Dole To Complete Sale Of Worldwide Packaged Foods And Asia Fresh Business In Early 2013

Dole Food Company, Inc. (NYSE: DOLE) today announced that it expects the sale of its worldwide packaged foods and Asia fresh businesses to ITOCHU Corporation for $1.685 billion in cash, now to be completed in early 2013. The sale transaction is still waiting for China regulatory approval, with the required regulatory approvals from the other six countries already received.

“After weeks of active engagement, the Chinese Ministry of Commerce officially accepted our antitrust filing on December 11, and promptly met with Dole and Itochu officials. A dedicated MOFCOM case team is focused on our filing, with a simultaneous process of interagency consultation,” said C. Michael Carter, Dole’s Executive Vice President and General Counsel. “We have been engaged in a very active dialogue with the Chinese regulatory agency, and we will continue to seek approval at the earliest date possible in 2013. We are confident that there are no competition issues that would complicate receiving antitrust approval in China.”

Mr. Carter, who is assuming the added role of President and Chief Operating Officer in connection with the sale transaction, also provided a financial and business update for the new Dole following the sale transaction. “We are pleased to announce that we are finalizing the written commitments from four of Dole’s banking partners for a new $400 million term loan and a $300 million revolving credit facility, to be implemented upon completion of the sale transaction. The $400 million term loan, together with substantially all of the proceeds from the sale transaction, will allow us to pay off our existing indebtedness of approximately $1.7 billion, and will provide needed funding for transaction-related taxes, costs and expenses, extinguishment of all or part of our long-term Japanese yen hedges, the anticipated right-sizing of the new Dole and other post-closing restructuring expenses, and possible resolution of the previously disclosed Honduras tax case, European Union Antitrust Inquiry and the DBCP cases. Upon consummation of the sale transaction, Dole’s resulting net leverage ratio will be approximately 1.8x (based on the new net debt level and 2013 projected Adjusted EBITDA of the new Dole), and we will benefit from a significant reduction in interest expense.”

On December 4, 2012, Typhoon Bopha, with high winds and heavy rain, struck the banana growing region in Mindanao, Philippines. The current estimated impact to the Asian banana industry is a loss of 30 million 13-kilo boxes, which is approximately 14% of the Asian banana industry on an annualized basis. “While the immediate effect has been an increase in prices in the Asian market, we have not yet seen any impact on prices in the North American and European banana markets,” said Mr. Carter.

“Despite the tightening global supply, we continue to see aggressive contract negotiations in the North American banana market even though costs are higher, with some importers seeking to buy market share,” said Mr. Carter. “While right-sizing initiatives for the new Dole will partially offset these impacts, our current expectation is that pro forma 2013 Adjusted EBITDA for the new Dole, including 2013 planned cost savings in the $20 million range, will be in the $150 - $170 million range, with income from continuing operations, net of income taxes, in the $45 - $60 million range, assuming no major market changes. The fresh fruit business of the new Dole is continuing to experience declining earnings in a continued difficult economic environment.”

“While the current environment in the banana market remains challenging, I remain very optimistic about the long-term future of the new Dole and its prospects,” stated David H. Murdock, Dole’s Chairman. “I am excited to be returning to the position of CEO, working with Michael Carter and Dole’s new management team, all of whom are committed to our right-sizing efforts and delivering synergies within Dole’s remaining fresh fruit and vegetables businesses.”

Dole has provided earnings guidance to give investors general information on the overall direction of its remaining businesses following the sale transaction. The guidance provided is subject to numerous uncertainties, including, among others, the timing and ultimate consummation of the sale transaction, overall economic and capital-market conditions and the markets for fresh fruits and vegetables. Dole does not intend, and undertakes no obligation, to update its forward-looking statements, including projections and future prospects.

This release contains “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of 1995 that involve a number of risks and uncertainties. Forward- looking statements, which are based on management’s current expectations, are generally identifiable by the use of terms such as “may,” “will,” “expects,” “believes,” “intends,” “anticipates” and similar expressions. The potential risks and uncertainties that could cause actual results to differ materially from those expressed or implied herein include the timing and whether the sale transaction is consummated, weather-related phenomena; market responses to industry volume pressures; product and raw materials supplies and pricing; energy supply and pricing; changes in interest and currency exchange rates; economic crises and security risks in developing countries; international conflict; and quotas, tariffs and other governmental actions. Further information on the factors that could affect Dole’s financial results is included in its filings with the SEC.

Non-GAAP Measurements

Net debt is calculated as total debt less cash. Adjusted EBITDA is a measure commonly used by financial analysts in evaluating the performance of companies. EBITDA is calculated from net income by adding interest expense and income tax expense, and adding depreciation and amortization. Through Q3 of 2012, Dole calculated Adjusted EBITDA from EBITDA by: (1) adding the net unrealized loss or subtracting the net unrealized gain on foreign currency and bunker fuel hedges and the cross currency swap which do not have a more than insignificant financing element present at contract inception; (2) adding the net loss or subtracting the net gain on the long-term Japanese yen hedges; (3) adding the foreign currency loss or subtracting the foreign currency gain on the vessel obligations; (4) adding the net unrealized loss or subtracting the net unrealized gain on foreign denominated instruments; (5) adding share-based compensation expense; (6) adding charges for restructuring and long-term receivables; (7) adding strategic review transaction costs and expenses; (8) adding refinancing charges and loss on early retirement of debt; and (9) subtracting the gain on asset sales.

For Dole’s 2013 projected Adjusted EBITDA included in this release, only share-based compensation expense has been added to EBITDA in calculating Adjusted EBITDA. The other eight factors, above, are not expected to be applicable to the new Dole or cannot now be estimated with reasonable precision; therefore, they are not reflected in 2013 projected EBITDA, and thus cannot be added or subtracted back in calculating 2013 Adjusted EBITDA. Potential resolutions of the Honduras tax case, the European Union Antitrust Inquiry and the DBCP cases have not been reflected in the 2013 Adjusted EBITDA projections.

Adjusted EBITDA has limitations as an analytical tool. It is not calculated or presented in accordance with U.S. GAAP and is not a substitute for net income attributable to Dole Food Company, Inc., net income, income from continuing operations, cash flows from operating activities or any other measure prescribed by U.S. GAAP. Further, Adjusted EBITDA as used herein is not necessarily comparable to similarly titled measures of other companies. However, Dole has included this measure because management believes that they are useful performance measures for Dole and for securities analysts, investors and others in the evaluation of Dole. Dole compensates for these limitations by relying primarily on U.S. GAAP results and using EBITDA only supplementally.

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