The 2015-16 listeria outbreak that led to a packaged salad recall by Westlake Village, Calif.-based Dole Food Co. cost the company more than $80 million.
Recall costs were $25.5 million, according to a 180-page Securities and Exchange Commission filing by the company, but the broader financial effects were greater.
“There were also lower volumes and $58.4 million of higher product costs due to inefficiencies related to the re-opening of the Springfield, Ohio, facility as well as additional product and transportation costs associated with servicing East Coast customers from our West Coast salad plant,” the company said in the document.
Dole recently announced its intention to go public, which prompted the filing. A company spokesman declined to comment.
The 2015-16 listeria outbreak sickened 19 people in the U.S. and 14 people in Canada, according to investigation summaries by Centers for Disease Control & Prevention and Public Health Agency of Canada. CDC lists one death, and the Canadian health agency lists as many as three.
Dole is currently defending against four lawsuits related to the outbreak — one in Michigan state court, one in Ohio federal district court, one in Indiana state court, and one in Ontario, Canada, according to the filing. The lawsuits are described as pending cases in the early stages.
Dole is also in the process of responding to a subpoena issued in April 2016, by the U.S. Department of Justice, which was seeking information for its ongoing investigation into the outbreak and Dole’s facility in Springfield, according to the document. A Department of Justice spokesperson was not immediately available for comment.
The company, which reported that it invested in 2016 on infrastructure improvement at renovation at the Springfield plant, said in the filing that it doesn’t expect the fallout from the outbreak to be financially harmful to a degree that should concern potential investors.
“In the opinion of management, after consultation with legal counsel, the claims or actions related to the packaged salads recall are not expected to have a material adverse effect, individually or in the aggregate, on our financial position or results of operations because the probable loss is not material,” Dole said in the document.
Dole also stated that since going private in 2013 it has undertaken investments and cost-saving measures that have “transformed our financial position,” increasing the company’s adjusted earnings before interest, tax, depreciation and amortization from $105.8 million in 2013 to $215.6 million in 2016.
Along with more information about the company’s overall operations and plans, the document also included details on Dole’s downsizing of its berry division.
“As a result of challenging market conditions, Dole committed to a restructuring plan to realign its fresh vegetables operations during the fourth quarter of 2016,” the company said in the document. “As part of this plan, Dole reduced its workforce and realigned its berries supply with expected demand.”
The costs associated with the overall restructuring were $10.7 million, and severance payments relating to layoffs involved 56 people, according to the filing.
Dole said in the document it doesn’t expect further restructuring costs.