Dole plc (NYSE: DOLE) ("Dole" or the "Group" or the "Company")
has today released its financial results for the three months ended
March 31, 2022.
Highlights for Q1'22:
- Revenue of $2.2 billion
- Net Income of $3.3 million and Diluted EPS of $(0.01)
- Adjusted EBITDA1 of $81.5 million
- Adjusted Net Income1 of $28.2 million and Adjusted Diluted EPS1
of $0.30
Financial Highlights - Unaudited
Q1'22
Q1'21
Q1'21
Pro-forma (2)
Revenue - $’m
2,245
1,051
2,266
Net Income - $'m
3.3
26.1
63.2
Net (Loss) Income attributable to Dole plc
- $'m.
(1.4)
21.3
57.7
Diluted EPS - $
(0.01)
0.38
0.61
Adjusted EBITDA - $’m (1)
81.5
79.2
131.1
Adjusted Net Income - $’m (1)
28.2
25.9
58.8
Adjusted Diluted EPS - $ (1)
0.30
0.46
0.62
Commenting on the results, Carl McCann, Executive Chairman
said:
“We are pleased with the result that the Group has delivered for
the first quarter of 2022 particularly as we were impacted by the
Value Added salads recall and foreign currency translation
movements in the quarter. Our diversified business model has once
more proven itself to be resilient. For the 2022 financial year, we
are now targeting revenue in the range of $9.4 billion to $9.7
billion and Adjusted EBITDA in the range of $350.0 million to
$370.0 million. The Board extends our appreciation to all of our
talented and dedicated people across the Group."
Revenue for the first quarter increased to $2.2 billion from
$1.1 billion. The increase was primarily driven by the impact of
revenue from DFC following the acquisition by Dole plc. On a
pro-forma2 comparative basis, revenue decreased marginally,
primarily due to a decrease in Fresh Vegetables resulting from the
Value Added salads product recall in January and February 2022 and
negative foreign currency translation movements which together
accounted for a $112.0 million impact to revenue.
Adjusted EBITDA for the first quarter increased to $81.5
million. On a pro-forma comparative basis, Adjusted EBITDA
decreased primarily due to the impact of the Value Added salads
product recall, as well as a reduction in Fresh Fruit versus a
strong prior year comparative, and a decrease in Diversified Fresh
Produce – EMEA primarily due to negative foreign currency
translation movements. These decreases were partially offset by an
improved performance within Diversified Fresh Produce – Americas
& ROW.
Adjusted Net Income for the first quarter was $28.2 million,
compared to $25.9 million in the prior year and $58.8 million on a
pro-forma comparative basis. The decreases on a pro-forma
comparative basis were predominantly due to the decreases in
Adjusted EBITDA noted above. Adjusted Diluted EPS for the quarter
was $0.30.
Selected Segmental Financial Information (Unaudited)
Q1'22
Q1'21 - Pro-forma
(U.S. Dollars in thousands)
Revenue
Adjusted EBITDA
Revenue
Adjusted EBITDA
Fresh Fruit
$
749,803
$
61,881
$
744,614
$
91,587
Diversified Fresh Produce - EMEA
791,155
20,101
793,740
24,927
Diversified Fresh Produce - Americas &
ROW
463,692
12,303
421,693
10,096
Fresh Vegetables
274,751
(12,746
)
327,701
4,534
Intersegment
(34,419
)
—
(21,985
)
—
Total
$
2,244,982
$
81,539
$
2,265,763
$
131,144
Fresh Fruit
Revenue for the first quarter increased 0.7% compared to
pro-forma revenue for the first quarter of 2021. Revenue was
positively impacted by increased pricing in North America and
Europe as well as by higher revenues from the commercial cargo
business, but partially offset by lower pricing in non-core markets
and negatively impacted by a decrease in volumes sold in European
and North American markets.
Adjusted EBITDA for the first quarter decreased 32.5% compared
to the prior year on a pro-forma basis. The prior year comparative
had the benefit of strong market conditions due to tight supply
conditions following hurricanes Eta and Iota in November 2020.
Adjusted EBITDA was negatively impacted by lower volumes as well as
higher cost of fruit, driven by higher input costs in packaging,
fertilizers and other materials, as well as higher distribution
costs, driven by higher fuel and higher ocean and inland freight
costs. These higher costs were partially offset by higher pricing
in core markets as well as by strong performance in the commercial
cargo business.
Diversified Fresh Produce – EMEA
Revenue for the first quarter was broadly in line with the prior
year pro-forma comparative. On a like-for-like basis, strong
revenue growth was seen across the division, largely driven by
higher prices across most regions as well as by increased food
service revenue, particularly in the United Kingdom ("U.K.").
However, this was offset primarily by a negative translation impact
on currency of $56.4 million due to the strengthening of the U.S.
Dollar in the quarter against the Euro, Swedish Krona, and
Sterling.
Adjusted EBITDA for the first quarter decreased 19.3% versus the
prior year pro-forma comparative. The decrease in Adjusted EBITDA
was primarily a result of an unfavorable impact from foreign
currency movements, as a result of the strengthening of the U.S.
dollar against the euro, Swedish krona and British Pound sterling
and due to the impact of logistical challenges trading in North
Europe as well as the timing of certain South African sales, offset
in part by a strong performance in the U.K., driven by a recovery
in food service.
Diversified Fresh Produce – Americas & ROW
Revenue for the first quarter increased 10.0% versus the prior
year pro-forma comparative. The increase was driven primarily by
higher selling prices at the end of the Chilean cherry season after
a difficult end to the season in the prior year, as well as by
higher average selling prices in North America, offset in part by
lower revenue in South American blueberries.
Adjusted EBITDA for the first quarter increased 21.8%, driven by
a strong recovery in the Chilean grape business, which had a very
difficult season in the prior year due to the impact of heavy rains
on quality and volumes. There was also positive development in the
majority of the North American businesses; however, this positive
development was offset in part by higher costs of certain vegetable
products, as well as higher travel costs with the easing of
COVID-19 restrictions.
Fresh Vegetables
Revenue for the first quarter decreased 16.2% versus the prior
year pro-forma comparative. Revenue was negatively impacted by the
packaged salads recall and temporary plant closures which impacted
operations in January and February 2022 and led to a decrease in
volumes of Value Added salad products sold in the first quarter.
The segment was also impacted by a planned decrease in volumes in
Fresh Packed vegetables products. These decreases were partially
offset by improved pricing in Value Added salads products, and
significantly stronger pricing in Fresh Packed vegetables products
supported by the reduced volume strategy.
Adjusted EBITDA for the first quarter was a loss of $12.7
million. Fresh Vegetables Adjusted EBITDA was negatively impacted
by lower revenue and lower cost absorption driven by the packaged
salads recall and plant closures which impacted operations in
January and February, as well as by inflationary pressures on
freight, packaging and labor costs. These challenges in Valued
Added salads business were partially offset by an improved
performance in Fresh Packed products.
Capital Expenditures
Capital expenditures for the first quarter of 2022 was $17.3
million, which included continued progress on the final farm
renovations in Honduras following the 2020 hurricanes.
Net Debt and Financial Leverage
Net Debt as of March 31, 2022 was $1.3 billion and Financial
Leverage was 3.75x. On May 23, 2022, Dole entered into a new
three-year, committed trade receivables arrangement that will
terminate $76.0 million of the Company’s existing uncommitted
non-recourse trade receivables arrangements. This facility will
provide an additional source of financing for the Group at a lower
cost. The maximum amount of receivables that can be sold under this
agreement at any time is $255.0 million.
Outlook for Fiscal Year 2022 (forward-looking
statement)
For fiscal year 2022, Dole is targeting:
- Revenue in the range of $9.4 billion to $9.7 billion
- Adjusted EBITDA in the range of $350.0 million to $370.0
million
- Capital Expenditures of approximately $125.0 million
- Net Interest Expense of approximately $45.0 million
- Adjusted Effective tax rate in the range of 23.0% to 27.0%
The reduction in targeted Adjusted EBITDA is primarily due to a
slower than anticipated return to full operating profitability in
our Fresh Vegetables segment and a more negative foreign currency
translation impact on translation of Euro earnings to U.S. Dollar
following a strengthening of the U.S. Dollar against European
currencies.
The geopolitical situation in Ukraine and Russia is ongoing and
as such it remains difficult to accurately predict what overall
impact this may have on global trade flows, cost inflation and
foreign exchange rates, and how this might impact the Group over
the remainder of this financial year.
The above outlook includes non-GAAP financial measures. Please
refer to the end of this release for an explanation and
reconciliation of our historical non-GAAP financial measures used
in this release to comparable GAAP measures.
Dividend
On May 24, 2022, the Board of Directors of Dole plc declared a
cash dividend for the first quarter of 2022 of $0.08 per share,
payable on July 6, 2022 to shareholders of record on June 17,
2022.
Consolidated Statement of Operations - Unaudited
Three Months Ended
March 31, 2022
March 31, 2021
March 31, 2021
Pro-forma
(U.S. Dollars and shares in
thousands, except per share amounts)
Revenues, net
$
2,244,982
$
1,051,139
$
2,265,763
Cost of sales
(2,110,943
)
(966,638
)
(2,043,829
)
Gross profit
134,039
84,501
221,934
Selling, marketing, general and
administrative expenses
(124,159
)
(66,751
)
(135,930
)
Merger, transaction and other related
costs
—
(6,777
)
—
Gain on disposal of businesses
242
1,539
1,539
Gain on asset sales
495
—
3,582
Operating income
10,617
12,512
91,125
Other income, net
2,517
295
4,941
Interest income
1,638
417
1,108
Interest expense
(11,644
)
(2,252
)
(11,292
)
Income before income taxes and equity
earnings
3,128
10,972
85,882
Income tax expense
(420
)
(1,256
)
(23,991
)
Equity in net earnings of investments
accounted for under the equity method
577
16,399
1,305
Net income
3,285
26,115
63,196
Less: Net income attributable to
noncontrolling interests
(4,679
)
(4,806
)
(5,546
)
Net income (loss) attributable to Dole
plc
$
(1,394
)
$
21,309
$
57,650
Net income (loss) per share attributable
to Dole plc - basic
$
(0.01
)
$
0.38
$
0.61
Net income (loss) per share attributable
to Dole plc - diluted
$
(0.01
)
$
0.38
$
0.61
Weighted average shares outstanding -
basic
94,878
55,532
94,878
Weighted average shares outstanding -
diluted
94,878
55,699
95,030
Consolidated Balance Sheets - Unaudited
March 31, 2022
December 31,
2021
ASSETS
(U.S. Dollars in thousands)
Cash and cash equivalents
$
215,948
$
250,561
Short-term investments
5,584
6,115
Trade receivables, net of allowances for
credit losses of $23,293 and $22,064, respectively
785,626
719,114
Grower advance receivables, net of
allowances of $9,764 and $9,606, respectively
102,709
72,350
Other receivables, net of allowances of
$14,213 and $14,066, respectively
137,162
125,908
Inventories, net of allowances of $5,051
and $7,447, respectively
457,660
410,737
Prepaid expenses
58,214
45,339
Other current assets
16,309
11,011
Assets held-for-sale
2,974
200
Total current assets
1,782,186
1,641,335
Long-term investments
21,405
23,433
Investments in unconsolidated
affiliates
126,846
128,407
Actively marketed property
37,001
50,364
Property, plant and equipment, net of
accumulated depreciation of $323,144 and $283,677, respectively
1,394,556
1,430,850
Operating lease right-of-use assets
363,045
368,632
Goodwill
509,174
511,333
DOLE brand
306,280
306,280
Other intangible assets, net of
accumulated amortization of $119,159 and $117,499 respectively
59,674
62,046
Other assets
125,855
98,917
Deferred income tax assets
47,238
46,371
Total assets
$
4,773,260
$
4,667,968
LIABILITIES AND EQUITY
Accounts payable
$
695,513
$
696,766
Income taxes payable
5,427
10,316
Accrued liabilities
429,297
464,931
Bank overdrafts
15,883
9,395
Notes payable and current portion of
long-term debt, net
83,792
51,785
Current maturities of operating leases
73,292
73,046
Other tax
36,125
35,212
Contingent consideration
3,037
2,958
Pension and postretirement benefits
17,857
17,664
Dividends payable and other current
liabilities
18,232
9,078
Total current liabilities
1,378,455
1,371,151
Long-term debt, net
1,387,941
1,297,808
Operating leases, less current
maturities
298,194
305,714
Deferred income tax liabilities
149,307
145,689
Income tax payable, less current
portion
40,439
40,439
Contingent consideration, less current
portion
4,106
4,302
Pension and postretirement benefits, less
current portion
147,621
152,149
Other long-term liabilities
105,944
105,310
Total liabilities
$
3,512,007
$
3,422,562
Commitments and contingent liabilities
(See Note 16)
Redeemable noncontrolling interests.
33,949
32,776
Stockholders’ equity:
Common stock $0.001 par value; 300,000,000
shares authorized and 94,877,706 shares outstanding as of March 31,
2022 and December 31, 2021
950
950
Additional paid-in capital
792,061
792,223
Retained earnings
404,334
413,335
Accumulated other comprehensive loss
(100,962
)
(125,919
)
Total equity attributable to Dole plc
1,096,383
1,080,589
Equity attributable to noncontrolling
interests
130,921
132,041
Total equity
1,227,304
1,212,630
Total liabilities, redeemable
noncontrolling interests and equity
$
4,773,260
$
4,667,968
Consolidated Statements of Cash Flows - Unaudited
Three Months Ended
March 31, 2022
March 31, 2021
Operating Activities
(U.S. Dollars in thousands)
Net income
$
3,285
$
26,115
Adjustments to reconcile net income to
net cash used in operating activities:
Depreciation and amortization
31,013
9,480
Incremental charges on purchase accounting
valuation of biological assets
17,513
—
Asset write-offs and net gain on sale of
assets
(495
)
—
Net loss on financial instruments
506
—
Stock-based compensation expense
648
—
Earnings from equity method
investments
(577
)
(16,399
)
Net gain on disposal of businesses
(242
)
(1,539
)
Amortization of debt discounts and debt
issuance costs
1,466
—
Benefit for deferred income taxes
(4,078
)
(539
)
Pension and other postretirement benefit
plan benefit
(1,023
)
(415
)
Fair value movement on contingent
consideration
25
41
Dividends received
810
2,075
Other
(234
)
2,084
Changes in operating assets and
liabilities:
Receivables, net of allowances
(114,022
)
(39,994
)
Inventories
(48,762
)
(3,811
)
Operating lease liabilities
1,037
2,276
Accrued and other current and long-term
liabilities
(32,161
)
(17,053
)
Cash flow used in operating
activities
(145,291
)
(37,679
)
Investing Activities
Sales of assets
15,620
—
Capital expenditures
(17,330
)
(8,669
)
Acquisitions, net of cash acquired
(1,399
)
—
Insurance proceeds received for damage to
property
776
—
Purchases of investments
(412
)
—
Investments in unconsolidated
affiliates
(48
)
(596
)
Other
3
147
Cash flow used in investing
activities
(2,790
)
(9,118
)
Financing Activities
Proceeds from borrowings and
overdrafts
341,795
551,306
Repayments on borrowings and
overdrafts
(212,414
)
(289,475
)
Payment of debt issuance costs
—
(7,500
)
Dividends paid to shareholders
(7,590
)
(4,307
)
Dividends paid to noncontrolling
interests
(3,616
)
(2,174
)
Payment of contingent consideration
(599
)
—
Cash flow provided by financing
activities
117,576
247,850
Effect of foreign currency exchange rate
changes on cash
(4,108
)
(3,206
)
(Decrease) increase in cash and cash
equivalents
(34,613
)
197,847
Cash and cash equivalents at beginning of
period
250,561
160,503
Cash and cash equivalents at end of
period
$
215,948
$
358,350
Reconciliation from Net Income to Adjusted EBITDA -
Unaudited
Three Months Ended
March 31, 2022
March 31, 2021
March 31, 2021
Pro-forma
(U.S. Dollars in thousands)
Net income
$
3,285
$
26,115
$
63,196
Interest expense
11,644
2,252
11,292
Income tax expense
420
1,256
23,991
EBIT
15,349
29,623
98,479
Depreciation
28,171
6,705
28,318
Amortization of intangible assets
2,842
2,775
2,775
Merger, transaction, and other related
costs
—
6,777
—
Net unrealized (gain) loss on derivative
instruments
(4,088
)
219
463
Net unrealized (gain) on foreign currency
denominated borrowings
(1,491
)
—
(5,859
)
Net noncash realized (gain) on foreign
currency denominated borrowings
(1,029
)
—
—
Produce recalls
16,251
—
—
Fair value movement on contingent
consideration
25
41
41
Asset write-downs, net of insurance
proceeds
(626
)
—
(9,880
)
Restructuring charges
—
—
(125
)
Incremental charges on biological assets
and inventory related costs due to acquisition of Legacy Dole
17,513
—
—
(Gain) on disposal of businesses
(242
)
(1,539
)
(1,539
)
Net realized foreign currency loss on
liquidated entities
5,445
—
—
Legal matters
—
—
15,000
Items in earnings for equity method
investments:
Dole's share of interest expense
556
7,257
334
Dole's share of income tax
561
15,675
855
Dole's share of depreciation
1,624
11,582
1,556
Dole's share of amortization
666
726
726
Dole's share of other items
12
(687
)
—
Adjusted EBITDA
$
81,539
$
79,154
$
131,144
Reconciliation from Net (Loss) Income attributable to Dole
plc shareholders to Adjusted Net Income - Unaudited
Three Months Ended
March 31, 2022
March 31, 2021
March 31, 2021
Pro-forma
(U.S. Dollars and shares in
thousands, except per share amounts)
(Loss) income for the financial year
attributable to equity shareholders
$
(1,394
)
$
21,309
$
57,650
Adjustments:
Amortization of intangible assets
2,842
2,775
2,775
Net unrealized (gain) loss on derivative
financial instruments
(4,088
)
219
463
Merger, transaction, and other related
costs
—
6,777
—
Net unrealized (gain) on foreign currency
denominated borrowings
(1,491
)
—
(5,859
)
Net noncash realized (gain) on foreign
currency denominated borrowings
(1,029
)
—
—
Produce recall costs
16,251
—
—
Fair value movements on contingent
consideration
25
41
41
Asset write-downs, net of insurance
proceeds
(626
)
—
(9,880
)
Restructuring charges
—
—
(125
)
Incremental charges on biological assets
and inventory related costs due to acquisition of Legacy Dole
17,513
—
—
(Gain) on disposal of businesses
(242
)
(1,539
)
(1,539
)
Net realized foreign currency loss on
liquidated entities
5,445
—
—
Legal matters
—
—
15,000
Income tax on items above
(5,249
)
(8
)
(2,254
)
Income tax on discrete tax items
250
—
2,520
Deferred tax on intangible assets
(125
)
(389
)
(389
)
NCI impact on items above
(458
)
(914
)
(259
)
Items in earnings for equity method
investments
Dole's share of amortization on intangible
assets
666
726
726
Dole's share of other items
12
(687
)
—
Dole's share of income tax on items
above
(103
)
(2,410
)
(120
)
Adjusted Net Income for Adjusted EPS
calculation
$
28,199
$
25,900
$
58,750
Adjusted earnings per share - basic
$
0.30
$
0.47
$
0.62
Adjusted earnings per share - diluted
$
0.30
$
0.46
$
0.62
Weighted average shares outstanding -
basic
94,878
55,532
94,878
Weighted average shares outstanding -
diluted
94,878
55,699
95,030
Net Debt and Financial Leverage
Net Debt is the primary measure used by management to analyze
the Company’s capital structure and financial leverage. Net Debt is
a non-GAAP financial measure, calculated as cash and cash
equivalents, less current and long-term debt. It also excludes debt
discounts and debt issuance costs. The calculation of Net Debt and
financial leverage as of March 31, 2022 is presented below. Net
Debt as of March 31, 2022 was $1.3 billion and financial leverage
was 3.75x.
March 31, 2022
Unaudited
(U.S. Dollars in thousands)
Cash and cash equivalents
$
(215,948
)
Bank overdrafts
15,883
Notes payable and current portion of
long-term debt, net
83,792
Long-term debt, net.
1,387,941
1,271,668
Less: Debt discounts and debt issuance
costs
19,894
Net Debt
$
1,291,562
Pro-forma Adjusted EBITDA for 12 months
ended 31 March, 2022
343,976
Financial Leverage: Net Debt /
Pro-forma Adjusted EBITDA
3.75x
Dole plc’s results are determined in accordance with U.S.
GAAP.
In addition to its results under U.S. GAAP, in this Press
Release we also present Dole plc’s Adjusted EBITDA, Adjusted Net
Income, Adjusted EPS, pro-forma EBIT, pro-forma Adjusted EBITDA,
Adjusted Effective tax rate pro-forma Adjusted Net Income and
pro-forma Adjusted Earnings per Share, which are supplemental
measures of financial performance that are not required by, or
presented in accordance with, U.S. GAAP (collectively, the
"non-GAAP financial measures"). We present these non-GAAP financial
measures because we believe they assist investors and analysts in
comparing our operating performance across reporting periods on a
consistent basis by excluding items that we do not believe are
indicative of our core operating performance. These non-GAAP
financial measures have limitations as analytical tools, and you
should not consider them in isolation or as a substitute for
analysis of our operating results, cash flows or any other measure
prescribed by U.S. GAAP. Our presentation of non-GAAP financial
measures should not be construed as an inference that our future
results will be unaffected by any of the adjusted items, or that
any projections and estimates will be realized in their entirety or
at all.
Adjusted EBITDA is calculated from EBIT by: (1) adding
depreciation charges; (2) adding amortization charges; (3) adding
merger, transaction and other related costs; (4) adding the net
unrealized loss or subtracting the net unrealized gain on
derivative instruments; (5) adding the net unrealized loss or
subtracting the net unrealized gain on foreign currency denominated
borrowings; (6) adding the net realized loss or subtracting the net
realized gain on noncash settled foreign currency denominated
borrowings; (7) adding or subtracting fair value movements on
contingent consideration; (8) adding impairment charges on
property, plant and equipment; (9) adding or subtracting asset
write-downs, net of insurance proceeds; (10) adding incremental
costs for produce recalls and related costs; (11) subtracting the
fair value gain or adding the fair value loss on the acquisition of
investments previously accounted for under the equity method; (12)
subtracting the gain or adding the loss on the sale of investments
accounted for under the equity method; (13) subtracting the gain or
adding the loss on the disposal of business interests; (14) adding
the net realized foreign currency loss or subtracting the net
realized foreign currency gain on liquidated entities; (15) adding
the loss or subtracting the gain on asset sales for assets
held-for-sale and actively marketed property; (16) adding the
incremental costs from the fair value uplift for biological assets
and inventory related to the acquisition of Legacy Dole; (17)
adding restructuring charges; and (18) adding costs for legal
matters not in the ordinary course of business. It also includes
the effect of the Company’s share of all listed items within
investments accounted for under the equity method.
Adjusted Net Income is calculated from net income (loss)
attributable to Dole plc by: (1) adding intangible asset
amortization charges; (2) adding merger, transaction and other
related costs; (3) adding net unrealized loss or subtracting the
net unrealized gain on derivative instruments including interest
rate swaps; (4) adding the net unrealized loss or subtracting the
net unrealized gain on foreign currency denominated borrowings; (5)
adding the net realized loss or subtracting the net realized gain
on noncash settled foreign currency denominated borrowings; (6)
adding or subtracting fair value movements on contingent
consideration; (7) adding impairment charges on property, plant and
equipment; (8) adding or subtracting asset write-downs, net of
insurance proceeds; (9) adding incremental costs for produce
recalls and related costs; (10) subtracting the fair value gain or
adding the fair value loss on the acquisition of investments
previously accounted for under the equity method; (11) subtracting
the gain or adding the loss on the sale of investments accounted
for under the equity method; (12) subtracting the gain or adding
the loss on the disposal of business interests; (13) adding the net
realized foreign currency loss or subtracting the net realized
foreign currency gain on liquidated entities; (14) adding the loss
or subtracting the gain on asset sales for assets held-for-sale and
actively marketed property; (15) adding the incremental costs from
the fair value uplift for biological assets and inventory related
to the acquisition of Legacy Dole; (16) adding restructuring
charges; and (17) adding costs for legal matters not in the
ordinary course of business. It excludes the tax effect of these
items and the effect attributable to non-controlling interests. It
also includes the effect of the Company’s share of all listed items
within investments accounted for under the equity method.
Adjusted Earnings per Share is calculated from Adjusted Net
Income divided by diluted weighted average number of shares in the
applicable period.
Adjusted Effective tax rate is calculated from the effective tax
rate by: (1) subtracting the impact from incremental costs from the
fair value uplift for biological assets and inventory related to
the acquisition of Legacy Dole; and (2) subtracting the impact from
uncertain tax positions.
Pro-forma EBIT is calculated from pro-forma net income (loss) by
adding pro-forma interest expense and adding the pro-forma income
tax expense or subtracting the pro-forma income tax benefit.
Pro-forma Adjusted EBITDA is calculated from pro-forma EBIT by:
(1) adding depreciation charges; (2) adding amortization charges;
(3) adding merger, transaction and other related costs; (4) adding
the net unrealized loss or subtracting the net unrealized gain on
derivative instruments; (5) adding the net unrealized loss or
subtracting the net unrealized gain on foreign currency denominated
borrowings; (6) adding the net realized loss or subtracting the net
realized gain on noncash settled foreign currency denominated
borrowings; (7) adding or subtracting fair value movements on
contingent consideration; (8) adding impairment charges on
property, plant and equipment; (9) adding or subtracting asset
write-downs, net of insurance proceeds; (10) adding incremental
costs for produce recalls and related costs; (11) subtracting the
fair value gain or adding the fair value loss on the acquisition of
investments previously accounted for under the equity method; (12)
subtracting the gain or adding the loss on the sale of investments
accounted for under the equity method; (13) subtracting the gain or
adding the loss on the disposal of business interests; (14) adding
the net realized foreign currency loss or subtracting the net
realized foreign currency gain on liquidated entities; (15) adding
the loss or subtracting the gain on asset sales for assets
held-for-sale and actively marketed property; (16) adding the
incremental costs from the fair value uplift for biological assets
and inventory related to the acquisition of Legacy Dole; (17)
adding restructuring charges; and (18) and adding costs for legal
matters not in the ordinary course of business. It also includes
the effect of the Company’s share of all listed items within
investments accounted for under the equity method.
Pro-forma Adjusted Net Income is calculated from pro-forma net
income (loss) attributable to Dole plc by: (1) adding intangible
asset amortization charges; (2) adding merger, transaction and
other related costs; (3) adding net unrealized loss or subtracting
the net unrealized gain on derivative instruments including
interest rate swaps; (4) adding the net unrealized loss or
subtracting the net unrealized gain on foreign currency denominated
borrowings; (5) adding the net realized loss or subtracting the net
realized gain on noncash settled foreign currency denominated
borrowings; (6) adding or subtracting fair value movements on
contingent consideration; (7) adding impairment charges on
property, plant and equipment; (8) adding or subtracting asset
write-downs, net of insurance proceeds; (9) adding incremental
costs for produce recalls and related costs; (10) subtracting the
fair value gain or adding the fair value loss on the acquisition of
investments previously accounted for under the equity method; (11)
subtracting the gain or adding the loss on the sale of investments
accounted for under the equity method; (12) subtracting the gain or
adding the loss on the disposal of business interests; (13) adding
the net realized foreign currency loss or subtracting the net
realized foreign currency gain on liquidated entities; (14) adding
the loss or subtracting the gain on asset sales for assets
held-for-sale and actively marketed property; (15) adding the
incremental costs from the fair value uplift for biological assets
and inventory related to the acquisition of Legacy Dole; (16)
adding restructuring charges; and (17) adding costs for legal
matters not in the ordinary course of business. It excludes the tax
effect of these items and the effect attributable to
non-controlling interests. It also includes the effect of the
Company’s share of all listed items within investments accounted
for under the equity method.
Pro-forma Adjusted Earnings per Share is calculated from
pro-forma Adjusted Net Income divided by diluted weighted average
number of shares in the applicable period.
Pro-forma EBIT, Adjusted EBITDA, pro-forma Adjusted EBITDA,
Adjusted Net Income, pro-forma Adjusted Net Income, Adjusted
Effective tax rate, Adjusted EPS and pro-forma Adjusted EPS are not
measurements of Dole plc financial performance under U.S. GAAP and
should not be considered as alternatives to net income attributable
to Dole plc, net income, income (loss) before income taxes and
equity earnings or any other performance measures derived in
accordance with U.S. GAAP. Additionally, pro-forma EBIT, pro-forma
Adjusted EBITDA, pro-forma Adjusted Net Income and pro-forma
Adjusted EPS are not intended to be liquidity measures because of
certain limitations such as:
- They do not reflect Dole plc’s cash expenditures, or future
requirements, for capital expenditures or contractual
commitments;
- They do not reflect changes in, or cash requirements for, Dole
plc’s working capital needs;
- They do not reflect the significant interest expense, or the
cash requirements necessary to service interest or principal
payments, on Dole plc’s debt; and
- Although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized will often have to be
replaced in the future, and these non-GAAP financial measures do
not reflect cash requirements for such replacements.
Because of these limitations, pro-forma EBIT, pro-forma Adjusted
EBITDA, pro-forma Adjusted Net Income, and pro-forma Adjusted EPS
should not be considered as measures of discretionary cash
available to Dole plc to invest in the growth of its and Dole plc’s
business.
Further, pro-forma EBIT, pro-forma Adjusted EBITDA, pro-forma
Adjusted Net Income, and pro-form Adjusted EPS as used herein may
not be calculated in a similar manner to, and are therefore not
necessarily comparable with, similarly titled measures of other
companies. However, we have included pro-forma EBIT, pro-forma
Adjusted EBITDA, pro-forma Adjusted Net Income, and pro-forma EPS
herein because Dole plc’s management believes that pro-forma EBIT,
pro-forma Adjusted EBITDA, pro-forma Adjusted Net Income, and
pro-forma Adjusted EPS are useful performance measures.
Dole is not able to provide a reconciliation for projected FY'22
Adjusted EBITDA and Adjusted Effective tax rate without undertaking
unreasonable efforts.
Pro-forma Methodology
The methodology used to prepare the unaudited pro-forma
consolidated financial statements for Dole plc to show the
estimated effects of the acquisition of DFC by TP and the IPO and
refinancing as if they had occurred on January 1, 2020 and is
consistent with how the pro-forma financial statements were
prepared in the F-1. The results for the three months ended March
31, 2022 are based on the Company's consolidated statutory results
and therefore are not pro-forma adjusted.
1. All associated transaction costs reflected
on January 1, 2020. As such, no transaction costs are included
within the pro-forma numbers discussed below.
2. Effective tax rate of 25% for Q1 2021.
3. Applying the results of the Purchase Price
Allocation (“PPA”) exercise, acquisition accounting and debt
refinancing to January 1, 2020:
a. Q1 2021 pro-forma results reflect a
reduction in the depreciation charge of $1.0 million. This is a
function of the asset values increasing as a result of the PPA
exercise offset by an increase in the estimated useful lives of the
assets.
b. The interest expense for Q1 2021 reflects
the outcome of the refinancing.
4. TP’s pickup of its 45.0% share of DFC’s
net income has been eliminated.
5. EPS is calculated using shares in issue
following the IPO and additional share issuances.
6. There is an adjustment in Q1 2021 of $5.0
million to reflect estimated ongoing incremental public company
costs of $14.0 million annualized.
See reconciliation of pro-forma results for the three months
ended March 31, 2021 below.
Pro-forma Reconciliation (Unaudited) – for the three months
ended March 31, 2021
TP
DFC
Dole plc
FV & Intercompany
Adjustment
Transaction Costs
Ongoing plc Costs
Debt Adjustment
Tax Adjustment
Pro-forma Financial
Statements
(U.S. Dollars and shares in
thousands, except per share amounts)
Revenues, net
1,051,139
1,232,674
2,283,813
(18,050
)
—
—
—
—
2,265,763
Cost of sales
(966,638
)
(1,096,241
)
(2,062,879
)
19,050
—
—
—
—
(2,043,829
)
Gross profit
84,501
136,433
220,934
1,000
—
—
—
—
221,934
Selling, marketing and general and
administrative expenses
(66,383
)
(64,522
)
(130,905
)
—
—
(5,025
)
—
—
(135,930
)
Merger, transaction, and other related
costs
(6,777
)
(387
)
(7,164
)
—
7,164
—
—
—
—
Gain on disposal of businesses
1,539
—
1,539
—
—
—
—
—
1,539
Gain on asset sales
—
3,582
3,582
—
—
—
—
—
3,582
Operating income (loss)
12,880
75,106
87,986
1,000
7,164
(5,025
)
—
—
91,125
Other income (expense), net
(73
)
5,014
4,941
—
—
—
—
—
4,941
Interest income
417
691
1,108
—
—
—
—
—
1,108
Interest expense
(2,252
)
(16,631
)
(18,883
)
—
—
—
7,591
—
(11,292
)
Income (loss) before income taxes and
equity earnings
10,972
64,180
75,152
1,000
7,164
(5,025
)
7,591
—
85,882
Income tax (expense) benefit
(1,256
)
(20,775
)
(22,031
)
—
—
1,580
(2,387
)
(1,153
)
(23,991
)
Equity in net earnings of investments
accounted for under the equity method
16,399
252
16,651
(15,346
)
—
—
—
—
1,305
Net income (loss)
26,115
43,657
69,772
(14,346
)
7,164
(3,445
)
5,204
(1,153
)
63,196
Less: Net income attributable to
noncontrolling interests
(4,806
)
(740
)
(5,546
)
—
—
—
—
—
(5,546
)
Net income (loss) attributable to Dole
plc
21,309
42,917
64,226
(14,346
)
7,164
(3,445
)
5,204
(1,153
)
57,650
Earnings per share:
Net income per share - basic
$
0.61
Net income per share - diluted
$
0.61
Weighted average shares outstanding
Basic
94,878
Diluted
95,030
About Dole plc A global leader in fresh produce, Dole plc
produces, markets, and distributes an extensive variety of fresh
fruits and vegetables sourced locally and from around the world.
Dedicated and passionate in exceeding our customers’ requirements
in over 75 countries, our goal is to make the world a healthier and
a more sustainable place.
Webcast and Conference Call Information
Dole plc will host a conference call and simultaneous webcast at
08:00 a.m. Eastern Time today to discuss the first quarter 2022
financial results. The webcast can be accessed within “Events and
Presentations” on the company website,
www.doleplc.com/investors.
An archived replay of the webcast will also be available shortly
after the live event has concluded. The conference call can be
accessed live by dialing +1 646 787 9445 or for international
callers by dialing +44 203 936 2999. The access code is 710667.
A replay of the call will be available through May 31, 2022, by
dialing +1 845 709 8569, or for international callers by dialing
+44 203 936 3001. The replay access code is 039478.
Forward-looking information
Certain statements made in this press release that are not
historical are forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements are based on management’s beliefs,
assumptions, and expectations of our future economic performance,
considering the information currently available to management.
These statements are not statements of historical fact. The words
“believe,” “may,” “could,” “will,” “should,” “would,” “anticipate,”
“estimate,” “expect,” “intend,” “objective,” “seek,” “strive,”
“target” or similar words, or the negative of these words, identify
forward-looking statements. The inclusion of this forward-looking
information should not be regarded as a representation by us or any
other person that the future plans, estimates, or expectations
contemplated by us will be achieved. Such forward-looking
statements are subject to various risks and uncertainties and
assumptions relating to our operations, financial results,
financial condition, business prospects, growth strategy and
liquidity. Accordingly, there are, or will be, important factors
that could cause our actual results to differ materially from those
indicated in these statements. If one or more of these or other
risks or uncertainties materialize, or if our underlying
assumptions prove to be incorrect, our actual results may vary
materially from what we may have expressed or implied by these
forward-looking statements. We caution that you should not place
undue reliance on any of our forward-looking statements. Any
forward-looking statement speaks only as of the date on which such
statement is made, and we do not undertake any obligation to update
any forward-looking statement to reflect events or circumstances
after the date on which such statement is made except as required
by the federal securities laws.
1 Dole plc reports its financial results in accordance with U.S.
Generally Accepted Accounting Principles ("GAAP"). Adjusted EBITDA,
Adjusted Net Income, Adjusted Earnings Per Share and Net Debt are
non-GAAP financial measures. Refer to the end of this release for
an explanation and reconciliation of these and other non-GAAP
financial measures used in this release to comparable GAAP
measures.
2 This press release contains pro-forma financial information.
The unaudited pro-forma consolidated financial statements for Dole
plc illustrate the effects of the acquisition of Dole Food Company,
Inc. ("DFC" or "Legacy Dole") by Total Produce ("TP") and the
effects of the IPO and refinancing as if they had occurred on
January 1, 2020. This is consistent with the pro-forma financial
statements presented in the Form F-1 filed with the SEC at the time
of the IPO.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220524005650/en/
Investor Contact: James O'Regan, Head of Investor
Relations, Dole plc joregan@totalproduce.com +353 1 887 2794 Media
Contact: Phil Elwood, Ogilvy philip.elwood@ogilvy.com +1 202 423 7957 Brian
Bell, Ogilvy brian.bell@ogilvy.com
+353 87 2436 130
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