-----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, HDYhiay+AiM/Sxh/hx9IOsBzuRSfLqKZNkZewILX32CmiVKc4ZtrHvvA3Nmf6RhG wi2qnRwyRIJQXVMNJQzD2Q== 0000101063-98-000093.txt : 19980814 0000101063-98-000093.hdr.sgml : 19980814 ACCESSION NUMBER: 0000101063-98-000093 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980630 FILED AS OF DATE: 19980813 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: 10-Q SEC ACT: SEC FILE NUMBER: 001-01550 FILM NUMBER: 98686528 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 June 30, 1998 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 July 31, 1998, there were 65,369,317 shares of Common Stock outstanding. Page 1 of 13 Pages - -------------------------------------------------------------- CHIQUITA BRANDS INTERNATIONAL, INC. ---------------------------------- TABLE OF CONTENTS ----------------- Page ----- PART I - Financial Information - ------
Consolidated Statement of Income for the quarters and six months ended June 30, 1998 and 1997 . . . . . 3 Consolidated Balance Sheet as of June 30, 1998, December 31, 1997 and June 30, 1997 . . . . . . . . . 4 Consolidated Statement of Cash Flow for the six months ended June 30, 1998 and 1997 . . . . . . . . . 5 Notes to Consolidated Financial Statements. . . . . . . . . . 6 Management's Analysis of Operations and Financial Condition . . . . . . . . . . . . . . . . . 9 PART II - Other Information - ------- Item 1 - Legal Proceedings. . . . . . . . . . . . . . . . . . 10 Item 2 - Changes in Securities and Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . 11 Item 4 - Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . 11 Item 5 - Other Information. . . . . . . . . . . . . . . . . . 12 Item 6 - Exhibits and Reports on Form 8-K . . . . . . . . . . 12 Signature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Part I - Financial Information - ------------------------------ CHIQUITA BRANDS INTERNATIONAL, INC. ----------------------------------- CONSOLIDATED STATEMENT OF INCOME (Unaudited) ------------------------------------------ (In thousands, except per share amounts)
Quarter Ended Six Months Ended June 30, June 30, ----------------- ------------------- 1998 1997 1998 1997 -------- -------- ---------- ---------- Net sales $744,191 $646,233 $1,461,408 $1,277,643 -------- -------- ---------- ---------- Operating expenses Cost of sales 561,900 484,036 1,102,487 948,107 Selling, general and administrative 85,085 72,834 168,692 147,212 Depreciation 22,990 21,466 46,243 43,041 -------- -------- ---------- ---------- 669,975 578,336 1,317,422 1,138,360 -------- -------- ---------- ---------- Operating income 74,216 67,897 143,986 139,283 Interest income 3,828 4,247 6,890 8,633 Interest expense (27,530) (27,320) (55,529) (55,778) Other income, net 6,828 159 7,073 439 -------- -------- ---------- ---------- Income before income taxes 57,342 44,983 102,420 92,577 Income taxes (4,500) (3,900) (8,500) (8,200) Net income $ 52,842 $ 41,083 $ 93,920 $ 84,377 ======== ======== ========== ========== Earnings per common share: Basic $ .75 $ .66 $ 1.33 $ 1.36 Diluted .66 .57 1.17 1.17 Dividends per common share $ .05 $ .05 $ .10 $ .10
See Notes to Consolidated Financial Statements. 3 CHIQUITA BRANDS INTERNATIONAL, INC. ----------------------------------- CONSOLIDATED BALANCE SHEET (Unaudited) ------------------------------------ (In thousands, except share amounts)
June 30, December 31, June 30, 1998 1997 1997 ---------- ----------- ---------- ASSETS - ------ Current assets Cash and equivalents $ 146,057 $ 125,702 $ 233,077 Trade receivables (less allowances of $11,211, $10,683 and $9,599) 232,114 184,913 197,458 Other receivables, net 79,275 87,301 72,739 Inventories 359,009 349,948 250,136 Other current assets 28,509 35,602 33,644 --------- ---------- ---------- Total current assets 844,964 783,466 787,054 Property, plant and equipment, net 1,200,163 1,151,396 1,130,785 Investments and other assets 303,069 301,173 312,912 Intangibles, net 200,470 165,578 156,701 ---------- ---------- ---------- Total assets $2,548,666 $2,401,613 $2,387,452 ========== ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Current liabilities Notes and loans payable $ 52,419 $ 59,659 $ 27,110 Long-term debt due within one year 43,953 92,905 97,489 Accounts payable 212,263 205,323 199,281 Accrued liabilities 107,867 125,231 90,033 ---------- ---------- ---------- Total current liabilities 416,502 483,118 413,913 Long-term debt of parent company 687,258 689,080 697,788 Long-term debt of subsidiaries 350,057 272,892 299,577 Accrued pension and other employee benefits 81,406 86,676 86,127 Other liabilities 92,296 89,761 89,679 ---------- ---------- ---------- Total liabilities 1,627,519 1,621,527 1,587,084 ---------- ---------- ---------- Shareholders' equity Preferred and preference stock 253,475 253,239 249,256 Common stock, 1998 - $.01 par value (65,337,341 shares), 1997 - $.33 par value (61,167,990 and 56,249,551 shares) 653 20,389 18,750 Capital surplus 754,562 672,944 600,540 Accumulated deficit (87,543) (166,486) (68,178) ---------- ---------- ---------- Total shareholders' equity 921,147 780,086 800,368 ---------- ---------- ---------- Total liabilities and shareholders' equity $2,548,666 $2,401,613 $2,387,452 ========== ========== ==========
See Notes to Consolidated Financial Statements. 4 CHIQUITA BRANDS INTERNATIONAL, INC. ----------------------------------- CONSOLIDATED STATEMENT OF CASH FLOW (Unaudited) ---------------------------------------------- (In thousands)
Six Months Ended June 30, ------------------------- 1998 1997 ---------- --------- Cash provided (used) by: Operations Net income $ 93,920 $ 84,377 Depreciation and amortization 49,501 45,739 Write-downs of cultivations and long-term investment 8,900 -- Changes in current assets and liabilities (18,237) (29,470) Other (318) (2,308) --------- --------- Cash flow from operations 133,766 98,338 --------- --------- Investing Capital expenditures (50,546) (34,319) Acquisitions of businesses (25,518) -- Refundable deposits for container equipment -- (8,589) Investment in Japanese joint venture (2,000) (4,474) Other 3,647 (1,328) --------- --------- Cash flow from investing (74,417) (48,710) --------- --------- Financing Debt transactions Issuances of long-term debt 67,266 -- Repayments of long-term debt (76,891) (42,112) Decrease in notes and loans payable (15,489) (50,248) Stock transactions Issuances of common stock 1,097 4,304 Dividends (14,977) (14,053) --------- --------- Cash flow from financing (38,994) (102,109) --------- --------- Increase (decrease) in cash and equivalents 20,355 (52,481) Balance at beginning of period 125,702 285,558 --------- --------- Balance at end of period $ 146,057 $ 233,077 ========= =========
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, 1997 for additional information relating to the Company's financial statements. Earnings Per Share - ------------------ Basic and diluted earnings per common share ("EPS") are calculated as follows (in thousands, except per share amounts):
Quarter Ended Six Months Ended June 30, June 30, ---------------- ---------------- 1998 1997 1998 1997 ------- ------- ------- ------- Net income $52,842 $41,083 $ 93,920 $ 84,377 Dividends on preferred and preference stock (4,275) (4,223) (8,551) (8,445) Net income attributable to common shares for basic EPS 48,567 36,860 85,369 75,932 Add back dividends on preferred and preference stock 4,275 4,223 8,551 8,445 ------- ------- ------- -------- Net income for diluted EPS $52,842 $41,083 $ 93,920 $ 84,377 ======= ======= ======= ======= Weighted average common shares outstanding 64,453 56,233 64,068 56,146 Nonvested restricted shares (72) (160) (72) (160) ------- ------- ------- ------- Shares used to calculate basic EPS 64,381 56,073 63,996 55,986 Assumed conversion of preferred and preference stock 15,479 15,232 15,479 15,232 Assumed exercise of stock options 762 1,207 698 1,150 -------- ------- -------- ------- Shares used to calculate diluted EPS 80,622 72,512 80,173 72,368 ======= ======= ======= ======= Basic EPS $ .75 $ .66 $ 1.33 $ 1.36 Diluted EPS .66 .57 1.17 1.17
The assumed conversion to common stock of the Company's 7% convertible subordinated debentures would have an anti-dilutive effect on diluted EPS and, therefore, has not been included in the computation. 6 Acquisitions - ------------ In January 1998, Chiquita acquired Stokely USA, Inc. ("Stokely"), previously a publicly-owned vegetable canning business with annual net sales of approximately $150 million. In connection with the acquisition, Chiquita issued $11 million of common stock (.8 million shares) in exchange for all outstanding Stokely shares and issued $33 million of common stock (2.2 million shares) and paid $18 million of cash to retire corresponding amounts of Stokely debt. In June 1998, Chiquita's Australian subsidiary acquired Campbell Mushrooms Pty Limited and Campbell Mushrooms Centre Pty Limited (collectively, the "Australian Mushroom Companies"), which had annual net sales of approximately $30 million. In connection with the acquisition, Chiquita issued $12 million of common stock (.9 million shares) and paid $4 million of cash in exchange for all of the outstanding capital stock of the Australian Mushroom Companies. The assets acquired of Stokely and the Australian Mushroom Companies consisted primarily of trade receivables ($13 million), inventories ($66 million), property, plant and equipment ($50 million) and intangibles ($35 million). Liabilities consisted primarily of debt ($36 million) and accounts payable and accrued liabilities ($42 million). Each transaction was accounted for as a purchase. Inventories (in thousands) - -------------------------
June 30, December 31, June 30, 1998 1997 1997 ---------- ----------- ---------- Bananas and other fresh produce $ 38,761 $ 36,035 $ 34,774 Canned vegetables 111,365 128,824 35,907 Other food products 8,212 8,661 8,945 Growing crops 119,865 115,007 113,359 Materials and supplies 72,927 53,909 49,064 Other 7,879 7,512 8,087 ---------- ---------- ---------- $ 359,009 $ 349,948 $ 250,136 ========== ========== ==========
Other - ----- Chiquita has a long-standing policy of periodically hedging transactions denominated in foreign currencies. At June 30, 1998, the Company had option contracts which ensure conversion of approximately $180 million of foreign sales through the end of 1998 at rates not higher than 1.78 Deutsche marks per dollar or lower than 1.60 Deutsche marks per dollar and approximately $120 million of foreign sales in 1999 at rates not higher than 1.80 Deutsche marks per dollar or lower than 1.61 Deutsche marks per dollar. The carrying value of these option contracts at June 30, 1998 was approximately $6 million; fair value based on quoted market prices was approximately $9 million. 7 In 1998, Chiquita adopted Statement of Financial Accounting Standards No. 130 "Comprehensive Income" and applied this standard to all periods presented in these financial statements. The adoption of this Statement had no impact on the Company's net income or shareholders' equity. For the first half of 1998 and 1997, the Company had comprehensive income of $93 million and $79 million, which consisted of net income and unrealized foreign currency translation losses of $1 million and $5 million. For the second quarters of 1998 and 1997, the Company had comprehensive income of $54 million and $39 million, which consisted of net income and unrealized foreign currency gains (losses) of $1 million and $(2) million. In June 1998, the Financial Accounting Standards Board issued Statement No. 133 "Accounting for Derivative Instruments and Hedging Activities." The Statement requires the recognition of all derivatives (primarily foreign currency option contracts and foreign exchange forward contracts) on the balance sheet at fair value. The Company's derivatives are specifically designated as hedges. Changes in the fair value of these derivatives will either be offset against the change in fair value of the corresponding hedged assets, liabilities, or firm commitments through earnings or reflected as other comprehensive income until the hedged item is recognized in earnings. Adoption of the Statement is required by January 1, 2000. If the Company were to adopt the new Statement as of July 1, 1998, the effect of adoption would be immaterial to the financial statements. 8 CHIQUITA BRANDS INTERNATIONAL, INC. ---------------------------------- MANAGEMENT'S ANALYSIS OF ------------------------ OPERATIONS AND FINANCIAL CONDITION ---------------------------------- Operations - ---------- Net sales for the quarter and six months ended June 30, 1998 increased by approximately 15% over the prior year amounts primarily from the expansion of Chiquita's vegetable canning operations through acquisitions completed in late 1997 and early 1998. Operating expenses also increased over the prior year levels primarily as a result of these acquisitions. The increase in second quarter earnings over the prior year level was primarily due to improved banana pricing in the Company's major markets, despite the adverse effect of a stronger dollar in comparison with European and Japanese currencies. The Company's banana volume for the second quarter was comparable to the prior year level, although industry volume was lower as exports from Ecuador and Colombia were reduced due to El Nino climatic conditions. In the first quarter, North American banana pricing was lower than for the prior year period on higher industry volume, while dollar price realizations in Europe were comparable to the prior year. Additionally, the Company's Diversified Foods Group, which includes vegetable canning operations, generated modest improvements in earnings in both the first and second quarters. The second quarter 1998 results include certain charges, primarily write-offs of a non-operating investment and of banana cultivations in Panama (see below), which were offset by a gain from a cash settlement in excess of $10 million of claims against The Cincinnati Enquirer concerning a series of newspaper articles about the Company published in May 1998 (see Part II, Item 1 - "Legal Proceedings"). The write-off of the investment and the settlement gain are included in "Other income, net," and the write-off of banana cultivations is included in "Cost of sales." As a result of a two-month strike in Chiquita's western Panama division which ended in mid-April, production was suspended in the division pending farm restoration. During the second quarter, the Company wrote off impaired banana cultivations which it was unable to properly maintain during the strike period. In addition, this non-productive division has been incurring unrecovered fixed costs. Production at this division is expected to be restored in the first quarter of 1999. Otherwise, the Company achieved lower overall delivered product costs during the second quarter and first half of 1998. The Company's effective tax rate is affected by the level and mix of income among various domestic and foreign jurisdictions in which the Company operates. Financial Condition - ------------------- Cash flow from operations increased to $134 million in the first half of 1998 from $98 million in the prior year period primarily as a result of improved earnings and the inclusion of seasonal cash flow of recently acquired canning operations. Cash from operations in 1998 was used primarily for capital expenditures and business acquisitions. At June 30, 1998, $23 million of borrowings were drawn against Chiquita's $125 million revolving credit facility. 9 Other - ----- Reference is made to the discussion of the European Union ("EU") banana quota and licensing regime, the Framework Agreement and the World Trade Organization ("WTO") proceeding regarding this regime contained in Part I, Item 1 - "Business - - Risks of International Operations" in the Company's 1997 Form 10-K and "Management's Analysis of Operations and Financial Condition" in the Company's 1997 Annual Report to Shareholders. In July 1998, the EU adopted a proposed new quota and license regime for implementation in January 1999 which would continue to discriminate in favor of producers and importers within the EU and its former colonies and limit the volume of bananas imported into the EU that are grown in Latin America, Chiquita's primary source of fruit. The United States and the five other governments that are challenging the EU banana policy in the WTO (Ecuador, Panama, Guatemala, Honduras and Mexico) have all indicated that they do not believe this EU proposal complies with the 1997 WTO findings. If the EU fails to comply with the WTO rulings by January 1, 1999, the WTO authorizes the injured governments to engage in retaliatory trade measures, such as the imposition of new tariffs or withdrawal of trade concessions, against the EU. Section 301 of the Trade Act of 1974, under which the case is also pending, also provides authority for U.S. retaliation if the EU does not comply by the January 1, 1999 deadline. Many administrative and implementation issues must be addressed in regulations to be adopted in the coming months and there can be no assurance as to the results of the WTO proceedings, the nature and extent of actions that may be taken by the affected countries or the impact on the EU quota and licensing regime, including the Framework Agreement. In connection with its ongoing information system management efforts, Chiquita has previously replaced or modified a significant portion of its key financial information and operational systems that were not year 2000 compliant. Remaining financial and operational systems have been assessed, and detailed plans have been developed and are being implemented to make the necessary modifications to ensure year 2000 compliance. The financial impact of making the required system changes for year 2000 compliance are not expected to have a material effect on Chiquita's financial statements. This quarterly report contains certain statements that may be deemed to be "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. These 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, labor relations, access to capital, actions of governmental bodies and other market and competitive conditions, many of which are beyond the control of Chiquita. Actual results or developments may differ materially from the expectations expressed in the forward-looking statements. Part II - Other Information - --------------------------- Item 1 - Legal Proceedings -------------------------- Reference is made to the discussion in the Company's March 31, 1998 Form 10-Q of three shareholder derivative lawsuits filed in early May 1998 in Ohio State Court shortly after publication of a series of newspaper articles concerning Chiquita by The Cincinnati Enquirer. Two additional similar lawsuits were filed later in May 1998 in the same court. In late June 1998, The Cincinnati Enquirer renounced the entire series of articles as containing untrue accusations and conclusions and creating a false and misleading impression of Chiquita's business practices. In late July 1998, all five lawsuits were dismissed without prejudice at the plaintiffs' request. 10 Reference is made to the discussion contained in the Company's 1997 Form 10-K of the lawsuits pending in several jurisdictions against Chiquita and other banana producing companies which used an agricultural chemical called DBCP, primarily in the 1970's, alleged to have caused sterility and other injuries. In June 1998, the Company entered into an agreement providing for settlements with the plaintiffs in the cases pending in Texas, Louisiana, Costa Rica, Panama and the Philippines. The Company is funding the settlement through an escrow account established for the benefit of these plaintiffs. The escrowed funds will be apportioned, according to a prescribed formula, among plaintiffs who execute releases. The settlement amount is not material to the Company's financial statements. Item 2 - Changes in Securities and Use of Proceeds -------------------------------------------------- (a) Reference is made to the amendments in the terms of the Company's 9 5/8% Senior Notes due 2004 described below in the last paragraph of Item 4. (c) On June 25, 1998, the Company issued 873,710 shares of common stock to Campbell Investment Company in payment of a portion of the purchase price for the Australian Mushroom Companies. The transaction was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933. The shares were valued at $14.1125, based on an average market value of Chiquita common stock preceding such date. Item 4 - Submission of Matters to a Vote of Security Holders ------------------------------------------------------------ The matters indicated below were voted upon at the Company's Annual Meeting of Shareholders held on May 13, 1998. (i) Election of Seven Directors
Votes ------------------------- Name For Withheld ----------------- ---------- ------- Carl H. Lindner 52,897,963 662,598 Keith E. Lindner 52,896,948 663,613 Fred J. Runk 52,924,422 636,139 Jean Head Sisco 52,935,011 625,550 William W. Verity 52,936,826 623,735 Oliver W. Waddell 52,938,596 621,965 Steven G. Warshaw 52,961,528 599,033
(ii) Approval of the Company's 1998 Stock Option and Incentive Plan. The votes were: For - 37,803,574; Against - 8,965,761; Abstain - 268,391; Broker Non-Votes - 6,522,835. (iii) Adoption of an amendment to the Certificate of Incorporation to increase the Company's number of authorized shares of Capital Stock from 150 million shares to 200 million shares. The votes were: For - 51,698,392; Against - 1,622,177; Abstain - 239,992. (iv) Adoption of an amendment to the Certificate of Incorporation to change the title and par value of the Company's Capital Stock, $.33 par value, to Common Stock, $.01 par value. The votes were: For - 52,694,204; Against - 641,842; Abstain - 224,515. 11 (v) Adoption of an amendment to the Certificate of Incorporation to decrease the shareholder vote required to make future amendments to the Certificate of Incorporation from two-thirds to a majority of the votes cast. The votes were: For - 45,526,233; Against - 1,321,938; Abstain - 198,555; Broker Non-Votes - 6,513,835. In June 1998 the Company obtained consents from the holders of its 9 5/8% Senior Notes due 2004 (the "Notes") to amend the definition of Permitted Indebtedness in the Indenture dated as of November 30, 1991 (the "Indenture") under which the Notes were issued. The amendments permit subsidiaries of the Company to borrow money for working capital purposes in food related businesses at times when the Company does not meet specified financial tests and the covenants under the Indenture would otherwise limit the ability of the Company and its subsidiaries to incur such debt. The amendments conform these provisions in the Indenture to corresponding provisions applicable to the Company's 9 1/8% Senior Notes due 2004 and 10 1/4% Senior Notes due 2006. Consents were solicited from holders of the Notes from June 12 through June 26, at which time consents had been received from holders of more than the requisite majority of Notes. Holders of $197,671,000 principal amount of the $250,000,000 aggregate principal amount of Notes outstanding, or 79.1% of the Notes, voted in favor of the amendments. The Company paid $5 per $1,000 principal amount of Notes to consenting holders. The amendments are set forth in the First Supplemental Indenture attached as Exhibit 99.1. Item 5 - Other Information -------------------------- Shareholders must submit proposals intended to be included in the Company's 1999 proxy materials by December 1, 1998. If the Company does not receive notice by February 22, 1999 of any other matter intended to be presented by a shareholder at the 1999 annual meeting, then management proxies will be permitted to use their discretionary voting authority to vote on the proposal at the meeting without any reference to it in the proxy statement. Proposals and notices of other matters should be mailed to the attention of the Secretary of the Company at the Company's executive offices at 250 East Fifth Street, Cincinnati, Ohio 45202. Item 6 - Exhibits and Reports on Form 8-K ---------------------------------------- Page Number(s) --------- (a) Exhibit 27 - Financial Data Schedule. . . . ** Exhibit 99.1 - First Supplemental Indenture, dated as of June 26, 1998, to Indenture dated as of November 30,1991 between Chiquita Brands International, Inc. and The Fifth Third Bank, as trustee. . . . . . . . . . . . . . . . . ** ** Omitted from this copy of Quarterly Report on Form 10-Q. Copy included in report filed electronically with the Securities and Exchange Commission. (b) The following reports on Form 8-K were filed during the quarter ended June 30, 1998: April 22, 1998 - to provide unaudited pro forma combined financial statements of the Company for the year ended December 31, 1997; to provide the unaudited consolidated financial statements of Stokely for the nine months ended December 31, 1997; and to report the Company's results of operations for the first quarter of 1998. 12 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) August 12, 1998 13 EX-27 2
5 This schedule contains summary financial information extracted from the Chiquita Brands International, Inc. Form 10-Q for the six months ended June 30, 1998 and is qualified in its entirety by reference to such financial information. 1,000 6-MOS DEC-31-1998 JUN-30-1998 146,057 0 243,325 11,211 359,009 844,964 1,886,798 686,635 2,548,666 416,502 1,037,315 0 253,475 653 667,019 2,548,666 1,461,408 1,461,408 1,102,487 1,102,487 46,243 0 55,529 102,420 8,500 93,920 0 0 0 93,920 1.33 1.17
EX-99 3 CHIQUITA BRANDS INTERNATIONAL, INC. and THE FIFTH THIRD BANK, as Trustee -------------------------------------------- FIRST SUPPLEMENTAL INDENTURE Dated as of June 26, 1998 To INDENTURE Dated as of November 30, 1991 -------------------------------------------- Amending the Indenture, dated as of November 30, 1991, between Chiquita Brands International, Inc. and The Fifth Third Bank, as trustee, with respect to the 9-5/8% Senior Notes due 2004 issued by Chiquita Brands International, Inc. FIRST SUPPLEMENTAL INDENTURE (the "First Supplemental Indenture" ) dated as of June 26 , 1998, by and between C h i q u ita Brands International, Inc., a New Jersey corporation (the "Company"), and The Fifth Third Bank, an Ohio banking corporation, as trustee (the "Trustee"), with respect to the 9-5/8% Senior Notes due 2004 issued by the Company (the "Senior Notes" ). RECITALS T h e Company and the Trustee are parties to an Indenture, dated as of November 30, 1991 (the "Indenture"), pursuant to which the Company has issued the Senior Notes in the aggregate principal amount of $250,000,000, all of which Senior Notes are Outstanding as of the date hereof. A Board Resolution sets forth the terms of the Senior Notes, i n c luding certain definitions and covenants relating thereto. Capitalized terms used herein without definition shall have the respective meanings given such terms in the Indenture. The Company has duly authorized the execution and delivery of this First Supplemental Indenture in order to provide for the amendment of the definition of "Permitted Indebtedness" and to add a definition of "Food-Related Businesses" (collectively, the "Amendment"). Section 902 of the Indenture provides that the Company may, when authorized by a Board Resolution and with the consent of Holders of more than 50% in aggregate principal amount of Outstanding Debt Securities of any series of Debt Securities then Outstanding affected thereby, effect an amendment to the Indenture. The Senior Notes are the sole series of Debt Securities affected by the Amendment. All of the Senior Notes were Outstanding as of the record date for determining Holders entitled to consent to the Amendment. Consents to the Amendment have been received by the Trustee f r om Holders of more than $164,969,000 in aggregate p r i ncipal amount of Outstanding Senior Notes, which represents an amount in excess of 50% in aggregate principal amount of Outstanding Senior Notes. The Company has requested the Trustee and the Trustee has agreed to join with it in the execution and delivery of this First Supplemental Indenture. The purpose of this First Supplemental Indenture is to effect the Amendment with respect to the Senior Notes. All conditions and requirements necessary to make this First Supplemental Indenture, when duly executed and delivered, a valid and binding agreement in accordance with its terms and for the purposes herein expressed have been performed and fulfilled. All things necessary to make this First Supplemental Indenture a valid agreement of the Company and the Trustee and a valid amendment of and supplement to the Indenture have been done. NOW, THEREFORE, it is agreed that the Indenture is amended with respect to the Senior Notes as follows from and after the date hereof: ARTICLE 1 AMENDMENT TO INDENTURE Section 1. The definition of "Food-Related Businesses" is hereby added as follows: "F o o d-Related Businesses" means businesses or operations involving food or food products, including, without limitation, sourcing, processing, transportation, s h i p p ing and distribution, and related assets and infrastructure. Section 2. T h e previous definition of "Permitted Indebtedness" is hereby deleted in its entirety and replaced with the following: "Permitted Indebtedness" means (1) Indebtedness of the Company or any Subsidiary outstanding on the date of this Indenture; (2) Debt Securities having aggregate gross proceeds not in excess of $350,000,000; (3) Indebtedness of the Company under its existing unsecured revolving credit facility as in effect on the date of this Indenture, whether or not such Indebtedness is outstanding on the date of this Indenture; PROVIDED, HOWEVER, that the proceeds of such Indebtedness shall be invested in, or used in connection with, Food-Related Businesses; (4) Indebtedness of the Company not in excess of $150 million under revolving credit f a c i l ities or other loan facilities or agreements established after the date of this Indenture; PROVIDED, HOWEVER, that the proceeds of such Indebtedness shall be invested in, or used in connection with, Food-Related Businesses; (5) Indebtedness of a Subsidiary of the Company (including Acquired Indebtedness), which is non-recourse to the Company, the proceeds of which are or have been used for w o rking capital purposes or for capital expenditures relating to Food-Related Businesses; (6) Indebtedness of a Subsidiary borrowed from a lender located in any country producing tropical fruit and denominated in the currency of such country other than U.S. dollars, which Indebtedness is incurred for hedging purposes in the ordinary course of business consistent with past practice; (7) Intercompany Debt Obligations of the Company and each of its wholly-owned Subsidiaries; PROVIDED, HOWEVER, that the obligations of the Company with respect to such Indebtedness shall be evidenced by an intercompany note and shall be subordinated in right of payment from and after such time as all Debt Securities issued and outstanding under this Indenture shall become due and payable (whether at Stated Maturity, by acceleration or otherwise) to the payment and performance of the Company's obligations under this Indenture or the Debt Securities; (8) a d ditional Indebtedness of the Company the aggregate principal amount of which outstanding at any time does not exceed 5% of Consolidated Assets; and (9) any renewals, e x tensions, substitutions, refundings, refinancings or replacements of any Indebtedness described in clauses (1), (2), (3), (4) or (8) above (including the replacement or s u b s t itution of any unused commitment relating to I n d e btedness), so long as the aggregate amount of Indebtedness represented thereby is not increased by such renewal, extension, substitution, refunding, refinancing or replacement. ARTICLE 2 MISCELLANEOUS Section 2.1 This First Supplemental Indenture may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts together shall constitute but one and the same instrument. Section 2.2. All provisions of this First Supplemental Indenture shall be deemed to be incorporated in, and made part of, the Indenture; and the Indenture, as supplemented by the First Supplemental Indenture, shall be read, taken and construed as one and the same instrument. Section 2.3. In case any provision in this First S u p plemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 2.4. N o thing in this First Supplemental Indenture, express or implied, shall give to any Person (other than the parties hereto, any Senior Notes Registrar, any Paying Agent, and Authenticating Agent and their successors under the Indenture, and the Holders of the Senior Notes), any benefit or any legal or equitable right, remedy or claim under the Indenture. Section 2.5 This First Supplemental Indenture shall be governed by and construed in accordance with the laws of the State of New York. IN WITNESS WHEREOF, the parties have caused this First Supplemental Indenture to be signed and acknowledged by their respective officers thereunto duly authorized as of the day and year first above written. CHIQUITA BRANDS INTERNATIONAL, INC. [Seal] /s/Gerald R. Kondritzer ---------------------------- Attest: Gerald R. Kondritzer Vice President and Treasurer /s/Donna K. Leonard ------------------------- Assistant General Counsel and Assistant Secretary THE FIFTH THIRD BANK, Trustee [Seal] /s/Gregory R. Hahn ---------------------------- Attest: Gregory R. Hahn Trust Officer /s/Thomas P. Huelsman ------------------------- Assistant Vice President STATE OF OHIO ) ) SS. COUNTY OF HAMILTON) O n the 26th day of June, 1998, before me personally came Gregory R. Hahn, to me known, who being by me duly sworn, did depose and say that he resides at 540 Morrvue Dr., Cincinnati, OH 45238, that he is a Trust Officer of THE FIFTH THIRD BANK, one of the corporations described in and which executed the above instrument; that he knows the corporate seal of said corporation; that one of the seals affixed to the said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation; and that he signed his name thereto by like authority. IN WITNESS WHEREOF, I have hereunto set my hand and a f fixed my official seal the day and year in this certificate first above written. /s/Barbara M. Howland\ ------------------------------ Notary Public, State of Ohio Commission expires: July 19, 1998 ------------- [Seal] STATE OF OHIO ) ) SS. COUNTY OF HAMILTON) O n the 26th day of June, 1998, before me personally came Gerald R. Kondritzer, to me known, who being by me duly sworn, did depose and say that he resides at 2324 Madison Road, #1904, Cincinnati, OH 45241, that he is Vice President and Treasurer of CHIQUITA BRANDS INTERNATIONAL, INC., one of the corporations described in and which executed the above instrument; that he knows the corporate seal of said corporation; that one of the seals affixed to the said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation; and that he signed his name thereto by like authority. IN WITNESS WHEREOF, I have hereunto set my hand and a f fixed my official seal the day and year in this certificate first above written. /s/Barbara M. Howland ------------------------------ Notary Public, State of Ohio Commission expires: July 19, 1998 ------------- [Seal] -----END PRIVACY-ENHANCED MESSAGE-----