Chiquita Brands Reports First Quarter 2010 Results

By Chiquita Brands International Inc., PRNE
Wednesday, April 28, 2010

North American salad and banana businesses performed well, partly offsetting weak European results

CINCINNATI, April 29, 2010 - Chiquita Brands International, Inc. (NYSE: CQB) today released financial
and operating results for the first quarter 2010. All figures in this press
release are for continuing operations, unless otherwise noted.

For the first quarter 2010, the company reported on a comparable basis a
loss from continuing operations of US$4 million, or (US$0.09) per diluted
share, versus income of US$22 million, or US$0.49 per diluted share, in 2009.
On a GAAP basis, the company reported a loss from continuing operations of
US$6 million, or (US$0.13) per diluted share, versus income of US$23 million,
or US$0.51 per diluted share, in 2009. Net sales were US$808 million, 4
percent lower than the prior year period. The comparable basis amounts
exclude certain items described below under "Items affecting comparability."

"Our North American salad and banana businesses performed well in the
first quarter," said Fernando Aguirre, chairman and chief executive officer.
"However, as previously announced, European banana demand and pricing were
negatively impacted by the harshest winter weather in 30 years and depressed
economic conditions which have affected commerce across Europe. Revitalizing
our European profitability in 2010 is our most important priority. Weeks ago,
we began implementing a five point plan to improve pricing, execute
significant cost improvements throughout our supply chain, permanently
capture the EU tariff reductions, reduce our selling and administrative costs
and increase distribution, which taken together will enable us to overcome
these early headwinds."

Aguirre added, "Looking across the year, while quarterly volatility is
common in our industry, we remain focused on executing our strategy for
long-term profitability. We believe that the resilience of our diversified
portfolio of businesses in North America and Europe will lead us to another
full year of strong profitability and we still expect to achieve our
full-year target of US$110 to US$120 million of comparable income. In
addition, we are very excited about our new partnership with Danone that will
enable us to expand and drive profitability of Just Fruit in a Bottle in
Europe more efficiently, which is the most recent example of our ability to
leverage our innovation to create additional shareholder value."


(The following table shows adjustments made to "Income (loss) from
continuing operations" and EPS from continuing operations between comparable
and GAAP results. See "Items affecting comparability" below for descriptions
of items excluded on a comparable basis, including descriptions of how these
items affect the results of reportable segments.)

(All amounts in U.S. dollars, unless otherwise specified)

    (in millions,
     except per share                           Income (loss) per diluted
     amounts)              Income (loss)                  share (1)
                         2010          2009        2010               2009
                         ----          ----        ----               ----

    Comparable results
     (Non-GAAP)           $(4)          $22      $(0.09)             $0.49
       relocation           -            (5)          -              (0.11)
      Incremental non-
       cash interest
       expense on
       Convertible Notes   (2)           (2)      (0.04)             (0.04)
      Other items           -             8           -               0.17
    Reported results
     (GAAP)               $(6)          $23      $(0.13)             $0.51

    Columns may not total due to rounding.

    (1) Shares used for diluted EPS calculation are on an as-reported basis.

Net Sales and Comparable Results: Quarterly sales decreased 4 percent
year-over-year to $808 million due to lower pricing and volume in the
company's core European markets and lower retail and foodservice volume in
salads. Comparable results for the quarter were a loss of $4 million compared
to income of $22 million in the year-ago period as a result of lower
performance in the company's European business.

Cash, Debt and Liquidity: Cash used in operations was $20 million for the
first quarter of 2010, compared to $27 million for the first quarter of 2009.
Seasonal working capital demands typically use cash in the first quarter and
provide cash in the second quarter. At March 31, 2010, cash and equivalents
were $85 million and debt had decreased to $648 million. The company did not
draw on its revolving credit facility in the first quarter of 2010 for its
seasonal working capital needs, unlike the prior year when it drew $38
. The company has no more than $20 million in debt maturities in any
year until 2014, maintaining ample liquidity and financial flexibility.

Banana Segment: Net sales for the segment decreased 2 percent to $477
, principally as a result of lower pricing and volumes in the core
European markets. Comparable operating income declined to $4 million,
compared to $40 million in 2009, due to lower local pricing and volume in
core European markets that was partly offset by continued strong performance
in North America.

Salads and Healthy Snacks Segment: Net sales decreased 8 percent to $259
, due to lower volumes in the retail value-added salads category.
Comparable operating income improved to $20 million from $13 million in 2009,
even as the company invested more in consumer marketing and experienced
increased retailer activity in private label products. The increased
profitability resulted from continued, sustainable cost reductions, such as a
more efficient distribution network and improved manufacturing processes, and
pricing gains.

Other Produce: Net sales for the segment were $73 million compared to $75
in 2009. The segment had operating income of $2 million in the first
quarter of both 2010 and 2009.


On March 30, 2010, the company signed a joint venture agreement with
Group Danone SA to expand Just Fruit in a Bottle much faster and more
efficiently across Europe, substantially increasing revenues and
profitability. Chiquita will receive a one-time $20 million cash payment in
exchange for a 51 percent interest in the Just Fruit in a Bottle business,
will license its trademark to the new entity, and expects the transaction to
be immediately accretive to earnings. The sale is expected to close in the
second quarter of 2010 after the completion of certain pre-closing

In only four years, Chiquita's Just Fruit in a Bottle product has become
a market leading brand of fruit smoothie in Europe with distribution in 12
countries. Chiquita's partnership with Danone establishes an alliance between
two companies whose values and product portfolios represent a rich legacy of
bringing branded, innovative, healthy foods to consumers around the world.

Under the joint venture managed by Danone, Chiquita and Danone will
become financial and operational partners to serve as the exclusive
distributor of Chiquita's Just Fruit in a Bottle and all future Chiquita
branded fresh fruit beverage products in Europe. Upon closing, the company
will deconsolidate Just Fruit in a Bottle and account for its remaining 49
percent investment using the equity method. The gain on the sale and
deconsolidation of Just Fruit in a Bottle is expected to be approximately $35
. A significant component of the gain will be based on the company's
fair value estimate of the equity method investment on the closing date. The
gain on sale and deconsolidation, as well as future equity in earnings of the
joint venture, will be included in the Salads and Healthy Snacks segment.


Based on the diversification and resilience of its business, the company
continues to expect to deliver improved full-year results in 2010, on a
comparable basis versus 2009, despite a slow start to the year in Europe and
challenges from a relatively weak economy.

For the full-year 2010, the company now expects to achieve revenue growth
of 1 to 3 percent, which has been adjusted from the prior expectation for 3
to 5 percent to reflect the negative impact of European sales in the first
half of the year and the sale and deconsolidation of Just Fruit in a Bottle.
However, the company has maintained its full-year comparable income target of
$110 to $120 million.

The company expects sourcing and production costs in the Banana segment
to be higher in 2010 compared to the year-ago period due to increased fuel
related and purchased fruit costs, partially offset by improved productivity
from owned operations. Industry supplies in Latin America and Asia are
expected to tighten as the year progresses, helping to restore the balance of
supply and demand in the market. In Europe, the company is implementing a
five point plan to improve pricing, execute significant cost improvements
throughout its supply chain, permanently capture the EU tariff reductions,
reduce selling and administrative costs and increase distribution.
Additionally, the Just Fruit in a Bottle joint venture with Danone will
improve reported results in the second half of the year. Taken together,
these actions will enable the company to overcome early headwinds in Europe
to achieve its full year expectations.

In North America, the company expects continued strong performance in
bananas and has executed sustainable cost reductions, such as improved
network and manufacturing efficiencies in salads. In the Salads and Healthy
Snacks segment, the company expects to improve its full-year 2009 margin
performance to at least 8 percent, even as it plans to increase investments
in consumer marketing and innovation to strengthen the company's long-term
competitive position by extending consumer loyalty and preference for its
branded products.

The company's expectations of comparable results exclude any unforeseen
weather or event risks; major currency fluctuations; the estimated $35
gain on the sale and deconsolidation of Just Fruit in a Bottle from
the joint venture with Danone; and $8 million of non-cash interest expense on
the Convertible Notes, all of which will be reported in the company's U.S.
GAAP results.

In addition, the company expects that the quarterly flow of earnings will
differ from 2009, with first half results much lower than the record levels
achieved a year ago and stronger results in the second half of the year.

The following chart summarizes management's estimates of certain key
items for 2010:

    (in millions)                     Q1 2010         FY 2010
    -------------                     -------         -------
                                       Actual        Estimate
                                       ------        --------

    Capital Expenditures                  $7          $70-80
    --------------------                 ---          ------
    Depreciation & Amortization          $14          $60-65
    ---------------------------          ---          ------
    Gross Interest Expense (1)           $14          $55-60
    --------------------------           ---          ------
    Net Interest Expense (1)             $13          $47-52
    ------------------------             ---          ------

    (1) Interest expense includes the impact of adoption in 2009 of an
    accounting standard that changed the method used to account for the
    company's Convertible Notes, which adds non-cash interest expense
    of $7 million in 2009 and $8 million in 2010

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 web cast is available at and a replay will be available until May 13.
Toll-free telephone access will be available by dialing +1-888-481-2845 in
the United States and +1-719-457-2625 from international locations and
providing the conference code 3885493. To access the telephone replay, dial
1-888-203-1112 from the United States and +1-719-457-0820 from international
locations and enter the confirmation code 3885493.


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 more meaningful year-over-year comparisons
of the company's financial performance, as well as the measures that
management uses to evaluate the company's performance against internal
budgets and targets, the company reports certain non-GAAP measures as defined
by the Securities and Exchange Commission. The differences between the U.S.
GAAP and non-GAAP financial measures are fully described below in "Items
affecting comparability." Non-GAAP financial measures should be considered in
addition to, and not instead of, U.S. GAAP financial measures, and may differ
from non-GAAP measures that other companies use.


First Quarter 2010 & 2009 Items

    - Restructuring Related Costs: In the fourth quarter of 2008,
      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, which is now complete, resulted in one-time
      costs of approximately $19 million; $12 million was recognized in 2009,
      of which $5 million was recorded in the first quarter of 2009.
      Restructuring related costs are included in reportable figures as a
      component of operating income, but are not allocated to the reportable

    - Incremental non-cash interest expense on Convertible Notes:
      As previously disclosed, the company retrospectively adopted new
      accounting standards related to its convertible debt instruments. These
      new standards changed the method of accounting for, and increased the
      amount of reported GAAP interest expense on, the company's $200 million
      of 4.25% Convertible Senior Notes. In determining earnings on a
      comparable basis the company excludes the additional non-cash interest
      expense that results from the application of this new accounting
      standard. Such higher non-cash interest expense was $2 million for both
      quarters ended March 31, 2010 and 2009, respectively, was $7 million
      for the full year 2009, and will be $8 million for the full year 2010.

    - Other items: In January 2009, the company sold its operations
      in the Ivory Coast. The sale resulted in a pre-tax gain of
      approximately $4 million, plus $4 million of income tax benefits were
      realized in the quarter related to these operations. The pre-tax gain
      is excluded in the first quarter comparable figures for the banana
      segment. In the 2010 second quarter, the company will also exclude the
      gain on sale and deconsolidation of Just Fruit in a Bottle.

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 $3.5 billion, Chiquita employs
approximately 21,000 people and has operations in nearly 80 countries
worldwide. For more information, please visit our corporate web site at

Forward-looking Statements

This press release contains certain statements, including in the "2010
Outlook" section, 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 continuing
uncertainty in the global economic environment), government regulations, food
safety issues and product recalls affecting the company or the industry,
labor relations, taxes, political instability and terrorism; unusual weather
events, conditions or crop risks; access to and cost of financing; and the
outcome of pending litigation and governmental investigations involving the
company, as well as 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:

         (Unaudited - in millions, except per share amounts)

                                                         Quarter Ended
                                                           March 31,
                                                        2010        2009
                                                        ----        ----
    Net sales                                           $808        $842
                                                        ----        ----
    Operating expenses:
      Cost of sales                                      706         710
      Selling, general and administrative                 80          83
      Depreciation                                        12          13
      Amortization                                         3           3
      Equity in earnings of investees                      0          (6)
      European headquarters relocation                     -           5
                                                         801         808
                                                         ---         ---
    Operating income                                       8          34
    Interest income                                        2           1
    Interest expense                                     (14)        (16)
    Income (loss) from continuing operations
     before taxes                                         (5)         19
    Income tax (expense) benefit (1)                      (1)          5
                                                         ---         ---
    Income (loss) from continuing operations              (6)         23
    Loss from discontinued operations (2)                 (3)          -
                                                         ---         ---
    Net income (loss)                                    $(9)        $23
                                                         ===         ===
    Basic earnings per share:
           Continuing operations                      $(0.13)      $0.52
           Discontinued operations                     (0.07)          -
                                                       -----         ---
                                                      $(0.20)      $0.52
                                                      ======       =====
    Diluted earnings per share:
           Continuing operations                      $(0.13)      $0.51
           Discontinued operations                     (0.07)          -
                                                       -----         ---
                                                      $(0.20)      $0.51
                                                      ======       =====
    Shares used to calculate basic earnings
     per share                                          44.8        44.5
    Shares used to calculate diluted earnings
     per share                                          44.8        45.5

    Columns may not total due to rounding.

    (1) "Income tax (expense) benefit" includes $1 million and $7 million
    in benefits in the first quarters of 2010 and 2009, respectively.
    The benefits relate to a 2010 foreign valuation allowance release,
    $4 million of 2009 benefits from the sale of the company's operation
    in the Ivory Coast and the resolution of tax contingencies in
    various jurisdictions.
    (2) Loss from discontinued operations relates to potential
    indemnification obligations for tax liabilities for Atlanta AG.
    Exhibit B:

    (Unaudited - in millions, except for percentages and exchange rates)

                                                    Quarter       Percent
                                                     Ended         Change
                                                   March 31,     Increase
                                                 2010    2009    vs. 2009
                                                 ----    ----    --------

    Net sales by segment
      Bananas                                    $477    $485       (1.8)%
      Salads and Healthy Snacks                   259     281       (8.0)%
      Other Produce                                73      75       (3.0)%
                                                  ---     ---       -----
        Total net sales                          $808    $842       (4.0)%
    Comparable segment operating income (loss)
      Bananas                                      $4     $40      (89.7)%
      Salads and Healthy Snacks                    20      13        54.3%
      Other Produce                                 2       2      (15.4)%
      Corporate                                   (18)    (20)        9.4%
                                                  ---     ---         ---
        Total operating income (loss)              $8     $35      (78.4)%
    Comparable operating margin by segment
      Bananas                                     0.9%    8.3%   (7.4) pts
      Salads and Healthy Snacks (2)               7.8%    4.6%     3.2 pts
      Other Produce                               2.5%    2.9%    (0.4)pts
    SG&A as a percent of sales                    9.9%    9.8%     0.1 pts
    Company banana sales volume (40 lb. boxes)
      North America                              14.9    15.0       (0.7)%
      Europe & Middle East
         Core European markets (3)               10.3    11.9      (13.4)%
         Mediterranean & Middle East              5.0     3.3        51.5%
    Banana Pricing
      North America                                                   3.9%
      Core European markets (3)
           U.S. Dollar                                              (5.7)%
           Local                                                   (11.1)%
      Mediterranean & Middle East                                  (12.4)%
    Fresh Express-branded retail value-added
      Volume (12-count cases)                    14.3    16.1      (11.2)%
      Pricing (4)                                                     0.3%

    Euro average exchange rate, spot (dollars
     per euro)                                  $1.39   $1.31         6.1%

    Euro average exchange rate, hedged (dollars
     per euro)                                  $1.40   $1.35         3.7%

    Columns may not total due to rounding.

    (1) See detailed description of reconciling items between GAAP and
    comparable basis figures in Exhibit B and in the text of this press
    release under the heading titled "Items affecting comparability."
    (2) Excluding $6 million of sales of Just Fruit in a Bottle in each
    of the periods, and operating losses of $3 million and $2 million in
    the first quarters of 2010 and 2009, respectively, operating margin
    for the Salads & Healthy Snacks segment in the first quarters of
    2010 and 2009 were 8.8 percent and 5.8 percent, respectively.
    (3) The company's core European Markets include the 27 member states
    of the European Union, Switzerland, Norway and Iceland.
    (4) Pricing is for Fresh Express-branded products only, and includes
    fuel and regulatory surcharges.
    Exhibit C:

                                    EUROPEAN CURRENCY
                                      2010 vs. 2009
                                (Unaudited - in millions)

    Currency Impact (Euro/Dollar)                             Q1
                           Revenue                           $12
                           Local Costs                        (4)
                           Hedging (1)                        (5)
                           Balance sheet translation (2)      (3)

    Net European currency impact                               $1

    Columns may not total due to rounding.

    (1) Hedging gains were $1 million in the first quarter of 2010 and $6
    million in first quarter of 2009.
    (2) Balance sheet translation for the first quarter of 2010 was a
    loss of $4 million compared to a loss of $1 million in the first
    quarter of 2009.

Ed Loyd, +1-513-784-8935, eloyd at

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