6-K
Dole plc (DOLE)
6
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of November, 2022
Commission File Number 001-40695
Dole plc
(Exact name of registrant as specified in its charter)
Dole plc
29 North Anne Street
Dublin 7
D07 PH36
Ireland
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
☒ Form 20-F ◻ Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ◻
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ◻
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
On November 17, 2022, Dole plc (the "Company") will host a conference call and simultaneous webcast to discuss the Company's financial results for the three and nine months ended September 30, 2022. An archived replay of the webcast and the investor presentation used during the webcast will be available shortly after the live event has concluded in the Investors section of the Company's website, www.doleplc.com/investors. A copy of the press release is furnished herewith as Exhibit 99.1 and incorporated by reference herein.
EXHIBIT INDEX
Exhibit No. Description
DOLE PLC
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: November 17, 2022 | DOLE PLC<br><br>(Registrant) |
|---|---|
| By: /s/ Jacinta Devine | |
| Name: Jacinta Devine | |
| Title: Chief Financial Officer |
Document
Exhibit 99.1
Dole plc Reports Third Quarter 2022 Financial Results
DUBLIN – November 17, 2022 - 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, 2022 | September 30, 2021 | September 30, 2021<br><br>Pro-forma2 | |
| 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, 2022 | September 30, 2021 | September 30, 2021<br><br>Pro-forma2 | |
| 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 |
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.
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<br><br>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<br><br>Pro-forma | |||||||
| (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.
Investor Contact:
James O'Regan, Head of Investor Relations, Dole plc
+353 1 887 2794
Media Contact:
Brian Bell, Ogilvy
+353 87 2436 130
Appendix
Consolidated Statement of Operations - Unaudited
| Three 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 | $ | 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 | 567,931 | 719,114 | ||
| Grower advance receivables, net of allowances for credit losses of $10,650 and $9,606, respectively | 149,086 | 72,350 | ||
| Other receivables, net of allowances for credit losses of $14,235 and $14,066, respectively | 156,087 | 125,908 | ||
| Inventories, net of allowances of $1,949 and $7,447, respectively | 451,926 | 410,737 | ||
| Prepaid expenses | 56,134 | 45,339 | ||
| Other current assets | 27,694 | 11,011 | ||
| Assets held-for-sale | 80 | 200 | ||
| Total current assets | 1,635,504 | 1,641,335 | ||
| Long-term investments | 17,347 | 23,433 | ||
| Investments in unconsolidated affiliates | 115,952 | 128,407 | ||
| Actively marketed property | 36,842 | 50,364 | ||
| Property, plant and equipment, net of accumulated depreciation of $367,856 and $283,677, respectively | 1,323,421 | 1,430,850 | ||
| Operating lease right-of-use assets | 358,699 | 368,632 | ||
| Goodwill | 487,524 | 511,333 | ||
| DOLE brand | 306,280 | 306,280 | ||
| Other intangible assets, net of accumulated amortization of $112,087 and $117,499, respectively | 52,103 | 62,046 | ||
| Other assets | 147,017 | 98,917 | ||
| Deferred income tax assets | 47,179 | 46,371 | ||
| Total assets | $ | 4,527,868 | $ | 4,667,968 |
| LIABILITIES AND EQUITY | ||||
| Accounts payable | $ | 657,116 | $ | 696,766 |
| Income taxes payable | 17,190 | 10,316 | ||
| Accrued liabilities | 474,865 | 464,931 | ||
| Bank overdrafts | 20,284 | 9,395 | ||
| Notes payable and current portion of long-term debt, net | 78,984 | 51,785 | ||
| Current maturities of operating leases | 86,563 | 73,046 | ||
| Other tax | 27,296 | 35,212 | ||
| Contingent consideration | 1,700 | 2,958 | ||
| Pension and postretirement benefits | 16,873 | 17,664 | ||
| Dividends payable and other current liabilities | 19,313 | 9,078 | ||
| Total current liabilities | 1,400,184 | 1,371,151 | ||
| Long-term debt, net | 1,208,152 | 1,297,808 | ||
| Operating leases, less current maturities | 278,429 | 305,714 | ||
| Deferred income tax liabilities | 150,374 | 145,689 | ||
| Income tax payable, less current portion | 30,501 | 40,439 | ||
| Contingent consideration, less current portion | 4,729 | 4,302 | ||
| Pension and postretirement benefits, less current portion | 135,790 | 152,149 | ||
| Other long-term liabilities | 62,507 | 105,310 | ||
| Total liabilities | $ | 3,270,666 | $ | 3,422,562 |
| Commitments and contingent liabilities (See Note 16) | ||||
| Redeemable noncontrolling interests | 31,770 | 32,776 | ||
| Stockholders’ equity: | ||||
| Common stock — $0.01 par value; 300,000 shares authorized and 94,899 and 94,878 shares outstanding as of September 30, 2022 and December 31, 2021, respectively | 949 | 950 | ||
| Additional paid-in capital | 793,521 | 792,223 | ||
| Retained earnings | 470,125 | 413,335 | ||
| Accumulated other comprehensive loss | (154,137) | (125,919) | ||
| Total equity attributable to Dole plc | 1,110,458 | 1,080,589 | ||
| Equity attributable to noncontrolling interests | 114,974 | 132,041 | ||
| Total equity | 1,225,432 | 1,212,630 | ||
| Total liabilities, redeemable noncontrolling interests and equity | $ | 4,527,868 | $ | 4,667,968 |
Consolidated Statements of Cash Flows - Unaudited
| Nine Months Ended | ||||
|---|---|---|---|---|
| September 30, 2022 | September 30, 2021 | |||
| Operating Activities | (U.S. Dollars in thousands) | |||
| Net income | $ | 98,385 | $ | 41,384 |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||
| Depreciation and amortization | 97,827 | 42,537 | ||
| Incremental charges on purchase accounting valuation of biological assets and inventory | 40,464 | 29,180 | ||
| Asset write-offs and net gain on sale of assets | (9,075) | — | ||
| Net gain on financial instruments | (1,482) | (2,795) | ||
| Stock-based compensation expense | 3,118 | — | ||
| Equity method earnings | (4,028) | (36,998) | ||
| Net (gain) loss on disposal of businesses | (242) | 595 | ||
| Amortization of debt discounts and debt issuance costs | 4,546 | 904 | ||
| (Benefit) provision for deferred income taxes and other tax-related liabilities | (49,823) | 221 | ||
| Pension and other postretirement benefit plan benefit cost | 482 | 232 | ||
| Fair value movement on contingent consideration | 64 | 1,130 | ||
| Dividends received from equity method investees | 7,632 | 10,715 | ||
| Net gain on acquisitions and disposals of equity method investments | — | (7,020) | ||
| Other | (617) | 859 | ||
| Changes in operating assets and liabilities: | ||||
| Receivables, net of allowances | (35,896) | (120,091) | ||
| Inventories | (60,647) | (50,454) | ||
| Operating lease liabilities | 3,703 | 6,055 | ||
| Accrued and other current and long-term liabilities | 27,144 | 64,286 | ||
| Cash flow provided by (used in) operating activities | 121,555 | (19,260) | ||
| Investing Activities | ||||
| Sales of assets | 27,764 | 13,869 | ||
| Capital expenditures | (66,582) | (32,790) | ||
| Acquisitions, net of cash acquired | (4,886) | 99,733 | ||
| Insurance proceeds | 2,278 | 10,217 | ||
| Purchases of investments | (414) | (1,186) | ||
| Investments in unconsolidated affiliates | (801) | (909) | ||
| Proceeds from sale of investments in unconsolidated affiliates | — | 10,607 | ||
| Other | 25 | (1,343) | ||
| Cash flow (used in) provided by investing activities | (42,616) | 98,198 | ||
| Financing Activities | ||||
| Proceeds from borrowings and overdrafts | 1,008,423 | 1,714,671 | ||
| Repayments on borrowings and overdrafts | (1,050,928) | (2,056,485) | ||
| Payment of debt issuance costs | (265) | (21,108) | ||
| Dividends paid to shareholders | (22,770) | (17,092) | ||
| Dividends paid to noncontrolling interests | (20,981) | (20,444) | ||
| Payments of contingent consideration | (2,451) | — | ||
| Proceeds from exercise of share options | — | 8,012 | ||
| Proceeds received from issuance of common stock in initial public offering, net of issuance costs | — | 398,876 | ||
| Cash flow (used in) provided by financing activities | (88,972) | 6,430 | ||
| Effect of foreign currency exchange rate changes on cash | (19,052) | (11,657) | ||
| (Decrease) increase in cash and cash equivalents | (29,085) | 73,711 | ||
| Cash and cash equivalents at beginning of period | 250,561 | 160,503 | ||
| Cash and cash equivalents at end of period | $ | 221,476 | $ | 234,214 |
Reconciliation from Net Income to Adjusted EBITDA - Unaudited
The following information is provided to give quantitative information related to items impacting comparability. Refer to the 'Non-GAAP Financial Measures' section of this document for additional detail on each item.
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| September 30, 2022 | September 30, 2021 | September 30, 2021 | ||||
| Pro-forma | ||||||
| (U.S. Dollars in thousands) | ||||||
| Net income (Reported GAAP) | $ | 46,604 | $ | (21,563) | $ | 35,904 |
| Income tax benefit | (34,778) | (3,401) | (4,091) | |||
| Interest expense | 17,095 | 9,341 | 11,431 | |||
| Merger, transaction and other related costs | — | 13,719 | — | |||
| Mark to market (gains) losses | 2,310 | (2,921) | (2,572) | |||
| (Gain) on asset sales | (530) | — | (4,610) | |||
| Produce recalls | (442) | — | — | |||
| Incremental charges on biological assets and inventory related costs due to acquisition of Legacy Dole | 5,520 | 29,180 | — | |||
| Other items4 | (532) | (1,201) | (13,133) | |||
| Adjustments from equity method investments | 1,602 | 2,357 | 1,164 | |||
| Adjusted EBIT (Non-GAAP) | 36,849 | 25,511 | 24,093 | |||
| Depreciation | 30,424 | 21,103 | 29,368 | |||
| Amortization of intangible assets | 2,633 | 2,649 | 2,664 | |||
| Depreciation and amortization adjustments from equity method investments | 3,074 | 5,675 | 1,925 | |||
| Adjusted EBITDA (Non-GAAP) | $ | 72,980 | $ | 54,938 | $ | 58,050 |
4 For the three months ended September 30, 2022, other items is comprised of $1.0 million of restructuring and legal adjustments, partially offset by $0.5 million in asset write-downs, net of insurance proceeds. For the three months ended September 30, 2021, other items is comprised of $3.3 million in net gains on equity method acquisitions, partially offset by $2.1 million in losses on disposal of businesses, and on a pro-forma basis, it is comprised of $0.1 million in adjustments to restructuring and legal costs, $9.8 million in insurance proceeds, net of asset write-downs, and $5.3 million in gains on equity method acquisitions and disposals, partially offset by $2.1 million in losses on the disposal of a business.
| Nine Months Ended | ||||||
|---|---|---|---|---|---|---|
| September 30, 2022 | September 30, 2021 | September 30, 2021 | ||||
| Pro-forma | ||||||
| (U.S. Dollars in thousands) | ||||||
| Net income (Reported GAAP) | $ | 98,385 | $ | 41,384 | $ | 177,054 |
| Income tax (benefit) expense | (28,355) | 4,838 | 41,971 | |||
| Interest expense | 41,724 | 14,187 | 34,385 | |||
| Merger, transaction and other related costs | — | 28,814 | — | |||
| Mark to market (gains) | (5,819) | (1,856) | (3,835) | |||
| (Gain) on asset sales | (8,346) | — | (9,292) | |||
| Produce recalls | 15,809 | — | — | |||
| Incremental charges on biological assets and inventory related costs due to acquisition of Legacy Dole | 40,464 | 29,180 | — | |||
| Other items5 | (1,283) | (6,441) | (13,557) | |||
| Adjustments from equity method investments | 4,926 | 45,406 | 4,287 | |||
| Adjusted EBIT (Non-GAAP) | 157,505 | 155,512 | 231,013 | |||
| Depreciation | 89,579 | 34,316 | 86,681 | |||
| Amortization of intangible assets | 8,248 | 8,221 | 8,236 | |||
| Depreciation and amortization adjustments from equity method investments | 7,998 | 30,966 | 6,539 | |||
| Adjusted EBITDA (Non-GAAP) | $ | 263,330 | $ | 229,015 | $ | 332,469 |
5 For the nine months ended September 30, 2022, other items is comprised of $1.0 million in legal and restructuring adjustments and $0.3 million in gains on disposal of businesses. For the nine months ended September 30, 2021, other items is comprised of $7.0 million in net gains on equity method acquisitions and disposals, partially offset by $0.6 million in losses on disposal of businesses, and on a pro-forma basis it is comprised of $19.4 million in insurance proceeds, net of asset-write downs, and $9.0 million in net gains on equity method acquisitions and disposals, partially offset by $14.2 million in net restructuring and legal costs and $0.6 in losses on disposal of businesses.
Reconciliation from Net Income attributable to Dole plc shareholders to Adjusted Net Income - Unaudited
The following information is provided to give quantitative information related to items impacting comparability. Refer to the 'Non-GAAP Financial Measures' section of this document for additional detail on each item. Refer to the Appendix for supplementary detail.
| Three Months Ended | ||||||
|---|---|---|---|---|---|---|
| September 30, 2022 | September 30, 2021 | September 30, 2021 | ||||
| Pro-forma | ||||||
| (U.S. Dollars and shares in thousands, except per share amounts) | ||||||
| Net income (loss) attributable to Dole plc (Reported GAAP) | $ | 39,837 | $ | (28,516) | $ | 28,634 |
| Adjustments: | ||||||
| Amortization of intangible assets | 2,633 | 2,649 | 2,664 | |||
| Merger, transaction and other related costs | — | 13,719 | — | |||
| Mark to market (gains) losses | 2,310 | (2,921) | (2,572) | |||
| (Gain) on asset sales | (530) | — | (4,610) | |||
| Produce recalls | (442) | — | — | |||
| Incremental charges on biological assets and inventory related costs due to acquisition of Legacy Dole | 5,520 | 29,180 | — | |||
| Other items6 | (532) | (1,201) | (13,133) | |||
| Adjustments from equity method investments | 628 | (721) | 972 | |||
| Income tax on items above and discrete tax items | (35,017) | (5,345) | (8,621) | |||
| NCI impact on items above | (878) | (885) | (927) | |||
| Adjusted Net Income for Adjusted EPS calculation (Non-GAAP) | $ | 13,529 | $ | 5,959 | $ | 2,407 |
| Adjusted earnings per share – basic (Non-GAAP) | $ | 0.14 | $ | 0.07 | $ | 0.03 |
| Adjusted earnings per share – diluted (Non-GAAP) | $ | 0.14 | $ | 0.07 | $ | 0.03 |
| Weighted average shares outstanding – basic | 94,891 | 82,166 | 94,878 | |||
| Weighted average shares outstanding – diluted | 94,908 | 82,166 | 95,030 |
6For the three months ended September 30, 2022, other items is comprised of $1.0 million of restructuring and legal adjustments, partially offset by $0.5 million in asset write-downs, net of insurance proceeds. For the three months ended September 30, 2021, other items is comprised of $3.3 million in net gains on equity method acquisitions, partially offset by $2.1 million in losses on disposal of businesses, and on a pro-forma basis, it is comprised of $0.1 million in adjustments to restructuring and legal costs, $9.8 million in insurance proceeds, net of asset write-downs, and $5.3 million in gains on equity method acquisitions and disposals, partially offset by $2.1 million in losses on the disposal of a business.
| 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) | ||||||
| Net income attributable to Dole plc (Reported GAAP) | $ | 79,715 | $ | 22,032 | $ | 155,829 |
| Adjustments: | ||||||
| Amortization of intangible assets | 8,248 | 8,221 | 8,236 | |||
| Merger, transaction and other related costs | — | 28,814 | — | |||
| Mark to market (gains) | (5,819) | (1,856) | (3,835) | |||
| (Gain) on asset sales | (8,346) | — | (9,292) | |||
| Produce recalls | 15,809 | — | — | |||
| Incremental charges on biological assets and inventory related costs due to acquisition of Legacy Dole | 40,464 | 29,180 | — | |||
| Other items7 | (1,283) | (6,441) | (13,557) | |||
| Adjustments from equity method investments | 1,918 | 703 | 2,462 | |||
| Income tax on items above and discrete tax items | (45,389) | (4,807) | (9,390) | |||
| NCI impact on items above | (2,289) | (2,724) | (2,766) | |||
| Adjusted Net Income for Adjusted EPS calculation (Non-GAAP) | $ | 83,028 | $ | 73,122 | $ | 127,687 |
| Adjusted earnings per share – basic (Non-GAAP) | $ | 0.88 | $ | 1.13 | $ | 1.35 |
| Adjusted earnings per share – diluted (Non-GAAP) | $ | 0.87 | $ | 1.13 | $ | 1.34 |
| Weighted average shares outstanding – basic | 94,882 | 64,516 | 94,878 | |||
| Weighted average shares outstanding – diluted | 94,915 | 64,723 | 95,030 |
7 For the nine months ended September 30, 2022, other items is comprised of $1.0 million in legal and restructuring adjustments and $0.3 million in gains on disposal of businesses. For the nine months ended September 30, 2021, other items is comprised of $7.0 million in net gains on equity method acquisitions and disposals, partially offset by $0.6 million in losses on disposal of businesses, and on a pro-forma basis it is comprised of $19.4 million in insurance proceeds, net of asset-write downs, and $9.0 million in net gains on equity method acquisitions and disposals, partially offset by $14.2 million in net restructuring and legal costs and $0.6 in losses on disposal of businesses.
Supplemental Reconciliation from Net Income attributable to Dole plc shareholders to Adjusted Net Income - Unaudited
The following information is provided to give quantitative information related to items impacting comparability. Refer to the 'Non-GAAP Financial Measures' section of this document for additional detail on each item.
| Three Months Ended September 30, 2022<br><br>(U.S. Dollars in thousands) | ||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues, net | Cost of sales | Gross profit | Gross Margin % | Selling, marketing, general and administration expenses | Other operating charges8 | Operating Income | ||||||||||||||||
| Reported (GAAP) | $ | 2,267,538 | (2,134,062) | 133,476 | 5.9 | % | (116,326) | 654 | $ | 17,804 | ||||||||||||
| Amortization of intangible assets | — | — | — | 2,633 | — | 2,633 | ||||||||||||||||
| Merger, transaction and other related costs | — | — | — | — | — | — | ||||||||||||||||
| Mark to market (gains) losses | — | 7,729 | 7,729 | — | — | 7,729 | ||||||||||||||||
| (Gain) on asset sales | — | — | — | — | (530) | (530) | ||||||||||||||||
| Produce recalls | — | (442) | (442) | — | — | (442) | ||||||||||||||||
| Incremental charges on biological assets and inventory related costs due to acquisition of Legacy Dole | — | 5,520 | 5,520 | — | — | 5,520 | ||||||||||||||||
| Other items | — | 509 | 509 | (1,041) | — | (532) | ||||||||||||||||
| Adjustments from equity method investments | — | — | — | — | — | — | ||||||||||||||||
| Income tax on items above and discrete tax items | — | — | — | — | — | — | ||||||||||||||||
| NCI impact on items above | — | — | — | — | — | — | ||||||||||||||||
| Adjusted (Non-GAAP) | $ | 2,267,538 | (2,120,746) | 146,792 | 6.5 | % | (114,734) | 124 | $ | 32,182 | Three Months Ended September 30, 2021<br><br>(U.S. Dollars in thousands) | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||||||||
| Revenues, net | Cost of sales | Gross profit | Gross Margin % | Selling, marketing, general and administration expenses | Other operating charges9 | Operating Income (Loss) | ||||||||||||||||
| Reported (GAAP) | $ | 1,942,185 | (1,843,415) | 98,770 | 5.1 | % | (110,213) | (15,718) | $ | (27,161) | ||||||||||||
| Amortization of intangible assets | — | — | — | 2,649 | — | 2,649 | ||||||||||||||||
| Merger, transaction and other related costs | — | — | — | — | 13,719 | 13,719 | ||||||||||||||||
| Mark to market (gains) losses | — | 275 | 275 | — | — | 275 | ||||||||||||||||
| (Gain) on asset sales | — | — | — | — | — | — | ||||||||||||||||
| Produce recalls | — | — | — | — | — | — | ||||||||||||||||
| Incremental charges on biological assets and inventory related costs due to acquisition of Legacy Dole | — | 29,180 | 29,180 | — | — | 29,180 | ||||||||||||||||
| Other items | — | (16) | (16) | — | 2,134 | 2,118 | ||||||||||||||||
| Adjustments from equity method investments | — | — | — | — | — | — | ||||||||||||||||
| Income tax on items above and discrete tax items | — | — | — | — | — | — | ||||||||||||||||
| NCI impact on items above | — | — | — | — | — | — | ||||||||||||||||
| Adjusted (Non-GAAP) | $ | 1,942,185 | (1,813,976) | 128,209 | 6.6 | % | (107,564) | 135 | $ | 20,780 |
8 Other operating charges for the three months ended September 30, 2022 is comprised of a gain on asset sales of $0.7 million, as reported on the Dole plc GAAP Consolidated Statements of Operations.
9 Other operating charges for the three months ended September 30, 2021 is comprised of merger, transaction and other related costs of $13.7 million and losses from disposal of businesses of $2.1 million, partially offset by gain on asset sales of $0.1 million, as reported on the Dole plc the GAAP Consolidated Statements of Operations.
| Three Months Ended September 30, 2022<br><br>(U.S. Dollars in thousands) | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Other income, net | Interest income | Interest expense | Income tax benefit (expense) | Equity earnings | Net Income | Net income attributable to noncontrolling interests (NCI) | ||||
| Reported (GAAP) | $ | 9,312 | 1,505 | (17,095) | 34,778 | 300 | 46,604 | $ | (6,767) | |
| Amortization of intangible assets | — | — | — | — | — | 2,633 | — | |||
| Merger, transaction and other related costs | — | — | — | — | — | — | — | |||
| Mark to market (gains) losses | (5,419) | — | — | — | — | 2,310 | — | |||
| (Gain) on asset sales | — | — | — | — | — | (530) | — | |||
| Produce recalls | — | — | — | — | — | (442) | — | |||
| Incremental charges on biological assets and inventory related costs due to acquisition of Legacy Dole | — | — | — | — | — | 5,520 | — | |||
| Other items | — | — | — | — | — | (532) | — | |||
| Adjustments from equity method investments | — | — | — | — | 628 | 628 | — | |||
| Income tax on items above and discrete tax items | — | — | — | (34,916) | (101) | (35,017) | — | |||
| NCI impact on items above | — | — | — | — | — | — | (878) | |||
| Adjusted (Non-GAAP) | $ | 3,893 | 1,505 | (17,095) | (138) | 827 | 21,174 | $ | (7,645) | |
| Three Months Ended September 30, 2021<br><br>(U.S. Dollars in thousands) | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| Other income, net | Interest income | Interest expense | Income tax benefit (expense) | Equity earnings | Net Income | Net income attributable to noncontrolling interests (NCI) | ||||
| Reported (GAAP) | $ | 7,167 | 990 | (9,341) | 3,401 | 3,381 | (21,563) | $ | (6,953) | |
| Amortization of intangible assets | — | — | — | — | — | 2,649 | — | |||
| Merger, transaction and other related costs | — | — | — | — | — | 13,719 | — | |||
| Mark to market (gains) losses | (3,196) | — | — | — | — | (2,921) | — | |||
| (Gain) on asset sales | — | — | — | — | — | — | — | |||
| Produce recalls | — | — | — | — | — | — | — | |||
| Incremental charges on biological assets and inventory related costs due to acquisition of Legacy Dole | — | — | — | — | — | 29,180 | — | |||
| Other items | — | — | — | — | (3,319) | (1,201) | — | |||
| Adjustments from equity method investments | — | — | — | — | (721) | (721) | — | |||
| Income tax on items above and discrete tax items | — | — | — | (5,706) | 361 | (5,345) | — | |||
| NCI impact on items above | — | — | — | — | — | — | (885) | |||
| Adjusted (Non-GAAP) | $ | 3,971 | 990 | (9,341) | (2,305) | (298) | 13,797 | $ | (7,838) | |
| Three Months Ended September 30, 2022 | Three Months Ended September 30, 2021 | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||
| (U.S. Dollars and shares in thousands, except per share amounts) | (U.S. Dollars and shares in thousands, except per share amounts) | |||||||||
| Net income attributable to Dole plc | Diluted net income per share | Net income (loss) attributable to Dole plc | Diluted net income (loss) per share | |||||||
| Reported (GAAP) | $ | 39,837 | $ | 0.42 | $ | (28,516) | $ | (0.35) | ||
| Amortization of intangible assets | 2,633 | 2,649 | ||||||||
| Merger, transaction and other related costs | — | 13,719 | ||||||||
| Mark to market (gains) losses | 2,310 | (2,921) | ||||||||
| (Gain) on asset sales | (530) | — | ||||||||
| Produce recalls | (442) | — | ||||||||
| Incremental charges on biological assets and inventory related costs due to acquisition of Legacy Dole | 5,520 | 29,180 | ||||||||
| Other items | (532) | (1,201) | ||||||||
| Adjustments from equity method investments | 628 | (721) | ||||||||
| Income tax on items above and discrete tax items | (35,017) | (5,345) | ||||||||
| NCI impact on items above | (878) | (885) | ||||||||
| Adjusted (Non-GAAP) | $ | 13,529 | $ | 0.14 | $ | 5,959 | $ | 0.07 | ||
| Weighted average shares outstanding – diluted | 94,908 | 82,166 | ||||||||
| Nine Months Ended September 30, 2022<br><br>(U.S. Dollars in thousands) | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Revenues, net | Cost of sales | Gross profit | Gross Margin % | Selling, marketing, general and administration expenses | Other operating charges10 | Operating Income | ||||
| Reported (GAAP) | $ | 6,872,655 | (6,435,233) | 437,422 | 6.4 | % | (364,043) | 9,317 | $ | 82,696 |
| Amortization of intangible assets | — | — | — | 8,248 | — | 8,248 | ||||
| Merger, transaction and other related costs | — | — | — | — | — | — | ||||
| Mark to market (gains) | — | 2,372 | 2,372 | — | — | 2,372 | ||||
| (Gain) on asset sales | — | — | — | — | (8,346) | (8,346) | ||||
| Produce recalls | — | 15,809 | 15,809 | — | — | 15,809 | ||||
| Incremental charges on biological assets and inventory related costs due to acquisition of Legacy Dole | — | 40,464 | 40,464 | — | — | 40,464 | ||||
| Other items | — | — | — | (1,015) | (268) | (1,283) | ||||
| Adjustments from equity method investments | — | — | — | — | — | — | ||||
| Income tax on items above and discrete tax items | — | — | — | — | — | — | ||||
| NCI impact on items above | — | — | — | — | — | — | ||||
| Adjusted (Non-GAAP) | $ | 6,872,655 | (6,376,588) | 496,067 | 7.2 | % | (356,810) | 703 | $ | 139,960 |
| Nine Months Ended September 30, 2021<br><br>(U.S. Dollars in thousands) | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Revenues, net | Cost of sales | Gross profit | Gross Margin % | Selling, marketing, general and administration expenses | Other operating charges11 | Operating Income | ||||
| Reported (GAAP) | $ | 4,202,922 | (3,917,484) | 285,438 | 6.8 | % | (249,593) | (29,147) | $ | 6,698 |
| Amortization of intangible assets | — | — | — | 8,221 | — | 8,221 | ||||
| Merger, transaction and other related costs | — | — | — | — | 28,814 | 28,814 | ||||
| Mark to market (gains) | — | (2,096) | (2,096) | — | — | (2,096) | ||||
| (Gain) on asset sales | — | — | — | — | — | — | ||||
| Produce recalls | — | — | — | — | — | — | ||||
| Incremental charges on biological assets and inventory related costs due to acquisition of Legacy Dole | — | 29,180 | 29,180 | — | — | 29,180 | ||||
| Other items | — | (16) | (16) | — | 595 | 579 | ||||
| Adjustments from equity method investments | — | — | — | — | — | — | ||||
| Income tax on items above and discrete tax items | — | — | — | — | — | — | ||||
| NCI impact on items above | — | — | — | — | — | — | ||||
| Adjusted (Non-GAAP) | $ | 4,202,922 | (3,890,416) | 312,506 | 7.4 | % | (241,372) | 262 | $ | 71,396 |
10 Other operating charges for the nine months ended September 30, 2022 is comprised of gain on asset sales of $9.1 million and gain on disposal of businesses of $0.2 million, as reported on the Dole plc the GAAP Consolidated Statements of Operations.
11 Other operating charges for the nine months ended September 30, 2021 is comprised of merger, transaction and other related costs of $28.8 million and a loss on disposal of a business of $0.6 million, partially offset by a gain on asset sales of $0.3 million, as reported on the Dole plc the GAAP Consolidated Statements of Operations.
| Nine Months Ended September 30, 2022<br><br>(U.S. Dollars in thousands) | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Other income, net | Interest income | Interest expense | Income tax benefit (expense) | Equity earnings | Net Income | Net income attributable to noncontrolling interests (NCI) | |||
| Reported (GAAP) | $ | 20,434 | 4,596 | (41,724) | 28,355 | 4,028 | 98,385 | $ | (18,670) |
| Amortization of intangible assets | — | — | — | — | — | 8,248 | — | ||
| Merger, transaction and other related costs | — | — | — | — | — | — | — | ||
| Mark to market (gains) | (8,191) | — | — | — | — | (5,819) | — | ||
| (Gain) on asset sales | — | — | — | — | — | (8,346) | — | ||
| Produce recalls | — | — | — | — | — | 15,809 | — | ||
| Incremental charges on biological assets and inventory related costs due to acquisition of Legacy Dole | — | — | — | — | — | 40,464 | — | ||
| Other items | — | — | — | — | — | (1,283) | — | ||
| Adjustments from equity method investments | — | — | — | — | 1,918 | 1,918 | — | ||
| Income tax on items above and discrete tax items | — | — | — | (45,081) | (308) | (45,389) | — | ||
| NCI impact on items above | — | — | — | — | — | — | (2,289) | ||
| Adjusted (Non-GAAP) | $ | 12,243 | 4,596 | (41,724) | (16,726) | 5,638 | 103,987 | $ | (20,959) |
| Nine Months Ended September 30, 2021<br><br>(U.S. Dollars in thousands) | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Other income, net | Interest income | Interest expense | Income tax expense | Equity earnings | Net Income | Net income attributable to noncontrolling interests (NCI) | |||
| Reported (GAAP) | $ | 7,867 | 1,826 | (14,187) | (4,838) | 44,018 | 41,384 | $ | (19,352) |
| Amortization of intangible assets | — | — | — | — | — | 8,221 | — | ||
| Merger, transaction and other related costs | — | — | — | — | — | 28,814 | — | ||
| Mark to market (gains) | 240 | — | — | — | — | (1,856) | — | ||
| (Gain) on asset sales | — | — | — | — | — | — | — | ||
| Produce recalls | — | — | — | — | — | — | — | ||
| Incremental charges on biological assets and inventory related costs due to acquisition of Legacy Dole | — | — | — | — | — | 29,180 | — | ||
| Other items | — | — | — | — | (7,020) | (6,441) | — | ||
| Adjustments from equity method investments | — | — | — | — | 703 | 703 | — | ||
| Income tax on items above and discrete tax items | — | — | — | (6,497) | 1,690 | (4,807) | — | ||
| NCI impact on items above | — | — | — | — | — | — | (2,724) | ||
| Adjusted (Non-GAAP) | $ | 8,107 | 1,826 | (14,187) | (11,335) | 39,391 | 95,198 | $ | (22,076) |
| Nine Months Ended September 30, 2022 | Nine Months Ended September 30, 2021 | ||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | |
| (U.S. Dollars and shares in thousands, except per share amounts) | (U.S. Dollars and shares in thousands, except per share amounts) | ||||||||
| Net income attributable to Dole plc | Diluted net income per share | Net income attributable to Dole plc | Diluted net income per share | ||||||
| Reported (GAAP) | $ | 79,715 | $ | 0.84 | $ | 22,032 | $ | 0.34 | |
| Amortization of intangible assets | 8,248 | 8,221 | |||||||
| Merger, transaction and other related costs | — | 28,814 | |||||||
| Mark to market (gains) | (5,819) | (1,856) | |||||||
| (Gain) on asset sales | (8,346) | — | |||||||
| Produce recalls | 15,809 | — | |||||||
| Incremental charges on biological assets and inventory related costs due to acquisition of Legacy Dole | 40,464 | 29,180 | |||||||
| Other items | (1,283) | (6,441) | |||||||
| Adjustments from equity method investments | 1,918 | 703 | |||||||
| Income tax on items above and discrete tax items | (45,389) | (4,807) | |||||||
| NCI impact on items above | (2,289) | (2,724) | |||||||
| Adjusted (Non-GAAP) | $ | 83,028 | $ | 0.87 | $ | 73,122 | $ | 1.13 | |
| Weighted average shares outstanding – diluted | 94,915 | 64,723 |
Net Debt Reconciliation
Net Debt is the primary measure used by management to analyze the Company’s capital structure. Net Debt is a non-GAAP financial measure, calculated as cash and cash equivalents, less current and long-term debt. It also excludes debt discounts and debt issuance costs. The calculation of Net Debt as of September 30, 2022 is presented below. Net Debt as of September 30, 2022 was $1.1 billion.
| September 30, 2022 | ||
|---|---|---|
| (U.S. Dollars in thousands) | ||
| Cash and cash equivalents (Reported GAAP) | $ | 221,476 |
| Debt (Reported GAAP): | ||
| Long-term debt, net | (1,208,152) | |
| Current maturities | (78,984) | |
| Bank overdrafts | (20,284) | |
| Total debt, net | (1,307,420) | |
| Less: Debt discounts and debt issuance costs (Reported GAAP) | (18,724) | |
| Total gross debt | (1,326,144) | |
| Net Debt (Non-GAAP) | $ | (1,104,668) |
Non-GAAP Financial Measures
Dole plc’s results are determined in accordance with U.S. GAAP.
In addition to its results under U.S. GAAP, in this Press Release we also present Dole plc’s Adjusted EBIT, Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, Adjusted Effective tax rate, Net Debt, pro-forma Adjusted EBIT, pro-forma Adjusted EBITDA, pro-forma Adjusted Net Income and pro-forma Adjusted Earnings per Share, which are supplemental measures of financial performance that are not required by, or presented in accordance with, U.S. GAAP (collectively, the "non-GAAP financial measures"). We present these non-GAAP financial measures because we believe they assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. These non-GAAP financial measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our operating results, cash flows or any other measure prescribed by U.S. GAAP. Our presentation of non-GAAP financial measures should not be construed as an inference that our future results will be unaffected by any of the adjusted items, or that any projections and estimates will be realized in their entirety or at all. In addition, adjustment items that are excluded from non-GAAP results can have a material impact on equivalent GAAP earnings, financial measures and cash flows.
Adjusted EBIT is calculated from GAAP net income by: (1) subtracting the income tax expense or adding the income tax benefit; (2) subtracting interest expense; (3) subtracting mark to market losses or adding mark to market gains related to unrealized impacts from derivative instruments and foreign currency denominated borrowings, realized impacts on noncash settled foreign currency denominated borrowings, net foreign currency impacts on liquidated entities and fair value movements on contingent consideration; (4) other items which are separately stated based on materiality, which include subtracting merger, transaction and other related costs, subtracting incremental costs for produce recalls, adding or subtracting asset write-downs, net of insurance proceeds, adding the gain or subtracting the loss on the disposal of business interests, subtracting the incremental costs from the fair value uplift for biological assets and inventory related to the acquisition of Legacy Dole, subtracting impairment charges on property, plant and equipment, adding the fair value gain or subtracting the fair value loss on the acquisition of investments previously accounted for under the equity method, subtracting the gain or adding the loss on the sale of investments accounted for under the equity method, adding the gain or subtracting the loss on asset sales for assets held-for-sale and actively marketed property and subtracting restructuring charges and costs for legal matters not in the ordinary course of business; and (5) adjustments from equity method investments, which includes the Company’s share of these items within equity method earnings.
Adjusted EBITDA is calculated from GAAP net income by: (1) subtracting the income tax expense or adding the income tax benefit; (2) subtracting interest expense; (3) subtracting depreciation charges; (4) subtracting amortization charges; (5) subtracting mark to market losses or adding mark to market gains related to unrealized impacts from derivative instruments and foreign currency denominated borrowings, realized impacts on noncash settled foreign currency denominated borrowings, net foreign currency impacts on liquidated entities and fair value movements on contingent consideration; (6) other items which are separately stated based on materiality, which include subtracting merger, transaction and other related costs, subtracting incremental costs for produce recalls, adding or subtracting asset write-downs, net of insurance proceeds, adding the gain or subtracting the loss on the disposal of business interests, subtracting the incremental costs from the fair value uplift for biological assets and inventory related to the acquisition of Legacy Dole, subtracting impairment charges on property, plant and equipment, adding the fair value gain or subtracting the fair value loss on the acquisition of investments previously accounted for under the equity method, subtracting the gain or adding the loss on the sale of investments accounted for under the equity method, adding the gain or subtracting the loss on asset sales for assets held-for-sale and actively marketed property and subtracting restructuring charges and costs for legal matters not in the ordinary course of business; and (7) adjustments from equity method investments, which includes the Company’s share of these items within equity method earnings.
Adjusted Net Income is calculated from GAAP net income attributable to Dole plc by: (1) subtracting amortization charges; (2) subtracting mark to market losses or adding mark to market gains related to unrealized impacts from derivative instruments and foreign currency denominated borrowings, realized impacts on noncash settled foreign currency denominated borrowings, net foreign currency impacts on liquidated entities and fair value movements on contingent consideration; (3) other items which are separately stated based on materiality, which include subtracting merger, transaction and other related costs, subtracting incremental costs for produce recalls, adding or subtracting asset write-downs, net of insurance proceeds, adding the gain or subtracting the loss on the disposal of business interests, subtracting the incremental costs from the fair value uplift for biological assets and inventory related to the acquisition of Legacy Dole, subtracting impairment charges on property, plant and equipment, adding the fair value gain or subtracting the fair value loss on the acquisition of investments previously accounted for under the equity method, subtracting the gain or adding the loss on the sale of investments accounted for under the equity method, adding the gain or subtracting the loss on asset sales for assets held-for-sale and actively marketed property and subtracting restructuring charges and costs for legal matters not in the ordinary course of business; (4) adjustments from equity method investments, which includes the Company’s share of these items within equity method earnings; (5) excluding the tax effect of these items and discrete tax adjustments; and (6) excluding the effect of these items attributable to non-controlling interests.
Adjusted Earnings per Share is calculated from Adjusted Net Income divided by diluted weighted average number of shares in the applicable period.
Adjusted Effective tax rate is calculated from the GAAP effective tax rate by: (1) adjusting the tax impact for each adjustment from GAAP net income attributable to Dole plc to Adjusted Net Income as described above; and (2) subtracting the impact from discrete tax adjustments, including uncertain tax positions.
Net Debt is a non-GAAP financial measure, calculated as GAAP cash and cash equivalents, less GAAP current and long-term debt. It also excludes GAAP debt discounts and debt issuance costs.
Pro-forma EBIT is calculated from pro-forma net income by adding pro-forma interest expense and adding the pro-forma income tax expense or subtracting the pro-forma income tax benefit, as well as including the following pro-forma adjustments: (1) subtracting mark to market losses or adding mark to market gains related to unrealized impacts from derivative instruments and foreign currency denominated borrowings, realized impacts on noncash settled foreign currency denominated borrowings, net foreign currency impacts on liquidated entities and fair value movements on contingent consideration; (2) other items which are separately stated based on materiality, which include subtracting merger, transaction and other related costs, subtracting incremental costs for produce recalls, adding or subtracting asset write-downs, net of insurance proceeds, adding the gain or subtracting the loss on the disposal of business interests, subtracting the incremental costs from the fair value uplift for biological assets and inventory related to the acquisition of Legacy Dole, subtracting impairment charges on property, plant and equipment, adding the fair value gain or subtracting the fair value loss on the acquisition of investments previously accounted for under the equity method, subtracting the gain or adding the loss on the sale of investments accounted for under the equity method, adding the gain or subtracting the loss on asset sales for assets held-for-sale and actively marketed property and subtracting restructuring charges and costs for legal matters not in the ordinary course of business; and (3) adjustments from equity method investments, which includes the Company’s share of these items within equity method earnings.
Pro-forma Adjusted EBITDA is calculated from pro-forma EBIT by including the following pro-forma adjustments: (1) adding depreciation charges; and (2) adding amortization charges. It also includes the effect of the Company’s share of these listed items within investments accounted for under the equity method.
Pro-forma Adjusted Net Income is calculated from pro-forma net income attributable to Dole plc by include the following pro-forma adjustments: (1) subtracting amortization charges; (2) subtracting mark to market losses or adding mark to market gains related to unrealized impacts from derivative instruments and foreign currency denominated borrowings, realized impacts on noncash settled foreign currency denominated borrowings, net foreign currency impacts on liquidated entities and fair value movements on contingent consideration; (3) other items which are separately stated based on materiality, which include subtracting merger, transaction and other related costs, subtracting incremental costs for produce recalls, adding or subtracting asset write-downs, net of insurance proceeds, adding the gain or subtracting the loss on the disposal of business interests, subtracting the incremental costs from the fair value uplift for biological assets and inventory related to the acquisition of Legacy Dole, subtracting impairment charges on property, plant and equipment, adding the fair value gain or subtracting the fair value loss on the acquisition of investments previously accounted for under the equity method, subtracting the gain or adding the loss on the sale of investments accounted for under the equity method, adding the gain or subtracting the loss on asset sales for assets held-for-sale and actively marketed property and subtracting restructuring charges and costs for legal matters not in the ordinary course of business; (4) adjustments from equity method investments, which includes the Company’s share of these items within equity method earnings; (5) it excludes the tax effect of these items and discrete tax adjustments; and (6) excluding the effect of these items attributable to non-controlling interests.
Pro-forma Adjusted Earnings per Share is calculated from pro-forma Adjusted Net Income divided by diluted weighted average number of shares in the applicable period.
Adjusted EBIT, pro-forma EBIT, Adjusted EBITDA, pro-forma Adjusted EBITDA, Adjusted Net Income, pro-forma Adjusted Net Income, Adjusted EPS, Adjusted Effective tax rate, Net Debt and pro-forma Adjusted EPS are not measurements of Dole plc financial performance under U.S. GAAP and should not be considered as alternatives to net income attributable to Dole plc, net income, income before income taxes and equity earnings or any other performance measures derived in accordance with U.S. GAAP. Additionally, pro-forma EBIT, pro-forma Adjusted EBITDA, pro-forma Adjusted Net Income and pro-forma Adjusted EPS are not intended to be liquidity measures because of certain limitations such as:
•They do not reflect Dole plc’s cash expenditures, or future requirements, for capital expenditures or contractual commitments;
•They do not reflect changes in, or cash requirements for, Dole plc’s working capital needs;
•They do not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on Dole plc’s debt; and
•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and these non-GAAP financial measures do not reflect cash requirements for such replacements.
Because of these limitations, pro-forma EBIT, pro-forma Adjusted EBITDA, pro-forma Adjusted Net Income, and pro-forma Adjusted EPS should not be considered as measures of discretionary cash available to Dole plc to invest in the growth of its and Dole plc’s business.
Further, pro-forma EBIT, pro-forma Adjusted EBITDA, pro-forma Adjusted Net Income, and pro-forma Adjusted EPS as used herein may not be calculated in a similar manner to, and are therefore not necessarily comparable with, similarly titled measures of other companies. However, we have included pro-forma EBIT, pro-forma Adjusted EBITDA, pro-forma Adjusted Net Income, and pro-forma Adjusted EPS herein because Dole plc’s management believes that pro-forma EBIT, pro-forma Adjusted EBITDA, pro-forma Adjusted Net Income, and pro-forma Adjusted EPS are useful performance measures.
Dole is not able to provide a reconciliation for projected FY'22 Adjusted EBITDA and Adjusted Effective tax rate without undertaking unreasonable efforts.
Pro-forma Methodology
The methodology used to prepare the unaudited pro-forma consolidated financial statements for Dole plc to show the estimated effects of the acquisition of DFC by TP and the IPO and refinancing as if they had occurred on January 1, 2020 and is consistent with how the pro-forma financial statements were prepared in the F-1. The results for the three and nine months ended September 30, 2022 are based on the Company's consolidated statutory results and therefore are not pro-forma adjusted.
1.All associated transaction costs reflected on January 1, 2020. As such, no transaction costs are included within the pro-forma numbers discussed below.
2.Effective tax rate of 25% for the nine months ended September 30, 2021.
3.Applying the results of the Purchase Price Allocation (“PPA”) exercise, acquisition accounting and debt refinancing to January 1, 2020:
a.Q3 2021 year to date pro-forma results reflect a reduction in the depreciation charge of $3.0 million. This is a function of the asset values increasing as a result of the PPA exercise offset by an increase in the estimated useful lives of the assets.
b.The interest expense for Q3 2021 reflects the outcome of the refinancing.
4.TP’s pickup of its 45.0% share of DFC’s net income has been eliminated.
5.EPS is calculated using shares in issue following the IPO and additional share issuances.
6.There is a year to date adjustment in Q3 2021 of $9.7 million to reflect estimated ongoing incremental public company costs of $14.0 million annualized.
See reconciliation of pro-forma results for the three and six months ended June 30, 2021 below.
Pro-forma Reconciliation (Unaudited) – for the three months ended September 30, 2021
| TP | DFC | Dole plc | FV & Intercompany Adjustment | Transaction Costs | Ongoing plc Costs | Debt Adjustment | Tax Adjustment | Pro-forma Financial Statements | |||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (U.S. Dollars and shares in thousands, except per share amounts) | |||||||||||
| Revenues, net | $ | 1,186,965 | 1,134,459 | 2,321,424 | (15,387) | — | — | — | — | $ | 2,306,037 |
| Cost of sales | (1,092,529) | (1,092,073) | (2,184,602) | 16,291 | — | — | — | — | (2,168,311) | ||
| Gross profit | 94,436 | 42,386 | 136,822 | 904 | — | — | — | — | 137,726 | ||
| Selling, marketing and general and administrative expenses | (75,236) | (50,812) | (126,048) | 5 | 4,045 | 300 | — | — | (121,698) | ||
| Merger, transaction, and other related costs | (7,558) | 1,798 | (5,760) | — | 5,760 | — | — | — | — | ||
| Gain on disposal of businesses | (2,134) | — | (2,134) | — | — | — | — | — | (2,134) | ||
| Gain on asset sales | (127) | 4,997 | 4,870 | — | — | — | — | — | 4,870 | ||
| Operating income (loss) | 9,381 | (1,631) | 7,750 | 909 | 9,805 | 300 | — | — | 18,764 | ||
| Other income (expense), net | 2,085 | 12,384 | 14,469 | 972 | — | — | — | — | 15,441 | ||
| Interest income | 496 | 642 | 1,138 | — | — | — | — | — | 1,138 | ||
| Interest expense | (6,546) | (8,841) | (15,387) | — | — | — | 3,956 | — | (11,431) | ||
| Income (loss) before income taxes and equity earnings | 5,416 | 2,554 | 7,970 | 1,881 | 9,805 | 300 | 3,956 | — | 23,912 | ||
| Income tax (expense) benefit | (5,823) | 12,387 | 6,564 | 277 | — | (94) | (1,245) | (1,411) | 4,091 | ||
| Equity in net earnings of investments accounted for under the equity method | 3,720 | (378) | 3,342 | 4,559 | — | — | — | — | 7,901 | ||
| Net income (loss) | 3,313 | 14,563 | 17,876 | 6,717 | 9,805 | 206 | 2,711 | (1,411) | 35,904 | ||
| Less: Net income attributable to noncontrolling interests | (6,570) | (700) | (7,270) | — | — | — | — | — | (7,270) | ||
| Net income (loss) attributable to Dole plc | $ | (3,257) | 13,863 | 10,606 | 6,717 | 9,805 | 206 | 2,711 | (1,411) | $ | 28,634 |
| Earnings per share: | |||||||||||
| Net income per share - basic | $ | 0.30 | |||||||||
| Net income per share - diluted | $ | 0.30 | |||||||||
| Weighted average shares outstanding | |||||||||||
| Basic | 94,878 | ||||||||||
| Diluted | 95,030 |
Pro-forma Reconciliation (Unaudited) – for the nine months ended September 30, 2021
| TP | DFC | Dole plc | FV & Intercompany Adjustment | Transaction Costs | Ongoing plc Costs | Debt Adjustment | Tax Adjustment | Pro-forma Financial Statements | |||
|---|---|---|---|---|---|---|---|---|---|---|---|
| (U.S. Dollars and shares in thousands, except per share amounts) | |||||||||||
| Revenues, net | $ | 3,447,702 | 3,639,104 | 7,086,806 | (52,614) | — | — | — | — | $ | 7,034,192 |
| Cost of sales | (3,166,598) | (3,338,768) | (6,505,366) | 55,518 | — | — | — | — | (6,449,848) | ||
| Gross profit | 281,104 | 300,336 | 581,440 | 2,904 | — | — | — | — | 584,344 | ||
| Selling, marketing and general and administrative expenses | (214,616) | (163,022) | (377,638) | 5 | 4,045 | (9,750) | — | — | (383,338) | ||
| Merger, transaction, and other related costs | (22,653) | — | (22,653) | — | 22,653 | — | — | — | — | ||
| Gain on disposal of businesses | (595) | — | (595) | — | — | — | — | — | (595) | ||
| Gain on asset sales | — | 12,381 | 12,381 | — | — | — | — | — | 12,381 | ||
| Operating income (loss) | 43,240 | 149,695 | 192,935 | 2,909 | 26,698 | (9,750) | — | — | 212,792 | ||
| Other income (expense), net | 2,785 | 16,055 | 18,840 | 972 | — | — | — | — | 19,812 | ||
| Interest income | 1,332 | 1,877 | 3,209 | — | — | — | — | — | 3,209 | ||
| Interest expense | (11,392) | (42,465) | (53,857) | — | — | — | 19,472 | — | (34,385) | ||
| Income (loss) before income taxes and equity earnings | 35,965 | 125,162 | 161,127 | 3,881 | 26,698 | (9,750) | 19,472 | — | 201,428 | ||
| Income tax (expense) benefit | (14,062) | (19,299) | (33,361) | 277 | — | 3,066 | (6,123) | (5,830) | (41,971) | ||
| Equity in net earnings of investments accounted for under the equity method | 44,357 | (313) | 44,044 | (26,447) | — | — | — | — | 17,597 | ||
| Net income (loss) | 66,260 | 105,550 | 171,810 | (22,289) | 26,698 | (6,684) | 13,349 | (5,830) | 177,054 | ||
| Less: Net income attributable to noncontrolling interests | (18,969) | (2,256) | (21,225) | — | — | — | — | — | (21,225) | ||
| Net income (loss) attributable to Dole plc | $ | 47,291 | 103,294 | 150,585 | (22,289) | 26,698 | (6,684) | 13,349 | (5,830) | $ | 155,829 |
| Earnings per share: | |||||||||||
| Net income per share - basic | $ | 1.64 | |||||||||
| Net income per share - diluted | $ | 1.64 | |||||||||
| Weighted average shares outstanding | |||||||||||
| Basic | 94,878 | ||||||||||
| Diluted | 95,030 |
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