Chiquita Brands International, Inc. (NYSE: CQB) today reported a fourth quarter 2000 loss of $69 million ($1.10 per share) before approximately $20 million ($.30 per share) of charges and write-downs of production and sourcing assets in the Company’s Fresh Produce operations. For the year, Chiquita reported a loss of $75 million ($1.38 per share) before the charges and write-downs.
In 1999, the Company reported a fourth quarter loss of $75 million ($1.20 per share) before a $3 million charge ($.05 per share) associated with the Company’s 1999 workforce reduction program. For the year, Chiquita reported a loss of $49 million ($1.01 per share) before $9 million ($.14 per share) of total charges associated with the workforce reduction program.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for 2000 was $145 million compared to $149 million in 1999. The Company’s results for 2000 were negatively impacted by the strongest dollar in relation to major European currencies in the last fourteen years, higher fuel costs and lower banana volume in North America. These effects were mostly offset by the Company’s substantial improvements in production and logistics costs of its Fresh Produce business and benefits from the workforce reduction program. Operating results for the Processed Foods group were comparable to the prior year.
Net sales for the fourth quarter decreased $90 million to $528 million and for the year decreased $302 million to $2.3 billion. The sales decrease was primarily attributable to the stronger dollar, lower banana volume in North America and non-core trading markets, and the deconsolidation of the Company’s Australian operations.
As previously indicated, the European Commission announced its intention to issue regulations to implement a “first-come, first-served” banana import quota system as early as April 1. If implemented, this quota system would likely result in further harm to Chiquita’s business as well as to other Latin American banana exporters. The “first-come, first-served” system is opposed by the African and Caribbean banana industries, the very sectors the European Commission purports to support and protect, the U.S., seven Latin American banana supplying countries, and the overwhelming majority of European banana operators. Chiquita’s recently announced lawsuit against the European Commission for over $500 million in damages reserves the right to claim additional future damages that would arise from implementation of the “first- come, first-served” system.
Chiquita is a leading international marketer, producer and distributor of quality fresh fruits and vegetables and processed foods.
This press release contains certain statements that are “forward-looking statements” within the meaning of the Private Securities Litigation Act of 1995. These statements are subject to a number of assumptions, risks and uncertainties, including the Company’s ability to reach agreement with holders of its parent company debt regarding its previously announced proposal to restructure such debt, the terms of any such restructure, the anticipated issuance of a going concern modification to the independent auditor’s report on the consolidated financial statements of the Company as a result of the Company’s suspension of interest and principal payments on its parent company debt, ability to obtain and complete bank and other financings when and as needed, product pricing, costs to purchase or grow (and availability of) fresh produce and other raw materials, currency exchange rate fluctuations, natural disasters and unusual weather conditions, operating efficiencies, labor relations, actions of governmental bodies including actions with regard to the European Union’s banana import regime, and other market and competitive conditions, many of which are beyond the control of Chiquita. Actual results or developments may differ materially from the expectations expressed or implied in the forward-looking statements.
CHIQUITA BRANDS INTERNATIONAL, INC. PRELIMINARY
CONSOLIDATED INCOME STATEMENT
FOR THE QUARTER AND YEAR ENDED DECEMBER 31, 2000 AND 1999
(In millions, except per share amounts)
Quarter Ended Year Ended
December 31, December 31,
2000 1999 2000 1999
EBITDA before unusual items $(16.0) $(22.4) $145.2 $148.7
Loss before unusual items (68.8) (74.8) (74.8) (49.4)
Unusual items* (20.1) (3.0) (20.1) (9.0)
Net loss (88.9) (77.8) (94.9) (58.4)
Cash — — 96.9 97.9
Parent company debt — — 859.3 883.8
Subsidiary debt — — 490.7 472.9
Net sales $528.5 $618.7 $2,253.8 $2,555.8
Cost of sales 494.8 559.7 1,863.9 2,094.4
Selling, general and
administrative 71.6 86.2 271.7 328.5
Depreciation 22.8 23.9 90.9 90.9
Total 589.2 669.8 2,226.5 2,513.8
Operating income (loss)* (60.7) (51.1) 27.3 42.0
Interest income 3.0 2.3 12.3 19.6
Interest expense (32.3) (29.3) (127.8) (112.0)
Other income, net 0.1 0.1 0.3 0.3
Loss before income taxes (89.9) (78.0) (87.9) (50.1)
Income taxes 1.0 0.2 (7.0) (8.3)
Net loss $(88.9) $(77.8) $(94.9) $(58.4)
Diluted earnings per share
Before unusual items $(1.10) $(1.20) $(1.38) $(1.01)
Unusual items* (0.30) (0.05) (0.30) (0.14)
Net loss (1.40) (1.25) (1.68) (1.15)
Shares used to calculate diluted
earnings per share 66.7 65.9 66.5 65.8
Quarterly results are subject to significant seasonal variations and are
not necessarily indicative of the results of operations for a full fiscal
* Operating income (loss) for the fourth quarter and year ended 2000
includes $20 million of charges and asset write-downs in the Company’s
Fresh Produce operations. Operating income (loss) for the fourth
quarter and year ended 1999 includes $3 million and $9 million,
respectively, of workforce reduction charges.
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