-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BkZ64/9WybBA16Ds1wfwKVUffDzg9nJWEmcLpnMlndbYG/NV59ADTxIg+qIhi2x/ av7zS3SRGdiEu8X3YJOhDQ== 0000101063-99-000039.txt : 19990810 0000101063-99-000039.hdr.sgml : 19990810 ACCESSION NUMBER: 0000101063-99-000039 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990809 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHIQUITA BRANDS INTERNATIONAL INC CENTRAL INDEX KEY: 0000101063 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 041923360 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-01550 FILM NUMBER: 99681485 BUSINESS ADDRESS: STREET 1: 250 E FIFTH ST CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137848011 FORMER COMPANY: FORMER CONFORMED NAME: UNITED BRANDS CO DATE OF NAME CHANGE: 19900403 10-Q 1 - ------------------------------------------------------------------------ FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended Commission File June 30, 1999 Number 1-1550 CHIQUITA BRANDS INTERNATIONAL,INC. Incorporated under the IRS Employer I.D. Laws of New Jersey No. 04-1923360 250 East Fifth Street, Cincinnati, Ohio 45202 (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, and (2) has been subject to such filing requirements for the past 90 days. Yes X No As of July 30, 1999, there were 65,800,479 shares of Common Stock outstanding. Page 1 of 13 Pages - ------------------------------------------------------------------------ CHIQUITA BRANDS INTERNATIONAL,INC. ---------------------------------- TABLE OF CONTENTS ----------------- Page ---- PART I - Financial Information - ------ Item 1 - Financial Statements
Consolidated Statement of Income for the quarters and six months ended June 30, 1999 and 1998 3 Consolidated Balance Sheet as of June 30, 1999, December 31, 1998 and June 30, 1998 4 Consolidated Statement of Cash Flow for the six months ended June 30, 1999 and 1998 5 Notes to Consolidated Financial Statements 6 Item 2 - Management's Analysis of Operations and Financial Condition 9 Item 3 - Quantitative and Qualitative Disclosures About Market Risk 10 PART II - Other Information - ------- Item 1 - Legal Proceedings 11 Item 2 - Changes in Securities and Use of Proceeds 11 Item 4 - Submission of Matters to a Vote of Security Holders 11 Item 6 - Exhibits and Reports on Form 8-K 12 Signature 13
Part I - Financial Information - ------------------------------ Item 1 - Financial Statements - ----------------------------- CHIQUITA BRANDS INTERNATIONAL,INC. ---------------------------------- CONSOLIDATED STATEMENT OF INCOME (Unaudited) -------------------------------------------- (In thousands, except per share amounts)
Quarter Ended June 30, Six Months Ended June 30, ---------------------- ------------------------- 1999 1998 1999 1998 ---------- --------- ---------- ---------- Net sales $ 676,857 $ 744,191 $1,369,859 $1,461,408 --------- --------- ---------- ---------- Operating expenses Cost of sales 536,049 561,900 1,050,824 1,102,487 Selling, general and administrative 82,204 85,085 160,942 168,692 Depreciation 22,433 22,990 44,698 46,243 --------- ---------- ---------- ---------- 640,686 669,975 1,256,464 1,317,422 --------- ---------- ---------- ---------- Operating income 36,171 74,216 113,395 143,986 Interest income 2,311 3,828 4,600 6,890 Interest expense (26,951) (27,530) (53,644) (55,529) Other income, net 93 6,828 181 7,073 --------- ---------- ---------- ---------- Income before income taxes 11,624 57,342 64,532 102,420 Income taxes (4,300) (4,500) (8,500) (8,500) --------- ---------- ---------- ---------- Net income $ 7,324 $ 52,842 $ 56,032 $ 93,920 ========= ========== ========== ========== Earnings per common share: Basic $ . 05 $ . 75 $ . 72 $ 1.33 Diluted . 05 .66 .69 1.17 Dividends per common share $ . 05 $ . 05 $ . 10 $ .10
See Notes to Consolidated Financial Statements. 3 CHIQUITA BRANDS INTERNATIONAL,INC. ---------------------------------- CONSOLIDATED BALANCE SHEET (Unaudited) ------------------------------------- (In thousands, except share amounts)
June 30, December 31, June 30, 1999 1998 1998 ---------- ------------- ---------- ASSETS - ------ Current assets Cash and equivalents $ 180,362 $ 88,906 $ 146,057 Trade receivables (less allowances of $10,924, $10,603 and $11,211) 237,477 201,574 232,114 Other receivables, net 76,706 128,293 79,275 Inventories 343,651 387,293 359,009 Other current assets 32,655 34,168 28,509 ----------- ---------- ---------- Total current assets 870,851 840,234 844,964 Property, plant and equipment, net 1,155,662 1,122,847 1,200,163 Investments and other assets 383,492 356,228 303,069 Intangibles, net 187,348 189,824 200,470 ---------- ---------- ---------- Total assets $2,597,353 $2,509,133 $2,548,666 ========== ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY - ------------------------------------ Current liabilities Notes and loans payable $ 56,861 $ 131,768 $ 52,419 Long-term debt due within one year 92,943 37,511 43,953 Accounts payable 223,220 217,266 212,263 Accrued liabilities 104,043 144,884 107,867 ---------- ---------- ---------- Total current liabilities 477,067 531,429 416,502 Long-term debt of parent company 883,548 683,294 687,258 Long-term debt of subsidiaries 222,446 319,312 350,057 Accrued pension and other employee benefits 84,424 90,382 81,406 Other liabilities 98,186 90,736 92,296 ---------- ---------- ---------- Total liabilities 1,765,671 1,715,153 1,627,519 ---------- ---------- ---------- Shareholders' equity Preferred and preference stock 253,475 253,475 253,475 Common stock, $.01 par value (65,788,077, 65,447,875 and 65,337,341 shares) 658 654 653 Capital surplus 759,632 755,660 758,953 Accumulated deficit (174,057) (214,967) (87,543) Accumulated other comprehensive loss (8,026) (842) (4,391) ---------- ---------- ---------- Total shareholders' equity 831,682 793,980 921,147 ---------- ---------- ---------- Total liabilities and share- holders' equity $2,597,353 $2,509,133 $2,548,666 ========== ========== ==========
See Notes to Consolidated Financial Statements. 4 CHIQUITA BRANDS INTERNATIONAL,INC. ---------------------------------- CONSOLIDATED STATEMENT OF CASH FLOW (Unaudited) ---------------------------------------------- (In thousands)
Six Months Ended June 30, ------------------------- 1999 1998 ----------- ----------- Cash provided (used) by: Operations Net income $ 56,032 $ 93,920 Depreciation and amortization 47,915 49,501 Write-downs of cultivations and long-term investment -- 8,900 Changes in current assets and liabilities and other (17,217) (18,555) ----------- ---------- Cash flow from operations 86,730 133,766 ----------- ---------- Investing Capital expenditures (74,475) (50,546) Hurricane Mitch insurance proceeds 25,000 -- Acquisitions of businesses (21,619) (25,518) Refundable deposits for container equipment 9,673 -- Long-term investments (8,142) (2,000) Other 11,424 3,647 ----------- ---------- Cash flow from investing (58,139) (74,417) ----------- ---------- Financing Debt transactions Issuances of long-term debt 194,623 67,266 Repayments of long-term debt (42,330) (76,891) Decrease in notes and loans payable (74,363) (15,489) Stock transactions Issuances of common stock 57 1,097 Dividends (15,122) (14,977) ----------- ---------- Cash flow from financing 62,865 (38,994) ----------- ---------- Increase in cash and equivalents 91,456 20,355 Balance at beginning of period 88,906 125,702 ----------- ---------- Balance at end of period $ 180,362 $ 146,057 =========== ==========
See Notes to Consolidated Financial Statements. 5 CHIQUITA BRANDS INTERNATIONAL,INC. ---------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) ----------------------------------------------------- Interim results are subject to significant seasonal variations and are not necessarily indicative of the results of operations for a full fiscal year. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary for a fair statement of the results of the interim periods shown have been made. See Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 1998 for additional information relating to the Company's financial statements. Earnings Per Share - ------------------ Basic and diluted earnings per common share ("EPS") are calculated as follows (in thousands, except per share amounts):
Quarter Ended Six Months Ended June 30, June 30, ---------------- ------------------ 1999 1998 1999 1998 ------ ------- -------- -------- Net income $7,324 $52,842 $56,032 $93,920 Dividends on preferred and preference stock (4,275) (4,275) (8,551) (8,551) ------- ------- ------- ------- Net income attributed to common shares for basic EPS 3,049 48,567 47,481 85,369 Add back dividends on preferred and preference stock -- 4,275 8,551 8,551 ------ ------- ------- ------- Net income attributed to common shares for diluted EPS $3,049 $52,842 $56,032 $93,920 ====== ======= ======= ======= Weighted average common shares outstanding 65,761 64,453 65,690 64,068 Nonvested restricted shares -- (72) -- (72) ------- ------- ------- ------- Shares used to calculate basic EPS 65,761 64,381 65,690 63,996 Convertible preferred and preference stock -- 15,479 15,479 15,479 Stock options and other stock awards 137 762 176 698 ------- ------- ------- ------- Shares used to calculate diluted EPS 65,898 80,622 81,345 80,173 ======= ======= ======= ======= Basic EPS $ .05 $ .75 $ .72 $ 1.33 Diluted EPS .05 .66 .69 1.17
The assumed conversions to common stock of the Company's 7% convertible subordinated debentures, preferred stock and preference stock are excluded from the diluted EPS computations for periods in which these items, on an individual basis, have an anti-dilutive effect on diluted EPS. 6 Segment Information (in thousands) - --------------------------------- Financial information for the Company's business segments is as follows:
Quarter Ended Six Months Ended June 30, June 30, ------------------- --------------------- 1999 1998 1999 1998 --------- --------- ---------- ---------- Net sales Fresh Produce $ 557,816 $ 625,725 $1,131,079 $1,228,076 Processed Foods 119,041 118,466 238,780 233,332 --------- --------- ---------- ---------- $ 676,857 $ 744,191 $1,369,859 $1,461,408 ========= ========= ========== ========== Operating income Fresh Produce $ 29,273 $ 67,997 $ 100,979 $ 130,538 Processed Foods 6,898 6,219 12,416 13,448 --------- --------- ---------- ---------- $ 36,171 $ 74,216 $ 113,395 $ 143,986 ========= ========= ========== ========== Inventories (in thousands) - ------------------------- June 30, December 31, June 30, 1999 1998 1998 ----------- ------------ ---------- Fresh produce $ 36,480 $ 43,052 $ 38,761 Processed food products 131,972 184,438 119,577 Growing crops 110,406 109,891 119,865 Materials, supplies and other 64,793 49,912 80,806 --------- ------------ --------- $ 343,651 $ 387,293 $ 359,009 =========== ============ =========
Hedging - ------- Chiquita has a long-standing policy of periodically hedging transactions denominated in foreign currencies. At June 30, 1999, the Company had option contracts denominated in Deutsche marks and the European Union common currency (the "euro") which ensure conversion of approximately $180 million of foreign sales through the end of 1999 at equivalent rates not higher than 1.79 Deutsche marks (.91 euro) per dollar or lower than 1.62 Deutsche marks (.83 euro) per dollar and approximately $80 million of foreign sales in 2000 at equivalent rates not higher than 1.82 Deutsche marks (.93 euro) per dollar or lower than 1.63 Deutsche marks (.83 euro) per dollar. The carrying value of these option contracts at June 30, 1999 was approximately $4 million and their fair value based on quoted market prices was approximately $14 million. 7 Senior Note Issuance - -------------------- In June 1999, the Company issued $200 million principal amount of 10% Senior Notes due 2009 for net proceeds of approximately $195 million. Through the end of the second quarter, the Company used approximately $110 million of these proceeds to repay borrowings under revolving lines of credit and to prepay debt of subsidiaries. The remaining proceeds from the offering are being used to repay other outstanding debt of the Company and its subsidiaries and for other general corporate purposes. Acquisitions and Divestitures - ----------------------------- In April 1999, Chiquita Processed Foods, L.L.C., the Company's vegetable canning subsidiary, acquired certain canning assets in Oregon. The purchase price of approximately $20 million was funded with borrowings under Chiquita Processed Foods' revolving credit facility. In January 1998, Chiquita acquired Stokely USA, Inc., previously a publicly-owned vegetable canning business. In connection with the acquisition, Chiquita issued $11 million of common stock (.8 million shares) in exchange for all outstanding Stokely shares, and issued $33 million of common stock (2.2 million shares) and paid $18 million of cash to retire corresponding amounts of Stokely debt. In June 1998, Chiquita's Australian subsidiary acquired Campbell Mushrooms Pty Limited and Campbell Mushrooms Centre Pty Limited (collectively, the "Australian Mushroom Companies"). In connection with the acquisition, Chiquita issued $12 million of common stock (.9 million shares) and paid $4 million of cash in exchange for all of the outstanding capital stock of the Australian Mushroom Companies. Each of these acquisitions was accounted for as a purchase. In late 1998, the Company merged its Chilean fresh produce operations into a joint venture and sold its Central American plastic products operations. The sales and operating expenses of these operations are no longer consolidated in the Company's financial statements for periods after these transactions. Comprehensive Income - -------------------- Comprehensive income for all periods presented consisted solely of net income and unrealized foreign currency translation gains (losses), as follows (in thousands):
Quarter Ended Six Months Ended June 30, June 30, ---------------- ------------------ 1999 1998 1999 1998 -------- ------- -------- -------- Net income $ 7,324 $52,842 $56,032 $93,920 Unrealized foreign currency translation gains (losses) (3,938) 856 (7,184) (983) ------- ------- ------- ------- Comprehensive income $ 3,386 $53,698 $48,848 $92,937 ======= ======= ======== =======
8 Item 2 - ------ CHIQUITA BRANDS INTERNATIONAL,INC. ---------------------------------- MANAGEMENT'S ANALYSIS OF ------------------------ OPERATIONS AND FINANCIAL CONDITION ---------------------------------- Operations - ---------- Operating income for the quarter and six months ended June 30, 1999 decreased $38 million and $31 million from the prior year primarily as a result of decreased earnings in the Company's Fresh Produce business segment. Operating results for the Company's Processed Foods segment were comparable to the prior year. The decrease in Fresh Produce earnings resulted from significantly lower banana pricing in Europe on higher industry volume in the second quarter of 1999. In the European Union ("EU"), the lower pricing was primarily due to a disproportionately large second quarter allocation of the annual quota of banana import licenses as compared to any prior second quarter allocation since the inception of the EU banana quota regime. To a lesser extent, the Kosovo conflict in the Balkans and the continued depressed Russian market put additional downward pressure on pricing in neighboring countries. Second quarter banana pricing was also lower in North America compared to the prior year, when El Nino related volume reduction resulted in higher short-term pricing. Early in the third quarter of 1999, the Company has been experiencing significantly lower banana pricing in comparison to the same period in 1998. Net sales for the quarter and six months ended June 30, 1999 decreased 9% and 6% from the corresponding periods in 1998 primarily as a result of the decreased banana pricing. The 1998 second quarter results include unusual charges (primarily write-offs of a non-operating investment and long-term production assets) which were offset by a gain from a settlement in excess of $10 million of claims against a newspaper. A portion of the unusual charges, including the write-off of production assets, is included in "Cost of sales." "Other income, net" includes the gain from the settlement of claims against the newspaper and the non-operating investment write-off. The Company's effective tax rate is affected by the level and mix of income among various domestic and foreign jurisdictions in which the Company operates. Financial Condition - ------------------- Operating cash flow decreased from $134 million in the first six months of 1998 to $87 million in the comparable period in 1999 primarily as a result of lower earnings. In June 1999, the Company issued $200 million principal amount of 10% Senior Notes due 2009 for net proceeds of approximately $195 million. Through the end of the second quarter, the Company used approximately $110 million of these proceeds to repay borrowings under revolving lines of credit and to prepay debt of subsidiaries. The remaining proceeds from the offering are being used to repay other outstanding debt of the Company and its subsidiaries and for other general corporate purposes. 9 At July 30, 1999, no borrowings were outstanding under Chiquita's $125 million revolving credit facility, and approximately $70 million of borrowings were available under committed lines of credit of subsidiaries. During the first half of 1999, capital expenditures of $74 million included approximately $40 million of spending to rehabilitate farms in Honduras and Guatemala destroyed or damaged by Hurricane Mitch flooding in late 1998. The Company expects to finance the remaining flood rehabilitation and its other capital expenditures with cash flow from operations, insurance proceeds and available cash. During the first quarter of 1999, the Company received an initial insurance payment of $25 million. Year 2000 Project - ----------------- Reference is made to the discussion of Chiquita's company-wide Year 2000 Project (the "Project") in "Management's Analysis of Operations and Financial Condition" in the Company's 1998 Annual Report to Shareholders. The Project has included the following phases: (1) inventorying the Company's hardware, software and equipment; (2) assessing which items have Year 2000 issues; (3) determining critical versus non-critical items; (4) replacing or repairing items that have Year 2000 issues; (5) testing material items; (6) assessing the Year 2000 readiness of the Company's material customers and suppliers; and (7) developing contingency plans. As of June 30, 1999, the first six phases of the Project are substantially complete. The Company has substantially completed assessing the Year 2000 readiness of material customers and suppliers, including financial institutions, telecommunications companies, public utility companies and commercial vendors. Assessment included obtaining written certifications of Year 2000 readiness from third parties, review of their Year 2000 readiness plans and site visits. Development of necessary contingency plans for third parties and critical internal systems is expected to be completed before the end of 1999. Chiquita's contingency planning is focusing on minimizing Year 2000 disruptions, should they occur, by having sufficient resources and personnel in place to permit an appropriate response to specific problems. The estimated total cost of the Project for systems that have not been replaced or upgraded in the normal course is less than $10 million. Most of this cost has already been incurred by the Company. Due to the widespread uncertainties inherent in the Year 2000 problem, resulting primarily from the widely reported uncertainty of the Year 2000 readiness of suppliers, customers and other third parties, including U.S. and foreign governmental entities, the Company is unable to determine at this time whether the consequences of Year 2000 failures will have a material impact on the Company's financial statements. However, the Company believes the most reasonably likely worst case scenario is that there could be some localized, temporary disruptions to portions of business activities, such as agricultural production, shipping, ripening and data processing, rather than systemic or long- term problems affecting its business operations as a whole. Item 3 - Quantitative and Qualitative Disclosures About Market Risk - ------------------------------------------------------------------- Reference is made to the discussion of Chiquita's Management of Market Risk in "Management's Analysis of Operations and Financial Condition" in the Company's 1998 Annual Report to Shareholders. As of June 30, 1999, there were no material changes to the information presented. 10 * * * * * This quarterly report contains certain information that may be deemed to be "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. This information is subject to a number of assumptions, risks and uncertainties, including 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, access to capital, actions of governmental bodies, actions or failures to act of customers, suppliers and other third parties with respect to Year 2000 readiness issues, 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 information. Part II - Other Information - --------------------------- Item 1 - Legal Proceedings -------------------------- The Illinois Attorney General's Office filed a complaint in Peoria County in November 1998 seeking an injunction and civil penalties for alleged environmental violations at a vegetable canning facility in Princeville, Illinois now owned by Chiquita Processed Foods, L.L.C., the Company's vegetable canning subsidiary. The facility is currently operating in compliance with the terms of a preliminary injunction entered by agreement of the parties. The Company expects monetary sanctions to be less than $150,000. Item 2 - Changes in Securities and Use of Proceeds -------------------------------------------------- On June 22, 1999, the Company issued $200 million of 10% Senior Notes due 2009 ("Senior Notes"). The Senior Notes are general unsecured obligations of the Company and rank pari passu with the Company's existing and future senior unsecured indebtedness, and senior to the Company's existing and future subordinated indebtedness. The terms of the Senior Notes contain restrictions on the payment of dividends and other distributions on, and repurchases and redemptions of, the Company's common stock. The restrictions are similar to those of other senior note indenture agreements of the Company. Item 4 - Submission of Matters to a Vote of Security Holders ------------------------------------------------------------ In connection with the election of seven directors of the Company, proxies were solicited pursuant to Regulation 14 under the Securities Exchange Act of 1934 and the following votes were cast at the Company's Annual Meeting of Shareholders held on May 12, 1999:
Votes -------------------------- Name For Withheld ---------------- ---------- ----------- Carl H. Lindner 54,057,970 1,121,552 Keith E. Lindner 54,059,154 1,120,368 Fred J. Runk 54,072,581 1,106,941 Jean Head Sisco 54,081,965 1,097,557 William W. Verity 54,085,839 1,093,683 Oliver W. Waddell 54,100,686 1,078,836 Steven G. Warshaw 54,054,128 1,125,394
11 Item 6 - Exhibits and Reports on Form 8-K -----------------------------------------
Page Number(s) -------- (a) Exhibit 4(a) - Third Supplemental Indenture dated as of June 15, 1999 to indenture dated as of February 15, 1994 between the Company and Fifth Third Bank (f/k/a The Fifth Third Bank), Trustee, filed as Exhibit 4.2 to Amendment No. 1 to Form 8-A dated June 23, 1999 * Exhibit 4(b) - Certificate of Actions Taken by the President of the Company establishing the terms of the 10% Senior Notes due 2009, filed as Exhibit 4.3 to Amendment No. 1 to Form 8-A dated June 23, 1999 * Exhibit 10 - Amendment No. 2 dated as of May 19, 1999 and Amendment No. 3 dated as of July 23, 1999 to Credit Agreement dated December 31, 1996 among Chiquita Brands International, Inc., BankBoston N.A. (f/k/a The First National Bank of Boston), as administrative agent, and the financial institutions which are lenders relating to the Company's $125 million revolving credit facility ** Exhibit 27 - Financial Data Schedule ** * Incorporated by reference. ** Omitted from this copy of Quarterly Report on Form 10-Q. Copy included in report filed electronically with the Securities and Exchange Commission. (b) The following reports on Form 8-K have been filed by the Company during the quarter ended June 30, 1999: May 18, 1999 - to report the Company's expected results for the second quarter of 1999. June 4, 1999 - to report the Company's plans for offerings of senior notes and to provide the Company's Computation of Earnings to Fixed Charges (Exhibit 12). June 15, 1999 - to report the terms of the offering of the Company's 10% Senior Notes.
12 SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CHIQUITA BRANDS INTERNATIONAL,INC. By: /s/ William A. Tsacalis ----------------------------- William A. Tsacalis Vice President and Controller (Chief Accounting Officer) August 9, 1999 13 EX-10 2 AMENDMENT NO. 2 TO CREDIT AGREEMENT AMENDMENT NO. 2, dated as of May 19, 1999, to the Credit Agreement, dated as of December 31, 1996 (the "CREDIT AGREEMENT"), among (i) CHIQUITA BRANDS INTERNATIONAL, INC., a New Jersey corporation ("BORROWER"), (ii) the financial institutions which are now, or in accordance with SECTION 12.2 of the Credit Agreement hereafter become, parties to the Credit Agreement (collectively, "LENDERS"), (iii) BANKBOSTON, N.A. as Administrative Agent for the Lenders, and (iv) BANKBOSTON, N.A., ING BANK N.V., and PNC BANK, N.A., as Co-agents for the Lenders. RECITALS The Borrower, the Lenders and the Agents party to this Amendment No. 2 ("THIS AGREEMENT") have agreed to amend certain of the provisions contained in the Credit Agreement as set forth herein. Accordingly, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS SECTION 1.1. DEFINITIONS. Unless otherwise defined herein, terms defined in the Credit Agreement are used herein as therein defined. ARTICLE II AMENDMENTS Effective on and as of May 19, 1999 ("EFFECTIVE DATE"), the Credit Agreement is hereby amended in the following respect: SECTION 2.1. AMENDMENT TO DEFINED TERM. The defined term "CONSOLIDATED EBITDA" appearing in SECTION 1.1 of the Credit Agreement (as previously amended by Amendment No. 1, dated as of December 8, 1997, to the Credit Agreement) is hereby further amended by inserting the following new paragraph immediately after the first two paragraphs of the defined term "CONSOLIDATED EBITDA": "For purposes of determining the Consolidated EBITDA of the Borrower and its Subsidiaries for the Reference Period ending June 30, 1999 and also for the Reference Period ending September 30, 1999, there shall be added to the Consolidated Operating Income of the Borrower and its Subsidiaries for such Reference Period $58,000,000, representing non-cash charges resulting from Hurricane Mitch during the fourth fiscal quarter of 1998." ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS The Borrower represents and warrants to and covenants with each Agent and Lender as follows: SECTION 3.1. REPRESENTATIONS IN LOAN DOCUMENTS. Each of the representations and warranties made by or on behalf of the Borrower to the Agents and the Lenders in the Loan Documents was true and correct in all material respects when made and is true and correct in all material respects on and as of the date hereof, except, in each case, (a) as affected by the consummation of the transactions contemplated by the Loan Documents (including this Agreement), and (b) to the extent that any such representation or warranty relates by its express terms solely to a prior date. SECTION 3.2. CORPORATE AUTHORITY, ETC. The execution and delivery by the Borrower of this Agreement and the performance by the Borrower of its agreements and obligations under this Agreement have been duly and properly authorized by all necessary corporate or other action on the part of the Borrower, and do not and will not conflict with, result in any violation of, or constitute any default under (a) any provision of any Governing Document of the Borrower, (b) any Contractual Obligation of the Borrower, or (c) any Applicable Law. SECTION 3.3. VALIDITY, ETC. This Agreement has been duly executed and delivered by the Borrower and constitutes the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, reorganization, insolvency, moratorium or other similar laws at the time in effect affecting the enforceability of the rights of creditors generally and to general equitable principles. The Borrower hereby ratifies and confirms all of the Obligations in all respects. SECTION 3.4. NO DEFAULTS. Before and after giving effect to this Agreement, no Defaults or Events of Default are or will be continuing under the Credit Agreement. SECTION 3.5. AMENDMENT FEE. In consideration of the execution and delivery of this Agreement by the Administrative Agent and the Required Lenders, the Borrower hereby promises to pay to the Administrative Agent on the Effective Date, for the account of each of the Lenders, an amendment fee ("AMENDMENT FEE") equal to 1/8th of 1% (.00125) of the Commitment of each such Lender in effect on the Effective Date. ARTICLE IV PROVISIONS OF GENERAL APPLICATION This Agreement shall become effective on and as of the Effective Date once the Administrative Agent has received (a) duly executed counterparts hereof signed by the Borrower and the Required Lenders, and (b) payment of the Amendment Fee for the account of each Lender. Except as otherwise expressly provided by this Agreement, all of the terms, conditions and provisions of the Credit Agreement and each of the other Loan Documents shall remain unaltered. This Agreement is a Loan Document for all purposes of the Credit Agreement. This Agreement and the rights and obligations hereunder of each of the parties hereto shall in all respects be construed in accordance with and governed by the internal laws of the State of New York. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, but all of such counterparts shall together constitute but one and the same agreement. In making proof of this Agreement, it shall not be necessary to produce or account for more than one counterpart hereof signed by each of the parties hereto. IN WITNESS WHEREOF, the parties hereto have caused this AMENDMENT NO. 2 to be executed by their respective authorized officers as of the date first above written. THE BORROWER: CHIQUITA BRANDS INTERNATIONAL, INC. By: /s/Gerald R. Kondritzer ------------------------------- Name: Gerald R. Kondritzer Title: Vice President and Treasurer THE AGENTS AND LENDERS: BANKBOSTON, N.A., AS ADMINISTRATIVE AGENT, AS ONE OF THE CO-AGENTS, AND AS ONE OF THE LENDERS By: /s/Robert F. Milordi ------------------------------- Name: Robert F. Milordi Title: Managing Director ING BANK N.V., AS ONE OF THE CO- AGENTS AND AS ONE OF THE LENDERS By: /s/H.W.L. Englehart ------------------------------- Name: H.W.L. Englehart Title: Senior Relationship Manager /s/J.J. Henff ------------------------------- Name: J.J. Henff Title: Senior Relationship Manager PNC BANK, N.A., AS ONE OF THE CO- AGENTS AND AS ONE OF THE LENDERS By: /s/D.F. Knuth ------------------------------- Name : David F. Knuth Title: Vice President THE SUMITOMO BANK, LIMITED, CHICAGO BRANCH, AS ONE OF THE LENDERS By: /s/John H. Kemper ------------------------------- Name: John H. Kemper Title: Senior Vice President BANK OF AMERICA ILLINOIS, AS ONE OF THE LENDERS By: /s/Casey Cosgrove ------------------------------- Name: Casey Cosgrove Title: Vice President CHRISTIANIA BANK OG KREDITKASSE, NEW YORK BRANCH, AS ONE OF THE LENDERS By /s/Martin Lunder /s/Hans Chr. Kjelsrud ----------------------------------- Name: Martin Lunder Hans Chr. Kjelrud Title: Sr. Vice Pres. Sr. Vice Pres. THE MITSUBISHI TRUST AND BANKING CORPORATION, AS ONE OF THE LENDERS By: /s/Nobuo Tominaga ------------------------------- Name: Nobuo Tominaga Title: Chief Manager FIRSTSTAR BANK, N.A., AS ONE OF THE LENDERS By: /s/Derek S. Rodebush ------------------------------- Name: Derek S. Rodebush Title: Vice President SUNTRUST BANK, N.A., AS ONE OF THE LENDERS By /s/Jack G. Prevost ------------------------------- Name: Jack G. Prevost Title: Managing Director EX-10 3 AMENDMENT NO. 3 TO CREDIT AGREEMENT AMENDMENT NO. 3, dated as of July 23, 1999, to the Credit Agreement, dated as of December 31, 1996 (the "Credit Agreement"), among (i) CHIQUITA BRANDS INTERNATIONAL, INC., a New Jersey corporation ("Borrower"), (ii) the financial institutions which are now, or in accordance with SECTION 12.2 of the Credit Agreement hereafter become, parties to the Credit Agreement (collectively, "LENDERS"), (iii) BANKBOSTON, N.A. as Administrative Agent for the Lenders, and (iv) BANKBOSTON, N.A., ING BANK N.V., and PNC BANK, N.A., as Co-agents for the Lenders. RECITALS The Borrower, the Lenders and the Agents party to this Amendment No. 3 ("THIS AGREEMENT") have agreed to amend certain of the provisions contained in the Credit Agreement as set forth herein. Accordingly, the parties hereto hereby agree as follows: ARTICLE I DEFINITIONS SECTION 1.1. DEFINITIONS. Unless otherwise defined herein, terms defined in the Credit Agreement are used herein as therein defined. ARTICLE II AMENDMENTS Effective on and as of July 23, 1999 ("EFFECTIVE DATE"), the Credit Agreement is hereby amended in each of the following respects: SECTION 2.1. AMENDMENTS TO CERTAIN NEGATIVE COVENANTS. (a) SECTION 9.2.1(D). SUBCLAUSE (II) of Section 9.2.1(d) is amended by deleting the Dollar amount "$375,000,000" appearing in such SUBCLAUSE (II), and by inserting in place thereof the Dollar amount "$325,000,000." (b) SECTION 9.2.3(A). PARAGRAPH (A) of SECTION 9.2.3 is amended to read in its entirety as follows: "(a) LEVERAGE RATIO: Permit the Leverage Ratio (i) to be greater than the ratio of 0.40:1.0 at any time prior to July 1, 1999, or (ii) to be greater than the ratio of 0.50:1.0 at any time on or after July 1, 1999." (c) SECTION 9.2.4(B). SUBCLAUSE (II) of SECTION 9.2.4(B) is amended by inserting the following proviso at the end of such SUBCLAUSE (II), immediately prior to the word "and": "; PROVIDED, HOWEVER, that the Borrower shall not at any time after June 30, 1999 use more than $5,000,000 of the proceeds from the Borrower's issuance of its 10% Senior Notes due 2009 to make any payments or distributions on account of the redemption, repurchase or other acquisition for value of, or to prepay, any Indebtedness for Borrowed Money of the Borrower under its 7% Convertible Subordinated Debentures due 2001;" ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS The Borrower represents and warrants to and covenants with each Agent and Lender as follows: SECTION 3.1. REPRESENTATIONS IN LOAN DOCUMENTS. Each of the representations and warranties made by or on behalf of the Borrower to the Agents and the Lenders in the Loan Documents was true and correct in all material respects when made and is true and correct in all material respects on and as of the date hereof, except, in each case, (a) as affected by the consummation of the transactions contemplated by the Loan Documents (including this Agreement), and (b) to the extent that any such representation or warranty relates by its express terms solely to a prior date. SECTION 3.2. CORPORATE AUTHORITY, ETC. The execution and delivery by the Borrower of this Agreement and the performance by the Borrower of its agreements and obligations under this Agreement have been duly and properly authorized by all necessary corporate or other action on the part of the Borrower, and do not and will not conflict with, result in any violation of, or constitute any default under (a) any provision of any Governing Document of the Borrower, (b) any Contractual Obligation of the Borrower, or (c) any Applicable Law. SECTION 3.3. VALIDITY, ETC. This Agreement has been duly executed and delivered by the Borrower and constitutes the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except as such enforceability may be limited by bankruptcy, reorganization, insolvency, moratorium or other similar laws at the time in effect affecting the enforceability of the rights of creditors generally and to general equitable principles. The Borrower hereby ratifies and confirms all of the Obligations in all respects. SECTION 3.4. NO DEFAULTS. Before and after giving effect to this Agreement, no Defaults or Events of Default are or will be continuing under the Credit Agreement. SECTION 3.5. AMENDMENT FEE. In consideration of the execution and delivery of this Agreement by the Administrative Agent and the Required Lenders, the Borrower hereby promises to pay to the Administrative Agent on July 30, 1999, for the account of each of the Lenders (each, a "CONSENTING LENDER") that (a) executes and delivers this Agreement, AND (b) delivers to the Administrative Agent or its special counsel by July 23, 1999, an execution copy of this Agreement signed by such Lender (or a facsimile copy thereof), an amendment fee ("AMENDMENT FEE") equal to 1/8th of 1% (.00125) of the Commitment of each such Consenting Lender in effect on the Effective Date. ARTICLE IV PROVISIONS OF GENERAL APPLICATION This Agreement shall become effective ON AND AS OF THE EFFECTIVE DATE once the Administrative Agent has received (a) duly executed counterparts hereof signed by the Borrower and the Required Lenders, and (b) payment of the Amendment Fee for the account of each Consenting Lender. Except as otherwise expressly provided by this Agreement, all of the terms, conditions and provisions of the Credit Agreement and each of the other Loan Documents shall remain unaltered. This Agreement is a Loan Document for all purposes of the Credit Agreement. This Agreement and the rights and obligations hereunder of each of the parties hereto shall in all respects be construed in accordance with and governed by the internal laws of the State of New York. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, but all of such counterparts shall together constitute but one and the same agreement. In making proof of this Agreement, it shall not be necessary to produce or account for more than one counterpart hereof signed by each of the parties hereto. [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK] IN WITNESS WHEREOF, the parties hereto have caused this AMENDMENT NO. 3 to be executed by their respective authorized officers as of the date first above written. THE BORROWER: CHIQUITA BRANDS INTERNATIONAL, INC. By: /s/Gerald R. Kondritzer --------------------------- Name: Gerald R. Kondritzer Title: Vice President and Treasurer THE AGENTS AND LENDERS: BANKBOSTON, N.A., AS ADMINISTRATIVE AGENT, AS ONE OF THE CO-AGENTS, AND AS ONE OF THE LENDERS By: /s/Robert F. Milordi --------------------------- Name: Robert F. Milordi Title: Managing Director ING BANK N.V., AS ONE OF THE CO- AGENTS AND AS ONE OF THE LENDERS By: /s/Drs. H. W. L. Engelhart ------------------------ Name: Drs. H. W. L. Engelhart Title: By: /s/Mr. A.P. deRidder ------------------------- Name: Mr. A.P. deRidder Title: PNC BANK, N.A., AS ONE OF THE CO- AGENTS AND AS ONE OF THE LENDERS By; /s/Bruce A. Kintner --------------------------- Name: Bruce A. Kintner Title: Vice President THE SUMITOMO BANK, LIMITED, CHICAGO BRANCH, AS ONE OF THE LENDERS By: /s/John H. Kemper -------------------------- Name: John H. Kemper Title: Senior Vice President BANK OF AMERICA ILLINOIS, AS ONE OF THE LENDERS By: /s/Casey Cosgrove ---------------------------- Name: Casey Cosgrove Title: Vice President CHRISTIANIA BANK OG KREDITKASSE, NEW YORK BRANCH, AS ONE OF THE LENDERS By: /s/Hans Chr. Kjlsrud ----------------------- Name: Hans Chr. Kjelsrud Title: Sr. Vice President By: /s/ Angela Dognancay -------------------- Name: Angela Dognancay Title: Vice President THE MITSUBISHI TRUST AND BANKING CORPORATION, as one of the Lenders By: /s/Nobuo Tominago ---------------------------- Name: Nobuo Tominago Title: Chief Manager FIRSTSTAR BANK, N.A., as one of the Lenders By: /s/Thomas G. Gibbons ------------------------ Name: Thomas G. Gibbons Title: Vice President SUNTRUST BANK, N.A., as one of the Lenders By: /s/Jack Prevost ---------------------------- Name: Jack Prevost Title: Mgg. Director EX-27 4
5 This schedule contains summary financial information extracted from the Chiquita Brands International, Inc. Form 10-Q for the six months ended June 30, 1999 and is qualified in its entirety by reference to such financial information. 1,000 6-MOS DEC-31-1999 JUN-30-1999 180,362 0 248,401 10,924 343,651 870,851 1,838,848 683,186 2,597,353 477,067 1,105,994 0 253,475 658 577,549 2,597,353 1,369,859 1,369,859 1,050,824 1,050,824 44,698 0 53,644 64,532 8,500 56,032 0 0 0 56,032 .72 .69
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