Dole Food Company announces Q4, full year results

Dole Food Company announces Q4, full year results

Dole Food Company, Inc. announced financial and operating results for the fourth quarter with $6.9 billion revenue increase and full year ended January 1, 2011.

Dole Food Company, Inc. announced financial and operating results for the fourth quarter and full year ended January 1, 2011. For the fourth quarter, Dole reported Adjusted EBITDA of $21 million ($29 million, excluding charges for restructuring and long-term receivables) compared to $68 million for the fourth quarter of 2009. For the full year, Dole reported Adjusted EBITDA of $320 million ($353 million, excluding charges for restructuring and long-term receivables) compared to $417 million in 2009. Dole reported a GAAP loss from continuing operations for fiscal year 2010 of $34 million or ($0.39) per share. Comparable Income from continuing operations for fiscal year 2010 was $62 million, compared to $67 million in 2009 (see Exhibit 2).

David A. DeLorenzo, Dole's President and CEO said: "We are quite pleased with the performance of our fresh vegetables and packaged foods segments in 2010. Our North America fresh vegetables business performed strongly, more than doubling its EBITDA, driven by higher value-added pricing and volumes, and improved plant efficiencies. Our packaged foods division achieved another record year, while introducing successful new products, such as our new "no sugar added" FRUIT BOWLS(R) in 100% juice and securing price increases to offset rising input costs. Of course, we were not immune to the challenges that confronted the entire banana industry last year, when extremely adverse weather conditions disrupted production, increasing fruit costs in Latin America. In addition, the temporary closure of the Iranian market drove down banana pricing in all Asian markets, including those in which Dole sells. With a difficult fourth quarter behind us, and with market prices improving, we are focused on a strong recovery in 2011."

Revenues

For fiscal 2010, revenues increased 2% to $6.9 billion. The increase was primarily due to higher worldwide volumes in packaged foods and higher North America packaged salad sales in fresh vegetables. Fresh fruit sales increased slightly as higher sales in the European ripening and distribution business were partially offset by lower banana volumes in North America and Europe. In addition, revenues were impacted by divestitures of Latin America box plants in 2009.

Adjusted EBITDA

For fiscal year 2010, Adjusted EBITDA of $320 million included $33 million of charges related to restructuring and long-term receivables. The decrease in Adjusted EBITDA was primarily due to lower fresh fruit earnings, which decreased as a result of lower banana and fresh pineapple earnings worldwide as well as lower earnings in the European ripening and distribution business. These factors were partially offset by a $27.3 million benefit from an arbitration settlement involving faulty manufactured containers sold to Dole. Fresh vegetables performance improved by $25 million due to better pricing, favorable product mix, and lower costs in packaged salads. Packaged salads earnings also benefited from a $5.3 million settlement with a fresh vegetables supplier, which was recorded during the fourth quarter. Packaged foods segment results were comparable to prior year as better earnings in the frozen fruit operations and Europe were offset by lower results in North America and Asia.

Fourth Quarter 2010

Earnings in the fourth quarter of 2010 were impacted by lower earnings in fresh fruit due to higher costs in Latin America and lower pricing in Asia bananas as compared to 2009. Fresh vegetables earnings in the fourth quarter of 2010 benefited from improved results in packaged salads, which were partially offset by lower earnings in fresh-packed vegetables, which had realized record prices in the fourth quarter of 2009. A favorable settlement with a fresh vegetables supplier also benefited the fourth quarter of 2010. Packaged foods' earnings improved slightly compared to 2009, with improved performance in frozen fruit, offset by lower earnings in Asia and North America packaged fruit.

Webcast

A replay of the webcast will be archived and available at www.dole.com.

Non-GAAP Measurements

EBIT, 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 is calculated from net income (loss) by adding loss or subtracting income from discontinued operations, net of income taxes, adding the loss or subtracting the gain on disposal of discontinued operations, net of income taxes, adding interest expense and adding income tax expense to net income. Adjusted EBITDA is calculated from EBIT 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 subtracting gain on asset sales. 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 certain derivative instruments (foreign currency and bunker fuel hedges and the cross currency swap), 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, and subtracting gain on asset sales, net of income taxes. These items have been adjusted because management excludes these amounts when evaluating the performance of Dole. For 2009, debt retirement costs in connection with Dole'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.

EBIT, 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 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, 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 EBIT, Adjusted EBITDA and Comparable Income (loss) from continuing operations (total and per share) herein because management believes that EBIT and Adjusted EBITDA are useful performance measures for Dole. In addition, EBIT, Adjusted EBITDA and Comparable Income (loss) from continuing operations (total and per share) are presented because Dole's management believes that these measures are frequently used by securities analysts, investors and others in the evaluation of Dole.

Dole, with 2010 net revenues of $6.9 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.

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