Chiquita Brands International, Inc : Chiquita Reports Third Quarter 2012 Results
(Thomson Reuters ONE) -
CHIQUITA REPORTS THIRD QUARTER 2012 RESULTS
* Third quarter comparable loss of ($0.47) per diluted share; GAAP loss of
($1.45) per diluted share
* Reaffirms previously announced strategy to focus on core Banana and Salad
businesses; Restructuring nearly complete
CHARLOTTE, N.C. - November 7, 2012 - Chiquita Brands (NYSE: CQB) today released
financial and operating results for the third quarter of 2012. The Company
reported GAAP net loss of $67 million on net sales of $714 million and
comparable net loss([1]) of $22 million. For the same period in 2011, the
company reported GAAP net loss of $29 million on net sales of $723 million and
comparable net loss of $16 million. The 2012 third quarter GAAP net loss
includes, among other items, $16 million ($12 million net of tax) in charges
related to previously announced restructuring activities, $28 million in
impairment and related charges for the company's investment in the Danone
Chiquita Fruits SAS ("Danone JV") and $6 million ($4 million net of tax) in
charges related to the company's headquarters relocation. The 2011 third
quarter GAAP net loss includes, among other items, $11 million of refinancing
costs.
"Chiquita's third quarter results exceeded our internal expectations. While it
was a challenging quarter, we made progress in positioning the company for
future growth by becoming more competitive in our core banana and salads
businesses," said Edward F. Lonergan, Chiquita's newly appointed president and
chief executive officer. "Although certain fundamentals suggest that supply and
demand in bananas is becoming balanced and prices are rising, we face difficult
pricing comparisons to 2011, particularly with respect to the impact of euro
exchange rates, which, by itself, negatively impacted year over year income
comparisons by $10 million for the third quarter. In salads, our retail volume
reductions as compared to the year ago periods have narrowed since the beginning
of the year, and we believe that our entry into private label and additional
salad products will further improve our results in 2013."
Lonergan added, "Chiquita made some difficult but necessary decisions this year
prior to my arrival. Focusing on the core businesses of bananas and salads is
the correct strategy for the company at this time. I am committed to the
strategy and believe these decisions will benefit stakeholders in the long run.
We continue to believe the long term operating income margin targets we
presented earlier this year are achievable in the next 24 to 36 months, and we
are already seeing improved results from the new strategy. We have seen
important customer wins in both bananas and salads, and most of the
restructuring activities are already complete."
_______________
[1]Comparable basis amounts exclude certain items described below under "Non-
GAAP Measurements and items affecting comparability."
2012 THIRD QUARTER SUMMARY
The following table shows adjustments and reconciling items made to "Net income
(loss)" and "Diluted earnings (loss) per share" between comparable and GAAP
results. See "Non-GAAP Measurements and items affecting comparability" below for
descriptions of items excluded on a comparable basis, including descriptions of
how these items affect the results of reportable segments.
Net Income Diluted earnings
(loss) (loss) per share[2]
--------------------------------------
(in millions, except per share amounts) 2012 2011 2012 2011
Reported results (GAAP) $ (67) $ (29) $ (1.45) $ (0.63)
Danone JV investment impairment 28 - 0.60 -
Restructuring, net of tax 12 - 0.25 -
Headquarters relocation, net of tax 4 - 0.09 -
Incremental non-cash interest expense 2 2 0.05 0.05
Recovery of previously reserved Grower
receivables (1) - (0.01) -
Refinancing costs - 11 - 0.24
--------------------------------------
Comparable results (Non-GAAP) $ (22) $ (16) $ (0.47) $ (0.35)
--------------------------------------
Columns may not total due to rounding.
[2]Shares used for diluted EPS calculation are on an as-reported basis.
Net Sales and Results: Quarterly sales decreased 1 percent year-on-year to
$714 million, primarily due to lower pricing in bananas and the decrease in the
euro from an average of $1.42/euro for the third quarter of 2011 to an average
of $1.25/euro for the third quarter of 2012. Comparable net income for the
quarter decreased due to lower revenue and higher sourcing and logistics costs,
partially offset by manufacturing improvements in salads that reduced quality
costs compared to 2011, and by lowering corporate and marketing expenses.
Cash, Debt and Liquidity: Cash flow from operations was $0 million for the
third quarter 2012 compared to cash used by operations of $29 million for the
third quarter 2011. At September 30, 2012, cash and equivalents were $37
million. Under its revolving credit facility, the company had $20 million in
borrowings and had $109 million of availability. As of September 30, 2012, the
company was in compliance with the covenants of its credit facility and expects
to remain in compliance for at least 12 months.
Bananas: Net sales decreased 2 percent to $446 million. For 2012, lower net
sales were the result of lower base contract pricing in North America and lower
U.S. dollar equivalent pricing in Europe because of lower average exchange
rates. Local pricing in Europe increased 8%. Logistics costs were higher in
2012 than the comparable period in 2011 in part because of bunker fuel hedging
gains that were accelerated into the third quarter of 2011 as a result of the
reconfiguration of Chiquita's global shipping operations. The savings from the
shipping reconfiguration partially offset the higher fuel costs, net of hedging.
As a result, comparable operating loss was $2 million for the third quarter of
2012, compared to comparable operating income of $7 million for the third
quarter of 2011.
Salads and Healthy Snacks: Net sales remained consistent year-on-year at
approximately $240 million as foodservice and healthy snack sales offset lower
volumes of retail value-added salads. Comparable operating income was $1
million for the third quarter of 2012, versus a $3 million loss in 2011.
OUTLOOK
There are many trends that, if they continue, should benefit Chiquita for the
balance of 2012 and into 2013.
* There are opportunities to increase volumes in bananas and salads. Recent
banana contract wins will result in high single digit percentage volume
growth in bananas in North America in 2013 and some of that volume has
already started benefiting results in the fourth quarter. In addition, the
company will meaningfully expand its retail salad volume with private label
contract volume starting early 2013.
* The tightening of banana supply out of Latin America is likely to continue
and should support pricing as demand in the markets appears to be balanced
with supply.
* The financial benefits of our restructuring will be fully realized in 2013.
The annual savings are expected to be at least $60 million, some of which
will be offset by increasing costs in our core businesses. Much of the
restructuring is complete, and, as such, in the fourth quarter Chiquita
expects to recognize at least $8 million of savings from these activities.
* The consolidation of the Midwest facilities near Chicago will be completed
and the company will begin to see operating cost savings from this project
toward the end of 2013.
* In 2012 the euro experienced volatility and significant weakness, which
depressed our European results. The euro has strengthened and at these
levels will benefit 2013 results.
Chiquita will continue to face difficult year over year comparisons in the
fourth quarter because of lower euro exchange rates and higher fuel costs, net
of hedging. We expect banana volume in North America and Europe to end the year
relatively flat, and salad volumes to be down 5% as compared to 2011 levels for
the full year.
These expectations do not include any unforeseen weather, event risks or major
currency fluctuations.
Management's estimates of certain financial items are as follows:
+-------------------------------+--------+-+-------+-+-------+---+-------+
|(in $ millions) |FY 2012 | |Q3 2012| |Q2 2012| |Q1 2012|
| |Estimate| |Actual | |Actual | |Actual |
+-------------------------------+--------+-+-------+-+-------+---+-------+
|Capital Expenditures | 55-65 | | 13 | | 11 | | 12 |
+-------------------------------+--------+-+-------+-+-------+---+-------+
|Depreciation & Amortization | 60-65 | | 16 | | 15 | | 16 |
+-------------------------------+--------+-+-------+-+-------+---+-------+
|Gross Interest Expense [1] | 45-50 | | 12 | | 10 | | 11 |
+-------------------------------+--------+-+-------+-+-------+---+-------+
|Net Interest Expense [1] | 40-45 | | 12 | | 9 | | 10 |
+-------------------------------+--------+-+-------+-+-------+---+-------+
[1] Interest expense includes the impact of accounting standards that add non-
cash interest expense of $2 million each quarter for a total of $10 million for
the full year.
CONFERENCE CALL
Chiquita will hold a conference call for investors to discuss its results at
4:30 p.m. EST today. Access to a live audio webcast is available at
http://investors.chiquita.com. Toll-free telephone access will be available by
dialing 1-877-874-1569 in the United States and +719-325-4785 from international
locations and providing the conference code 3914213. To access the telephone
replay, dial 1-888-203-1112 from the United States and +719-457-0820 from
international locations and enter the confirmation code 3914213.
CONTACTS:
Steve Himes, 980-636-5636, shimes(at)chiquita.com, (Investors and Analysts)
Tiffany Breaux, 980-636-5029, tbreaux(at)chiquita.com, (Media)
NON-GAAP MEASUREMENTS AND ITEMS AFFECTING COMPARABILITY
The company reports its financial results in accordance with generally accepted
accounting principles in the United States of America (U.S. GAAP). To provide
investors with additional information regarding the company's results, more
meaningful year-on-year comparisons of the company's core financial performance,
and measures that management uses to evaluate the company's performance against
internal budgets and targets, the company reports certain non-GAAP measures as
defined by the Securities and Exchange Commission. Our press release uses non-
GAAP measures of comparable net income (loss), comparable diluted earnings
(loss) per share, comparable operating income, and comparable operating margin
by segment. Non-GAAP financial measures should be considered in addition to,
and not instead of, U.S. GAAP financial measures, and may differ from non-GAAP
measures that other companies use. The adjustments between the U.S. GAAP and
non-GAAP financial measures listed below are excluded from comparable income
because they are unusual and/or infrequent in nature and are consistent with the
company's internal reporting and measurement of financial performance.
* Valuation Allowance Release: During the second quarter 2011, the company
determined it is more likely than not that it will realize its deferred tax
assets, and accordingly, it recognized an income tax benefit representing
the reversal of $87 million of valuation allowances against 100 percent of
the U.S. federal deferred tax assets and a portion of the state deferred tax
assets, primarily net operating loss carry forwards. Income taxes are not
included in the results of reportable segments.
* Reserve for (Recovery of) Grower Advances: The second quarter of 2011
includes a $32 million reserve for the expected remaining carrying value of
advances made to a Chilean grower. In the third quarter and nine months
ended September 30, 2012, the company recovered $0.7 million and $1.4
million, respectively, of these advances to the Chilean grower through the
bankruptcy process and continues to seek additional recoveries. The reserve
and the recovery are excluded from comparable income of the Other Produce
segment.
* Italian Tax Settlement: In the second quarter 2011, the company settled, or
was in the process of settling, several years of Italian income tax claims
at an incremental cost of $6 million, which was significantly below the
amounts originally claimed by the tax authorities. Income taxes are not
included in the results of reportable segments.
* Refinancing costs: In July 2011 the company recognized $11 million related
to the company's debt refinancing costs, which are included in Other Expense
in our consolidated income statement. Refinancing costs are not included in
the results of reportable segments.
* Danone JV investment impairment: In the third quarter of 2012, the company
recognized $28 million to fully impair its 49% equity-method investment and
to record probable funding obligations to the Danone JV, which are excluded
from comparable results of the Salads and Healthy Snacks segment. The
Company's obligations to fund the Danone JV are limited to an aggregate ?14
million ($18 million) without unanimous consent of the owners.
* Restructuring: In August 2012, Chiquita announced a company restructuring
supporting the goal of increasing profitability in its core businesses,
resulting in at least $60 million of annual savings. In the third quarter of
2012 the company recognized $16 million ($12 million net of tax) of one time
restructuring costs, including $9 million of severance expenses, and expects
to recognize approximately $4 million during the fourth quarter of 2012.
Cash payments related to the restructuring plan are expected to continue
through 2014, primarily related to severance payments to the former Chief
Executive Officer. Restructuring costs are excluded from comparable
reporting of Corporate costs.
* Headquarters relocation: In November 2011, Chiquita announced its plan to
relocate the company's corporate headquarters from Cincinnati, Ohio to
Charlotte, North Carolina. Of the $30 million of one-time costs expected to
be incurred, the company recognized costs of $6 million ($4 million net of
tax) in the third quarter of 2012, and $17 million ($11 million net of tax)
and $4 million of capital expenditures in the nine months ended September
30, 2012. The company expects an additional $3 million of other relocation
costs and capital expenditures to be recognized through 2013. Relocation
costs are excluded from comparable reporting of Corporate costs.
* Shipping reconfiguration: During the third quarter of 2011, the company
initiated a reconfiguration of its European shipping system which is
expected to provide more than $12 million of annualized cost savings, net of
transition costs that include expected losses on subleased vessels removed
from service in 2011 and 2012. Comparable operating income of the Banana
segment excludes a charge of $6 million in the first quarter of 2012 and $4
million in the fourth quarter of 2011 for net losses expected on certain
ship sublease contracts. These sublease losses will not recur in 2013 since
the primary leases for vessels expiring in 2012 will not be renewed.
* Exit activities: In the second quarter of 2012, comparable operating income
of the Salads and Healthy Snacks segment excludes $1 million of expense to
close a research and development facility. During the first quarter of
2012, the company excluded from comparable operating income $4 million ($3
million net of tax) for asset write-offs and severance for discontinued
product items, and other restructuring-related severance. GAAP reporting
included $2 million of these activities in the Salads and Healthy Snacks
segment and $2 million was in the Other Produce segment. In the second
quarter of 2011, the company excluded from comparable operating income $2
million of severance costs to realign its salad overhead costs and to embed
its global innovation and marketing functions into its business units. This
realignment-related expense was allocated to the reportable segments for
GAAP reporting.
* Incremental non-cash interest expense on Convertible Notes: Accounting
standards related to convertible debt instruments increased the amount of
reported GAAP interest expense on the company's $200 million of 4.25%
Convertible Senior Notes. Comparable net income excludes this additional
interest expense because it is non-cash; it was $2 million for each of the
third quarters of 2012 and 2011; $7 million and $6 million in the nine
months ended September 30, 2012 and 2011, respectively. Interest expense is
not included in the results of reportable segments.
ABOUT CHIQUITA BRANDS INTERNATIONAL, INC.
Chiquita Brands International, Inc. (NYSE: CQB) is a leading international
marketer and distributor of nutritious, high-quality fresh and value-added food
products - from energy-rich bananas, blends of convenient green salads, other
fruits to healthy snacking products. The company markets its healthy, fresh
products under the Chiquita® and Fresh Express® premium brands and other related
trademarks. With annual revenues of more than $3 billion, Chiquita employs more
than 21,000 people and has operations in nearly 70 countries worldwide. For
more information, please visit our corporate web site at www.chiquita.com.
FORWARD-LOOKING STATEMENTS
This press release contains certain statements, including in the "2012 Outlook"
section, that are "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are subject to a
number of assumptions, risks and uncertainties, many of which are beyond the
control of Chiquita, including: the customary risks experienced by global food
companies, such as prices for fuel and other commodity inputs, currency
exchange rate fluctuations, industry and competitive conditions (all of which
may be more unpredictable in light of continuing uncertainty in the global
economic environment), government regulations, food safety issues and product
recalls affecting the company or the industry, labor relations, taxes, political
instability and terrorism; challenges in implementing the relocation of the
company's corporate headquarters, and other North American corporate functions,
to Charlotte, North Carolina; challenges in implementing restructuring and
leadership changes announced in August 2012 including the company's ability to
achieve the cost savings and other benefits anticipated from the restructuring;
unusual weather events, conditions or crop risks; our continued ability to
access the capital and credit markets on commercially reasonable terms and
comply with the terms of our credit agreements; and the outcome of pending
litigation and governmental investigations involving the company, as well as the
legal fees and other costs incurred in connection with these items.
Any forward-looking statements made in this press release speak as of the date
made and are not guarantees of future performance. Actual results or
developments may differ materially from the expectations expressed or implied in
the forward-looking statements, and the company undertakes no obligation to
update any such statements. Additional information on factors that could
influence Chiquita's financial results is included in its SEC filings, including
its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K.
# # #
Exhibit A:
CHIQUITA BRANDS INTERNATIONAL, INC.
CONSOLIDATED INCOME STATEMENT
(Unaudited - in millions, except per share amounts)
Quarter Ended Nine Months Ended
September 30, September 30,
-----------------------------------------
2012 2011 2012 2011
-----------------------------------------
Net sales $ 714 $ 723 $ 2,341 $ 2,418
Operating expenses:
Cost of sales 643 640 2,072 2,044
Selling, general and 71 76 208 244
administrative
Depreciation 13 13 39 38
Amortization 2 2 7 7
Equity in loss of investees 29 2 32 5
Reserve for (recovery of) grower - - (1) 33
advances
Relocation and Restructuring costs 22 - 33 -
-----------------------------------------
Operating income (loss) (66) (10) (49) 46
Interest income 1 1 2 3
Interest expense (12) (12) (33) (41)
Other expense - (11) - (11)
-----------------------------------------
Income (loss) before taxes (78) (32) (80) (3)
Income tax benefit 11 4 7 76
-----------------------------------------
Net income (loss) $ (67) $ (29) $ (72) $ 73
-----------------------------------------
Basic earnings per share $ (1.45) $ (0.63) $ (1.57) $ 1.61
Diluted earnings per share $ (1.45) $ (0.63) $ (1.57) $ 1.58
Shares used to calculate basic 46.1 45.6 46.0 45.5
earnings per share
Shares used to calculate diluted 46.1 45.6 46.0 46.3
earnings per share
Columns may not total due to rounding.
Exhibit B:
CHIQUITA BRANDS INTERNATIONAL, INC.
OPERATING STATISTICS - THIRD QUARTER
(Unaudited - in millions, except for percentages and exchange rates)
Quarter ended Percent Nine months Percent
September 30, Change ended Change
September 30,
2012 2011 vs. 2011 2012 2011 vs. 2011
------------------------------ -----------------------------
Net sales by
segment
Bananas $446 $453 (1.6)% $1,499 $1,548 (3.1)%
Salads and 240 240 0.1% 729 731 (0.2)%
Healthy Snacks
Other Produce 28 30 (4.9)% 112 139 (19.2)%
------------------------------ -----------------------------
$714 $723 (1.2)% $2,341 $2,418 (3.2)%
Comparable
operating income
(loss) [1]
Bananas $(2) $7 NM $52 $123 NM
Salads and 1 (3) NM 14 7 NM
Healthy Snacks
Other Produce (4) (2) NM (13) (6) NM
Corporate (12) (13) 6.3% (33) (45) 25.3%
------------------------------ -----------------------------
$(17) ($10) (64.4)% $20 $80 (74.7)%
Comparable
operating margin
by segment
Bananas (0.4)% 1.5% (1.9) pts 3.5% 8.0% (4.5) pts
Salads and 0.3% (1.1)% 1.4 pts 1.9% 1.0% 0.9 pts
Healthy Snacks
Other Produce (14.5)% (5.2)% (9.3) pts (11.2)% (4.1)% (7.1) pts
SG&A as a percent 10.0% 10.5% 0.6 pts 8.9% 10.1% 1.2 pts
of sales
Company banana
sales volume
(40 lb. boxes)
North America 16.3 16.2 0.8% 48.8 48.8 (0.1)%
Core European 8.6 9.4 (8.0)% 29.2 30.4 (3.9)%
markets[2]
Mediterranean & 4.5 3.8 16.5% 13.3 10.3 28.4%
Middle East
Banana Pricing
North America (2.2)% (8.4)%
Core European
markets[2]
U.S. Dollar (3.3)% (6.4)%
Local 8.4% 2.0%
Mediterranean & 15.3% 2.4%
Middle East
Retail value-added
salads
Volume (12-count 11.3 11.8 (3.7)% 35.8 37.9 (5.4)%
cases)
Pricing (3.4)% (1.0)%
Euro average $1.25 $1.42 (11.9)% $1.28 $1.40 (8.6)%
exchange rate,
spot (dollars per
euro)
Euro average $1.24 $1.41 (12.3)% $1.29 $1.39 (7.1)%
exchange rate,
hedged
(dollars per euro)
NM - Not meaningful
Columns may not total due to rounding.
[1] See description of reconciling items between GAAP and comparable basis
figures in this press release under "Non-GAAP measurements and items affecting
comparability."
[2] The company's core European markets include the 27 member states of the
European Union, Switzerland, Norway and Iceland.
Exhibit C:
EUROPEAN CURRENCY
YEAR-ON-YEAR CHANGE - FAVORABLE (UNFAVORABLE)
2012 vs. 2011
(Unaudited - in millions)
Currency Impact (Euro/Dollar) Q1 Q2 Q3 YTD
Revenue $(10) $(25) $(20) $(55)
Local costs 2 6 4 12
Hedging([1]) 6 1 (1) 7
Balance sheet translation([2]) - (8) 7 (2)
--------------------------------
Net European currency impact $(2) $(26) $(10) $(38)
--------------------------------
Columns may not total due to rounding.
[1] Third quarter hedging costs were $1 million versus no material hedging
recognized in the same period of 2011.
[2] Third quarter balance sheet translation was a gain of $2 million in 2012
versus a loss of $4 million in the same period of 2011.
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Chiquita Brands International, Inc via Thomson Reuters ONE
[HUG#1656047]
Unternehmensinformation / Kurzprofil:
Datum: 07.11.2012 - 22:26 Uhr
Sprache: Deutsch
News-ID 200872
Anzahl Zeichen: 31488
contact information:
Town:
Cincinnati
Kategorie:
Business News
Diese Pressemitteilung wurde bisher 105 mal aufgerufen.
Die Pressemitteilung mit dem Titel:
"Chiquita Brands International, Inc : Chiquita Reports Third Quarter 2012 Results"
steht unter der journalistisch-redaktionellen Verantwortung von
Chiquita Brands International, Inc (Nachricht senden)
Beachten Sie bitte die weiteren Informationen zum Haftungsauschluß (gemäß TMG - TeleMedianGesetz) und dem Datenschutz (gemäß der DSGVO).
