Dole Food Company Inc. (NYSE:DOL) Thursday announced that its first-quarter net income was $34.7 million, or 62 cents per share, compared with net income of $36.4 million, or 65 cents per share, for the first quarter of 2000.
Net income decreased slightly due to a higher effective tax rate in the first quarter of 2001 versus the effective tax rate in the first quarter of 2000, reflecting a shift in the company’s mix of earnings. On a pretax basis, first-quarter 2001 earnings increased $3.6 million versus the same period of 2000, due in large part to a $2.8 million reduction of interest expense.
Earnings before interest and taxes (“EBIT”) improved slightly to $72 million for the first quarter of 2001 from $71 million for the first quarter of 2000.
Higher EBIT in the company’s fresh vegetables segment offset lower profitability in the company’s fresh fruit segment, primarily in the banana business, and higher marketing costs in the company’s processed foods segment. In the company’s North American fresh vegetables business, higher pricing for commodity vegetables and continued growth in fresh-cut salads contributed to higher year-over-year EBIT.
In the company’s banana business, weak foreign currency exchange rates and competitive pressures in North America and Asia were offset by increased local pricing in Europe and the favorable impact of cost cutting activities initiated in the latter part of 1999 and 2000.
EBIT for the first quarter of 2001 also included $4.5 million of expense related to the divestiture of certain banana production operations in Latin America. This had a negative impact on net income of approximately $3 million or 5 cents per share for the quarter.
Lawrence A. Kern, president and chief operating officer, stated: “We are pleased that our fresh vegetables segment continues to surpass expectations and that earnings from our fresh-cut flowers operations have improved. In Europe, increased local pricing for bananas helped to offset the weakness in foreign currency exchange rates and the impact of competition in North America and Asia. Additionally, cost-cutting measures instituted in the latter part of 2000 helped offset the pressure on results caused by these external factors. We continue to aggressively pursue cost reductions and the reconfiguration of businesses in order to enhance future profitability.”
Revenues for the first quarter of 2001 totaled $1.11 billion compared with revenues of $1.13 billion for the same quarter of 2000. Revenues for the first quarter of 2000 reflect the reclassification of $30 million to present commission revenue amounts in accordance with the interpretations of Securities and Exchange Commission Staff Accounting Bulletin No. 101, which the company adopted in the fourth quarter of 2000. The change in first-quarter 2000 presentation had no impact on earnings for that period.
Cash flow from operations (EBITDA) in the first quarter of 2001 totaled $103 million compared with $102 million for the same quarter of 2000. Interest expense decreased 12% from $23.2 million for the first quarter of 2000 to $20.5 million for the first quarter of 2001, mainly due to lower levels of debt.
Dole Food Company Inc., with 2000 revenues of $4.8 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 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 “will” 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; electrical power supply and pricing; changes in interest and currency exchange rates; economic crises in developing countries; quotas, tariffs and other governmental actions; and the ability of the company and its European customers and suppliers to complete euro conversion efforts. Further information on the factors that could affect Dole’s financial results is included in its SEC filings, including its Annual Report on Form 10-K.
DOLE FOOD COMPANY INC.
Summary of Consolidated Operations
March 24, March 25,
(in 000s, except per-share amounts) 2001 2000
Revenue $ 1,111,053 $ 1,126,328
Cost of products sold 923,735 936,520
Gross margin 187,318 189,808
Selling, marketing and
administrative expenses 115,953 121,791
Operating income 71,365 68,017
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Interest income 1,272 2,099
Other income (expense) — net (1,111) 542
Earnings before interest and taxes 71,526 70,658
Interest expense 20,469 23,220
Income before income taxes 51,057 47,438
Income taxes 16,338 11,000
Net income $ 34,719 $ 36,438
Net income per common share
Basic $ 0.62 $ 0.65
Diluted 0.62 0.65
Diluted average number of common
shares outstanding 56,139 55,880