Dole plc (NYSE: DOLE) has today released its financial results for the third quarter ended September 30, 2021.

Highlights for the three and nine months of 2021 include:

• Merger of Total Produce plc (“TP”) and Dole Food Company (“DFC”) to form Dole plc
• IPO of Dole plc on July 30, 2021, raising net proceeds of $398.9 million
• Completed $1.4 billion debt refinancing
• Strong results delivered within a complex economic environment
• Diversified business model and wide geographic footprint provide resilience
• Net Debt / Pro-Forma LTM Adjusted EBITDA 2.76x
• Dividend of $0.08 per share declared for the quarter
• Full year Pro-Forma Revenue target $9.2 billion - $9.4 billion
• Full year Pro-Forma Adjusted EBITDA target $390 million - $400 million

Note 1: This press release contains pro-forma financial information. The unaudited pro-forma consolidated financial statements for Dole plc illustrate the effects of the acquisition of DFC by TP and the effects of the IPO and refinancing as if they had occurred on January 1, 2020. This is comparable to the Pro-Forma financial statements presented in the Form F-1 filed with the SEC at the time of the IPO.

The financial statements filed today with the SEC, and which are available on our website (https://www.doleplc.com/investors), contain the results of TP for the first 7 months to July 29, 2021 (including equity earnings from TP’s 45% shareholding in DFC) plus the combined results of TP and DFC from July 29, 2021 to September 30, 2021. Comparative period results to September 30, 2020, are comprised of the nine-month results of TP including equity earnings from TP’s 45% shareholding in DFC.

Note 2: Dole plc reports its financial results in accordance with U.S. Generally Accepted Accounting Principles (GAAP). Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings Per Share are non-GAAP financial measures. Refer to the end of this release for an explanation and reconciliation of these and other non-GAAP financial measures used in this release to comparable GAAP measures.

Commenting on the results, Carl McCann, Executive Chairman said:

“Dole plc has delivered a strong performance for the first nine months of 2021 in the context of inflationary pressures across our North American and European markets during the third quarter. With industry wide supply chain congestion and labor shortages, our diversified business model has proven itself to be responsive and resilient. We are very pleased with the response of our divisions and people in the face of these challenges and are confident in our ability to meet our full year outlook.”

Pro-Forma Revenue for the third quarter increased 0.3% to $2.3 billion. The increase was driven by growth in the Fresh Vegetables and Diversified Fresh Produce – Americas & ROW divisions, offset by decreases in Fresh Fruit and Diversified Fresh Produce – EMEA.

Pro-Forma Revenue increased 4.5% to $7.1 billion for the first nine months of 2021. The increase in year-to-date Pro-Forma Revenue was driven by growth in the Diversified Fresh Produce – Americas & ROW, Diversified Fresh Produce – EMEA and the Fresh Vegetables divisions.

Pro-Forma Adjusted EBITDA for the third quarter decreased 35.4% to $59.7 million compared to the prior year period. The decrease was predominantly driven by EBITDA decreases in Fresh Vegetables due to weak markets in our Fresh Packed Vegetables business and inflationary headwinds in Value Added Salads, as well as EBITDA decreases in the Fresh Fruit division due to ongoing supply chain impacts following last year’s hurricanes, and inflationary pressure which contributed to higher costs of production during the quarter.

Pro-Forma Adjusted EBITDA for the first nine months of 2021 increased 12.6% to $337.7 million. The increase has been driven by EBITDA increases in the Fresh Fruit division following a strong first half of the year, and from the Diversified Fresh Produce – EMEA division. This was partially offset by EBITDA decreases in the Fresh Vegetables division due primarily to weakness in our Fresh Packed Vegetables business from an oversupplied market as well as inflationary pressures in Value Added Salads, and in Diversified Fresh Produce – Americas & ROW, due to the impact of adverse weather events in Chile at the outset of the year and against a strong comparator.

Pro-Forma Adjusted Net Income for the third quarter decreased 88.1% to $3.7 million, driven by the reduction in Pro-Forma Adjusted EBITDA.

Pro-Forma Adjusted Net Income for the first nine months of 2021 increased 22.5% to $131.6 million, driven by the increase in Pro-Forma Adjusted EBITDA, offset by an increase in depreciation charges and increase in earnings attributable to non-controlling shareholders.

Selected Pro-Forma Quarterly Segmental Financial Information

Fresh Fruit

Pro-Forma Revenue for the third quarter was down 0.8% due to lower volumes of Bananas in North America and lower Banana pricing in Europe, as well as lower pricing for Pineapples in North America. This was offset in part by higher pricing in North America for Bananas, volume growth in Pineapples in North America and in Europe, as well as growth in commercial cargo revenues due to higher freight rates.

Pro-forma Revenue for the first nine months of 2021 increased 2.7% due to higher Banana pricing in North America and higher Pineapple pricing across all markets as well as growth in commercial cargo, partially offset by lower Banana volumes in all markets.

Pro-Forma Adjusted EBITDA for the third quarter was down 53.2% compared to the prior year due to lower revenue and higher transportation costs in North America and higher produce costs driven by input materials increases, as well cost pressures from the supply chain impact caused by hurricanes Iota and Eta in Honduras and Guatemala in November 2020. These cost increases were partially offset by strong performance in commercial cargo, as well as by the benefit of currency hedges.

Pro-Forma Adjusted EBITDA for the first nine months of 2021 increased 27.0% largely due to higher revenue driven by higher pricing in the North American Banana market and due to strong performance from commercial cargo, offset by cost pressures from the supply chain impact caused by hurricanes Iota and Eta in Honduras and Guatemala in November 2020 and inflationary headwinds.

Fresh Vegetables

Pro-Forma Revenue for the third quarter increased 1.0% primarily due to higher pricing in the Value-Added Salads business, offset by lower volumes in this business. Production was impacted by labor availability challenges in the quarter. In addition, lower volume and lower pricing in the Fresh Packed Vegetables business led to a decrease in Revenue.

Pro-Forma Revenue for the first nine months of 2021 increased 4.3% due to higher volumes and pricing in the Value-Added Salads business, driven by strong market demand and a better mix of products sold. This was partially offset by revenue declines in the Fresh Packed Vegetables business caused by oversupply within this category impacting pricing.

Pro-forma Adjusted EBITDA for the third quarter decreased by 90.8% primarily due to the significant impact of inflation in inland transportation as well as in packaging and labor and the persistently weak Fresh Packed Vegetables market. Price increases have been implemented with all Valued Added Salads customers to help address the inflationary challenges. Within Fresh Packed Vegetables, plantings have been decreased for 2022 to reduce market exposure.

Pro-Forma Adjusted EBITDA for the first nine months decreased 84.8% primarily due to the inflationary impact on input costs and some specific once off production issues in the Value-Added Salads business.

Diversified Fresh Produce – Americas & ROW

Pro-Forma Revenue for the third quarter increased 4.0% due to a strong performance in the Berry category and growth in other categories such as Apples and Kiwis, offset partially by some port related challenges in the North American export businesses.

Pro-Forma Revenue for the first nine months increased 5.2% due to higher revenue from Berries, and more incrementally by growth in the Chilean export fruit business.

Pro-Forma Adjusted EBITDA for the third quarter decreased 52.4%, driven by the continuing impact of adverse weather which affected the Chilean grape growing season in the first part of the year, offset by good growth in the Berries category.

Pro-Forma Adjusted EBITDA for the first nine months was down 15.1%, with the decrease largely driven by the adverse weather events that impacted the Chilean grape season. This was offset in part by Pro-Forma Adjusted EBITDA improvement from the Berry category as well other categories such as Asparagus and Chilean Top Fruit and Stone Fruit.

Diversified Fresh Produce – EMEA

Pro-forma Revenue for the third quarter decreased 0.8% due to the divestment of a business in the third quarter of 2021 partially offset by the incremental contributions from step up acquisitions and the favorable impact of currency translation.

Pro-Forma Revenue for the first nine months is up 5.9% due to positive currency movements, a strong performance across retail, wholesale, and foodservice channels, and the contribution from step up acquisitions in the period. This was partially offset by the incremental impact of divestments in the third quarter of 2021.

Pro-Forma Adjusted EBITDA for the third quarter was up 9.4% due to a good recovery in the Dutch business following a reorganization, as well as strong performance across other European markets and the favorable impact of currency translation.

Pro-forma Adjusted EBITDA for the first nine months is 33.8% ahead, driven by the recovery in the Dutch business and good performance in Ireland and the UK helped by the reopening of food service channels. The Brazilian export business also performed strongly. The results also benefited from the favorable impact of currency translation.

Net debt

Net Debt is the primary measure used by management to analyze the Company’s capital structure and financial leverage. Net debt is a non-GAAP financial measure, calculated as cash and cash equivalents, less current and long-term debt. It also excludes debt discounts and debt issuance costs. The calculation of Net Debt and Financial Leverage as at September 30, 2021 is presented below. Net debt at September 30, 2021 was $1.1 billion. Net Debt for the last 12 months Pro-Forma Adjusted EBITDA was 2.76x.

Capital Expenditure

Capital expenditure for the year to date is $153 million, including $53 million in final payments for two new vessels, Dole Aztec and Dole Maya which were delivered in the first half of 2021. In addition, $16 million was spent reinvesting in Honduran farms impacted by last year’s hurricanes, and $25 million in acquiring pineapple assets.

Outlook for FY21

For the twelve months ending December 31, 2021, Dole plc is targeting Pro-Forma Revenue in the range of $9.2 billion to $9.4 billion and Pro-Forma Adjusted EBITDA in the range of $390 million to $400 million.

Dividend

On December 2, 2021, the Board of Directors of Dole plc declared a cash dividend for the third quarter of 2021 of $0.08 per share, payable on January 7, 2022, to shareholders of record on December 17, 2021.

Pro-Forma Financial Statements

Pro-Forma Methodology

The methodology used to prepare the unaudited Pro-Forma consolidated financial statements for Dole plc to show the estimated effects of the acquisition of Dole Food Company (“DFC”) by Total Produce plc (“TP”) and the IPO and refinancing as if they had occurred on January 1, 2020, is in line with how the Pro-Forma financial statements were prepared in the F-1.

1. All associated Transaction costs reflected on January 1, 2020.
2. Effective tax rate for 2020 (28.5%) and 2021 (25%).
3. Applying the results of the Purchase Price Allocation (“PPA”) exercise to January 1, 2020:
   1. Reversal of fair value uplift to banana and pineapple inventory and bearer plants. DFC accounts for agricultural costs in accordance with ASC 905 Agriculture for all crops except pineapples and bananas due to their continuous cycle of production. At the acquisition balance sheet date previously uncapitalized pineapple and banana costs are required to be recognized at their fair value to reflect the biological transformation of these crops. This is an uplift of $35.0 million in relation to inventory and $68.0 million in relation to bearer plants. These fair value uplifts will be amortized in the income statement over the remaining growth and harvest cycle for the inventory element and over the life of the plants for the bearer plants. In the YTD Q3 2020 this amortization amounted to $86.0 million.
   2. 2020 and 2021 Pro-Forma results reflect a reduction in the depreciation charge of $4.0 million. This is a function of the asset values increasing as a result of the PPA exercise offset by an increase in the estimated useful lives of the assets.
   3. The interest expense for both years reflects the outcome of the refinancing.
   4. Fair value loss on TP’s investment in DFC recorded on January 1, 2020.
4. TP’s pickup of its 45% share of DFC’s net income has been eliminated.
5. EPS is calculated using shares in issue following the IPO and additional share issuances.
6. There is an adjustment in both years to reflect estimated ongoing incremental public company costs of $14.0 million annualized.

Pro-Forma Statement of Operations – for the three months ended September 30, 2021

Pro-Forma Statement of Operations – for the nine months ended September 30, 2021

Reconciliation from Pro-Forma Net Income to Pro-Forma Adjusted EBITDA – for the three months ended September 30, 2021

Reconciliation from Pro-Forma Net Income to Pro-Forma Adjusted EBITDA – for the nine months ended September 30, 2021

Reconciliation from Pro-Forma Net Income to Pro-Forma Adjusted Net Income – for the three months ended September 30, 2021

Reconciliation from Pro-Forma Net Income to Pro-Forma Adjusted Net Income – for the nine months ended September 30, 2021

Pro-Forma Reconciliation – for the nine months ended September 30, 2021

Pro-Forma Reconciliation – for the nine months ended September 30, 2020

Quarterly Information