SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| (Mark One) | ||
| [x] |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
| For the quarterly period ended September 30, 2002 | ||
| OR |
||
| [ ] |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
For the transition period from to
Commission file number 1-1550
CHIQUITA BRANDS INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in Its Charter)
| New Jersey | 04-1923360 | |
| (State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
250 East Fifth Street
Cincinnati, Ohio 45202
(Address of principal executive offices and zip code)
Registrant’s telephone number, including area code: (513) 784-8000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).
Yes X No
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes X No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. As of October 31, 2002, there were 39,822,371 shares of Common Stock outstanding.
CHIQUITA BRANDS INTERNATIONAL, INC.
TABLE OF CONTENTS
| Page | ||||||||||||
| PART I — Financial Information | ||||||||||||
| Item 1 | - | Financial Statements | ||||||||||
| Consolidated Statement of Income for the quarter and six months ended September 30, 2002, for the quarter and nine months ended September 30, 2001, and for the quarter ended March 31, 2002 | 3 | |||||||||||
| Consolidated Balance Sheet as of September 30, 2002, December 31, 2001 and September 30, 2001 | 4 | |||||||||||
| Consolidated Statement of Cash Flow for the six months ended September 30, 2002, for the quarter ended March 31, 2002, and for the nine months ended September 30, 2001 | 5 | |||||||||||
| Notes to Consolidated Financial Statements | 6 | |||||||||||
| Item 2 | - | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 15 | |||||||||
| Item 3 | - | Quantitative and Qualitative Disclosures About Market Risk | 19 | |||||||||
| Item 4 | - | Controls and Procedures | 19 | |||||||||
| PART II — Other Information | ||||||||||||
| Item 4 | - | Submission of Matters to a Vote of Security Holders | 20 | |||||||||
| Item 6 | - | Exhibits and Reports on Form 8-K | 20 | |||||||||
| Signature | 21 | |||||||||||
| Certification of Chief Executive Officer | 22 | |||||||||||
| Certification of Chief Financial Officer | 23 | |||||||||||
2
Part I — Financial Information
Item 1 — Financial Statements
CHIQUITA BRANDS INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF INCOME (Unaudited)
(In thousands, except per share amounts)
| Reorganized | Predecessor | Reorganized | |||||||||||||||||||
| Company* | Company* | Company* | Predecessor Company* | ||||||||||||||||||
| Quarter | Quarter | Six Months | Quarter | Nine Months | |||||||||||||||||
| Ended | Ended | Ended | Ended | Ended | |||||||||||||||||
| Sept. 30, | Sept. 30, | Sept. 30, | March 31, | Sept. 30, | |||||||||||||||||
| 2002 | 2001 | 2002 | 2002 | 2001 | |||||||||||||||||
Net sales |
$ | 528,911 | $ | 508,739 | $ | 1,160,839 | $ | 629,505 | $ | 1,681,398 | |||||||||||
Operating expenses |
|||||||||||||||||||||
Cost of sales |
456,907 | 435,499 | 951,810 | 510,384 | 1,386,138 | ||||||||||||||||
Selling, general and
administrative |
59,078 | 55,672 | 125,647 | 55,336 | 173,238 | ||||||||||||||||
Depreciation |
9,648 | 21,178 | 19,590 | 21,401 | 62,810 | ||||||||||||||||
| 525,633 | 512,349 | 1,097,047 | 587,121 | 1,622,186 | |||||||||||||||||
Operating income (loss) |
3,278 | (3,610 | ) | 63,792 | 42,384 | 59,212 | |||||||||||||||
Interest income |
960 | 2,013 | 1,976 | 624 | 7,168 | ||||||||||||||||
Interest expense |
(11,068 | ) | (33,387 | ) | (23,384 | ) | (9,486 | ) | (98,118 | ) | |||||||||||
Financial restructuring items |
— | (3,239 | ) | — | (285,822 | ) | (6,345 | ) | |||||||||||||
Income (loss) before income
taxes and cumulative effect
of a change in method
of accounting |
(6,830 | ) | (38,223 | ) | 42,384 | (252,300 | ) | (38,083 | ) | ||||||||||||
Income taxes |
(1,400 | ) | — | (2,900 | ) | (1,000 | ) | (7,000 | ) | ||||||||||||
Income (loss) before cumulative
effect of a change in method
of accounting |
(8,230 | ) | (38,223 | ) | 39,484 | (253,300 | ) | (45,083 | ) | ||||||||||||
Cumulative effect of a change
in method of accounting |
— | — | — | (144,523 | ) | — | |||||||||||||||
Net income (loss) |
$ | (8,230 | ) | $ | (38,223 | ) | $ | 39,484 | $ | (397,823 | ) | $ | (45,083 | ) | |||||||
Basic and diluted earnings per
common share: |
|||||||||||||||||||||
- Before cumulative effect
of a change in method
of accounting |
$ | (0.21 | ) | $ | (0.56 | ) | $ | 0.99 | $ | (3.23 | ) | $ | (0.76 | ) | |||||||
- Cumulative effect of a
change in method
of accounting |
— | — | — | (1.85 | ) | — | |||||||||||||||
- Net income (loss) |
$ | (0.21 | ) | $ | (0.56 | ) | $ | 0.99 | $ | (5.08 | ) | $ | (0.76 | ) | |||||||
*See Notes to Consolidated Financial Statements, including
Basis of Presentation
describing the Reorganized Company and
Predecessor Company.
3
CHIQUITA BRANDS INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET (Unaudited)
(In thousands, except share amounts)
| Reorganized | ||||||||||||||
| Company* | Predecessor Company* | |||||||||||||
| September 30, | December 31, | September 30, | ||||||||||||
| 2002 | 2001 | 2001 | ||||||||||||
ASSETS |
||||||||||||||
Current assets |
||||||||||||||
Cash and equivalents |
$ | 54,654 | $ | 70,428 | $ | 121,203 | ||||||||
Trade receivables (less allowances
of $10,266, $11,902, and $11,956) |
233,057 | 193,945 | 209,257 | |||||||||||
Other receivables, net |
65,517 | 80,378 | 71,081 | |||||||||||
Inventories |
409,439 | 392,190 | 411,421 | |||||||||||
Other current assets |
49,004 | 35,414 | 41,434 | |||||||||||
Total current assets |
811,671 | 772,355 | 854,396 | |||||||||||
Property, plant and equipment, net |
377,368 | 1,005,606 | 1,021,023 | |||||||||||
Investments and other assets, net |
155,724 | 319,884 | 324,971 | |||||||||||
Assets held for sale |
59,809 | 6,232 | 6,282 | |||||||||||
Intangibles, net |
387,585 | 158,415 | 159,461 | |||||||||||
Total assets |
$ | 1,792,157 | $ | 2,262,492 | $ | 2,366,133 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
||||||||||||||
Liabilities not subject to compromise |
||||||||||||||
Current liabilities |
||||||||||||||
Notes and loans payable |
$ | 13,668 | $ | 53,374 | $ | 23,024 | ||||||||
Long-term debt due within one year |
||||||||||||||
Parent company |
— | — | 858,740 | |||||||||||
Subsidiaries |
51,327 | 56,376 | 52,135 | |||||||||||
Accounts payable |
262,912 | 175,161 | 238,321 | |||||||||||
Accrued liabilities |
87,222 | 102,452 | 180,947 | |||||||||||
Total current liabilities |
415,129 | 387,363 | 1,353,167 | |||||||||||
Long-term debt of parent company |
250,000 | — | — | |||||||||||
Long-term debt of subsidiaries |
255,250 | 306,017 | 329,774 | |||||||||||
Accrued pension and other employee
benefits |
101,189 | 68,193 | 63,938 | |||||||||||
Other liabilities |
103,134 | 89,505 | 90,247 | |||||||||||
Total liabilities not subject to
compromise |
1,124,702 | 851,078 | 1,837,126 | |||||||||||
Liabilities subject to compromise |
— | 962,820 | — | |||||||||||
Total liabilities |
1,124,702 | 1,813,898 | 1,837,126 | |||||||||||
Shareholders’ equity |
||||||||||||||
Preferred and preference stock |
— | 139,729 | 156,925 | |||||||||||
Common stock, $.01 par value
(39,816,164 new shares, 78,273,183
and 75,339,489 old shares
outstanding, respectively) |
398 | 783 | 753 | |||||||||||
Capital surplus |
625,556 | 881,192 | 864,024 | |||||||||||
Retained earnings (deficit) |
39,484 | (530,068 | ) | (456,383 | ) | |||||||||
Accumulated other comprehensive
income (loss) |
2,017 | (43,042 | ) | (36,312 | ) | |||||||||
Total shareholders’ equity |
667,455 | 448,594 | 529,007 | |||||||||||
Total liabilities and
shareholders’ equity |
$ | 1,792,157 | $ | 2,262,492 | $ | 2,366,133 | ||||||||
*See Notes to Consolidated Financial Statements, including Basis of Presentation
describing the Reorganized Company and Predecessor Company.
4
CHIQUITA BRANDS INTERNATIONAL, INC.
CONSOLIDATED STATEMENT OF CASH FLOW (Unaudited)
(In thousands)
| Reorganized | ||||||||||||||
| Company* | Predecessor Company* | |||||||||||||
| Six Months | Quarter | Nine Months | ||||||||||||
| Ended | Ended | Ended | ||||||||||||
| Sept. 30, | March 31, | Sept. 30, | ||||||||||||
| 2002 | 2002 | 2001 | ||||||||||||
Cash provided (used) by: |
||||||||||||||
Operations |
||||||||||||||
Income (loss) before cumulative effect of
a change in method of accounting |
$ | 39,484 | $ | (253,300 | ) | $ | (45,083 | ) | ||||||
Financial restructuring items |
— | 272,961 | — | |||||||||||
Depreciation and amortization |
19,590 | 21,401 | 67,489 | |||||||||||
Parent company interest expense not paid |
— | — | 63,499 | |||||||||||
Collection of tax refund |
— | — | 9,456 | |||||||||||
Changes in current assets and liabilities
and other |
38,236 | (33,954 | ) | 49,555 | ||||||||||
Cash flow from operations |
97,310 | 7,108 | 144,916 | |||||||||||
Investing |
||||||||||||||
Capital expenditures |
(20,261 | ) | (4,807 | ) | (22,746 | ) | ||||||||
Hurricane Mitch insurance proceeds |
— | — | 6,393 | |||||||||||
Long-term investments |
— | — | (16,532 | ) | ||||||||||
Proceeds from sales of property, plant
and equipment |
4,357 | 5,029 | 8,287 | |||||||||||
Other |
642 | 275 | (578 | ) | ||||||||||
Cash flow from investing |
(15,262 | ) | 497 | (25,176 | ) | |||||||||
Financing** | ||||||||||||||