Dole Food Company Inc. (NYSE:DOL) Wednesday reported a net loss of $7.4 million, or 13 cents per share, for the third quarter of 2000 vs. a net loss of $8.0 million, or 14 cents per share, for the third quarter of 1999.
The company’s third-quarter 2000 results reflect the after-tax impact of certain gains offset by a business downsizing charge, while its third-quarter 1999 results include rehabilitation expenses related to Hurricane Mitch.
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During the third quarter of 2000, the company received net insurance proceeds of $43 million related to Hurricane Mitch and recorded a pretax gain of $8 million on the previously announced sale of its California and Arizona citrus assets. These earnings were largely offset by a pretax charge of $46 million taken to reduce capacity in the company’s banana operations and shut down its Latin American citrus and melon operations. In the third quarter of 1999, the company incurred Hurricane Mitch rehabilitation expenses totaling $8 million.
Excluding the after-tax impact of these items in both years, the company would have reported a net loss of $1.3 million, or 2 cents per share, for the third quarter of 2000 compared with a net loss of $1.9 million, or 3 cents per share, for the third quarter of 1999.
The third-quarter 2000 net loss before special items arose from the impact of the weak euro and the continued high prices for fuel oil, which largely offset significant year-over-year cost savings in the company’s banana business.
The company’s other businesses continued to perform well, particularly its North American vegetable division, which generated significantly stronger earnings as compared to the third quarter of 1999 due to favorable pricing in the commodity vegetables business and increased market share in the fresh-cut salads business. The increase in interest income was attributable to interest on a tax refund received during the quarter.
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By GlobalDataCash flow (EBITDA) before special items totaled $70 million in the third quarter of 2000 compared with $68 million for the same quarter of 1999. Revenue totaled $1.4 billion for the third quarter of both years.
David A. DeLorenzo, president and chief operating officer, stated: “We believe that the further downsizing of our fresh fruit operations will result in significant cost savings and profit improvement for the company. Additionally, we remain encouraged by the performance of our other businesses, which continue to meet or exceed internal expectations.”
Interest expense was $30 million for the third quarter of 2000, compared with interest expense of $28 million for the third quarter of 1999 due to slightly higher average debt levels.
As a result of the company’s year-to-date earnings mix combined with the tax impacts of the Hurricane Mitch insurance proceeds, gain on sale of the California and Arizona citrus assets and the downsizing charge, the effective tax rate is now 32%, as compared to 23% at the end of the second quarter of 2000.
The company will host an earnings conference call today at 1 p.m. (EST), featuring remarks by David A. DeLorenzo, president and chief operating officer, and Kenneth J. Kay, vice president and chief financial officer. The conference call will be Webcast and available online at www.dole.com and at www.streetfusion.com in the “Earnings Events” section.
Dole Food Company Inc., with 1999 revenues of $5.1 billion, is the world’s largest producer and marketer of high-quality fresh fruit, fresh vegetables and fresh-cut flowers, and markets a growing line of packaged foods.
This release contains forward-looking statements based on current expectations 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 “believe,” “will,” “continue” and similar expressions. The potential risks and uncertainties that could cause actual results to differ materially from those expressed or implied herein include weather-related phenomena; market responses to industry volume pressures; product and raw materials supplies and pricing; changes in interest and currency exchange rates; economic crises in developing countries; and quotas, tariffs and other governmental actions. Further information on the factors that could affect Dole’s financial results is included in its Securities and Exchange Commission filings, including its Annual Report on Form 10-K.
DOLE FOOD COMPANY INC.
Summary of Consolidated Operations
(in 000s, except per-share amounts)
Quarter Ended Three Quarters Ended
Oct. 7, Oct. 9, Oct. 7, Oct. 9,
2000 1999 2000 1999
Revenue 1,436,880 1,412,098 3,894,075 3,917,089
Cost of products sold 1,259,742 1,232,917 3,315,563 3,394,001
Gross margin 177,138 179,181 578,512 523,088
Selling, marketing and
administrative expenses 158,157 157,732 410,810 380,491
Hurricane Mitch (insurance
proceeds) rehabilitation
expenses - net (42,506) 7,826 (42,506) (18,689)
Business downsizing charge 45,761 -- 45,761 --
Gain on sale of citrus assets (8,142) -- (8,142) --
Operating income 23,868 13,623 172,589 161,286
Interest income 8,829 3,282 12,886 8,578
Other income - net 706 1,081 548 30
Earnings before
interest and taxes 33,403 17,986 186,023 169,894
Interest expense 30,148 28,182 76,945 71,016
Income (loss) before
income taxes 3,255 (10,196) 109,078 98,878
Income taxes 10,605 (2,200) 34,905 21,800
Net income (loss) (7,350) (7,996) 74,173 77,078
Net income (loss)
per common share
Basic $ (0.13) $ (0.14) $ 1.33 $ 1.35
Diluted (0.13) (0.14) 1.33 1.35
Diluted average number
of common shares
outstanding 55,857 56,933 55,920 57,270
