-- Pricing and Cost Savings Continue To More Than Offset Higher Costs --
-- Company Continues to Expect Full Year 2008 to be a Strong Improvement
Versus Year Ago --
CINCINNATI, July 31 /PRNewswire-FirstCall/ -- Chiquita Brands
International, Inc. (NYSE: CQB) today released financial and operating
results for the second quarter 2008. For continuing operations, the company
reported net sales of $1 billion, up 6 percent year-over-year, and income
of $59 million, or $1.31 per diluted share, compared to $5 million, or
$0.12 per diluted share, in the year-ago period. Including the results of
discontinued operations, the company reported income of $62 million or
$1.37 per diluted share. The 2008 quarter includes other income, net of
tax, of $6 million, or $0.13 per diluted share, from the resolution of a
claim related to a non-income tax refund, and the 2007 quarter included a
charge of $3 million, or ($0.07) per diluted share, related to the
settlement of U.S. antitrust litigation.
"I am very pleased with our strong second quarter results, which mark
our best quarterly performance in three years," said Fernando Aguirre,
chairman and chief executive officer. "Our ability to deliver year-on-year
improvements, despite unprecedented cost increases, is a testament to the
strength of our business, the diversity of our product portfolio, and our
strategy to drive profitable growth. We are particularly satisfied that our
pricing discipline and focus on profitability has improved the performance
and momentum of our banana segment for the fourth consecutive quarter. We
are disappointed, however, with the current performance of our salad
operations, and we are focused on executing plans to improve our salad
margins over time."
Mr. Aguirre concluded, "While quarter-to-quarter volatility is typical
due to the seasonality of our industry, we continue to expect to achieve
significantly better operating results for the full year. We remain focused
on aggressively improving profitability, and prudently investing in the
launch of innovative products to become the global leader in healthy, fresh
foods."
All financial results in this press release are for continuing
operations only, unless otherwise stated. As previously announced, since
the company reached a definitive agreement for the sale of its subsidiary
Atlanta AG, its financial statements now present Atlanta AG as a
discontinued operation. Additional comparable historical information for
the most recent six quarters and the full year ended December 31, 2007 is
provided in Exhibit H.
2008 SECOND QUARTER SUMMARY
Q2 Q2 YTD YTD
($ millions) 2008 2007 2008 2007
Net Sales $994.6 $934.0 $1,930.1 $1,839.2
Operating Income $72.4 $30.8 $129.2 $48.8
Income from continuing
operations(1) $59.5 $5.4 $91.9 $2.7
Income from discontinued
operations $2.6 $3.2 $1.9 $2.5
Net Income(1) $62.1 $8.6 $93.8 $5.2
Operating Cash Flow $121.4 $76.8 $108.8 $62.7
Total Debt $873.7 $844.7
Cash $202.7 $159.8
(1) Includes in the second quarter 2008 other income, net of tax, of $6
million, or $0.13 per diluted share, from the resolution of a claim related
to a non-income tax refund, and a charge in the year-ago period of $3
million, or ($0.07) per diluted share, related to the settlement of U.S.
antitrust litigation.
-- Net Sales: Quarterly sales rose primarily due to higher banana
pricing and a favorable euro exchange rate, offset by lower banana volumes
principally reflecting industry-wide constraints on volume availability.
-- Operating Income: Quarterly operating income improved year-over-year
due to higher banana pricing in each of the company's markets,
strengthening of the euro and savings from the company's business
restructuring. Higher banana pricing in core European and Trading markets
continued to be attributable to constrained supply during the quarter as
well as the company's strategy to maintain and favor its premium product
quality and price differentiation rather than market share. In the North
American market, higher banana pricing was attributable to increases in
base contract prices, the company's fuel-related surcharge and the
continuation of a surcharge to mitigate the higher costs due to constrained
industry-wide volume availability. The positive banana results were
partially offset by weakness in value-added salads and increased investment
in innovation. For second quarter net sales and operating income
information by segment, see Exhibit A.
-- Operating cash flow: Operating cash flow was $121 million for the
second quarter of 2008 compared to $77 million for the second quarter of
2007. The increase resulted primarily from improvements in operating
income.
-- Total debt: The company's total debt at June 30, 2008 was $874
million, up $29 million from a year ago, principally due to the company's
issuance of $200 million of convertible notes in February 2008. At June 30,
2008, the company's debt-to-capital ratio was 45 percent, as compared to
the company's long-term target debt-to-capital ratio of 40 percent. See
Exhibit F for a detailed debt schedule.
UPDATE ON SALE OF ATLANTA AG
On May 13, 2008, the company entered a definitive agreement to sell its
wholly-owned German distribution business, Atlanta AG, to UNIVEG Fruit and
Vegetables BV ("UNIVEG") for approximately $85 million in proceeds, plus
working capital and net debt adjustments. The sale proceeds will be used
primarily for debt reduction. The transaction will enable the company to
increase its focus on providing branded, healthy, fresh foods to consumers
worldwide, while ensuring continued reliable, high-quality ripening and
distribution services of Chiquita bananas in the German, Austrian and
Danish markets. The Atlanta AG sale is expected to be completed during the
third quarter, after the completion of a normal review by EU competition
authorities.
As the company previously announced, it determined that Atlanta AG's
commodity distribution business was no longer a strong fit with Chiquita's
long-term strategy to drive profitable growth. Although Atlanta AG
represented $1.2 billion in revenues from non-Chiquita products in 2007,
its results have not been significant to Chiquita's annual operating income
in recent periods. Chiquita anticipates that the sale and related entry
into a long-term banana ripening and distribution services agreement with
UNIVEG will result in a gain as well as a one-time tax benefit. The company
also anticipates that the sale and related use of proceeds will be
accretive to future earnings. For comparison purposes, the company has
provided in Exhibit H certain historical financial information reflecting
Atlanta AG as a discontinued operation for the most recent six quarters and
the full year ended December 31, 2007.
OUTLOOK
The company continues to expect it will generate significant
improvement in sales and operating income from continuing operations for
the full-year 2008, compared to the full-year 2007. This is primarily due
to contract and market price increases and the benefits of the company's
restructuring, which are more than offsetting increases in industry and
other product supply costs. The company's estimates for higher industry and
other product supply costs remain the same as provided in the company's
mid-quarter update in June. As previously announced, the company continues
to expect the balance of 2008 to follow normal seasonal trends, including a
loss in the third quarter roughly in line with the loss incurred in the
third quarter of 2007. The following chart summarizes management's
estimates, based on current trends and market prices, of the impact of
certain items on the company's results for 2008.
Q1 Q2 Full-Year
2008 2008 2008
($ millions) Actual Actual Estimate
Higher Costs:
Higher Industry Costs(1) $50 $42 $195-210
Other Higher Product Supply Costs(2) $29 $33 $75-85
Sub total $79 $75 $270-295
Pricing, Cost Reductions and Other
Benefits:
Pricing and Exchange Gains(3) $92 $104 +
Gross Cost Savings $10 $11 $30
2007 Business Restructuring Savings $18 $19 $65-80
Fuel Hedging Gains(4) $7 $8 $35
Sub total $127 $142 +
Net Benefit $48 $67 +
Capital Expenditures $12 $9 $55-65
Depreciation & Amortization $19 $19 $70-75
Gross Interest Expense(5) $17 $17 $67-72
Net Interest Expense(5) $16 $15 $57-62
Euro Hedging Costs(6) $5 $6 $16
(1) Represents year-over-year increases for items such as purchased
fruit, raw products, fertilizers, bunker fuel, ship charters, paper and
resins.
(2) Represents year-over-year increases for items such as labor and
materials in banana production and salad manufacturing, discharging and
other logistic costs.
(3) Pricing variance includes year-over-year improvement in the
company's banana and salad markets, as well as euro exchange benefits.
(4) Includes year-over-year variance in the company's fuel hedging
program based on the 2008 fuel swap portfolio and market forward rates as
of July 30, 2008.
(5) Assumes an average LIBOR rate of 2.9 percent. Excludes $9 million
of expenses for the write-off of deferred financing fees related to the
refinancing of the company's credit facility in the first quarter 2008.
(6) Based on market forward rates as of July 30, 2008 in relation to
the company's 2008 hedging portfolio, which includes euro put options at
average strike rates of $1.40 and sold call options at average strike rates
of $1.56 per euro through December 2008.
Conference Call
A conference call to discuss second quarter 2008 results will begin at
4:30 p.m. EDT today and will be available via webcast at http://www.chiquita.com.
Toll-free telephone access will be available by dialing 1-888-224-1164 in
the United States and +913-312-0974 from international locations. A webcast
and audio replay of the call at http://www.chiquita.com will be available until
August 14, 2008. To access the phone replay, dial 1-888-203-1112 from the
United States and +719-457-0820 from international locations and enter the
access code 2041881. A transcript of the call will be posted as soon as
possible after July 31 and will be available from the company's web site
for 12 months.
About Chiquita Brands International, Inc.
With annual revenues of approximately $4 billion from continuing
operations, Chiquita Brands International, Inc. (NYSE: CQB) is a leading
international marketer and distributor of high-quality fresh and
value-added food products -- from energy-rich bananas and other fruits to
nutritious blends of convenient green salads. The company markets its
products under the Chiquita(R) and Fresh Express(R) premium brands and
other related trademarks. Chiquita employs approximately 23,000 people
operating in more than 70 countries worldwide. For more information, please
visit our web site at http://www.chiquita.com.
Forward-looking Statements
This press release contains certain statements 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 food safety, prices for commodity and other inputs,
currency exchange rate fluctuations, government regulations, industry and
competitive conditions, labor relations, taxes, crop risks, political
instability and terrorism; changes in the competitive environment following
the 2006 conversion to a tariff-only banana import regime in the European
Union; unusual weather conditions; access to and cost of financing; the
company's ability to achieve the cost savings and other benefits
anticipated from the 2007 restructuring; product recalls and other events
affecting the industry and consumer confidence in company products; the
company's ability to consummate the pending sale of Atlanta AG; and the
outcome of pending claims and governmental investigations involving the
company, and the legal fees and other costs incurred in connection with
them. 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:
SECOND QUARTER DETAILED SEGMENT INFORMATION
(All comparisons below are to the second quarter 2007, unless otherwise
specified.)
The company reports the following three business segments, which have
been modified to move the company's Just Fruit in a Bottle product to
Salads and Healthy Snacks from Other Produce, and to present the operations
of Atlanta AG as discontinued:
-- Bananas: This segment includes the sourcing (purchase and
production), transportation, marketing and distribution of bananas.
-- Salads and Healthy Snacks: This segment includes value-added salads,
as well as fresh vegetable and fruit ingredients used in foodservice,
processed fruit ingredient products, and healthy snacking operations,
including the company's European smoothie product, Just Fruit in a Bottle.
-- Other Produce: This segment includes the sourcing, marketing and
distribution of whole fresh fruits and vegetables other than bananas.
The company does not allocate certain corporate expenses to the
reportable segments. These expenses are included in "Corporate."
Prior-period figures have been reclassified to reflect these changes.
See Exhibit G for the revised presentation of segment results for the most
recent six quarters and the full year ended Dec. 31, 2007 for the
reclassification of Just Fruit in a Bottle, and Exhibit H for additional
comparable financial information for the most recent six quarters and the
full year to present the operations of Atlanta AG as discontinued.
Bananas
Net sales for the segment increased 17 percent to $563 million. Segment
operating income was $89 million, compared to $43 million in the year-ago
period.
Banana segment operating results improved due to:
-- $49 million from improved revenue in North America due to increases
in base contract prices, increases in fuel-related surcharges and cost
recovery from the implementation of a surcharge designed to mitigate the
impact of increased costs from constrained industry-wide volume
availability.
-- $29 million benefit from the impact of stronger European currency
exchange rates (outlined in Exhibit E).
-- $14 million from improved local banana pricing in core European
markets attributable to constrained volume supply and the company's
strategy to maintain and favor its premium product quality and price
differentiation rather than market share.
-- $8 million of higher fuel hedging gains, partly offsetting higher
industry costs.
-- $5 million from improved pricing in Trading markets, attributable to
constrained volume availability.
These improvements were partially offset during the quarter by:
-- $32 million of industry cost increases for purchased fruit,
fertilizers, bunker fuel, paper and ship charters.
-- $16 million of higher production costs from owned banana production,
discharging and inland transportation, net of $4 million from cost-savings
programs other than restructuring.
-- $8 million from lower volume, primarily in the company's core
European markets.
Salads and Healthy Snacks
Net sales increased 4 percent to $350 million. Operating loss was $6
million, compared to operating income of $10 million in the year-ago
period.
Salads and Healthy Snacks segment operating results were adversely
affected by:
-- $10 million of higher industry costs due to increases in fuel and
raw product costs in North American salad operations.
-- $6 million of increased production and transportation costs
primarily related to temporary network inefficiencies during the process of
consolidating processing and distribution centers, net of $7 million of
cost savings in North American salad operations.
-- $5 million of incremental investment during the quarter in the
continued successful geographic expansion of the Just Fruit in a Bottle
line of products, which is now in six countries in Europe.
-- $5 million of higher costs driven by product mix, including the
expansion of single-serve Gourmet Cafe salads and growth in more
value-added Healthy Snacking products.
-- $2 million of excess sourcing costs associated with the
industry-wide FDA recall of tomatoes.
These adverse items were partially offset during the quarter by:
-- $7 million due to higher pricing in retail value-added salads
including improved mix, increased fuel surcharge revenues to offset higher
costs, and improved trade spending management.
-- $2 million of E. coli research funding in 2007, which did not
repeat.
-- $2 million of lower selling, general and administrative expenses in
North America salad operations as a result of the 2007 restructuring.
Other Produce
Net sales decreased 30 percent to $82 million due to the elimination of
third-party sales in Chile and lower-margin sales of Mexican vegetables.
The quarterly operating income was $5 million in 2008, compared to
break-even in the year-ago period. The increase in operating performance
was driven by the exit of the Chilean operations in 2007 and improved
performance of non-banana whole fresh fruit in North America and Europe.
Exhibit B:
CHIQUITA BRANDS INTERNATIONAL, INC.
CONSOLIDATED INCOME STATEMENT
(Unaudited - in millions, except per share amounts)
Quarter Ended Six Months Ended
June 30, June 30,
2008 2007 2008 2007
Net sales $994.6 $934.0 $1,930.1 $1,839.2
Operating expenses
Cost of sales 808.6 787.6 1,588.3 1,568.8
Selling, general and
administrative 99.9 97.0 180.3 184.9
Depreciation 16.8 19.1 33.5 37.1
Amortization 2.5 2.5 4.9 4.9
Equity in earnings of
investees (5.6) (3.0) (6.1) (5.3)
922.2 903.2 1,800.9 1,790.4
Operating income 72.4 30.8 129.2 48.8
Interest income 1.8 2.6 3.1 4.9
Interest expense (17.1) (23.7) (43.3) (46.7)
Other income(1) 8.6 - 8.6 -
Income from continuing
operations before taxes 65.7 9.7 97.6 7.0
Income taxes(2) (6.2) (4.3) (5.7) (4.3)
Income from continuing
operations 59.5 5.4 91.9 2.7
Income from discontinued
operations(3) 2.6 3.2 1.9 2.5
Net Income $62.1 $8.6 93.8 5.2
Basic earnings per share
Continuing operations $1.37 $0.12 $2.13 $0.06
Discontinued
operations 0.06 0.08 0.04 0.06
1.43 0.20 2.17 0.12
Diluted earnings per share(4)
Continuing operations 1.31 0.12 2.06 0.06
Discontinued
operations 0.06 0.08 0.04 0.06
1.37 0.20 2.10 0.12
Shares used to calculate
basic earnings per share 43.5 42.5 43.2 42.4
Shares used to calculate
diluted earnings per share(4) 45.3 43.2 44.8 42.8
(1) Other income includes the resolution of a claim related to a
non-income tax refund. An offsetting $3 million of related expense is
included in "Income taxes."
(2) Income taxes included benefits of $1 million and $6 million for the
quarter and six months ended June 30, 2008, and zero and $4 million for the
quarter and six months ended June 30, 2007, due to the resolution of tax
contingencies in various jurisdictions.
(3) Discontinued operation includes Atlanta AG and related operations.
(4) Includes the dilutive effect of outstanding warrants and stock
options based on the treasury stock method, and the dilutive effect of
restricted stock awards. In the second quarter of 2008, the 4.25%
convertible senior notes due 2016 did not have a dilutive effect, because
the average trading price of the common shares was below the initial
conversion price of $22.45 per share.
Exhibit C:
CHIQUITA BRANDS INTERNATIONAL, INC.
OPERATING STATISTICS - SECOND QUARTER
(Unaudited - in millions, except for percentages and exchange rates)
Percent
Change
Quarter Ended June 30, Favorable
(Unfavorable)
2008 2007 vs. 2007
Net sales by segment
Bananas $562.7 $480.4 17.1%
Salads and Healthy Snacks 350.4 337.0 4.0%
Other Produce 81.5 116.6 (30.1%)
Total net sales 994.6 934.0 6.5%
Segment operating income (loss)
Bananas $89.0 $43.3 105.5%
Salads and Healthy Snacks (5.9) 10.0 N/A
Other Produce 4.5 0.0 N/A
Corporate (15.2) (22.5) 32.4%
Total operating income 72.4 30.8 135.1%
Operating margin by segment
Bananas 15.8% 9.0% 6.8 pts
Salads and Healthy Snacks (1.7%) 3.0% (4.7) pts
Other Produce 5.5% 0.0% 5.5 pts
SG&A as a percent of sales 10.0% 10.4% 0.4 pts
Company banana sales volume
(40 lb. boxes)
North America(1) 16.1 16.0 0.6%
European Core Markets(2) 12.7 13.8 (8.0%)
Asia and the Middle East(3) 6.1 4.5 35.6%
Trading Markets(4) 1.4 2.6 (46.2%)
Total 36.3 36.9 (1.6%)
Fresh Express retail
value-added salad
sales volume 17.4 17.4 0.0%
(12-count cases)
Euro average exchange
rate, spot $1.56 $1.35 15.6%
(dollars per euro)
Euro average exchange
rate, hedged $1.52 $1.30 16.9%
(dollars per euro)
(1) Total volume sold includes all banana varieties, such as
Chiquita-to-Go, Chiquita minis, organic bananas and plantains.
(2) The company's "core" European markets include the 27 member states
of the European Union, Switzerland, Norway and Iceland.
(3) The company primarily operates through joint ventures in this
region.
(4) The company's trading markets are mainly European and Mediterranean
countries that do not belong to the European Union.
Exhibit C (continued):
CHIQUITA BRANDS INTERNATIONAL, INC.
OPERATING STATISTICS - SIX MONTHS
(Unaudited - in millions, except for percentages and exchange rates)
Percent
Change
Six Months Ended Favorable
June 30, (Unfavorable)
2008 2007 vs. 2007
Net sales by segment
Bananas $1,090.8 $960.4 13.6%
Salads and Healthy Snacks 685.3 631.4 8.5%
Other Produce 154.0 247.4 (37.8%)
Total net sales 1,930.1 1,839.2 4.9%
Segment operating income (loss)
Bananas $149.8 $75.8 97.6%
Salads and Healthy Snacks (2.2) 8.1 N/A
Other Produce 7.9 (0.3) N/A
Corporate (26.3) (34.8) 24.4%
Total operating income 129.2 48.8 164.8%
Operating margin by segment
Bananas 13.7% 7.9% 5.8 pts
Salads and Healthy Snacks (0.3%) 1.3% (1.6) pts
Other Produce 5.1% (0.1%) 5.2 pts
SG&A as a percent of sales 9.3% 10.1% 0.8 pts
Company banana sales volume
(40 lb. boxes)
North America(1) 31.3 31.4 (0.3%)
European Core Markets(2) 25.2 28.4 (11.3%)
Asia and the Middle East(3) 11.0 9.2 19.6%
Trading Markets(4) 2.6 4.7 (44.7%)
Total 70.1 73.7 (4.9%)
Fresh Express retail
value-added salad
sales volume 34.2 33.6 1.8%
(12-count cases)
Euro average exchange
rate, spot
(dollars per euro) $1.53 $1.33 15.0%
Euro average exchange
rate, hedged
(dollars per euro) $1.49 $1.29 15.5%
(1) Total volume sold includes all banana varieties, such as
Chiquita-to- Go, Chiquita minis, organic bananas and plantains.
(2) The company's "core" European markets include the 27 member states
of the European Union, Switzerland, Norway and Iceland.
(3) The company primarily operates through joint ventures in this
region.
(4) The company's trading markets are mainly European and Mediterranean
countries that do not belong to the European Union.
Exhibit D:
CHIQUITA AVERAGE BANANA PRICES AND VOLUME
YEAR-OVER-YEAR PERCENTAGE CHANGE - FAVORABLE (UNFAVORABLE)
2008 vs. 2007
(Unaudited)
Pricing Volume
Region Q2 YTD Q2 YTD
North America(1) 35% 27% 1% 0%
European Core Markets(2)
U.S. Dollar basis(3) 23% 25% (8%) (11%)
Local Currency 6% 9%
Asia and the Middle East(4)
U.S. Dollar basis 15% 13% 36% 20%
Trading Markets
U.S. Dollar basis 26% 33% (46%) (45%)
(1) Pricing includes fuel-related and other surcharges. Total volume
sold includes all banana varieties, such as Chiquita-to-Go, Chiquita minis,
organic bananas and plantains.
(2) The company's "core" European markets include the 27 member states
of the European Union, Switzerland, Norway and Iceland.
(3) Prices on a U.S. dollar basis do not include the impact of hedging.
(4) The company primarily operates through joint ventures in this region.
FRESH EXPRESS RETAIL VALUE-ADDED SALADS
NET REVENUE PER CASE AND VOLUME
YEAR-OVER-YEAR PERCENTAGE CHANGE - FAVORABLE (UNFAVORABLE)
2008 vs. 2007
(Unaudited)
Net Revenue
Per Case Volume
Region Q2 YTD Q2 YTD
North America(1) 4% 3% 0% 2%
(1) Net revenue per case includes fuel-related surcharges.
Exhibit E:
EUROPEAN CURRENCY
YEAR-OVER-YEAR CHANGE - FAVORABLE (UNFAVORABLE)
2008 vs. 2007
(Unaudited - in millions)
Currency Impact (Euro/Dollar) Q2 YTD
Revenue $41 $79
Local Costs (13) (24)
Hedging(1) 1 2
Balance sheet translation(2) - 1
Net European currency impact $29 $58
(1) Hedging costs in the second quarter 2008 were $6 million compared
to $7 million in the second quarter 2007. Hedging costs for YTD 2008 were
$11 million compared to $13 million for YTD 2007.
(2) Balance sheet translation was zero for the second quarter 2008 and
a gain of $1 million YTD 2008. Balance sheet translation was zero for the
second quarter and YTD 2007.
Exhibit F:
CHIQUITA BRANDS INTERNATIONAL, INC.
DEBT SCHEDULE - SECOND QUARTER 2008
(Unaudited - in millions)
Payments,
Mar. 31, Other June 30,
2008 Additions Reductions 2008
Parent Company
7 1/2% Senior Notes $250.0 $- $- $250.0
8 7/8% Senior Notes 225.0 - - 225.0
4.25% Convertible Senior
Notes 200.0 - - 200.0
Subsidiaries
Term Loans 200.0 - (2.5) 197.5
Revolving Credit Facilities - - - -
Other 1.5 - (0.3) 1.2
Total Debt(1) $876.5 - $(2.8) $873.7
CHIQUITA BRANDS INTERNATIONAL, INC.
DEBT SCHEDULE - YEAR-TO-DATE 2008
(Unaudited - in millions)
Payments,
Dec. 31, Other June 30,
2007 Additions Reductions 2008
Parent Company
7 1/2% Senior Notes $250.0 $- $- $250.0
8 7/8% Senior Notes 225.0 - - 225.0
4.25% Convertible Senior
Notes(2) - 200.0 - 200.0
Subsidiaries
Term Loans(3) 325.7 200.0 (328.2) 197.5
Revolving Credit Facilities(3) - 57.0 (57.0) -
Other 2.5 - (1.3) 1.2
Total Debt(1) $803.2 $457 $(386.5) $873.7
(1) Excludes discontinued operations. (2) In February 2008, the company issued $200 million in principal
amount of 4.25% convertible senior notes. Net proceeds of $193.7 million
were used to repay a portion of the outstanding amounts under Term Loan C
of the company's prior credit facility.
(3) In March 2008, the company completed the refinancing of its credit
facility, comprised of a new $150 million revolving credit facility and a
$200 million term loan. Net proceeds of $193.2 million from the new term
loan were used to repay the entire outstanding balance on the company's
prior revolving credit facility and the remaining portion of Term Loan C,
and $13.7 million was retained by the company.
Exhibit G:
CHIQUITA BRANDS INTERNATIONAL, INC.
SEGMENT OPERATING STATISTICS
RECLASSIFIED - 2007 and H1 2008
(Unaudited - in millions)
For the Quarter Ended Full
2008 2007 Year
Mar.31 Jun.30 Mar.31 Jun.30 Sept.30 Dec.31 Dec.31
Net sales
by segment
Bananas(1) $528.1 $562.7 $480.0 $480.4 $417.5 $455.4 $1,833.3
Salads and
Healthy
Snacks(2) 334.8 350.4 294.4 337.0 319.2 326.6 1,277.2
Other
Produce(3) 72.5 81.5 130.8 116.6 48.5 58.4 354.3
Total net
sales 935.4 994.6 905.2 934.0 785.2 840.4 3,464.8
Segment
operating
income
Bananas(1) $60.8 $89.0 $32.5 $43.3 $4.2 $31.9 $111.9
Salads and
Healthy
Snacks(2) 3.6 (5.9) (1.9) 10.0 6.7 (1.6) 13.2
Other
Produce(3) 3.4 4.5 (0.3) 0.0 (4.9) (0.2) (5.4)
Corporate(4) (11.0) (15.2) (12.3) (22.5) (13.3) (14.1) (62.2)
Restructuring - - - - - (25.9) (25.9)
Total
operating
income 56.8 72.4 18.0 30.8 (7.3) (9.9) 31.6
Operating
margin
by segment
Bananas(1) 11.5% 15.8% 6.8% 9.0% 1.0% 7.0% 6.1%
Salads and
Healthy
Snacks(2) 1.1% (1.7%) (0.6%) 3.0% 2.1% (0.5%) 1.0%
Other
Produce(3) 4.7% 5.5% (0.2%) 0.0% (10.1%) (0.3%) (1.5%)
(1) Banana includes the sourcing (purchase and production),
transportation, marketing and distribution of bananas.
(2) Salads and Healthy Snacks includes value-added salads, as well as
fresh vegetable and fruit ingredients used in foodservice, processed fruit
ingredient products, and healthy snacking operations, including the
company's European smoothie product, Just Fruit in a Bottle.
(3) Other Produce includes the sourcing, marketing and distribution of
whole fresh fruits and vegetables other than bananas.
(4) Corporate includes expenses which are not allocated to the
reportable segments.
Exhibit H:
As earlier disclosed, although Atlanta AG represented $1.2 billion in
revenues from non-Chiquita products in 2007, its results have not been
significant to Chiquita's annual operating income in recent periods.
Atlanta AG ripens and distributes bananas and other fresh produce primarily
in Germany and Austria. Prior to becoming discontinued operations, Atlanta
AG's financial results were reported in the company's Banana and Other
Produce segments.
Financial Information Reflecting Atlanta AG as Discontinued Operations
(Unaudited - in millions)
For the Quarter Ended
2008
Mar. 31 Jun. 30
Net Sales
Banana - Continuing operations $528.1 $562.7
Banana - Discontinued operations(1) 55.8 68.6
Total Bananas 583.9 631.3
Salads and Healthy Snacks 334.8 350.4
Other Produce - Continuing operations 72.5 81.5
Other Produce - Discontinued operations(1) 279.3 326.4
Total Other Produce 351.8 407.9
Total Net Sales - Continuing operations 935.4 994.6
Total Net Sales - Discontinued
operations(1) 335.1 395.0
Total Net Sales $1,270.5 $1,389.6
Operating Income
Banana - Continuing operations $60.8 $89.0
Banana - Discontinued operations(1) 0.3 0.5
Total Bananas 61.1 89.5
Salads and Healthy Snacks 3.6 (5.9)
Other Produce - Continuing operations 3.4 4.5
Other Produce - Discontinued operations(1) (0.5) 3.0
Total Other Produce 2.9 7.5
Corporate - Continuing operations (11.0) (15.2)
Corporate - Discontinued operations(1) 0.1 (0.2)
Total Corporate (10.9) (15.4)
Restructuring - -
Total Operating Income - Continuing
operations 56.8 72.4
Total Operating Income - Discontinued
operations(1) (0.1) 3.3
Total Operating Income $56.7 $75.7
Basic Earnings Per Share
Continuing Operations $0.76 $1.37
Discontinued Operations (0.02) 0.06
Total Basic Earnings Per Share $0.74 $1.43
Diluted Earnings Per Share
Continuing Operations $0.74 $1.31
Discontinued Operations (0.02) 0.06
Total Diluted Earnings Per Share $0.72 $1.37
Depreciation and Amortization
Continuing operations $19.2 $19.2
Discontinued operations(1) 1.7 1.7
Total Depreciation and Amortization $20.9 $20.9
Current Assets
Continuing operations $840.0 $974.6
Discontinued operations 217.8 231.8
Total Current Assets 1,057.8 1,206.4
Current Liabilities
Continuing operations $487.0 $522.9
Discontinued operations 174.5 174.0
Total Current Liabilities 661.5 696.9
(1) Discontinued operations include those of Atlanta AG and related
operations.
Exhibit H (continued):
Financial Information Reflecting Atlanta AG as Discontinued Operations
(Unaudited - in millions)
For the Quarter Ended Full
2007 Year
Mar. 31 Jun. 30 Sept. 30 Dec. 31 Dec. 31
Net Sales
Banana - Continuing
operations $480.0 $480.4 $417.5 $455.4 $1,833.3
Banana - Discontinued
operations 42.8 48.1 40.3 47.4 178.6
Total Bananas 522.8 528.5 457.8 502.8 2,011.9
Salads and Healthy
Snacks 294.4 337.0 319.2 326.6 1,277.2
Other Produce -
Continuing operations 130.8 116.6 48.5 58.4 354.3
Other Produce -
Discontinued
operations(1) 244.4 273.3 235.6 266.1 1,019.4
Total Other Produce 375.2 389.9 284.1 324.5 1,373.7
Total Net Sales -
Continuing operations 905.2 934.0 785.2 840.4 3,464.8
Total Net Sales -
Discontinued
operations(1) 287.2 321.4 275.9 313.5 1,198.0
Total Net Sales $1,192.4 $1,255.4 $1,061.1 $1,153.9 $4,662.8
Operating Income
Banana - Continuing
operations $32.5 $43.3 $4.2 $31.9 $111.9
Banana -
Discontinued
operations(1) 0.9 1.1 (0.1) 0.9 2.8
Total Bananas 33.4 44.4 4.1 32.8 114.7
Salads and Healthy
Snacks (1.9) 10.0 6.7 (1.6) 13.2
Other Produce -
Continuing
operations (0.3) 0.0 (4.9) (0.2) (5.4)
Other Produce -
Discontinued
operations(1) (0.6) 2.0 (2.8) (2.9) (4.3)
Total Other Produce (0.9) 2.0 (7.7) (3.1) (9.7)
Corporate -
Continuing
operations (12.3) (22.5) (13.3) (14.1) (62.2)
Corporate -
Discontinued
operations(1) (0.3) 0.4 0.5 0.4 1.0
Total Corporate (12.6) (22.1) (12.8) (13.7) (61.2)
Restructuring - - - (25.9) (25.9)
Total Operating Income
- Continuing operations 18.0 30.8 (7.3) (9.9) 31.6
Total Operating
Income - Discontinued
operations(1) 0.0 3.5 (2.4) (1.6) (0.5)
Total Operating Income $18.0 $34.3 ($9.7) ($11.5) $31.1
Basic Earnings Per Share
Continuing Operations ($0.06) $0.12 ($0.61) ($0.59) ($1.14)
Discontinued
Operations (0.02) 0.08 (0.05) (0.09) (0.08)
Total Basic
Earnings Per Share ($0.08) $0.20 ($0.66) ($0.68) ($1.22)
Diluted Earnings Per
Share
Continuing Operations ($0.06) $0.12 ($0.61) ($0.59) ($1.14)
Discontinued Operations (0.02) 0.08 (0.05) (0.09) (0.08)
Total Diluted
Earnings Per Share ($0.08) $0.20 ($0.66) ($0.68) ($1.22)
Depreciation and
Amortization
Continuing operations $20.4 $21.6 $20.7 $19.5 $82.2
Discontinued
operations(1) 1.8 1.9 1.8 1.6 7.1
Total Depreciation
and Amortization $22.2 $23.5 $22.5 $21.1 $89.3
Current Assets
Continuing operations $767.8 $807.2 $752.4 $730.1
Discontinued
operations 181.9 183.4 158.9 191.0
Total Current
Assets 949.7 990.6 911.3 921.1
Current Liabilities
Continuing operations $553.9 $448.9 $443.3 $470.5
Discontinued
operations 158.3 152.1 137.9 152.6
Total Current
Liabilities 712.2 601.0 581.2 623.1
SOURCE Chiquita Brands International, Inc.
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Related links:
http://www.chiquita.com/
CONTACT:
Ed Loyd, Chiquita Brands International, Inc.,
+1-513-784-8935, eloyd@chiquita.com
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