Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 2.54 0.14%
NASDAQ 4,095.52 9.29 0.23%
Ticker Volume Price Price Delta
STOXX 50 3,155.81 16.55 0.53%
FTSE 100 6,625.25 41.08 0.62%
DAX 9,409.71 91.89 0.99%
Ticker Volume Price Price Delta
NIKKEI 14,548.12 31.85 0.22%
TOPIX 1,173.34 -0.03 -0.00%
HANG SENG 22,760.24 64.23 0.28%

Dole Receives Approval from China to Sell Worldwide Packaged Foods and Asia Fresh Produce Business



  Dole Receives Approval from China to Sell Worldwide Packaged Foods and Asia
  Fresh Produce Business

           New Dole Unaudited Results for 2012 and Business Update

Business Wire

WESTLAKE VILLAGE, Calif. -- January 24, 2013

Dole Food Company, Inc. (“Dole”) (NYSE: DOLE) today announced that ITOCHU
Corporation (“ITOCHU”) and Dole received unconditional approval from the
Chinese Ministry of Commerce to implement the sale of Dole’s worldwide
packaged foods and Asia fresh produce business to ITOCHU.

“The Ministry of Commerce of the People’s Republic of China officially
approved our antitrust filing, with no conditions or requirements, in a
decision dated January 21, 2013,” said C. Michael Carter, Dole’s Executive
Vice President and General Counsel. “We are grateful to the case team of
China’s Anti-monopoly Bureau of MOFCOM for their professionalism and
commitment to the timely review of our transaction with ITOCHU. We have now
received all seven required regulatory approvals, and Dole expects to complete
the sale within the next 30 days.”

Dole also announced fiscal year 2012 results for the two lines of fresh
produce business that will remain with the new Dole following the consummation
of the sale transaction: fresh fruit and fresh vegetables. The historical
results of the Dole worldwide packaged foods and Asia fresh business being
sold to ITOCHU are classified as discontinued operations.

Selected Financial Results from Continuing Operations (the two lines of fresh
produce business remaining with the new Dole)

                                                 Fiscal Year
                                                 December 29,     December 31,
                                                 2012             2011
                                                 (in millions)
Revenues, net                                    $   4,246.7      $   4,778.4
Adjusted EBITDA                                      145.8            195.7
Income from continuing operations before             5.9              95.1
income taxes and equity earnings

Revenues

Revenues decreased 11% to $4.2 billion for the year ended December 29, 2012,
primarily due to the divestitures of our fresh fruit subsidiaries in Germany
and Spain, which represented $539 million of sales in 2011. Fresh fruit
revenues, excluding the impact of the divestitures, decreased 2% as a result
of lower pricing in North America bananas and unfavorable euro and Swedish
krona foreign currency movements in Europe. This was partially offset by
higher volumes of fresh pineapple sold and improved pricing for Chilean
deciduous fruit. Fresh vegetables revenues increased 8% primarily due to
improved pricing for packaged salads and sales from the October 2011 berry
acquisition, which contributed $68 million to sales in 2012. This was
partially offset by lower pricing for fresh-packed vegetables. Excluding the
sales from the berry business acquisition, fresh vegetables revenues improved
3%.

Adjusted EBITDA

Adjusted EBITDA was $146 million for the year ended December 29, 2012 compared
to $196 million in the prior year. Fresh fruit Adjusted EBITDA decreased
primarily due to lower pricing for bananas in North America as well as higher
fruit costs in Europe, partially offset by lower shipping costs in Europe. In
addition, fresh fruit earnings were impacted by provisions totaling $26
million recorded in the fourth quarter of 2012 in connection with the possible
resolution of certain legal-related matters. Fresh vegetables Adjusted EBITDA
was comparable. Higher earnings in the packaged salads and fresh berries
businesses were partially offset by lower pricing experienced during the first
half of 2012 across all major fresh-packed vegetable product lines. Packaged
salads earnings increased primarily due to improved pricing. Fresh berries
earnings increased as a result of the berry business acquisition, partially
offset by higher growing costs.

Segment Information (the two lines of fresh produce business remaining with
the new Dole)

                                     Fiscal Year
                                     December 29,     December 31,
                                     2012             2011
Revenues from external customers     (in millions)
Fresh fruit                          $   3,141.2      $   3,757.0
Fresh vegetables                         1,104.0          1,019.7
Corporate                                1.5              1.7
                                     $   4,246.7      $   4,778.4

                                                 Fiscal Year
                                                 December 29,     December 31,
                                                 2012             2011
EBIT:                                            (in millions)
Fresh fruit EBIT                                 $  103.5         $  138.8
Fresh vegetables EBIT                               24.8             31.4    
Total operating segments                            128.3            170.2
Corporate:
Net unrealized gain (loss) on foreign               (0.5    )        (1.7   )
denominated instruments
Share-based compensation                            (7.5    )        (5.8   )
ITOCHU transaction related costs                    (48.4   )        -
Operating expenses                                  (47.7   )        (53.4  )
Corporate                                           (104.1  )        (60.9  )
Total EBIT before disc. ops.                     $  24.2          $  109.3   

2013 Guidance

“Fresh fruit performance in 2012 was below 2011, and we expect this trend to
continue in 2013,” said Mr. Carter, who will be assuming the added role of
President and COO in connection with the ITOCHU transaction. “We continue to
see aggressive contract negotiations in the North American banana market,
driving earnings in that market to lower levels. We expect fresh vegetables
Adjusted EBITDA to improve in 2013, but not enough to offset the expected
continued decline in the North America banana market. Overall, we expect 2013
Adjusted EBITDA for the new Dole to be at the low end of the guidance range we
announced on January 2, 2013, assuming no major market changes.”

“In light of the competitive fresh produce market conditions, we are assessing
the new Dole’s capital requirements and other possible near-term funding
resources, such as Dole’s Hawaii land holdings,” continued Mr. Carter.
“Potential investments could include increasing the number of fresh fruit
farms owned and operated by the new Dole, and required updating of our owned
vessel fleet, which has an average age of 21 years.”

After the consummation of the ITOCHU transaction, Dole will retain six
refrigerated container vessels, ranging in ages from 14 to 24 years, as well
as seven break-bulk refrigerated vessels, ranging in ages from 19 to 27 years.
Three of the break-bulk vessels will continue to be used by the Asia Fresh
produce business following completion of the ITOCHU transaction, under a ships
usage agreement between Dole and ITOCHU. Dole also has four other break-bulk
refrigerated vessels under a charter arrangement which will terminate at the
end of 2013, and are currently under sub-charter to a third party, and a fifth
vessel under charter that is scheduled to terminate in June 2013, subject to
possible extension.

The new Dole will also retain approximately 24,700 acres in Hawaii on the
Island of Oahu, of which approximately 16,500 acres are listed for sale. Dole
farms pineapple, coffee and cacao on approximately 2,900 acres, and has an
additional 1,800 farming acres which are not currently in production. The
remaining 3,500 acres comprise gullies, washes, and other natural
non-productive land. Dole currently estimates the relatively short-term
monetization of the approximately 21,800 acres of land that Dole is not
currently farming, to be in the $175 million to $200 million range. This
range, which exceeds the current net book value for this land, is based on a
recently completed internal assessment confirmed by a nationally recognized
commercial real estate services firm.

Audited Financials

Dole expects to timely file its annual report on Form 10-K by March 14, 2013,
including its audited financial statements for fiscal year 2012. At that time,
Dole expects to issue an earnings release and will host a conference call with
investors.

Non-GAAP Measurements

Earnings before interest, taxes and discontinued operations (“EBIT before
discontinued operations”) and Adjusted EBITDA are measures commonly used by
financial analysts in evaluating the performance of companies. EBIT before
discontinued operations is calculated from income from continuing operations
before income taxes and equity earnings by adding interest expense and equity
earnings. 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; (3) adding the foreign currency loss or subtracting the
foreign currency gain on the vessel obligations; (4) adding the net unrealized
loss or subtracting the net unrealized gain on foreign denominated
instruments; (5) adding share-based compensation expense; (6) adding charges
for restructuring and long-term receivables; (7) adding ITOCHU transaction
related costs; and (8) subtracting the gain on asset sales. 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 and Adjusted EBITDA 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, income from continuing operations before income taxes and equity
earnings, cash flows from operating activities or any other measure prescribed
by U.S. GAAP. Further, EBIT before discontinued operations and Adjusted EBITDA
from continuing operations as used herein are not necessarily comparable to
similarly titled measures of other companies. However, Dole has included these
two 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 has provided earnings guidance to give investors general information on
the overall direction of its remaining businesses following the sale
transaction. The guidance provided is subject to numerous uncertainties,
including, among others, the timing and ultimate consummation of the sale
transaction, overall economic and capital-market conditions and the markets
for fresh fruits and vegetables. Dole does not intend, and undertakes no
obligation, to update its forward-looking statements, including projections
and future prospects.

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 the timing and whether the sale transaction is consummated,
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 filings with the SEC.

Exhibit 1 - Reconciliation of income from continuing operations before income
taxes and equity earnings* to EBIT before discontinued operations and Adjusted
EBITDA

                                                 Fiscal Year
                                                 December 29,     December 31,
                                                 2012             2011
                                                 (in millions)
Income from continuing operations before         $  5.9           $  95.1
income taxes and equity earnings
Interest expense **                                 12.2             9.6
Equity earnings                                     6.1              4.6     
Earnings before interest, taxes and
discontinued operations (“EBIT before               24.2             109.3
discontinued ops”)
Depreciation and amortization                       65.8             63.9
Net unrealized (gain) loss on derivative            1.2              0.9
instruments
Foreign currency exchange (gain) loss on            2.4              (0.1   )
vessel obligations
Net unrealized (gain) loss on foreign               0.8              1.9
denominated instruments
Share-based compensation                            10.8             7.9
Charges for restructuring and long-term             5.1              16.4
receivables
ITOCHU transaction related costs                    48.4             -
Gain on asset sales                                 (12.9  )         (4.5   )
Adjusted EBITDA                                  $  145.8         $  195.7   

*Dole has reconciled EBIT before discontinued ops and Adjusted EBITDA to
Income from continuing operations before income taxes and equity earnings,
because the latter is the GAAP measure most directly comparable to EBIT before
discontinued ops and Adjusted EBITDA that can be computed at this time. Dole
has not yet completed the final calculation of its income tax provision, and
will not be in a position to do so for several more weeks. In view, however,
of the imminent closing of the transaction with ITOCHU, the results and
prospects for the fresh produce businesses that will remain with Dole will be
most directly relevant for investors. Therefore, Dole determined that it was
advisable to disclose the 2012 results for such businesses as soon as
possible, reconciling to the available GAAP measure most directly comparable
to EBIT before discontinued ops and Adjusted EBITDA.

**Interest expense reflects only interest on debt not required to be repaid in
connection with the ITOCHU sale transaction, as well as interest accrued on
liabilities related to certain legal-related matters. Interest expense
incurred on debt required to be repaid as part of the ITOCHU sale transaction
is classified within discontinued operations.

Contact:

Dole Food Company, Inc.
Beth Potillo
818-879-6733
Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement