-----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, Ve1nJJMMzwPW4K6T8rr1ZSs06iFngzrDNQeVHT9i+cPHtM11syFtLrAdTN1szpN+ nqRoawhnY1tjlB4uHnuTUQ== 0001047469-98-019301.txt : 19980513 0001047469-98-019301.hdr.sgml : 19980513 ACCESSION NUMBER: 0001047469-98-019301 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980328 FILED AS OF DATE: 19980512 SROS: NYSE SROS: PCX 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: SEC FILE NUMBER: 001-04455 FILM NUMBER: 98616076 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 FORM 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 March 28, 1998 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 April 30, 1998 - -------------------------- ------------------------------------ Common Stock, No Par Value 60,355,612 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- DOLE FOOD COMPANY, INC. INDEX
Page Number ------ PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS Consolidated Statements of Income -- quarter ended March 28, 1998 and March 22, 1997...................... 3 Consolidated Balance Sheets -- March 28, 1998 and January 3, 1998........................................ 4 Consolidated Statements of Cash Flow - quarter ended March 28, 1998 and March 22, 1997...................... 5 Notes to Consolidated Financial Statements............. 6 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.......... 7 PART II. OTHER INFORMATION ITEM 1. Legal Proceedings...................................... 8 ITEM 6. Exhibits and Reports on Form 8-K....................... 9 Signatures............................................. 10
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 ---------------------- March 28, March 22, 1998 1997 --------- --------- Revenue $1,011,984 $964,992 Cost of products sold 872,963 813,254 --------- --------- Gross margin 139,021 151,738 Selling, marketing and administrative expenses 97,314 90,939 --------- --------- Operating income 41,707 60,799 Interest income 1,687 2,176 Other income (expense) - net (933) 5,167 --------- --------- Earnings before interest and taxes 42,461 68,142 Interest expense (14,700) (16,899) --------- --------- Income before income taxes 27,761 51,243 Income taxes (5,000) (9,200) --------- --------- Net income $22,761 $42,043 --------- --------- --------- --------- Net income per common share Basic $0.38 $0.70 Diluted 0.37 0.70 --------- --------- --------- --------- Diluted average number of common shares outstanding 60,837 60,196 --------- --------- --------- ---------
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 3 DOLE FOOD COMPANY, INC. CONSOLIDATED BALANCE SHEETS (in 000s)
March 28, January 3, 1998 1998 (Unaudited) (Audited) ----------- ---------- CURRENT ASSETS Cash and short-term investments $ 31,832 $ 31,202 Receivables - net 558,513 534,844 Inventories Finished products 171,979 149,933 Raw material and work in progress 120,729 142,623 Growing crop costs 47,917 46,207 Packing materials 26,976 24,803 Operating supplies and other 114,242 105,126 ----------- ---------- 481,843 468,692 Prepaid expenses 55,690 48,438 ----------- ---------- Total current assets 1,127,878 1,083,176 Investments 70,554 69,248 Property, plant and equipment - net 1,022,508 1,024,247 Long-term receivables - net 64,817 63,482 Other assets 245,616 223,742 ----------- ---------- TOTAL ASSETS $ 2,531,373 $ 2,463,895 ----------- ---------- ----------- ---------- CURRENT LIABILITIES Notes payable $ 10,607 $ 11,290 Current portion of long-term debt 1,826 2,326 Accounts payable and accrued liabilities 653,426 662,823 ----------- ---------- Total current liabilities 665,859 676,439 Long-term debt 821,112 754,849 Other long-term liabilities 318,682 328,293 Minority interests 44,342 37,842 Commitments and contingencies Common shareholders' equity Common stock 321,006 320,707 Additional paid-in capital 182,392 174,058 Retained earnings 270,157 259,456 Accumulated other comprehensive loss (92,177) (87,749) ----------- ---------- Total common shareholders' equity 681,378 666,472 ----------- ---------- TOTAL LIABILITIES AND EQUITY $ 2,531,373 $ 2,463,895 ----------- ---------- ----------- ----------
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. 4 DOLE FOOD COMPANY, INC. CONSOLIDATED STATEMENTS OF CASH FLOW (Unaudited) (in 000s)
Quarter Ended ------------------------- March 28, March 22, 1998 1997 --------- --------- OPERATING ACTIVITIES Net income $ 22,761 $ 42,043 Adjustments to net income Depreciation and amortization 25,410 27,361 Provision for deferred income taxes 1,816 1,775 Other (20) (8,554) Change in operating assets and liabilities Receivables - net (28,954) (52,676) Inventories (11,798) 7,328 Prepaid expenses (8,191) (5,349) Accounts payable and accrued liabilities (21,662) (3,740) Internal Revenue Service payment related to prior years' audits (17,145) - Other (3,480) (8,612) --------- --------- Cash flow used in operating activities (41,263) (424) --------- --------- INVESTING ACTIVITIES Capital additions (18,471) (18,911) Proceeds from sales of property, plant & equipment 2,670 5,138 Businesses acquired - net of acquired cash (441) (10,300) Sales (purchases) of investments - net (537) 4,912 --------- --------- Cash flow used in investing activities (16,779) (19,161) --------- --------- FINANCING ACTIVITIES Short-term debt repayments - net (1,186) (11,966) Long-term debt borrowings - net 57,253 27,438 Cash dividends paid (6,028) (5,985) Issuance of common stock 9,127 1,529 Repurchase of common stock (494) - --------- --------- Cash flow provided by financing activities 58,672 11,016 --------- --------- Increase (decrease) in cash and short-term investments 630 (8,569) Cash and short-term investments at beginning of period 31,202 34,342 --------- --------- Cash and short-term investments at end of period $ 31,832 $ 25,773 --------- --------- --------- ---------
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. 5 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 March 28, 1998 and January 3, 1998 (audited), and its results of operations and cash flow for the quarters ended March 28, 1998 and March 22, 1997. For additional information, refer to the notes to the Company's audited consolidated financial statements for the year ended January 3, 1998. Interim results are subject to significant seasonal variations and are not necessarily indicative of the results of operations for a full year. The Company's fresh fruit and vegetable operations are sensitive to a number of factors including foreign currency fluctuations; and weather conditions and their effect on industry volumes, prices, product quality and costs. Certain prior year amounts have been reclassified to conform with the 1998 presentation. 2. During the first quarter of 1998, the Company declared dividends on its common stock of $12.1 million of which $6.0 million were paid. The dividends declared during the first quarter of 1998 include regular quarterly dividends for the first and second quarters of 1998. For the same period of 1997, the Company declared and paid dividends of $6.0 million representing the regular quarterly dividend of $0.10 cents per share. 3. The Company paid interest of $18.0 million in the first quarter of 1998 and $11.9 million for the same period in 1997. The Company paid income taxes of $21.8 million for the first quarter of 1998 which included $17.1 million related to prior years' audits. The Company received income tax refunds (net of income taxes paid) of $1.8 million for the first quarter of 1997. 4. In accordance with Statement of Financial Accounting Standards No. 130 (SFAS 130) "Reporting Comprehensive Income," the Company recognized $18.4 million and $30.5 million of comprehensive income which consists of net income and unrealized foreign currency translation losses of $4.4 million and $11.5 million for the quarters ended March 28, 1998 and March 22, 1997, respectively. 5. The weighted average number of common shares outstanding before the dilutive effect of stock options at average prices for the quarters ended March 28, 1998 and March 22, 1997 was 60,197,000 and 59,858,000, respectively. 6 DOLE FOOD COMPANY, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Revenue for the first quarter of 1998 increased 5% to $1,012.0 million from $965.0 million for the same period in 1997. Net income for the first quarter of 1998 was $22.8 million, or $0.37 per diluted share, compared to $42.0 million, or $0.70 per diluted share, for the first quarter of 1997. Revenue increased due to European distribution businesses acquired in the fourth quarter of 1997 and favorable volume and pricing in the vegetable and Honduran beverage operations. The decrease in earnings was primarily due to weaker pricing in the North American banana market caused by high industry volume. The decrease was also caused by weakening currency markets, especially in Japan. This was somewhat offset by strong vegetable operations. Operating income was $41.7 million for the first quarter of 1998 compared to $60.8 million for the first quarter of 1997. Interest expense decreased 13% for the first quarter of 1998 compared to the same period of the prior year as a result of lower average debt levels. In the prior year, other income (expense) - net included a gain from the sale of an investment. In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information" (SFAS 131). In accordance with SFAS 131, the Company is currently evaluating the additional business segments to be reported in its 1998 Annual Report on Form 10-K. Since the statement requires additional disclosure only, it will have no effect on the financial condition or results of operations of the Company. LIQUIDITY AND CAPITAL RESOURCES Cash flow used in operating activities increased to $41.3 million for the first quarter of 1998 from $0.4 million for the comparable period of the prior year. This was primarily due to lower earnings, a payment to the Internal Revenue Service related to prior years' audits, lower accounts payable and accrued liabilities levels and an increase in inventory. The Company is currently pursuing a refund of the payment to the Internal Revenue Service. During the first quarter of 1997, the Company experienced an underlying decrease in its working capital requirements as a result of the closure of its Fresno, California dried fruit operations. Capital expenditures of $18.5 million for the first quarter of 1998 were for the acquisition and maintenance of productive assets and were funded largely by the proceeds from borrowings. As of March 28, 1998, the Company had no borrowings outstanding under its $400 million, five year revolving credit facility. During the first quarter of 1998, the Company repurchased 10,000 shares at a cost of $0.5 million. 7 PART II. OTHER INFORMATION DOLE FOOD COMPANY, INC. ITEM 1. LEGAL PROCEEDINGS In the Company's Form 10-K for the fiscal year ended January 3, 1998, the Company described certain lawsuits that had been filed in Texas, Louisiana, Mississippi, and Hawaii 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. All cases were removed to federal court and most have been dismissed on the grounds that the plaintiff's home countries are the more appropriate forums for the claims. Dismissal motions are pending in one Texas case and two Hawaii cases, and one Louisiana case was remanded to state court. The dismissed Texas cases are on appeal. The DBCP manufacturers have reported that they have settled with the majority of Texas and Louisiana plaintiffs. In April 1998, the Dow Chemical Company, a manufacturer of DBCP, filed a lawsuit against a Company subsidiary seeking indemnification for settlements and defense costs. 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. 8 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 March 28, 1998. 9 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 May 12, 1998 By /s/ James A. Dykstra ---------------------- James A. Dykstra Controller and Chief Accounting Officer 10 EX-11 2 EXHIBIT 11 EXHIBIT 11 DOLE FOOD COMPANY, INC. COMPUTATIONS OF EARNINGS PER COMMON SHARE (Unaudited) (in 000s, except per share amounts)
Quarter Ended -------------------------- March 28, March 22, 1998 1997 --------- --------- BASIC Net income applicable to common shares $22,761 $42,043 Weighted average number of common shares outstanding during the period 60,197 59,858 --------- --------- Basic earnings per common share $0.38 $0.70 --------- --------- --------- --------- DILUTED Net income applicable to common shares $22,761 $42,043 --------- --------- Weighted average number of common shares outstanding during the period 60,197 59,858 Add: Dilutive effect of stock options at average prices during the period 640 338 --------- --------- Total diluted shares 60,837 60,196 --------- --------- Diluted earnings per common share $0.37 $0.70 --------- --------- --------- ---------
11 EX-27 3 EXHIBIT 27
5 1,000 OTHER JAN-02-1999 JAN-04-1998 MAR-28-1998 31,832 0 619,639 61,126 481,843 1,127,878 1,683,824 661,316 2,531,373 665,859 821,112 0 0 321,006 360,372 2,531,373 1,011,984 1,011,984 872,963 872,963 98,247 0 14,700 27,761 5,000 22,761 0 0 0 22,761 0.38 0.37 THE COMPANY'S FISCAL YEAR ENDS ON THE SATURDAY CLOSEST TO DECEMBER 31. FISCAL YEAR 1998 ENDS JANUARY 2, 1999 AND INCLUDES 52 WEEKS. ALL QUARTERS IN 1998 HAVE 12 WEEKS, EXCEPT THE THIRD QUARTER WHICH HAS 16 WEEKS. IN ACCORDANCE WITH SFAS NO. 128, "EARNINGS PER SHARE", THIS ITEM REFLECTS BASIC EARNINGS PER SHARE. IN ACCORDANCE WITH SFAS NO. 128, "EARNINGS PER SHARE", THIS ITEM REFLECTS DILUTED EARNINGS PER SHARE.
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