Dole plc (NYSE: DOLE) ("Dole" or the "Group" or the "Company") has today released its financial results for the fourth quarter and fiscal year ended December 31, 2021.

Highlights for FY’21:

• Transformational year for the Group
• Significant increase in scale and footprint following acquisition of remaining 55.0% of Dole Food Company, Inc. ("DFC" or "Legacy Dole") by Total Produce plc ("TP") to create Dole plc ("Dole")
• Following the acquisition, revenue has increased 113.7%, Adjusted EBITDA¹ 56.5% and total assets 147.5%
• On a pro-forma² basis, revenue increased 3.5% and Adjusted EBITDA increased 5.9% for the full year
• Group is well positioned for long term sustainable growth following completion of IPO and debt refinancing
• Net Debt¹ / pro-forma Adjusted EBITDA 2.87x as of December 31, 2021

Transformational impact of the acquisition of DFC by TP

On July 29, 2021, TP completed the acquisition of the remaining 55.0% of DFC, to create Dole plc. Following this acquisition, the Group has increased significantly in scale and geographical footprint. Revenue has increased 48.5% to $6.5 billion for the full year 2021 compared to 2020. Pro-forma revenue for the full year 2021 of $9.3 billion has increased 113.7% compared to revenue for 2020. Revenue for 2021 includes five months of DFC revenue for the period of July 30, 2021 to December 31, 2021.

Adjusted EBITDA has increased 15.3% to $290.1 million for the full year 2021 compared to 2020. Pro-forma Adjusted EBITDA for the full year 2021 of $393.6 million has increased 56.5% compared to Adjusted EBITDA for 2020. Adjusted EBITDA for 2021 includes five months of DFC Adjusted EBITDA for the period of July 30, 2021 to December 31, 2021, and TP's 45.0% share of DFC Adjusted EBITDA for seven months for the period of January 1, 2021 to July 29, 2021.

Total assets has increased 147.5% to $4.7 billion following the acquisition. The Group now has a strategic and valuable asset base, including over 114,000 acres of owned land and other land holdings, over 160 distribution and manufacturing facilities, 75 packing houses, 12 cold storage facilities, five salad manufacturing plants and 13 owned vessels.

¹ Dole plc reports its financial results in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). Adjusted EBITDA, Adjusted Net Income, Adjusted Earnings Per Share and Net Debt 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.
² 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 which will be filed in due course with the SEC, and which will be available on our website once filed ( https://www.doleplc.com/investors), will contain the results of TP for the first 7 months to July 29, 2021 (including equity earnings from TP’s 45.0% shareholding in DFC) plus the combined results of TP and DFC from July 30, 2021 to December 31, 2021. Comparative period results to December 31, 2020, are comprised of the full year results of TP including equity earnings from TP’s 45.0% shareholding in DFC.

Pro-forma Financial Information - Highlights (Unaudited)

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

“2021 marked a transformational year for the Group following the acquisition of the remaining 55.0% of DFC by Dole plc and the subsequent IPO of the Group on NYSE. Our scale and footprint have increased significantly and we are well positioned to deliver long term sustainable growth. The Group delivered a strong performance for the full year of 2021, with growth across key metrics in line with guidance. Our diversified business model has continued to provide resilience within a challenging macroeconomic environment, while our strategic asset base and multi-continental sourcing model provide a competitive advantage. Our people have once again been the driver of this strong performance and we thank them for their dedication and determination.

“For the 2022 financial year, we are targeting revenue in the range of $9.6 billion to $9.9 billion and Adjusted EBITDA of $370.0 million to $380.0 million. The year on year expected reduction in Adjusted EBITDA is primarily due to the significant impact of the Value Added Salads product recall and temporary plant closures. We are monitoring the ongoing geopolitical situation in Ukraine and Russia; however, it is difficult to predict today what impact this may have on the macroeconomic environment and our business."

Pro-forma revenue for the fourth quarter increased 2.3% to $2.3 billion. The increase was driven by growth in the Fresh Fruit, Diversified Fresh Produce – EMEA and Diversified Fresh Produce – Americas & ROW reporting segments.

Pro-forma revenue for the full year 2021 increased 3.5% to $9.3 billion. The increase in full year pro-forma revenue was driven by growth across all reporting segments.

Pro-forma Adjusted EBITDA for the fourth quarter decreased 14.9% to $61.1 million. The decrease was predominantly driven by a decrease in Fresh Vegetables due to the impact of the product recall, a reduction in Fresh Fruit due to the continued impact of input cost inflation, and a slight decrease in Diversified Fresh Produce - EMEA. These decreases were partially offset by a strong performance within Diversified Fresh Produce – Americas & ROW.

Pro-forma Adjusted EBITDA for the full year 2021 increased 5.9% to $393.6 million. The increase was driven by a strong performance in Fresh Fruit and Diversified Fresh Produce – EMEA.

Pro-forma Adjusted Net Income for the fourth quarter decreased 25.0% to $13.5 million, predominantly due to the decrease in pro-forma Adjusted EBITDA in the quarter.

Pro-forma Adjusted Net Income for the full year 2021 increased 11.8% to $141.2 million, driven by the increase in pro-forma Adjusted EBITDA and decrease in the effective tax rate, which was partially offset by an increase in depreciation charges and increase in earnings attributable to non-controlling shareholder interests.

Value Added Salads Product Recall and Temporary Plant Closures Update

In December of 2021, we announced a voluntary recall for all packaged salads processed at our Bessemer City, North Carolina and Yuma, Arizona facilities due to a possible health risk from Listeria monocytogenes. We temporarily suspended operations at both facilities to facilitate proper investigation and sanitation procedures. In January of 2022, after we identified that the likely source of the contamination was a single piece of harvesting equipment that had been contaminated from the natural environment, we issued another recall of packaged salads processed at our Springfield, Ohio and Soledad, California facilities that handled product that had been harvested on that equipment. Operations were not fully suspended at the Soledad and Springfield locations as a result of that recall. Through genetic testing and in cooperation with the FDA, we ultimately confirmed that the harvest equipment was the source and that our processing facilities were not harboring any contamination. Our plants have now returned to operating at full capacity.

Incremental exceptional costs as a result of these recalls and temporary plant closures include costs for the disposal of affected inventory and packaging, reimbursements of charges to customers, penalties charged by customers, direct labor and benefits, freight for redirecting trucks carrying affected products, legal considerations and incremental sanitization procedures. The known and expected impact of these exceptional one-off costs for the 2021 recall is estimated at $17.6 million for the Fresh Vegetables segment. In addition, we also estimated a reduction of $3.3 million in Adjusted EBITDA in 2021 arising from the impact of temporary lost volumes and fixed cost absorption.

Total expected exceptional one-off costs in fiscal year 2022 related to the recalls and temporary plant closures are approximately $15.0 million. In addition, we also estimate a reduction in Adjusted EBITDA of approximately $25.0 million arising from the impact of temporary lost volumes, fixed cost absorption and delays in initiating price increases needed to address inflation.

The total impact of both recalls and the temporary plant closures is uncertain and may be subject to change.

Selected Pro-forma Quarterly Segmental Financial Information (Unaudited)

Fresh Fruit

Pro-forma revenue for the fourth quarter increased 6.9% predominantly due to higher pricing of bananas in North America, continued growth in commercial cargo revenues and higher pineapple volumes.

Pro-forma revenue for the full year 2021 increased 2.9% with the benefit of higher banana pricing in North America and higher pineapple pricing in the key North American and European markets and a strong performance from the commercial cargo business throughout the year, partially offset by lower banana volumes in all markets.

Pro-forma Adjusted EBITDA for the fourth quarter decreased 10.3% compared to the prior year. The reduction was predominantly due to inflationary pressures in Europe that were not offset until the pricing was adjusted for new contracts in 2022.

Pro-forma Adjusted EBITDA for the full year 2021 increased 21.6% predominantly due to strong pricing in the North American banana market in the first half of the year and due to the strong performance in the commercial cargo business.

Diversified Fresh Produce – EMEA

Pro-forma revenue and pro-forma Adjusted EBITDA for the fourth quarter increased 4.3% and 1.9%, respectively, primarily as a result of strong trading results across the reporting segment.

Pro-forma revenue for the full year increased 5.4% due to positive currency movements and a strong performance across all channels.

Pro-forma Adjusted EBITDA for the full year increased 24.0%, driven by strong trading across the segment, the continued recovery in food service channels as European governments relaxed COVID-19 measures and the benefit of positive foreign currency translation during the year.

Diversified Fresh Produce – Americas & ROW

Pro-forma revenue for the fourth quarter increased 0.8% and pro-forma revenue for the full year increased 3.8% due to higher revenue from the berry category and growth in the South American export fruit business.

Pro-forma Adjusted EBITDA for the fourth quarter increased 42.6%, driven by a strong start to the Peruvian grape season and the Chilean cherry season.

Pro-forma Adjusted EBITDA for the full year decreased 1.4%, largely due to the impact of adverse weather events that impacted the Chilean grape season at the outset of the year as well as the impact of inflation and logistics challenges for some of our North American businesses. This was offset in part by positive underlying development in the business from continued growth in the berry category, in the Chilean cherry business, in kiwi, and with a recovery in apples and pears after challenges in the prior year.

Fresh Vegetables

Pro-forma revenue for the fourth quarter decreased 8.5% primarily due to lower volumes driven by the impact of the Value Added Salads product recall and temporary plant closures in December.

Pro-forma revenue for the full year 2021 increased 1.0% due to higher pricing in Value Added Salads, partially offset by lower volumes as a consequence of the Value Added Salads product recall and temporary plant closures and lower pricing and volumes in Fresh Packed Vegetables.

Pro-forma Adjusted EBITDA for the fourth quarter decreased 140.7% primarily due to the impact of the Value Added Salads product recall and temporary plant closures as well as a weak end to the year in Fresh Packed Vegetables due to an oversupply in the market.

Following a challenging year, pro-forma Adjusted EBITDA for the full year decreased 101.6% due to the impact of the Value Added Salads product recall and temporary plant closures, significant inflationary pressures in packaging, freight and labor, and persistently weak Fresh Packed Vegetable markets throughout the year.

Capital Expenditures

Pro-forma capital expenditures for the full year 2021 was approximately $190.0 million, including $53.5 million in respect of final payments for two new vessels, Dole Aztec and Dole Maya, which were delivered in the first half of 2021. In addition, $21.4 million was spent reinvesting in Honduran farms impacted by last year’s hurricanes, and $25.4 million in acquiring pineapple assets.

Capital Structure and Financial Leverage

On July 30, 2021 Dole completed its IPO on NYSE, raising net proceeds of $398.9 million. The proceeds raised were used to repay debt within DFC, including $300.0 million of 7.25% Senior Secured Notes. Concurrently with the IPO, the Group also successfully completed a refinancing and syndication of $1.4 billion of new credit facilities, providing the Group with well-structured liquidity to support continued growth. As a result of the IPO and refinancing, the Group has reduced its annual interest expense by over $40.0 million, based on current interest rates.

Net Debt as of December 31, 2021 was $1.1 billion and Financial Leverage was 2.87x.

Outlook for Fiscal Year 2022

For fiscal year 2022, Dole is targeting:

• Revenue in the range of $9.6 billion to $9.9 billion
• Adjusted EBITDA in the range of $370.0 million to $380.0 million
• Capital Expenditures of approximately $125.0 million
• Net Interest Expense of approximately $45.0 million
• Effective tax rate in the range of 25.0% to 28.0%

The anticipated reduction in targeted Adjusted EBITDA is primarily due to the significant impact of the Value Added Salads product recalls and temporary plant closures. Additionally, the Group anticipates a negative foreign currency translation impact on translation of Euro earnings to U.S. Dollar.

With the exception of the Value Added Salads business, all other businesses within the group have commenced the year satisfactorily and are trading in line with expectations. However, due to the uncertainty caused by the current geopolitical situation in Ukraine and Russia, it is difficult to accurately predict what impact this may have on global trade flows, cost inflation and foreign exchange rates, and how this might impact the Group over this financial year.

Dividend

On March 14, 2022, the Board of Directors of Dole plc declared a cash dividend for the fourth quarter of 2021 of $0.08 per share, payable on April 12, 2022 to shareholders of record on March 29, 2022.

Consolidated Statement of Operations

Revenue and Adjusted EBITDA by reportable segment

Consolidated Balance Sheets

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 DFC by 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 (26.0%).
3. Applying the results of the Purchase Price Allocation (“PPA”) exercise, acquisition accounting and debt refinancing 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 pineapple 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. The pro-forma results include the full reversal of these amounts, or $103.0 million, based on the life of the plants.
   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 45.0% 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 2020 of $14.0 million and an adjustment in 2021 of $9.8 million to reflect estimated ongoing incremental public company costs of $14.0 million annualized.

Pro-forma Statement of Operations (Unaudited) – for the quarters ended December 31, 2021 and 2020

Pro-forma Statement of Operations (Unaudited) – for the years ended December 31, 2021 and 2020

Reconciliation from Pro-forma Net Income to Pro-forma Adjusted EBITDA (Unaudited) – for the quarters ended December 31, 2021 and 2020

Reconciliation from Pro-forma Net Income to Pro-forma Adjusted EBITDA (Unaudited) – for the years ended December 31, 2021 and 2020

Reconciliation from Pro-forma Net Income to Pro-forma Adjusted Net Income (Unaudited) – for the quarters ended December 31, 2021 and 2020

Reconciliation from Pro-forma Net Income to Pro-forma Adjusted Net Income (Unaudited) – for the years ended December 31, 2021 and 2020

Pro-forma Reconciliation (Unaudited) – for the full year ended December 31, 2021

Pro-forma Reconciliation (Unaudited) – for the full year ended December 31, 2020