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March 19, 2008 |
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DOLE FOOD: Posts US$57.5 Million Net Loss in Year Ended Dec. 29 Dole Food Company Inc. reported a net loss of US$57.5 million for the year ended Dec. 29, 2007, compared to a net loss of US$89.6 million for the year ended Dec. 30, 2006. For the year ended Dec. 29, 2007, revenues increased 13.0% to US$6.93 billion from US$6.15 billion in the prior year. Higher worldwide sales of fresh fruit and packaged foods products in North America and Europe drove the increase in revenues during 2007. Higher volumes of bananas and pineapples accounted for approximately US$222.0 million or 28.0% of the overall revenues increase. Higher revenues in the company's European ripening and distribution operations contributed an additional US$528.0 million. Higher sales of packaged foods products, primarily for FRUIT BOWLS, fruit in plastic jars, pineapple juice and packaged frozen fruit accounted for approximately US$85.0 million or 11.0% of the overall revenues increase. Favorable foreign currency exchange movements in the company's selling locations also positively impacted revenues by approximately US$171 million. These increases were partially offset by a reduction in fresh vegetables sales due to lower volumes of commodity vegetables sold in North America and Asia. In addition, the company's fresh-cut flowers business reported overall lower sales volumes due primarily to the changes in the customer base and product offerings attributable to the implementation of the 2006 restructuring plan. Operating Income For the year ended Dec. 29, 2007, operating income was US$130.1 million compared with US$79.0 million in 2006. The increase was primarily attributable to improved operating results in the company's banana operations worldwide which benefited from stronger pricing and higher volumes. In addition, operating income improved in the European ripening and distribution business and the fresh-cut flowers segment due to the absence of restructuring costs of US$12.8 million and US$29.0 million, respectively. These improvements were partially offset by lower earnings in the company's packaged salads business and packaged foods segment primarily due to higher product costs. Interest Income and Other Income (Expense), Net For the year ended Dec. 29, 2007, interest income increased slightly to US$7.6 million from US$7.2 million in 2006. The slight increase in interest income was primarily related to higher levels of cash at JP Fresh during 2007. Other income (expense), net decreased to income of US$1.8 million in 2007 from income of US$15.2 million in 2006. The decrease was due to a reduction in the gain generated on the company's cross currency swap of US$22.7 million, partially offset by a reduction in the foreign currency exchange loss on the company's British pound sterling capital lease vessel obligation of US$9.2 million. Interest Expense Interest expense for the year ended Dec. 29, 2007, was US$194.9 million compared to US$174.7 million in 2006. The increase was primarily related to higher levels of borrowings during 2007 on the company's term loan facilities and the asset based revolving credit facility. Income Taxes The company recorded US$1.1 million of income tax expense on US$55.3 million of pretax losses from continuing operations for the year ended Dec. 29, 2007, reflecting a 1.9% effective income tax rate for the year. Income tax expense decreased US$17.1 million from US$18.2 million in 2006 primarily due to a shift in the mix of earnings in foreign jurisdictions taxed at a lower rate than in the U.S. The effective tax rate in 2006 was 24.8%. Equity in Earnings of Unconsolidated Subsidiaries Equity in earnings of unconsolidated subsidiaries for the year ended Dec. 29, 2007, increased to US$1.7 million from US$177,000 in 2006. The increase was primarily related to higher earnings generated by one of the company's European investments. Discontinued Operations During the fourth quarter of 2006, the company sold all of the assets and substantially all of the liabilities associated with its Pacific Coast Truck operations for US$20.7 million. The company received net proceeds of US$15.3 million from the sale after the assumption of US$5.4 million of debt, realizing a gain of approximately US$2.8 million, net of income taxes of US$2.0 million. Long-Term Debt At Dec. 29, 2007, the company had total outstanding long-term borrowings of US$2.41 billion, consisting primarily of US$1.10 billion of unsecured senior notes and debentures due 2009 through 2013 and US$1.22 billion of secured debt (consisting of revolving credit and term loan facilities and capital lease obligations). The company has US$350.0 million of unsecured senior notes maturing May 1, 2009. The company is currently evaluating its available options to refinance the notes. Balance Sheet At Dec. 29, 2007, the company's consolidated balance sheet showed US$4.64 billion in total assets, US$4.29 billion in total liabilities, US$29.9 million in minority interests, and US$325.0 million in total stockholders' equity. Full-text copies of the company's consolidated financial statements for the year ended Dec. 29, 2007, are available for free at http://researcharchives.com/t/s?2910 About Dole Food Headquartered in Westlake Village, California, Dole Food Company, Inc. -- http://www.dole.com/ -- is a producer and marketer of fresh fruit, fresh vegetables and fresh-cut flowers, and markets a line of packaged foods. The company has four primary operating segments. The fresh fruit segment produces and markets fresh fruit to wholesale, retail and institutional customers worldwide. The fresh vegetables segment contains operating segments that produce and market commodity vegetables and ready-to-eat packaged vegetables to wholesale, retail and institutional customers primarily in North America, Europe and Asia, including Thailand. The packaged foods segment contains several operating segments that produce and market packaged foods, including fruit, juices and snack foods. Dole's fresh- cut! flowers segment sources, imports and markets fresh-cut flowers, grown mainly in Colombia and Ecuador, primarily to wholesale florists and supermarkets in the U.S. * * * As reported in the Troubled Company Reporter-Europe on Feb. 28, 2008, Moody's Investors Service lowered Dole Food Company Inc.'s corporate family rating and probability of default ratings to B3 from B2, and downgraded the ratings of the company's unsecured shelf filings. Moody's said the rating outlook is stable. Tuesday's edition of the TCR-AP delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR-AP editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Tuesday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR-AP constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR-AP editor holds some position in the issuers' public debt and equity securities about which we report. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR-AP. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com Friday's edition of the TCR-AP features a list of companies with insolvent balance sheets obtained by our editors based on the latest balance sheets publicly available a day prior to publication. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. |
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