As filed with the U.S. Securities and Exchange Commission on July 19, 2021.

Registration No. 333-257621

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

Amendment No. 1

to

FORM F-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

Dole plc

(Exact Name of Registrant as Specified in Its Charter)

 

 

 

 

Ireland		0191		Not Applicable
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

Dole plc

29 North Anne Street

Dublin 7

D07 PH36

Ireland

353-1-887-2600

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

Rory Byrne

Chief Executive Officer

Dole plc

29 North Anne Street

Dublin 7

D07 PH36

Ireland

353-1-887-2600

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

P. Michelle Gasaway Michael J. Hong David C. Eisman Skadden, Arps, Slate, Meagher & Flom LLP 300 South Grand Avenue Los Angeles, California 90071 (213) 687-5000		Marc D. Jaffe Ian D. Schuman Adam J. Gelardi Latham & Watkins LLP 1271 Avenue of the Americas New York, New York 10020 (212) 906-1200

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.  ☐

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act.

Emerging growth company   ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

 

 

CALCULATION OF REGISTRATION FEE

 

Title of Each Class of Securities to be Registered		Shares to be Registered (1)		Proposed maximum aggregate offering price per share(1)		Proposed Maximum Aggregate Offering Price(1)(2)		Amount Of Registration Fee(3)
Ordinary shares, $0.01 par value per share		29,900,000		$23.00		$687,700,000		$75,029

(1)	Includes 3,900,000 ordinary shares that the underwriters may purchase pursuant to their option to purchase additional shares, if any. See Underwriting.

(2)	Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended (the Securities Act).

(3)	The registrant previously paid a registration fee of $10,910 in relation to its filing of its initial Registration Statement on Form F-1 (No. 333-257621) on July 2, 2021. The registrant has paid the remaining registration fee of $64,119 herewith.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

 

 

 

†	The term “new or revised financial accounting standards” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

 

 

 

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

Subject to Completion, Dated July 19, 2021

Preliminary Prospectus

 

26,000,000 Ordinary Shares

Dole plc

Ordinary Shares

 

 

This is an initial public offering of ordinary shares of Dole plc. We are offering 23,539,067 ordinary shares. The selling shareholders identified in this prospectus are offering an additional 2,460,933 ordinary shares. We expect the initial public offering price will be between $20.00 and $23.00 per share. Currently, no public market exists for our ordinary shares. After pricing of the offering, we expect that our ordinary shares will trade on the New York Stock Exchange under the symbol “DOLE.”

This offering is being made in connection with, and is conditioned upon, the completion of the Transaction (as defined below) between Total Produce plc (“Total Produce”) and the parent company of Dole Food Company, Inc. (“Dole Food Company”) to form Dole plc, as further described in this prospectus.

We intend to use the net proceeds from this offering to pay certain costs of the Transaction (as defined below), to repay certain of our and our subsidiaries’ outstanding indebtedness and for general corporate purposes. We will not receive any proceeds from the sale of our ordinary shares by the selling shareholders.

 

 

We and the selling shareholders have granted the underwriters an option for a period of 30 days after the date of this prospectus to purchase up to an additional 3,530,860 ordinary shares and 369,140 ordinary shares, respectively, at the initial public offering price less the underwriting discounts and commissions.

Upon the completion of this offering, assuming an initial public offering price of $21.50 per share (the midpoint of the price range set forth above), (i) investors purchasing ordinary shares in this offering will beneficially own approximately 28.4% of our ordinary shares (or approximately 31.4% if the underwriters exercise their option to purchase additional ordinary shares in full); (ii) shareholders of Total Produce immediately prior to completion of the Transaction (the “TP Holders”) will beneficially own approximately 61.3% of our ordinary shares (or approximately 59.0% if the underwriters exercise their option to purchase additional ordinary shares in full); and (iii) Castle & Cooke Holdings, Inc. and The Murdock Group, LLC who were indirect shareholders of Dole Food Company immediately prior to the completion of the Transaction, will beneficially own approximately 10.3% of our ordinary shares (or approximately 9.6% if the underwriters exercise their option to purchase additional ordinary shares in full).

Investing in our ordinary shares involves risks. See “Risk Factors” beginning on page 31 to read about certain factors you should consider before buying our ordinary shares.

Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

 

		Per Share				Total
Initial public offering price		$				$
Underwriting discounts and commissions(1)		$				$
Proceeds, before expenses, to us		$				$
Proceeds, before expenses, to the selling shareholders		$				$

 

(1)	See “Underwriting” for a description of the compensation payable to the underwriters.

The underwriters expect to deliver the ordinary shares against payment on or about                     , 2021.

 

 

Goldman Sachs & Co. LLC		Deutsche Bank Securities		Davy

BofA Securities		BMO Capital Markets		Rabo Securities		Stephens Inc.

 

 

Prospectus dated                 , 2021

Dole

Dole OUR MISSION make the world a healthier place

Dole At a glance

#1
FRESH PRODUCE COMPANY BY SIZE
#1
BRAND IN THE INDUSTRY1

TABLE OF CONTENTS

 

PROSPECTUS SUMMARY			1
THE OFFERING			22
SUMMARY HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL INFORMATION			25
RISK FACTORS			31
DESCRIPTION OF THE TRANSACTION			63
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS			73
INDUSTRY, MARKET, AND OTHER DATA			75
USE OF PROCEEDS			77
DIVIDEND POLICY			78
CAPITALIZATION			79
DILUTION			81
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION			82
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF TOTAL PRODUCE AND DOLE			97
BUSINESS			151
MANAGEMENT			178
EXECUTIVE COMPENSATION			185
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS			205
PRINCIPAL AND SELLING SHAREHOLDERS			208
DESCRIPTION OF CERTAIN INDEBTEDNESS			210
DESCRIPTION OF SHARE CAPITAL			212
SHARES ELIGIBLE FOR FUTURE SALE			231
ANTICIPATED MATERIAL IRISH TAX CONSEQUENCES TO NON-IRISH HOLDERS OF OUR SECURITIES			233
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS			238
UNDERWRITING			241
EXPENSES RELATED TO THE OFFERING			248
LEGAL MATTERS			249
EXPERTS			249
ENFORCEMENT OF CIVIL LIABILITIES			252
WHERE YOU CAN FIND ADDITIONAL INFORMATION			253

Through and including                 , 2021 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer’s obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

You should rely only on the information contained in this prospectus, any amendment or supplement to this prospectus and any free writing prospectus prepared by us or on our behalf to which we have referred you. Neither we, the selling shareholders nor the underwriters have authorized anyone to provide you with different or additional information or to make any representations other than those contained in this prospectus, in any amendment or supplement to this prospectus or in any free writing prospectus we have authorized for use with respect to this offering. Neither we, the selling shareholders, nor the underwriters take any responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you or any representation that others may make to you. Neither we nor the selling shareholders are making an offer of these securities in any state, country or other jurisdiction where the offer is not permitted. You should not assume that the information in this prospectus, in any amendment or supplement to this prospectus or in any free writing prospectus is accurate as of any date other than the date of such document (or any earlier date

 

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as of which such information is given) regardless of its time of delivery or the time of any sales of our ordinary shares. Our business, financial condition, results of operations, cash flows, assets, liabilities or prospects may have changed since that date.

We are incorporated under the laws of Ireland and a majority of our outstanding securities are owned by non-U.S. residents. Under the rules of the U.S. Securities and Exchange Commission (the “SEC”), we are currently eligible for treatment as a “foreign private issuer.” As a foreign private issuer, we will not be required to file periodic reports and financial statements with the SEC as frequently or as promptly as domestic registrants whose securities are registered under the Exchange Act. See “Implications of Being a Foreign Private Issuer.”

For investors outside the United States: None of the Company, the selling shareholders nor the underwriters has done anything that would permit this offering or possession or distribution of this prospectus in any jurisdiction, other than the United States, where action for that purpose is required. Persons outside the United States who come into possession of this prospectus must inform themselves about, and observe any restrictions relating to, the offering of the ordinary shares and the distribution of this prospectus outside the United States.

 

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ABOUT THIS PROSPECTUS

Basis of Presentation

As used throughout this prospectus, the following terms have the meanings, unless the context otherwise requires:

 

•

the “Company,” “we,” “us,” and “our” refer (i) after giving effect to the Transaction, to Dole plc and its consolidated subsidiaries, which will include Total Produce and Dole Food Company, (ii) for periods from and after July 30, 2018, when Total Produce acquired a 45% equity interest in DFC Holdings, and up to the completion of the Transaction, to Total Produce, its consolidated subsidiaries and Dole Food Company, which operated as a part of an operating segment of Total Produce, and (iii) for periods prior to July 30, 2018, to Total Produce and its consolidated subsidiaries;

 

•

“C&C Holdings” refers to Castle & Cooke Holdings, Inc.;

 

•

“C&C Parties” refers to, collectively, TMG, Dolicious and C&C Holdings;

 

•

“DFC Holdings” refers to DFC Holdings, LLC, the parent company of Dole Food Company;

 

•

“Dole Food Company” refers to Dole Food Company, Inc. on a consolidated basis;

 

•

“Dole plc” refers to Dole plc on a consolidated basis following the consummation of the Transaction;

 

•

“Dolicious” refers to Dolicious Corporation;

 

•

“Exchange Act” refers to the Securities Exchange Act of 1934, as amended;

 

•

“Fresh Packed Vegetables” refers to various commodity vegetables including mainly iceberg lettuce, romaine hearts, green onions, radishes, brussels sprouts, artichokes, asparagus, celery, broccoli and cauliflower, in each case produced conventionally or organically as defined by the Dole plc management team;

 

•

“Merger Sub” refers to TP-Dole Merger Sub, LLC;

 

•

“NYSE” refers to the New York Stock Exchange;

 

•

“Securities Act” refers to the Securities Act of 1933, as amended;

 

•

“TMG” refers to The Murdock Group, LLC;

 

•

“Total Produce” or the “Group” refers to Total Produce plc on a consolidated basis;

 

•

“TP Holders” refers to the shareholders of Total Produce immediately prior to completion of the Transaction;

 

•

“Total Produce Parties” refers to Dole plc (formerly known as Pearmill Limited), Total Produce, TP USA and Merger Sub;

 

•

“TP USA” refers to Total Produce USA Holdings Inc.;

 

•

the “Transaction” refers to, collectively, the Share Exchange, the Merger (each as defined below) and the other transactions described below in the sections entitled “Description of the Transaction—Merger and Related Transactions—Pre-Closing Unit Sales” and “Description of the Transaction—Merger and Related Transactions—Contribution” (excluding, for purposes of clarity and the avoidance of doubt, this offering);

 

•

“Transaction Agreement” refers to the binding transaction agreement, dated February 16, 2021 (as amended on April 23, 2021 and from time to time thereafter), by and among the Total Produce Parties, DFC Holdings and the C&C Parties, which currently own a 55% interest in DFC Holdings, pursuant to which Total Produce agreed to combine with DFC Holdings under Dole plc and, upon the terms and subject to the conditions set forth in the Transaction Agreement, complete this offering as soon as possible thereafter;

 

iii

•

“U.S. GAAP” refers to U.S. Generally Accepted Accounting Principles; and

 

•

“Value Added Salads” refers to all ready to eat kits, salad kits and salad mixes as per Nielsen.

Basis of Presentation

Total Produce’s fiscal year ends on December 31. Dole Food Company changed its fiscal year end from a 52/53 week year ending on the Saturday closest to December 31 to a calendar year ending on December 31, effective with fiscal year 2020. Unless otherwise noted, any reference to a year in the context of Total Produce’s financial data preceded by the word “fiscal” refers to the fiscal year ended December 31 of that year. Any reference to a year in the context of Dole Food Company’s financial data preceded by the word “fiscal” for fiscal years prior to fiscal year 2020 refers to the fiscal year ended on the Saturday closest to December 31 of that year. For example, references to “fiscal year 2020” refer to the fiscal year ended December 31, 2020 for each of Total Produce and Dole Food Company and references to “fiscal year 2019” refer to the fiscal year ended December 31, 2019 with respect to Total Produce and to the year ended December 28, 2019 with respect to Dole Food Company. Any reference to a year not preceded by “fiscal” refers to a calendar year. Certain amounts, percentages and other figures presented in this prospectus have been subject to rounding adjustments and therefore may not represent the arithmetic summation or calculation of the figures that precede them.

The financial results of Total Produce, Dole Food Company and their respective subsidiaries will be consolidated in the financial statements of Dole plc following the Transaction and this offering. Dole plc has engaged to date only in activities in contemplation of the Transaction and this offering and will have no operations or assets prior to the completion of the Transaction. Following the completion of this offering, Dole plc will be a holding company, and its principal asset will be ordinary shares of Total Produce, all of which it will hold directly or indirectly through holding companies. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Total Produce and Dole Food Company” for more information.

References in this prospectus to pro forma figures give effect to (i) the Transaction, (ii) the sale by us of ordinary shares in this offering at an assumed initial public offering price of $ per share (the midpoint of the price range set forth on the cover of this prospectus, and after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us), (iii) this offering and the use of proceeds hereby, and (iv) the consummation of debt financing in connection with the Transaction, as if they had occurred on January 1, 2020. See “Unaudited Pro Forma Condensed Consolidated Financial Information” for more information.

Our financial statements, the financial statements of Total Produce and the financial statements of DFC Holdings included in this prospectus were prepared in accordance with U.S. GAAP.

Certain of our financial information is presented in euros. For the convenience of the reader, in this prospectus, unless otherwise indicated, translations from euros into U.S. dollars were made at the rate of €1.00 to $1.2107 for income statement information and $1.1728 for balance sheet information, which were the average closing rates per OANDA.com for the quarter ended March 31, 2021 and the closing rate on March 31, 2021, respectively. Such U.S. dollar amounts are not necessarily indicative of the amounts of U.S. dollars that could actually have been purchased upon exchange of euros at the dates indicated or any other date.

All references in this prospectus to “$” mean U.S. dollars and all references to “€” mean euros.

 

iv

Market and Industry Data

Certain market and industry data included in this prospectus has been obtained from third-party sources that we believe to be reliable, including data that we have commissioned. Market estimates are calculated by using independent industry publications, government publications, and third party forecasts in conjunction with our assumptions about our markets. We have not independently verified such third party information. While we are not aware of any misstatements regarding any market, industry or similar data presented herein, such data involves risks and uncertainties and is subject to change based on various factors, including those discussed under the headings “Special Note Regarding Forward-Looking Statements” and “Risk Factors” in this prospectus. For more information on the market and industry data we use, see “Industry, Market and Other Data.”

Trademarks, Service Marks and Trade Names

We own or have rights to various trademarks, service marks and trade names that we use in connection with the operation of our business. We use the DOLE registered mark, trademark and related design marks in this prospectus. This prospectus may also contain trademarks, service marks and trade names of third parties, which are the property of their respective owners. Our use or display of third parties’ trademarks, service marks, trade names or products in this prospectus is not intended to, and does not imply a relationship with, or endorsement or sponsorship by us. Solely for convenience, the trademarks, service marks and trade names referred to in this prospectus may appear without the ^{®, TM} or ^SM symbols, but the omission of such references is not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable owner of these trademarks, service marks and trade names.

Implications of Being a Foreign Private Issuer

Our status as a foreign private issuer exempts us from compliance with certain laws and regulations of the SEC and certain regulations of the NYSE. As of the completion of this offering, we intend to follow the NYSE corporate governance standards for domestic issuers. However, we may in the future elect to follow home country practice in Ireland. Consequently, as a foreign private issuer, we are not subject to all of the disclosure requirements applicable to U.S. public companies. For example, we are exempt from certain rules under the Exchange Act that regulate disclosure obligations and procedural requirements related to the solicitation of proxies, consents or authorizations applicable to a security registered under the Exchange Act. In addition, our executive officers and directors are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and related rules with respect to their purchases and sales of our securities. Moreover, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. public companies. Accordingly, there may be less publicly available information concerning us than there is for U.S. public companies.

In addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year. Foreign private issuers are also exempt from the Regulation Fair Disclosure, aimed at preventing issuers from making selective disclosures of material information.

We may take advantage of these exemptions until such time as we no longer qualify as a foreign private issuer. In order to maintain our current status as a foreign private issuer, either a majority of our outstanding voting securities must be directly or indirectly held of record by non-residents of the United States, or, if a majority of our outstanding voting securities are directly or indirectly held of record by

 

v

residents of the United States, a majority of our executive officers or directors may not be United States citizens or residents, more than 50% of our assets cannot be located in the United States and our business must be administered principally outside the United States.

We have taken advantage of certain of these reduced reporting and other requirements in this prospectus. Accordingly, the information contained herein may be different from the information you receive from other public companies in which you hold equity securities.

Non-GAAP Financial Measures

Total Produce Non-GAAP Financial Measures

In addition to its results under U.S. GAAP in this prospectus we also present Total Produce’s EBIT and Adjusted EBITDA which are supplemental measures of financial performance that are not required by, or presented in accordance with, U.S. GAAP.

EBIT is calculated from net income by adding net interest expense and tax expense.

Adjusted EBITDA is calculated from EBIT by: (1) adding depreciation charges; (2) adding intangible asset amortization charges; (3) adding litigation and transaction related costs; (4) adding or subtracting fair value movements on contingent consideration; (5) adding impairment charges on goodwill, intangible assets and property, plant and equipment, net of insurance proceeds; (6) adding net unrealized loss or subtracting the net unrealized gain on derivative instruments; (7) adding the net unrealized loss or subtracting the net unrealized gain on foreign denominated intercompany borrowings; (8) adding the net realized loss or subtracting the net realized gain on noncash settled foreign denominated intercompany borrowings; (9) adding restructuring charges or onerous contract costs; (10) adding the loss or subtracting the gain on asset sales for assets held-for-sale and actively marketed property; (11) adding financing charges and other debt related costs; (12) deducting the gain or adding the loss on the sale of equity investments or other business interests and (13) adding the foreign currency gains relating to proceeds from share placings. It also includes the Group share of these items within equity method investments and the following items specific to its equity method investment in Dole Food Company; (A) deducting costs of discontinued operations; (B) adding vegetable recalls and related costs and (C) adding costs that are directly related to the COVID-19 pandemic, and are as follows: (i) incremental to charges incurred prior to the outbreak, including incremental costs related to personal protective equipment and transportation, and direct costs due to lower production capacity from a plant shutdown, (ii) not expected to recur once the crisis has subsided and operations return to normal, and (iii) clearly separable from normal operations.

Management uses EBIT and Adjusted EBITDA because they are measures commonly used by financial analysts in evaluating the performance of companies in our industry. The adjustments in calculating Adjusted EBITDA have been made because management excludes these amounts when evaluating performance because it eliminates the effects of (i) considerable amounts of non-cash depreciation and amortization and (ii) items not within the control of the Company’s operations managers. EBIT or Adjusted EBITDA is not calculated or presented in accordance with U.S. GAAP, and is not a substitute for net income, income from continuing operations, cash flows from operating activities or any other measure prescribed by U.S. GAAP. Further, EBIT or Adjusted EBITDA as used herein is not necessarily comparable to similarly titled measures of other companies.

A reconciliation of these non-GAAP measures to revenue and net income, the most directly comparable measure calculated in accordance with U.S. GAAP, are set forth in “Summary Historical and Pro Forma Consolidated Financial Information.”

 

vi

Dole Food Company Non-GAAP Financial Measures

In addition to its results under U.S. GAAP presented in this prospectus, Dole Food Company’s EBIT before discontinued operations and Adjusted EBITDA, which are supplemental measures of financial performance that are not required by, or presented in accordance with, U.S. GAAP, are also presented in this prospectus.

EBIT before discontinued operations is calculated from net income (loss) by adding the loss from discontinued operations, net of income taxes, adding interest expense from continuing operations, and adding the income tax expense from continuing operations. Adjusted EBITDA is calculated from EBIT before discontinued operations by: (1) adding depreciation and amortization; (2) adding the net unrealized loss or subtracting the net unrealized gain on derivative instruments; (3) adding the net unrealized loss or subtracting the net unrealized gain on foreign denominated intercompany borrowings; (4) adding the net realized loss or subtracting the net realized gain on noncash settled foreign denominated intercompany borrowings; (5) adding restructuring charges; (6) adding the loss or subtracting the gain on asset sales for assets held-for-sale and actively marketed property; (7) adding vegetable recalls and related costs; (8) adding refinancing charges and other debt related costs; (9) adding litigation and transaction costs; (10) adding asset write-downs; and (11) adding costs that are directly related to the COVID-19 pandemic, and are as follows: costs that are (i) incremental to charges incurred prior to the outbreak, including incremental costs related to personal protective equipment and transportation, and direct costs due to lower production capacity from a plant shutdown, (ii) not expected to recur once the crisis has subsided and operations return to normal, and (iii) clearly separable from normal operations. Dole Food Company did not add-back any costs related to COVID-19 after the third quarter of 2020.

However, EBIT before discontinued operations and Adjusted EBITDA are not measurements of Dole Food Company’s financial performance under U.S. GAAP and should not be considered as alternatives to net income (loss) attributable to Dole Food Company, net income (loss), income (loss) from continuing operations or any other performance measures derived in accordance with U.S. GAAP. Additionally, EBIT before discontinued operations and Adjusted EBITDA are not intended to be liquidity measures because of certain limitations such as:

 

•

they do not reflect Dole Food Company’s cash expenditures, or future requirements, for capital expenditures or contractual commitments;

 

•

they do not reflect changes in, or cash requirements for, Dole Food Company’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 Food Company’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 measures do not reflect cash requirements for such replacements.

Because of these limitations, EBIT before discontinued operations and Adjusted EBITDA should not be considered as measures of discretionary cash available to Dole Food Company to invest in the growth of its and Dole plc’s business.

Further, EBIT before discontinued operations and Adjusted EBITDA 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 EBIT before discontinued operations and Adjusted EBITDA herein because Dole Food Company’s management believes that EBIT before discontinued operations and Adjusted EBITDA are useful performance measures for it. These non-

 

vii

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 or cash flows as reported under U.S. GAAP.

In calculating these non-GAAP financial measures, Dole Food Company makes certain adjustments that are based on assumptions and estimates that may prove to be inaccurate. In addition, in evaluating Dole Food Company’s non-GAAP financial measures, you should be aware that Dole Food Company may, in the future, incur expenses that are the same as or similar to those eliminated or adjusted for in this presentation. Our presentation of these non-GAAP financial measures should not be construed as an inference that Dole Food Company’s future results will be unaffected by any such adjustments. The non-GAAP information in this prospectus should be read in conjunction with Dole Food Company’s audited consolidated financial statements and the related notes included elsewhere in this prospectus. A reconciliation of these non-GAAP measures to net income (loss), the most directly comparable measure calculated in accordance with U.S. GAAP, is set forth in “Summary Historical and Pro Forma Consolidated Financial Information.”

Pro Forma Non-GAAP Financial Measures

In addition to its results under U.S. GAAP, in this prospectus we also present Dole plc’s pro forma EBIT, pro forma Adjusted EBITDA, pro forma Adjusted net income attributable to Dole plc 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.

Pro forma EBIT before discontinued operations is calculated from net income by adding the loss from discontinued operations, net of income tax, adding interest expense and adding the income tax expense from continuing operations.

Pro forma Adjusted EBITDA is calculated from net income by: (1) adding the loss from discontinued operations, net of income tax; (2) adding interest expense; (3) adding the income tax expense from continuing operations; (4) adding depreciation charges; (5) adding intangible asset amortization charges; (6) adding litigation and transaction related costs; (7) adding or subtracting fair value movements on contingent consideration; (8) adding impairment charges on goodwill, intangible assets and property, plant and equipment, net of insurance proceeds; (9) adding net unrealized loss or subtracting the net unrealized gain on derivative instruments; (10) adding the net unrealized loss or subtracting the net unrealized gain on foreign denominated intercompany borrowings; (11) adding the net realized loss or subtracting the net realized gain on noncash settled foreign denominated intercompany borrowings; (12) adding restructuring charges or onerous contract costs; (13) adding the loss or subtracting the gain on asset sales for assets held-for- sale and actively marketed property; (14) adding financing charges and other debt related costs; (15) deducting the gain or adding the loss on the sale of equity investments or other business interests; and (16) adding costs that are directly related to the COVID-19 pandemic, and are as follows: (i) incremental to charges incurred prior to the outbreak, including incremental costs related to personal protective equipment and transportation, and direct costs due to lower production capacity from a plant shutdown, (ii) not expected to recur once the crisis has subsided and operations return to normal, and (iii) clearly separable from normal operations. Costs related to COVID-19 are not added back after the third quarter of 2020. The calculation of Pro forma Adjusted EBITDA also excludes the effect of the Group share of these items within equity method investments.

Pro forma Adjusted net income attributable to Dole plc is calculated from net income attributable to Dole plc by: (1) adding the loss from discontinued operations, net of income tax; (2) adding intangible asset amortization charges; (3) adding litigation and transaction related costs; (4) adding or subtracting fair value movements on contingent consideration; (5) adding impairment charges on goodwill, intangible assets and property, plant and equipment, net of insurance proceeds; (6) adding

 

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net unrealized loss or subtracting the net unrealized gain on derivative instruments including interest rate swaps; (7) adding the net unrealized loss or subtracting the net unrealized gain on foreign denominated intercompany borrowings; (8) adding the net realized loss or subtracting the net realized gain on noncash settled foreign denominated intercompany borrowings; (9) adding restructuring charges or onerous contract costs; (10) adding the loss or subtracting the gain on asset sales for assets held-for-sale and actively marketed property; (11) deducting the gain or adding the loss on the sale of equity investments or other business interests; (12) adding the fees for bond redemption and charges for extinguishment of existing debt issuance costs; (13) adding back the expense or subtracting the benefit of U.S. Tax Reform discrete income tax expense (benefit); and (14) adding costs that are directly related to the COVID-19 pandemic, and are as follows: (i) incremental to charges incurred prior to the outbreak, including incremental costs related to personal protective equipment and transportation, and direct costs due to lower production capacity from a plant shutdown, (ii) not expected to recur once the crisis has subsided and operations return to normal, and (iii) clearly separable from normal operations. Costs related to COVID-19 are not added back after the third quarter of 2020. It also excludes the tax effect and the effect attributable to non-controlling interests share of such items. The calculation of Pro forma Adjusted net income also excludes the effect of the Group share of these items within equity method investments.

Pro forma Adjusted Earnings per Share is calculated from Adjusted net income attributable to Dole plc divided by diluted weighted average number of shares in the applicable period.

However, pro forma EBIT before discontinued operations, pro forma Adjusted EBITDA and pro forma Adjusted net income attributable to Dole plc 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 (loss) from continuing operations or any other performance measures derived in accordance with U.S. GAAP. Additionally, pro forma EBIT before discontinued operations and pro forma Adjusted EBITDA 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;

 

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they do not reflect changes in, or cash requirements for, Dole plc’s working capital needs;

 

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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

 

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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 measures do not reflect cash requirements for such replacements.

Because of these limitations, pro forma EBIT before discontinued operations and pro forma Adjusted EBITDA 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 before discontinued operations, pro forma Adjusted EBITDA and pro forma Adjusted net income attributable to Dole plc 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 before discontinued operations, pro forma Adjusted EBITDA and pro forma Adjusted net income attributable to Dole plc herein because Dole Plc’s management believes that pro forma EBIT before discontinued operations, pro forma Adjusted EBITDA and pro forma Adjusted net income attributable to Dole plc are useful performance measures for it. 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 or cash flows as reported under U.S. GAAP.

 

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In calculating these non-GAAP financial measures, Dole plc makes certain adjustments that are based on assumptions and estimates that may prove to be inaccurate. In addition, in evaluating Dole Food Company’s non-GAAP financial measures, you should be aware that Dole plc may, in the future, incur expenses that are the same as or similar to those eliminated or adjusted for in this presentation. Our presentation of these non-GAAP financial measures should not be construed as an inference that Dole plc’s future results will be unaffected by any such adjustments. The non-GAAP information in this prospectus should be read in conjunction with Dole plc’s audited consolidated financial statements and the related notes included elsewhere in this prospectus. A reconciliation of these non-GAAP measures to net income, the most directly comparable measure calculated in accordance with U.S. GAAP, is set forth in “Summary Historical and Pro Forma Consolidated Financial Information.”

 

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RISK FACTORS

An investment in our ordinary shares involves a high degree of risk. You should carefully consider the risks and uncertainties described below together with the other information set forth in this prospectus before investing in our ordinary shares. If any of the following risks or uncertainties actually occurs, our business, financial position and results of operations could be materially and adversely affected. In such case, the trading price of our ordinary shares could decline and you may lose all or part of your investment. Our business, financial condition, prospects, results of operations or cash flows could also be harmed by risks and uncertainties not currently known to us or that we currently do not believe are material. We cannot assure you that any of the events discussed in the risk factors below will not occur.

Risks Related to Our Business and Industry

Adverse weather conditions, natural disasters, crop disease, pests and other natural conditions can impose significant costs and losses on our business.

Fresh produce is vulnerable to adverse weather conditions, including windstorms, floods, drought and temperature extremes, which are quite common but difficult to predict, the effects of which may be influenced and intensified by ongoing global climate change. Unfavorable growing conditions can reduce both crop size and crop quality. This risk is particularly acute with respect to regions or countries from which we source a significant percentage of our products. In extreme cases, entire harvests may be lost in some geographic areas. In addition, weather patterns may affect consumer demand, creating shortages in key products. For example, we experience an increased demand for salads during summer months and prolonged warm weather may stress our ability to meet such demand. Conversely, extended bouts of cold or other inclement weather may depress such demand, leading to wasted product. Adverse weather may also impact our supply chains, preventing us from procuring supplies necessary to the running of our operations and delivering our products to our customers. Outsized weather events and natural disasters may prolong or worsen such impacts. For example, we were recently adversely impacted by hurricanes in Honduras and unseasonably significant rainfall in Chile. Such adverse conditions can increase costs, decrease revenue and lead to additional charges to earnings, which may have an adverse effect on our business, financial condition and results of operations.

Fresh produce is also vulnerable to crop disease and to pests, which may vary in severity and effect, depending on the stage of production at the time of infection or infestation, the type of treatment applied, climatic conditions and the risks associated with ongoing global climate change. For example, black sigatoka is a fungal disease that affects banana cultivation in most areas where they are grown commercially.

Tropical Race 4 (“TR4”) may impose significant costs and losses on our business.

We have begun seeing instances of Banana Fusarium Wilt Tropical Race 4 (“TR4”), a serious vascular crop disease that affects bananas in some areas where we source product. TR4 significantly reduces productivity of banana crops and destroys affected banana plants. In the 1950’s, a predecessor disease to TR4, Banana Fusarium Wilt Tropical Race 1 (“TR1”), resulted in the banana industry discontinuing cultivation of the Gros Michel banana, which is susceptible to TR1, and moving to the Cavendish variety. While TR4 is a significant threat to the Cavendish banana, other options currently exist and are being developed. For example, a TR4-tolerant banana variety has been identified and is currently being used in Asia and Australia where TR4 has been present for many years. It is approximately 15-20% less productive than the Cavendish, however, making production costs higher.

 

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Although we are yet to experience any material impacts to our growing or sourcing operations, we continuously monitor TR4 and make improvements to our existing biosecurity and other prevention strategies. For example, we are conducting site-specific TR4 prevention activities throughout Latin America in coordination with local authorities and international experts to contain and prevent spread based on a risk-based mitigation plan. We have also developed contingency plans should TR4 at some point impact our operations, including the potential deployment of conventionally bred, gene-edited, or genetically modified (“GMO”) banana plants more resistant or immune to the disease. These prevention and research efforts have cost us approximately $6.7 million to date, and we expect to spend an additional approximately $5.3 million in 2021 and $7.2 million in 2022. Future costs are uncertain and will depend on the extent of any continued spread of the disease. For more information about gene-edited and GMO banana plants, see “—Risks Related to Our Business and Industry—Some of the ingredients that we use in our products contain GMOs and we may in the future need to develop and market GMO products and products containing GMO ingredients based on adverse market conditions.”

We may be unable to prevent TR4’s spread or develop bananas fully resistant to the disease, causing increased costs, decreased revenue and charges to earnings, which may have an adverse effect on our business, financial condition and results of operations. Efforts to develop a fully resistant plant may not succeed and if those efforts do succeed, fruit from fully resistant plants may not be marketable due to consumer preference or government regulation.

Our business is highly competitive and we cannot assure you that we will maintain our current market share.

We face strong competition from many companies in all of our product lines. Our principal competitors in the international banana business are Chiquita Brands International, Fresh Del Monte Produce and Fyffes. The international pineapple and diversified fruit categories have a large number of exporters, importers, and cooperatives competing in the sector. Our primary competitor in pineapples is Fresh Del Monte Produce and our primary competitors in the diversified fruit category are the South African company Core Fruit, the Chilean company Frusan and the multinational Unifrutti. In fresh vegetables, a limited number of grower-shippers in the United States and Mexico supply a significant portion of the U.S. market, with numerous smaller independent distributors also competing. We also face competition from grower cooperatives. In Value Added Salads, our primary competitors include Chiquita Brands International (which markets Fresh Express), Ready Pac Produce and Taylor Fresh Foods. In fresh-packed vegetables, our primary competitors include Tanimura & Antle, Duda Farm Fresh Foods, Ocean Mist Farms and the Nunes Company. In berries, our primary competitors include Driscoll Strawberry Associates, Naturipe Farms, California Giant Berry Farms, and Well-Pict Berries.

Some of our most significant competitive risks include the following:

 

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some of our competitors may have greater operating flexibility and, in certain cases, this may permit them to respond better or more quickly to changes in the industry or to introduce new products and packaging more quickly and with greater marketing support;

 

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several of our product lines compete with products sourced from other regions, private label products and other alternatives;

 

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bidding for contracts or arrangements with retail and food service customers is highly competitive, and the prices or other terms of our contract bids may not be sufficient to retain existing business or to maintain current levels of profitability;

 

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existing customers may demand changes in terms of trading which would impact our cash flow and/or profitability;

 

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we cannot predict the pricing or promotional actions of our competitors or whether those actions will have a negative effect on us; and

 

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global economic conditions or trade disruptions may influence the behavior of our competitors in a manner, which may have a negative effect on us.

There can be no assurance that we will continue to compete effectively with our present and future competitors.

Global capital and credit market issues could negatively affect our liquidity, increase our costs of borrowing and disrupt the operations of our suppliers and customers.

We depend in part on stable, liquid and well-functioning capital and credit markets to fund our operations. Although we believe that our operating cash flows, access to capital and credit markets and credit facility will permit us to meet our financing needs for the foreseeable future, there can be no assurance that continued or increased volatility and disruption in the capital and credit markets will not impair our liquidity or increase our costs of borrowing. Our business, financial condition and results of operations could also be negatively impacted if our suppliers or customers experience disruptions resulting from tighter capital and credit markets.

Our earnings are sensitive to fluctuations in market prices and demand for our products.

Excess supply often causes severe price competition in our businesses. Growing conditions in various parts of the world, particularly weather conditions such as windstorms, fires, floods, droughts and freezes, as well as diseases and pests, are primary factors affecting market prices because of their influence on the supply and quality of product.

Although the perishability of fresh produce varies to a certain degree by item (for example, bananas will typically keep fresh in temperature controlled storage for longer than lettuce), fresh produce is, as a general matter, highly perishable and must be brought to market and sold soon after harvest. The selling price received for each type of produce depends on all of these factors, including the availability and quality of the produce item in the market, and the availability and quality of competing types of produce.

In addition, general public perceptions regarding the quality, safety or health risks associated with particular food products could reduce demand and prices for some of our products. To the extent that consumer preferences evolve away from products that we produce for health or other reasons, and we are unable to modify our products or to develop products that satisfy new consumer preferences, there will be a decreased demand for our products. However, even if market prices are unfavorable, produce items which are ready to be, or have been, harvested must be brought to market promptly. A decrease in the selling price received for our products due to the factors described above could have an adverse effect on our business, financial condition and results of operations.

Currency exchange fluctuations may impact the results of our operations.

We grow, source, import, package market and distribute over 300 products that are sourced, grown, processed, marketed and distributed in over 30 countries. Our international sales are usually transacted in U.S. dollars and European currencies. Our results of operations are affected by fluctuations in currency exchange rates in both sourcing and selling locations. Although we enter into foreign currency exchange forward contracts from time to time to reduce our risk related to currency exchange fluctuation, our results of operations may still be impacted by foreign currency exchange rates, primarily, the euro-to-U.S. dollar, Swedish krona-to-U.S. dollar and Chilean peso-to-U.S. dollar

 

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exchange rates. For example, if the U.S. dollar exchange rates in 2020, had remained unchanged from the 2019 rates, the Total Produce and Dole Food Company revenues would have been lower by approximately $25 million and $14.1 million respectively. In recent years, the euro-to-U.S. dollar exchange rate has been subject to substantial volatility which may continue, particularly in light of recent political events regarding the European Union, or EU, including the United Kingdom’s exit from the EU. We estimate that a 10% strengthening of the U.S. dollar relative to Dole Food Company’s foreign currency exposure would lower pro forma revenue by approximately $86.0 million, excluding the impact of foreign currency exchange hedges. The impact of the U.S. dollar strengthening by 10% relative to Euro, Swedish Krona and Pound Sterling would lower the revenue of Total Produce by approximately $243.0 million, excluding the impact of foreign currency exchange hedges. Because we do not hedge against all of our foreign currency exposure, our business will continue to be susceptible to foreign currency fluctuations. For more information see “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Total Produce and Dole Food Company—Key Factors and Trends Affecting Our Results of Operations—Foreign Currency Fluctuations.”

Increases in commodity or raw product costs, such as fuel and paper, or changes to their availability, could adversely affect our operating results.

Increased costs for purchased fruit and vegetables have in the past negatively impacted our operating results, and there can be no assurance that they will not adversely affect our business, financial condition and results of operations in the future.

In addition, the price and availability of various commodities can significantly affect our costs. For example, the price of bunker fuel used in shipping operations, including fuel used in ships that we own or charter, is an important variable component of transportation costs. In addition, fuel and transportation costs are a significant component of the price of much of the produce that we purchase from third parties, and there can be no assurance that we will be able to pass on the increased costs we incur in these respects to customers.

The cost and availability of paper is also significant to us because some of our products are packed in cardboard boxes for shipment. If the price of paper increases, and we are not able to effectively pass these price increases along to our customers, then our operating income will decrease. Similarly, if the availability of paper is affected by increased global demand, our operations could be negatively impacted Increased costs for paper have in the past negatively impacted our operating results, and there can be no assurance that these increased costs will not adversely affect our business, financial condition and results of operations in the future.

We are subject to the risk of product contamination and product liability claims.

The sale of food products for human consumption involves the risk of injury to consumers. Such injuries may result from tampering by unauthorized third parties, quality issues such as product contamination or spoilage, including the presence of foreign objects, substances, chemicals or other agents or residues introduced during the growing, storage, processing, handling or transportation phases. We have been from time to time involved in product liability lawsuits and cannot be sure that consumption of our products will not cause a health-related illness in the future, that we will not be subject to claims or lawsuits relating to such matters or that we will not need to initiate recalls of our products in response to the foregoing. We have in the past from time to time initiated recalls, including Class I recalls, for possible contamination of produce with allergens or bacteria, such as Salmonella, E. coli and Listeria. For example, Dole Food Company experienced a Listeria outbreak in early 2016 linked to packaged salads produced at a Dole Food Company facility in Ohio, which Dole Food Company responded to by immediately ceasing all production at such facility and issuing a voluntary withdrawal and recall of packaged salads produced there. Even if a product liability claim is

 

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unsuccessful or is not fully pursued, the negative publicity surrounding any assertion that our products caused illness or injury could adversely affect our reputation with existing and potential customers and our corporate and brand image. Moreover, claims or liabilities of this sort might not be covered by our insurance or by any rights of indemnity or contribution that we may have against others. We cannot be sure that we will not incur claims or liabilities for which we are not insured or that exceed the amount of our insurance coverage.

Adverse perception, events or rumors relating to our brand could negatively impact our business.

Consumer and institutional recognition of the Total Produce and Dole Food Company trademarks and related brands, and the association of these brands with high-quality and safe food products, are an integral part of our business. The occurrence of any events or rumors that cause consumers and/or institutions to no longer associate these brands with high-quality and safe food products may materially adversely affect the value of our brand names and demand for our products. We have licensed and will continue to license the Total Produce and DOLE brand name to several affiliated and unaffiliated companies for use in the United States and abroad. In addition, we sold the use of the DOLE brand in Asia, Australia and New Zealand for fresh fruit, worldwide for shelf stable packaged food products, and worldwide for juice products. Acts or omissions by these companies, over which we have limited or no control, may also have such adverse effects.

In addition, sustainability credentials are an increasingly important factor in stakeholders’ perceptions of a company. Should we not meet the expectations of our stakeholders or communicate our work in this area sufficiently this may negatively impact our reputation.

We may be unable to service our substantial debt with our current or expected cash flows and such debt may limit our flexibility and ability to pursue additional financing.

As of March 31, 2021, after giving effect to the Transaction and the consummation of debt financing in connection with the Transaction, we would have had $1,920.0 million of outstanding indebtedness. Following the completion of this offering and after giving further effect to the consummation of debt financing in connection with the Transaction, and our planned use of a portion of the net proceeds to be received by us from this offering to repay outstanding debt, as described under “Use of Proceeds”, we would have had $1,301.0 million of outstanding indebtedness and $460 million available for borrowing under the Revolving Credit Facility, as of March 31, 2021. Our ability to make scheduled payments of the principal of, to pay interest on or to refinance our indebtedness, depends on our future performance, which is subject to economic, financial, competitive and other factors beyond our control, including those described in this “Risk Factors” section and elsewhere in this prospectus. Our business may not generate sufficient cash flow from operations to service our debt and make necessary capital expenditures. If we are unable to generate such cash flow, we may be required to adopt one or more alternatives, such as selling assets, restructuring debt or obtaining additional financing on terms that may be onerous or highly dilutive. Our ability to refinance our indebtedness will depend on the capital markets and our financial condition at such time. We may not be able to engage in any of these activities or engage in these activities on desirable terms, which could result in a default on our debt obligations. For more information on our outstanding indebtedness, see “Description of Certain Indebtedness.”

Our earnings are subject to seasonal variability.

Our earnings may be affected by seasonal factors, including:

 

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the seasonality of our supplies and consumer demand;

 

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the ability to process products during critical harvest periods; and

 

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the timing and effects of ripening and perishability.

 

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As an example, although banana production tends to be relatively stable throughout the year, banana pricing is seasonal because bananas compete against other fresh fruit that generally comes to market beginning in the summer. As a result, banana prices are typically higher during the first half of the year.

We expect to expand our business, in part, through future acquisitions, but we may not be able to identify or complete suitable acquisitions, which could harm our business, financial condition and results of operations.

Our business strategy includes growth through the acquisitions of other businesses. We continually review, evaluate and consider potential acquisitions. In such evaluations, we are required to make difficult judgments regarding the value of business opportunities and the related risks and cost of potential liabilities. We plan to use acquisitions of companies to expand our geographic coverage, add experienced management and increase our product offerings. We may not be able to continue to identify attractive acquisition opportunities or successfully acquire identified targets. In addition, we may not be successful in integrating our current or future acquisitions, including integrations in connection with the Transaction, into our existing operations, which may result in unforeseen operational difficulties or diminished financial performance or require a disproportionate amount of our management’s attention. Even if we are successful in integrating our current or future acquisitions into our existing operations, we may not derive the benefits, such as operational or administrative synergies, that we expected from such acquisitions, which may result in the investment of our capital resources without realizing the expected returns on such investment. Furthermore, competition for acquisition opportunities may increase our cost of making further acquisitions or cause us to refrain from making additional acquisitions. We also may be limited in our ability to incur additional indebtedness in connection with or to fund future acquisitions under the Credit Agreement (as defined below). In addition, although we have dedicated in-house personnel whose primary role is to focus on acquisitions, the time and effort involved in attempting to identify acquisition candidates and consummate acquisitions may divert members of our management from the operations of our company.

We depend on certain key customers and are subject to risks if such key customers reduce the amount of products they purchase from us or terminate their relationships with us.

In certain regions our customer base is concentrated among a small number of large, key customers. Overall our top ten customers accounted for approximately 30% of pro forma revenue for fiscal year 2020, although no one customer accounted for more than 10% of combined revenue. If we fail to maintain our relationships with such customers and such customers terminate their relationship or otherwise reduce the amount of products they purchase from us below our expectations, we could suffer adverse effects in such reason on our business, business opportunities, results of operations, financial condition and cash flows.

We typically extend credit to our key customers. Failure to collect, trade receivables, untimely collection or customer defaults could adversely affect our liquidity.

We extend credit to certain of our key customers and, as of December 31, 2020, on a pro forma basis, we would have had $741.0 million in trade receivables outstanding. Generally, our customers will pay within the credit period, however, customer illiquidity may cause repayment to fall outside the credit period or not at all. We perform ongoing credit evaluations of our customers’ financial condition and manage the risk based on experience, customers’ track record and historic default rates. If we encounter future problems collecting amounts due from our customers, particularly customers with a large amount of credit outstanding, or if we experience delays or customer default in the collection of amounts due, our liquidity could be adversely affected.

 

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Public health outbreaks, epidemics or pandemics, including the global COVID-19 pandemic, have disrupted and may continue to disrupt, our business and could materially affect our business, financial condition and results of operations.

The recent COVID-19 pandemic and resulting worldwide economic conditions have affected, and may continue to affect, our business, financial condition and results of operations.

The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and created significant volatility and disruption of financial markets. For example, government imposed mandatory closures and restrictions across various key global markets of ours resulted in volatile supply and demand conditions, primarily due to reduced demand in the foodservice distribution channel. As a result, product was redirected to the retail channel and in some cases this led to an increased supply and lower pricing. This primarily impacted our pineapple and fresh-packed vegetable products. While demand in our retail channels for certain products has increased due to the impact of COVID-19 and this has somewhat compensated for losses in other channels and for other products, there is no guarantee that this increased demand will continue. While these effects were pronounced to varying degrees throughout fiscal year 2020, the future extent of the impact of the COVID-19 pandemic on our financial performance, including our ability to execute our strategic initiatives, is still uncertain and will depend on future developments, including the duration and spread of the pandemic, related government restrictions and the success of vaccines and other treatments for COVID-19. Additionally, as the global economic impacts of COVID-19 continue, fluctuate and/or change, the pandemic’s impact on our operating results may change or be prolonged.

In addition, our ability to continue to supply our products is highly dependent on our workforce, including our workers involved in the growing, harvesting, transportation, processing and distribution of our products. Our ability to maintain the safety of our workforce may be significantly impacted by individuals contracting or being exposed to COVID-19, and our operations and financial results may be negatively affected as a result. While we are following the requirements of governmental authorities and taking additional preventative and protective measures to ensure the safety of our workforce, we cannot be certain that these measures will be successful in ensuring the health of our workforce. For example, as a result of a significant number of positive test results at one of our salad processing plants, our workforce was significantly depleted for approximately one week, resulting in inefficiencies and higher production and product transportation costs. Additional workforce disruptions of this nature may significantly impact our ability to maintain our operations and may adversely affect our financial results. Throughout the pandemic governments have restricted travel between countries and transportation generally, and this has impacted the movement of our goods across international borders. While these restrictions have not significantly impacted our ability to supply our products to date, there is no guarantee that future border closures or restrictions will not have a significant impact on our business. We also incurred costs in relation to safety precautions undertaken in our shipping operations and the stockpiling of certain commodities, and although such costs have since subsided, there can be no assurances that we would not be required to incur such costs or similar costs in the future.

The impact of the COVID-19 pandemic on our operating results can also impact our ability to meet our financial obligations. Our operating results have been and may continue to be impacted by the pandemic, and we cannot predict whether future developments associated with the COVID-19 pandemic will materially adversely affect our long-term liquidity position. In the event of a continued sustained market deterioration or further delayed recovery, we may need additional liquidity which would require us to evaluate available alternative strategies such as selling assets, restructuring or refinancing our indebtedness, or seeking additional equity capital, strategies of which could be unsuccessful.

 

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We are subject to costs and liabilities under foreign and domestic environmental laws and regulations.

Compliance with environmental laws, including those related to the handling, use, generation, transport, and disposal of hazardous materials is inherent in major agricultural operations, including those conducted by us. Compliance with these foreign and domestic laws and related regulations is an ongoing process, and these laws and regulations are frequently revised and generally become stricter over time. Failure to comply with applicable laws and regulations can result in requirements to cease noncompliant operations, incurrence of additional capital or operating expenses to correct violations, or the assessment of significant fines and penalties. While we believe that we are generally in material compliance with applicable laws and regulations, there can be no assurance that the cost of compliance with environmental laws and regulations will not, in the future, have a material effect on our capital expenditures, earnings or competitive position. It is possible that future developments, such as increasingly strict environmental laws and enforcement policies thereunder, including those driven by concerns about climate change and further restrictions on the use of agricultural chemicals, could result in increased compliance costs which may be material.

Environmental laws include those that impose liability and/or increased costs for environmental damage from the use of herbicides, pesticides and other potentially hazardous substances or environmental contamination of our current and previously owned or leased property.

We use herbicides, pesticides and other potentially hazardous substances in the operation of our business. We may have to pay for the costs or damages associated with any improper application, accidental release or the use or misuse of such substances. Our insurance may not be adequate to cover such costs or damages or may not continue to be available at a price or under terms that are satisfactory to us. In such cases, payment of such costs or damages could have an adverse effect on our business, financial condition or results of operations.

We may be subject to liability and/or increased costs for environmental damage from the use of herbicides, pesticides and other potentially hazardous substances or environmental contamination of our current and previously owned or leased property.

We use herbicides, pesticides and other potentially hazardous substances in the operation of our business. We may have to pay for the costs or damages associated with any improper application, accidental release or the use or misuse of such substances. Our insurance may not be adequate to cover such costs or damages or may not continue to be available at a price or under terms that are satisfactory to us. In such cases, payment of such costs or damages could have an adverse effect on our business, financial condition or results of operations.

Certain environmental laws, including the Comprehensive Environmental Response, Compensation, and Liability Act in the United States, impose strict and, in many cases, joint and several, liability for the cost of remediating contamination, on current and former owners of property or on persons responsible for causing such contamination. Dole Food Company has been in the past involved in remedial investigations and actions at some locations, and we could in the future be required to spend significant sums to remediate contamination that has been caused by us, our predecessors, or prior owners or operators of our properties. An adverse result in any potential future matter could have an adverse effect on our business, financial condition and results of operations.

We face risks related to our former use of the pesticide DBCP.

Dole Food Company formerly used DBCP, a nematicide that was used on a variety of crops throughout the world. The registration for DBCP with the U.S. government was cancelled, with limited

 

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exceptions, in 1979 based in part on an apparent link to male sterility among chemical factory workers who produced DBCP. There are a number of pending lawsuits in the United States and other countries against the manufacturers of DBCP and certain growers, including Dole Food Company, who used DBCP in the past. The cost to defend or settle these lawsuits, and the costs to pay any judgments or settlements resulting from these lawsuits, or other lawsuits which might be brought, could have an adverse effect on our business, financial condition or results of operations. For more information, see “Business—Legal Proceedings.”

Goodwill and other intangible assets are subject to the risk of future impairments which could adversely impact our operating results.

We review goodwill and other intangible assets for impairment on an annual basis or earlier if indicators for impairment are present. The goodwill associated with our acquisitions are sensitive to differences between estimated and actual cash flows and changes in the related discount rate used to evaluate the fair value of these assets. If these businesses do not perform to expected levels, the goodwill may be at risk for impairment in the future.

The fair value of the Dole Food Company trade names and trademarks are sensitive to differences between estimated and actual cash flows and changes in the related discount rate used to evaluate the fair value of these assets. If our products do not perform to expected levels, the trade names and trademarks associated with these products may also be at risk for impairment in the future.

Any such impairment charges could be material and have an adverse impact on our business, financial condition and results of operations.

Changes in immigration laws could impact the availability of labor to harvest our products and operate our salad manufacturing plants, or the availability of produce purchased from third party suppliers.

The personnel engaged for our U.S. harvesting operations typically include significant numbers of immigrants who are authorized to work in the United States. Immigrants who are authorized to work in the United States also make up a portion of the workforce at our U.S. salad manufacturing plants. The availability and number of these workers could decrease if there are changes in U.S. immigration laws. A scarcity of available personnel to harvest agricultural products in the United States could increase our labor costs, increase our product costs or lead to product shortages, and adversely impacting our business, financial condition and results of operations.

A portion of our workforce is unionized and labor disruptions could decrease our profitability.

As of December 31, 2020, approximately 30% of our full-time employees worldwide worked under various collective bargaining agreements and unionized workforces. We cannot give assurance that we will be able to negotiate these or other collective bargaining agreements on the same or more favorable terms as the current agreements, or at all, and without production interruptions, including labor stoppages. A prolonged labor dispute, which could include a work stoppage, could have an adverse effect on the portion of our business affected by the dispute, which could adversely impact our business, financial condition and results of operations.

We are subject to risks relating to our information systems.

Our electronic information and our information system assets may be made unavailable, leaked or altered due to a computer cybersecurity incident, which could adversely affect the results of our operations, and we cannot predict the extent or duration of these incidents.

 

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Although our computer systems are distributed in many geographic areas and Dole Food Company and Total Produce maintain largely independent information technology systems, there are some intra-company systems which are connected together in a private network. A widespread computer cybersecurity incident, such as virus infection, may significantly disrupt our operations and business processes. In such a case, we may have to operate manually, which may result in significant delay in the delivery of our products to our customers or damage to the fresh fruit and vegetable products. Our customers could refuse to continue to do business with us and prematurely terminate or reduce existing contracts, resulting in a significant reduction of our operating revenue.

We have intellectual property, trade secrets and confidential business information that are stored in electronic formats that could be leaked to competitors or the public due to computer cybersecurity incidents, which may result in loss of competitive position and market share. We also have personal confidential information stored in our controlled systems. This information, if stolen or leaked, could result in significant financial and legal risk including penalties under data protection legislation, such as the General Data Protection Regulation in the EU.

In the context of our EU-facing operations, we may be subject to specific compliance obligations under the General Data Protection Regulation (EU) 2016/679 (the “GDPR”) and associated laws and regulations in different EU Member States in which we operate. In addition, portions of our business established outside the EU may be required to comply with the requirements of the GDPR and associated EU legislation with respect to the offering of products to, or the monitoring of, individuals in the EU. We may also be subject to the local privacy and data protection laws of the EU Member States in which we offer products. Failure to comply with these EU data protection and privacy laws, can carry penalties and potential criminal sanctions, as well as the risk of litigation. In addition, Directive 2002/58/EC (as amended by Directive 2009/136/EC) (together, the “e-Privacy Directive”) governs, among other things, the use of cookies and the sending of electronic direct marketing within the EU and, as such, will apply to our marketing activities within the EU. Following Brexit, the UK has adopted its own data protection and direct marketing laws (the “UK data protection laws”) which are currently based on the corresponding EU legislation. Our UK-facing operations may therefore be subject to specific compliance obligations under the UK data protection laws.

We may be targeted by computer hackers from the internet, from business partners’ networks connected to our network or from employees, for specific purposes such as financial gain, political or ideological motives or simply to damage our reputation, which may result in significant decline in consumer preference for our products in certain geographic regions or globally, and could potentially reduce our market share.

Recovery from any of the above computer incidents could be expensive. Rapidly raising and maintaining higher standards of computer cybersecurity practices in our business globally may require significant initial investment and higher operating costs, and therefore could negatively impact our operating income.

We are increasingly dependent on information technology, and expanding social media vehicles present new risks.

The inappropriate use of certain media vehicles could cause brand damage or information leakage. Negative posts or comments about us or our products on any social networking web site could seriously damage our reputation. In addition, the disclosure of non-public company sensitive information through external media channels could lead to information loss. Identifying new points of entry as social media continues to expand presents new challenges. Any business interruptions or damage to our reputation could negatively impact our business, financial condition and results of operations.

 

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Certain of our defined benefit pension plans are currently underfunded, and we may have to make significant cash payments to the plans, which would reduce the cash available for our business.

We have underfunded obligations under certain of our benefit plans. As of December 31, 2020, the liabilities under Dole Food Company’s benefit plans exceeded the assets of such benefit plans by approximately $132.2 million, and the liabilities under Total Produce’s benefit plans exceeded the assets of such benefit plans by approximately $21.3 million. As a result, on a pro forma basis, as of December 31, 2020, the liabilities under our benefit plans would have exceeded the assets of those benefit plans by approximately $153.5 million. The funded status of our benefit plans is dependent upon many factors, including returns on invested assets, actuarial assumptions, including the level of certain market interest rates and the discount rate used to determine pension obligations. Unfavorable returns on the plan assets, or unfavorable changes in applicable laws or regulations, could materially change the timing and amount of required plan funding, which would reduce the cash available for our business. In addition, a decrease in the discount rate used to determine pension obligations could result in an increase in the valuation of our benefit plans obligations, which could affect the reported funding status of our benefit plans and future contributions, as well as the periodic pension cost in subsequent fiscal years. ERISA, along with certain provisions of the Code (as defined below), require minimum funding contributions to our U.S. defined benefit pension plan.

The Pension Benefit Guaranty Corporation (the “PBGC”) has the authority to petition a court to terminate an underfunded tax-qualified pension plan under limited circumstances. In the event our U.S. tax-qualified defined benefit pension plan is terminated by the PBGC, we could be liable to the PBGC for the entire amount of the underfunding, as calculated by the PBGC based on its own assumptions, which might result in a larger obligation than that based on the assumptions we have used to fund such plan.

The European defined benefit plans are also subject to local regulators such as the Irish Pensions Authority and UK’s Pension Regulator. Total Produce has three European defined benefit plans (two in Ireland and one in the Netherlands), two UK defined benefit plans and one in Canada. Each of these is subject to local funding requirements and the powers of local regulators such as the Irish Pensions Authority, the UK’s Pension Regulator and the Dutch Central Bank (De Nederlandse Bank) in the Netherlands. The UK’s Pension Regulator has the power in certain circumstances to impose a debt or contribution demand on an employer to the extent that a defined benefit scheme is underfunded. There is currently no legislation in Ireland or the Netherlands equivalent to that in the UK.

Indebtedness under our Credit Agreement bears interest based on the London Interbank Offered Rate (“LIBOR”), which may be subject to regulatory guidance and/or reform that could cause interest rates under our current or future debt agreements to perform differently than in the past or cause other unanticipated consequences.

The ICE Benchmark Administration, the administrator of LIBOR, announced on March 5, 2021 that it intends to cease publication of LIBOR rates (i) with respect to U.S. dollar LIBOR with interest periods of 1 week and 2 months, after December 31, 2021 and (ii) with respect to U.S. dollar LIBOR with all other interest periods, after June 30, 2023, and as a result, methods of calculating LIBOR are evolving. If LIBOR ceases to exist or if the methods of calculating LIBOR change from their current form, we may need to renegotiate the terms of our Credit Agreement to replace LIBOR with the new standard that is established, if any, or to otherwise agree with the agent under such facilities on a new means of calculating interest. At this time we cannot reasonably estimate the expected impact on our business of the discontinuation of LIBOR.

 

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We face other risks in connection with our international operations.

Our operations are heavily dependent upon products grown, purchased and sold internationally. In addition, our operations significantly contribute to the economies of many of the countries in which we operate, increasing our visibility and susceptibility to legal or regulatory changes. These activities are subject to risks that are inherent in operating in foreign countries, including the following:

 

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foreign countries could change laws and regulations, or impose currency restrictions and other restraints;

 

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the risk that the government may expropriate assets;

 

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the potential imposition or implementation of burdensome tariffs, quotas or customs clearance processes;

 

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political changes and economic crises may lead to changes in the business environment in which we operate;

 

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conflict within a country in which we operate or international conflict, including terrorist acts, could significantly impact our business, financial condition and results of operations;

 

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economic sanctions may be imposed on some countries, which could disrupt the markets for products we sell, even if we do not sell into the target country;

 

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the suspension of imports of one or more products we sell, which could disrupt the markets for those products in other countries;

 

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dependency on leases and other agreements;

 

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global competitive, economic, industry, market, political and regulatory conditions, including economic downturns, political instability and war or civil disturbances that may disrupt production and distribution logistics or limit sales in individual territories;

 

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trade wars between nations in which we do business; and

 

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the difficulty in adhering to various anti-corruption laws and regulations.

Additionally, as a company with international operations, we are subject to economic and trade sanctions laws and regulations in the jurisdictions in which we do business, including, as applicable, the United States, the United Kingdom, and the European Union, among others. These laws and regulations may have a broad jurisdictional reach. For instance, our non-U.S. affiliates may be required to comply with the sanctions administered by the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”), depending on the sanctions program involved or the nexus of the non-U.S. affiliate’s activities to the United States. Economic sanctions typically prohibit or impose restrictions on dealings that involve certain foreign jurisdictions, governments, individuals or entities. Moreover, the goods we sell may be subject to applicable export control laws and regulations, such as the Export Administration Regulations (“EAR”) administered by the U.S. Department of Commerce’s Bureau of Industry and Security. The EAR generally govern the export, reexport, and in-country transfer of items that are subject to the EAR, including U.S.-origin goods. Changes to applicable sanctions or export control laws and regulations could result in decreased use of our products, or hinder our ability to export or sell our products to existing or potential customers, which may adversely affect our operating results, financial condition or strategic objectives. If we fail to comply with these laws and regulations, we could be subject to substantial civil or criminal penalties.

Dole Food Company has previously engaged in the exportation of agricultural commodities to distributors located in Iran and in other countries for onward shipment to Iran in reliance on an OFAC general license that authorizes such activities. This general license required Dole Food Company to comply with certain conditions with respect to products sold, end-user limitations and payment terms. Although Dole Food Company believes it complied with the general license requirements, there can be no assurance that Dole Food Company would be deemed by OFAC to have been in compliance.

 

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