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Press release from Business Wire

Dole Food Company, Inc. Announces Fourth Quarter and Full Year Results

Thursday, March 15, 2012

Dole Food Company, Inc. Announces Fourth Quarter and Full Year Results16:06 EDT Thursday, March 15, 2012 WESTLAKE VILLAGE, Calif. (Business Wire) -- Dole Food Company, Inc. (NYSE:DOLE) today announced financial and operating results for the fourth quarter and full year ended December 31, 2011. For the fourth quarter, Dole reported Adjusted EBITDA of $53 million compared to $31 million for the fourth quarter of 2010. GAAP income from continuing operations for the fourth quarter of 2011 was $4 million, or $0.05 per share, compared to a loss of $36 million, or ($0.41) per share, in the fourth quarter of 2010. Comparable Income from continuing operations for the fourth quarter improved to a loss of $2 million or ($0.02) per share versus a loss of $31 million or ($0.35) per share in the fourth quarter of 2010 (see Exhibit 2). For the full year, Dole reported Adjusted EBITDA of $386 million compared to $364 million in 2010. Dole reported GAAP income from continuing operations for fiscal year 2011 of $42 million or $0.47 per share, compared to a loss of $34 million or ($0.39) per share in 2010. Comparable Income from continuing operations for fiscal year 2011 was $121 million or $1.38 per share, compared to $40 million or $0.46 per share in 2010 (see Exhibit 2). “We are very pleased with Dole's strong fourth quarter earnings. Adjusted EBITDA of $53 million in the quarter was a 70% improvement over the previous year as a result of solid performances in each of our operating segments,” said David A. DeLorenzo, Dole's President and CEO. “The cost reduction programs set forth in the past two years have helped improve earnings despite increasing input costs and the strength of foreign currencies. Going forward, we continue to be encouraged by consumer acceptance of our new product introductions as well as the strength of our core products. We are also pleased to report that we have entered into an agreement to sell our distribution company in Germany. This pending sale is in line with our continuing plan to divest non-core assets, and will further our goal to reduce debt and improve operating margins.” Selected Financial Resultsfrom Continuing Operations:   Quarter Ended   Fiscal YearDecember 31,2011   January 1,2011December 31,2011   January 1,2011(In millions) Revenues, net $ 1,536 $ 1,557 $ 7,224 $ 6,893 Operating income (loss) 18 (11 ) 230 194 Adjusted EBITDA 53 31 386 364 Comparable Income (loss) (2 ) (31 ) 121 40   See “Non-GAAP Measurements” below for discussion of EBIT and Adjusted EBITDA. Revenues For fiscal 2011, revenues increased 5% to $7.2 billion. Higher sales were reported in all three of Dole's operating segments. Fresh fruit sales increased 5% primarily as a result of improved local pricing worldwide for bananas and higher volumes of bananas sold in North America and Asia. In addition, favorable foreign currency exchange movements in Europe and Japan benefitted revenues. Packaged foods revenues increased 7% primarily due to higher sales across all major product lines. Fresh vegetables revenues increased 2% as a result of improved pricing for packaged salads, higher sales of berries due to the fourth quarter acquisition of SunnyRidge partially offset by lower sales of fresh-packed vegetables. Adjusted EBITDA For fiscal 2011, Adjusted EBITDA was $386 million compared to $364 million 2010. The increase in Adjusted EBITDA was primarily due to higher fresh fruit earnings, which increased as a result of higher banana earnings worldwide as well as higher earnings in the European ripening and distribution and Chilean deciduous fruit businesses. Excluding a $5.3 million legal settlement recorded in the fourth quarter of 2010, fresh vegetables earnings increased by 5% as improved performance in packaged salads were partially offset by weak pricing for iceberg lettuce. Packaged foods earnings were lower as higher product and selling, marketing and general administrative expenses were partially offset by improved pricing worldwide. Segment Information   Quarter Ended   Fiscal Year   December 31,2011   January 1,2011December 31,2011   January 1,2011Revenues from external customers:(In millions) Fresh fruit $ 1,026 $ 1,064 $ 5,024 $ 4,793 Fresh vegetables 216 208 1,002 978 Packaged foods 294 285 1,197 1,121 Corporate   -   -   1   1$1,536$1,557$7,224$6,893     Quarter Ended   Fiscal Year   December 31,2011   January 1,2011December 31,2011   January 1,2011EBIT:(In millions) Fresh fruit EBIT $ (6 ) $ (25 ) $ 172 $ 118 Fresh vegetables EBIT 7 7 31 34 Packaged foods EBIT   34     29     97     107   Total operating segments 35 11 300 259 Corporate: Unrealized loss on cross currency swap - (7 ) (4 ) (67 ) Net loss on long-term Japanese Yen hedges - - (20 ) - Net unrealized gain (loss) on foreign denominated instruments 3 3 (2 ) (3 ) Share-based compensation (2 ) (1 ) (6 ) (5 ) Refinancing charges and loss on early retirement of notes - - (26 ) (5 ) Operating and other expenses   (14 )   (12 )   (51 )   (36 ) Corporate   (13 )   (17 )   (109 )   (116 ) Total EBIT before disc. ops.$22   $(6)$191   $143     See Exhibit 2 for further detailed information on segments. Cash and Debt   December 31, 2011   January 1, 2011Cash:(In millions) Cash and cash equivalents $129 * $180 * Total Debt: Revolving credit facility $ 69 $ - Term loan facilities 896 830 Senior Notes and Debentures 645 697 Other debt, net of debt discount   70   76Total Debt$1,680$1,603Net Debt$1,551$1,423   *Includes $6 million and $10 million of restricted cash at December 31, 2011 and January 1, 2011. Conference Call Dole will hold a conference call for investors to discuss its 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 866-788-0538 in the United States and 857-3580-1676 from international locations and providing the conference code 15667144. A replay of the call will be available until March 22, 2012. To access the telephone replay, dial 888-286-8010 from the United States and 617-801-6888 from international locations and enter the confirmation code 80471933. A replay of the webcast will be archived and available at www.dole.com. About Dole Food Company 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. Forward-looking Statements 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. Non-GAAP Financial Measures Earnings before interest, taxes and discontinued operations (“EBIT before discontinued operations”), Adjusted EBITDA and Comparable Income (loss) 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 subtracting income from discontinued operations, net of income taxes, and gain on disposal of 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 refinancing charges and loss on early retirement of notes; (8) adding charges for restructuring and long-term receivables; (9) for 2009, adding the debt retirement costs in connection with the initial public offering; 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 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 (loss) from continuing operations is calculated from income (loss) 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 the refinancing charges and loss on early retirement of notes, net of income taxes, subtracting the gain on legal settlements, 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 (loss) 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 (loss) 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. Exhibit 1Reconciliation of net income (loss) to EBIT before discontinued operations and Adjusted EBITDA:   Quarter Ended   Fiscal YearDecember 31,2011   January 1,2011December 31,2011   January 1,2011(In millions)Net income (loss)$4$(37)$42$(30) Discontinued operations, net   -     1     -     (4) Income (loss) from continuing operations 4 (36 ) 42 (34 ) Interest expense 30 37 142 164 Income taxes   (12)   (7)   7     13   EBIT before discontinued operations22(6)191143 Depreciation and amortization 25 26 104 114 Net unrealized (gain) loss on derivative instruments (1 ) 6 7 65 Net loss on long-term Japanese yen hedges 1 - 21 - Foreign currency gain on vessel obligations - (1 ) - (3 ) Net unrealized (gain) loss on foreign denominated instruments (3 ) (4 ) 3 3 Share-based compensation 2 2 9 7 Charges for restructuring and long-term receivables 8 8 30 33 Refinancing charges and loss on early retirement of notes - - 26 5 Gain on asset sales   (1)   -     (5)   (3)Adjusted EBITDA$53   $31   $386   $364     Exhibit 2 Segment EBIT was significantly impacted by unrealized non-cash foreign currency exchange gains and losses, and gains on assets sales, which are detailed in the tables below:   Quarter Ended   Year Ended   December 31,2011   January 1,2011December 31,2011   January 1,2011Fresh Fruit(In millions) Revenues $ 1,026 $ 1,064 $ 5,024 $ 4,793   EBIT: Fresh fruit products $ 1 $ (19 ) $ 202 $ 120 Charges for restructuring and long-term receivables (8 ) (8 ) (30 ) (33 ) Gain on legal settlement, net - - - 27 Unrealized gain on foreign currency and fuel hedges - - (2 ) - Net loss on long-term Japanese yen hedges - - (1 ) - Foreign currency exchange gain (loss) on vessel obligations - 2 - 3 Net unrealized gain on foreign denominated instruments - - - - Share-based compensation (1 ) - (2 ) (2 ) Gain on asset sales   2     -     5     3   Total Fresh fruit EBIT $(6)$(25)$172   $118       Quarter Ended   Year Ended   December 31,2011   January 1,2011December 31,2011   January 1,2011Fresh Vegetables(In millions) Revenues $ 216 $ 208 $ 1,002 $ 978   EBIT: Fresh vegetables products $ 7 $ 2 $ 32 $ 29 Share-based compensation - - (1 ) - Gain on legal settlement   -   5   -     5 Total Fresh vegetables EBIT $7$7$31   $34     Quarter Ended   Year Ended   December 31,2011   January 1,2011December 31,2011   January 1,2011Packaged Foods(In millions) Revenues $ 294 $ 285 $ 1,197 $ 1,121   EBIT: Packaged foods products $ 33 $ 28 $ 100 $ 105 Unrealized gain (loss) on foreign currency hedges 1 1 (2 ) 2 Net unrealized gain on foreign denominated instruments   -   -   (1)   - Total Packaged Foods EBIT $34$29$97   $107   Exhibit 3 - Reconciliation of Income (loss) from continuing operations to Comparable Income (loss) from continuing operations (Unaudited):     Quarter EndedDecember 31, 2011   January 1, 2011(In millions, except per share data)   Earningspershare   Earningsper share Income (loss) from continuing operations $ 4 $ 0.05 $ (36 ) $ (0.41 ) Net unrealized (gain) loss on derivative instruments, net of income taxes of $0.4 million and $0.3 million (1 ) (0.01 ) 6 0.07 Net gain on long-term Japanese yen hedges, net of income taxes of ($1.5) millions (1 ) (0.01 ) - - Charges for restructuring and long-term receivables, net of income taxes of ($1.9) million and ($0.3 million) 6 0.07 7 0.09 Foreign currency exchange gain on vessel obligations, net of income taxes1 - - (1 ) (0.02 ) Net unrealized gain on foreign denominated instruments, net of income taxes1 (2 ) (0.03 ) (4 ) (0.04 ) Share-based compensation, net of income taxes of ($2.9) million and ($2.0) million (1 ) (0.01 ) - - Refinancing charges and loss on early retirement of notes, net of income taxes of ($6.8) million and $0 (7 ) (0.08 ) - - Gain on legal settlements, net of income taxesof $0 and $2.0 million2 - - (3 ) (0.04 ) Gain on asset sales, net of income taxes of $1.2 million and $0   -   -     -     -   Comparable Income (loss) from continuing operations$(2)$ (0.02)$(31)$(0.35)   1 There was no income tax impact for this reconciling item. 2 Last year, we included the gain on legal settlement, net of income taxes, in Comparable Income (loss) from continuing operations. We have excluded this one-time gain from the historical periods in the current presentation.     Fiscal YearDecember 31, 2011   January 1, 2011(In millions, except per share data)   Earningsper share   Earningsper share Income (loss) from continuing operations $ 42 $ 0.47 $ (34 ) $ (0.39 ) Net unrealized loss on derivative instruments, net of income taxes of $0.2 million and $0.3 million 7 0.08 65 0.75 Net loss on long-term Japanese yen hedges, net of income taxes of $(1.5) million 19 0.22 - - Charges for restructuring and long-term receivables, net of income taxes of ($1.9) million and ($0.3 million) 28 0.33 32 0.37 Foreign currency exchange gain on vessel obligations, net of income taxes1 - - (2 ) (0.03 ) Net unrealized loss on foreign denominated instruments, net of income taxes of ($0.2) million and $0 3 0.03 3 0.04 Share-based compensation, net of income taxes of ($2.9) million and ($2.0) million) 6 0.07 5 0.05 Refinancing charges and loss on early retirement of notes, net of income taxes of ($6.8) million and ($0.5) million 19 0.22 4 0.05 Gain on legal settlements, net of income taxesof $0 and $2.0 million2 - - (30 ) (0.35 ) Gain on asset sales, net of income taxes of $1.2 million and $0.2 million   (3)   (0.04)   (3)   (0.03)Comparable Income from continuing operations$121   $1.38   $40   $0.46     1 There was no income tax impact for this reconciling item. 2 Last year, we included the gain on legal settlement, net of income taxes, in Comparable Income (loss) from continuing operations. We have excluded this one-time gain from the historical periods in the current presentation. Dole Food Company, Inc.Joseph TesorieroPhone: (818) 879-6900Beth PotilloPhone: (818) 879-6733