-----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, V1dJhJuiuo44LT/0sU6Occ3eA2FSFop4gCXbUoMnQkIJu1ewJQ7maFmNa8I01LtA VaFvIOGqNn2wUDLjwSOkrQ== 0000950152-97-008198.txt : 19971124 0000950152-97-008198.hdr.sgml : 19971124 ACCESSION NUMBER: 0000950152-97-008198 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971120 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971121 SROS: NONE 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: 97725417 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 CHIQUITA BRANDS INTERNATIONAL, INC. 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): November 20,1997 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 2 INFORMATION TO BE INCLUDED IN THE REPORT Items 1, 2, 3, 4, 6 and 8 are not applicable and are omitted from this Report. Item 5. Other Events. The Company is making this filing in order to place the information contained or incorporated by reference herein on file with the Securities and Exchange Commission ("SEC") under the Securities Exchange Act of 1934. A. Reference is made to the Pro Forma Financial Information included as Item 7(b). This pro forma financial information corresponds to the pro forma financial information included in the Company's Current Report on Form 8-K dated September 15, 1997 but, in accordance with Rule 3-12 of Regulation S-X, has been updated to include financial information for the quarter ended September 30, 1997. B. Pursuant to the requirements of Rule 3-05 of Regulation S-X, the Company hereby incorporates by reference the following consolidated financial statements of Stokely USA, Inc. ("Stokely") (SEC File No. 0-13943) listed under Item 7(a). C. The following information is included in two registration statements being filed under the Securities Act of 1933 and supplements Management's Analysis of Operations and Financial Condition included in the Company's Current Report on Form 10-Q for the quarter ended September 30, 1997: For the first nine months of 1997, the Company reported net income from continuing operations of $56 million, after giving effect to a loss of $28 million in the third quarter. At September 30, 1997, Chiquita's accumulated deficit totaled $103 million. The Company's interim results are subject to significant seasonal variations; typically the first six months of the calendar year are the stronger period. Operating income in the third quarter of 1997 compared to the third quarter of 1996 was adversely affected by (1) a stronger dollar, mitigated in part by the Company's foreign currency hedging program, and (2) increased banana production costs arising from weather-related effects and other influences on current productivity; the adverse impact of these items was partially offset by the benefit of higher local currency pricing for bananas in Europe. These trends, including higher production costs, have continued into the fourth quarter. 2 3 Item 7. Financial Statements and Exhibits. (a) Financial Statements of Businesses Acquired. 1. Audited financial statements of Stokely, including the notes thereto: Independent Auditors' Report dated June 19, 1997 (October 10, 1997 as to Note L) Consolidated Balance Sheets as of March 31, 1997 and 1996 Consolidated Statements of Operations for the Years Ended March 31, 1997, 1996 and 1995 Consolidated Statements of Stockholders' Equity for the Years Ended March 31, 1997, 1996 and 1995 Consolidated Statements of Cash Flows for the Years Ended March 31, 1997, 1996 and 1995 Notes to Consolidated Financial Statements The foregoing consolidated financial statements and Independent Auditors' Report are incorporated by reference to Item 8, pages 42 - 63 of Stokely's Annual Report on Form 10-K for the Year Ended March 31, 1997 as amended on Form 10-K/A filed on October 14, 1997. 2. Interim financial statements (unaudited) of Stokely for the quarter and six months ended September 30, 1997: Consolidated Condensed Balance Sheets - September 30, 1997, September 30, 1996 and March 31, 1997 Consolidated Condensed Statements of Operations - Three and Six Months Ended September 30, 1997 and 1996 Consolidated Condensed Statements of Cash Flows - Six Months Ended September 30, 1997 and 1996 Notes to Consolidated Condensed Financial Statements The foregoing financial statements and notes are incorporated by reference from Item 1, pages 3-10 of Stokely's Quarterly Report on Form 10-Q for the Quarter Ended September 30, 1997. 3 4 (b) Pro Forma Financial Information. Page No. Chiquita Brands International, Inc. Pro Forma Combined Balance Sheet (unaudited) as of September 30, 1997 6 Pro Forma Combined Income Statement (unaudited) for the year ended December 31, 1996 8 Pro Forma Combined Income Statement (unaudited) for the nine months ended September 30, 1997 10 (c) Exhibits 23.1 Consent of Independent Auditors (Deloitte & Touche, LLP) 4 5 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 Owatonna Canning Company, Olivia Canning Company, Midwest Foods, Inc. and Goodhue Canning Company (collectively, the "Owatonna Companies") and the proposed acquisitions by Chiquita of Stokely and American Fine Foods, Inc. ("AFF"). All of these acquisitions were reported by Chiquita in its Current Report on Form 8-K dated September 15, 1997 (the "September 8-K") and will be accounted for as purchases. 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), Stokely and AFF at September 30, 1997 and has been prepared to reflect the pending acquisitions assuming they had occurred on September 30, 1997. The unaudited pro forma combined income statement for the year ended December 31, 1996 is based on the income statements of Chiquita, Stokely and AFF for the twelve months ended December 31, 1996 and of the Owatonna Companies for the twelve months ended February 28, 1997 and has been prepared as if the acquisitions had occurred on January 1, 1996. The unaudited pro forma combined income statement for the nine months ended September 30, 1997 combines the income statements of Chiquita, the Owatonna Companies, Stokely and AFF for the same period and is prepared as if the acquisitions had occurred on January 1, 1997. These unaudited pro forma financial statements should be read in conjunction with the historical financial statements and notes thereto of Owatonna Canning Company included in the September 8-K and the historical financial statements and notes thereto of Stokely incorporated by reference in this Form 8-K. 5 6 Chiquita Brands International, Inc. Pro Forma Combined Balance Sheet (unaudited) September 30, 1997 (in thousands)
Chiquita (including Owatonna Pro Forma Pro Forma Companies) Stokely AFF Adjustments Combined ----------- --------- -------- ----------- ----------- ASSETS CURRENT ASSETS Cash and equivalents $ 172,330 $ 1,515 $ 179 $ (45,977)(a) $ 128,047 Trade receivables, net 203,788 12,931 5,776 -- 222,495 Other receivables, net 65,726 -- 317 -- 66,043 Inventories 321,616 91,469 42,444 -- 455,529 Other current assets 39,595 750 3,377 (572)(b) 43,150 ----------- --------- -------- ----------- ----------- TOTAL CURRENT ASSETS 803,055 106,665 52,093 (46,549) 915,264 Property, plant and equipment, net 1,143,005 39,625 10,504 1,193,134 Investments and other assets 312,574 2,507 922 316,003 Intangibles, net 156,564 -- -- 12,407 (c) 168,971 ----------- --------- -------- ----------- ----------- TOTAL ASSETS $ 2,415,198 $ 148,797 $ 63,519 $ (34,142) $ 2,593,372 =========== ========= ======== =========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Notes and loans payable $ 36,395 $ 47,725 $ 20,998 $ (43,723)(a) $ 61,395 Long-term debt due within one year 90,430 43,300 1,142 (33,227)(a) 101,645 Accounts payable 208,307 45,017 5,873 -- 259,197 Accrued liabilities 108,691 5,663 6,664 2,700 (d) 123,718 ----------- --------- -------- ----------- ----------- TOTAL CURRENT LIABILITIES 443,823 141,705 34,677 (74,250) 545,955 Long-term debt of parent company 696,731 -- -- -- 696,731 Long-term debt of subsidiaries 284,615 2,100 1,112 (1,112)(a) 286,715 Accrued pension and other employee benefits 87,107 2,883 521 (114)(e) 90,397 Other liabilities 90,246 -- 1,193 (3,193)(b)(f) 88,246 ----------- --------- -------- ----------- ----------- TOTAL LIABILITIES 1,602,522 146,688 37,503 (78,669) 1,708,044 ----------- --------- -------- ----------- ----------- SHAREHOLDERS' EQUITY Preferred stock 253,239 -- -- 173 (f) 253,412 Capital stock 19,786 572 865 178 (a)(f)(g) 21,401 Capital surplus 642,881 43,508 2,498 24,858 (a)(f)(g) 713,745 Other shareholders' equity -- (296) (526) 822 (g) -- Accumulated deficit (103,230) (41,675) 23,179 18,496 (g) (103,230) ----------- --------- -------- ----------- ----------- TOTAL SHAREHOLDERS' EQUITY 812,676 2,109 26,016 44,527 885,328 ----------- --------- -------- ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 2,415,198 $ 148,797 $ 63,519 $ (34,142) $ 2,593,372 =========== ========= ======== =========== ===========
6 7 NOTE: The Pro Forma Combined Balance Sheet, which gives effect to the acquisition by Chiquita of the Owatonna Companies and the proposed acquisitions of Stokely and AFF, includes pro forma adjustments to reflect: (a) Assumed repayment of all $23.3 million of AFF debt with cash, assumed repayment of $32.1 million of Stokely long-term debt with approximately 2.1 million shares of Chiquita Common Stock, and assumed reduction of Stokely working capital loans payable to $25 million using cash. (b) Elimination of deferred tax assets and liabilities of the acquired companies. (c) The excess of acquisition cost (including transaction costs) over the fair value of net assets acquired, totaling $10.7 million for Stokely and $1.8 million for AFF. (d) Estimated transaction costs for professional services incurred in connection with the acquisitions. (e) Adjustment of the accumulated postretirement benefit liabilities of Stokely and AFF. (f) Issuance of: $11.4 million (.8 million shares) of Chiquita Common Stock in exchange for 100% of the equity of Stokely; $27.2 million (1.8 million shares) of Chiquita Common Stock in exchange for 100% of the equity of AFF; and estimated additional consideration of $1.8 million (.1 million shares) of Chiquita Common Stock and $.2 million (3,500 shares) of Chiquita Series C Preference Stock in connection with the acquisition of the Owatonna Companies. The historical Chiquita balance sheet includes preliminary consideration of $42 million (3.0 million shares) of Chiquita Common Stock and $4 million (.1 million shares) of Chiquita Series C Preference Stock issued in connection with the acquisition of the Owatonna Companies. (g) Elimination of the shareholders' equity accounts of Stokely and AFF. purchase price to the net assets acquired. Furthermore, it is not necessarily indicative of the actual or future financial position that would have occurred or will occur upon consummation of the acquisitions of the Owatonna Companies, Stokely and AFF. 7 8 Chiquita Brands International, Inc. Pro Forma Combined Income Statement (unaudited) Year Ended December 31, 1996 (in thousands, except per share data)
Owatonna Pro Forma Pro Forma Chiquita Companies Stokely AFF Adjustments Combined ----------- --------- --------- ------- ----------- ----------- Net sales $ 2,435,248 $ 61,885 $ 198,108 $81,111 $ (40,329)(a) $ 2,736,023 Operating expenses Cost of sales 1,947,888 32,346 160,022 69,178 (38,900)(a) 2,170,534 Selling, general and administrative 313,490 18,243 30,632 5,458 (1,000)(a)(b) 366,823 Depreciation 89,534 2,690 6,675 1,692 (569)(a) 100,022 Nonrecurring charges -- -- 26,029 -- (12,500)(a) 13,529 ----------- -------- --------- ------- -------- ----------- Operating income (loss) 84,336 8,606 (25,250) 4,783 12,640 85,115 Interest income 28,276 573 -- 12 (1,750)(c) 27,111 Interest expense (130,232) (365) (11,066) (1,645) 8,400(a)(c) (134,908) Other income, net 892 163 -- 53 -- 1,108 ----------- -------- --------- ------- -------- ----------- Income (loss) before income taxes (16,728) 8,977 (36,316) 3,203 19,290 (21,574) Income taxes (11,000) (2,755) -- (1,339) 3,794(d) (11,300) ----------- -------- --------- ------- -------- ----------- Income (loss) before extraordinary item (27,728) 6,222 (36,316) 1,864 23,084 (32,874) Less dividends on preferred stock (11,955) -- -- -- (208)(e) (12,163) ----------- -------- --------- ------- -------- ----------- Loss before extraordinary item attributable to common shares $ (39,683) $ 6,222 $ (36,316) $ 1,864 $ 22,876 $ (45,037) =========== ======== ========= ======= ======== =========== Loss per common share before extraordinary item - primary and fully diluted $ (.72) $ (0.71) =========== ============ Shares used to calculate loss per common share before extraordinary item 55,167 63,338 =========== ===========
NOTE: This Pro Forma Combined Income Statement, which gives effect to the acquisition of the Owatonna Companies and the proposed acquisitions of Stokely and AFF by Chiquita, includes pro forma adjustments to reflect: (a) Elimination of: revenues and direct operating expenses of Stokely's frozen vegetable business; interest expense ($1.6 million) from borrowings associated with frozen vegetable assets; and nonrecurring charges resulting from Stokely's sale of this business. The acquisition of Stokely by Chiquita does not include any assets or operating activity in the frozen vegetable business. (b) Amortization of goodwill totaling $0.3 million arising from the acquisitions on a straight-line basis over 40 years. (c) Reductions of interest expense of: - $1.6 million due to the assumed repayment of all AFF debt with cash; - $4.3 million due to the assumed repayment of $32.1 million of Stokely long-term debt with approximately 2.1 million shares of Chiquita Common Stock; and - $.9 million due to the assumed reduction of Stokely working capital loans payable remaining after giving effect to the disposition of the frozen vegetable business to an average balance of $25 million using cash. Interest income is reduced by $1.8 million to reflect the use of cash equivalents for these debt repayments. (d) Elimination of tax expense of the Owatonna Companies and AFF as a result of including these companies in the Chiquita consolidated tax returns. (e) Dividends on Chiquita Series C Preference Stock issued in connection with the acquisition of the Owatonna Companies. 8 9 The Pro Forma Combined Income Statement does not include any adjustment to eliminate $13.5 million ($.21 per share on a pro forma basis) of nonrecurring charges which are principally associated with the closing and write-down of plant and office facilities and are included in Stokely's historical operating income. This 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, 1996 or of future results of the combined companies. 9 10 Chiquita Brands International, Inc. Pro Forma Combined Income Statement (unaudited) Nine Months Ended September 30, 1997 (in thousands, except per share data)
Owatonna Pro Forma Pro Forma Chiquita Companies Stokely AFF Adjustments Combined ----------- -------- --------- -------- ----------- ----------- Net sales $ 1,833,904 $ 44,714 $ 109,563 $ 53,611 -- $ 2,041,792 Operating expenses Cost of sales 1,412,100 25,930 87,335 43,772 -- 1,569,137 Selling, general and administrative 223,479 17,255 20,384 4,163 $ (1,692) (a)(b) 263,589 Depreciation 64,418 2,171 3,631 1,163 -- 71,383 ----------- -------- --------- -------- -------- ----------- Operating income (loss) 133,907 (642) (1,787) 4,513 1,692 137,683 Interest income 12,481 330 -- 6 (1,100)(c) 11,717 Interest expense (82,482) (177) (7,334) (645) 4,600 (c) (86,038) Other income, net 656 164 -- 34 -- 854 ----------- -------- --------- -------- -------- ----------- Income before income taxes 64,562 (325) (9,121) 3,908 5,192 64,216 Income taxes (8,200) 109 -- (1,264) 855 (d) (8,500) ----------- -------- --------- -------- -------- ----------- Net income (loss) 56,362 (216) (9,121) 2,644 6,047 55,716 Less dividends on preferred stock (12,672) -- -- -- (152)(e) (12,824) ----------- -------- --------- -------- -------- ----------- Net income (loss) attributable to common shares $ 43,690 $ (216) $ (9,121) $ 2,644 $ 5,895 $ 42,892 =========== ======== ========= ======== ======== =========== Earnings per common share: - Primary $ 0.77 $ 0.66 - Fully diluted $ 0.77 $ 0.66 Shares used to calculate earnings per common share: - Primary 56,869 64,733 - Fully diluted 56,979 64,843
NOTE: This Pro Forma Combined Income Statement, which gives effect to the acquisition of the Owatonna Companies and the proposed acquisitions of Stokely and AFF by Chiquita, includes pro forma adjustments to reflect: (a) Amortization of goodwill totaling $.2 million arising from the acquisitions on a straight-line basis over 40 years. (b) Transaction costs for professional services incurred by the acquired companies totaling $1.9 million. (c) Reductions of interest expense of: - $.6 million due to the assumed repayment of all AFF debt with cash; - $2.9 million due to the assumed repayment of $32.1 million of Stokely long-term debt with approximately 2.1 million shares of Chiquita Common Stock; and - $1.1 million due to the assumed reduction of Stokely working capital loans payable to an average balance of $25 million using cash. Interest income is reduced by $1.1 million to reflect the use of cash equivalents for these debt repayments. (d) 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. (e) Dividends on Chiquita Series C Preference Stock issued in connection with the acquisition of the Owatonna Companies. 10 11 This 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 the future results of the combined companies. 11 12 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: November 20, 1997 CHIQUITA BRANDS INTERNATIONAL, INC. By: /s/ William A. Tsacalis ----------------------------------- William A. Tsacalis Vice President and Controller 12 EX-23.1 2 EXHIBIT 23.1 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the following Registration Statements and related prospectuses of Chiquita Brands International, Inc. of our report dated June 19, 1997 (October 10, 1997 as to Note L) appearing in the Annual Report on Form 10-K/A of Stokely USA, Inc. for the year ended March 31, 1997 and incorporated by reference in this Current Report on Form 8-K dated November 20, 1997. Registration Form No. Description - ------------------------------------------------------------------------------- S-3 33-58424 Dividend Reinvestment Plan S-3 33-41057 Common Stock issuable upon conversion of Convertible Subordinated Debentures S-3 333-00789 Debt Securities, Preferred Stock, Preference Stock, Depositary Shares, Common Stock and Securities Warrants S-3 333-37187 Common Stock to be sold in a secondary offering S-8 33-2241 Chiquita Savings and Investment Plan 33-16801 33-42733 33-56572 333-39671 S-8 33-14254 1986 Stock Option and Incentive Plan 33-38284 33-41069 33-53993 S-8 33-25950 Individual Stock Option Plan S-8 33-38147 Associate Stock Purchase Plan /s/Deloitte & Touche, LLP Milwaukee, Wisconsin November 20, 1997 -----END PRIVACY-ENHANCED MESSAGE-----