Dole plc Reports First Quarter 2024 Financial Results

Dole plc (NYSE:DOLE) ("Dole" or the "Group" or the "Company") today released its financial results for the three months ended March 31, 2024.

Highlights for the three months ended March 31, 2024:

• Strong first quarter Group results with growth across all segments
• Revenue of $2.1 billion, an increase of 6.6%
• Net Income of $65.4 million, an increase of 219.5%
• Adjusted EBITDA¹ of $110.1 million, an increase of 9.7%
• Adjusted Net Income of $40.6 million and Adjusted Diluted EPS of $0.43
• Completed the sale of 65% equity stake in Progressive Produce for gross proceeds of $120.3 million and gain of $74.0 million

Financial Highlights - Unaudited

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

"We are pleased to deliver a strong result for the first quarter of 2024, with revenue growth of 6.6% and Adjusted EBITDA increasing 9.7% to $110.1 million.

"We successfully completed the sale of our 65% equity stake in Progressive Produce in March and used the net proceeds to strengthen our financial position by reducing our long-term debt by $100 million. At the end of the quarter, our net debt was $776 million.

"Our strong start to the year positions us well to deliver another good result in 2024. For the full year, we are maintaining our target to deliver Adjusted EBITDA in line with 2023 on a like-for-like basis. Adjusting for the sale of Progressive Produce, this implies an Adjusted EBITDA target of at least $360 million."

Group Results - First Quarter

Revenue increased 6.6%, or $132.2 million, due to strong operational performance across all segments and a $12.8 million favorable impact of foreign currency translation, partially offset by a net negative impact from acquisitions and divestitures of $13.3 million. On a like-for-like basis³, revenue was 6.7%, or $132.6 million, ahead of prior year.

Net Income increased 219.5% or $45.0 million, due to strong operational performance across the Group, as well as the gain on the sale of Progressive Produce of $74.0 million, offset partially by an impairment of goodwill of $36.7 million.

Adjusted EBITDA increased 9.7%, or $9.7 million, primarily driven by stronger performance in the Diversified Americas and Diversified EMEA segments. On a like-for-like basis, Adjusted EBITDA increased 10.8%, or $10.8 million.

Adjusted Net Income increased $8.3 million, predominantly due to increases in Adjusted EBITDA as noted above and lower depreciation and interest expense, partially offset by higher tax expense. Adjusted Diluted EPS for the three months ended March 31, 2024 was $0.43 compared to $0.34 in the prior year.

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Selected Segmental Financial Information (Unaudited)

Fresh Fruit

Revenue increased 3.2%, or $25.3 million, primarily due to higher worldwide volumes of bananas and pineapples sold and an increase in worldwide pricing of pineapples, offset in part by lower worldwide pricing for bananas.

Adjusted EBITDA increased 0.3%, or $0.2 million, driven by higher volumes and lower fruit sourcing costs, partially offset by lower pricing and decreases in commercial cargo.

Diversified Fresh Produce – EMEA

Revenue increased 7.0%, or $55.5 million, primarily due to strong performance in Ireland, the U.K. and Northern Europe, a favorable impact from foreign currency translation of $12.7 million and an incremental net positive impact of $6.2 million from acquisitions. On a like-for-like basis, revenue was 4.6%, or $36.7 million, ahead of prior year.

Adjusted EBITDA increased 10.9%, or $2.6 million, primarily driven by strong performance in Northern Europe and South Africa, as well as by a positive impact of $0.3 million from foreign currency translation. On a like-for-like basis, Adjusted EBITDA was 10.0%, or $2.3 million, ahead of prior year.

Diversified Fresh Produce – Americas & ROW

Revenue increased 12.8%, or $54.1 million, primarily driven by higher volumes of cherries sold, as a result of seasonal timing differences, improved pricing and volumes in avocados and generally strong volumes and better pricing across most commodities. These positive impacts were partially offset by decreases in berries and lower sales from the Progressive Produce business following its disposal in mid-March 2024. On a like-for-like basis, revenue was 17.4%, or $73.4 million, ahead of the prior year.

Adjusted EBITDA increased 89.3%, or $6.9 million, primarily driven by higher cherry revenue, improved performance in avocados in North America and generally stronger pricing and higher volumes across most commodities, partially offset by the impact of the disposal of the Progressive Produce business. On a like-for-like basis, Adjusted EBITDA was 106.0%, or $8.2 million, ahead of the prior year.

Capital Expenditures

Cash capital expenditures from continuing operations for the three months ended March 31, 2024 were $18.2 million, which included investments in shipping containers, farming investments, efficiency projects in our warehouses and ongoing investments in IT and logistics assets. Additions through finance lease from continuing operations were $7.0 million for the three months ended March 31, 2024.

Sale of Progressive Produce

On March 13, 2024, the Company completed the sale of its 65.0% equity interest in the Progressive Produce business to PTF Holdings. As a result of the sale, Dole received gross proceeds of $120.3 million in cash and recognized a gain on the sale of $74.0 million. On April 25, 2024, Dole voluntarily prepaid $100.0 million of its Term Loan facilities with proceeds from the sale of Progressive Produce.

Free Cash Flow from Continuing Operations and Net Debt

Free cash flow from continuing operations was an outflow of $53.2 million for the three months ended March 31, 2024. Free cash flow was primarily driven by normal seasonal impacts. There were outflows from receivables based on higher sales and timing of collections, as well as higher inventories of finished goods, partially offset by the impact of higher accrued liabilities. Net Debt as of March 31, 2024 was $775.8 million.

Outlook for Fiscal Year 2024 (forward-looking statement)

We are very pleased with the strong start we have made to fiscal year 2024 and believe this puts us in a good position to deliver a strong overall result for the year.

While still early in the year and forecasting remains complex, we are maintaining our target to deliver full year Adjusted EBITDA in line with 2023 on a like-for-like basis. Adjusting for the disposal of Progressive Produce, this implies an Adjusted EBITDA target of at least $360 million for the full year.

For fiscal year 2024, we are maintaining our capital expenditure from continuing operations guidance to be in the range of $110 - $120 million and are reducing our interest expense guidance to be in the range of $75 - $80 million.

Dividend

On May 14, 2024, the Board of Directors of Dole plc declared a cash dividend for the first quarter of 2024 of $0.08 per share, payable on July 5, 2024 to shareholders of record on June 12, 2024. A cash dividend of $0.08 per share was paid on April 4, 2024 for the fourth 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 first quarter 2024 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 U.S. or +353 (1) 582 2023 in Ireland and +44 20 3481 4247 for U.K. and other international participants. The conference ID is 2520960.

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.

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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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. Refer to the Appendix for supplementary detail.

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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.

Supplemental Reconciliation of Prior Year Segment Results to Current Year Segment Results – Unaudited

Net Debt Reconciliation

Net Debt is the primary measure used by management to analyze the Company's capital structure. Net Debt is a non-GAAP financial measure, calculated as cash and cash equivalents, less current and long-term debt. It also excludes debt discounts and debt issuance costs. The calculation of Net Debt as of March 31, 2024 is presented below. Net Debt as of March 31, 2024 was $775.8 million.

Free Cash Flow from Continuing Operations Reconciliation

Non-GAAP Financial Measures

Dole plc's results are determined in accordance with U.S. GAAP.

In addition to its results under U.S. GAAP, in this Press Release, we also present Dole plc's Adjusted EBIT, Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, Free Cash Flow from Continuing Operations and Net Debt, which are supplemental measures of financial performance that are not required by, or presented in accordance with, U.S. GAAP (collectively, the "non-GAAP financial measures"). We present these non-GAAP financial measures, because we believe they assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. These non-GAAP financial measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our operating results, cash flows or any other measure prescribed by U.S. GAAP. Our presentation of non-GAAP financial measures should not be construed as an inference that our future results will be unaffected by any of the adjusted items or that any projections and estimates will be realized in their entirety or at all. In addition, adjustment items that are excluded from non-GAAP results can have a material impact on equivalent GAAP earnings, financial measures and cash flows.

Adjusted EBIT is calculated from GAAP net income by: (1) subtracting the income or adding the loss from discontinued operations, net of income taxes; (2) adding the income tax expense or subtracting the income tax benefit; (3) adding interest expense; (4) adding mark to market losses or subtracting mark to market gains related to unrealized impacts from certain derivative instruments and foreign currency denominated borrowings, realized impacts on noncash settled foreign currency denominated borrowings, net foreign currency impacts on liquidated entities and fair value movements on contingent consideration; (5) other items which are separately stated based on materiality, which during the three months ended March 31, 2024 and March 31, 2023, included adding or subtracting asset write-downs from extraordinary events, net of insurance proceeds, subtracting the gain or adding the loss on the disposal of business interests, subtracting the gain or adding the loss on asset sales for assets held for sale and actively marketed property, adding impairment charges on goodwill and adding costs incurred for the cyber-related incident; and (6) the Company's share of these items from equity method investments.

Adjusted EBITDA is calculated from GAAP net income by: (1) subtracting the income or adding the loss from discontinued operations, net of income taxes; (2) adding the income tax expense or subtracting the income tax benefit; (3) adding interest expense; (4) adding depreciation charges; (5) adding amortization charges on intangible assets; (6) adding mark to market losses or subtracting mark to market gains related to unrealized impacts from certain derivative instruments and foreign currency denominated borrowings, realized impacts on noncash settled foreign currency denominated borrowings, net foreign currency impacts on liquidated entities and fair value movements on contingent consideration; (7) other items which are separately stated based on materiality, which during the three months ended March 31, 2024 and March 31, 2023, included adding or subtracting asset write-downs from extraordinary events, net of insurance proceeds, subtracting the gain or adding the loss on the disposal of business interests, subtracting the gain or adding the loss on asset sales for assets held for sale and actively marketed property, adding impairment charges on goodwill and adding costs incurred for the cyber-related incident; and (8) the Company's share of these items from equity method investments.

Adjusted Net Income is calculated from GAAP net income attributable to Dole plc by: (1) subtracting the income or adding the loss from discontinued operations, net of income taxes; (2) adding amortization charges on intangible assets; (3) adding mark to market losses or subtracting mark to market gains related to unrealized impacts from certain derivative instruments and foreign currency denominated borrowings, realized impacts on noncash settled foreign currency denominated borrowings, net foreign currency impacts on liquidated entities and fair value movements on contingent consideration; (4) other items which are separately stated based on materiality, which during the three months ended March 31, 2024 and March 31, 2023, included adding or subtracting asset write-downs from extraordinary events, net of insurance proceeds, subtracting the gain or adding the loss on the disposal of business interests, subtracting the gain or adding the loss on asset sales for assets held for sale and actively marketed property, adding impairment charges on goodwill and adding costs incurred for the cyber-related incident; (5) the Company's share of these items from equity method investments; (6) excluding the tax effect of these items and discrete tax adjustments; and (7) excluding the effect of these items attributable to non-controlling interests.

Adjusted Earnings per Share is calculated from Adjusted Net Income divided by diluted weighted average number of shares in the applicable period.

Net Debt is a non-GAAP financial measure, calculated as GAAP cash and cash equivalents, less GAAP current and long-term debt. It also excludes GAAP unamortized debt discounts and debt issuance costs.

Free cash flow from continuing operations is calculated from GAAP net cash used in or provided by operating activities for continuing operations less GAAP capital expenditures.

Like-for-like basis refers to the U.S. GAAP measure or non-GAAP financial measure excluding the impact of foreign currency translation movements and acquisitions and divestitures.

Dole is not able to provide a reconciliation for projected FY'24 results without taking unreasonable efforts.

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