Dole plc Reports Fourth Quarter and Full Year 2022 Financial Results

DUBLIN, March 07, 2023--(BUSINESS WIRE)--Dole plc (NYSE: DOLE) ("Dole" or the "Group" or the "Company") today released its financial results for the three months and year ended December 31, 2022.

Highlights for the year ended December 31, 2022:

• First full year of Dole plc results post-acquisition

• Good progress made on integration of legacy businesses and rebranding of European operations

• Launch of Dole Exotics and the "BeExotic" brand

• Released first Dole plc Sustainability Report, outlining medium to long-term sustainability goals

• Post year end, announced the Agreement to sell our Fresh Vegetables division to Fresh Express, for gross proceeds of approximately $293.0 million

• Satisfactory full year financial performance delivered in a challenging operating environment

• Full year revenue of $9.2 billion and Adjusted EBITDA¹ of $337.7 million, in-line with our latest guidance

Financial Highlights – Unaudited

	Three Months Ended						Year Ended
	December 31, 2022			December 31, 2021			December 31, 2022			December 31, 2021			December 31, 2021 Pro-forma2
	(U.S. Dollars in millions, except per share amounts)
Revenue	2,356			2,251			9,229			6,454			9,286
Net Income (Loss)	13.3			(24.6	)		111.7			16.8			177.6
Net Income (Loss) attributable to Dole plc	6.8			(29.3	)		86.5			(7.2	)		151.7
Diluted EPS	0.07			(0.31	)		0.91			(0.10	)		1.60
Adjusted EBITDA1	74.4			61.1			337.7			290.1			393.6
Adjusted Net Income1	8.9			0.0			92.0			73.1			141.2
Adjusted Diluted EPS1	0.09			0.00			0.97			1.01			1.49

1 Dole plc reports its financial results in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). See full GAAP financial results in the appendix. Adjusted EBIT, Adjusted EBITDA, Adjusted Net Income, Adjusted Earnings Per Share and Net Debt are non-GAAP financial measures. Refer to the appendix of this release for an explanation and reconciliation of these and other non-GAAP financial measures used in this release to comparable GAAP financial 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.

Commenting on the results, Carl McCann, Executive Chairman said:

"We were very pleased to have a strong final quarter. We delivered Adjusted EBITDA growth of 21.7% for the fourth quarter and our full year revenue and Adjusted EBITDA were in line with guidance.

"Post year end, we announced the sale of our Fresh Vegetables business. This sale will strengthen the financial position of the Group and increase our focus on our core activities.

"With our diversified product offering and wide geographic footprint, we believe our business is well positioned for growth. For the 2023 financial year, we are targeting Adjusted EBITDA of $350.0 million.

"We thank all of our talented people for their dedication and significant contributions during this past year."

Group Results – Fourth Quarter

Revenue increased 4.7%, or $104.7 million, primarily due to higher pricing across the Group. On a like-for-like basis³, excluding the impact of foreign currency translation and acquisitions and divestitures, revenue increased 10.2%, or $229.0 million, with growth across all segments.

Adjusted EBITDA increased 21.7%, or $13.3 million, primarily driven by a strong quarter for the Fresh Fruit segment, partially offset by challenges in our Diversified Americas and Diversified EMEA segments and a loss in Fresh Vegetables. On a like-for-like basis, Adjusted EBITDA increased 29.0%.

Adjusted Net Income increased $8.9 million, predominantly due to the increases in Adjusted EBITDA, partially offset by a lower income tax benefit and higher interest expense. Adjusted Diluted EPS was $0.09 compared to $0.00 in the prior year.

Group Results – Full Year

Revenue decreased 0.6%, or $56.8 million, on a pro-forma comparative basis; however, on a like-for-like basis, revenue increased 5.0%. The increase was driven by inflation-justified price increases across the Group.

Adjusted EBITDA decreased 14.2%, or $55.9 million, on a pro-forma comparative basis, primarily due to losses incurred by the Fresh Vegetables segment following a challenging year, as well as the negative impact of foreign currency translation. On a like-for-like basis, Adjusted EBITDA decreased 10.4%.

Adjusted Net Income decreased by 34.9%, or $49.2 million, on a pro-forma comparative basis, predominantly due to the decrease in Adjusted EBITDA and higher interest expense. Adjusted Diluted EPS decreased by 34.9% to $0.97.

Vegetables Transaction

On January 30, 2023, we entered into a Stock Purchase Agreement (the "Agreement") with Fresh Express Acquisitions LLC ("Fresh Express"), a wholly owned subsidiary of Chiquita Holdings Limited, pursuant to which Fresh Express has agreed to acquire our Fresh Vegetables division for approximately $293.0 million in cash, subject to certain adjustments set forth in the Agreement (the "Vegetables Transaction"). The Vegetables Transaction is expected to close after regulatory approvals are obtained, subject to the satisfaction or waiver of customary closing conditions.

_________________________

3 Like-for-like basis refers to the measure excluding the impact of foreign currency translation movements and acquisitions and divestitures. Refer to the Appendix for further detail on these impacts and the calculation of like-for-like variances.

Selected Segmental Financial Information

	Three Months Ended
	December 31, 2022								December 31, 2021
	(U.S. Dollars in thousands)
	Revenue				Adjusted EBITDA				Revenue				Adjusted EBITDA
Fresh Fruit	$	740,167			$	41,233			$	680,881			$	15,694
Diversified Fresh Produce - EMEA		751,594				23,630				815,330				29,363
Diversified Fresh Produce - Americas & ROW		573,936				15,557				479,702				20,574
Fresh Vegetables		315,082				(6,026	)			296,848				(4,520	)
Intersegment		(24,581	)			—				(21,281	)			—
Total	$	2,356,198			$	74,394			$	2,251,480			$	61,111

	Year Ended
	December 31, 2022								December 31, 2021 Pro-forma
	(U.S. Dollars in thousands)
	Revenue				Adjusted EBITDA				Revenue				Adjusted EBITDA
Fresh Fruit	$	3,047,149			$	212,175			$	2,877,030			$	209,999
Diversified Fresh Produce - EMEA		3,152,561				114,718				3,438,341				131,126
Diversified Fresh Produce - Americas & ROW		1,965,667				44,277				1,779,065				53,069
Fresh Vegetables		1,205,902				(33,446	)			1,280,594				(614	)
Intersegment		(142,426	)			—				(89,358	)			—
Total	$	9,228,853			$	337,724			$	9,285,672			$	393,580

Fourth Quarter Commentary

Fresh Fruit

Revenue increased 8.7%, or $59.3 million, compared to the prior year quarter. Revenue was positively impacted by higher worldwide pricing of bananas, higher commercial cargo revenues and increases in volumes of pineapples sold in core markets, partially offset by lower volumes of bananas sold.

Adjusted EBITDA increased significantly by 162.7%, or $25.5 million. Adjusted EBITDA was positively impacted by higher revenue, partially offset by higher fruit sourcing costs and higher costs of shipping, packaging and handling.

Diversified Fresh Produce – EMEA

Revenue decreased 7.8%, or $63.7 million, primarily driven by a negative translation impact on currency of $117.3 million due to the strengthening of the U.S. dollar against the European currencies. On a like-for-like basis, revenue increased 6.9%, or $56.6 million, primarily driven by inflation-justified price increases across the segment.

Adjusted EBITDA decreased 19.5%, or $5.7 million. On a like-for-like basis, excluding the negative impact of currency translation of $4.4 million, Adjusted EBITDA decreased 4.8%, or $1.4 million. The decrease in Adjusted EBITDA was primarily a result of losses on crop yield in South Africa and a weaker quarter in our Northern European and Irish businesses, offset by a stronger performance by our Spanish, Czech and Dutch businesses.

Diversified Fresh Produce – Americas & ROW

Revenue increased 19.6%, or $94.2 million, primarily driven by higher pricing and volumes of cherries in Chile, higher pricing for potatoes and onions in North America and overall positive growth in our North American operations.

Adjusted EBITDA decreased 24.4%, or $5.0 million. The decrease in Adjusted EBITDA was primarily due to a weak season for Chilean apples and kiwis and raspberries in North America, partially offset by a strong start to the Chilean cherry season and continued positive performance of potatoes and onions in North America.

Fresh Vegetables

Revenue increased 6.1%, or $18.2 million. This increase was primarily driven by price increases realized for value-added products and continued strong pricing of fresh-packed products, partially offset by lower volumes of both value-added and fresh-packed products.

Adjusted EBITDA decreased 33.3%, or $1.5 million. The decrease in Adjusted EBITDA was primarily driven by a challenging quarter in value-added products, due to sourcing challenges which led to lower volumes and higher input costs, as well as by the continued impact of inflationary cost increases on freight, packaging materials, food ingredients and labor. These challenges in value-added products were partially offset by improved performance for fresh-packed products. The prior year quarter was adversely impacted by the packaged salads recall announced on December 24, 2021.

Full Year Commentary

Fresh Fruit

Revenue increased 5.9%, or $170.1 million, on a pro-forma comparative basis. The increase was predominantly driven by higher worldwide pricing of bananas and higher commercial cargo revenues.

Adjusted EBITDA increased 1.0%, or $2.2 million, on a pro-forma comparative basis. Adjusted EBITDA was positively impacted by higher revenue, partially offset by lower volumes of pineapples in North America and higher costs of ocean and inland freight, packaging, fertilizers and other materials.

Diversified Fresh Produce – EMEA

Revenue decreased 8.3%, or $285.8 million, on a pro-forma comparative basis, primarily driven by a negative translation impact on currency of $418.9 million and a net unfavorable impact on revenue from acquisitions and divestitures of $92.6 million. On a like-for-like basis, revenue increased 6.6%, or $225.7 million, primarily driven by inflation-justified price increases across the segment, as well as an increase in food service activity from the general easing of COVID-19 restrictions.

Adjusted EBITDA decreased 12.5%, or $16.4 million, on a pro-forma comparative basis. On a like-for-like basis, excluding the negative impact of currency translation of $16.3 million, Adjusted EBITDA was flat. Strong performance in our Spanish, U.K. and Dutch businesses and an overall increase in average selling prices was offset by logistical challenges on trading in Northern Europe and losses on crop yield in South Africa.

Diversified Fresh Produce – Americas & ROW

Revenue increased 10.5%, or $186.6 million, on a pro-forma comparative basis, primarily driven by higher pricing for potatoes and onions in North America, as well as by good performance from avocados and a strong start to the Chilean cherry season.

Adjusted EBITDA decreased 16.6%, or $8.8 million, on a pro-forma comparative basis. The decrease in Adjusted EBITDA was primarily due to a challenging end to the Chilean grape season, weaker performance for apples and kiwis in South America and lower pricing for raspberries in North America. These negative impacts were partially offset by strong performance for potatoes, onions and avocados in North America and growth for Chilean cherries.

Fresh Vegetables

Revenue decreased 5.8%, or $74.7 million, on a pro-forma comparative basis. Revenue was impacted by lower volumes following the packaged salads recall and plant suspension at the outset of 2022 and planned reduction of fresh-packed vegetables volumes.

Adjusted EBITDA decreased $32.8 million on a pro-forma comparative basis. The decrease in Adjusted EBITDA was primarily a result of lower revenue following the packaged salads recall and inflationary cost increases in freight, packaging materials, food ingredients and product sourcing. Unfavorable weather events in the second half of the year also impacted product sourcing. These challenges were partially offset by improved performance for fresh-packed products.

Capital Expenditures

Capital expenditures for the year ended December 31, 2022 were $98.0 million and included investments in farm renovations and greenhouse projects across our growing regions, the acquisition of an additional farm in Peru and ongoing investments in information technology, logistics and efficiency projects in our warehouses and processing facilities.

Net Debt

Net Debt as of December 31, 2022 was $1.0 billion.

Outlook and Strategic Priorities for Fiscal Year 2023 (forward-looking statement)

The operating environment in 2023 continues to bring both new opportunities and new challenges.

We are continuing to see improvements in global supply chains and signs of moderating inflation, which can have a positive impact on our business. However, we have also witnessed further weather events, such as colder weather in Spain and Northern Africa, which have created challenges for importers in Northern Europe at the start of the year.

Within our own business, we recently experienced a cybersecurity incident identified as ransomware. We moved quickly to contain the threat and have been working closely with leading cybersecurity experts to remediate the issue and secure our systems. We have also been cooperating with law enforcement. The incident had a limited overall impact on our operations; however, it was disruptive for our Chilean and Fresh Vegetables businesses in particular.

Overall, for full year 2023, we believe our business is well positioned for growth. While forecasting in the current environment is complex, we are targeting full year Adjusted EBITDA of $350.0 million. This target assumes no contribution from the Fresh Vegetables division.

The above outlook includes non-GAAP financial measures. Please refer to the appendix of this release for an explanation and reconciliation of our historical non-GAAP financial measures used in this release to comparable GAAP financial measures.

Dividend

On March 6, 2023, the Board of Directors of Dole plc declared a cash dividend for the fourth quarter of 2022 of $0.08 per share, payable on April 21, 2023 to shareholders of record on March 31, 2023. A cash dividend of $0.08 per share was paid on January 6, 2023 for the third quarter of 2022.

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 fourth quarter and full year 2022 financial results. The webcast can be accessed at www.doleplc.com/investors.

The conference call can be accessed live by dialing (646) 307-1963 in the US or +353 (1) 582 2023 in Ireland and +44 20 3481 4247 for UK and other international participants. The conference ID is 4191785.

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.

Appendix
Consolidated Statements of Operations - Unaudited
	Three Months Ended								Year Ended
	December 31, 2022				December 31, 2021				December 31, 2022				December 31, 2021				December 31, 2021
																	Pro-forma
	(U.S. Dollars and shares in thousands, except per share amounts)
Revenues, net	$	2,356,198			$	2,251,480			$	9,228,853			$	6,454,402			$	9,285,672
Cost of sales4		(2,198,911	)			(2,157,090	)			(8,634,144	)			(6,105,271	)			(8,565,685	)
Gross profit		157,287				94,390				594,709				349,131				719,987
Selling, marketing, general and administrative expenses4		(127,669	)			(130,873	)			(491,712	)			(349,769	)			(517,712	)
Merger, transaction and other related costs		—				(1,258	)			—				(30,072	)			—
(Loss) gain on disposal of businesses		(50	)			606				192				11				11
Impairment of property, plant and equipment		(397	)			—				(397	)			—				—
Gain on asset sales		2,559				319				11,634				581				3,323
Operating income (loss)		31,730				(36,816	)			114,426				(30,118	)			205,609
Other income (expense), net		(9,112	)			791				11,322				8,658				20,572
Interest income		2,046				2,112				6,642				3,938				5,321
Interest expense		(19,761	)			(12,843	)			(61,485	)			(27,030	)			(45,520	)
Income (loss) before income taxes and equity earnings		4,903				(46,756	)			70,905				(44,552	)			185,982
Income tax benefit (expense)		5,704				18,171				34,059				13,333				(32,089	)
Equity method earnings		2,698				4,009				6,726				48,027				23,658
Net income (loss)		13,305				(24,576	)			111,690				16,808				177,551
Less: Net income attributable to noncontrolling interests		(6,524	)			(4,675	)			(25,194	)			(24,027	)			(25,900	)
Net income (loss) attributable to Dole plc	$	6,781			$	(29,251	)		$	86,496			$	(7,219	)		$	151,651
Net income (loss) per share attributable to Dole plc – basic	$	0.07			$	(0.31	)		$	0.91			$	(0.10	)		$	1.60
Net income (loss) per share attributable to Dole plc – diluted	$	0.07			$	(0.31	)		$	0.91			$	(0.10	)		$	1.60
Weighted average shares outstanding – basic		94,899				94,878				94,886				72,190				94,878
Weighted average shares outstanding – diluted		94,928				95,041				94,906				72,190				95,030

4 The consolidated statement of operations for the three months ended December 31, 2021 reflects a reclassification of $30.7 million to selling, marketing, general and administrative expenses from cost of sales in order to correct the presentation of expenses. Management does not believe such reclassification is necessary in the consolidated statement of operations for the year ended December 31, 2021.

Consolidated Balance Sheets - Unaudited
	December 31, 2022				December 31, 2021
ASSETS	(U.S. Dollars in thousands)
Cash and cash equivalents	$	228,840			$	250,561
Short-term investments		5,367				6,115
Trade receivables, net of allowances for credit losses of $19,130 and $22,064, respectively		605,154				719,114
Grower advance receivables, net of allowances of $15,817 and $9,606, respectively		120,940				72,350
Other receivables, net of allowances of $14,810 and $14,066, respectively		137,575				125,908
Inventories, net of allowances of $4,410 and $7,447, respectively		436,878				410,737
Prepaid expenses		55,045				45,339
Other current assets		15,034				11,011
Assets held-for-sale		645				200
Total current assets		1,605,478				1,641,335
Long-term investments		16,498				23,433
Investments in unconsolidated affiliates		124,239				128,407
Actively marketed property..		31,007				50,364
Property, plant and equipment, net of accumulated depreciation of $404,009 and $283,677, respectively		1,343,307				1,430,850
Operating lease right-of-use assets		392,797				368,632
Goodwill		497,453				511,333
DOLE brand		306,280				306,280
Other intangible assets, net of accumulated amortization of $120,315 and $117,499 respectively		50,990				62,046
Other assets		159,681				98,917
Deferred tax assets, net		64,112				46,371
Total assets	$	4,591,842			$	4,667,968
LIABILITIES AND EQUITY
Accounts payable	$	729,615			$	696,766
Income taxes payable		11,558				10,316
Accrued liabilities		465,626				464,931
Bank overdrafts		8,623				9,395
Current portion of long-term debt, net		97,435				51,785
Current maturities of operating leases		81,968				73,046
Payroll and other tax		28,913				35,212
Contingent consideration		1,791				2,958
Pension and postretirement benefits		17,287				17,664
Dividends payable and other current liabilities		17,698				9,078
Total current liabilities		1,460,514				1,371,151
Long-term debt, net		1,127,321				1,297,808
Operating leases, less current maturities		320,272				305,714
Deferred tax liabilities, net		143,376				145,689
Income tax payable, less current portion		30,458				40,439
Contingent consideration, less current portion		5,022				4,302
Pension and postretirement benefits, less current portion		124,646				152,149
Other long-term liabilities		61,248				105,310
Total liabilities	$	3,272,857			$	3,422,562
Commitments and contingent liabilities:
Redeemable noncontrolling interests		32,311				32,776
Stockholders’ equity:
Common stock — $0.01 par value; 300,000,000 shares authorized and 94,899,194 shares outstanding as of December 31, 2022 and 300,000,000 shares authorized and 94,877,706 shares outstanding as of December 31, 2021		949				950
Additional paid-in capital		795,063				792,223
Retained earnings		469,249				413,335
Accumulated other comprehensive loss		(104,133	)			(125,919	)
Total equity attributable to Dole plc		1,161,128				1,080,589
Equity attributable to noncontrolling interests		125,546				132,041
Total equity		1,286,674				1,212,630
Total liabilities, redeemable noncontrolling interests and equity	$	4,591,842			$	4,667,968

Consolidated Statements of Cash Flows - Unaudited
	Year Ended
	December 31, 2022				December 31, 2021
Operating Activities	(U.S. Dollars in thousands)
Net income	$	111,690			$	16,808
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization		130,997				72,955
Incremental charges on purchase accounting valuation of biological assets and inventory		41,145				65,916
Net (gain) on sale of assets and asset write-offs		(11,634	)			(581	)
Impairment of property, plant and equipment		397				—
Net (gain) loss on financial instruments		7,167				(3,910	)
Stock-based compensation expense		4,500				815
Equity method earnings		(6,726	)			(48,027	)
Net (gain) on disposal of businesses		(192	)			(11	)
Amortization of debt discounts and debt issuance costs		6,213				2,634
Deferred tax (benefit)		(35,044	)			(23,168	)
Pension and other postretirement benefit plan expense		3,151				2,913
Dividends received from equity method investees		9,817				12,137