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): April 22, 1998
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
<PAGE>
INFORMATION TO BE INCLUDED IN THE REPORT
Items 1, 2, 3, 4, 6, 8 and 9 are not applicable and are omitted
from this Report.
Item 5. Other Events.
The Company is making this filing in order to incorporate the
information contained herein by reference into certain of the
Company's Registration Statements under the Securities Act of
1933, including Registration Statements on Form S-3 No. 333-46373
and No. 333-51497. Reference is made to the Company s April 22,
1998 News Release attached as Exhibit 99.1 reporting results of
operations for the first quarter and the attached interim
financial statements of Stokely USA, Inc. and pro forma financial
information as of December 31, 1997.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired. Page No.
Stokely USA, Inc.
Consolidated Condensed Balance Sheets (unaudited)
at December 31, 1997 and 1996 and March 31, 1997
4-5
Consolidated Condensed Statements of Operations
(unaudited) for the three and nine months ended
December 31, 1997 and 1996 6-7
Consolidated Condensed Statements of Cash Flows
(unaudited) for the nine months ended December 31,
1997 and 1996 8
Notes to Consolidated Condensed Financial Statements
(unaudited) 9-10
(b) Pro Forma Financial Information.
Chiquita Brands International, Inc.
Pro Forma Combined Balance Sheet (unaudited) as of
December 31, 1997 12-13
Pro Forma Combined Income Statement (unaudited)
for the year ended December 31, 1997 14-15
(c) Exhibits
99.1 News Release of the Company issued April 22,1998.
<PAGE>
<PAGE>
STOKELY USA, INC.
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1997
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
STOKELY USA, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in thousands)
December 31, December 31, March 31,
1997 1996 1997
(unaudited) (unaudited) (note)
------------- ------------- -------------
<S> <C> <C> <C>
ASSETS
- --------------
CURRENT ASSETS:
Cash and cash equivalents $ 784 $ 1,430 $ 1,660
Accounts receivable, less allowance for
losses of $862, $508 and $508, respectively 11,523 13,596 10,634
Inventories: Finished goods 65,944 86,721 68,861
Manufacturing supplies 2,866 3,176 4,924
Prepaid expenses 522 825 728
Property held for disposition 132 4,846 537
----------- ---------- ----------
Total current assets 81,771 110,594 87,344
OTHER ASSETS:
Property held for disposition 448 1,495 1,022
Other assets 1,459 2,231 1,907
---------- ---------- ----------
Total other assets 1,907 3,726 2,929
PROPERTY, PLANT & EQUIPMENT, at cost 74,552 71,987 73,112
Less accumulated depreciation 36,196 32,070 32,643
---------- ---------- ----------
38,356 39,917 40,469
---------- ---------- ----------
TOTAL ASSETS $122,034 $154,237 $ 130,742
========== ========== ==========
</TABLE>
See accompanying notes to consolidated condensed financial
statements (unaudited).
Note: The balance sheet at March 31, 1997 has been condensed from
the audited financial statements at that
date.
<PAGE>
<TABLE>
<CAPTION>
STOKELY USA, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(Dollars in thousands)
December 31, December 31, March 31,
1997 1996 1997
(unaudited) (unaudited) (note)
------------- ------------- -------------
<S> <C> <C> <C>
LIABILITIES & STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $ 42,142 $ 19,533 $ 15,551
Accounts payable 28,711 32,465 29,311
Long-term debt due within one year 9,616 5,650 2,584
Other current liabilities 4,319 2,975 3,466
------------ ------------ ------------
Total current liabilities 84,788 60,623 50,912
LONG-TERM DEBT, less current maturities 34,982 77,871 68,041
OTHER LIABILITIES 2,856 4,525 2,982
STOCKHOLDERS' EQUITY:
Capital stock 572 572 572
Additional paid-in capital 43,508 43,596 43,593
Accumulated deficit (44,384) (32,555) (34,993)
Cumulative translation adjustments (17) (15) 8
Treasury stock at cost (271) (380) (373)
----------- ----------- -----------
Total stockholders' equity (592) 11,218 8,807
----------- ----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $122,034 $154,237 $130,742
=========== =========== ===========
</TABLE>
See accompanying notes to consolidated condensed financial
statements (unaudited).
Note: The balance sheet at March 31, 1997 has been condensed from
the audited financial statements at that date.
<PAGE>
<TABLE>
<CAPTION>
STOKELY USA, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands except per share amounts)
(unaudited)
Three Months Ended
December 31,
1997 1996
------------- -------------
<S> <C> <C>
REVENUES:
- -------------
Net sales $ 48,212 $ 55,342
Other -- 13
------------ ------------
Total revenues 48,212 55,355
COST AND EXPENSES:
- -------------------
Cost of products sold 39,724 44,147
Selling, general & administrative expenses 8,441 7,555
Interest 2,582 2,963
Merger expenses 175 --
------------ ------------
Total cost and expenses 50,922 54,665
------------ ------------
INCOME (LOSS) BEFORE INCOME TAX (2,710) 690
INCOME TAXES -- --
------------ ------------
NET INCOME (LOSS) $ (2,710) $ 690
============ ============
NET INCOME (LOSS) PER COMMON SHARE $ (.24) $ .06
============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING 11,390,871 11,372,570
============ ============
</TABLE>
See accompanying notes to consolidated condensed financial
statements (unaudited).
<PAGE>
STOKELY USA, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Dollars in thousands except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
December 31,
1997 1996
------------ -------------
<S> <C> <C>
REVENUES:
- ------------
Net sales $ 122,221 $ 149,315
Other 3 74
------------- --------------
Total revenues 122,224 149,389
COST AND EXPENSES:
- -----------------------
Cost of products sold 101,365 124,757
Selling, general & administrative expenses 22,138 22,014
Nonrecurring charges -- 12,929
Interest 7,340 8,174
Merger expenses 773 --
------------- -------------
Total cost and expenses 131,616 167,874
------------- -------------
LOSS BEFORE INCOME TAX (9,392) (18,485)
INCOME TAXES -- --
------------- -------------
NET LOSS $ (9,392) $ (18,485)
============= =============
NET LOSS PER COMMON SHARE $ (.82) $ (1.63)
============= =============
WEIGHTED AVERAGE SHARES OUTSTANDING 11,386,269 11,356,375
============= =============
</TABLE>
See accompanying notes to consolidated condensed financial
statements (unaudited).
<PAGE>
STOKELY USA, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
December 31,
1997 1996
------------- ------------
<S> <C> <C>
Net cash (used in) from operating activities $ (1,240) $ 3,400
Cash flows from investing activities:
Purchase of property, plant and equipment (1,599) (2,023)
Proceeds from disposal of property, plant and equipment 1,456 9,394
Decrease in other assets - net 301 21
------------- ------------
Net cash provided by investing activities 158 7,392
------------- ------------
Cash flows from financing activities:
Change in notes payable 1,091 2,146
Payments of long-term debt (527) (11,359)
Payment of deferred debt issuance costs (375) (1,077)
Capital stock transactions - net 17 151
------------- ------------
Net cash provided by (used in) financing activities 206 (10,139)
------------- ------------
Increase (decrease) in cash and cash equivalents (876) 653
Cash and cash equivalents at beginning of period 1,660 777
------------- ------------
Cash and cash equivalents at end of period $ 784 $ 1,430
============= ============
</TABLE>
See accompanying notes to consolidated condensed financial
statements (unaudited).
<PAGE>
STOKELY USA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(unaudited)
1. In the opinion of management, the accompanying unaudited
consolidated condensed financial statements contain all normal
and recurring adjustments necessary to present fairly Stokely
USA, Inc.'s ("Stokely's") consolidated condensed balance sheets
as of December 31, 1997 and 1996 and March 31, 1997, the
consolidated condensed statements of operations for the three and
nine month periods ended December 31, 1997 and 1996, and the
consolidated condensed statements of cash flows for the nine
month periods then ended.
The results of operations for the three and nine months ended
December 31, 1997 are not necessarily indicative of the results
to be expected for the full year. For interim reporting
purposes, certain expenses are based on estimates rather than
expenses actually incurred. The unaudited interim consolidated
condensed financial statements should be read in conjunction with
the consolidated financial statements and notes thereto for the
fiscal year ended March 31, 1997, included in Stokely's Form 10-K
(as amended) filed with the Securities and Exchange Commission.
The accounting policies followed by Stokely are described in Note
A of the financial statements of Stokely's Form 10-K (as amended)
for the year ended March 31, 1997. Certain amounts have been
reclassified to conform to the current year presentation.
2. Supplemental cash flow disclosures: Cash payments for
interest were $4,996,000 and $7,733,000 for the nine months ended
December 31, 1997 and 1996, respectively. Net payments of income
taxes were $46,000 and $29,000 for the nine months ended December
31, 1997 and 1996, respectively.
3. A nonrecurring charge of $13,529,000 (of which $600,000
relating to inventory write-downs was included in cost of
products sold) was recognized during the nine months ended
December 31, 1996 as discussed in Stokely's Annual Report on Form
10-K (as amended) for the fiscal year ended March 31, 1997.
Reserves utilized during the three months ended December 31, 1997
are as follows (in thousands):
<PAGE>
<TABLE>
<CAPTION>
Balance at Reserves Balance at
September 30, 1997 Utilized December 31, 1997
------------------- ------------ ---------------------
<S> <C> <C> <C>
Property, plant and equipment
write-downs $6,955 $622 $6,333
Severance costs 216 105 111
Inventory write-downs 48 -- 48
Other costs 154 40 114
------------ ------------ -------------
Total $7,373 $767 $6,606
============ ============ ==============
</TABLE>
4. On January 16, 1998 Stokely was acquired by Chiquita Brands
International, Inc. ("Chiquita") pursuant to an Agreement and
Plan of Reorganization dated as of September 17, 1997 among
Chiquita, Chiquita Acquisition Corp. and Stokely. The merger
price was $1.00 per share of Stokely common stock, paid entirely
in shares of Chiquita capital stock ("Common Stock") valued at
$15.03 per share, the average of the closing market prices of
Chiquita Common Stock for the 15 trading days immediately
preceding the merger. This resulted in a payment of
approximately .0665 of a share of Chiquita Common Stock per
Stokely share, or an aggregate of 757,918 shares of Chiquita
Common Stock issued to the Stokely shareholders. Chiquita also
issued 2,208,615 shares of Common Stock to certain holders of an
aggregate of approximately $33.2 million of Stokely long-term
debt and paid $18.0 million of cash to reduce Stokely's
borrowings under its revolving credit facility. Additionally, in
connection with the merger, certain Stokely suppliers forgave
$1.0 million of amounts owed to them.
Expenses incurred related to the merger totaled $773,000 through
December 31, 1997, and consisted primarily of legal, consulting
and financial advisor fees. There were also approximately $1.4
million of expenses which were expensed and paid at the time of
the merger, the majority of which related to fees payable to
Stokely's financial advisor.
Prior to the merger, Stokely was in violation of certain
covenants applicable to its Senior Notes due January 2000 (which
constituted an event of default) and most of its Industrial
Development Revenue Bonds. The Senior Noteholders and the
holders of certain Industrial Development Revenue Bonds exchanged
their outstanding debt for shares of Chiquita Common Stock at the
time of the merger and, as a result of transactions in connection
with the merger, the remaining Industrial Development Revenue
Bonds are no longer in default.
<PAGE>
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 Stokely based on
the assumptions described in the accompanying notes. These
financial statements have been prepared from the historical
consolidated financial statements of Chiquita (which, for
purposes of the unaudited pro forma combined income statement,
have been adjusted to reflect the acquisitions by Chiquita of
Owatonna Canning Company, Olivia Canning Company, Midwest Foods,
Inc. and Goodhue Canning Company (collectively, the "Owatonna
Companies") and American Fine Foods, Inc. ("AFF") assuming these
acquisitions had occurred on January 1, 1997) and Stokely. This
pro forma information is not necessarily indicative of actual or
future operating results or financial position that would have
occurred had each of the acquisitions been consummated on January
1, 1997.
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, and AFF, which was
acquired in December 1997) and Stokely at December 31, 1997 and
has been prepared to reflect the acquisition of Stokely assuming
it had occurred on December 31, 1997. The unaudited pro forma
combined income statement for the year ended December 31, 1997
gives effect to all the acquisitions (including the acquisition
of Stokely) as if they had occurred on January 1, 1997. Each
transaction was accounted for as a purchase.
These unaudited pro forma combined financial statements
should be read in conjunction with the historical financial
statements and notes thereto of: Chiquita, which are
incorporated by reference in its Annual Report on Form 10-K for
the year ended December 31, 1997; Owatonna Canning Company
included in Chiquita's Current Report on Form 8-K dated September
15, 1997; AFF included in Chiquita's Current Report on Form 8-K
dated December 8, 1997 (as amended on February 3, 1998); and
Stokely included in Chiquita's Current Report on Form 8-K dated
November 20, 1997 and included herein.
<PAGE>
Chiquita Brands International, Inc.
Pro Forma Combined Balance Sheet (unaudited)
December 31, 1997
(in thousands)
<TABLE>
<CAPTION>
Chiquita
(including
Owatonna Pro Forma Pro Forma
and AFF) Stokely Adjustments Combined
Assets ------------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
Current assets
Cash and equivalents $ 125,702 $ 784 $ (19,000) (a) $ 107,486
Trade receivables, net 184,913 11,523 (200) (b) 196,236
Other receivables, net 87,301 -- -- 87,301
Inventories 349,948 68,810 (500) (b) 418,258
Other current assets 35,602 654 -- 36,256
----------- ------------ ----------- -----------
Total current assets 783,466 81,771 (19,700) 845,537
Property, plant and equipment, net 1,151,396 38,356 (10,200) (c) 1,179,552
Investments and other assets 301,173 1,907 -- 303,080
Intangibles, net 165,578 -- 31,583 (d) 197,161
----------- ----------- ----------- -----------
Total assets $ 2,401,613 $ 122,034 $ 1,683 $ 2,525,330
============ ============ ============ ============
Liabilities and Shareholders' Equity
Current liabilities
Notes and loans payable $ 59,659 $ 42,142 $ (19,000) (a) $ 82,801
Long-term debt due within one year 92,905 9,616 (5,400) (a) 97,121
Accounts payable 205,323 28,711 (1,000) (e) 233,034
Accrued liabilities 125,231 4,319 7,200 (f) (g) 136,750
----------- ----------- ----------- -----------
Total current liabilities 483,118 84,788 (18,200) 549,706
Long-term debt of parent company 689,080 -- -- 689,080
Long-term debt of subsidiaries 272,892 34,982 (27,800) (a) 280,074
Accrued pension and other
employee benefits 86,676 2,856 (800) (h) 88,732
Other liabilities 89,761 -- 3,300 (f) 93,061
----------- ----------- ----------- -----------
Total liabilities 1,621,527 122,626 (43,500) 1,700,653
----------- ----------- ----------- -----------
Shareholders' Equity
Preferred stock 253,239 -- -- 253,239
Capital stock 20,389 572 417 (a)(i)(j) 21,378
Capital surplus 672,944 43,508 94 (a)(i)(j) 716,546
Other shareholders' equity -- (288) 288 (j) --
Accumulated deficit (166,486) (44,384) 44,384 (j) (166,486)
----------- ----------- ----------- -----------
Total shareholders' equity 780,086 (592) 45,183 824,677
----------- ----------- ----------- -----------
Total liabilities and
shareholders' equity $ 2,401,613 $ 122,034 $ 1,683 $ 2,525,330
=========== =========== =========== ===========
<PAGE>
</TABLE>
NOTE: This Pro Forma Combined Balance Sheet, which gives effect
to the acquisition by Chiquita of Stokely, includes pro forma
adjustments to reflect:
(a) Assumed repayment of $33.2 million of Stokely long-term debt
with approximately 2.2 million shares of Chiquita Common
Stock, and assumed reduction of Stokely working capital
loans payable to $23 million using cash.
(b) The adjustment of Stokely's receivables and inventory to
estimated fair value.
(c) The adjustment to record at estimated net realizable value
that property, plant and equipment at Stokely plants which
will be closed.
(d) The excess of acquisition cost over the fair value of net
assets acquired.
(e) Forgiveness of $1 million of payables by Stokely suppliers
in conjunction with the acquisition.
(f) The adjustment to record at estimated fair value those
liabilities assumed, primarily for compensation and
severance benefits of employees to be terminated.
(g) Transaction fees associated with acquisition of $1.1
million.
(h) The adjustment of the accumulated postretirement benefit
liabilities.
(i) Issuance of $11.4 million (.8 million shares) of Chiquita
Common Stock in exchange for 100% of the equity of Stokely.
(j) Elimination of the shareholders' equity accounts of Stokely.
This Pro Forma Combined Balance Sheet is based on a preliminary
allocation of purchase price to the net assets acquired.
Furthermore, it is not necessarily indicative of the actual or
future financial position that occurred or will occur upon
consummation of and subsequent to the acquisitions of the
Owatonna Companies, AFF and Stokely.
<PAGE>
Chiquita Brands International, Inc.
Pro Forma Combined Income Statement (unaudited)
Year Ended December 31, 1997
(in thousands, except per share data)
<TABLE>
<CAPTION>
Owatonna
Companies AFF
through through Pro Forma
Chiquita 9/24/97 12/8/97 Adjustments
------------ ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net sales $2,433,726 $ 44,714 $ 70,808 $ --
------------ ---------- ---------- ---------
Operating expenses
Cost of sales 1,935,870 26,830 58,807 --
Selling, general and
administrative 311,568 17,255 5,624 (2,100) (a)(b)
Depreciation 86,122 2,171 1,441 (170) (c)
------------ ---------- ---------- ---------
Operating income
(loss) 100,166 (1,542) 4,936 2,270
Interest income 16,540 330 6 (770) (d)
Interest expense (108,913) (177) (1,006) 1,010 (d)
Other income, net 750 164 83 --
------------ ---------- ---------- ---------
Income before
income taxes 8,543 (1,225) 4,019 2,510
Income taxes (8,200) 424 (1,388) 664 (e)
------------ ---------- ---------- ---------
Net income (loss) 343 (801) 2,631 3,174
Less dividends on
preferred stock (16,949) -- -- (210)(f)
------------ ---------- ---------- ---------
Net income (loss)
attributable to
common shares $ (16,606) $ (801) $ 2,631 $ 2,964
============ ========== ========== ==========
Earnings per common
share
- Basic $(.29)
- Diluted $(.29)
Shares used to
calculate earnings
per common share:
- Basic 57,025
- Diluted 57,025
<CAPTION>
<PAGE>
Pro Forma Pro Forma
Subtotal Stokely Adjustments Combined
------------ ---------- ---------- ------------
<S> <C> <C> <C> <C>
Net Sales $2,549,248 $157,775 $ -- $2,707,023
------------ ---------- ---------- ------------
Operating expenses
Cost of sales 2,021,507 125,950 -- 2,147,457
Selling, general and
administrative 332,347 28,875 90 (A)(B) 361,312
Depreciation 89,564 4,865 (1,300)(C) 93,129
------------ ---------- ---------- ------------
Operating income (loss) 105,830 (1,915) 1,210 105,125
Interest income 16,106 -- (920)(D) 15,186
Interest expense (109,086) (9,916) 5,480 (D) (113,522)
Other income, net 997 -- -- 997
------------ ---------- ---------- ------------
Income before income taxs 13,847 (11,831) 5,770 7,786
Income taxes (8,500) -- -- (8,500)
------------ ---------- ---------- ------------
Net income (loss) 5,347 (11,831) 5,770 (714)
Less dividends on preferred
stock (17,159) -- -- (17,159)
------------ ---------- ---------- ------------
Net income (loss) attributable
to common shares $ (11,812) $(11,831) $5,770 $(17,873)
=========== =========== ========= ============
Earnings per
common share
- Basic $(.28)
- Diluted $(.28)
Shares used to
calculate earnings
per common share:
- Basic 63,875
- Diluted 63,875
</TABLE>
NOTE: This Pro Forma Combined Income Statement gives effect to
the acquisitions of the Owatonna Companies and AFF and the
January 1998 acquisition of Stokely by Chiquita.
<PAGE>
For the Owatonna Companies and AFF acquisitions, pro forma
adjustments have been made to reflect:
(a) Amortization of goodwill ($.3 million) arising from the
acquisitions on a straight-line basis over 40 years.
<PAGE>
(b) Elimination of transaction costs for professional services
incurred by the acquired companies totaling $2.4 million.
(c) Reductions of depreciation due to recording at estimated net
realizable value the property, plant and equipment at plants
which will be closed.
(d) Reductions of interest expense of $1.0 million due to the
assumed repayment of all AFF debt with cash. Interest income is
reduced by $.8 million to reflect the use of cash equivalents for
these debt repayments.
(e) Elimination of tax expense of the Owatonna Companies and
federal tax expense of AFF as a result of including these
companies in the Chiquita consolidated tax returns.
(f) Dividends on Chiquita Series C Preference Stock issued in
connection with the acquisition of the Owatonna Companies.
For the Stokely acquisition, pro forma adjustments have been made
to reflect:
(A) Amortization of goodwill ($.9 million) arising from the
acquisition on a straight-line basis over 40 years.
(B) Elimination of transaction costs for professional services
incurred by Stokely totaling $.8 million.
(C) Reductions of depreciation due to recording at estimated net
realizable value the property, plant and equipment at plants
which will be closed.
(D) Reductions of interest expense of $3.8 million due to the
assumed repayment of $33.2 million of Stokely long-term debt with
approximately 2.1 million shares of Chiquita Common Stock and
$1.7 million due to the assumed reduction of Stokely working
capital loans payable to an average balance of $23 million using
cash. Interest income is reduced by $.9 million to reflect the
use of cash equivalents for these working capital loan
repayments.
The 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 future results of the combined
companies.
<PAGE>
<PAGE>
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: May 4, 1998 CHIQUITA BRANDS INTERNATIONAL, INC.
By: /s/ William A. Tsacalis
William A. Tsacalis
Vice President and Controller
<PAGE>
Exhibit 99.1
FOR IMMEDIATE RELEASE
CHIQUITA ANNOUNCES FIRST QUARTER RESULTS
AND DECLARES QUARTERLY DIVIDENDS
CINCINNATI, OHIO, April 22, 1998 -- Chiquita Brands
International, Inc. today reported first quarter 1998 diluted
earnings per share of $.52 which was in line with the consensus
of Wall Street analyst estimates. Diluted earnings per share for
the 1997 first quarter was $.60 per share. Net income for the
first quarter ended March 31, 1998 was $41 million compared to
net income of $43 million for the first quarter of 1997. Net
sales for the quarter increased by $86 million to $717 million in
1998 primarily from the expansion of Chiquita's vegetable canning
operations through acquisitions completed in late 1997 and early
1998.
First quarter North America banana prices were lower than in 1997
on higher industry volume. Subsequent pricing has been higher
than last year. The growth in industry volume slowed as the
quarter progressed as exports from Ecuador and Colombia began to
decline due to ongoing El Nino climatic conditions.
In Europe, despite the continued adverse effect of a stronger
dollar, the Company achieved dollar price realizations comparable
to the prior year on higher European currency banana pricing.
The Company indicated that after a strike lasting almost 60 days
at its western Panama division during the term of a valid labor
contract, the workers unilaterally returned to work last week
without having settled remaining issues. As a result of the
strike, production from the division was interrupted and the
first quarter 1998 results included unrecovered fixed costs from
this division. The Company is evaluating the extent to which the
division will be able to return to production before the end of
the year. Otherwise, the Company achieved improved utilization
of production and transportation capacity on increased worldwide
banana volume during the quarter.
The Company also noted that operating results of its Diversified
Food Group improved during the quarter. Chiquita's consolidated
operating income for the first quarter of 1998 was $70 million,
approximately $2 million less than for 1997.
Separately, the Company declared quarterly cash dividends of $.05
per share on its common stock, $.7188 per share on its Series A
Preferred Stock and $.9375 per share on its Series B Preferred
Stock. Each dividend is payable as of June 7, 1998 to
shareholders of record at the close of business on May 21, 1998.
Chiquita is a leading international marketer, producer and
<PAGE>
distributor of bananas and other quality fresh and processed food
products.
This press release contains certain statements that may be deemed
to be "forward-looking statements" within the meaning of the
Private Securities Litigation Act of 1995. All statements, other
than statements of historical facts, included in this press
release that address events, developments or financial results
that Chiquita expects, believes or estimates will or may occur in
the future are forward-looking statements. These statements are
based on certain assumptions and analyses made by the Company in
light of its experience and perception of historical trends,
current conditions, expected future developments and other
factors it believes are appropriate under the circumstances.
Such 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, access to
capital, actions of governmental bodies and other market and
competitive conditions, many of which are beyond the control of
Chiquita. Readers are cautioned that any such statements are not
guarantees of future performance and that actual results or
developments may differ materially from the expectations
expressed in the forward-looking statements.
FOR FURTHER INFORMATION, PLEASE CONTACT:
Joseph W. Hagin (513) 784-8866
<PAGE>
PRELIMINARY
CHIQUITA BRANDS INTERNATIONAL, INC.
CONSOLIDATED INCOME STATEMENT
FOR THE QUARTER ENDED MARCH 31, 1998 AND 1997
(In millions, except per share amounts)
<TABLE>
<CAPTION>
Quarter Ended March 31,
1998 1997
--------- ---------
<S> <C> <C>
Net sales $717.2 $ 631.4
--------- ---------
Operating costs and expenses:
Cost of sales 540.6 464.0
Selling, general and administrative 83.6 74.4
Depreciation 23.2 21.6
--------- ---------
647.4 560.0
--------- ---------
Operating income 69.8 71.4
Interest income 3.1 4.4
Interest expense (28.0) (28.5)
Other income, net .2 .3
--------- ---------
Income before income taxes 45.1 47.6
Income taxes (4.0) (4.3)
--------- ---------
Net income $ 41.1 $ 43.3
========= =========
Diluted earnings per share $ 0.52 $ 0.60
========= =========
Shares used to calculate diluted
earnings per share 79.7 72.2
========= =========
</TABLE>
Quarterly results are subject to significant seasonal variations
and are not necessarily indicative of the results of operations
for a full fiscal year.
1998 includes sales, costs and shares issued in connection with
the acquisition of canning businesses.
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