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Previous: UNITED BANCORP /OR/, 10-Q, 1996-05-15 |
Next: UNITED COMPANIES LIFE INSURANCE CO, 10-Q, 1996-05-15 |
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, 1996 Number 1-1550
CHIQUITA BRANDS INTERNATIONAL, INC.
Incorporated under the IRS Employer I.D.
Laws of New Jersey No. 04-1923360
250 East Fifth Street, Cincinnati, Ohio 45202
(513) 784-8000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. YES X NO
As of May 1, 1996, there were 55,268,227 shares of Common Stock
outstanding.
Page 1 of 12 Pages<PAGE>
CHIQUITA BRANDS INTERNATIONAL, INC.
TABLE OF CONTENTS
Page
PART I - Financial Information
Consolidated Statement of Income for the quarters
ended March 31, 1996 and 1995 . . . . . . . . . . 3
Consolidated Balance Sheet as of March 31, 1996,
December 31, 1995 and March 31, 1995 . . . . . . 4
Consolidated Statement of Cash Flow for the quarters
ended March 31, 1996 and 1995 . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . 6
Management's Analysis of Operations and
Financial Condition . . . . . . . . . . . . . . . 7
PART II - Other Information
Item 6 - Exhibits and Reports on Form 8-K . . . . . . 8
Signature . . . . . . . . . . . . . . . . . . . . . . . . 9<PAGE>
Part I - Financial Information
<TABLE>
<CAPTION>
CHIQUITA BRANDS INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
(In thousands, except per share amounts)
Quarter Ended March 31,
1996 1995
<S> <C> <C>
Net sales $ 624,806 $ 674,269
---------- ----------
Operating expenses
Cost of sales 471,999 495,995
Selling, general and administrative 73,235 77,403
Depreciation 21,711 24,651
---------- ----------
566,945 598,049
---------- ----------
Operating income 57,861 76,220
Interest income 7,340 6,670
Interest expense (35,167) (41,417)
Other income, net 194 426
---------- ----------
Income from continuing operations before income taxes 30,228 41,899
Income taxes (6,000) (8,300)
---------- ----------
Income from continuing operations 24,228 33,599
Discontinued operations -- 4,029
---------- ----------
Net income $ 24,228 $ 37,628
========== ==========
Weighted average number of common
shares outstanding (see Exhibit 11) 55,919 53,482
========== ==========
Earnings per common share:
Primary - Continuing operations $ .40 $ .59
- Discontinued operations -- .07
---------- ----------
- Net income $ .40 $ .66
========== ==========
Fully diluted - Continuing operations $ .38 $ .55
- Discontinued operations -- .07
---------- ----------
- Net income $ .38 $ .62
========== ==========
Dividends per common share $ .05 $ .05
========== ==========
</TABLE> See Notes to Consolidated Financial Statements.<PAGE>
<TABLE>
<CAPTION>
CHIQUITA BRANDS INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET (Unaudited)
(In thousands, except share amounts)
March 31, 1996 December 31, 1995 March 31, 1995
<S> <C> <C> <C>
ASSETS
Current assets
Cash and equivalents $ 211,945 $ 236,675 $ 125,079
Marketable securities 31,734 34,743 --
Trade receivables (less allowances
of $11,075, $11,310 and $14,565) 216,317 184,364 238,581
Other receivables, net 94,017 89,848 71,254
Inventories 277,141 293,379 305,622
Other current assets 36,919 37,827 36,081
---------- ---------- ----------
Total current assets 868,073 876,836 776,617
Restricted cash 39,520 39,520 77,530
Net assets of discontinued operations -- -- 54,753
Property, plant and equipment, net 1,163,123 1,182,144 1,359,234
Investments and other assets 357,321 356,805 319,239
Intangibles, net 166,941 168,228 157,191
---------- --------- ----------
Total assets $ 2,594,978 $ 2,623,533 $ 2,744,564
========== ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes and loans payable $ 107,370 $ 119,456 $ 123,973
Long-term debt due within one year 49,876 52,877 76,100
Accounts payable 208,881 206,717 225,008
Accrued liabilities 101,875 130,893 93,441
---------- ---------- ----------
Total current liabilities 468,002 509,943 518,522
Long-term debt of parent company 841,072 840,925 840,508
Long-term debt of subsidiaries 394,667 401,121 515,402
Accrued pension and other employee benefits 85,935 85,514 73,067
Other liabilities 109,769 113,823 114,265
---------- ---------- ---------
Total liabilities 1,899,445 1,951,326 2,061,764
---------- ---------- ---------
Shareholders' equity
Preferred and preference stock 138,369 138,369 190,639
Capital stock, $.33 par value (55,234,823
54,769,140 and 50,232,496 shares) 18,412 18,256 16,745
Capital surplus 584,786 581,019 511,478
Accumulated deficit (46,034) (65,437) (20,938)
Minimum pension liability adjustment -- -- (15,124)
---------- ---------- ----------
Total shareholders' equity 695,533 672,207 682,800
---------- ---------- ----------
Total liabilities and shareholders'
equity $ 2,594,978 $ 2,623,533 $ 2,744,564
========== ========== ==========
</TABLE> See Notes to Consolidated Financial Statements.<PAGE>
<TABLE>
<CAPTION>
CHIQUITA BRANDS INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF CASH FLOW (Unaudited)
(In thousands)
Quarter Ended March 31,
1996 1995
<S> <C> <C>
Cash provided (used) by:
Operations
Income from continuing operations $ 24,228 $ 33,599
Depreciation and amortization 23,145 26,149
Write-down of Costa Rican banana
producing assets 8,900 --
Changes in current assets and liabilities (46,792) (55,187)
Other (5,458) (5,253)
---------- ----------
Cash flow from operations 4,023 (692)
---------- ----------
Investing
Capital expenditures (12,255) (15,506)
Restricted cash deposits -- (2,500)
Proceeds from sales of transportation assets
and other divestitures -- 12,208
Other 4,699 3,821
---------- ----------
Cash flow from investing (7,556) (1,977)
---------- ----------
Financing
Debt transactions
Issuances of long-term debt 4,758 8,020
Repayments of long-term debt (13,488) (35,753)
Decrease in notes and loans payable (9,234) (1,846)
Stock transactions
Issuances of capital stock 1,592 370
Dividends (4,825) (4,560)
---------- ----------
Cash flow from financing (21,197) (33,769)
Discontinued operations -- (4,006)
---------- ----------
Decrease in cash and equivalents (24,730) (40,444)
Balance at beginning of period 236,675 165,523
--------- ----------
Balance at end of period $ 211,945 $ 125,079
========= ==========
</TABLE>
See Notes to Consolidated Financial Statements.<PAGE>
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, 1995 for additional
information relating to the Company's financial statements.
In December 1995, the Company's remaining meat operations were
sold to Smithfield Foods, Inc. As a result, the Meat Division is
accounted for as a discontinued operation in 1995.
Inventories consist of the following (in thousands):
<TABLE>
<CAPTION>
March 31, December 31, March 31,
1996 1995 1995
----------- ------------ ------------
<S> <C> <C> <C>
Bananas and other fresh produce $ 42,810 $ 39,920 $ 47,113
Other food products 47,139 64,528 55,338
Growing crops 120,080 120,178 115,395
Materials and supplies 56,650 56,925 72,021
Other 10,462 11,828 15,755
----------- ------------- ------------
$ 277,141 $ 293,379 $ 305,622
=========== ============= ============
</TABLE>
In accordance with its long-standing policy to periodically
hedge transactions denominated in foreign currencies, at March
31, 1996, the Company had option contracts which ensure
conversion through 1996 of approximately $290 million of foreign
sales at a rate not higher than 1.45 Deutsche marks per dollar or
lower than 1.34 Deutsche marks per dollar. The carrying value of
these option contracts, and their fair value based on quoted
market prices, were not significant at March 31, 1996.<PAGE>
CHIQUITA BRANDS INTERNATIONAL, INC.
MANAGEMENT'S ANALYSIS OF
OPERATIONS AND FINANCIAL CONDITION
OPERATIONS
Net sales for the quarter ended March 31, 1996 decreased 7%
from the prior year primarily as a result of the sale of the
Costa Rican operations of the Company's Numar edible oils group
and other non-core operations in 1995.
Income from continuing operations before income taxes was $30
million in the first quarter of 1996 compared to $42 million in
1995. The 1996 amount includes write-downs and costs of $12
million resulting from damage to the Company's banana producing
assets caused by industry-wide flooding in Costa Rica during the
first quarter. The elimination of earnings from Numar and other
divested operations was offset by reduced net interest expense
resulting from sales of non-core assets as well as the Company's
refinancing and deleveraging program.
Banana operating results, excluding the flood-related charges,
were comparable to the prior year. The effect of lower banana
prices in the European Union ("EU") and higher costs caused by
the banana Framework Agreement, which was not fully implemented
until the second quarter of 1995, was offset by benefits from the
Company's overall cost reduction program. The lower EU pricing
resulted primarily from the carryover into early 1996 of the
overissuance of special import licenses to European-based banana
companies under the pretext of relief for hurricane damage
sustained in the Caribbean in 1995.
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 $25 million during the first quarter of 1996
due primarily to $47 million of seasonal increases in working
capital and $18 million of net repayments of debt which offset
free cash flow generated from operations during the quarter. As
a result of sales of non-core assets and related debt reductions,
net debt (total debt less cash and securities) has decreased by
$244 million since March 31, 1995 to approximately $1.1 billion
at March 31, 1996.
In February 1996, the Company filed a shelf registration
statement for the issuance of up to $500 million of debt and
equity securities which was declared effective by the Securities
and Exchange Commission in May. The registration statement
provides that, unless otherwise stated in a prospectus
supplement, proceeds from future issuances of securities will be
used to repay outstanding debt of the Company and its
subsidiaries and for general corporate purposes.<PAGE>
Part II - Other Information
Item 6 - Exhibits and Reports on Form 8-K
Page
Numbers
(a) Exhibit 11 - Computation of Earnings
Per Common Share . . . . . . . . . . . . . . . . . .10-11
Exhibit 12 - Computation of Ratio of
Earnings to Fixed Charges and Ratio of Earnings
to Combined Fixed Charges and Preferred Stock
Dividends . . . . . . . . . . . . . . . . . . . . . 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) The following reports on Form 8-K were filed by the
Company during the quarter ended March 31, 1996:
February 7, 1996 - to file the Company's Consolidated
Financial Statements for the year ended December 31, 1994
and unaudited Consolidated Financial Statements for the
nine months ended September 30, 1995, restated to
deconsolidate the discontinued Meat Division operations
which were sold to Smithfield Foods, Inc. on December 20,
1995.
February 26, 1996 - to report the Company's announcement
of results of operations for the year ended December 31,
1995.<PAGE>
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 14, 1996PAGE
<PAGE>
Exhibit 11
<TABLE>
<CAPTION>
CHIQUITA BRANDS INTERNATIONAL, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE (Unaudited)
(In thousands, except per share amounts)
Quarter Ended
March 31,
-----------------------
1996 1995
---------- ----------
<S> <C> <C>
A. Primary earnings per common share
-------------------------------------
Income from continuing operations $ 24,228 $ 33,599
Dividends on Series A Preferred Stock (2,066) (2,066)
Income from continuing operations ---------- ----------
attributable to common shares 22,162 31,533
Discontinued operations -- 4,029
---------- ----------
Net income attributable to common shares $ 22,162 $ 35,562
========== ==========
Shares used in calculation of per share data:
Weighted average common and equivalent
Series C preference shares outstanding 55,089 53,045
Less restricted common shares (310) (390)
Dilutive effect of assumed exercise of
stock options and warrants 1,140 827
---------- ----------
55,919 53,482
========== ==========
Primary earnings per common share:
Continuing operations $ .40 $ .59
Discontinued operations -- .07
---------- ----------
Net income $ .40 $ .66
========== ==========
/TABLE
<PAGE>
Exhibit 11 (continued)
<TABLE>
<CAPTION>
CHIQUITA BRANDS INTERNATIONAL, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE (Unaudited)
(In thousands, except per share amounts)
Quarter Ended
March 31,
------------------------
1996 1995
---------- ----------
<S> <C> <C>
B. Fully diluted earnings per common share
-------------------------------------------
Income from continuing operations $ 24,228 $ 33,599
Discontinued operations -- 4,029
---------- ----------
Net income $ 24,228 $ 37,628
========== ==========
Shares used to calculate fully diluted earnings
per common share:
Weighted average common and equivalent
Series C preference shares outstanding 55,089 53,045
Less restricted common shares (289) (369)
Dilutive effect of assumed conversion of Series A
Preferred Stock 7,566 7,566
Dilutive effect of assumed exercise of stock
options and warrants 1,463 841
---------- ----------
63,829 61,083
========== ==========
Fully diluted earnings per common share:
Continuing operations $ .38 $ .55
Discontinued operations -- .07
---------- ----------
Net income $ .38 $ .62
========== ==========
/TABLE><PAGE
<PAGE>
Exhibit 12
CHIQUITA BRANDS INTERNATIONAL, INC.
<TABLE>
<CAPTION>
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS (Unaudited)
(In thousands, except ratio amounts)
Quarter Ended
March 31,
-------------------------
1996 1995
---------- ----------
<S> <C> <C>
Earnings:
Income from continuing operations
before income taxes $ 30,228 $ 41,899
Interest expense 35,167 41,417
Portion of rentals representing interest cost 8,406 12,301
Amortization of capitalized interest 974 1,025
Undistributed share of income of less-than-
fifty percent owned investees (208) (513)
---------- ----------
$ 74,567 $ 96,129
========== ==========
Fixed charges:
Interest expense $ 35,167 $ 41,417
Capitalized interest 59 200
Portion of rentals representing interest cost 8,406 12,301
---------- ----------
$ 43,632 $ 53,918
========== ==========
Ratio of earnings to fixed charges 1.71 1.78
========== ==========
Earnings $ 74,567 $ 96,129
========== ==========
Fixed charges $ 43,632 $ 53,918
Preferred stock dividends 2,066 3,136
---------- ----------
$ 45,698 $ 57,054
========== ==========
Ratio of earnings to combined fixed
charges and preferred stock dividends 1.63 1.68
---------- ----------
/TABLE
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Chiquita
Brands International, Inc. Form 10-Q for the three months ended March 31, 1996
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-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 211,945
<SECURITIES> 31,734
<RECEIVABLES> 227,392
<ALLOWANCES> 11,075
<INVENTORY> 277,141
<CURRENT-ASSETS> 868,073
<PP&E> 1,692,627
<DEPRECIATION> 529,504
<TOTAL-ASSETS> 2,594,978
<CURRENT-LIABILITIES> 468,002
<BONDS> 1,235,739
0
138,369
<COMMON> 18,412
<OTHER-SE> 538,752
<TOTAL-LIABILITY-AND-EQUITY> 2,594,978
<SALES> 624,806
<TOTAL-REVENUES> 624,806
<CGS> 471,999
<TOTAL-COSTS> 471,999
<OTHER-EXPENSES> 21,711
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 35,167
<INCOME-PRETAX> 30,228
<INCOME-TAX> 6,000
<INCOME-CONTINUING> 24,228
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 24,228
<EPS-PRIMARY> .40
<EPS-DILUTED> .38
</TABLE>
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