<PAGE> 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): December 20, 1995
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) 784-8011
<PAGE> 2
INFORMATION TO BE INCLUDED IN THE REPORT
Items 1, 3, 4, 5, 6 and 8 are not applicable and are omitted from this Report.
Item 2. Acquisition or Disposition of Assets.
On December 20, 1995, the Company completed the sale of its Meat
Division to Smithfield Foods, Inc. ("Smithfield"). The Company sold all of the
outstanding common stock of its wholly owned subsidiary, John Morrell & Co.
("Morrell"), which comprised the Meat Division, to Smithfield for a price of
$58 million, which was determined in arms length negotiation with Smithfield. In
connection with the transaction, Morrell retained all of the liabilities of the
Meat Division. The purchase price consisted of $25 million in cash and a number
of shares of Smithfield common stock having a value of $33 million, based on
$30.157 per share, which represents the average trading price of Smithfield
common stock for the 30 trading days prior to the second day prior to the
closing. On December 20, 1995 the closing price for Smithfield common stock was
$31.75 per share. As a result of the sale, the Company owns 1,094,273 shares
(approximately 6.2%) of Smithfield's outstanding common stock. Morrell is
engaged in the processing and marketing primarily of fresh pork and processed
meat products and operates pork slaughtering and/or processing plants in Sioux
Falls, South Dakota, Sioux City, Iowa, Great Bend, Kansas and other facilities
in Cincinnati, Ohio and Chicago, Illinois.
Reference is made to the condensed consolidated pro forma financial
statements included in Item 7(b), the Stock Purchase Agreement dated December
20, 1995 between Smithfield and the Company, attached as Exhibit 7(c)2.1, and
the Company's December 21, 1995 News Release reporting the sale, attached as
Exhibit 7(c)99.1.
Item 7. Financial Statements and Exhibits.
---------------------------------
(a) Financial Statements of Businesses Acquired.
Not Applicable.
(b) Pro Forma Financial Information.
Chiquita Brands International, Inc. Pro Forma Condensed Consolidated
Financial Statements (Unaudited)
The following unaudited pro forma condensed consolidated statements of
income reflect the Company's continuing results of operations after giving
effect to the deconsolidation of the Meat Division's results of operations.
The following unaudited pro forma condensed consolidated balance sheet assumes
the sale occurred on September 30, 1995.
<PAGE> 3
CHIQUITA BRANDS INTERNATIONAL, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (Unaudited)
Nine Months Ended September 30, 1995
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Pro Forma
As Reported Adjustments Pro Forma
----------- ----------- ---------
<S> <C> <C> <C>
Net sales $3,064,962 $(1,094,169) $1,970,793
---------- ---------- ----------
Operating expenses
Cost of sales 2,494,521 (1,013,306) 1,481,215
Selling, general and
administrative expenses 314,140 (70,351) 243,789
Depreciation 80,249 (6,185) 74,064
---------- ---------- ----------
2,888,910 (1,089,842) 1,799,068
---------- ---------- ----------
Operating income 176,052 (4,327) 171,725
Interest income 22,694 (307) 22,387
Interest expense (125,101) 1,308 (123,793)
Other income, net 1,022 (25) 997
---------- ---------- ----------
Income before income taxes 74,667 (3,351) 71,316
Income taxes (13,900) -- (13,900)
---------- ---------- ----------
Income from continuing operations $ 60,767 $ (3,351) $ 57,416
========== ========== ==========
Weighted average number of common
shares outstanding 53,585 53,585
Income from continuing operations
per common share:
- Primary $ 1.02 $ .96
- Fully diluted $ .99 $ .94
</TABLE>
See Note to Pro Forma Condensed Consolidated Financial Statements
<PAGE> 4
CHIQUITA BRANDS INTERNATIONAL, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (Unaudited)
Year Ended December 31, 1994
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Pro Forma
As Reported Adjustment* Pro Forma
----------- ----------- ---------
<S> <C> <C> <C>
Net sales $3,961,720 $(1,455,894) $2,505,826
----------- ----------- ----------
Operating expenses
Cost of sales 3,293,341 (1,297,162) 1,996,179
Selling, general and
administrative expenses 442,780 (111,282) 331,498
Depreciation 115,816 (8,852) 106,964
----------- ----------- ----------
3,851,937 (1,417,296) 2,434,641
----------- ----------- ----------
Operating income 109,783 (38,598) 71,185
Interest income 22,967 (65) 22,902
Interest expense (169,521) 2,057 (167,464)
Other income (expense), net 1,571 995 2,566
----------- ----------- ----------
Loss before income taxes (35,200) (35,611) (70,811)
Income taxes (13,500) -- (13,500)
----------- ----------- ----------
Loss from continuing operations $ (48,700) $ (35,611)* $ (84,311)
=========== =========== ==========
Weighted average number of common
shares outstanding 52,033 52,033
Loss from continuing operations
per common share:
- Primary $ (1.07) $ (1.76)
- Fully diluted $ (1.07) $ (1.76)
</TABLE>
* Pro forma adjustments for 1994 include the elimination of a $10.2 million
nonrecurring gain from the sale of the Meat Division's specialty meat
operations.
See Note to Pro Forma Condensed Consolidated Financial Statements
<PAGE> 5
CHIQUITA BRANDS INTERNATIONAL, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (Unaudited)
Year Ended December 31, 1993
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Pro Forma
As Reported Adjustments Pro Forma
----------- ----------- ---------
<S> <C> <C> <C>
Net sales $4,082,637 $(1,549,712) $2,532,925
----------- ----------- ----------
Operating expenses
Cost of sales 3,412,151 (1,418,599) 1,993,552
Selling, general and administrative expenses 448,685 (115,751) 332,934
Depreciation 111,598 (9,007) 102,591
----------- ----------- ----------
3,972,434 (1,543,357) 2,429,077
----------- ----------- ----------
Operating income 110,203 (6,355) 103,848
Interest income 20,413 (36) 20,377
Interest expense (174,112) 4,323 (169,789)
Other income (expense), net 4,415 2,068 6,483
----------- ----------- ----------
Loss before income taxes (39,081) -- (39,081)
Income taxes (12,000) -- (12,000)
----------- ----------- ----------
Loss from continuing operations $ (51,081) $ -- $ (51,081)
=========== =========== ==========
Weighted average number of common
shares outstanding 51,427 51,427
Loss from continuing operations
per common share:
- Primary $ (.99) $ (.99)
- Fully diluted $ (.99) $ (.99)
</TABLE>
See Note to Pro Forma Condensed Consolidated Financial Statements
<PAGE> 6
CHIQUITA BRANDS INTERNATIONAL, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (Unaudited)
Year Ended December 31, 1992
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Pro Forma
As Reported Adjustments Pro Forma
----------- ----------- ---------
<S> <C> <C> <C>
Net sales $4,468,046 $(1,744,796) $2,723,250
----------- ----------- ----------
Operating expenses
Cost of sales 3,948,429 (1,639,004) 2,309,425
Selling, general and
administrative expenses 486,397 (117,722) 368,675
Depreciation 90,601 (10,163) 80,438
Restructuring and reorganization 96,400 (35,100) 61,300
----------- ----------- ----------
4,621,827 (1,801,989) 2,819,838
----------- ----------- ----------
Operating loss (153,781) 57,193 (96,588)
Interest income 43,356 (55) 43,301
Interest expense (160,285) 5,249 (155,036)
Other income (expense), net (8,330) (55) (8,385)
----------- ----------- ----------
Loss before income taxes (279,040) 62,332 (216,708)
Income taxes (5,000) -- (5,000)
----------- ----------- ----------
Loss from continuing operations $ (284,040) $ 62,332 $ (221,708)
=========== =========== ==========
Weighted average number of common
shares outstanding 51,804 51,804
Loss from continuing operations
per common share:
- Primary $ (5.48) $ (4.28)
- Fully diluted $ (5.48) $ (4.28)
</TABLE>
See Note to Pro Forma Condensed Consolidated Financial Statements
<PAGE> 7
CHIQUITA BRANDS INTERNATIONAL, INC.
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
September 30, 1995
(In thousands, except share amounts)
<TABLE>
<CAPTION>
Pro Forma
As Reported Adjustments Pro Forma
----------- ----------- ---------
<S> <C> <C> <C>
ASSETS
Current Assets
Cash and equivalents $ 223,675 $ 25,000 $ 248,675
Trade receivables, net 278,505 (67,736) 210,769
Other receivables, net 92,006 (6,043) 85,963
Inventories 366,311 (53,828) 312,483
Other current assets 34,568 (710) 33,858
----------- ----------- ---------
Total current assets 995,065 (103,317) 891,748
Restricted cash 69,530 -- 69,530
Property, plant and equipment, net 1,323,872 (55,567) 1,268,305
Investments and other assets 335,286 22,364 357,650
Intangibles, net 160,641 (5,932) 154,709
----------- ----------- -----------
Total assets $2,884,394 $(142,452) $2,741,942
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Notes and loans payable $ 133,596 $ (19,215) $ 114,381
Long-term debt due within one year 66,460 (230) 66,230
Accounts payable 262,217 (41,106) 221,111
Accrued liabilities 171,959 (32,165) 139,794
----------- ----------- -----------
Total current liabilities 634,232 (92,716) 541,516
Long-term debt of parent company 840,783 -- 840,783
Long-term debt of subsidiaries 479,523 (3,627) 475,896
Accrued pension and other
employee benefits 119,334 (45,333) 74,001
Other liabilities 116,153 (776) 115,377
----------- ----------- -----------
Total liabilities 2,190,025 (142,452) 2,047,573
----------- ----------- -----------
Shareholders' equity
Preferred and preference stock 138,369 -- 138,369
Capital stock, $.33 par value
(53,807,078 shares) 17,936 -- 17,936
Other shareholders' equity 538,064 -- 538,064
----------- ----------- -----------
Total shareholders' equity 694,369 0 694,369
----------- ----------- -----------
Total liabilities and
shareholders' equity $2,884,394 ($142,452) $2,741,942
=========== =========== ===========
</TABLE>
See Note to Pro Forma Condensed Consolidated Financial Statements
<PAGE> 8
CHIQUITA BRANDS INTERNATIONAL, INC.
NOTE TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
On December 20, 1995, the Company completed the sale of its Meat Division to
Smithfield Foods, Inc. ("Smithfield") for a price of approximately $60 million,
consisting of $25 million in cash and approximately 1.1 million shares of
Smithfield common stock. The pro forma condensed consolidated financial
statements have been adjusted to reflect 1) the deconsolidation of the Meat
Division, which will be reported as a discontinued operation in the Company's
consolidated financial statements, and 2) the receipt of proceeds from the sale.
No adjustments have been reflected in the financial statements for the assumed
use of proceeds as the Company has not determined how the proceeds will be
utilized.
<PAGE> 9
Item 7. Financial Statements and Exhibits.
---------------------------------
(c) Exhibits.
2.1 *Stock Purchase Agreement dated December 20, 1995 between
Smithfield and the Company, filed as Exhibit 7.1 to Schedule 13D dated December
20, 1995 filed by the Company and certain other persons with respect to
Smithfield common stock.
99.1. News Release of the Company issued December 21, 1995.
- - - ---------------------------------------------
* Incorporated by reference.
<PAGE> 10
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: January 4, 1996 CHIQUITA BRANDS INTERNATIONAL, INC.
By /s/ William A. Tsacalis
-----------------------
William A. Tsacalis
Vice President and Controller
<PAGE> 1
Exhibit 7(c)99.1
CHIQUITA BRANDS INTERNATIONAL
NEWS RELEASE
CHIQUITA COMPLETES SALE OF MEAT DIVISION OPERATIONS
CINCINNATI, OHIO, December 21, 1995 -- Chiquita Brands International,
Inc. (NYSE: CQB) today announced the completion of the sale of its Meat
Division to Smithfield Foods, Inc. (NASDAQ: SFDS). The selling price was $58
million, consisting of $25 million in cash and $33 million of Smithfield common
stock. In addition, Smithfield Foods assumed all of the liabilities of the
Meat Division. As a result of the sale, Chiquita owns approximately 1.1
million shares (6%) of Smithfield's outstanding common stock.
The sale to Smithfield represents the final step in the divestiture of
Chiquita's meat business. Accordingly, the Meat Division will be reported in
Chiquita's 1995 annual results as a discontinued operation, the results of
which will be excluded from Chiquita's continuing operations.
Chiquita stated that the completed sale of the Meat Division, the
recently announced sale of Grupo Numar's Costa Rican operations and other 1995
asset redeployments were part of its previously announced program to improve
shareholder value through ongoing cost reduction in the Company's core business
and divestiture of non-core operations.
Chiquita is a leading international marketer, processor and producer of
quality food products.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Joseph W. Hagin (513) 784-8866
