Yahoo Finance Dole plc Reports Third Quarter 2022 Financial Results
DUBLIN, November 17, 2022--(BUSINESS WIRE)--Dole plc (NYSE: DOLE) ("Dole" or the "Group" or the "Company") today released its financial results for the three and nine months ended September 30, 2022.
Highlights for the three months ended September 30, 2022:
Revenue of $2.3 billion
Net Income of $46.6 million and Diluted EPS of $0.42
Adjusted EBITDA1 of $73.0 million
Adjusted Net Income1 of $13.5 million and Adjusted Diluted EPS1 of $0.14
Financial Highlights - Unaudited
Three Months Ended | |||
September 30, | September 30, | September 30, | |
Revenue - $’m | 2,268 | 1,942 | 2,306 |
Net Income - $'m | 46.6 | (21.6) | 35.9 |
Net Income attributable to Dole plc - $'m | 39.8 | (28.5) | 28.6 |
Diluted EPS - $ | 0.42 | (0.35) | 0.30 |
Adjusted EBITDA - $’m1 | 73.0 | 54.9 | 58.1 |
Adjusted Net Income - $’m1 | 13.5 | 6.0 | 2.4 |
Adjusted Diluted EPS - $1 | 0.14 | 0.07 | 0.03 |
Nine Months Ended | |||
September 30, | September 30, | September 30, | |
Revenue - $’m | 6,873 | 4,203 | 7,034 |
Net Income - $'m | 98.4 | 41.4 | 177.1 |
Net Income attributable to Dole plc - $'m | 79.7 | 22.0 | 155.8 |
Diluted EPS - $ | 0.84 | 0.34 | 1.64 |
Adjusted EBITDA - $’m1 | 263.3 | 229.0 | 332.5 |
Adjusted Net Income - $’m1 | 83.0 | 73.1 | 127.7 |
Adjusted Diluted EPS - $1 | 0.87 | 1.13 | 1.34 |
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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, Adjusted Effective tax rate 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 are pleased with the strong results delivered for the third quarter of 2022, which were significantly ahead of the prior year and ahead of our own expectations. The broad diversification of our product offering, and the wide geographic footprint of our vertically integrated business provides us with a strong foundation for continued growth.
As we move towards the end of the financial year, we are now targeting Adjusted EBITDA within our previously guided range but at the lower end.
Our talented and dedicated people are our greatest asset, and we thank them for their significant contributions during the past year."
Revenue for the three months ended September 30, 2022 increased to $2.3 billion from $1.9 billion. The increase was primarily driven by the impact of revenue from Legacy Dole following the acquisition by Dole plc. Compared on a pro- forma basis, revenue decreased by 1.7%, or $38.5 million, primarily due to negative foreign currency translation movements of $136.8 million and a net unfavorable impact of $17.9 million from acquisitions and divestitures. On a like- for-like basis3, revenue increased 5.0%, or $116.2 million, with growth in all segments with the exception of Fresh Vegetables.
Adjusted EBITDA for the three months ended September 30, 2022 increased to $73.0 million. On a pro-forma comparative basis, Adjusted EBITDA increased 25.7%, or $14.9 million, primarily due to an increase in the Fresh Fruit segment as a result of higher pricing of bananas and strong performance in the commercial cargo business. These increases were offset by a negative impact of currency translation of $4.0 million, primarily on the reported results of the Diversified EMEA segment, and losses in the Fresh Vegetables and Diversified Americas segments.
Adjusted Net Income for the three months ended September 30, 2022 was $13.5 million, compared to $2.4 million on a pro-forma basis. The increases on a pro-forma comparative basis were predominantly due to the increases in Adjusted EBITDA noted above, offset by higher interest expense. Adjusted Diluted EPS for the three months ended September 30, 2022 was $0.14 compared to $0.03 for the pro-forma comparative three months ended September 30, 2021.
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3 | Like-for-like basis refers to the measure excluding the impact of foreign currency translation movements and acquisitions and divestitures. | |
Selected Segmental Financial Information (Unaudited)
Three Months Ended | |||||||||||||||
September 30, 2022 | September 30, 2021 Pro-forma | ||||||||||||||
(U.S. Dollars in thousands) | |||||||||||||||
Revenue | Adjusted EBITDA | Revenue | Adjusted EBITDA | ||||||||||||
Fresh Fruit | $ | 751,348 | $ | 51,076 | $ | 672,737 | $ | 16,994 | |||||||
Diversified Fresh Produce - EMEA | 759,964 | 31,616 | 877,423 | 35,851 | |||||||||||
Diversified Fresh Produce - Americas & ROW | 479,839 | (725 | ) | 453,704 | 4,280 | ||||||||||
Fresh Vegetables | 306,843 | (8,987 | ) | 323,772 | 925 | ||||||||||
Intersegment | (30,456 | ) | — | (21,599 | ) | — | |||||||||
Total | $ | 2,267,538 | $ | 72,980 | $ | 2,306,037 | $ | 58,050 | |||||||
Nine Months Ended | |||||||||||||||
September 30, 2022 | September 30, 2021 | ||||||||||||||
(U.S. Dollars in thousands) | |||||||||||||||
Revenue | Adjusted EBITDA | Revenue | Adjusted EBITDA | ||||||||||||
Fresh Fruit | $ | 2,306,982 | $ | 170,942 | $ | 2,196,149 | $ | 194,307 | |||||||
Diversified Fresh Produce - EMEA | 2,400,967 | 91,088 | 2,623,011 | 101,762 | |||||||||||
Diversified Fresh Produce - Americas & ROW | 1,391,731 | 28,720 | 1,299,363 | 32,494 | |||||||||||
Fresh Vegetables | 890,820 | (27,420 | ) | 983,746 | 3,906 | ||||||||||
Intersegment | (117,845 | ) | — | (68,077 | ) | — | |||||||||
Total | $ | 6,872,655 | $ | 263,330 | $ | 7,034,192 | $ | 332,469 | |||||||
Fresh Fruit
Revenue for the three months ended September 30, 2022 increased 11.7%, or $78.6 million, compared to pro-forma revenue for the three months ended September 30, 2021. Revenue was positively impacted by increased pricing worldwide for bananas, increased pricing in commercial cargo and higher volumes of bananas in North America, partially offset by lower volumes of bananas in Europe and Latin America.
Adjusted EBITDA for the three months ended September 30, 2022 increased 200.6%, or $34.1 million, compared to the prior year on a pro-forma basis. Adjusted EBITDA was positively impacted by higher pricing of bananas in core markets and strong performance in the commercial cargo business, partially offset by higher costs of ocean and inland freight, packaging, fertilizers and other materials.
Diversified Fresh Produce – EMEA
Revenue for the three months ended September 30, 2022 decreased 13.4%, or $117.5 million, compared to pro-forma revenue for the three months ended September 30, 2021. This was primarily driven by a negative translation impact on currency of $134.9 million due to the strengthening of the U.S. dollar in the quarter against the euro, Swedish krona, and sterling. In addition, there was a net unfavorable impact on revenue from divestitures and acquisitions of $17.9 million in the quarter. On a like-for-like basis, revenue increased 4.0%, or $35.3 million, across the business, driven by increased pricing.
Adjusted EBITDA for the three months ended September 30, 2022 decreased 11.8%, or $4.2 million, compared to the prior year on a pro-forma basis. The decrease in Adjusted EBITDA was primarily a result of a negative currency translation effect of $4.7 million when translating the results of euro, Swedish krona and sterling businesses into the U.S. dollar, which strengthened significantly against European currencies when compared to the prior year. On a like-for-like basis, Adjusted EBITDA increased 0.1% with strong performance from our Northern European and Spanish businesses offset by a more challenging quarter for our U.K. wholesale businesses.
Diversified Fresh Produce – Americas & ROW
Revenue for the three months ended September 30, 2022 increased 5.8%, or $26.1, million versus the prior year on a pro- forma basis. The increase was driven primarily by higher overall average selling prices, particularly in the North American market for potato and onion products.
Adjusted EBITDA for the three months ended September 30, 2022 was a loss of $0.7 million compared to Adjusted EBITDA of $4.3 million in the pro-forma comparative period, primarily due to a difficult end to the Chilean grape season driven by supply chain challenges, offset in part by strong performance in potato and onion products in North America.
Fresh Vegetables
Revenue for the three months ended September 30, 2022 decreased 5.2% or $16.9 million compared to the prior year on a pro-forma basis. Revenue was negatively impacted by lower volumes of value added salads. These decreases were partially offset by significantly stronger pricing in fresh packed products, as well as by improved pricing in value added salads.
Adjusted EBITDA for the three months ended September 30, 2022 was a loss of $9.0 million compared to Adjusted EBITDA of $0.9 million in the pro-forma comparative period. Adjusted EBITDA was negatively impacted by lower volumes, as well as by inflationary cost increases in freight, packaging materials, food ingredients and labor. Fresh Vegetables was also impacted by higher sourcing costs for vegetables due to weather-related events. These challenges in the value added salads business were partially offset by improved performance for fresh packed products.
Capital Expenditures
Capital expenditures for the nine months ended September 30, 2022 were $66.6 million, which included investments in farm renovations and glasshouse projects across our growing regions, the acquisition of an additional farm in Peru and ongoing investments in IT, logistics and efficiency projects in our warehouses and processing facilities.
Net Debt
Net Debt as of September 30, 2022 was $1.1 billion.
Outlook for Fiscal Year 2022 (forward-looking statement)
For fiscal year 2022, Dole is targeting:
Revenue in the range of $9.1 billion to $9.4 billion
Adjusted EBITDA at the lower end of the range of $330.0 million to $350.0 million
Capital Expenditures of approximately $95.0 million (reflects a reduction from $110.0 million)
Interest Expense of approximately $60.0 million
Adjusted Effective tax rate in the range of 23% to 25%
The global economic environment remains dynamic, and we are currently seeing positive trends, along with some further challenges, as we progress through the final quarter of this financial year. Our focus remains on delivering operating efficiencies and being disciplined in our deployment of capital, while continuing to push for inflation-justified price increases. Our scale and wide geographic footprint, along with our diverse portfolio of healthy and nutritious products, leaves us well positioned as we move towards 2023.
For the full year, we now expect Adjusted EBITDA to be at the lower end of our previously guided range due to the ongoing challenges within our Fresh Vegetables segment, which has taken longer in its recovery, as well as the impact of the unusual supply chain challenges encountered in the third quarter at the end of the Chilean grape season in North America.
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 November 16, 2022, the Board of Directors of Dole plc declared a cash dividend for the third quarter of 2022 of $0.08 per share, payable on January 6, 2023 to shareholders of record on December 16, 2022. A cash dividend of $0.08 per share was paid on October 7, 2022 for the second 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 third 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 +1 646 664 1960 in the U.S., or for international callers by dialing +44 203 936 2999. The access code is 716863.
A replay of the call will be available through November 24, 2022, by dialing +1 845 709 8569 in the U.S., or for international callers by dialing +44 203 936 3001. The replay access code is 303327.
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 Statement of Operations - Unaudited | ||||||||||||
Three Months Ended | ||||||||||||
September 30, | September 30, | September 30, | ||||||||||
Pro-forma | ||||||||||||
(U.S. Dollars and shares in thousands, except per share amounts) | ||||||||||||
Revenues, net | $ | 2,267,538 | $ | 1,942,185 | $ | 2,306,037 | ||||||
Cost of sales | (2,134,062 | ) | (1,843,415 | ) | (2,168,311 | ) | ||||||
Gross profit | 133,476 | 98,770 | 137,726 | |||||||||
Selling, marketing, general and administrative expenses | (116,326 | ) | (110,213 | ) | (121,698 | ) | ||||||
Merger, transaction and other related costs | — | (13,719 | ) | — | ||||||||
Loss on disposal of businesses | — | (2,134 | ) | (2,134 | ) | |||||||
Gain on asset sales | 654 | 135 | 4,870 | |||||||||
Operating income (loss) | 17,804 | (27,161 | ) | 18,764 | ||||||||
Other income, net | 9,312 | 7,167 | 15,441 | |||||||||
Interest income | 1,505 | 990 | 1,138 | |||||||||
Interest expense | (17,095 | ) | (9,341 | ) | (11,431 | ) | ||||||
Income (loss) before income taxes and equity earnings | 11,526 | (28,345 | ) | 23,912 | ||||||||
Income tax benefit | 34,778 | 3,401 | 4,091 | |||||||||
Equity method earnings | 300 | 3,381 | 7,901 | |||||||||
Net income (loss) | 46,604 | (21,563 | ) | 35,904 | ||||||||
Less: Net income attributable to noncontrolling interests | (6,767 | ) | (6,953 | ) | (7,270 | ) | ||||||
Net income (loss) attributable to Dole plc | $ | 39,837 | $ | (28,516 | ) | $ | 28,634 | |||||
Net income (loss) per share attributable to Dole plc – basic | $ | 0.42 | $ | (0.35 | ) | $ | 0.30 | |||||
Net income (loss) per share attributable to Dole plc – diluted | $ | 0.42 | $ | (0.35 | ) | $ | 0.30 | |||||
Weighted average shares outstanding – basic | 94,891 | 82,166 | 94,878 | |||||||||
Weighted average shares outstanding – diluted | 94,908 | 82,166 | 95,030 | |||||||||
Nine Months Ended | ||||||||||||
September 30, 2022 | September 30, 2021 | September 30, 2021 | ||||||||||
Pro-forma | ||||||||||||
(U.S. Dollars and shares in thousands, except per share amounts) | ||||||||||||
Revenues, net | $ | 6,872,655 | $ | 4,202,922 | $ | 7,034,192 | ||||||
Cost of sales | (6,435,233 | ) | (3,917,484 | ) | (6,449,848 | ) | ||||||
Gross profit | 437,422 | 285,438 | 584,344 | |||||||||
Selling, marketing, general and administrative expenses | (364,043 | ) | (249,593 | ) | (383,338 | ) | ||||||
Merger, transaction and other related costs | — | (28,814 | ) | — | ||||||||
Gain (loss) on disposal of businesses | 242 | (595 | ) | (595 | ) | |||||||
Gain on asset sales | 9,075 | 262 | 12,381 | |||||||||
Operating income | 82,696 | 6,698 | 212,792 | |||||||||
Other income, net | 20,434 | 7,867 | 19,812 | |||||||||
Interest income | 4,596 | 1,826 | 3,209 | |||||||||
Interest expense | (41,724 | ) | (14,187 | ) | (34,385 | ) | ||||||
Income before income taxes and equity earnings | 66,002 | 2,204 | 201,428 | |||||||||
Income tax benefit (expense) | 28,355 | (4,838 | ) | (41,971 | ) | |||||||
Equity method earnings | 4,028 | 44,018 | 17,597 | |||||||||
Net income | 98,385 | 41,384 | 177,054 | |||||||||
Less: Net income attributable to noncontrolling interests | (18,670 | ) | (19,352 | ) | (21,225 | ) | ||||||
Net income attributable to Dole plc | $ | 79,715 | $ | 22,032 | $ | 155,829 | ||||||
Net income per share attributable to Dole plc – basic | $ | 0.84 | $ | 0.34 | $ | 1.64 | ||||||
Net income per share attributable to Dole plc – diluted | $ | 0.84 | $ | 0.34 | $ | 1.64 | ||||||
Weighted average shares outstanding – basic | 94,882 | 64,516 | 94,878 | |||||||||
Weighted average shares outstanding – diluted | 94,915 | 64,723 | 95,030 | |||||||||
Consolidated Balance Sheets - Unaudited | ||||||||
September 30, 2022 | December 31, 2021 | |||||||
ASSETS | (U.S. Dollars and shares in thousands) | |||||||
Cash and cash equivalents | $ | 221,476 | $ | 250,561 | ||||
Short-term investments | 5,090 | 6,115 | ||||||
Trade receivables, net of allowances for credit losses of $19,801 and $22,064, respectively | ... | |||||||
