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, 1995 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) 784-8011
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, 1995, there were 50,238,878 shares of Common Stock
outstanding.
Page 1 of 12 Pages
CHIQUITA BRANDS INTERNATIONAL, INC.
TABLE OF CONTENTS
Page
PART I - Financial Information
Consolidated Statement of Income for the quarters
ended March 31, 1995 and 1994 . . . . . .3
Consolidated Balance Sheet as of
March 31, 1995, December 31, 1994 and
March 31, 1994. . . . . . . . . . . . .4-5
Consolidated Statement of Cash Flow for the quarters
ended March 31, 1995 and 1994 . . . . . .6
Notes to Consolidated Financial Statements .7
Management's Analysis of Operations and
Financial Condition . . . . . . . . . . .8
PART II - Other Information
Item 1 - Legal Proceedings . . . . . . . . .9
Item 6 - Exhibits and Reports on Form 8-K. .9
Signature. . . . . . . . . . . . . . . . . . . 10
<PAGE>
Part I - Financial Information
CHIQUITA BRANDS INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF INCOME
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended March 31,
1995 1994
<S> <C> <C>
Net sales $1,028,363 $1,056,247
Operating expenses
Cost of sales 821,251 840,956
Selling, general and
administrative 100,152 104,879
Depreciation 26,533 28,427
947,936 974,262
Operating income 80,427 81,985
Interest income 6,808 5,170
Interest expense (41,728) (44,270)
Other income, net 421 649
Income before income taxes 45,928 43,534
Income taxes (8,300) (8,000)
Income before extraordinary item 37,628 35,534
Extraordinary loss from
prepayment of debt -- (22,840)
Net income $37,628 $12,694
Weighted average number of
common shares
outstanding (see Exhibit 11) 53,482 53,176
Earnings (loss) per common share:
Primary -Income before
extraordinary item $ .66 $ .65
-Extraordinary loss -- (.43)
-Net income $ .66 $ .22
Fully diluted-Income before
extraordinary item $ .62 $ .62
-Extraordinary loss -- (.40)
-Net income $ .62 $ .22
Cash dividends declared per
common share $.05 $ .05
</TABLE>
See Notes to Consolidated Financial Statements.
CHIQUITA BRANDS INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
March 31,December 31,March 31,
1995 1994 1994
<S> <C> <C> <C>
Current assets
Cash and equivalents $125,079 $178,855 $211,618
Trade receivables, less
allowances of $15,872,
$14,149 and $13,213,
respectively 309,812 257,777 314,785
Other receivables, net 75,007 95,948 97,286
Inventories 362,760 351,730 346,371
Other current assets 36,322 33,932 39,832
Total current
assets 908,980 918,242 1,009,892
Restricted cash 77,530 75,030 51,020
Property, plant and
equipment, net 1,407,674 1,433,858 1,494,106
Investments and
other assets 326,989 309,721 306,968
Intangibles, net 163,239 165,170 171,702
$2,884,412 $2,902,021 $3,033,688
</TABLE>
See Notes to Consolidated Financial Statements.
CHIQUITA BRANDS INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET (continued)
(In thousands, except share amounts)
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
March 31,December 31,March 31,
1995 1994 1994
<S> <C> <C> <C>
Current liabilities
Notes and loans
payable $134,032 $130,163 $135,921
Long-term debt due
within one year 76,121 91,032 84,959
Accounts payable 267,072 270,033 263,498
Accrued liabilities 129,890 162,589 137,667
Total current
liabilities 607,115 653,817 622,045
Long-term debt of
parent company 840,508 840,377 840,006
Long-term debt of
subsidiaries 515,438 524,500 566,186
Accrued pension and
other employee
benefits 122,099 120,325 130,241
Other liabilities 116,452 118,193 141,787
Total liabilities 2,201,612 2,257,212 2,300,265
Shareholders' equity
Preferred and
preference stock 190,639 190,639 190,639
Capital stock, $.33
par value (50,232,496,
49,300,881 and
48,641,321 shares
outstanding,
respectively) 16,745 16,434 16,214
Capital surplus 511,478 505,800 495,985
Retained earnings
(deficit) (20,938) (52,940) 48,514
Minimum pension
liability adjustment (15,124) (15,124) (17,929)
Total shareholders'
equity 682,800 644,809 733,423
$2,884,412 $2,902,021 $3,033,688
</TABLE>
See Notes to Consolidated Financial Statements.
CHIQUITA BRANDS INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF CASH FLOW
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended March 31,
1995 1994
<S> <C> <C>
Cash provided (used) by:
Operations
Income before
extraordinary item $37,628 $35,534
Depreciation and
amortization 28,025 30,279
Changes in current
assets and
liabilities (87,959) (87,275)
Other (1,915) 1,032
Cash flow from operations (24,221) (20,430)
Investing
Capital expenditures (17,109) (48,755)
Restricted cash deposits (2,500) --
Proceeds from sale
of containers 6,830 --
Proceeds from sales
of businesses 5,378 52,700
Other 1,698 (3,643)
Cash flow from investing (5,703) 302
Financing
Debt transactions
Issuances of long-term debt 8,006 206,822
Repayments of long-term debt (35,758) (261,188)
Increase (decrease) in notes
and loans payable 8,090 (1,774)
Stock transactions
Issuance of preferred stock -- 138,369
Issuances of capital stock 370 723
Dividends (4,560) (2,432)
Cash flow from financing (23,852) 80,520
Increase (decrease) in cash
and equivalents (53,776) 60,392
Balance at beginning of period 178,855 151,226
Balance at end of period $125,079 $211,618
</TABLE>
See Notes to Consolidated Financial Statements.
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, 1994 for additional information relating to the
Company's financial statements.
Inventories consisted of the following (in thousands):
<TABLE>
<CAPTION>
March 31,December 31,March 31,
1995 1994 1994
<S> <C> <C> <C>
Bananas and other
fresh produce $50,546 $47,592 $48,791
Meat 46,624 35,165 38,657
Other food products 53,228 63,565 38,067
Growing crops 115,395 115,177 119,685
Materials and supplies 81,218 76,078 86,672
Other 15,749 14,153 14,499
$362,760 $351,730 $346,371
</TABLE>
In the first quarter of 1994, the Company sold $175 million principal
amount of 9-1/8% Senior Notes due 2004 and 2,875,000 shares of $2.875
Non-Voting Cumulative Preferred Stock, Series A. Most of the net proceeds
from the offerings were used to prepay higher rate subordinated debentures.
These prepayments resulted in an extraordinary loss of $22.8 million.
In accordance with its long-standing policy to periodically hedge
transactions denominated in foreign currencies, at March 31, 1995, the
Company had foreign exchange forward contracts to ensure conversion of
approximately $223 million of foreign sales commitments for the remainder
of 1995 at an average exchange rate of 1.53 Deutsche marks per dollar. The
fair value of these contracts, based on quoted market prices, was
approximately $26 million at March 31, 1995. The Company also had foreign
currency put options to ensure conversion of approximately $170 million of
foreign sales through the first half of 1996 at an average exchange rate of
1.48 Deutsche marks per dollar. The fair value of these options, based on
quoted market prices, was not significant at March 31, 1995.
CHIQUITA BRANDS INTERNATIONAL, INC.
MANAGEMENT'S ANALYSIS OF
OPERATIONS AND FINANCIAL CONDITION
OPERATIONS
Net sales for the quarter ended March 31, 1995 decreased 2.6% from the
same quarter last year primarily as a result of the sale of the Company's
specialty meat operations during the prior year's first quarter.
Operating income for the quarter was $80.4 million in 1995 and $82.0
million in 1994 with lower earnings from the sale of bananas partially offset
by improved earnings from other food products within the Chiquita
operations segment. The effect of higher banana operating costs, including
the impact of reduced Honduran production which has now returned to
normal, and higher paper prices, was partially offset by the benefit of a
weaker dollar in relation to European currencies. Although improved, results
for the Company's Meat Division held for sale were not significant in either
the 1995 or 1994 first quarter.
Net interest expense for the quarter decreased from the prior year as a
result of debt refinancing and reduction activities since the beginning of
1994.
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 $54 million during the first quarter of 1995 due
primarily to funding seasonal increases in working capital and net repayments
of debt of $20 million. Cash used for capital expenditures of $17 million
was partially offset by $12 million of proceeds from the sales of container
equipment and the Company's New Zealand fresh produce distribution
business during the quarter.
During the second quarter of 1995, the Company refinanced
approximately $175 million of loans secured by ships. These refinancings
have provided the Company with approximately $30 million of cash proceeds
and, by extending the loan maturities, have reduced amounts due within one
year of March 31, 1995 by approximately $17 million.
<PAGE>
Part II - Other Information
Item 1 - Legal Proceedings
Reference is made to Part I, Item I - "Business-Meat Division Held
for Sale-Labor relations" in the Company's 1994 10-K and Note 2 to the
Company's Consolidated Financial Statements included in the Company's
1994 Annual Report to Shareholders and the discussion of the case
concerning medical benefits for retired hourly employees. In May 1995,
the United Food and Commercial Workers Union, on behalf of retired
workers affected by the termination of medical benefits, filed a petition
for certiorari in the United States Supreme Court requesting a review of
lower court decisions. Morrell has filed its brief opposing further
review.
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibit 11 - Computation of Earnings Per
Common Share. . . . . . . . . . . Pages 11-12
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, 1995.
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 15, 1995
Exhibit 11
CHIQUITA BRANDS INTERNATIONAL, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended March 31,
1995 1994
<S> <C> <C>
A. Primary earnings per common share
Income before
extraordinary item $37,628 $35,534
Dividends on Series A
Preferred Stock (2,066) (1,033)
Income available to
common shares before
extraordinary item 35,562 34,501
Extraordinary loss from
prepayment of debt -- (22,840)
Net income used to
calculate primary
earnings per share $35,562 $11,661
Shares used in calculation
of per share data:
Weighted average common
and equivalent Series C
preference shares
outstanding 53,045 51,806
Less restricted
common shares (390) --
Dilutive effect of assumed
exercise of certain
stock options and warrants 827 1,370
Weighted average common
shares used to calculate
primary earnings (loss)
per share 53,482 53,176
Primary earnings (loss)
per common share:
-Before extraordinary item $ .66 $ .65
-Extraordinary item -- .(43)
-Net income $ .66 $ .22
</TABLE>
Exhibit 11 (continued)
CHIQUITA BRANDS INTERNATIONAL, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
(In thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended March 31,
1995 1994
<S> <C> <C>
B. Fully diluted earnings per common share
Income available to common shares
before extraordinary item $35,562 $34,501
Add back dividends as a result of
assumed conversion of Series A
preferred stock 2,066 1,033
Income used to calculate fully
diluted earnings per share
before extraordinary item 37,628 35,534
Extraordinary loss from
prepayment of debt -- (22,840)
Net income used to
calculate fully diluted
earnings per share $37,628 $12,694
Shares used in calculation
of per share data:
Weighted average common
shares used to calculate
primary earnings (loss)
per share 53,482 53,176
Additional shares resulting
from assumed exercise of
options and assumed conversions
of Series A Preferred Stock and
convertible subordinated
debentures 7,580 4,125
Additional restricted
common shares 21 --
Weighted average common
shares used to calculate
fully diluted earnings
(loss) per share 61,083 57,301
Fully diluted earnings (loss) per common share:
- Before extraordinary item $ .62 $ .62
- Extraordinary loss -- (.40)
- Net income $ .62 $ .22
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains summary financial information extracted from the Chiquita
Brands International, Inc. Form 10-Q for the quarterly period ended March 31,
1995 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 125,079
<SECURITIES> 0
<RECEIVABLES> 325,684
<ALLOWANCES> 15,872
<INVENTORY> 362,760
<CURRENT-ASSETS> 908,980
<PP&E> 2,063,013
<DEPRECIATION> 655,339
<TOTAL-ASSETS> 2,884,412
<CURRENT-LIABILITIES> 607,115
<BONDS> 1,355,946
<COMMON> 16,745
0
190,639
<OTHER-SE> 475,416
<TOTAL-LIABILITY-AND-EQUITY> 2,884,412
<SALES> 1,028,363
<TOTAL-REVENUES> 1,028,363
<CGS> 821,251
<TOTAL-COSTS> 821,251
<OTHER-EXPENSES> 26,533
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 41,728
<INCOME-PRETAX> 45,928
<INCOME-TAX> 8,300
<INCOME-CONTINUING> 37,628
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 37,628
<EPS-PRIMARY> .66
<EPS-DILUTED> .62
</TABLE>
