Chiquita Brands International, Inc : Chiquita Reports Third Quarter 2011 Results
(Thomson Reuters ONE) -
CHIQUITA REPORTS THIRD QUARTER 2011 RESULTS
Reports comparable loss of ($0.35) per diluted share; GAAP diluted EPS of
($0.63)
Affirms outlook for significant improvement in full year results versus 2010
Announces $50 million redemption of senior notes
CINCINNATI - Nov. 3, 2011 - Chiquita Brands (NYSE: CQB) today released financial
and operating results for the third quarter of 2011, reporting net sales of $723
million and comparable loss[1] of $16 million, GAAP net loss of $29 million.
GAAP results include $11 million of refinancing costs, including tender and call
premiums and unamortized financing fee write-offs, in connection with the
company's July debt refinancing.
"Overall, our results continued to reflect the trends we have seen all year.
Bananas in North America continued to perform well, Europe is starting to
recover, and salads were disappointing but we've taken corrective action to
reverse that trend," said Fernando Aguirre, chairman and chief executive
officer. "As we expected in bananas, North America had higher price and volume
and the European market pricing was soft but our results benefitted from much
more favorable currency rates and higher core market volume. While salad
performance was below expectations, we began to close the gap versus last year
on sales volume comparisons. Our operating costs, which did not yet reflect the
full benefit of recent realignment decisions, were higher due to product supply
related costs and inefficiencies, much of which we expect to be temporary."
Aguirre added, "In October, retail salad volumes nearly returned to last year's
levels, and continued recovery of this business will help deliver a modest
improvement in overall Salads and Healthy Snacks segment results. Importantly,
we continue to focus on driving down costs throughout our entire product supply
chain to enhance our performance in a challenging environment. As a result, we
continue to expect a significant improvement over last year's results to deliver
our fourth year of consecutive profitability. Due to the strength of our
financial position, we also are reducing our debt by an additional $50 million
through the redemption of senior notes."
_______________
[1]Comparable basis amounts exclude certain items described below under "Non-
GAAP Measurements and items affecting comparability." All figures in this press
release are for continuing operations, unless otherwise indicated.
2011 THIRD QUARTER SUMMARY
The following table shows adjustments made to "Income (loss) from continuing
operations" and EPS from continuing operations 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.
Income (loss)
per diluted
share[1]
Income (loss)
(in millions, except per
share amounts) 2011 2010 2011 2010
------- ------- --------- --------
Comparable results (Non-GAAP)
($16) ($7) ($0.35) ($0.14)
Refinancing costs (11) - (0.24) -
Incremental non-cash interest
expense on Convertible Notes (2) (2) (0.05) (0.04)
------- ------- --------- --------
Reported results (GAAP) ($29) ($8) ($0.63) ($0.19)
------- ------- --------- --------
Columns may not total due to rounding.
[1]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 $723
million on lower sales in Salads & Healthy Snacks and Other Produce, partially
offset by higher banana sales. Comparable results for the quarter declined as
reduction in salad income exceeded improvements in bananas performance and
reduced costs for interest and taxes.
Cash, Debt and Liquidity: At September 30, 2011, cash and equivalents were $133
million. In July, the company took advantage of favorable market conditions to
refinance its secured credit facility and retire its 8 7/8% Senior Notes due
2015. At current rates, the refinancing will reduce interest cost by
approximately $11 million annually, with $2 million realized in the third
quarter 2011. Refinancing costs, which included tender and call premiums and
unamortized financing fee write-offs, were $11 million. The company also
announced the redemption of $50 million principal amount of its 7 1/2% Senior
Notes due 2014, as described below.
Bananas: Net sales increased 5 percent to $453 million, on higher unit volumes,
higher pricing in North America and relatively unchanged European pricing on a
U.S. dollar basis. Sourcing and logistics costs were slightly lower, as the
company defrayed fuel cost and other inflationary factors through better hedging
results, including $12 million of unrealized hedging gains that were accelerated
into the quarter as a result of reconfiguration of global shipping operations.
Comparable operating income was $7 million for the third quarter of 2011,
compared to $3 million in the 2010 period.
Salads and Healthy Snacks: Net sales decreased 5 percent to $240 million due to
lower retail value-added salad volume partially offset by growth in foodservice
and healthy snacks. The segment incurred a comparable operating loss of $3
million for the third quarter of 2011, compared to income of $18 million in the
2010 period, primarily due to a decline in retail value-added salad volume from
customer conversions to private label in 2010, increased product supply costs to
maintain quality, temporary manufacturing disruptions, and incremental expenses
associated with Fresh Rinse customization.
ANNOUNCED DEBT REDUCTION
Chiquita also announced today that it is delivering to the holders of its
7 1/2% Senior Notes due 2014 notice that it will redeem $50 million aggregate
principal amount of the Notes. The redemption date is December 5, 2011. The
redemption price for the Notes is 101.250% of the outstanding aggregate
principal amount of Notes being redeemed, plus accrued and unpaid interest to,
but excluding, the redemption date. The redemption is being made pursuant to the
terms of the Notes. The Notes will be redeemed pro rata in amounts of $1,000 or
any integral multiple thereof, and no Note of less than $1,000 will be redeemed.
There is approximately $156 million aggregate principal amount of Notes
currently outstanding. This action will generate annualized cost savings of
nearly $4 million, or $0.09 per diluted share beginning in December 2011.
2011 OUTLOOK
The company expects to achieve net sales growth of at least 3 percent (excluding
the effect of discontinued non-core produce lines and the European smoothies
business that was deconsolidated in 2010), and fourth quarter and full year
2011 comparable results that are significantly better than in 2010. The
company expects to overcome ongoing industry cost inflation and improve its
results through:
* improving trends in unit volumes;
* enhancing banana supply chain efficiency and costs, such as better product
sourcing (in contrast to extraordinarily high costs in the fourth quarter
of 2010 from severe industry supply shortages), and reconfiguration of its
global shipping system providing annualized savings;
* elimination of temporary excess salad production costs;
* lower corporate expenses, and benefits from the previously announced
realignment of its salad business and its global innovation organizations;
and
* reduced interest payments from refinancing and prepayment of debt
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) | Q4 2011 | | FY 2011 |
+---------------------------------+---------+-----+---------+
| Capital Expenditures | 25-30 | | 75-80 |
+---------------------------------+---------+-----+---------+
| Depreciation & Amortization | 15 | | 60 |
+---------------------------------+---------+-----+---------+
| Gross Interest Expense[1] | 11 | | 51 |
+---------------------------------+---------+-----+---------+
| Net Interest Expense [1] | 10 | | 47 |
+---------------------------------+---------+-----+---------+
[1] Interest expense includes the impact of accounting standards that add non-
cash interest expense of $9 million in 2011 and $10 million in 2012 for the
company's Convertible Notes.
CONFERENCE CALL
Chiquita will hold a conference call for investors to discuss its results at
4:30 p.m. EDT today. Access to a live audio webcast is available at
http://investors.chiquita.com. Toll-free telephone access will be available by
dialing 1-877-795-3649 in the United States and +719-325-4818 from international
locations and providing the conference code 7405378. 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 7405378.
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 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. 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
differences between the U.S. GAAP and non-GAAP financial measures are as follow:
* Refinancing: The company recognized $11 million of refinancing costs in July
2011, as described above.
* Reserve for 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. The reserve, recognized under GAAP, is excluded from
comparable income of the Other Produce segment.
* Severance: During the second quarter of 2011, the company realigned its
salad overhead costs and embedded its global innovation and marketing
functions into its business units. This realignment resulted in costs of $2
million in the second quarter of 2011 primarily relating to severance.
Realignment-related expense, recognized under GAAP, was allocated to the
reportable segments, but excluded from comparable income.
* Gain on Deconsolidation of Just Fruit in a Bottle: The company entered into
a joint venture with Danone S.A. in May 2010 to market fruit beverages based
on Chiquita's Just Fruit in a Bottle® platform in Europe. Upon closing, the
company sold 51 percent of its smoothie business to Danone for ?15 million
($18 million) and deconsolidated it, accounting for its remaining 49 percent
investment using the equity method. The gain on the sale and
deconsolidation was $32 million, which included a $15 million gain related
to fair value of the retained 49 percent investment on the closing date.
This gain, recognized under GAAP, is excluded from comparable income of the
Salads and Healthy Snacks segment.
* 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. In determining earnings on a comparable basis,
the company excludes this additional non-cash interest expense, which was $2
million for each of the quarters ended September 30, 2011 and 2010.
Contact: Ed Loyd, 513-784-8935,eloyd(at)chiquita.com
ABOUT CHIQUITA BRANDS INTERNATIONAL, INC.
Chiquita Brands International, Inc. (NYSE: CQB) is committed to Improving World
Nutrition, as 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 atwww.chiquita.com.
FORWARD-LOOKING STATEMENTS
This press release contains certain statements, including in the "2011 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; unusual weather events, conditions or crop risks;
access to and cost of financing; 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,
--------------------------------------------------------
2011 2010 2011 2010
-------------------------- -------------------------
Net sales $ 723 $ 730 $ 2,418 $ 2,454
-------------------------- -------------------------
Operating expenses:
Cost of sales 640 630 2,044 2,075
Selling, general 76 75 244 245
and administrative
Depreciation 13 13 38 37
Amortization 2 2 7 7
Equity in loss of 2 2 5 -
investees
Reserve for grower - - 33 2
advances
Deconsolidation of
European (32)
smoothie business - - -
-------------------------- -------------------------
Operating income (loss) (10) 6 46 121
Interest income 1 1 3 4
Interest expense (12) (14) (41) (43)
Other (11) (3) (11) -
-------------------------- -------------------------
Income (loss) from
continuing
operations before taxes (32) (9) (3) 83
Income tax benefits 4 1 76 (2)
(expense)
-------------------------- -------------------------
Income (loss) from
continuing
operations (29) (8) 73 80
Loss from discontinued
operations[1] - - - (3)
-------------------------- -------------------------
Net income (loss) $ (29) $ (8) $ 73 $ 77
-------------------------- -------------------------
Basic earnings per
share:
Continuing operations $ (0.63) $ (0.19) $ 1.61 $ 1.78
Discontinued - - - (0.07)
operations
-------------------------- -------------------------
$ (0.63) $ (0.19) $ 1.61 $ 1.71
-------------------------- -------------------------
Diluted earnings per
share:
Continuing operations $ (0.63) $ (0.19) $ 1.58 $ 1.75
Discontinued - - - (0.07)
operations
-------------------------- -------------------------
$ (0.63) $ (0.19) $ 1.58 $ 1.68
-------------------------- -------------------------
Shares used to calculate
basic
earnings per share 45.6 45.1 45.5 44.9
Shares used to calculate
diluted
earnings per share 45.6 45.1 46.3 45.8
Columns may not total due to rounding.
[1] Loss from discontinued operations relates to indemnification obligations for
tax liabilities of Atlanta AG.
Exhibit B:
CHIQUITA BRANDS INTERNATIONAL, INC.
Condensed Consolidated Balance Sheets
(in millions, except per share amounts)
(Unaudited) (Derived from
audited financial
statements)
September 30, December 31,
2011 2010
-------------------------------------
ASSETS
Cash and cash equivalents $ 133 $ 156
Trade accounts receivables, net of 280 265
allowance
Other receivables, net 80 117
Inventories 238 212
Prepaid expenses 46 38
Other current assets 52 20
-------------------------------------
Total current assets 827 809
Property, plant and equipment, net 358 350
Investments and other assets, net 136 168
Trademarks 449 449
Goodwill 177 177
Other intangible assets, net 108 115
-------------------------------------
Total assets $2,055 $2,067
-------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current portion of long-term debt $ 17 $ 20
Accounts payable 281 264
Accrued liabilities 123 128
-------------------------------------
Total current liabilities 421 412
Long-term debt, net of current portion 608 614
Accrued pension and other employee benefits 70 74
Deferred gain - sale of shipping fleet 38 49
Deferred tax liabilities 51 116
Other liabilities 48 63
-------------------------------------
Total liabilities 1,236 1,327
-------------------------------------
Shareholders' equity:
Common stock, $.01 par value (45,774,157
and 45,298,038 shares outstanding,
respectively) $ - $ -
Capital surplus 826 815
Accumulated deficit (3) (76)
Accumulated other comprehensive income (4) -
(loss)
-------------------------------------
Total shareholders' equity 819 740
-------------------------------------
Total liabilities and shareholders'
equity $2,055 $2,067
-------------------------------------
Columns may not total due to rounding.
Exhibit C:
CHIQUITA BRANDS INTERNATIONAL, INC.
OPERATING STATISTICS - THIRD QUARTER
(Unaudited - in millions, except for percentages and exchange rates)
Percent Percent
Change Nine months Change
Quarter ended Increase ended Increase
September 30, (Decrease) September 30, (Decrease)
2011 2010 vs. 2010 2011 2010 vs. 2010
-------------------------------- ----------------------------
Net sales by segment
Bananas $453 $431 5.1% $1,548 $1,455 6.4%
Salads and Healthy Snacks[1] 240 251 (4.6)% 731 798 (8.4)%
Other Produce 30 47 (37.0)% 139 202 (31.1)%
-------------------------------- ----------------------------
$723 $730 (1.0)% $2,418 $2,454 (1.5)%
Comparable operating income (loss) by
segment [2]
Bananas $7 $3 NM $123 $71 74.0%
Salads and Healthy Snacks[1] (3) 18 NM 7 68 (89.0)%
Other Produce (2) 1 NM (6) 4 NM
Corporate (13) (15) 14.2% (45) (54) 17.6%
-------------------------------- ----------------------------
($10) $6 NM $80 $88 (8.9)%
Comparable operating margin by segment
Bananas 1.5% 0.6% 0.8 pts 8.0% 4.9% 3.1 pts
Salads and Healthy Snacks (1.1)% 7.1% (8.2) pts 1.0% 8.5% (7.4)
pts
Other Produce (5.2)% 1.4% (6.6) pts (4.1)% 1.9% (6.1)
pts
SG&A as a percent of sales 10.5% 10.3% 0.2 pts 10.1% 10.0% 0.1 pts
Company banana sales volume
(40 lb. boxes)
North America 16.2 15.1 7.3% 48.8 46.5 4.9%
Core European markets[3] 9.4 9.0 4.4% 30.4 30.5 (0.3)%
Mediterranean & Middle East 3.8 4.2 (9.5)% 10.3 14.0 (26.4)%
Banana Pricing
North America 2.7% 7.4%
Core European markets[3]
U.S. Dollar (0.5)% 7.9%
Local (10.0)% 1.0%
Mediterranean & Middle East (9.4)% 7.5%
Retail value-added salads
Volume (12-count cases) 11.8 12.9 (8.5)% 37.9 42.4 (10.6)%
Pricing 0.5% (0.7)%
Euro average exchange rate, spot $1.42 $1.28 10.9% $1.40 $1.31 6.9%
(dollars per euro)
Euro average exchange rate, hedged $1.41 $1.24 13.7% $1.39 $1.33 4.5%
(dollars per euro)
Columns may not total due to rounding.
[1] European fruit smoothie sales before entering into the Danone joint venture
in May 2010 were $1 million and operating losses were $3 million in 2010.
[2] See description of reconciling items between GAAP and comparable basis
figures in this press release under "Non-GAAP measurements and items affecting
comparability."
[3] The company's core European markets include the 27 member states of the
European Union, Switzerland, Norway and Iceland.
Exhibit D:
EUROPEAN CURRENCY
YEAR-ON-YEAR CHANGE - FAVORABLE (UNFAVORABLE)
2011 vs. 2010
(Unaudited - in millions)
Currency Impact (Euro/Dollar) Q3 YTD
Revenue $ 18 $ 40
Local costs (7) (16)
Hedging[1] 3 (9)
Balance sheet translation[2] (9) -
--------------------------------
Net European currency impact $ 5 $ 15
--------------------------------
Columns may not total due to rounding.
[1] Third quarter hedging costs in 2011 were $0.4 million in 2011 and $4 million
in 2010. YTD hedging costs were $3 million compared to a YTD benefit of $5
million in 2010.
[2] Third quarter balance sheet translation was a loss of $4 million in 2011 and
a gain of $5 million in 2010. YTD balance sheet translation was a loss of $2
million for each of 2011 and 2010.
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#1560770]
Unternehmensinformation / Kurzprofil:
Datum: 03.11.2011 - 21:02 Uhr
Sprache: Deutsch
News-ID 83997
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contact information:
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