Dole Food conducting strategic business review
May 10, 2012
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WESTLAKE VILLAGE, CALIF. — Dole Food Co., Inc. last week announced it is conducting a strategic business review and looking at options for a possible separation.
“We have initiated a strategic business review of our businesses,” said David A. DeLorenzo, president and chief executive officer. “As a part of this review, the alternatives we may consider include a full or partial separation of one or more of our businesses through a spin-off or other capital markets transaction as well as other alternatives that will enhance shareholder value. We are committed to enhancing shareholder value, and this review is a company priority.”
Mr. DeLorenzo said the company believes its share price does not reflect the inherent value of its packaged foods business as it is overshadowed by the larger commodity business. He said the review will especially look at the packaged foods business.
“The company is working with financial advisers to assist the board of directors and management in reviewing strategic alternatives and in evaluating prospects and options pertaining to select businesses of the company,” Dole said in a statement. “There can be no assurances the company will pursue or complete any of the strategic alternatives that are reviewed. The company intends to disclose developments with respect to the progress of the strategic review process at such time, if any, that the company determines further disclosure is appropriate or required.”
Dole also announced its first-quarter results. For the quarter ended March 24, the company had net income of $17.2 million, up significantly from $2 million during the same quarter of the previous year. The company had revenue of $1,626.6 million, down 4% from $1,686.1 million during the same quarter of the previous year.
“Our first-quarter results were impacted by extraordinarily low prices in all of our major commodity vegetables,” Mr. DeLorenzo, said. “Our packaged salads and fresh berries businesses had very strong results in the quarter; however, these gains were offset by the weaker performance in commodity vegetables. As anticipated, banana earnings were weaker due to lower pricing in North America and Europe, as well as higher fruit costs from Latin America, which more than offset a strong performance in Asia bananas. Our packaged foods segment performed well, with adjusted EBITDA increasing by 10%. We are very pleased with the performance of our new Fruit Smoothie Shakers and Frozen Fruit Single-serve Cups and have launched significant marketing campaigns in support of these new products.”