
Dole Food Company, Inc. Announces Launch Of Credit Facilities Amendments And Strong Results For 2009
Company Info / Press Release 20100202DOLE FOOD COMPANY, INC. ANNOUNCES LAUNCH OF CREDIT FACILITIES AMENDMENTS AND STRONG RESULTS FOR 2009WESTLAKE VILLAGE, California - February 02, 2010Dole Food Company, Inc. today announced that it has launched amendments to its senior secured credit facilities that Dole expects will reduce its interest expense, extend its maturities and provide for the redemption of the remaining $70 million principal amount of its senior notes due 2011. This will put Doleââ¬â¢s nearest debt maturity in 2013. Dole also announced improved operating results, with 2009 Adjusted EBITDA of $417 million, lower year-end net debt of $1.478 billion, and a reduced 2009 leverage ratio of 3.5 times. For 2008, Adjusted EBITDA was $410 million, net debt was $2.113 billion, and the leverage ratio was 5.2 times.David A. DeLorenzo, Doleââ¬â¢s President and CEO said: ââ¬ÅDole had another outstanding year in 2009. We continued to build on the strong operating performance achieved in 2008, generating outstanding cash flow, which allowed us to pay down a significant amount of debt. In addition, we had cash proceeds from asset sales in 2009 totaling approximately $185 million, bringing the two year total for asset sales to over $400 million ââ¬â while growing EBITDA. During October 2009, we successfully completed an IPO of Dole common stock, raising $330 million of net proceeds to Dole, all of which was used to pay down debt and its related costs. In addition, in September 2009 we successfully refinanced $363 million of our 7.25% Senior Notes due 2010. We are pleased with the outstanding results achieved in 2009. Our operating results and our recent IPO have greatly strengthened our balance sheet. We are optimistic as we look forward to improving earnings and further reductions in costs and debt in 2010.\"Dole intends to hold a conference call concerning its complete 2009 results when it files its Form 10-K with the Securities and Exchange Commission, on or before April 2, 2010.Dole also announced the following results for fiscal year 2009, which ended on January 2, 2010.Selected Financial Results from Continuing Operations (Unaudited)Fiscal Year2009 2008(In Millions)Revenues, net $6,779 $7,620Operating income 352 275Income from continuing operations before income taxes 108 99Adjusted EBITDA 417 410Reconciliation of income from continuing operations before income taxes to EBIT and Adjusted EBITDA (Unaudited):Fiscal Year2009 2008(In Millions)Income from continuing operations before income taxes $108 $99Interest expense 206 174Earnings before interest and taxes (\"EBIT\") 314 273Depreciation and amortization 120 138Net unrealized loss on derivative instruments 8 49Foreign currency loss (gain) on vessel obligations 6 (21)Net unrealized gain on foreign denominated instruments - (2)Net unrealized gain on foreign denominated instruments 30 -Gains on asset sales (61) (27)Gains on asset sales $417 $410See ââ¬ÅNon-GAAP Measurementsââ¬Â below for discussion of EBIT and Adjusted EBITDA.RevenuesFor fiscal 2009, revenues decreased 11% to $6.8 billion. The decrease was primarily due to the fourth quarter 2008 sale of our JP Fresh and Dole France ripening and distribution subsidiaries and the benefit of a 53-week year in 2008 compared to a 52-week year in 2009. In addition, lower sales in the remaining European ripening and distribution business, and in the fresh vegetables and packaged foods segments impacted revenues.Adjusted EBITDAFor fiscal 2009, Adjusted EBITDA increased $7 million to $417 million primarily due to higher earnings in the packaged foods segment as a result of lower costs. This benefit was partially offset by lower earnings in the fresh fruit segment primarily due to weather induced cost increases in Latin America. The European ripening and distribution business had lower earnings due to the sale of JP Fresh and Dole France, and unfavorable foreign exchange and lower pricing. The fresh vegetables segment was relatively flat compared to prior year as stronger performance in the fresh-packed vegetables business was offset by lower packaged salads earnings as a result of higher marketing spend. Earnings were also impacted in 2009 by the write-off of $5.6 million of deferred debt issuance costs primarily associated with the March 2009 amendment of our senior secured credit facilities.Cash and Debt (Unaudited)January 2, 2010 January 3, 2009Cash: (In Millions)Cash and cash equivalents $120 $91Total Debt:Revolving credit facility - $151Term loan facilities 739 835Senior Notes and Debentures 767 1,100Other debt, and debt discount* - 92 118Total Debt $1,598 $2,204Net Debt $1,478 $2,113* includes $20 million of debt discount at January 2, 2010Segment Information (Unaudited)Fiscal Year2009 2008Revenues from external customers (In Millions)Fresh fruit $4,711 $5,401Fresh Vegetables 1,025 1,087Packaged foods 1,042 1,131Corporate 1 1$6,779 $7,620Fiscal Year2009 2008EBIT (In Millions)Fresh fruit $305 $306Fresh Vegetables 9 1Packaged foods 106 71Total operating segments 420 378Corporate:Unrealized loss on cross currency swap (21) (51)Unrealized loss on foreign denominated instruments (1) (1)Debt retirement costs in connection with initial public offering (30) -Operating and other expenses, net (54) (53)Total Corporate 106 105Total EBIT $314 $273Fourth Quarter2009 2008Revenues from external customers (In Millions)Fresh fruit $1,039 $1,104Fresh Vegetables 234 248Packaged foods 256 288Corporate - -$1,529 $1,6402009 2008EBIT (In Millions)Fresh fruit $65 $62Fresh Vegetables - 10Packaged foods 30 30Total Operating segments 95 102Corporate:Unrealized gain (loss) on cross currency swap 14 (30)Unrealized gain (loss) on foreign denominated instruments 7 (4)Debt retirement costs in connection with initial public offering (30) -Operating and other expenses, net (16) (21)Total Corporate (25) (55)Total EBIT $70 $47See Exhibit 1 for further detailed information on segments.Fourth Quarter 2009Earnings in the fourth quarter of 2009 compared to 2008 were impacted by the benefit of an extra week in the prior year due to a 53 week year in 2008. Fourth quarter 2008 also benefited from higher fuel surcharges in North America. In addition, the fourth quarter of 2009 was impacted by incremental marketing spend associated with the national roll out of new packaged salad items and packaging, as well as lower earnings in Asia fresh fruit.During the fourth quarter of 2009, Dole sold three box manufacturing plants and other properties in Latin America. With the closing of fourth quarter asset sales, total net cash proceeds received for 2009 attributable to asset sales were approximately $185 million.As a result of Doleââ¬â¢s successful IPO in October, proceeds from asset sales and cash generated from operations, Doleââ¬â¢s net debt (defined as total debt less cash and cash equivalents) at the end of fiscal 2009 was $1.478 billion, a reduction of $635 million, or 30%, compared to the end of fiscal 2008.Non-GAAP MeasurementsEBIT and Adjusted EBITDA are measures commonly used by financial analysts in evaluating the performance of companies. EBIT is calculated by adding back interest expense to income from continuing operations before income taxes. Adjusted EBITDA is calculated by adding depreciation and amortization from continuing operations, adding the net unrealized loss or subtracting the net unrealized gain on certain derivative instruments (foreign currency and bunker fuel hedges and the cross currency swap), adding the foreign currency loss or subtracting the foreign currency gain on the vessel obligations, adding the net unrealized loss or subtracting the net unrealized gain on foreign denominated instruments, and by subtracting gains on asset sales from EBIT. These items have been adjusted because management excludes these amounts when evaluating the performance of Dole. For 2009, debt retirement costs in connection with Doleââ¬â¢s initial public offering are also added to EBIT in calculating Adjusted EBITDA. Net debt is calculated as total debt less cash and cash equivalents. Doleââ¬â¢s leverage ratio is calculated as total net debt divided by Adjusted EBITDA.EBIT and Adjusted EBITDA are not calculated or presented in accordance with U.S. GAAP and EBIT and Adjusted EBITDA 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 and Adjusted EBITDA as used herein are not necessarily comparable to similarly titled measures of other companies. However, Dole has included EBIT and Adjusted EBITDA herein because management believes that EBIT and Adjusted EBITDA are useful performance measures for Dole. In addition, EBIT and Adjusted EBITDA are presented because Doleââ¬â¢s management believes that these measures are frequently used by securities analysts, investors and others in the evaluation of Dole.Dole, with 2009 net revenues of $6.8 billion, is the worldââ¬â¢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 (Unaudited)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 EndedJanuary 2, 2010 January 3, 2009 January 2, 2010 January 3, 2009Fresh fruit (In Millions)Revenues, net $1,039 $1,104 $4,711 $5,401EBIT:Fresh Fruit products $25 $52 $248 $256Unrealized gain (loss) on foreign currency and fuel hedges 11 (16) 12 -Foreign currency exchange gain (loss) on vessel obligations - 12 (6) 21Net unrealized gain on foreign denominated instruments 1 2 - 4Gains on asset sales 28 12 51 25Total Fresh Fruit EBIT $65 $62 $305 $306Quarter Ended Year EndedJanuary 2, 2010 January 3, 2009 January 2, 2010 January 3, 2009Fresh Vegetables (In Millions)Revenues, net $234 $248 $1,025 $1,087EBIT:Fresh vegetables products - $10 - $1Gains on asset sales - - 9 -Total Fresh Vegetables EBIT - $10 $9 $1Quarter Ended Year EndedJanuary 2, 2010 January 3, 2009 January 2, 2010 January 3, 2009Packaged Foods (In Millions)Revenues, net $256 $288 $1,042 $1,131EBIT:Packaged foods products $31 $28 $104 $68Unrealized gain (loss) on foreign currency hedges (1) 1 1 2Net unrealized gain (loss) on foreign denominated instruments - 1 - (1)Gains on asset sales - - 1 2Total Packaged Foods $30 $30 $106 $71