-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GPU5mOZ2KEq1L7vJAur5C5IG0ZEb4T1v0bCXb5skvRMHMx3x6B9t5Kxev80tv4gJ GVysmHV+tC2cwz3OKQA6dg== 0000101063-97-000025.txt : 19970514 0000101063-97-000025.hdr.sgml : 19970514 ACCESSION NUMBER: 0000101063-97-000025 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970513 SROS: AMEX SROS: BSE SROS: NYSE SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHIQUITA BRANDS INTERNATIONAL INC CENTRAL INDEX KEY: 0000101063 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 041923360 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-01550 FILM NUMBER: 97601486 BUSINESS ADDRESS: STREET 1: 250 E FIFTH ST CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137848011 FORMER COMPANY: FORMER CONFORMED NAME: UNITED BRANDS CO DATE OF NAME CHANGE: 19900403 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended Commission File March 31, 1997 Number 1-1550 CHIQUITA BRANDS INTERNATIONAL, INC. Incorporated under the IRS Employer I.D. Laws of New Jersey No. 04-1923360 250 East Fifth Street, Cincinnati, Ohio 45202 (513) 784-8000 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, and (2) has been subject to such filing requirements for the past 90 days. YES X NO As of May 1, 1997, there were 56,286,962 shares of Common Stock outstanding. Page 1 of 11 Pages CHIQUITA BRANDS INTERNATIONAL, INC. TABLE OF CONTENTS Page PART I - Financial Information Consolidated Statement of Income for the quarters ended March 31, 1997 and 1996 . . . . . . . . . . 3 Consolidated Balance Sheet as of March 31, 1997, December 31, 1996 and March 31, 1996 . . . . . . . 4 Consolidated Statement of Cash Flow for the quarters ended March 31, 1997 and 1996 . . . . . . . . . . 5 Notes to Consolidated Financial Statements . . . . 6 Management's Analysis of Operations and Financial Condition . . . . . . . . . . . . . . . 7 PART II - Other Information Item 2 - Changes in Securities . . . . . . . . . . 8 Item 6 - Exhibits and Reports on Form 8-K . . . . . 8 Signature . . . . . . . . . . . . . . . . . . . . . . . 9 Part I - Financial Information
CHIQUITA BRANDS INTERNATIONAL, INC. CONSOLIDATED STATEMENT OF INCOME (Unaudited) (In thousands, except per share amounts) Quarter Ended March 31, 1997 1996 --------- --------- Net sales $631,410 $624,806 --------- --------- Operating expenses Cost of sales 464,071 471,999 Selling, general and administrative 74,378 73,235 Depreciation 21,575 21,711 --------- --------- 560,024 566,945 --------- --------- Operating income 71,386 57,861 Interest income 4,386 7,340 Interest expense (28,458) (35,167) Other income, net 280 194 --------- --------- Income before income taxes 47,594 30,228 Income taxes (4,300) (6,000) --------- --------- Net income $43,294 $24,228 ========= ========= Shares used to calculate earnings per common share: Primary 56,952 55,919 ========= ========= Fully diluted 72,516 63,829 ========= ========= Earnings per common share: Primary $.69 $.40 ========= ========= Fully diluted $.60 $.38 ========= ========= Dividends per common share $.05 $.05 ========= =========
See Notes to Consolidated Financial Statements 3
CHIQUITA BRANDS INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEET (Unaudited) (In thousands, except share amounts) March 31, December 31, March 31, 1997 1996 1996 ----------- ------------- ----------- ASSETS Current assets Cash and equivalents $164,670 $285,558 $211,945 Marketable securities -- -- 31,734 Trade receivables (less allowances of $9,373, $9,832 and $11,075) 217,281 162,566 216,317 Other receivables, net 88,908 91,126 94,017 Inventories 267,638 275,177 277,141 Other current assets 47,643 29,884 36,919 ----------- ----------- ----------- Total current assets 786,140 844,311 868,073 Restricted cash -- -- 39,520 Property, plant and equipment, net 1,132,238 1,139,677 1,163,123 Investments and other assets 323,039 319,149 357,321 Intangibles, net 158,257 163,797 166,941 ----------- ----------- ----------- Total assets $2,399,674 $2,466,934 $2,594,978 =========== =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Notes and loans payable $37,349 $78,107 $107,370 Long-term debt due within one year 94,191 56,982 49,876 Accounts payable 196,697 193,875 208,881 Accrued liabilities 83,833 135,370 101,875 ----------- ----------- ----------- Total current liabilities 412,070 464,334 468,002 Long-term debt of parent company 702,712 704,763 841,072 Long-term debt of subsidiaries 321,805 374,488 394,667 Accrued pension and other employee benefits 84,051 83,797 85,935 Other liabilities 112,811 115,299 109,769 ----------- ----------- ----------- Total liabilities 1,633,449 1,742,681 1,899,445 ----------- ----------- ----------- Shareholders' equity Preferred stock 249,256 249,256 138,369 Capital stock, $.33 par value (56,245,552, 55,841,384 and 55,234,823 shares) 18,748 18,614 18,412 Capital surplus 600,458 594,885 584,786 Accumulated deficit (102,237) (138,502) (46,034) ----------- ----------- ----------- Total shareholders' equity 766,225 724,253 695,533 ----------- ----------- ----------- Total liabilities and shareholders' equity $2,399,674 $2,466,934 $2,594,978 =========== =========== ===========
See Notes to Consolidated Financial Statements 4
CHIQUITA BRANDS INTERNATIONAL, INC. CONSOLIDATED STATEMENT OF CASH FLOW (Unaudited) (In thousands) Quarter Ended March 31, 1997 1996 ---------- ---------- Cash provided (used) by: Operations Net income $43,294 $24,228 Depreciation and amortization 22,957 23,145 Write-down of Costa Rican banana producing assets -- 8,900 Changes in current assets and liabilities: Receivables (54,351) (37,869) Inventories 7,102 16,230 Accounts payable 5,509 2,589 Other current assets and liabilities (53,043) (27,742) Other 745 (5,458) --------- --------- Cash flow from operations (27,787) 4,023 --------- --------- Investing Capital expenditures (13,211) (12,255) Refundable deposits for container equipment (15,849) -- Other (991) 4,699 --------- --------- Cash flow from investing (30,051) (7,556) --------- --------- Financing Debt transactions Issuances of long-term debt -- 4,758 Repayments of long-term debt (18,070) (13,488) Decrease in notes and loans payable (40,064) (9,234) Stock transactions Issuances of capital stock 2,113 1,592 Dividends (7,029) (4,825) --------- --------- Cash flow from financing (63,050) (21,197) --------- --------- Decrease in cash and equivalents (120,888) (24,730) Balance at beginning of period 285,558 236,675 --------- --------- Balance at end of period $164,670 $211,945 ========= =========
See Notes to Consolidated Financial Statements 5 CHIQUITA BRANDS INTERNATIONAL, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Interim results are subject to significant seasonal variations and are not necessarily indicative of the results of operations for a full fiscal year. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary for a fair statement of the results of the interim periods shown have been made. See Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1996 for additional information relating to the Company's financial statements.
Inventories consist of the following (in thousands): March 31, December 31, March 31, 1997 1996 1996 ---------- ------------ ---------- Bananas and other fresh produce $41,060 $34,557 $42,810 Other food products 54,756 66,929 47,139 Growing crops 113,650 114,425 120,080 Materials and supplies 48,527 49,699 56,650 Other 9,645 9,567 10,462 ---------- ---------- ---------- $267,638 $275,177 $277,141 ========== ========== ==========
In accordance with its long-standing policy to periodically hedge transactions denominated in foreign currencies, at March 31, 1997, the Company had option contracts which ensure conversion of approximately $330 million of foreign sales through 1997 at a rate of 1.55 Deutsche marks per dollar and approximately $170 million of foreign sales in 1998 at rates not higher than 1.63 Deutsche marks per dollar or lower than 1.50 Deutsche marks per dollar. At March 31, 1997, the carrying value of these option contracts was approximately $5 million and their fair value based on quoted market prices was approximately $29 million. In February 1997, the Financial Accounting Standards Board issued Statement No. 128, "Earnings per Share," which the Company is required to adopt on December 31, 1997. At that time, the Company will be required to change the method currently used to compute earnings per share and to restate all prior periods. Statement No. 128 is not expected to have a material effect on the Company's earnings per share. CHIQUITA BRANDS INTERNATIONAL, INC. MANAGEMENT'S ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION OPERATIONS Net sales for the quarter ended March 31, 1997 were comparable to sales for the same quarter of 1996. Operating income for the 1997 first quarter was $71 million compared to 1996 first quarter operating income of $58 million, which included write-downs and costs of $12 million resulting from damage to the Company s banana producing assets caused by industry-wide flooding in Costa Rica during the 1996 first quarter. Worldwide banana volume and average pricing increased in 1997 in comparison to the first quarter of 1996. The benefit of these favorable developments was offset by (i) the adverse impact of a stronger dollar, mitigated in part by the Company's foreign currency hedging program, and (ii) additional costs which are being incurred during 1997 for the purchase and shipment of replacement fruit as a result of flooding in Honduras and Guatemala in late 1996. Net interest expense was reduced by $4 million in comparison to the first quarter of 1996 as a result of the Company's debt refinancing and reduction activities. The Company's effective tax rate is affected by the level and mix of income between various domestic and foreign jurisdictions in which the Company operates. FINANCIAL CONDITION Cash decreased by $121 million during the first quarter of 1997 due primarily to seasonal increases in working capital and prepayments of debt. As a result of debt refinancing and reduction activities, net debt (total debt less cash and marketable securities) has decreased by $118 million since March 31, 1996 to approximately $1.0 billion at March 31, 1997. OTHER Reference is made to the discussion of the European Union ("EU") banana quota and licensing regime, the Framework Agreement and the pending World Trade Organization ("WTO") proceeding regarding this regime contained in Part I, Item 1 - "Business- Risks of International Operations" in the Company's 1996 Form 10- K and "Management's Analysis of Operations and Financial Condition" in the Company's 1996 Annual Report to Shareholders. It has been widely reported that in April 1997 the WTO panel hearing the case issued its final report to the governments involved in the proceeding, finding that the licensing and quota systems under the EU regime and the Framework Agreement violate numerous international trade agreements to the detriment of Latin American supplying countries and U.S. marketing firms such as Chiquita. Reportedly, the report recommends that the WTO request the EU to bring its import regime for bananas into conformity with these agreements. The report is subject to appeal procedures that could extend by a few months the time before it could be adopted. Thereafter, the parties would have a "reasonable" period of time (not to exceed 15 months) to implement the report's recommendations. There can be no assurance as to the ultimate outcome of the WTO proceedings, including any appeal of the final report, the nature and extent of any actions that may be taken by the affected countries or the impact on the EU quota regime or the Framework Agreement. Part II - Other Information Item 2 - Changes in Securities (c) On January 29, 1997, the Company issued 206,777 shares of Common Stock to the seller of agricultural assets in a transaction exempt from registration pursuant to Section 4(2) of the Securities Act of 1933. The shares were issued as consideration for the approximately $3 million purchase price of the assets. Item 6 - Exhibits and Reports on Form 8-K Page Number(s) (a) Exhibit 11 - Computation of Earnings Per Common Share . . . . . . . . . . . . . . . 10-11 Exhibit 27 - Financial Data Schedule . . . ** ** Copy omitted from this Quarterly Report on Form 10-Q. Copy included in report filed electronically with the Securities and Exchange Commission. (b) There were no reports on Form 8-K filed by the Company during the quarter ended March 31, 1997. SIGNATURE 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. CHIQUITA BRANDS INTERNATIONAL, INC. By: /s/ William A. Tsacalis William A. Tsacalis Vice President and Controller (Chief Accounting Officer) May 12, 1997 EX-11 2
Exhibit 11 CHIQUITA BRANDS INTERNATIONAL, INC. COMPUTATION OF EARNINGS PER COMMON SHARE (Unaudited) (In thousands, except per share amounts) Quarter Ended March 31, 1997 1996 --------- --------- A. Primary earnings per common share Net income $43,294 $24,228 Dividends on preferred stock (4,223) (2,066) --------- --------- Net income attributable to common shares $39,071 $22,162 ========= ========= Shares used in calculation of per share data: Weighted average common shares outstanding 56,059 55,089 Less restricted common shares (200) (310) Dilutive effect of assumed exercise of stock options 1,093 1,140 56,952 55,919 ========= ========= Primary earnings per common share $.69 $.40 ========= =========
10 Exhibit 11 (continued)
CHIQUITA BRANDS INTERNATIONAL, INC. COMPUTATION OF EARNINGS PER COMMON SHARE (Unaudited) (In thousands, except per share amounts) Quarter Ended March 31, 1997 1996 --------- --------- B. Fully diluted earnings per common share Net income $43,294 $24,228 ========= ========= Shares used in calculation of per share data: Weighted average common shares outstanding 56,059 55,089 Less restricted common shares (189) (289) Dilutive effect of assumed conversion of preferred stock 15,232 7,566 Dilutive effect of assumed exercise of stock options 1,414 1,463 --------- ---------- 72,516 63,829 ========== ========== Fully diluted earnings per common share $.60 $.38 ========== ========== 11
EX-27 3
5 This schedule contains summary financial information extracted from the Chiquita Brands International, Inc. Form 10-Q for the three months ended March 31, 1997 and is qualified in its entirety by reference to such financial statements. 1,000 3-MOS DEC-31-1997 MAR-31-1997 164,670 0 226,654 9,373 267,638 786,140 1,725,060 592,822 2,399,674 412,070 1,024,517 0 249,256 18,748 498,221 2,399,674 631,410 631,410 464,071 464,071 21,575 0 28,458 47,594 4,300 43,294 0 0 0 43,294 .69 .60
-----END PRIVACY-ENHANCED MESSAGE-----