8,

                       2012           2011           2012           2011
Corporate              (In millions)
Unrealized loss on
cross currency         $  -           $  -           $  -           $  (3.8  )
swap
Net gain (loss) on
long-term Japanese        0.9            2.4            0.3            (20.2 )
yen hedges
Net unrealized
gain (loss) on
foreign                   (2.9  )        1.8            0.2            (4.6  )
denominated
instruments
Share-based               (2.4  )        (1.8  )        (5.8  )        (4.4  )
compensation
Refinancing
charges and loss          -              (26.2 )        (0.4  )        (26.2 )
on early
retirement of debt
Strategic review         (7.2  )       -            (8.3  )       -     
transaction costs
Total                  $  (11.6 )     $  (23.8 )     $  (14.0 )     $  (59.2 )
                                                                             

Exhibit 3 - Reconciliation of Income (loss) from continuing operations to
Comparable Income (loss) from continuing operations (Unaudited):

                          Quarter Ended
                            October 6, 2012          October 8, 2011
                            (In millions, except per share data)
                                        Earnings                Earnings
                                          per share                  per share
Loss from continuing        $ (13.6 )     $ (0.16 )    $ (47.0 )     $ (0.54 )
operations
Net unrealized (gain)
loss on derivative                                                 
instruments, net of
income taxes of $(0.2)        (0.3  )     0.00           2.6           0.03
million and $0.1
million
Net (gain) loss on
long-term Japanese yen        0.9         0.01           (2.3  )       (0.02 )
hedges, net of income
taxes^1
Charges for
restructuring, net of         0.7         0.01           13.2          0.15
income taxes of $(0.1)
million and $0
Foreign currency
exchange (gain) loss on       2.2         0.03           (2.5  )       (0.03 )
vessel obligations, net
of income taxes^1
Net unrealized loss on
foreign denominated                                                     
instruments, net of
income taxes of $0.1          3.5         0.04           (1.9  )       (0.02 )
million and $(0.2)
million
Share-based
compensation, net of          2.6         0.03           2.9           0.03
income taxes of $(1.1)
million and $0
Refinancing charges and
loss on early                 -           -              26.2          0.30
retirement of debt, net
of income taxes^1
Strategic review
transaction costs, net        4.5         0.05           -             -
of income taxes of
$(2.7) million and $0
Gain on asset sales,         (5.8  )     (0.07   )     (3.3  )      (0.04 )
net of income taxes^1
Comparable Income
(loss) from continuing      $ (5.3  )     $ (0.06 )    $ (12.1 )     $ (0.14 )
operations
                                                                     

^1 There was no income tax impact for this reconciling item.

                          Three Quarters Ended
                            October 6, 2012          October 8, 2011
                            (In millions, except per share data)
                                        Earnings                Earnings
                                          per share                  per share
Income from continuing      $ 69.1        $ 0.78       $ 37.5        $ 0.43
operations
Net unrealized loss on
derivative instruments,
net of income taxes of        0.6         0.01           8.1           0.09
$(0.1) million and
$(0.2) million
Net loss on long-term
Japanese yen hedges,          1.7         0.02           20.1          0.23
net of income taxes of
$(0.1) million and $0
Charges for
restructuring, net of         4.0         0.05           21.9          0.25
income taxes of $(0.1)
million and $0
Foreign currency
exchange loss on vessel       2.7         0.03           -             -
obligations, net of
income taxes^1
Net unrealized loss on
foreign denominated                                                 
instruments, net of
income taxes of $0 and        0.5         0.01           5.6           0.06
$(0.2) million
Share-based
compensation, net of          6.6         0.07           6.9           0.08
income taxes of $(2.8)
million and $0
Refinancing charges and
loss on early
retirement of debt, net       0.3         0.00           26.2          0.30
of income taxes of
$(0.1) million and $0
million
Strategic review
transaction costs, net        5.6         0.06           -             -
of income taxes of
$(2.7) million and $0
Gain on asset sales,
net of income taxes of       (11.5 )     (0.13   )     (3.3  )      (0.04 )
$0.4 million and $0
Comparable Income from      $ 79.6       $ 0.90      $ 123.0      $ 1.40  
continuing operations

^1 There was no income tax impact for this reconciling item.

Contact:

Dole Food Company, Inc.
Joseph Tesoriero
(818) 879-6900
or
Beth Potillo
(818) 879-6733
 
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