- Comparable full-year 2008 income from continuing operations improved $56
million despite recessionary environment
- Q4 includes non-cash goodwill impairment charge of $375 million at Fresh
Express
- Comparable 2008 full-year EPS of $1.12; Reported EPS of $(7.43),
including charges
- Expect to improve full-year net income and EPS in 2009 on a comparable
basis
CINCINNATI, Feb. 19 /PRNewswire-FirstCall/ -- Chiquita Brands
International, Inc. (NYSE: CQB) today released financial and operating results
for the fourth quarter and full-year 2008. All figures in this press release
are for continuing operations, unless otherwise noted.
For the full year, net sales increased by 4 percent to $3.6 billion, and
the company reported a loss from continuing operations of $325 million, or
$(7.43) per diluted share, versus a loss of $46 million, or $(1.14) per
diluted share, in 2007. On a comparable basis, the company reported income
from continuing operations of $49 million, or $1.12 per diluted share, versus
a loss of $7 million, or $(0.23) per diluted share, in 2007. The comparable
basis amounts exclude certain items affecting comparability, including a
non-cash goodwill impairment charge taken in the fourth quarter of $375
million, or $(8.58) per diluted share, for Fresh Express, as further described
below under "Items affecting comparability."
For the fourth quarter, net sales were flat year-over-year at $839
million, and the company reported a loss from continuing operations of $411
million, or $(9.27) per diluted share, versus a loss of $23 million, or
$(0.59) in the fourth quarter of 2007. On a comparable basis, the loss from
continuing operations for the quarter was $33 million, or $(0.74) per diluted
share, versus income of $3 million, or $0.02 per diluted share, in 2007.
"We overcame unprecedented cost challenges in 2008 and significantly
improved comparable full-year results versus 2007," said Fernando Aguirre,
chairman and chief executive officer. "We sold non-strategic assets,
strengthened our financial position, reduced controllable costs, extended our
geographic growth and continued positioning the company for long-term
success."
Mr. Aguirre added, "Our fourth quarter results were lower year-over-year
due to higher costs including flood impacts, a weaker euro, and lower
performance in salads. We took a non-cash goodwill impairment charge for
Fresh Express in the fourth quarter, primarily due to current economic
conditions and lower category growth expectations. Although the economic
environment is uncertain, we expect to improve full-year results in 2009 on a
comparable basis. We believe we have the right products and strategy to
leverage global health and wellness trends and are executing our profit
improvement plans in salads, maintaining our focus on profitability in
bananas, and innovating toward higher-margin products."
2008 FULL-YEAR SUMMARY
(The following table shows adjustments made in "Income (loss) from
continuing operations" and EPS from continuing operations between comparable
and GAAP results presentation. See "Items affecting comparability" below for
description of items excluded on a comparable basis, including descriptions of
how these items affect the results of reportable segments. Exhibit B provides
a similar reconciliation by segment of "Operating income (loss).")
Income (loss) From Diluted EPS From
Continuing Continuing
Operations Operations(1)
FY 2008 FY 2007 FY 2008 FY 2007
Comparable results (Non-GAAP) $48.6 $(6.9) $1.12 $(0.23)
Asset impairments (374.5) - (8.56) -
Restructuring costs (6.9) (25.9) (0.16) (0.61)
Loss on divestitures - (10.0) - (0.24)
Other items 7.6 (2.9) 0.17 (0.06)
Reported results (GAAP) $(325.2) $(45.7) $(7.43) $(1.14)
(1) Shares used for diluted EPS calculation are on an as reported basis.
Net Sales: Annual sales increased 4 percent year-over-year to $3.6
billion, as a result of higher banana pricing in each of the company's markets
and favorable average exchange rates, partially offset by lower banana volumes
in core European markets.
Comparable Results: Comparable income from continuing operations results
for the full-year 2008 improved by $56 million, to $49 million, due to higher
global banana pricing, favorable average exchange rates and savings from the
company's 2007 business restructuring, partially offset by higher sourcing
costs in the banana segment and declines in the salads and healthy snacks
operations.
Cash, Debt and Liquidity: At December 31, 2008, the company had $77
million in cash and $129 million of borrowing capacity under a five-year
revolving credit facility with a syndicate of commercial banks. Debt at
year-end 2008 was $777 million, reflecting the third straight year of debt
reduction. The company has a solid capital structure and no more than $20
million in debt maturities in any year until 2014. The non-cash goodwill
impairment charge in the fourth quarter of 2008 has no effect on the company's
liquidity, covenant compliance, or borrowing capacity.
Banana Segment: Net sales for the segment increased 12 percent to $2.1
billion, principally as a result of improved pricing in bananas and higher
average euro exchange rates. On a comparable basis, operating income improved
65 percent to $184 million, compared to $112 million in 2007, due to pricing
and euro exchange rates that more than offset higher sourcing and logistics
costs and lower volume in the company's core European markets.
Salads and Healthy Snacks Segment: Net sales increased 2 percent to $1.3
billion primarily due to higher pricing, including fuel surcharges, in retail
salads and foodservice. On a comparable basis, operating loss was $25
million, versus income of $13 million in 2007, due to higher fuel and raw
product costs, network inefficiencies during the consolidation of processing
and distribution centers, increased investment in new products including the
successful expansion of Just Fruit in a Bottle in Europe and single-serve
Gourmet Cafe salads. The total operating losses invested in the start-up and
expansion of Just Fruit in a Bottle in Europe was $26 million for the year.
Other Produce: Net sales decreased 31 percent to $244 million due
primarily to the elimination of both local sales from previously owned
operations in Chile and lower-margin sales of Mexican-sourced vegetables. On
a comparable basis, operating income was $10 million, versus $5 million in
2007.
FOURTH QUARTER 2008 RESULTS
(The following table shows adjustments made in "Income (loss) from
continuing operations" and EPS from continuing operations between comparable
and GAAP results presentation. See "Items affecting comparability" below for
description of items excluded on a comparable basis, including descriptions of
how these items affect the results of reportable segments. Exhibit B provides
a similar reconciliation by segment of "Operating income (loss).")
Income (loss) From Diluted EPS
Continuing From Continuing
Operations Operations(1)
Q4 2008 Q4 2007 Q4 2008 Q4 2007
Comparable results
(Non-GAAP) $(32.8) $3.4 $(0.74) $0.02
Asset impairments (374.5) - (8.44) -
Restructuring costs (5.2) (25.9) (0.12) (0.61)
Other items 1.4 - 0.03 -
Reported results (GAAP) $(411.1) $(22.5) $(9.27) $(0.59)
(1) Shares used for diluted EPS calculation are on an as reported basis.
Net Sales: Net sales were flat at $839 million as higher local banana
prices were offset by weaker euro exchange rates, a unit volume decline in
retail and foodservice salads sales, and the elimination of both non-Chiquita
sales in Chile and lower-margin sales of Mexican vegetables in the Other
Produce segment.
Comparable Results: On a comparable basis, the results from continuing
operations for the quarter swung to a loss of $33 million from income of $3
million in the year-ago quarter due to higher banana production and logistics
costs (including flood-related costs), lower average euro exchange rates and
lower volumes in Salads and Healthy Snacks, partially offset by higher banana
pricing in North America and savings from the company's 2007 business
restructuring.
Banana Segment: Net sales for the segment increased 9 percent to $496
million principally as a result of improved pricing in North America, which
more than offset the impact of lower average euro exchange rates (outlined in
Exhibit E). Comparable operating income was $13 million versus $32 million in
the year-ago period. The decrease was due to higher product sourcing costs
including the impact of flooding in Panama and Costa Rica and lower average
euro exchange rates. Flooding impacted the fourth quarter by approximately $8
million in higher costs, and is expected to have an incremental impact of
close to $30 million in 2009 due to the costs to source and ship replacement
volume.
Salads and Healthy Snacks Segment: Net sales decreased 10 percent to $295
million, mostly due to lower volumes, which were partly offset by higher
pricing and fuel surcharges. Foodservice volume decreased 25 percent as the
company elected not to renew certain foodservice contracts with customers
unwilling to accept price increases, and retail value-added salads volumes
declined 4 percent, roughly in line with category performance. Comparable
operating loss was $14 million, compared to a loss of $2 million in the
year-ago period, due to higher brand development, marketing and innovation
spending in North American salads (such as the expansion of innovative
products), increases in raw product costs in salad operations, and increased
investment in the successful expansion of Just Fruit in a Bottle in Europe.
The operating losses invested in the start-up of Just Fruit in a Bottle in
Europe were $8 million for the fourth quarter of 2008.
Other Produce: Net sales decreased 17 percent to $48 million due
primarily to a decline in lower-margin sales of Mexican vegetables.
Comparable operating income was $2 million compared to breakeven in the
year-ago period.
2009 OUTLOOK
While the company will continue to face challenges in 2009, particularly
given uncertainty in the global economic environment, management expects to
deliver improved full-year results in 2009, on a comparable basis, through
both profit-improvement strategies and cost reduction initiatives. The
company intends to continue to use free cash flow primarily for debt
reduction.
In the Banana segment, the overall supply and demand balance from Latin
America remains relatively favorable and consumer demand remains stable.
Banana sourcing and production costs are expected to increase in 2009 compared
to 2008 due to purchased fruit contract pricing, government-imposed exit
prices, and close to $30 million of incremental sourcing and logistics costs
from flooding that occurred late in 2008 in Costa Rica and Panama. Reductions
in fuel-related costs are expected to be partly offset by fuel hedging
results, which would generate a loss in 2009 at current market forward rates
compared to a gain in 2008. Banana pricing is expected to be relatively
stable in North America, despite a significant decline in the amount of
fuel-related surcharges. Local European banana pricing is less certain due in
part to higher first-half volumes from the French West Indies compared to the
post-Hurricane Dean-period a year ago, and the expected lower value of the
euro, which averaged $1.47/euro in 2008, and for which the company is
approximately 75 percent hedged at $1.39/euro in 2009, compared to a current
spot rate of approximately $1.27/euro.
In the Salads and Healthy Snacks segment, the company expects to generate
improved results in 2009, on a comparable basis, in both salads and healthy
snacks. The profit-improvement strategies in salads focus on increasing
pricing, eliminating unprofitable contracts and products, modifying pricing to
recover fuel-related cost increases, improving the efficiency of its
manufacturing and distribution network, and improving merchandising. As part
of these initiatives, the company elected not to renew certain foodservice
contracts with customers unwilling to accept certain price increases; and, as
a result, the company expects that its foodservice volume could decline by as
much as 50 percent in 2009. In healthy snacks, the company expects as much as
$10 million in lower operating losses from the start-up of Just Fruit in a
Bottle in Europe, in keeping with the target for individual markets to reach
breakeven by the end of their third year after market launch.
In addition to the company's overall business outlook, the following chart
summarizes management's estimates of certain key items for 2009:
FY 2008 FY 2009
(in millions) Actual Estimate
Capital Expenditures $63 $55-65
Depreciation & Amortization $73 $65-69
Gross Interest Expense (1,2) $67 $58-62
Net Interest Expense (1,2) $60 $52-56
(1) 2008 excludes $9 million for the write-off of deferred financing
fees related to the refinancing of the company's credit facility
in the first quarter.
(2) 2009 excludes $7 million of non-cash interest expense due to the
adoption of FASB Staff Position No. APB 14-1, "Accounting for
Convertible Debt Instruments That May Be Settled in Cash upon
Conversion (including partial cash settlement)."
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
www.chiquita.com and a replay will be available until March 5, 2009.
Toll-free telephone access will be available by dialing 1-888-726-2459 in the
United States and +913-312-0732 from international locations. 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 4064878.
NON-GAAP MEASUREMENTS
The company reports its financial results in accordance with generally
accepted accounting principles in the United States of America (U.S. GAAP).
In an effort to provide investors with additional information regarding the
company's results and to provide a more meaningful year-over-year comparison
of the company's financial performance, the company sometimes uses non-GAAP
measures as defined by the Securities and Exchange Commission. The
differences between the U.S. GAAP and non-GAAP financial measures are
reconciled in the text of this press release and in attached schedules, and
are more fully described below in "Items affecting comparability." In
presenting comparable results, the company discloses non-GAAP financial
measures which it believes will be useful to investors. Management uses the
non-GAAP financial measures to evaluate the company's financial performance
against internal budgets and targets, including those associated with
incentive compensation plans, because it believes that these non-GAAP
financial measures are useful for evaluating the company's core operating
results and facilitating comparison across reporting periods. Importantly,
non-GAAP financial measures should be considered in addition to, and not
instead of, U.S. GAAP financial measures. In addition, the non-GAAP measures
the company is using may differ from non-GAAP measures that other companies
use.
ITEMS AFFECTING COMPARABILITY
(See Exhibit B for Reconciliation of GAAP and Non-GAAP Operating
Information)
2008 Items
Asset Impairments: The non-cash Fresh Express goodwill impairment charge
of $375 million in the fourth quarter is the result of the company's 2008
impairment analysis in accordance with SFAS No. 142, "Goodwill and Other
Intangible Assets." The impairment is included in reported figures for the
Salads and Healthy Snacks segment and had an income tax benefit of
approximately $1 million. The impairment does not have any impact on the
company's liquidity, covenant compliance, or borrowing capacity.
Restructuring Costs: In the fourth quarter, the company committed to
relocate its European headquarters from Belgium to Switzerland, in order to
optimize the company's long-term tax structure. The relocation is expected to
be completed in mid-2009. The company expects to incur one-time costs related
to this relocation in the range of $19-23 million, of which $5 million was
recognized in the fourth quarter of 2008 and $2 million in earlier periods,
with most of the remainder expected in the first half of 2009. Restructuring
costs are included in reportable figures as a component of operating income,
but are not allocated to the reportable segments.
Other Items: Other items in 2008 included a $14 million gain from
open-market repurchases of Senior Notes ($10 million in the third quarter and
$4 million in the fourth quarter); $8 million of other income, and $3 million
in related tax expense, in the second quarter from the resolution of claims
and the receipt of refunds of certain non-income taxes paid between 1980 and
1990. These items are included in the reportable figures as other income and
income tax expense, which are below operating income; they are not allocated
to the reportable segments. Other items also include a $3 million impairment
charge in the fourth quarter related to the closure of a UK ripening center,
which is included in the reportable figures for the Banana segment, and $9
million of deferred financing fee write-offs reported in interest expense in
the first quarter as a result of the company's successful refinancing.
2007 Items
Restructuring Costs: A $26 million charge in Q4 from implementation of a
business restructuring plan. Restructuring costs are included in reportable
figures as a component of operating income, but are not allocated to the
reportable segments.
Gain (Loss) on Divestitures: $10 million in charges were incurred related
to the exit of the company's Chilean operations ($5 million in the first
quarter, $1 million in the second quarter, and $4 million in the third
quarter). These charges are included in the reportable figures for the Other
Produce segment.
Other Items: A $3 million charge in the second quarter related to the
settlement of U.S. antitrust litigation. This charge is not allocated to the
reportable segments; it is included in the reportable figures as a Corporate
expense.
About Chiquita Brands International, Inc.
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 healthy, fresh products under the
Chiquita(R) and Fresh Express(R) premium brands and other related trademarks.
With annual revenues of nearly $4 billion, Chiquita employs approximately
23,000 people and has operations in more than 90 countries worldwide. For
more information, please visit our web site at 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 prices for
commodity and other inputs, currency exchange rate fluctuations, industry and
competitive conditions (all of which may be more unpredictable in light of
uncertainty in the global economic environment), government regulations, food
safety and product recalls affecting the company or the industry, labor
relations, taxes, political instability and terrorism; unusual weather
conditions and crop risks; access to and cost of financing; any negative
operating or other impacts from the relocation of the company's European
headquarters to Switzerland; and the outcome of pending litigation and
governmental investigations involving the company, and the legal fees and
other costs incurred in connection with such 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 -- FOURTH QUARTER AND FULL YEAR
(Unaudited - in millions, except per share amounts)
Quarter Ended Year Ended
December 31, December 31,
2008 2007 2008 2007
Net sales $839.3 $840.4 $3,609.4 $3,464.8
Operating expenses
Cost of sales 744.4 704.9 3,067.6 2,949.9
Selling,
general and
administrative 105.3 93.7 378.3 374.8
Depreciation 15.3 17.0 62.9 72.4
Amortization 2.5 2.5 9.8 9.8
Equity in
earnings of
investees (3.3) 6.3 (10.3) 0.4
European
headquarters
relocation 5.2 - 6.9 -
Goodwill
impairment 375.3 - 375.3 -
Restructuring - 25.9 - 25.9
1,244.7 850.3 3,890.5 3,433.2
Operating income
(loss) (405.4) (9.9) (281.1) 31.6
Interest income 1.8 1.6 7.1 9.8
Interest expense (15.4) (19.1) (75.8) (86.2)
Other income(1) 4.5 - 22.7 -
Income (loss)
from continuing
operations before
taxes (414.5) (27.4) (327.1) (44.8)
Income tax
benefit
(expense)(2) 3.4 4.9 1.9 (0.9)
Income (loss)
from continuing
operations (411.1) (22.5) (325.2) (45.7)
Income (loss)
from
discontinued
operations(3) (0.8) (3.5) 1.5 (3.3)
Net income
(loss) $(411.9) $(26.0) $(323.7) $(49.0)
Basic earnings per
share:(5)
Continuing
operations $(9.27) $(0.59) $(7.43) $(1.14)
Discontinued
operations (0.01) (0.09) 0.03 (0.08)
$(9.28) $(0.68) $(7.40) $(1.22)
Diluted earnings per
share: (4, 5)
Continuing
operations $(9.27) $(0.59) $(7.43) $(1.14)
Discontinued
operations (0.01) (0.09) 0.03 (0.08)
$(9.28) $(0.68) $(7.40) $(1.22)
Shares used to
calculate basic
earnings per share 44.4 42.6 43.7 42.5
Shares used to
calculate
diluted earnings
per share(4) 44.4 42.6 43.7 42.5
(1) The quarter ended December 31, 2008 includes a net gain of
$4 million, or $0.10 per diluted share, related to open market
repurchases of senior notes. The year ended December 31, 2008
includes a net gain of $14 million, or $0.32 per diluted share,
from the senior notes repurchase program and an $8 million gain
from the favorable resolution of a claim related to a non-income
tax refund. An offsetting $3 million of related tax expense for
the claim resolution is included in "Income tax benefit (expense)"
for the year ended December 31, 2008.
(2) Includes benefits of $5 million and $17 million for the quarter and
year ended December 31, 2008, respectively and $9 million and
$14 million for the quarter and year ended December 31, 2007,
respectively, primarily due to the resolution of tax contingencies
in various jurisdictions and the release of valuation allowance.
(3) Includes the operating results of Atlanta AG and related operations,
as well as the net gain on the sale of Atlanta of less than
$1 million.
(4) Includes any dilutive effect of outstanding warrants and stock
options based on the treasury stock method, and the dilutive
effect of restricted stock awards. For the quarter and year
ended December 31, 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.
(5) Earnings available to common shareholders for the quarter and
year ended December 31, 2007, used to calculate earnings per share,
are reduced by a one-time $2.7 million deemed dividend to a
minority shareholder in a joint venture.
Exhibit B:
CHIQUITA BRANDS INTERNATIONAL, INC.
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION
OPERATING INCOME (LOSS) - FULL YEAR
(Unaudited - in millions)
2008
Reconciliation Salads & Operating
Bananas Healthy Other Corp- Restruc- income
Snacks Produce orate turing (loss)
Comparable
results
(Non-GAAP) $184.2 $(24.5) $10.1 $(65.6) $- $104.2
Asset
impairments - (375.3) - - - (375.3)
Restructuring
costs - - - - (6.9) (6.9)
Loss on
divestitures - - - - - -
Other items (3.1) - - - - (3.1)
Reported results
(U.S. GAAP) $181.1 $(399.8) $10.1 $(65.6) $(6.9) $(281.1)
2007
Reconciliation Salads & Operating
Bananas Healthy Other Corp- Restruc- income
Snacks Produce orate turing (loss)
Comparable
results
(Non-GAAP) $111.9 $13.2 $4.6 $(59.3) $- $70.4
Asset
impairments - - - - - -
Restructuring
costs - - - - (25.9) (25.9)
Loss on
divestitures - - (10.0) - - (10.0)
Other items - - - (2.9) - (2.9)
Reported results
(U.S. GAAP) $111.9 $13.2 $(5.4) $(62.2) $(25.9) $31.6
Exhibit B (continued):
CHIQUITA BRANDS INTERNATIONAL, INC.
RECONCILIATION OF GAAP AND NON-GAAP INFORMATION
OPERATING INCOME (LOSS) - FOURTH QUARTER
(Unaudited - in millions)
Q4 2008
Reconciliation Salads & Operating
Bananas Healthy Other Corp- Restruc- income
Snacks Produce orate turing (loss)
Comparable
results
(Non-GAAP) $12.8 $(13.8) $2.0 $(22.8) $- $(21.8)
Asset
impairments - (375.3) - - - (375.3)
Restructuring
costs - - - - (5.2) (5.2)
Loss on
divestitures - - - - - -
Other items (3.1) - - - - (3.1)
Reported operating
income (loss)
(U.S. GAAP) $9.7 $(389.1) $2.0 $(22.8) $(5.2) $(405.4)
Q4 2007
Reconciliation Salads & Operating
Bananas Healthy Other Corp- Restruc- income
Snacks Produce orate turing (loss)
Comparable
results
(Non-GAAP) $31.9 $(1.6) $(0.1) $(14.2) $- $16.0
Asset
impairments - - - - - -
Restructuring
costs - - - - (25.9) (25.9)
Loss on
divestitures - - - - - -
Other items - - - - - -
Reported operating
income (loss)
(U.S. GAAP) $31.9 $(1.6) $(0.1) $(14.2) $(25.9) $(9.9)
Exhibit C:
CHIQUITA BRANDS INTERNATIONAL, INC.
OPERATING STATISTICS - FULL YEAR
(Unaudited - in millions, except for percentages and exchange rates)
Percent
Change
Year Ended December 31, Favorable
(Unfavorable)
2008 2007 vs. 2007
Net sales by segment
Bananas $2,060.3 $1,833.3 12.4%
Salads and Healthy Snacks 1,305.0 1,277.2 2.2%
Other Produce 244.1 354.3 (31.1)%
Total net sales $3,609.4 $3,464.8 4.2%
Comparable segment operating
income (loss)( 1)
Bananas $184.2 $111.9 64.6%
Salads and Healthy Snacks (24.5) 13.2 N/A
Other Produce 10.1 4.6 119.6%
Corporate (65.6) (59.3) (10.6)%
Total operating
income (loss) $104.2 $70.4 48.0%
Comparable operating margin
by segment
Bananas 8.9% 6.1% 2.8pts
Salads and Healthy Snacks (1.9)% 1.0% (2.9)pts
Other Produce 4.1% 1.3% 2.8pts
SG&A as a percent of sales 10.5% 10.8% 0.3pts
Company banana sales
volume(2)
(40 lb. boxes)
North America 62.2 61.5 1.1%
Core European Markets(3) 49.2 53.4 (7.9)%
Asia and the Middle East (4) 24.2 19.1 26.7%
Trading Markets(5) 6.8 8.8 (22.7)%
Total 142.4 142.8 (0.3)%
Fresh Express retail value-added
salad sales volume
(12-count cases) 66.1 65.6 0.8%
Euro average exchange rate, spot
(dollars per euro) $1.47 $1.37 7.3%
Euro average exchange rate,
hedged (dollars per euro) $1.45 $1.33 9.0%
(1) See detailed description of reconciling items between GAAP and
comparable basis figures in Exhibit B and in the text of the
press release under the heading titled "Items affecting
comparability."
(2) Total volume sold includes all banana varieties, such as
Chiquita-to-Go, Chiquita minis, organic bananas and plantains.
(3) The company's Core European Markets include the 27 member states
of the European Union, Switzerland, Norway and Iceland.
(4) The company primarily operates through joint ventures in this
region, where sales are invoiced mostly in U.S. dollars.
(5) 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 - FOURTH QUARTER
(Unaudited - in millions, except for percentages and exchange rates)
Percent
Quarter Ended December 31, Change
Favorable
(Unfavorable)
2008 2007 vs. 2007
Net sales by segment
Bananas $496.0 $455.4 8.9%
Salads and Healthy
Snacks 295.0 326.6 (9.7)%
Other Produce 48.3 58.4 (17.3)%
Total net sales $839.3 $840.4 (0.1)%
Comparable segment
operating income (loss)(1)
Bananas $12.8 $31.9 (59.9)%
Salads and Healthy
Snacks (13.8) (1.6) N/A
Other Produce 2.0 (0.1) N/A
Corporate (22.8) (14.2) (60.6)%
Total operating loss $(21.8) $16.0 N/A
Operating margin by
segment
Bananas 2.6% 7.0% (4.4)pts
Salads and Healthy
Snacks (4.7)% (0.5)% (4.2)pts
Other Produce 4.1% (0.2)% 4.3pts
SG&A as a percent of
sales 12.5% 11.2% (1.3)pts
Company banana sales
volume(2)
(40 lb. boxes)
North America 15.7 14.9 5.4%
European Core
Markets(3) 12.4 12.6 (1.6)%
Asia and the Middle
East (4) 7.1 4.7 51.1%
Trading Markets(5) 2.7 2.3 17.4%
Total 37.9 34.5 9.9%
Fresh Express retail
value-added salad sales
volume
(12-count cases) 15.0 15.6 (3.8)%
Euro average exchange
rate, spot (dollars per
euro) $1.32 $1.44 (8.3)%
Euro average exchange
rate, hedged (dollars
per euro)
$1.35 $1.41 (4.3)%
(1) See detailed description of reconciling items between GAAP and
comparable basis figures in Exhibit B and in the text of the
press release under the heading titled "Items affecting
comparability."
(2) Total volume sold includes all banana varieties, such as
Chiquita-to-Go, Chiquita minis, organic bananas and plantains.
(3) The company's Core European Markets include the 27 member states
of the European Union, Switzerland, Norway and Iceland.
(4) The company primarily operates through joint ventures in this
region, where sales are invoiced mostly in U.S. dollars.
(5) 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 Q4 FY Q4 FY
North America(1) 34% 30% 5% 1%
Core European
Markets(2)
U.S. Dollar basis(3) (7)% 14%
Local Currency 1% 5% (2)% (8)%
Asia and the Middle
East(4)
U.S. Dollar basis 22% 14% 51% 27%
Trading Markets
U.S. Dollar basis 7% 18% 17% (23)%
(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,
where sales are invoiced mostly in U.S. dollars.
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 Q4 FY Q4 FY
North America(1) 6% 5% (4)% 1%
(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) Q4 FY
Revenue $(20) $81
Local Costs 7 (25)
Hedging(1) 7 10
Balance sheet translation(2) (1) (5)
Net European currency impact $(7) $61
(1) Hedging gains in the fourth quarter 2008 were $4 million compared
to costs of $4 million in the fourth quarter 2007. Hedging costs
for the full year 2008 were $9 million compared to $19 million
for 2007.
(2) Balance sheet translation was a gain of $2 million for the
fourth quarter 2008 and zero for the full year 2008. Balance
sheet translation was a gain of $3 million for the fourth
quarter 2007 and $5 million for the full year 2007.
Exhibit F:
CHIQUITA BRANDS INTERNATIONAL, INC.
DEBT SCHEDULE - FULL-YEAR 2008
(Unaudited - in millions)
Payments,
Dec. 31, Other Dec. 31,
2007 Additions Reductions 2008
Parent Company
7 1/2% Senior Notes (1) $250.0 $- $(54.7) $195.3
8 7/8% Senior Notes(1) 225.0 - (36.6) 188.4
4.25% Convertible Senior
Notes (2) - 200.0 200.0
Subsidiaries
Term Loans (2) 325.7 200.0 (333.2) 192.5
Revolving Credit
Facilities(2) - 57.0 (57.0) -
Other 2.5 - (1.8) 0.7
Total Debt(3) $803.2 $457.0 $(483.3) $776.9
CHIQUITA BRANDS INTERNATIONAL, INC.
DEBT SCHEDULE - FOURTH QUARTER 2008
(Unaudited - in millions)
Payments,
Sept. 30, Other Dec. 31,
2008 Additions Reductions 2008
Parent Company
7 1/2% Senior Notes (1) $207.9 $- $(12.6) $195.3
8 7/8% Senior Notes(1) 200.8 - (12.4) 188.4
4.25% Convertible Senior
Notes (2) 200.0 - - 200.0
Subsidiaries
Term Loans (2) 195.0 - (2.5) 192.5
Revolving Credit
Facilities(2) - - - -
Other 1.0 - (0.3) 0.7
Total Debt(3) $804.7 $- $(27.8) $776.9
(1) During September and October 2008, the company repurchased
$66 million and $25 million, respectively, principal amount of
its senior notes at a discount, by applying $75 million of
proceeds from the sale of Atlanta AG.
(2) The company significantly improved its debt structure by
extending debt maturities and obtaining significantly more
flexible financial covenants through the issuance of
$200 million of convertible notes and the refinancing of its
credit facility, comprised of a new $150 million revolving
credit facility and a $200 million term loan, during the
first quarter 2008.
(3) Represents continuing operations only; excludes
discontinued operations.
SOURCE Chiquita Brands International, Inc.
CONTACT: Ed Loyd of Chiquita Brands International, Inc.,
+1-513-784-8935, eloyd@chiquita.com
Web Site: http://www.chiquita.com
(CQB)
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