Chiquita Reports First Quarter 2011 Results

By Chiquita Brands International Inc., PRNE
Wednesday, May 4, 2011

Profits improve significantly versus year-ago

CINCINNATI, May 5, 2011 - Chiquita Brands (NYSE: CQB) today released financial and operating
results for the first quarter of 2011, reporting comparable income(1) of $26
, GAAP net income of $24 million, and net sales of $824 million.
Comparable diluted EPS (1) was $0.57 for the first quarter of 2011, compared
to a loss of ($0.09) in the prior year period. First quarter results improved
from the year-ago period primarily due to European market stabilization
versus the significant losses that occurred in the first quarter of 2010.

"We delivered a turn-around in profitability in the first quarter by
executing well and overcoming increased industry costs," said Fernando
, chairman and chief executive officer. "I am particularly pleased
with the progress we are making in Europe, and am confident that we can
regain prior levels of profitability in the medium and the long-term and
maximize our premium brand position. In North America, our banana business
continues to perform well and we are very focused on attracting new customers
to increase our salad distribution as the year progresses. Importantly, we
are off to a good start for the year in terms of profitability and although
second quarter comparisons may be more challenging, we continue to expect to
deliver significant operating profit improvement in 2011 versus 2010."

    (1) Comparable basis amounts exclude certain items described below
        under "Items affecting comparability." All figures in this press
        release are for continuing operations, unless otherwise indicated.


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.

    (in millions,
     except per share
     amounts)                                           Income (loss) per
                                    Income (loss)         diluted share(1)
                                 2011          2010    2011            2010
                                 ----          ----     ---            ----

     Comparable results
     (Non-GAAP)                   $26          ($4)   $0.57          ($0.09)
       non-cash interest
         expense on
          Convertible Notes        (2)          (2)   (0.04)          (0.04)

     Reported results
     (GAAP)                       $24          ($6)   $0.52          ($0.13)
                                  ===           ===   =====          ======

    Columns may not total due to rounding.

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

Net Sales and Results: Quarterly sales increased 2 percent year-on-year
to $824 million and comparable results for the quarter improved to $26
from a loss of $4 million in the year-ago period. The improvement in
comparable income was the result of stronger performance in bananas,
partially offset by weaker results in Salads & Healthy Snacks and increased
income tax costs.

Cash, Debt and Liquidity: Cash used in operations was $26 million for the
first quarter of 2011 compared to $20 million in the year-ago period.
Seasonal working capital demands typically use cash in the first quarter and
provide cash in the second quarter. At March 31, 2011, cash and equivalents
were $114 million and the company made debt principal payments of $5 million
in the first quarter of 2011. The company continues to have significant
financial flexibility with $128 million of available revolving credit, with
no more than $20 million in debt maturities due in any year until 2014.

Bananas: Net sales for the segment increased 13 percent to $539 million,
as the company achieved higher local pricing to overcome increased supply
costs associated with tight industry supply conditions. European market
prices also reflected improved consumer demand from the unusual lows during
the first quarter of 2010. North American pricing included force majeure
surcharges that began in late January to recover significantly higher
sourcing costs that have continued since late 2010. Comparable operating
income was $56 million for the first quarter of 2011, compared to $4 million
in the 2010 period.

Salads and Healthy Snacks: Net sales decreased 8 percent to $238 million.
Comparable operating income was $6 million for the first quarter of 2011,
compared to income of $20 million in the year-ago period, primarily due to
lower retail value-added salad volume from customer conversions to private
label in 2010 and increased costs caused by adverse weather conditions during
the winter lettuce sourcing season in Arizona.


For the full year 2011, the company expects a 3 percent increase in net
sales, excluding discontinued other non-core produce lines and the European
smoothies business that was deconsolidated. The company expects relatively
flat year-on-year sales on a reported basis. Based on current industry
pricing and cost trends, as well as unit volume changes and other economic
impacts discussed below, the company expects to significantly improve its
full-year operating profitability.

Industry banana supplies have remained relatively tight thus far in 2011,
which has led to higher sourcing costs. Through April, the company has
continued to achieve higher pricing to recover industry cost increases.
However, industry supplies are expected to approach more normal levels during
the second half of the year which may affect the company's ability to achieve
comparatively higher pricing. For the second quarter of 2011, year-on-year
profit comparisons will be affected by increased marketing investments in
Europe and the absence of retroactive duty benefits recognized during the
2010 period. For the balance of 2011, the company expects to achieve
continued profitable banana volume growth in its core markets, and to execute
internal product cost reduction programs. The company has hedged
approximately 50 percent of its net euro cash flow for the remainder of 2011
at $1.42 per euro (an effective rate of $1.38 per euro after premium cost) to
reduce currency-related volatility in its cash flows and earnings.

In salads, year-on-year retail value-added salad volume and operating
margins are expected to be lower for the second quarter and first half of
2011, reflecting 2010 customer conversions to private label. New accounts
will contribute additional volume as the year progresses. Including all of
these factors, as well as investments in the company's planned rollout of
Fresh Rinse(TM) and consumer marketing programs, operating margin percentages
for full-year 2011 are expected to be roughly flat for the Salads & Healthy
Snacks segment.

The company's expectations for improved results in 2011 exclude any
unforeseen weather, event risks or major currency fluctuations. The following
chart summarizes management's estimates of certain other financial items for

    (in millions)                        Q1 2011         FY 2011
    -------------                        -------         -------
                                          Actual        Estimate
                                          ------        --------

    Capital Expenditures                     $12          $75-85
    --------------------                     ---          ------

    Depreciation & Amortization              $15          $57-62
    ---------------------------              ---          ------
    Gross Interest Expense (1)               $14          $50-55
    --------------------------               ---          ------
    Net Interest Expense (1)                 $13          $45-50
    ------------------------                 ---          ------

    (1) Interest expense includes the impact of accounting standards that
        add non-cash interest expense of $9 million in 2011 and $10 million
        in 2012 for the company's Convertible Notes.


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 Toll-free telephone access will be available
by dialing 1-888-312-9865 in the United States and +1-719-325-2418 from
international locations and providing the conference code 8895207. 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


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-on-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 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.


Incremental non-cash interest expense on Convertible Notes: Accounting
standards related to convertible debt instruments 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 this additional non-cash interest expense, which was $2
for quarters ended March 31, 2011 and 2010.


Chiquita Brands International, Inc. (NYSE: CQB) is a leading
international marketer and distributor of nutritious, high-quality fresh and
value-added food products - from energy-rich bananas, other fruits, blends of
convenient green salads to healthy snacking products. 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 more than $3
, Chiquita employs more than 21,000 people and has operations in
nearly 70 countries worldwide. For more information, please visit our
corporate web site at


This press release contains certain statements, including in the "2011
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 fuel and other
commodity 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 these 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:
                           CONSOLIDATED INCOME STATEMENT
                (Unaudited - in millions, except per share amounts)

                                                       Quarter Ended March 31
                                                        2011            2010
                                                        ----            ----
    Net sales                                           $824            $808
                                                        ----            ----
    Operating expenses:
      Cost of sales                                      688             706
      Selling, general and
       administrative                                     77              80
      Depreciation                                        13              12
      Amortization                                         2               3
      Equity in loss (earnings) of
       investees                                           2               0
                                                         782             801
                                                         ---             ---
    Operating income                                      42               8
    Interest income                                        1               2
    Interest expense                                     (14)            (14)
    Other income (expense)                                 -               0
    Income (loss) from continuing
     operations                                           29              (5)
          before taxes
    Income tax benefits (expense)                         (5)             (1)
                                                         ---             ---
    Income (loss) from continuing
     operations                                           24              (6)
    Loss from discontinued
     operations(1)                                         -              (3)
                                                         ---             ---
    Net income (loss)                                    $24             $(9)
                                                         ===             ===
    Basic earnings per share:
           Continuing operations                       $0.53          $(0.13)
           Discontinued operations                         -           (0.07)
                                                         ---           -----
                                                       $0.53          $(0.20)
                                                       =====          ======
    Diluted earnings per share:
           Continuing operations                       $0.52          $(0.13)
           Discontinued operations                         -           (0.07)
                                                         ---           -----
                                                       $0.52          $(0.20)
                                                       =====          ======
    Shares used to calculate basic
           earnings per share                           45.3            44.8

    Shares used to calculate diluted
           earnings per share                           46.2            44.8

    Columns may not total due to rounding.

    (1) Loss from discontinued operations relates to potential
        indemnification obligations for tax liabilities of Atlanta AG.

    Exhibit B:

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

                                                               Percent Change
                                       Quarter Ended March 31,   (Decrease)
                                           2011        2010       vs. 2010
                                           ----        ----       --------

    Net sales by segment
       Bananas                             $539        $477          13.1 %
       Salads and Healthy
        Snacks(1)                           238         259          (7.8)%
       Other Produce                         47          73         (35.4)%
                                            ---         ---         ------
          Total net sales                  $824        $808           2.0 %

    Comparable segment
     operating income (loss)(2)
       Bananas                              $56          $4             NM
       Salads and Healthy
        Snacks(2)                             6          20         (70.0)%
       Other Produce                         (3)          2             NM
       Corporate                            (17)        (18)         (8.0)%
                                            ---         ---          -----
          Total comparable operating
           income                           $42          $8             NM

    Comparable operating
     margin by segment
       Bananas                             10.4 %       0.9 %      9.6  pts
       Salads and Healthy
        Snacks(1)                           2.5 %       7.8 %     (5.2) pts
       Other Produce                       (6.4)%       2.5 %     (9.0) pts

    SG&A as a percent of sales              9.3 %       9.9 %     (0.6) pts

    Company banana sales
     volume (40 lb. boxes)
       North America                       16.0        14.9           7.4 %
       Europe & Middle East
          Core European markets(3)         10.4        10.3           1.0 %
          Mediterranean & Middle
           East                             3.2         5.0         (36.0)%

    Banana Pricing
       North America                                                  8.7 %
       Core European markets(3)
          U.S. Dollar                                                15.1 %
          Local                                                      16.6 %
       Mediterranean & Middle
        East                                                         28.8 %

    Fresh Express-branded
     retail value-added salads
      Volume (12-count cases)              12.8        14.3         (10.5)%
      Pricing                                                        (1.8)%

    Euro average exchange
     rate, spot (dollars per euro)        $1.36       $1.39          (2.2)%

    Euro average exchange
     rate, hedged
    (dollars per euro)                    $1.35       $1.40          (3.6)%

    Columns may not total due to rounding.

    (1) European fruit smoothie sales before entering into the Danone
        joint venture were $6 million in the first quarter of 2010. Operating
        losses recognized by the company were $3 million in each of the first
        quarters of 2011 and 2010.
    (2) See detailed description of reconciling items between GAAP and
        comparable basis figures in the text of this press release under the
        heading titled "Items affecting comparability."
    (3) The company's core European markets include the 27 member states
        of the European Union, Switzerland, Norway and Iceland.

    Exhibit C:

                              EUROPEAN CURRENCY
                                2011 vs. 2010
                          (Unaudited - in millions)

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

    Net European currency impact                                   $(1)

    Columns may not total due to rounding.

    (1) Hedging costs were $2 million in the first quarter of 2011 and income
        of $1 million in the first quarter of 2010.
    (2) Balance sheet translation was a gain of $2 million in the first
        quarter of 2011 and was a loss of $4 million in the first quarter of

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

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