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Chiquita Brands International Inc. Reports Operating Results (10-K)

February 27, 2012 | About:

Chiquita Brands International Inc. (CQB) filed Annual Report for the period ended 2011-12-31.

Chiquita Brands has a market cap of $472.39 million; its shares were traded at around $10.28 with a P/E ratio of 13.06 and P/S ratio of 0.15. Chiquita Brands had an annual average earning growth of 2% over the past 10 years.

Highlight of Business Operations:

We source, distribute and market bananas that are sold principally under the “Chiquita” brand name. Banana segment net sales were $2.0 billion, $1.9 billion and $2.1 billion in 2011, 2010 and 2009, respectively. Banana sales amounted to 64%, 60% and 60% of our consolidated net sales in 2011, 2010 and 2009, respectively. Banana sales in European and Middle Eastern markets were 55%, 57% and 61% of the segment sales in 2011, 2010 and 2009, respectively. Middle Eastern markets include Iran, where the U.S. government permits us to sell bananas pursuant to license despite its trade sanctions because they are food products. The majority of the remaining sales in the banana segment are in North America. We receive royalties from the use of the Chiquita brand under a trademark licensing agreement with a third party for banana sales in Japan and Korea.

The Salads and Healthy Snacks segment includes packaged, ready-to-eat salads in the retail market, commonly referred to as "value-added salads," sold under the Fresh Express and other labels, fresh vegetable and fruit ingredients used in foodservice, healthy snacks, and processed fruit ingredient products. Net sales of the Salads and Healthy Snacks segment were approximately $1.0 billion, $1.0 billion and $1.1 billion for the years ended December 31, 2011, 2010 and 2009, respectively.

Fresh Express retail value-added salad sales represented approximately 20%, 21% and 21% of consolidated “Net sales” in each of 2011, 2010 and 2009, respectively. Significant retail value-added salad product lines that represented 10% or more of retail sales include:

We distribute and market fresh fruit and vegetables other than bananas in Europe and North America and license the use of the Chiquita brand to a third-party for pineapples sold in Japan and Korea. The major items sold are pineapples, grapes and avocados. Net sales of the Other Produce segment were approximately $163 million, $261 million and $253 million in 2011, 2010 and 2009, respectively. During the fourth quarter of 2010, we discontinued certain types of low-margin produce to better focus on produce generating sufficient margins or offering growth opportunity by adding value to consumers and retailers.

Our international operations involve a variety of currencies, and our most significant exposure is to the euro. Approximately 40% of our total sales were in Europe in each of 2011, 2010 and 2009. Sales and operating expenses in our Core European markets are denominated in primarily euros, as well as other European currencies. We also have significant operations in Latin America that result in costs incurred in those local currencies; however banana and other produce purchase contracts are typically in U.S. dollars. We reduce currency exchange risk from sales originating in currencies other than the U.S. dollar by exchanging local currencies for dollars promptly upon receipt. We further manage our currency exposure with hedging instruments, such as average rate euro put options, collars and forward contracts, to hedge the dollar value of our estimated net euro cash flow exposure up to 18 months into the future if we determine the cost-benefit is favorable. For information with respect to our hedging activities, see Notes 1 and 11 to the Consolidated Financial Statements and "Management s Discussion and Analysis of Financial Condition and Results of Operations" included in Exhibit 13.

Read the The complete Report

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