<PAGE>
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 26, 1994
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 1-4455
DOLE FOOD COMPANY, INC.
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(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.)
31355 Oak Crest Drive
Westlake Village, California 91361
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(Address of principal executive offices and zip code)
(818) 879-6600
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(Registrant's telephone number, including area code)
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 22, 1994
- - ----------------------- ------------------------------------
Common Stock, without 59,467,746
par value
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DOLE FOOD COMPANY, INC.
Index
<TABLE>
<CAPTION>
Page
Number
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<S> <C>
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statement of Income -- quarters ended
March 26, 1994 and March 27, 1993................... 3
Consolidated Balance Sheet -- March 26, 1994 and
January 1, 1994..................................... 4
Consolidated Statement of Cash Flow -- quarters
ended March 26, 1994 and March 27, 1993............. 5
Notes to Consolidated Financial Statements.......... 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations....... 7-8
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K.................... 9-10
Signatures................................................... 11
</TABLE>
2
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PART I.
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DOLE FOOD COMPANY, INC.
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
(in 000s, except per share amounts)
<TABLE>
<CAPTION>
Quarter Ended
----------------------
March 26, March 27,
1994 1993
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<S> <C> <C>
Revenue $818,782 $766,488
Cost of products sold 672,303 634,697
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Gross margin 146,479 131,791
Selling, marketing and administrative
expenses 91,341 76,952
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Operating income 55,138 54,839
Interest expense (18,163) (16,910)
Interest income 2,614 3,074
Gain on sale of 18% of common stock
of subsidiary - 30,853
Other expense - net (940) (2,698)
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Income before income taxes 38,649 69,158
Income taxes (8,900) (15,900)
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Net income $ 29,749 $ 53,258
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Earnings per common share $ .50 $ .89
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Average number of common shares outstanding 59,708 59,702
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</TABLE>
See Notes to Consolidated Financial Statements.
3
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DOLE FOOD COMPANY, INC.
CONSOLIDATED BALANCE SHEET
(in 000s)
<TABLE>
<CAPTION>
March 26, January 1,
1994 1994
(Unaudited) (Audited)
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<S> <C> <C>
Current assets
Cash and short-term investments $ 50,797 $ 37,497
Receivables - net 478,663 407,554
Inventories
Finished products 250,814 213,753
Raw materials and work in progress 126,683 160,635
Growing crop costs 38,739 38,509
Packing materials 73,847 69,843
Operating supplies and other 73,160 70,688
Real estate development inventory 110,094 105,900
Prepaid expenses 49,018 37,970
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Total current assets 1,251,815 1,142,349
Real estate developments 291,533 288,217
Investments 35,372 34,071
Property, plant and equipment - net 1,810,931 1,767,089
Long-term receivables - net 70,550 70,653
Other assets 91,795 85,540
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$3,551,996 $3,387,919
========== ==========
Current liabilities
Notes payable $ 61,413 $ 64,050
Current portion of long-term debt 14,407 14,612
Accounts payable and accrued liabilities 580,782 581,490
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Total current liabilities 656,602 660,152
Long-term debt 1,310,528 1,158,297
Deferred income taxes and other long-term
liabilities 436,459 430,014
Minority interests 83,825 87,342
Common shareholders' equity
Common stock 320,109 320,099
Additional paid-in capital 165,184 164,908
Retained earnings 614,427 596,573
Cumulative foreign currency translation
adjustment (35,138) (29,466)
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Total common shareholders' equity 1,064,582 1,052,114
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$3,551,996 $3,387,919
========== ==========
</TABLE>
See Notes to Consolidated Financial Statements.
4
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DOLE FOOD COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOW
(Unaudited)
(in 000s)
<TABLE>
<CAPTION>
Quarter Ended
--------------------
March 26, March 27,
1994 1993
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<S> <C> <C>
Operating activities
Net income $ 29,749 $ 53,258
Adjustments to net income
Depreciation and amortization 30,734 29,259
Equity earnings, net of distributions (936) (840)
Gain on sale of subsidiary stock - (30,853)
Other 5,362 (90)
Change in operating assets and liabilities
Receivables - net (74,703) (67,825)
Inventories (14,087) 4,234
Prepaid expenses (11,055) (17,550)
Real estate developments (7,478) (3,483)
Accounts payable and accrued liabilities (4,668) (18,463)
Other (7,783) 3,870
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Cash flow used in operations (54,865) (48,483)
Investing activities
Capital additions (46,275) (39,837)
Purchase price of acquisitions, net of
acquired cash (29,644) (19,504)
Other 317 369
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Cash flow used by investing activities (75,602) (58,972)
Financing activities
Short-term repayments - net (1,672) (23,809)
Long-term borrowings - net 151,101 65,608
Cash dividends paid (5,948) (5,945)
Net proceeds on sale of subsidiary common stock - 73,595
Other 286 296
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Cash flow from financing activities 143,767 109,745
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Increase in cash and short-term investments 13,300 2,290
Cash and short-term investments at beginning
of period 37,497 57,272
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Cash and short-term investments at end of period $ 50,797 $ 59,562
======== ========
Supplemental cash flow data
- - ---------------------------
Cash paid during the quarter for:
Interest $ 20,548 $ 13,384
Income taxes 45 4,390
</TABLE>
See Notes to Consolidated Financial Statements.
5
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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
26, 1994, and its results of operations and cash flow for the quarter then
ended. Interim results are subject to significant seasonal variations and
are not necessarily indicative of the results of operations for a full year.
2. During the first quarter of 1994, the Company declared approximately $11.9
million of cash dividends on its common stock, representing two quarterly
dividends of 10 cents per share, declared in February and March of 1994.
During the first quarter of 1993, the Company declared and paid
approximately $5.9 million of cash dividends on its common stock, which
represented a regular quarterly dividend of 10 cents per share.
3. Certain prior year amounts have been reclassified to conform to the 1994
presentation.
6
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DOLE FOOD COMPANY, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
- - -------------------------------
Cash flow from financing activities increased to $144 million for the first
quarter of 1994 from $110 million for the same period in 1993, in order to fund
higher investing activities and meet operating requirements. Approximately $55
million of cash was used in operations during the first quarter of 1994, largely
related to seasonally high receivables. The Company's external borrowings were
higher during the first quarter of 1994 than the comparable period in 1993,
which included proceeds generated by the March 1993 initial public offering of
18% of the common stock of Castle & Cooke Homes, Inc., the Company's residential
real estate development company.
At March 26, 1994, net borrowings outstanding under uncommitted lines of credit
totaled approximately $548 million. The Company has additional borrowing
capacity under a $400 million, 364-day revolving credit facility. There were no
borrowings outstanding under this credit facility at March 26, 1994.
In addition, Castle & Cooke Homes, Inc. had borrowings of $47 million under a
$100 million revolving credit facility which requires a series of reductions in
committed borrowing capacity as follows: $10 million on each of March 31, 1994,
September 30, 1994 and March 31, 1995; and $20 million on September 30, 1995.
The agreement terminates in March 1996.
Cash and short-term investments totaled approximately $51 million at March 26,
1994.
Capital expenditures for the first quarter of 1994 totaled approximately $46
million, of which $39 million was invested in the Company's food operations for
infrastructure, further development and modernization of new and existing
facilities, and progress payments on new vessels. In February 1994, the Company
acquired three commercial real estate properties.
RESULTS OF OPERATIONS
- - ---------------------
Net income for the first quarter of 1994 was $29.7 million, or 50 cents per
share, compared to 1993 first quarter net income of $53.3 million (89 cents per
share) which included a 1993 pretax gain of approximately $31 million related to
the sale of 18% of the common stock of Castle & Cooke Homes, Inc.
Revenues for the first quarter of 1994 grew 7% from $766 million in 1993 to $819
million in 1994, primarily attributable to the effects of acquisitions which
occurred in 1993.
7
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DOLE FOOD COMPANY, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONTINUED)
- - ---------------------------------
Consolidated gross margins as a percentage of revenue were comparable during the
first quarters of 1994 and 1993, reflecting reduced operating expense levels for
certain food operations as a result of the Company's cost reduction efforts,
offset by lower margins for certain food operations which experienced price
pressures during the first quarter of 1994.
Operating income for the Company's food operations, net of corporate general and
administrative expenses, totaled $50.5 million in the first quarter of both 1994
and 1993. Earnings for bananas improved over the prior year's first quarter
primarily due to a stronger market in Europe and the effects of the Company's
cost reduction efforts. This improvement was primarily offset by sharply lower
lettuce and celery prices. Price pressures continued to negatively affect canned
pineapple and concentrate earnings. Selling, marketing and administrative
expenses in the first quarter of 1994 were higher than the previous year due to
the effects of 1993 acquisitions, plus additional spending for new products and
marketing programs for the fresh vegetable and packaged foods operations which
more than offset savings achieved through cost reduction measures. Worldwide
banana markets are continuing to adjust to the European Community banana
regulations. Price pressures are expected to persist on canned pineapple and
concentrate.
Operating income for Castle & Cooke Homes, Inc. totaled $9.7 million in the
first quarter of 1994, compared to $13.0 million for the same period of 1993.
The decrease was attributable to a change in the overall sales mix which
resulted in a lower average sales price and operating margin in the first
quarter of 1994 compared to the first quarter of 1993. In addition, results for
1993 included a bulk land sale in Bakersfield, California.
The Lana'i resorts operations reported improved occupancy rates for both hotels
resulting in a reduced first quarter operating loss before depreciation of $3.4
million in 1994 as compared to a $4.8 million loss in 1993. Depreciation expense
was $4.2 million and $4.0 million for 1994 and 1993, respectively.
Interest expense, net of interest income and capitalized interest, increased to
$15.5 million for the first quarter of 1994 from $13.8 million in 1993, as a
result of higher average borrowing levels and higher borrowing rates in 1994.
The higher weighted average borrowing rate in 1994 was primarily the result of
refinancing outstanding floating rate bank debt with public bonds during May and
July of 1993, issued at an average interest rate of approximately 7%. The
issuance of these bonds allowed the Company to extend its average debt maturity,
diversify its funding sources and reduce its exposure to higher interest rates
on variable rate debt.
8
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PART II. OTHER INFORMATION
DOLE FOOD COMPANY, INC.
<TABLE>
<CAPTION>
Page
Number
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<S> <C>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11. Computations of earnings per
common share........................................ 10
(b) No reports on Form 8-K were filed for the quarter
ended March 26, 1994.
</TABLE>
9
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EXHIBIT 11
DOLE FOOD COMPANY, INC.
Computations of Earnings per Common Share
(Unaudited)
(in 000s, except per share amounts)
<TABLE>
<CAPTION>
Quarter Ended
--------------------
March 26, March 27,
1994 1993
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<S> <C> <C>
PRIMARY
Net income applicable to common shares.......... $29,749 $53,258
======= =======
Average number of common shares outstanding
during the period 59,464 59,418
Add:
Shares issuable upon exercise of stock
options at average prices during the
period................................... 244 284
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Total primary shares 59,708 59,702
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Primary earnings per common share $ .50 $ .89
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FULLY DILUTED
Net income applicable to common shares
and dilutive securities........................ $29,749 $53,258
======= =======
Average number of common shares outstanding
during the period 59,464 59,418
Add:
Shares issuable upon exercise of stock
options at higher of average prices
or end of period prices.................. 305 316
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Total fully diluted shares 59,769 59,734
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Fully diluted earnings per common share $ .50 $ .89
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</TABLE>
10
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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.
DOLE FOOD COMPANY, INC.
Registrant
May 9, 1994 By /s/ ALAN B. SELLERS
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Alan B. Sellers
Executive Vice President -
Chief Financial Officer
By /s/ PATRICIA A. MCKAY
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Patricia A. McKay
Vice President - Controller
11
