<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 23, 1996
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)
(818) 879-6600
-----------------------------------------------------
(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 19, 1996
- ------------------------- ------------------------------------
Common Stock, without 60,006,176
par value
<PAGE>
DOLE FOOD COMPANY, INC.
Index
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Income -- quarters ended
March 23, 1996 and March 25, 1995....................... 3
Consolidated Balance Sheets -- March 23, 1996 and
December 30, 1995....................................... 4
Consolidated Statements of Cash Flow -- quarters ended
March 23, 1996 and March 25, 1995....................... 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-
<PAGE>
PART I.
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DOLE FOOD COMPANY, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in 000s, except per share amounts)
<TABLE>
<CAPTION>
Quarter Ended
-------------------------
March 23, March 25,
1996 1995
--------- ---------
<S> <C> <C>
Revenue $ 814,438 $ 849,124
Cost of products sold 687,448 698,375
--------- ---------
Gross margin 126,990 150,749
Selling, marketing and administrative
expenses 79,815 96,003
--------- ---------
Operating income 47,175 54,746
Interest expense (17,002) (24,091)
Interest income 2,184 2,216
Other income (expense) - net 4,152 (860)
--------- ---------
Income from continuing operations,
before income taxes 36,509 32,011
Income taxes (6,500) (7,600)
--------- ---------
Income from continuing operations 30,009 24,411
Loss from discontinued operations,
net of income taxes - (790)
--------- ---------
Net income $ 30,009 $ 23,621
========= =========
Earnings (loss) per common share:
Continuing operations $ .50 $ .41
Discontinued operations - (.01)
--------- ---------
Net income per common share $ .50 $ .40
========= =========
Average number of common shares outstanding 60,329 59,679
========= =========
</TABLE>
See Notes to Consolidated Financial Statements.
-3-
<PAGE>
DOLE FOOD COMPANY, INC.
CONSOLIDATED BALANCE SHEETS
(in 000s)
<TABLE>
<CAPTION>
March 23, December 30,
1996 1995
(Unaudited) (Audited)
----------- ------------
<S> <C> <C>
Current assets
Cash and short-term investments $ 46,782 $ 72,151
Receivables - net 472,607 462,303
Inventories
Finished products 202,892 179,390
Raw materials and work in progress 201,752 216,830
Growing crop costs 39,423 51,980
Packing materials 27,671 25,227
Operating supplies and other 86,929 86,233
----------- ------------
558,667 559,660
Prepaid expenses 57,886 43,087
----------- ------------
Total current assets 1,135,942 1,137,201
Investments 61,101 63,319
Property, plant and equipment - net 1,017,600 1,016,991
Long-term receivables - net 34,796 28,409
Other assets 197,833 196,272
----------- ------------
$ 2,447,272 $ 2,442,192
=========== ============
Current liabilities
Notes payable $ 9,767 $ 21,778
Current portion of long-term debt 1,997 1,779
Accounts payable and accrued liabilities 565,705 633,333
----------- ------------
Total current liabilities 577,469 656,890
Long-term debt 959,682 895,998
Other long-term liabilities 354,815 354,545
Minority interests 25,042 26,324
Common shareholders' equity
Common stock 320,633 320,497
Additional paid-in capital 174,273 170,266
Retained earnings 82,288 58,269
Cumulative foreign currency translation
adjustment (46,930) (40,597)
----------- ------------
Total common shareholders' equity 530,264 508,435
----------- ------------
$ 2,447,272 $ 2,442,192
=========== ============
</TABLE>
See Notes to Consolidated Financial Statements.
-4-
<PAGE>
DOLE FOOD COMPANY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOW
(Unaudited)
(in 000s)
<TABLE>
<CAPTION>
Quarter Ended
------------------------
March 23, March 25,
1996 1995
---------- ---------
<S> <C> <C>
Operating activities
Income from continuing operations $ 30,009 $ 24,411
Adjustments to continuing operations
Depreciation and amortization 25,424 25,581
Equity earnings, net of distributions (429) (676)
Provision for deferred income taxes 2,244 89
Other (3,102) (35)
Change in operating assets and liabilities
Receivables - net (15,734) (16,856)
Inventories 993 (23,846)
Prepaid expenses (14,799) (23,536)
Accounts payable and accrued liabilities (89,539) (1,457)
Other 11,628 8,736
---------- ---------
Cash flow used in operating activities of
continuing operations (53,305) (7,589)
Cash flow used in operating activities
of discontinued operations - (7,052)
---------- ---------
Cash flow used in operating activities (53,305) (14,641)
Investing activities
Capital additions (15,097) (42,213)
Proceeds from sales of property, plant & equipment 2,808 135,760
Businesses acquired, net of acquired cash (15,212) (7,297)
Sales (purchases) of investments - net 6,207 (5,539)
Other (814) (811)
---------- ---------
Cash flow (used in) from investing activities
of continuing operations (22,108) 79,900
Cash flow used in investing activities
of discontinued operations - (2,855)
---------- ---------
Cash flow (used in) from investing
activities (22,108) 77,045
Financing activities
Short-term repayments - net (12,011) (22,441)
Long-term borrowings (repayments) - net 63,902 (27,444)
Cash dividends paid (5,990) (5,948)
Issuance of common stock 4,143 34
---------- ---------
Cash flow from (used in) financing activities
of continuing operations 50,044 (55,799)
Cash flow (used in) financing activities
of discontinued operations - (1,484)
---------- ---------
Cash flow from (used in) financing
activities 50,044 (57,283)
(Decrease) increase in cash and short-term
investments (25,369) 5,121
Cash and short-term investments at beginning
of period 72,151 45,162
---------- ---------
Cash and short-term investments at end of period $ 46,782 $ 50,283
========== =========
</TABLE>
See Notes to Consolidated Financial Statements.
-5-
<PAGE>
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
23, 1996 and March 25, 1995, and its results of operations and cash flow
for the quarters then ended. Interim results are subject to significant
seasonal variations and are not necessarily indicative of the results of
operations for a full year.
On December 28, 1995, the Company completed the separation of its real
estate and resorts business from its food business through a pro rata
distribution to its shareholders. In connection with the distribution, 1995
operating results of the real estate and resorts business have been
presented as discontinued operations.
Certain prior year amounts have been reclassified to conform to the 1996
presentation.
2. The Company declared and paid dividends on its common stock of
approximately $6.0 million during the first quarter of 1996 and $5.9
million during the first quarter of 1995. The cash dividends represent the
regular quarterly dividend of 10 cents per share.
3. The Company paid interest of $19.5 million in the first quarter of 1996 and
$33.0 million for the same period in 1995. The Company received income tax
refunds (net of income taxes paid) of $18.4 million for the first quarter
of 1996 and paid income taxes (net of refunds) of $1.7 million for the
first quarter of 1995.
-6-
<PAGE>
DOLE FOOD COMPANY, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company's operating activities during the first quarter of 1996 used $53
million of cash, primarily to meet seasonal working capital requirements. The
Company had a net reduction in borrowings in the first quarter of 1995 due to
proceeds of approximately $133 million generated from the sale and leaseback of
certain vessels.
At March 23, 1996, the Company had net borrowings outstanding of approximately
$159 million under a $1 billion credit facility which expires in 1999. The
Company also borrows under uncommitted lines of credit at rates offered from
time to time by various banks that may or may not be lenders under the $1
billion credit facility.
During the first quarter of 1996, the Company completed certain European
acquisitions for a total purchase price of approximately $26 million, and made
initial cash purchase price payments aggregating approximately $15 million.
Capital expenditures totaled approximately $15 million for the first quarter of
1996 compared to approximately $42 million for the first quarter of 1995. The
1996 expenditures were invested in various business expansions and modernization
of existing facilities.
RESULTS OF OPERATIONS
- ---------------------
Net income for the first quarter of 1996 was $30.0 million or 50 cents per
share, a 23% increase over net income from continuing operations of $24.4
million or 41 cents per share for the first quarter of 1995.
Revenue for the first quarter of 1996 totaled $814.4 million, an increase of
approximately 3% compared to revenue from continuing operations for the same
quarter in 1995, excluding revenue from the worldwide juice and juice beverage
business and pistachio business which were sold in 1995. The growth in revenue
is attributable to volume increases in the banana operations, and previous
acquisitions.
Selling, marketing and administrative expenses were $79.8 million or 10% of
revenue for the first quarter of 1996 compared to $96.0 million for continuing
operations or 11% of revenue for the first quarter of 1995. The decrease was
due to the sale of the worldwide juice and juice beverage business in the second
quarter of 1995.
-7-
<PAGE>
DOLE FOOD COMPANY, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS (CONTD)
- -----------------------------
Operating income was $47.2 million for the first quarter of 1996 compared to
$54.7 million for the same period in 1995. Lower operating results were
primarily due to the weakness in the banana operations caused by adverse weather
conditions. Partially offsetting the lower banana results were improved
earnings from the value added, pre-cut salad, and fresh and processed pineapple
operations for the first quarter of 1996. First quarter 1996 results were
slightly impacted by the weakened yen and the overall economic environment in
Japan.
Other income of $4.2 million for the first quarter of 1996 was primarily from a
gain on the sale of certain investments.
Interest expense, net of interest income, decreased to $14.8 million for the
first quarter of 1996 from $21.9 million for the first quarter of 1995, as a
result of lower average debt levels slightly offset by higher interest rates.
The Company's effective tax rate decreased to 18% for the first quarter of 1996
from 24% for continuing operations for the first quarter of 1995, primarily as a
result of the 1995 real estate and resorts business distribution which caused a
change in the mix of the Company's foreign and domestic earnings.
-8-
<PAGE>
PART II. OTHER INFORMATION
DOLE FOOD COMPANY, INC.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
<TABLE>
<CAPTION>
Exhibit Page
No. Number
------- ------
<S> <C>
11 Computations of earnings per common share 10
27 Financial data schedule
</TABLE>
(b) No reports on Form 8-K were filed for the quarter ended March 23, 1996.
-9-
<PAGE>
EXHIBIT 11
DOLE FOOD COMPANY, INC.
Computations of Earnings per Common Share
(Unaudited)
(in 000s, except per share amounts)
<TABLE>
<CAPTION>
Quarter Ended
-------------------------
March 23, March 25,
1996 1995
----------- -----------
<S> <C> <C>
PRIMARY
Net income from continuing operations
applicable to common shares $ 30,009 $ 24,411
Loss from discontinued operations applicable
to common shares - (790)
----------- -----------
Net income applicable to common shares $ 30,009 $ 23,621
=========== ===========
Average number of common shares outstanding
during the period 59,891 59,481
Add:
Shares issuable upon exercise of stock
options at average prices during the
period 438 198
----------- -----------
Total primary shares 60,329 59,679
=========== ===========
Primary earnings per common share:
Continuing operations $ .50 $ .41
Discontinued operations - (.01)
----------- -----------
Net income $ .50 $ .40
=========== ===========
FULLY DILUTED
Net income from continuing operations
applicable to common shares $ 30,009 $ 24,411
Loss from discontinued operations applicable
to common shares - (790)
----------- -----------
Net income applicable to common shares $ 30,009 $ 23,621
=========== ===========
Average number of common shares outstanding
during the period 59,891 59,481
Add:
Shares issuable upon exercise of stock
options at higher of average prices or
end of period prices 560 200
----------- -----------
Total fully diluted shares 60,451 59,681
=========== ===========
Fully diluted earnings per common share:
Continuing operations $ .50 $ .41
Discontinued operations - (.01)
----------- -----------
Net income $ .50 $ .40
=========== ===========
</TABLE>
-10-
<PAGE>
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
April 26, 1996 By /s/ MICHAEL S. KARSNER
----------------------------
Michael S. Karsner
Vice President - Treasurer
and Chief Financial Officer
By /s/ PATRICIA A. MCKAY
----------------------------
Patricia A. McKay
Vice President - Finance
and Controller
-11-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS <F1>
<FISCAL-YEAR-END> DEC-28-1996<F1>
<PERIOD-START> DEC-31-1995<F1>
<PERIOD-END> MAR-23-1996<F1>
<CASH> 46,782
<SECURITIES> 0
<RECEIVABLES> 410,300<F2>
<ALLOWANCES> 47,187<F3>
<INVENTORY> 558,667
<CURRENT-ASSETS> 1,135,942
<PP&E> 1,590,658
<DEPRECIATION> 573,058
<TOTAL-ASSETS> 2,447,272
<CURRENT-LIABILITIES> 577,469
<BONDS> 959,682
0
0
<COMMON> 320,633
<OTHER-SE> 209,631
<TOTAL-LIABILITY-AND-EQUITY> 2,447,272
<SALES> 814,438
<TOTAL-REVENUES> 814,438
<CGS> 687,448
<TOTAL-COSTS> 687,448
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0<F3>
<INTEREST-EXPENSE> 17,002
<INCOME-PRETAX> 36,509
<INCOME-TAX> 6,500
<INCOME-CONTINUING> 30,009
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 30,009
<EPS-PRIMARY> 0.50
<EPS-DILUTED> 0.50
<FN>
<F1>THE COMPANY'S FISCAL YEAR ENDS ON THE SATURDAY CLOSEST TO DECEMBER 31.
FISCAL YEAR 1996 CONSISTS OF 52 WEEKS AND ENDS ON DECEMBER 28, 1996. ALL
QUARTERS IN 1996 HAVE 12 WEEKS, EXCEPT THE THIRD QUARTER OF 1996 WHICH HAS 16
WEEKS.
<F2>INCLUDES TRADE RECEIVABLES ONLY.
<F3>INCLUDES AMOUNTS RELATED TO TRADE RECEIVABLES AND CURRENT NOTES RECEIVABLE.
</FN>
</TABLE>
