Dole plc Reports Second Quarter 2023 Financial Results

Dole plc (NYSE: DOLE) ("Dole" or the "Group" or the "Company") today released its financial results for the three and six months ended June 30, 2023.

Highlights for the three months ended June 30, 2023:

• Second quarter Revenue of $2.1 billion, an increase of 4.4%
• Second quarter Net Income of $52.3 million, an increase of 8.1%
• Second quarter Adjusted EBITDA¹ of $122.7 million, an increase of 9.7%
• Second quarter Adjusted Net Income of $48.4 million and Adjusted Diluted EPS of $0.51

Financial Highlights - Unaudited

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¹ Dole plc reports its financial results in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). See full GAAP financial results in the appendix. Adjusted EBIT, Adjusted EBITDA, Adjusted Net Income, Adjusted Earnings Per Share 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 Fresh Vegetables results are reported separately as discontinued operations, net of income taxes, in our condensed consolidated statements of operations, its assets and liabilities are separately presented in our condensed consolidated balance sheets, and its cash flows are included within the condensed consolidated cash flows for all periods presented. Unless otherwise noted, our discussion of our results included herein, outlook and all supplementary tables, including non-GAAP financial measures, are presented on a continuing operations basis.

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

"We are very pleased with the strong result for the second quarter, delivering Adjusted EBITDA growth of 9.7%. This result is due to the dedication and efforts of all our people across the Group.

As we progress through the second half of the year, our performance for the first six months gives us confidence in achieving our targeted Adjusted EBITDA for the full year of at least $350.0 million.”

Group Results - Second Quarter

Revenue increased 4.4%, or $90.3 million, primarily due to strong performance in the Fresh Fruit and Diversified EMEA segments, offset partially by the Diversified Americas segment. On a like-for-like basis³, revenue was 3.8%, or $77.9 million, ahead of prior year.

Adjusted EBITDA increased 9.7%, or $10.9 million, primarily driven by strong Fresh Fruit performance, offset partially by headwinds in the Diversified Americas segment. On a like-for-like basis, Adjusted EBITDA increased 9.2%, or $10.3 million.

Adjusted Net Income decreased $4.1 million, predominantly due to higher interest expense, offset by the increases in Adjusted EBITDA noted above. Adjusted Diluted EPS for the three months ended June 30, 2023 was $0.51 compared to $0.55 in the prior year.

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³ Like-for-like basis refers to the measure excluding the impact of foreign currency translation movements and acquisitions and divestitures.

Selected Segmental Financial Information (Unaudited)

Fresh Fruit

Revenue increased 4.1%, or $33.2 million. Revenue was positively impacted by higher worldwide pricing of bananas and pineapples and worldwide increases in volumes of bananas sold, partially offset by lower volumes of pineapples sold.

Adjusted EBITDA increased 16.9%, or $9.5 million. Adjusted EBITDA was positively impacted by strong revenue performance, partially offset by higher fruit sourcing costs and higher costs of shipping, packaging and handling, as well as by lower commercial cargo activity.

Diversified Fresh Produce – EMEA

Revenue increased 7.7%, or $65.8 million, primarily driven by inflation-justified price increases across the segment and a positive impact from acquisitions of $15.9 million. The impact of foreign currency translation was not material in the quarter. On a like-for-like basis, revenue was 6.0%, or $51.1 million, ahead of prior year.

Adjusted EBITDA increased 10.8%, or $4.2 million, primarily driven by strong performance across the segment, particularly within the Spanish, Dutch, Irish and Czech businesses, as well as by a favorable impact from acquisitions of $0.5 million, partially offset by weaker trading results in the South African business. On a like-for-like basis, Adjusted EBITDA was 10.0%, or $3.8 million, ahead of prior year.

Diversified Fresh Produce – Americas & ROW

Revenue decreased 6.8%, or $30.6 million, primarily driven by lower volumes across the segment, partially offset by continued strong performance for potatoes and onions in North America and inflation-justified price increases across the segment.

Adjusted EBITDA decreased 16.4%, or $2.8 million, primarily due to a challenging quarter for berries, partially offset by strong performance for potatoes and onions, as well as by strong trading results within other commodities.

Capital Expenditures

Capital expenditures for the six months ended June 30, 2023 were $41.0 million, which included investments in farm renovations and ongoing investments in IT, logistics and efficiency projects in our warehouses and processing facilities. This amount also includes $5.4 million of capital expenditures related to discontinued operations.

Net Debt

Net Debt as of June 30, 2023 was $1.0 billion.

Outlook for Fiscal Year 2023 (forward-looking statement)

We are very pleased with the Group’s performance in the first half of the year, delivering $223.0 million of Adjusted EBITDA.

In the first half of 2023, we have seen the benefit of improved logistical efficiencies in several areas, which is helping to bring more stability to our core fruit business. Partially offsetting this benefit has been the anticipated reduction in commercial cargo activity.

As we look out into the second half of the year and towards 2024, there is the potential for disruption in many of the key growing regions in Central and South America due to the onset of El Niño climatic conditions. However, we are monitoring the changing weather patterns closely and believe we are well placed to deal with potential challenges using our diverse sourcing network and due to our advanced farming practices.

While the macro-economic environment remains difficult to predict, in our business we have seen positives such as the strengthening Euro relative to the U.S. Dollar, more open supply chains, and moderation of inflation for certain input costs. However, we do continue to be impacted by higher interest rates and other foreign currency movements.

Overall, taking the above factors into account, we believe our strong first half has put us in an excellent position to deliver a good result for the year and we are now targeting an Adjusted EBITDA for 2023 of at least $350.0 million.

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 August 16, 2023, the Board of Directors of Dole plc declared a cash dividend for the second quarter of 2023 of $0.08 per share, payable on October 5, 2023 to shareholders of record on September 14, 2023. A cash dividend of $0.08 per share was paid on July 6, 2023 for the first quarter of 2023.

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 second quarter 2023 financial results. The webcast can be accessed at www.doleplc.com/investor-relations.

The conference call can be accessed live by dialing (646) 307-1963 in the US or +353 (1) 582 2023 in Ireland and +44 20 3481 4247 for UK and other international participants. The conference ID is 4317462.

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.

Category: Financial

Appendix

Consolidated Statement of Operations - Unaudited

Consolidated Balance Sheets - Unaudited

Consolidated Statements of Cash Flows - Unaudited

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.

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⁴ For the three months ended June 30, 2023, other items is comprised of $0.2 million of asset writedowns, net of insurance proceeds. For the three months ended June 30, 2022, other items is comprised of $0.1 million in asset writedowns, net of insurance proceeds. For the six months ended June 30, 2023, other items is comprised of $0.9 million of asset writedowns, net of insurance proceeds. For the six months ended June 30, 2022, other items is comprised of $0.5 million in insurance proceeds, net of asset writedowns and $0.3 million in gains on disposal of a business.

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.

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⁵ For the three months ended June 30, 2023, other items is comprised of $0.2 million of asset writedowns, net of insurance proceeds. For the three months ended June 30, 2022, other items is comprised of $0.1 million in asset writedowns, net of insurance proceeds. For the six months ended June 30, 2023, other items is comprised of $0.9 million of asset writedowns, net of insurance proceeds. For the six months ended June 30, 2022, other items is comprised of $0.5 million in insurance proceeds, net of asset writedowns and $0.3 million in gains on disposal of a business.

Supplemental Reconciliation from Net Income attributable to Dole plc 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.

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⁶ Other operating charges for the three months ended June 30, 2023 is comprised of gains on asset sales of $10.7 million, as reported on the Dole plc GAAP Consolidated Statements of Operations.

⁷ Other operating charges for the three months ended June 30, 2022 is comprised of gains on asset sales of $7.9 million, as reported on the Dole plc the GAAP Consolidated Statements of Operations.

Supplemental Reconciliation from Net Income attributable to Dole plc 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.