DUBLIN, May 24, 2022--(BUSINESS WIRE)--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
Revenue - $’m
Net Income - $'m
Net (Loss) Income attributable to Dole plc - $'m.
Diluted EPS - $
Adjusted EBITDA - $’m (1)
Adjusted Net Income - $’m (1)
Adjusted Diluted EPS - $ (1)
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)
Q1'21 - Pro-forma
(U.S. Dollars in thousands)
Diversified Fresh Produce - EMEA
Diversified Fresh Produce - Americas & ROW
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.
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 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.
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
(U.S. Dollars and shares in thousands, except per share amounts)
Cost of sales
Selling, marketing, general and administrative expenses
Merger, transaction and other related costs
Gain on disposal of businesses
Gain on asset sales
Other income, net
Income before income taxes and equity earnings
Income tax expense
Equity in net earnings of investments accounted for under the equity method
Less: Net income attributable to noncontrolling interests
Net income (loss) attributable to Dole plc
Net income (loss) per share attributable to Dole plc - basic
Net income (loss) per share attributable to Dole plc - diluted
Weighted average shares outstanding - basic
Weighted average shares outstanding - diluted
Consolidated Balance Sheets - Unaudited
(U.S. Dollars in thousands)
Cash and cash equivalents
Trade receivables, net of allowances for credit losses of $23,293 and $22,064, respectively
Grower advance receivables, net of allowances of $9,764 and $9,606, respectively
Other receivables, net of allowances of $14,213 and $14,066, respectively
Inventories, net of allowances of $5,051 and $7,447, respectively
Other current assets
Total current assets
Investments in unconsolidated affiliates
Actively marketed property
Property, plant and equipment, net of accumulated depreciation of $323,144 and $283,677, respectively
Operating lease right-of-use assets
Other intangible assets, net of accumulated amortization of $119,159 and $117,499 respectively
Deferred income tax assets
LIABILITIES AND EQUITY
Income taxes payable
Notes payable and current portion of long-term debt, net
Current maturities of operating leases
Pension and postretirement benefits
Dividends payable and other current liabilities
Total current liabilities
Long-term debt, net
Operating leases, less current maturities
Deferred income tax liabilities
Income tax payable, less current portion
Contingent consideration, less current portion
Pension and postretirement benefits, less current portion
Other long-term liabilities
Commitments and contingent liabilities (See Note 16)
Redeemable noncontrolling interests.
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
Additional paid-in capital
Accumulated other comprehensive loss
Total equity attributable to Dole plc
Equity attributable to noncontrolling interests
Total liabilities, redeemable noncontrolling interests and equity
Consolidated Statements of Cash Flows - Unaudited
Three Months Ended
March 31, 2022
March 31, 2021
(U.S. Dollars in thousands)
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization
Incremental charges on purchase accounting valuation of biological assets
Asset write-offs and net gain on sale of assets
Net loss on financial instruments
Stock-based compensation expense
Earnings from equity method investments
Net gain on disposal of businesses
Amortization of debt discounts and debt issuance costs
Benefit for deferred income taxes
Pension and other postretirement benefit plan benefit
Fair value movement on contingent consideration
Changes in operating assets and liabilities:
Receivables, net of allowances
Operating lease liabilities
Accrued and other current and long-term liabilities
Cash flow used in operating activities
Sales of assets
Acquisitions, net of cash acquired
Insurance proceeds received for damage to property
Purchases of investments
Investments in unconsolidated affiliates
Cash flow used in investing activities
Proceeds from borrowings and overdrafts
Repayments on borrowings and overdrafts
Payment of debt issuance costs
Dividends paid to shareholders
Dividends paid to noncontrolling interests
Payment of contingent consideration
Cash flow provided by financing activities
Effect of foreign currency exchange rate changes on cash
(Decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period
Reconciliation from Net Income to Adjusted EBITDA - Unaudited