-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FVAM6wxHpdGEo/PCbxmGCJFSJ0IQILJahc81hUwAIV8W/bI/90hj/2n3raURLvjQ yib+J8BhaXlOLGUFeq9R9g== 0000912057-97-025276.txt : 19970730 0000912057-97-025276.hdr.sgml : 19970730 ACCESSION NUMBER: 0000912057-97-025276 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970614 FILED AS OF DATE: 19970729 SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DOLE FOOD COMPANY INC CENTRAL INDEX KEY: 0000018169 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 990035300 STATE OF INCORPORATION: HI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04455 FILM NUMBER: 97647011 BUSINESS ADDRESS: STREET 1: 31355 OAK CREST DRIVE CITY: WESTLAKE VILLAGE STATE: CA ZIP: 91361 BUSINESS PHONE: 8188796600 MAIL ADDRESS: STREET 1: 31355 OAK CREST DR CITY: WESTLAKE VILLAGE STATE: CA ZIP: 91361 FORMER COMPANY: FORMER CONFORMED NAME: CASTLE & COOKE INC DATE OF NAME CHANGE: 19910731 10-Q 1 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________ FORM 10-Q (Mark one) [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the quarterly period ended June 14, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-4455 ____________________________________ DOLE FOOD COMPANY, INC. (Exact name of registrant as specified in its charter) HAWAII 99-0035300 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 31365 OAK CREST DRIVE WESTLAKE VILLAGE, CALIFORNIA 91361 (Address of principal executive offices and zip code) Registrant's telephone number, including area code: (818) 879-6600 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Shares Outstanding at July 12, 1997 - --------------------- ----------------------------------- Common Stock, without 59,965,817 par value - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- DOLE FOOD COMPANY, INC. INDEX ----- Page Number ------ PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Consolidated Statements of Income -- quarters and half years ended June 14, 1997 and June 15, 1996.......... 3 Consolidated Balance Sheets -- June 14, 1997 and December 28, 1996......................................... 5 Consolidated Statements of Cash Flow -- half years ended June 14, 1997 and June 15, 1996.......................... 6 Notes to Consolidated Financial Statements............... 7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations............ 8 PART II. OTHER INFORMATION ITEM 3. Legal Proceedings....................................... 9 ITEM 4. Submission of Matters to a Vote of Security Holders..... 10 ITEM 6. Exhibits and Reports on Form 8-K........................ 10 Signatures.............................................. 13 -2- PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS DOLE FOOD COMPANY, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in 000s, except per share amounts) Quarter Ended - ------------------------------------------------------------------------------- June 14, June 15, 1997 1996 ----------- ----------- REVENUE $ 1,107,804 $ 1,041,191 Cost of products sold 916,798 861,599 ----------- ----------- Gross margin 191,006 179,592 Selling, marketing and administrative expenses 90,798 88,423 ----------- ----------- Operating income 100,208 91,169 Interest expense (15,065) (16,382) Interest income 1,244 1,419 Other income (expense) - net (458) 1,374 ----------- ----------- Income before income taxes 85,929 77,580 Income taxes (15,500) (14,000) ----------- ----------- NET INCOME $ 70,429 $ 63,580 ----------- ----------- ----------- ----------- Net income per common share $ 1.17 $ 1.05 ----------- ----------- ----------- ----------- Average number of common shares outstanding 60,373 60,476 ----------- ----------- ----------- ----------- SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. -3- DOLE FOOD COMPANY, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (in 000s, except per share amounts) Half Year Ended - ------------------------------------------------------------------------------- June 14, June 15, 1997 1996 ----------- ----------- REVENUE $ 2,072,796 $ 1,855,629 Cost of products sold 1,730,052 1,549,047 ----------- ----------- Gross margin 342,744 306,582 Selling, marketing and administrative expenses 181,737 168,238 ----------- ----------- Operating income 161,007 138,344 Interest expense (31,964) (33,384) Interest income 3,420 3,603 Other income - net 4,709 5,526 ----------- ----------- Income before income taxes 137,172 114,089 Income taxes (24,700) (20,500) ----------- ----------- NET INCOME $ 112,472 $ 93,589 ----------- ----------- ----------- ----------- Net income per common share $ 1.87 $ 1.55 ----------- ----------- ----------- ----------- Average number of common shares outstanding 60,266 60,393 ----------- ----------- ----------- ----------- SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. -4- DOLE FOOD COMPANY, INC. CONSOLIDATED BALANCE SHEETS (in 000s) June 14, December 28, 1997 1996 (Unaudited) (Audited) ------------------------------------ CURRENT ASSETS Cash and short-term investments $ 23,427 $ 34,342 Receivable - net 577,939 518,266 Inventories Finished products 166,137 169,280 Raw materials and work in progress 118,173 198,306 Growing crop costs 38,185 46,887 Packing materials 18,761 23,213 Operating supplies and other 90,709 88,366 ----------- ----------- 431,965 526,052 Prepaid expenses 48,817 47,164 ----------- ----------- Total current assets 1,082,148 1,125,824 Investments 68,161 72,930 Property, plant and equipment - net 1,015,931 1,024,135 Long-term receivable - net 70,447 69,861 Other assets 202,961 194,057 ----------- ----------- $ 2,439,648 $ 2,486,807 ----------- ----------- ----------- ----------- CURRENT LIABILITIES Notes payable $ 8,047 $ 20,478 Current portion of long-term debt 1,985 1,497 Accounts payable and accrued liabilities 649,442 639,955 ----------- ----------- Total current liabilities 659,474 661,930 Long-term debt 761,635 903,807 Other long-term liabilities 342,832 341,798 Minority interests 35,811 29,712 Common Shareholders' equity Common stock 320,778 320,476 Additional paid-in capital 170,924 167,645 Retained earnings 223,773 123,280 Cumulative foreign currency translation adjustment (75,579) (61,841) ----------- ----------- Total common shareholders's equity 639,896 549,560 ----------- ----------- $ 2,439,648 $ 2,486,807 ----------- ----------- ----------- ----------- SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. -5- DOLE FOOD COMPANY, INC. CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) (in 000s) Half Year Ended ---------------------- June 14, June 15, 1997 1996 --------- --------- OPERATING ACTIVITIES Net income $ 112,472 $ 93,589 Adjustments to net income Depreciation and amortization 51,593 51,271 Equity earnings, net of distributions (33) (1,914) Provision for deferred income taxes 12,799 11,908 Gain on sale of assets (4,884) (4,054) Change in operating assets and liabilities Receivables, net (64,237) (50,444) Inventories 94,087 44,606 Prepaid expenses and other assets (24,479) (8,729) Accounts payable and accrued liabilities 592 15,958 Other 689 (13,092) --------- --------- Cash flow provided by operating activities 178,599 139,099 --------- --------- INVESTING ACTIVITIES Capital additions (49,351) (34,973) Proceeds from sales of property, plant & equipment 22,803 9,676 Businesses acquired, net of acquired cash (10,300) (32,578) Sales of investments, net 9,347 6,485 --------- --------- Cash flow used in investing activities (27,501) (51,390) --------- --------- FINANCING ACTIVITIES Short-term debt repayments, net (17,431) (13,000) Long-term debt repayments, net (136,184) (105,664) Cash dividends paid (11,979) (11,993) Issuance of common stock 3,581 5,970 --------- --------- Cash flow used in financing activities (162,013) (124,687) --------- --------- Decrease in cash and short-term investments (10,915) (36,978) Cash and short-term investments at beginning of period 34,342 72,151 --------- --------- Cash and short-term investments at end of period $ 23,427 $ 35,173 --------- --------- --------- --------- Interest paid $ 36,822 $ 34,100 Income taxes paid, net of refunds 6,732 (12,100) SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. -6- DOLE FOOD COMPANY, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. In the opinion of management, the accompanying unaudited consolidated financial statements of Dole Food Company, Inc. (the "Company") include all adjustments necessary to present fairly its financial position as of June 14, 1997 and June 15, 1996, and its results of operations for the quarters and half years then ended and its cash flow for the half years then ended. Interim results are subject to significant seasonal variations and are not necessarily indicative of the results of operations for a full year. For additional information, refer to the notes to the Company's audited consolidated financial statements for the year ended December 28, 1996. 2. The Company declared and paid dividends on its common stock of approximately $12.0 million during the first half of 1997 and 1996. The cash dividends represent the regular quarterly dividend of 10 cents per share. 3. In February 1997, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 128 (SFAS 128), "Earnings Per Share", which is effective for fiscal years ending after December 15, 1997. SFAS 128 replaces disclosure of primary and fully diluted earnings per share with basic and diluted earnings per share. Application of SFAS 128 would not have had any effect on the Company's earnings per share for the quarters or half years ended June 14, 1997 or June 15, 1996. -7- DOLE FOOD COMPANY, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES Cash flow provided by operating activities increased to $178.6 million for the first half of 1997 from $139.1 million for the comparable period of the prior year, an increase of $39.5 million. The improvement in cash flow provided by operating activities is primarily attributable to the strong operating performance of the Company and the closure of its North America dried fruit operations. As of June 14, 1997, the Company had net borrowings outstanding of approximately $30 million under its $600 million, five year revolving credit facility. RESULTS OF OPERATIONS Net income for the first half of 1997 increased 20% to $112.5 million, $1.87 per share, from $93.6 million, $1.55 per share, for the first half of 1996. Net income for the second quarter of 1997 increased to $70.4 million, $1.17 per share, from $63.6 million, $1.05 per share, for the second quarter of 1996. Revenue for the first half of 1997 increased 12% to $2,072.8 million from $1,855.6 million for the same period in 1996. Revenue for the second quarter of 1997 was $1,107.8 million, an increase of approximately 6% compared to revenue for the same quarter of the prior year. Approximately 52% and 67% of the increase in revenue for the half year and the second quarter, respectively, is attributable to increased volumes for bananas. The growth in revenue attributable to increased banana volumes was somewhat mitigated by slightly lower average pricing and the adverse impact of the stronger dollar against several major currencies in which the Company transacts sales. Also contributing to increased revenue for the half year and second quarter was a larger North America navel and minneola crop which generated high quality fruit resulting in increased volumes and pricing. Operating income was $161.0 million for the first half of 1997 compared to $138.3 million for the first half of 1996, an increase of $22.7 million. Operating income for the second quarter of 1997 was $100.2 million compared to operating income of $91.2 million for the second quarter of 1996. Despite the adverse impact of the stronger dollar on revenues, operating income as a percentage of revenue has remained constant at 8% and 9% for the first half and second quarter, respectively, of 1997 and 1996. Interest expense, net of interest income, decreased 4% for the first half of 1997 and 8% for the second quarter of 1997 compared to the same periods of the prior year as a result of lower average debt levels. The growth in earnings and the favorable impact on operating cash flow allowed the Company to reduce net debt by $143.2 million during the first half of 1997. Other income, net of other expense, consists primarily of earnings from equity investments, gains and losses on the sale of property and minority interest expense. The decrease in other income, net of other expense, for the first half and second quarter of 1997 is due to an increase in minority interest expense. -8- PART II. OTHER INFORMATION DOLE FOOD COMPANY, INC. ITEM 3. LEGAL PROCEEDINGS In the Company's Form 10-K for the year ended December 28, 1996, the Company described certain lawsuits that had been filed in Texas against some of the manufacturers of a formerly widely used agricultural chemical called DBCP, the Company and several of its competitors. In these lawsuits, a large number of foreign nationals allege personal injuries caused by contact with DBCP. The plaintiffs claim that during the 1960's and 1970's they were employees of Company subsidiaries, competitors and independent local growers. In October 1995, four of the six cases pending in Texas state courts were removed to Texas federal court and dismissed by the Texas federal court on the grounds that the plaintiffs' home countries are the more appropriate forums for the claims. This dismissal involved approximately 75% of the Texas plaintiffs, many of whom have now filed claims in their home countries of Costa Rica, Ecuador, Honduras, Nicaragua and the Philippines. Plaintiffs have appealed these dismissals. The two remaining Texas state court cases were removed to Texas federal court, one of which has since been dismissed. Such dismissal has been appealed. Similar DBCP actions were filed in Louisiana state court in June 1995 by plaintiffs from some of the same foreign countries. The Louisiana cases were removed to federal court but were remanded in September 1996. In May 1996, additional DBCP actions were filed in Mississippi state court. These cases have been removed to federal court. As to all such matters, the Company has denied liability and asserted substantial defenses. In the opinion of management, after consultation with outside counsel, the pending lawsuits are not expected to have a material adverse effect on the Company's financial position or results of operations. The Company is involved from time to time in various claims and legal actions incident to its operations, both as plaintiff and defendant. In the opinion of management, after consultation with outside counsel, none of the claims or actions to which the Company is a party is expected to have a material adverse effect on the Company's financial position or results of operations. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Dole Food Company, Inc. held its Annual Meeting of Stockholders (the "Meeting") on May 22, 1997, at which the Company's stockholders voted: (1) to elect the nominated slate of seven directors, each to serve until the next meeting and until his or her successor has been duly elected and qualified: Elaine L. Chao, Mike Curb, David A. DeLorenzo, Richard M. Ferry, James F. Gary, Zoltan Merszei and David H. Murdock; and (2) to elect Arthur Andersen LLP as the Company's independent public accountants and auditors for the 1997 fiscal year. Holders of record of the Company's common stock as of April 2, 1997 were entitled to vote at the Meeting. On April 2, 1997, there were 59,893,427 shares of common stock outstanding and entitled to vote and 55,423,929 of such shares were represented at the Meeting. Each of the directors received at least 99.0% of the shares cast in favor of his or her election. The -9- shares cast for each director are as follows: Elaine L. Chao: 55,127,538 for and 296,391 withheld; Mike Curb: 55,124,818 for and 299,111 withheld; David A. DeLorenzo: 55,131,088 for and 292,841 withheld; Richard M. Ferry: 55,139,068 for and 284,861 withheld; James F. Gary: 54,754,732 for and 669,197 withheld; Zoltan Merszei: 54,769,143 for and 654,786 withheld; and David H. Murdock: 55,059,879 for and 364,050 withheld. With respect to the election of Arthur Andersen LLP, the shares cast were 55,214,588 shares for, 93,918 shares against, and 115,423 shares in abstention. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (A) EXHIBITS: Exhibit Page No. Number ------- ------ 11 Computations of earnings per common share 11 27 Financial data schedule (B) No reports on Form 8-K were filed for the quarter ended June 14, 1997. -10- EXHIBIT 11 DOLE FOOD COMPANY, INC. COMPUTATIONS OF EARNINGS PER COMMON SHARE (Unaudited) (in 000s, except per share amounts) Quarter Ended --------------------- June 14, June 15, 1997 1996 -------- -------- PRIMARY Net income applicable to common shares $ 70,429 $ 63,580 -------- -------- Average number of common shares outstanding during the period 59,917 60,022 Add: Shares issuable upon exercise of stock options at average orices during the period 456 454 -------- -------- Total primary shares 60,373 60,476 -------- -------- Primary earnings per common share $ 1.17 $ 1.05 -------- -------- -------- -------- FULLY DILUTED Net income applicable to common shares $ 70,429 $ 63,580 -------- -------- Average number of common shares outstanding during the period 59,917 60,022 Add: Shares issuable upon exercise of stock options at higher of average prices or end of period prices 586 630 -------- -------- Total fully diluted shares 60,503 60,652 -------- -------- Fully diluted earnings per common share $ 1.16 $ 1.05 -------- -------- -------- -------- -11- EXHIBIT 11 (CONTINUED) DOLE FOOD COMPANY, INC. COMPUTATIONS OF EARNINGS PER COMMON SHARE (Unaudited) (in 000s, except per share amounts) Half Year Ended --------------------- June 14, June 15, 1997 1996 --------- --------- PRIMARY Net income applicable to common shares $ 112,472 $ 93,589 --------- --------- Average number of common shares outstanding during the period 59,887 59,956 Add: Shares issuable upon exercise of stock options at average prices during the period 379 437 --------- --------- Total primary shares 60,266 60,393 --------- --------- Primary earnings per common share $ 1.87 $ 1.55 --------- --------- --------- --------- FULLY DILUTED Net applicable to common shares $112,472 $ 93,589 --------- --------- Average number of common shares outstanding during the period 59,887 59,956 Add: Shares issuable upon exercise of stock options at higher of average prices or end of period prices 586 630 --------- --------- Total fully diluted shares 60,473 60,586 --------- --------- Fully diluted earnings per common share $ 1.86 $ 1.54 --------- --------- --------- --------- -12- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DOLE FOOD COMPANY, INC. Registrant July 29, 1997 By /s/ HARVEY J. HEIMBUCH ---------------------------- Harvey J. Heimbuch Vice President - Controller and Chief Accounting Officer -13- EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS JAN-03-1998 DEC-29-1996 JUN-14-1997 23,427 0 633,355 55,416 431,965 1,082,148 1,653,260 637,329 2,439,648 659,474 761,635 0 0 320,778 319,118 2,439,648 2,072,796 2,072,796 1,730,052 1,730,052 0 0 31,964 137,172 24,700 112,472 0 0 0 112,472 1.87 1.86 THE COMPANY'S FISCAL YEAR ENDS ON THE SATURDAY CLOSEST TO DECEMBER 31. FISCAL YEAR 1997 CONSISTS OF 52 WEEKS AND ENDS ON JANUARY 3, 1998. ALL QUARTERS IN 1997 HAVE 12 WEEKS, EXCEPT THE THIRD QUARTER OF 1997 WHICH HAS 16 WEEKS.
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