UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: February 21, 2013
DOLE FOOD COMPANY, INC.
(Exact Name of Registrant as Specified in Charter)
| Delaware | 1-4455 | 99-0035300 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
One Dole Drive
Westlake Village, California 91362
(Address of Principal Executive Offices and Zip Code)
Registrant’s telephone number, including area code: (818) 879-6600
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Section 5 | Corporate Governance and Management |
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
| (b) | Departure of Directors or Certain Officers. |
In connection with the previously announced sale of the worldwide packaged foods and Asia fresh produce businesses of Dole Food Company, Inc. (“Dole”) to ITOCHU Corporation, on February 21, 2013, David A. DeLorenzo stepped down from his position as President and Chief Executive Officer of Dole, but will remain on Dole’s Board of Directors following completion of the sale transaction. In addition, on February 21, 2013, Joseph S. Tesoriero stepped down from his position as Executive Vice President and Chief Financial Officer of Dole. Mr. DeLorenzo and Mr. Tesoriero will remain employees of Dole through the closing of the sale to ITOCHU.
| (c) | Appointment of Certain Officers. |
On February 22, 2013, Dole announced the following, effective as of February 21, 2013:
| • | David H. Murdock returned to the role of Chairman and Chief Executive Officer; |
| • | C. Michael Carter assumed the added role of President and Chief Operating Officer; |
| • | Keith C. Mitchell became Chief Financial Officer; |
Biographical information regarding Mr. Murdock and Mr. Carter, and any related party transactions between such individuals and Dole, are described in the Company’s 2012 Proxy Statement, filed with the Securities and Exchange Commission on April 13, 2012, which descriptions are incorporated into this Item by this reference.
Mr. Mitchell, 51, served as the Chief Financial Officer of Dole Fresh Fruit since 2007. Before joining Dole in 1993, he held various finance and audit positions with Koppers Company, Inc., PPG Industries and Arthur Anderson & Co. There is no information that is required to be disclosed with respect to Mr. Mitchell pursuant to Item 404(a) of Regulation S-K.
(d) Election of Directors.
On February 21, 2013, the Board of Directors of Dole elected C. Michael Carter and E. Rolland Dickson, M.D. to rejoin the Board as directors of Dole, filling new vacancies created by the Board of Directors on February 21, 2013. Mr. Carter will be a member of the Executive Committee, and Dr. Dickson will be a member of the Audit Committee and the Nominating and Corporate Governance Committee.
As a non-employee director, Dr. Dickson will receive the standard compensation amounts payable to non-employee directors of Dole, which includes an annual cash retainer of $60,000, a Board meeting fee of $2,000 for each Board meeting attended, or $1,000 for telephonic participation, and a Committee meeting fee of $1,000 for each Committee meeting attended in person or participated in telephonically. In addition, non-employee members of the Board are
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entitled to an additional cash payment of $75,000, payable annually on October 28. Finally, each non-employee director has an annual executive physical benefit of up to $6,000 at a facility determined by Dole. There is no information that is required to be disclosed with respect to Dr. Dickson pursuant to Item 404(a) of Regulation S-K.
As an employee of Dole, Mr. Carter will not receive any compensation for his service as a director.
| (e) | Compensatory Arrangements of Certain Officers. |
On February 21, 2013, the Corporate Compensation and Benefits Committee of the Board of Directors approved a modification to the outstanding stock options held by Mr. DeLorenzo and Mr. Tesoriero such that the post-termination exercise period for all such stock options will be extended from three months following each such executive’s termination of employment until March 31, 2014.
| Section 8 | Other Events |
| Item 8.01. | Other Events |
On February 22, 2013, Dole issued a press release announcing an update on the ITOCHU sale and providing a financial and business update on Dole following such sale transaction. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated into this Item and Item 5.02 by this reference.
| Section 9. | Financial Statement and Exhibits |
| Item 9.01. | Financial Statements and Exhibits |
| (d) | Exhibits: |
99.1 Press Release dated February 22, 2013 regarding an update on the ITOCHU sale and a financial and business update on Dole following such sale transaction.
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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.
| Dated: February 22, 2013 | DOLE FOOD COMPANY, INC. REGISTRANT | |||||||
| By: | /s/ C. Michael Carter | |||||||
| C. Michael Carter | ||||||||
| President and Chief Operating Officer | ||||||||
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EXHIBIT INDEX
| Exhibit |
Description | |
| 99.1 | Press Release dated February 22, 2013 regarding an update on the ITOCHU sale and a financial and business update on Dole following such sale transaction. | |
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Exhibit 99.1
News Release
Dole to Complete Sale of Worldwide Packaged Foods and Asia Fresh Businesses on April 1, 2013
New Dole Financial and Business Update
WESTLAKE VILLAGE, Calif.—(BUSINESS WIRE)—Feb. 22, 2013—Dole Food Company, Inc. (NYSE: DOLE) announced today that the previously announced sale of its worldwide packaged foods and Asia fresh produce businesses to ITOCHU Corporation for $1.685 billion in cash, will be completed on April 1, 2013. Dole and ITOCHU have agreed to this firm fixed closing date at ITOCHU’s request, and have extended the term of the definitive acquisition agreement signed by the parties on September 17, 2012, to the April 1 date. ITOCHU today paid Dole a non-refundable cash deposit of $200 million to be applied toward the purchase price, and the parties agreed that, with limited exceptions, the deposit will be forfeited and retained by Dole if the closing does not occur by April 1, 2013. Dole intends to use the $200 million in cash to temporarily repay revolver borrowings, certain transaction related expenses, and general corporate purposes.
“The consummation of the sale on April 1st will complete this transformative transaction for Dole, resulting in a major percentage of Dole’s operations being sold to ITOCHU. The new Dole will have a smaller footprint as a commodity produce company with overall revenue in the $4.2 billion range with two lines of business: fresh fruit and fresh vegetables,” said David H. Murdock, Dole’s Chairman. “ITOCHU will have exclusive rights to the Dole® trademark on packaged food products worldwide and on fresh produce in Asia, Australia and New Zealand. We will remain an industry leader in the sourcing, distribution and marketing of bananas, pineapples and other tropical fruits, packaged salads, fresh-packed vegetables and fresh berries.”
As part of the extension agreement, David A DeLorenzo, current President and Chief Executive Officer of Dole, will immediately assume a full-time position leading the management team of the businesses being acquired by ITOCHU through the closing date, after which he will join ITOCHU as the senior management of these businesses. Mr. DeLorenzo has stepped down from his roles as President and Chief Executive Officer of Dole, but will remain on Dole’s Board of Directors following completion of the sale transaction. In addition, as previously announced, Joseph S. Tesoriero has stepped down from his position as Executive Vice President and Chief Financial Officer. Mr. DeLorenzo and Mr. Tesoriero will remain employees of Dole through the closing of the sale to ITOCHU.
As part of the previously announced leadership changes in connection with the sale transaction, Mr. Murdock has returned to the role of Chairman and Chief Executive Officer, and C. Michael Carter has assumed the added role of President and Chief Operating Officer, with all operating and corporate functions reporting to him. In addition, Dole’s Board increased its size to nine, and Mr. Carter and E. Rolland Dickson, M.D. have rejoined the board. Dr. Dickson previously was a professor of medicine at the Mayo Medical School and director of development at the Mayo Foundation for Medical Education and Research. Dr. Dickson is internationally recognized for his leadership in the fields of liver disease and liver transplantation, and has served as a director of Poniard Pharmaceuticals, Axcan Pharma Inc., and Pathway Corp.
In addition, Keith C. Mitchell, current chief financial officer of Dole’s North American Fresh Fruit business, has become Chief Financial Officer; A Charlene Mims, currently responsible for benefits and payroll, will lead Human Resources; both Beth Potillo, current Treasurer, and Yoon J. Hugh, current Controller and Chief Accounting Officer, have become Senior Vice Presidents with added responsibilities; and Genevieve M. Kelly, current Vice President, Associate General Counsel & Assistant Secretary, as well as division general counsel for the fresh fruit business, has become Deputy General Counsel.
On January 24, 2013, Dole announced fiscal year 2012 results for the two lines of fresh produce business that will remain with the new Dole following the consummation of the sale transaction. Fresh fruit performance is continuing its declining trend, principally due to banana market conditions, and Dole expects that 2013 Adjusted EBITDA for these businesses will be at the low end of the previously announced guidance range of $150 - $170 million, with income from continuing operations, net of income taxes, in the $45 - $60 million range, assuming no major market changes. Dole expects to timely file its annual report on Form 10-K by March 14, 2013, if not sooner, including its audited financial statements for fiscal year 2012. At that time, Dole expects to issue an earnings release and will host a conference call with investors.
In light of the current competitive fresh produce market conditions, Dole has assessed its ongoing capital requirements and possible near-term funding resources for the new Dole, including Dole’s Hawaii land holdings, and is actively marketing the approximately 21,800 acres of land that it is not currently farming in Hawaii on the Island of Oahu. Dole is seeking to sell as much of this land as it possibly can each year, expecting that it will take a few years to sell such a large quantity of farm land. Targeted proceeds are in the $175 - $200 million range, which would exceed current book value. Potential proceeds maybe used to invest in both increasing the number of fresh fruit farms owned and operated by the new Dole and in updating Dole’s owned vessel fleet.
Dole has provided earnings guidance to give investors general information on the overall direction of its remaining businesses following the sale transaction. The guidance provided is subject to numerous uncertainties, including, among others, the timing and ultimate consummation of the sale transaction, overall economic and capital-market conditions and the markets for fresh fruits and vegetables. Dole does not intend, and undertakes no obligation, to update its forward-looking statements, including projections and future prospects.
This release contains “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of 1995 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 “may,” “will,” “expects,” “believes,” “intends,” “anticipates” and similar expressions. The potential risks and uncertainties that could cause actual results to differ materially from those expressed or implied herein include the timing and whether the sale transaction is consummated, weather-related phenomena; market responses to industry volume pressures; product and raw materials supplies and pricing; energy supply and pricing; changes in interest and currency exchange rates; economic crises and security risks in developing countries; international conflict; and quotas, tariffs and other governmental actions. Further information on the factors that could affect Dole’s financial results is included in its filings with the SEC.
Non-GAAP Measurements
Adjusted EBITDA is a measure commonly used by financial analysts in evaluating the performance of companies. EBITDA is calculated from net income by adding interest expense and income tax expense, and adding depreciation and amortization. Through Q3 of 2012, Dole calculated Adjusted EBITDA from EBITDA by: (1) adding the net unrealized loss or subtracting the net unrealized gain on foreign currency and bunker fuel hedges and the cross currency swap which do not have a more than insignificant financing element present at contract inception; (2) adding the net loss or subtracting the net gain on the long-term Japanese yen hedges; (3) adding the foreign currency loss or subtracting the foreign currency gain on the vessel obligations; (4) adding the net unrealized loss or subtracting the net unrealized gain on foreign denominated instruments; (5) adding share-based compensation expense; (6) adding charges for restructuring and long-term receivables; (7) adding strategic review transaction costs and expenses; (8) adding refinancing charges and loss on early retirement of debt; and (9) subtracting the gain on asset sales.
For Dole’s 2013 projected Adjusted EBITDA included in this release, only share-based compensation expense has been added to EBITDA in calculating Adjusted EBITDA The other eight factors, above, are not expected to be applicable to the new Dole or cannot now be estimated with reasonable precision; therefore, they are not reflected in 2013 projected EBITDA and thus cannot be added or subtracted back in calculating 2013 Adjusted EBITDA Potential resolutions of the Honduras tax case, the European Union Antitrust Inquiry and the DBCP cases have not been reflected in the 2013 Adjusted EBITDA projections.
Adjusted EBITDA has limitations as an analytical tool. It is not calculated or presented in accordance with U.S. GAAP and is not a substitute for net income attributable to Dole Food Company, Inc., net income, income from continuing operations, cash flows from operating activities or any other measure prescribed by U.S. GAAP. Further, Adjusted EBITDA as used herein is not necessarily comparable to similarly titled measures of other companies. However, Dole has included this measure because management believes that they are useful performance measures for Dole and for securities analysts, investors and others in the evaluation of Dole. Dole compensates for these limitations by relying primarily on U.S. GAAP results and using EBITDA only supplementally.
Source: Dole Food Company, Inc.
Dole Food Company, Inc.
Beth Potillo, 818-879-6733