(March 31, 5:01 p.m.) The opportunities and challenges of the world’s biggest fruit and vegetable marketer are on display in the 2007 annual report filed with the U.S Securities and Exchange Commission by the Dole Food Co. Inc.
The Westlake Village, Calif.-based company’s 10-K annual report for the year ending Dec. 29, 2007, showed revenues of $6.9 billion, up 13% from 2006.
The company reportedly earned operating income of $130 million in 2007, compared to $79 million earned in 2006. A net loss of $58 million was reported for 2007 compared to a net loss of $90 million in 2006. In the report, the company said higher costs for commodities — most notably, fuel and containerboard — affected operations.
The report noted Dole’s market share leadership in several product categories, strong global brand awareness, modern infrastructure, diversified sourcing capabilities and low cost production.
At the same time, the company — privately held by billionaire David Murdock — acknowledged that its substantial debt could affect its operations in the future. The company’s annual report said that debt includes $1.14 billion in senior secured indebtedness and other structurally senior indebtedness, $1.11 billion in senior unsecured indebtedness, $81 million in unsecured notes payable and approximately $86 million in capital leases.
Dole said it has $350 million of unsecured senior notes maturing May 1, 2009, and is evaluating its refinancing options.
Based on Dole’s fourth quarter operating results, Standard & Poor’s Ratings Services on March 21 lowered the rating on Dole’s unsecured debt. A spokesman for Standard & Poor’s could not be reached for comment on March 26.
Forbes magazine reported March 24 that S&P also lowered Dole’s unsecured debt issues to CCC+ from B- and on senior secured term loans to B+ from BB.
Looking ahead, the company’s position is helped by record worldwide banana prices and its market-leading position, said Marty Ordman, vice president of marketing and corporate communications for Dole.
“We are positive about the future, and we are strengthening our cash flow and improving our earnings,” he said. In addition, he said Dole was in an “aggressive” mode of selling assets and reducing its debt.
The company’s annual 10-K report released in March noted $115 million in assets are being held for sale, Ordman said. While he did not specify what assets will be sold, he said some of the company’s global land holdings would be in that group.
ANNUAL REPORT HIGHLIGHTS
In its annual report, Dole reports the company:
- is the world’s largest producer of fresh fruits and vegetables.
- employs 45,000 people globally on a full-time, permanent basis and has another 42,000 full-time seasonal or temporary employees.
- sources 200 products from 9,000 growers in 75 countries and distributes products in more than 90 countries. Dole’s largest concentration of production is in Ecuador, where the company sourced about 32% of Dole’s Latin American bananas in 2007.
- increased fresh fruit revenues in 2007 19% to $4.7 billion from $4 billion in 2006.
- saw fresh vegetables revenues for 2007 decrease 2% to $1.06 billion from $1.08 billion.
- maintains No.1 market share positions in North American bananas, North American iceberg lettuce, celery, cauliflower, and packaged fruit products.
- markets more than 158 million boxes of bananas annually, and has a 36% market share in North America, 31% market share in Japan and 12% in Europe.
- saw the fresh fruit business segment represented 68% of 2007 consolidated total revenues.
- is the world’s No. 2 pineapple marketer, selling 34 million boxes annually.
- exports from 3,200 company-owned or company leased acres in Chile and contracts from 11,000 acres there. Dole Chile’s fruit exports accounted for 6% of fresh fruit revenues in 2007.
- showed the value-added division accounted for 51% of our revenues for Dole’s fresh vegetable sales. The fresh vegetables business segment accounted for 15% of 2007 consolidated total revenues, the company reported.
- has strong leadership in ready to eat salad. Dole’s unit market share of the ready-to-eat salads category reported by Information Resources Inc. (“IRI”) was 32.9% for the 12-week period ended Dec. 29, 2007.
- noted its top 10 customers in 2007 accounted for 30% of total revenues, though no one customer accounted for more than 7% of total 2007 revenues.
- owns or leases more than 60 processing, ripening and distribution centers, and owns 25 ships and about 15,000 refrigerated containers.