Chiquita Files Investor Presentation
(Thomson Reuters ONE) -
Highlights Benefits of Revised Transaction Agreement with Fyffes
Announces Strong Preliminary Third Quarter 2014 Results - Company on Track to
Meet 2014 Profit Forecast
CHARLOTTE, N.C., Oct. 14, 2014 (GLOBE NEWSWIRE) -- Chiquita Brands
International, Inc. (NYSE:CQB) ("Chiquita") today filed a presentation with the
U.S. Securities and Exchange Commission ("SEC") that outlines the benefits to
Chiquita shareholders of the revised transaction agreement with Fyffes plc (ESM:
FFY ID: AIM: FFY LN) ("Fyffes") ("the Combination"), and provides preliminary
third quarter, 2014, earnings results.
Highlights of the presentation include:
* Reiteration of how the revised Fyffes transaction is significantly more
favorable to Chiquita shareholders due to the:
* Improved exchange ratio and its impact on the value of the Combination
for Chiquita shareholders:
* Incremental equity value of approximately $150 million based on the
revised ownership level of 59.6%;(i)
* Incremental equity per Chiquita share of approximately $1.75 per
share based on the resulting pro forma share count;(ii) and
* Incremental present value of approximately $2.50 per share based on
the resulting pro forma share count.(ii, iii)
* Increased value of the Fyffes transaction since announcement of the
original transaction:
* Identified an additional $20 million of synergies for a total of at
least $60 million in annualized pre-tax cost synergies by the end of
2016 resulting in a benefit of approximately $1.80 per share; and
* Outperformance of Fyffes' business adding approximately $10
million(iv) (?7.5 million) to combined EBITDA resulting in a benefit
of approximately $0.90 per share.
* Implied pro forma share price(v) of ChiquitaFyffes of $15.59, based upon
the new exchange ratio and incremental EBITDA expectations implying a
significant increase in value relative to the original transaction with
Fyffes, compared to the average trading price of Chiquita of $11.24
between the announcement of the Fyffes transaction and the receipt of
the unsolicited proposal from Cutrale / Safra.
* New present value of future share price range of $15.46 to $20.01 based
on a range of EBITDA growth during 2015 of 5% to 15% and an LTM EBITDA
multiple range of 7.0x to 8.0x.
* Reception of all regulatory approvals and the transaction remaining on
track to close expeditiously.
* Extensive due diligence process demonstrates the open access Chiquita
has provided Cutrale / Safra.
Strong Preliminary Third Quarter 2014 Earnings
Chiquita today also reported preliminary unaudited selected results for the
third quarter 2014 in conjunction with the filing of the investor
presentation. Because the third quarter has only recently ended, the information
that follows is preliminary and based upon information available to the company
as of the date of this press release. The company does not intend to update this
information prior to its regularly scheduled third quarter 2014 earnings
announcement and subsequent filings with the Securities and Exchange Commission.
Third quarter 2014 net sales were approximately $739 million and the company
expects third quarter operating income on a U.S. GAAP basis to be in the range
of $0 - $2 million compared to U.S. GAAP operating income of $1 million in the
third quarter of 2013. The company expects Comparable operating income in the
range of $10 - $12 million and Adjusted EBITDA in the range of $25 - $27
million. This compares to third quarter 2013 net sales of $723 million,
Comparable operating income of $2 million and Adjusted EBITDA of $18 million.
A reconciliation of operating income, a U.S. GAAP measure, to calculate (i)
comparable operating income and (ii) Adjusted EBITDA amounts is included in a
Non-GAAP Financial Measures table below.
(i) Represents an increase in value for Chiquita shareholders based on the
closing price of March 7, 2014 and the revised terms of the new deal calculated
by reference to the undisturbed share price for Fyffes of $1.23 as of March
7, 2014, with EUR converted to USD at an exchange rate of $1.3875 to ?1.000 as
of March 7, 2014, and the undisturbed share price for Chiquita of $10.84 as of
March 7, 2014 and excludes impact of higher synergies and revised, higher EBITDA
guidance for Fyffes. See page 9 of the presentation.
(ii) Implied benefit per share assumes pro forma ChiquitaFyffes diluted shares
outstanding.
(iii )The illustrative analysis of the implied present value of the future
share price of Chiquita is designed to provide an illustrative indication of the
potential present value of a future value of the equity based on the revised
terms of the new deal and as a function of Chiquita or ChiquitaFyffes estimated
future EBITDA, including synergies, and assumed EBITDA trading multiples of
7.0x - 8.0x LTM EBITDA, reflecting historical trading levels for selected fresh
produce companies. The illustrative analysis assumes growth from a base of
estimated combined pro forma EBITDA of $202 million stated as Chiquita's
projected adjusted EBITDA for the fiscal year ending December 31, 2014 of $140
million, being the mid-point of Chiquita's estimated range of $130 to $150
million, with Fyffes estimated 2014 EBITDA stated as $62 million, being the mid-
point of Fyffes projected adjusted EBITA for the fiscal year ending December
31, 2014 as set forth in Fyffes announcement dated August 27, 2014 plus, for
comparability purposes, LTM depreciation of ?7.1 million (converted to US$ at an
exchange rate of $1.3242 to ?1.0000), and assumes run-rate synergies of $60
million per the revised merger benefits statement. See page 11 of the
presentation.
(iv) EUR converted to USD at an exchange rate of $1.3242 to ?1.000.
(v) Implied share price based on Chiquita volume weighted average share price
from March 10, 2014 announcement of proposed combination with Fyffes to Cutrale
/ Safra bid on August 8, 2014 of $11.24, takes account of higher synergies and
revised higher EBITA guidance for Fyffes, capitalized at 7.5x LTM EBITDA (that
multiple representing mid-point of 7.0x - 8.0x LTM EBITDA based on historical
trading levels for selected fresh produce companies) and assumes management
projected fiscal year end 2015 net debt and pro forma ChiquitaFyffes diluted
shares. See page 10 of the presentation.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (UNAUDITED)
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 financial measures
defined as non-GAAP measures by the Securities and Exchange Commission. This
press release uses non-GAAP measures of comparable operating income (loss) and
Adjusted EBITDA. 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 and may not be compared to similar measures disclosed by other
issuers, because not all issuers calculate these measures in the same way. The
adjustments between the U.S. GAAP and non-GAAP financial measures listed below
are excluded from comparable operating income because they are unusual and/or
infrequent in nature and are consistent with the company's internal reporting
and measurement of financial performance.
-------------------------------------------------------------------------------
Unaudited and Preliminary
Quarter Ended Quarter Ended Quarter Ended
September 30, 2014 September 30, 2014 September 30, 2013
---------------------------------------------------------
(in millions) Low High
Operating income
(U.S. GAAP) $ -- $ 2 $ 1
Transaction expenses
[1] 8 8 --
Unrealized foreign
currency hedging loss
[2] -- -- 2
Exit activities and
other matters [3] 2 2 (1)
---------------------------------------------------------
Comparable operating
income (Non-GAAP) 10 12 2
Depreciation and
amortization 15 15 16
---------------------------------------------------------
Adjusted EBITDA (Non-
GAAP) $ 25 $ 27 $ 18
---------------------------------------------------------
-------------------------------------------------------------------------------
[1] Transaction expenses include costs related to the proposed combination with
Fyffes plc and the unsolicited offer from the Cutrale Group and the Safra Group.
[2] Hedge accounting was terminated prospectively in the first quarter of 2013
for certain currency hedges that were transferred to banks participating in the
company's ABL Credit Facility. These unrealized gains and losses were recognized
in "Net sales" for positions originally intended to hedge sales in the second
and third quarters of 2013. Termination of hedge accounting did not change the
economic purpose or effect to reduce uncertainty in the U.S. dollar realization
of euro-denominated sales, but did result in unrealized changes in fair value of
these hedge positions to be recognized prior to settlement. In the quarter ended
September 30, 2013, the company recognized $2 million of losses in Net sales
associated with unrealized changes in the fair value of these option
contracts. These unrealized changes net to zero in the first nine months of
2013 because all of the affected hedge positions had settled by September
30, 2013.
[3] Exit activities and other matters include $2 million of costs related to
restructuring, discontinued, non-core product lines, resizing of products as
part of strategic cost reduction activities and legal matters in the third
quarter of 2014 and recovery of a previously reserved receivable of an exited
business in the third quarter of 2013.
About Chiquita Brands International, Inc.
Chiquita Brands (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 and 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 approximately 20,000
people and has operations in nearly 70 countries worldwide. For more
information, please visit www.chiquita.com.
No Offer or Solicitation
This communication is not intended to and does not constitute an offer to sell
or the solicitation of an offer to subscribe for or buy or an invitation to
purchase or subscribe for any securities or the solicitation of any vote or
approval in any jurisdiction pursuant to the proposed combination of Chiquita
and Fyffes or otherwise, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in contravention of applicable law. No offer of
securities shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as amended.
Important Additional Information Has Been Filed and Will Be Filed with the SEC
Regarding the transaction with Fyffes, ChiquitaFyffes Limited, a private limited
company organized under the laws of Ireland ("ChiquitaFyffes") has filed with
the U.S. Securities and Exchange Commission (the "SEC") a registration statement
on Form S-4 that includes a Proxy Statement that also constitutes a Prospectus
of ChiquitaFyffes. The registration statement was declared effective by the SEC
on July 25, 2014. The Form S-4 also includes the Scheme Circular and Explanatory
Statement required to be sent to Fyffes shareholders for the purpose of seeking
their approval of the combination. Each of Chiquita and Fyffes has completed
mailing to their respective shareholders the definitive Proxy
Statement/Prospectus/Scheme Circular in connection with the proposed combination
of Chiquita and Fyffes and related transactions. ChiquitaFyffes has filed with
the SEC a post-effective amendment to the registration statement on Form S-4
that includes a First Supplement to the Proxy Statement/Prospectus/Scheme
Circular. The post-effective amendment to the registration statement on Form S-
4 was declared effective by the SEC on October 8, 2014. Each of Chiquita and
Fyffes has commenced mailing the First Supplement to the Proxy
Statement/Prospectus/Scheme Circular to each of the Chiquita shareholders that
previously received the Proxy Statement/Prospectus and to each of the Fyffes
shareholders who appears on the register of shareholders as of the date of the
mailing. INVESTORS AND SHAREHOLDERS ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS/SCHEME CIRCULAR (INCLUDING THE SCHEME EXPLANATORY
STATEMENT) , THE FIRST SUPPLEMENT TO THE PROXY STATEMENT/PROSPECTUS/SCHEME
CIRCULAR AND OTHER RELEVANT DOCUMENTS (INCLUDING A SUPPLEMENT TO THE PROXY
STATEMENT/PROSPECTUS/SCHEME CIRCULAR DESCRIBING THE REVISED TERMS FOR THE FYFFES
TRANSACTION) FILED OR TO BE FILED WITH THE SEC CAREFULLY WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT CHIQUITA,
FYFFES, CHIQUITAFYFFES, THE COMBINATION AND RELATED MATTERS. Investors and
security holders are able to obtain free copies of the definitive Proxy
Statement/Prospectus/Scheme Circular (including the Scheme), the First
Supplement to the Proxy Statement/Prospectus/Scheme Circular and other documents
filed with the SEC by ChiquitaFyffes, Chiquita and Fyffes through the website
maintained by the SEC at www.sec.gov. In addition, investors and shareholders
are able to obtain free copies of the definitive Proxy
Statement/Prospectus/Scheme Circular (including the Scheme), the definitive
First Supplement to the Proxy Statement/Prospectus/Scheme Circular and other
documents filed by Chiquita, Fyffes and ChiquitaFyffes with the SEC by
contacting Chiquita Investor Relations at: Chiquita Brands International, Inc.,
c/o Corporate Secretary, 550 South Caldwell Street, Charlotte, North Carolina
28202 or by calling (980) 636-5000, or by contacting Fyffes Investor Relations
at c/o Seamus Keenan, Company Secretary, Fyffes, 29 North Anne Street, Dublin
7, Ireland or by calling + 353 1 887 2700.
Participants In The Solicitation
Chiquita, Fyffes, ChiquitaFyffes and their respective directors and executive
officers may be considered participants in the solicitation of proxies in
connection with the combination. Information about the directors and executive
officers of Fyffes is set forth in its Annual Report for the year ended December
31, 2013, which was published on April 11, 2014 and is available on the Fyffes
website at www.fyffes.com. Information about the directors and executive
officers of Chiquita is set forth in its Annual Report on Form 10-K for the year
ended December 31, 2013, which was filed with the SEC on March 4, 2014 and its
proxy statement for its 2014 annual meeting of shareholders, which was filed
with the SEC on April 11, 2014. Other information regarding the participants in
the proxy solicitations and a description of their direct and indirect
interests, by security holdings or otherwise, are contained in the definitive
Proxy Statement/Prospectus/Scheme Circular and the First Supplement to the Proxy
Statement/Prospectus/Scheme Circular described above that were mailed to
shareholders and other relevant materials to be filed with the SEC when they
become available.
Forward Looking Statements
This communication contains certain statements that are "forward-looking
statements." These statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond the control of Chiquita and Fyffes,
including: the customary risks experienced by global food companies, such as
prices for commodity and other inputs, currency exchange 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 Chiquita and/or
Fyffes or the industry, labor relations, taxes, political instability and
terrorism; unusual weather events, conditions or crop risks; continued ability
of Chiquita and Fyffes to access the capital and credit markets on commercially
reasonable terms and comply with the terms of their debt instruments; access to
and cost of financing; and the outcome of pending litigation and governmental
investigations involving Chiquita and/or Fyffes, as well as the legal fees and
other costs incurred in connection with these items. Readers are cautioned that
any forward-looking statement is not a guarantee of future performance and that
actual results could differ materially from those contained in the forward-
looking statement. Forward-looking statements relating to the combination
involving Fyffes and Chiquita include, but are not limited to: statements about
the benefits of the combination, including expected synergies and future
financial and operating results; Fyffes and Chiquita's plans, objectives,
expectations and intentions; the expected timing of completion of the
combination; and other statements relating to the combination that are not
historical facts. Forward-looking statements involve estimates, expectations and
projections and, as a result, are subject to risks and uncertainties. There can
be no assurance that actual results will not materially differ from
expectations. Important factors could cause actual results to differ materially
from those indicated by such forward-looking statements.
With respect to the combination, these factors include, but are not limited to:
risks and uncertainties relating to the ability to obtain the requisite Fyffes
and Chiquita shareholder approvals; the risk that a condition to closing of the
combination may not be satisfied; the length of time necessary to consummate the
combination; the risk that the businesses will not be integrated successfully;
the risk that the cost savings and any other synergies from the combination may
not be fully realized or may take longer to realize than expected; disruption
arising as consequence of the combination making it more difficult to maintain
existing relationships or establish new relationships with customers, employees
or suppliers; the diversion of management time on transaction-related issues;
the ability of the combined company to retain and hire key personnel; the effect
of future regulatory or legislative actions on the companies; and the risk that
the credit ratings of the combined company or its subsidiaries may be different
from what the companies expect.
These risks, as well as other risks associated with the combination, are more
fully discussed in the Proxy Statement/Prospectus/Scheme Circular that is
included in the Registration Statement on Form S-4 and the First Supplement to
the Proxy Statement/Prospectus/Scheme Circular that is included in the post-
effective amendment to the Registration Statement on Form S-4 that were filed
with the SEC in connection with the combination and are contained in the
definitive Proxy Statement/Prospectus/Scheme Circular and in the definitive
First Supplement to the Proxy Statement/Prospectus/Scheme Circular that have
been mailed to shareholders. Additional risks and uncertainties are identified
and discussed in Chiquita's reports filed with the SEC and available at the
SEC's website at www.sec.gov and in Fyffes reports filed with the Registrar of
companies available at Fyffes website at www.fyffes.com. Forward-looking
statements included in this document speak only as of the date of this document.
Neither Chiquita nor Fyffes undertakes any obligation to update its forward-
looking statements to reflect events or circumstances after the date of this
communication.
No statement in this communication is intended to constitute a profit forecast
for any period, nor should any statements be interpreted to mean that earnings
or earnings per share will necessarily be greater or lesser than those for the
relevant preceding financial periods for Chiquita, or Fyffes or ChiquitaFyffes,
as appropriate. No statement in this communication constitutes an asset
valuation.
Chiquita has made an updated profit forecast for the year ending December
31, 2014 as set out under the heading "Updated Chiquita Profit Forecast"
beginning on page 132 of the First Supplement to the Proxy
Statement/Prospectus/Scheme Circular mailed to shareholders of Chiquita and
Fyffes (the "Chiquita Profit Forecast"). The directors of Chiquita confirm that
the Updated Chiquita Profit Forecast remains valid for the purpose of the
Combination.
Statement Required by the Takeover Rules
The directors of Chiquita accept responsibility for the information contained in
this communication. To the best of the knowledge and belief of the directors of
Chiquita (who have taken all reasonable care to ensure that such is the case),
the information contained in this communication for which they accept
responsibility is in accordance with the facts and does not omit anything likely
to affect the import of such information.
CONTACT: Chiquita Contacts:
Investors
Steve Himes
1 980-636-5636
shimes(at)chiquita.com
MacKenzie Partners Inc.
Toll-Free (800) 322-2885 or (212) 929-5500 (call collect)
Alliance Advisors, LLC
Toll free at (855) 976-3330
cqb(at)allianceadvisorsllc.com
Media
Ed Loyd
1 980-636-5145
eloyd(at)chiquita.com
Kelly Sullivan, Averell Withers or Joe Berg
Joele Frank, Wilkinson Brimmer Katcher
1 212-355-4449
This announcement is distributed by GlobeNewswire on behalf of
GlobeNewswire 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 GlobeNewswire
[HUG#1862972]
Datum: 14.10.2014 - 23:01 Uhr
Sprache: Deutsch
News-ID 344035
Anzahl Zeichen: 25635
contact information:
Town:
Charlotte
Kategorie:
Business News
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