Chiquita Brands International Inc. posted an $18 million net loss for the third quarter, matching its net loss for the same period in 2013 and earning the description of “strongest” third-quarter performance in five years from its chief executive officer.
“The momentum generated by Chiquita’s ‘return to the core’ strategy resulted in higher sales in our banana segment, and improved pricing in both bananas and salads and healthy snacks,” CEO Ed Lonergan said in a news release.
The company did not offer its traditional public conference call for investors and media for the quarterly results.
Despite that “improved pricing,” Lonergan said in the release that there was lower demand for those products and for foodservice vegetables. Operating income for the quarter was $12 million, compared to $2 million for the third quarter of 2013, according to the company’s financial report.
Lonergan referenced the sale last month of the Charlotte, N.C.-based company to a duo of Brazilian billionaires — which is expected to close late this year or early in 2015 — in terms of the quarterly results.
“I am particularly proud of our results in light of the significant work and potential distractions that existed for our employees in the third quarter surrounding the evaluation of our strategic alternatives,” Lonergan said in the release.
Brazil’s privately held Safra Group and Cutrale Group are buying Chiquita via a new entity they formed specifically for the deal, Cavendish Acquisition. Chiquita’s board unanimously endorsed the $1.3 billion deal after shareholders rejected a merger with Dublin-based Fyffes Plc. by a vote of more than 2-to-1 on Oct. 24.
Transaction costs totaled $8 million and $17 million for the Fyffes deal and Brazilian deal respectively, for the “quarter and nine months” ended Sept. 30, according to the release.
The third quarter news release reported on two specific fresh produce segments, bananas and salads/healthy snacks.
Lonergan said high banana sourcing and transportation costs in the quarter, caused by “atypical weather” were a factor for the third quarter this year, but he expects tighter fruit supplies in the remainder of the year will help year-end results.
“Favorable comparisons in the salad business (Fresh Express) as a result of third quarter-deployed salads pricing actions and improving performance of our Midwest salad facility” should also boost year-end results, the CEO said in the release.
Banana net sales were up 4% to $477 million for the quarter compared to the same period in 2013. Salad and healthy snack net sales dropped 2% to $234 million for the quarter, according to the release.