-----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, H7oP9COI2lsJTpYaRmW2EDIH/IU229uDLOPbch/NRVaD7D6pBS3xa8jrAwTYTySR P27ylPJSioPXutuSDlYwxg== 0000101063-98-000067.txt : 19980506 0000101063-98-000067.hdr.sgml : 19980506 ACCESSION NUMBER: 0000101063-98-000067 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980422 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980505 SROS: AMEX SROS: BSE SROS: NYSE SROS: PCX 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: 8-K SEC ACT: SEC FILE NUMBER: 001-01550 FILM NUMBER: 98610896 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 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported): April 22, 1998 CHIQUITA BRANDS INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) New Jersey 1-1550 04-1923360 (State or other (Commission (IRS Employer jurisdiction of File Number) Identification No.) incorporation) 250 East Fifth Street, Cincinnati, Ohio 45202 (Address of principal executive offices) Registrant's telephone number, including area code: (513) 784-8000 INFORMATION TO BE INCLUDED IN THE REPORT Items 1, 2, 3, 4, 6, 8 and 9 are not applicable and are omitted from this Report. Item 5. Other Events. The Company is making this filing in order to incorporate the information contained herein by reference into certain of the Company's Registration Statements under the Securities Act of 1933, including Registration Statements on Form S-3 No. 333-46373 and No. 333-51497. Reference is made to the Company s April 22, 1998 News Release attached as Exhibit 99.1 reporting results of operations for the first quarter and the attached interim financial statements of Stokely USA, Inc. and pro forma financial information as of December 31, 1997. Item 7. Financial Statements and Exhibits. (a) Financial Statements of Businesses Acquired. Page No. Stokely USA, Inc. Consolidated Condensed Balance Sheets (unaudited) at December 31, 1997 and 1996 and March 31, 1997 4-5 Consolidated Condensed Statements of Operations (unaudited) for the three and nine months ended December 31, 1997 and 1996 6-7 Consolidated Condensed Statements of Cash Flows (unaudited) for the nine months ended December 31, 1997 and 1996 8 Notes to Consolidated Condensed Financial Statements (unaudited) 9-10 (b) Pro Forma Financial Information. Chiquita Brands International, Inc. Pro Forma Combined Balance Sheet (unaudited) as of December 31, 1997 12-13 Pro Forma Combined Income Statement (unaudited) for the year ended December 31, 1997 14-15 (c) Exhibits 99.1 News Release of the Company issued April 22,1998. STOKELY USA, INC. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS DECEMBER 31, 1997
STOKELY USA, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (Dollars in thousands) December 31, December 31, March 31, 1997 1996 1997 (unaudited) (unaudited) (note) ------------- ------------- ------------- ASSETS - -------------- CURRENT ASSETS: Cash and cash equivalents $ 784 $ 1,430 $ 1,660 Accounts receivable, less allowance for losses of $862, $508 and $508, respectively 11,523 13,596 10,634 Inventories: Finished goods 65,944 86,721 68,861 Manufacturing supplies 2,866 3,176 4,924 Prepaid expenses 522 825 728 Property held for disposition 132 4,846 537 ----------- ---------- ---------- Total current assets 81,771 110,594 87,344 OTHER ASSETS: Property held for disposition 448 1,495 1,022 Other assets 1,459 2,231 1,907 ---------- ---------- ---------- Total other assets 1,907 3,726 2,929 PROPERTY, PLANT & EQUIPMENT, at cost 74,552 71,987 73,112 Less accumulated depreciation 36,196 32,070 32,643 ---------- ---------- ---------- 38,356 39,917 40,469 ---------- ---------- ---------- TOTAL ASSETS $122,034 $154,237 $ 130,742 ========== ========== ==========
See accompanying notes to consolidated condensed financial statements (unaudited). Note: The balance sheet at March 31, 1997 has been condensed from the audited financial statements at that date.
STOKELY USA, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED BALANCE SHEETS (Dollars in thousands) December 31, December 31, March 31, 1997 1996 1997 (unaudited) (unaudited) (note) ------------- ------------- ------------- LIABILITIES & STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Notes payable $ 42,142 $ 19,533 $ 15,551 Accounts payable 28,711 32,465 29,311 Long-term debt due within one year 9,616 5,650 2,584 Other current liabilities 4,319 2,975 3,466 ------------ ------------ ------------ Total current liabilities 84,788 60,623 50,912 LONG-TERM DEBT, less current maturities 34,982 77,871 68,041 OTHER LIABILITIES 2,856 4,525 2,982 STOCKHOLDERS' EQUITY: Capital stock 572 572 572 Additional paid-in capital 43,508 43,596 43,593 Accumulated deficit (44,384) (32,555) (34,993) Cumulative translation adjustments (17) (15) 8 Treasury stock at cost (271) (380) (373) ----------- ----------- ----------- Total stockholders' equity (592) 11,218 8,807 ----------- ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $122,034 $154,237 $130,742 =========== =========== ===========
See accompanying notes to consolidated condensed financial statements (unaudited). Note: The balance sheet at March 31, 1997 has been condensed from the audited financial statements at that date.
STOKELY USA, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Dollars in thousands except per share amounts) (unaudited) Three Months Ended December 31, 1997 1996 ------------- ------------- REVENUES: - ------------- Net sales $ 48,212 $ 55,342 Other -- 13 ------------ ------------ Total revenues 48,212 55,355 COST AND EXPENSES: - ------------------- Cost of products sold 39,724 44,147 Selling, general & administrative expenses 8,441 7,555 Interest 2,582 2,963 Merger expenses 175 -- ------------ ------------ Total cost and expenses 50,922 54,665 ------------ ------------ INCOME (LOSS) BEFORE INCOME TAX (2,710) 690 INCOME TAXES -- -- ------------ ------------ NET INCOME (LOSS) $ (2,710) $ 690 ============ ============ NET INCOME (LOSS) PER COMMON SHARE $ (.24) $ .06 ============ ============ WEIGHTED AVERAGE SHARES OUTSTANDING 11,390,871 11,372,570 ============ ============
See accompanying notes to consolidated condensed financial statements (unaudited). STOKELY USA, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Dollars in thousands except per share amounts) (unaudited)
Nine Months Ended December 31, 1997 1996 ------------ ------------- REVENUES: - ------------ Net sales $ 122,221 $ 149,315 Other 3 74 ------------- -------------- Total revenues 122,224 149,389 COST AND EXPENSES: - ----------------------- Cost of products sold 101,365 124,757 Selling, general & administrative expenses 22,138 22,014 Nonrecurring charges -- 12,929 Interest 7,340 8,174 Merger expenses 773 -- ------------- ------------- Total cost and expenses 131,616 167,874 ------------- ------------- LOSS BEFORE INCOME TAX (9,392) (18,485) INCOME TAXES -- -- ------------- ------------- NET LOSS $ (9,392) $ (18,485) ============= ============= NET LOSS PER COMMON SHARE $ (.82) $ (1.63) ============= ============= WEIGHTED AVERAGE SHARES OUTSTANDING 11,386,269 11,356,375 ============= =============
See accompanying notes to consolidated condensed financial statements (unaudited). STOKELY USA, INC. AND SUBSIDIARIES CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Dollars in thousands) (unaudited)
Nine Months Ended December 31, 1997 1996 ------------- ------------ Net cash (used in) from operating activities $ (1,240) $ 3,400 Cash flows from investing activities: Purchase of property, plant and equipment (1,599) (2,023) Proceeds from disposal of property, plant and equipment 1,456 9,394 Decrease in other assets - net 301 21 ------------- ------------ Net cash provided by investing activities 158 7,392 ------------- ------------ Cash flows from financing activities: Change in notes payable 1,091 2,146 Payments of long-term debt (527) (11,359) Payment of deferred debt issuance costs (375) (1,077) Capital stock transactions - net 17 151 ------------- ------------ Net cash provided by (used in) financing activities 206 (10,139) ------------- ------------ Increase (decrease) in cash and cash equivalents (876) 653 Cash and cash equivalents at beginning of period 1,660 777 ------------- ------------ Cash and cash equivalents at end of period $ 784 $ 1,430 ============= ============
See accompanying notes to consolidated condensed financial statements (unaudited). STOKELY USA, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (unaudited) 1. In the opinion of management, the accompanying unaudited consolidated condensed financial statements contain all normal and recurring adjustments necessary to present fairly Stokely USA, Inc.'s ("Stokely's") consolidated condensed balance sheets as of December 31, 1997 and 1996 and March 31, 1997, the consolidated condensed statements of operations for the three and nine month periods ended December 31, 1997 and 1996, and the consolidated condensed statements of cash flows for the nine month periods then ended. The results of operations for the three and nine months ended December 31, 1997 are not necessarily indicative of the results to be expected for the full year. For interim reporting purposes, certain expenses are based on estimates rather than expenses actually incurred. The unaudited interim consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the fiscal year ended March 31, 1997, included in Stokely's Form 10-K (as amended) filed with the Securities and Exchange Commission. The accounting policies followed by Stokely are described in Note A of the financial statements of Stokely's Form 10-K (as amended) for the year ended March 31, 1997. Certain amounts have been reclassified to conform to the current year presentation. 2. Supplemental cash flow disclosures: Cash payments for interest were $4,996,000 and $7,733,000 for the nine months ended December 31, 1997 and 1996, respectively. Net payments of income taxes were $46,000 and $29,000 for the nine months ended December 31, 1997 and 1996, respectively. 3. A nonrecurring charge of $13,529,000 (of which $600,000 relating to inventory write-downs was included in cost of products sold) was recognized during the nine months ended December 31, 1996 as discussed in Stokely's Annual Report on Form 10-K (as amended) for the fiscal year ended March 31, 1997. Reserves utilized during the three months ended December 31, 1997 are as follows (in thousands):
Balance at Reserves Balance at September 30, 1997 Utilized December 31, 1997 ------------------- ------------ --------------------- Property, plant and equipment write-downs $6,955 $622 $6,333 Severance costs 216 105 111 Inventory write-downs 48 -- 48 Other costs 154 40 114 ------------ ------------ ------------- Total $7,373 $767 $6,606 ============ ============ ==============
4. On January 16, 1998 Stokely was acquired by Chiquita Brands International, Inc. ("Chiquita") pursuant to an Agreement and Plan of Reorganization dated as of September 17, 1997 among Chiquita, Chiquita Acquisition Corp. and Stokely. The merger price was $1.00 per share of Stokely common stock, paid entirely in shares of Chiquita capital stock ("Common Stock") valued at $15.03 per share, the average of the closing market prices of Chiquita Common Stock for the 15 trading days immediately preceding the merger. This resulted in a payment of approximately .0665 of a share of Chiquita Common Stock per Stokely share, or an aggregate of 757,918 shares of Chiquita Common Stock issued to the Stokely shareholders. Chiquita also issued 2,208,615 shares of Common Stock to certain holders of an aggregate of approximately $33.2 million of Stokely long-term debt and paid $18.0 million of cash to reduce Stokely's borrowings under its revolving credit facility. Additionally, in connection with the merger, certain Stokely suppliers forgave $1.0 million of amounts owed to them. Expenses incurred related to the merger totaled $773,000 through December 31, 1997, and consisted primarily of legal, consulting and financial advisor fees. There were also approximately $1.4 million of expenses which were expensed and paid at the time of the merger, the majority of which related to fees payable to Stokely's financial advisor. Prior to the merger, Stokely was in violation of certain covenants applicable to its Senior Notes due January 2000 (which constituted an event of default) and most of its Industrial Development Revenue Bonds. The Senior Noteholders and the holders of certain Industrial Development Revenue Bonds exchanged their outstanding debt for shares of Chiquita Common Stock at the time of the merger and, as a result of transactions in connection with the merger, the remaining Industrial Development Revenue Bonds are no longer in default. CHIQUITA BRANDS INTERNATIONAL, INC. PRO FORMA COMBINED FINANCIAL STATEMENTS The following unaudited pro forma combined financial statements give effect to the acquisition by Chiquita of Stokely based on the assumptions described in the accompanying notes. These financial statements have been prepared from the historical consolidated financial statements of Chiquita (which, for purposes of the unaudited pro forma combined income statement, have been adjusted to reflect the acquisitions by Chiquita of Owatonna Canning Company, Olivia Canning Company, Midwest Foods, Inc. and Goodhue Canning Company (collectively, the "Owatonna Companies") and American Fine Foods, Inc. ("AFF") assuming these acquisitions had occurred on January 1, 1997) and Stokely. This pro forma information is not necessarily indicative of actual or future operating results or financial position that would have occurred had each of the acquisitions been consummated on January 1, 1997. The unaudited pro forma combined balance sheet is based on the balance sheets of Chiquita (including the Owatonna Companies, which were acquired in September 1997, and AFF, which was acquired in December 1997) and Stokely at December 31, 1997 and has been prepared to reflect the acquisition of Stokely assuming it had occurred on December 31, 1997. The unaudited pro forma combined income statement for the year ended December 31, 1997 gives effect to all the acquisitions (including the acquisition of Stokely) as if they had occurred on January 1, 1997. Each transaction was accounted for as a purchase. These unaudited pro forma combined financial statements should be read in conjunction with the historical financial statements and notes thereto of: Chiquita, which are incorporated by reference in its Annual Report on Form 10-K for the year ended December 31, 1997; Owatonna Canning Company included in Chiquita's Current Report on Form 8-K dated September 15, 1997; AFF included in Chiquita's Current Report on Form 8-K dated December 8, 1997 (as amended on February 3, 1998); and Stokely included in Chiquita's Current Report on Form 8-K dated November 20, 1997 and included herein. Chiquita Brands International, Inc. Pro Forma Combined Balance Sheet (unaudited) December 31, 1997 (in thousands)
Chiquita (including Owatonna Pro Forma Pro Forma and AFF) Stokely Adjustments Combined Assets ------------- ------------ ------------- -------------- Current assets Cash and equivalents $ 125,702 $ 784 $ (19,000) (a) $ 107,486 Trade receivables, net 184,913 11,523 (200) (b) 196,236 Other receivables, net 87,301 -- -- 87,301 Inventories 349,948 68,810 (500) (b) 418,258 Other current assets 35,602 654 -- 36,256 ----------- ------------ ----------- ----------- Total current assets 783,466 81,771 (19,700) 845,537 Property, plant and equipment, net 1,151,396 38,356 (10,200) (c) 1,179,552 Investments and other assets 301,173 1,907 -- 303,080 Intangibles, net 165,578 -- 31,583 (d) 197,161 ----------- ----------- ----------- ----------- Total assets $ 2,401,613 $ 122,034 $ 1,683 $ 2,525,330 ============ ============ ============ ============ Liabilities and Shareholders' Equity Current liabilities Notes and loans payable $ 59,659 $ 42,142 $ (19,000) (a) $ 82,801 Long-term debt due within one year 92,905 9,616 (5,400) (a) 97,121 Accounts payable 205,323 28,711 (1,000) (e) 233,034 Accrued liabilities 125,231 4,319 7,200 (f) (g) 136,750 ----------- ----------- ----------- ----------- Total current liabilities 483,118 84,788 (18,200) 549,706 Long-term debt of parent company 689,080 -- -- 689,080 Long-term debt of subsidiaries 272,892 34,982 (27,800) (a) 280,074 Accrued pension and other employee benefits 86,676 2,856 (800) (h) 88,732 Other liabilities 89,761 -- 3,300 (f) 93,061 ----------- ----------- ----------- ----------- Total liabilities 1,621,527 122,626 (43,500) 1,700,653 ----------- ----------- ----------- ----------- Shareholders' Equity Preferred stock 253,239 -- -- 253,239 Capital stock 20,389 572 417 (a)(i)(j) 21,378 Capital surplus 672,944 43,508 94 (a)(i)(j) 716,546 Other shareholders' equity -- (288) 288 (j) -- Accumulated deficit (166,486) (44,384) 44,384 (j) (166,486) ----------- ----------- ----------- ----------- Total shareholders' equity 780,086 (592) 45,183 824,677 ----------- ----------- ----------- ----------- Total liabilities and shareholders' equity $ 2,401,613 $ 122,034 $ 1,683 $ 2,525,330 =========== =========== =========== ===========
NOTE: This Pro Forma Combined Balance Sheet, which gives effect to the acquisition by Chiquita of Stokely, includes pro forma adjustments to reflect: (a) Assumed repayment of $33.2 million of Stokely long-term debt with approximately 2.2 million shares of Chiquita Common Stock, and assumed reduction of Stokely working capital loans payable to $23 million using cash. (b) The adjustment of Stokely's receivables and inventory to estimated fair value. (c) The adjustment to record at estimated net realizable value that property, plant and equipment at Stokely plants which will be closed. (d) The excess of acquisition cost over the fair value of net assets acquired. (e) Forgiveness of $1 million of payables by Stokely suppliers in conjunction with the acquisition. (f) The adjustment to record at estimated fair value those liabilities assumed, primarily for compensation and severance benefits of employees to be terminated. (g) Transaction fees associated with acquisition of $1.1 million. (h) The adjustment of the accumulated postretirement benefit liabilities. (i) Issuance of $11.4 million (.8 million shares) of Chiquita Common Stock in exchange for 100% of the equity of Stokely. (j) Elimination of the shareholders' equity accounts of Stokely. This Pro Forma Combined Balance Sheet is based on a preliminary allocation of purchase price to the net assets acquired. Furthermore, it is not necessarily indicative of the actual or future financial position that occurred or will occur upon consummation of and subsequent to the acquisitions of the Owatonna Companies, AFF and Stokely. Chiquita Brands International, Inc. Pro Forma Combined Income Statement (unaudited) Year Ended December 31, 1997 (in thousands, except per share data)
Owatonna Companies AFF through through Pro Forma Chiquita 9/24/97 12/8/97 Adjustments ------------ ---------- ---------- ------------ Net sales $2,433,726 $ 44,714 $ 70,808 $ -- ------------ ---------- ---------- --------- Operating expenses Cost of sales 1,935,870 26,830 58,807 -- Selling, general and administrative 311,568 17,255 5,624 (2,100) (a)(b) Depreciation 86,122 2,171 1,441 (170) (c) ------------ ---------- ---------- --------- Operating income (loss) 100,166 (1,542) 4,936 2,270 Interest income 16,540 330 6 (770) (d) Interest expense (108,913) (177) (1,006) 1,010 (d) Other income, net 750 164 83 -- ------------ ---------- ---------- --------- Income before income taxes 8,543 (1,225) 4,019 2,510 Income taxes (8,200) 424 (1,388) 664 (e) ------------ ---------- ---------- --------- Net income (loss) 343 (801) 2,631 3,174 Less dividends on preferred stock (16,949) -- -- (210)(f) ------------ ---------- ---------- --------- Net income (loss) attributable to common shares $ (16,606) $ (801) $ 2,631 $ 2,964 ============ ========== ========== ========== Earnings per common share - Basic $(.29) - Diluted $(.29) Shares used to calculate earnings per common share: - Basic 57,025 - Diluted 57,025 Pro Forma Pro Forma Subtotal Stokely Adjustments Combined ------------ ---------- ---------- ------------ Net Sales $2,549,248 $157,775 $ -- $2,707,023 ------------ ---------- ---------- ------------ Operating expenses Cost of sales 2,021,507 125,950 -- 2,147,457 Selling, general and administrative 332,347 28,875 90 (A)(B) 361,312 Depreciation 89,564 4,865 (1,300)(C) 93,129 ------------ ---------- ---------- ------------ Operating income (loss) 105,830 (1,915) 1,210 105,125 Interest income 16,106 -- (920)(D) 15,186 Interest expense (109,086) (9,916) 5,480 (D) (113,522) Other income, net 997 -- -- 997 ------------ ---------- ---------- ------------ Income before income taxs 13,847 (11,831) 5,770 7,786 Income taxes (8,500) -- -- (8,500) ------------ ---------- ---------- ------------ Net income (loss) 5,347 (11,831) 5,770 (714) Less dividends on preferred stock (17,159) -- -- (17,159) ------------ ---------- ---------- ------------ Net income (loss) attributable to common shares $ (11,812) $(11,831) $5,770 $(17,873) =========== =========== ========= ============ Earnings per common share - Basic $(.28) - Diluted $(.28) Shares used to calculate earnings per common share: - Basic 63,875 - Diluted 63,875
NOTE: This Pro Forma Combined Income Statement gives effect to the acquisitions of the Owatonna Companies and AFF and the January 1998 acquisition of Stokely by Chiquita. For the Owatonna Companies and AFF acquisitions, pro forma adjustments have been made to reflect: (a) Amortization of goodwill ($.3 million) arising from the acquisitions on a straight-line basis over 40 years. (b) Elimination of transaction costs for professional services incurred by the acquired companies totaling $2.4 million. (c) Reductions of depreciation due to recording at estimated net realizable value the property, plant and equipment at plants which will be closed. (d) Reductions of interest expense of $1.0 million due to the assumed repayment of all AFF debt with cash. Interest income is reduced by $.8 million to reflect the use of cash equivalents for these debt repayments. (e) Elimination of tax expense of the Owatonna Companies and federal tax expense of AFF as a result of including these companies in the Chiquita consolidated tax returns. (f) Dividends on Chiquita Series C Preference Stock issued in connection with the acquisition of the Owatonna Companies. For the Stokely acquisition, pro forma adjustments have been made to reflect: (A) Amortization of goodwill ($.9 million) arising from the acquisition on a straight-line basis over 40 years. (B) Elimination of transaction costs for professional services incurred by Stokely totaling $.8 million. (C) Reductions of depreciation due to recording at estimated net realizable value the property, plant and equipment at plants which will be closed. (D) Reductions of interest expense of $3.8 million due to the assumed repayment of $33.2 million of Stokely long-term debt with approximately 2.1 million shares of Chiquita Common Stock and $1.7 million due to the assumed reduction of Stokely working capital loans payable to an average balance of $23 million using cash. Interest income is reduced by $.9 million to reflect the use of cash equivalents for these working capital loan repayments. The Pro Forma Combined Income Statement is based on a preliminary allocation of purchase price to the net assets acquired. Furthermore, it is not necessarily indicative of the actual operating results of the combined companies had the acquisitions occurred on January 1, 1997 or of future results of the combined companies. SIGNATURES 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 hereunto duly authorized. Date: May 4, 1998 CHIQUITA BRANDS INTERNATIONAL, INC. By: /s/ William A. Tsacalis William A. Tsacalis Vice President and Controller EX-99 2 Exhibit 99.1 FOR IMMEDIATE RELEASE CHIQUITA ANNOUNCES FIRST QUARTER RESULTS AND DECLARES QUARTERLY DIVIDENDS CINCINNATI, OHIO, April 22, 1998 -- Chiquita Brands International, Inc. today reported first quarter 1998 diluted earnings per share of $.52 which was in line with the consensus of Wall Street analyst estimates. Diluted earnings per share for the 1997 first quarter was $.60 per share. Net income for the first quarter ended March 31, 1998 was $41 million compared to net income of $43 million for the first quarter of 1997. Net sales for the quarter increased by $86 million to $717 million in 1998 primarily from the expansion of Chiquita's vegetable canning operations through acquisitions completed in late 1997 and early 1998. First quarter North America banana prices were lower than in 1997 on higher industry volume. Subsequent pricing has been higher than last year. The growth in industry volume slowed as the quarter progressed as exports from Ecuador and Colombia began to decline due to ongoing El Nino climatic conditions. In Europe, despite the continued adverse effect of a stronger dollar, the Company achieved dollar price realizations comparable to the prior year on higher European currency banana pricing. The Company indicated that after a strike lasting almost 60 days at its western Panama division during the term of a valid labor contract, the workers unilaterally returned to work last week without having settled remaining issues. As a result of the strike, production from the division was interrupted and the first quarter 1998 results included unrecovered fixed costs from this division. The Company is evaluating the extent to which the division will be able to return to production before the end of the year. Otherwise, the Company achieved improved utilization of production and transportation capacity on increased worldwide banana volume during the quarter. The Company also noted that operating results of its Diversified Food Group improved during the quarter. Chiquita's consolidated operating income for the first quarter of 1998 was $70 million, approximately $2 million less than for 1997. Separately, the Company declared quarterly cash dividends of $.05 per share on its common stock, $.7188 per share on its Series A Preferred Stock and $.9375 per share on its Series B Preferred Stock. Each dividend is payable as of June 7, 1998 to shareholders of record at the close of business on May 21, 1998. Chiquita is a leading international marketer, producer and distributor of bananas and other quality fresh and processed food products. This press release contains certain statements that may be deemed to be "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. All statements, other than statements of historical facts, included in this press release that address events, developments or financial results that Chiquita expects, believes or estimates will or may occur in the future are forward-looking statements. These statements are based on certain assumptions and analyses made by the Company in light of its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, including product pricing, costs to purchase or grow (and availability of) fresh produce and other raw materials, currency exchange rate fluctuations, natural disasters and unusual weather conditions, operating efficiencies, access to capital, actions of governmental bodies and other market and competitive conditions, many of which are beyond the control of Chiquita. Readers are cautioned that any such statements are not guarantees of future performance and that actual results or developments may differ materially from the expectations expressed in the forward-looking statements. FOR FURTHER INFORMATION, PLEASE CONTACT: Joseph W. Hagin (513) 784-8866 PRELIMINARY CHIQUITA BRANDS INTERNATIONAL, INC. CONSOLIDATED INCOME STATEMENT FOR THE QUARTER ENDED MARCH 31, 1998 AND 1997 (In millions, except per share amounts)
Quarter Ended March 31, 1998 1997 --------- --------- Net sales $717.2 $ 631.4 --------- --------- Operating costs and expenses: Cost of sales 540.6 464.0 Selling, general and administrative 83.6 74.4 Depreciation 23.2 21.6 --------- --------- 647.4 560.0 --------- --------- Operating income 69.8 71.4 Interest income 3.1 4.4 Interest expense (28.0) (28.5) Other income, net .2 .3 --------- --------- Income before income taxes 45.1 47.6 Income taxes (4.0) (4.3) --------- --------- Net income $ 41.1 $ 43.3 ========= ========= Diluted earnings per share $ 0.52 $ 0.60 ========= ========= Shares used to calculate diluted earnings per share 79.7 72.2 ========= =========
Quarterly results are subject to significant seasonal variations and are not necessarily indicative of the results of operations for a full fiscal year. 1998 includes sales, costs and shares issued in connection with the acquisition of canning businesses. -----END PRIVACY-ENHANCED MESSAGE-----