Chiquita Brands said Tuesday that relocating its headquarters from Cincinnati to Charlotte will cost $30 million, but most of that will be offset by $24 million worth of state and local incentives.
The company announced last year that it was moving to Charlotte for access to a busier airport, a more bilingual workforce and government incentives. Chiquita said it will recoup the $24 million over the next 12 years, as incentives such as tax rebates are awarded by North Carolina, Charlotte and Mecklenburg County.
Chiquita also expects to generate about $4 million a year worth of expense savings through the move, because of consolidation, lower rent and lower travel costs.
In its earnings report Tuesday, Chiquita said its fourth quarter loss was better than during the same quarter last year. Chiquita lost $16 million in the fourth quarter, less than the $20 million fourth quarter loss of a year ago. Total sales dropped 7 percent, to $722 million, due to drops in banana, snack and salad sales, as well as the company exiting several product lines.
For the full year, Chiquita said its profit fell slightly, to $57 million, compared to $61 million in 2010. The company earned $1.23 a share, down from $1.32 a share last year. Total sales were down 3 percent from 2010, falling to $3.1 billion.
Chiquita said its bagged-salad business was hurt, as consumers switched to cheaper private-label salads. Sales in the salads and healthy snack category fell 7 percent, to $953 million. Bananas were a brighter spot, as sales increased 4 percent, to $2 billion. Much of that was due to higher pricing.
"We had a much better year in bananas driven by higher pricing and volume in North America, and initial recovery in Europe. Our salads business did not perform as well as expected," said CEO Fernando Aguirre, in a statement.
"We have made solid progress in realigning our salad business structure, reconfiguring banana shipping, reducing debt and consolidating our corporate structure through our move to Charlotte," Aguirre said.
The company is moving to the NASCAR Plaza office building this year. Although all of the company's approximately 400 corporate employees were offered the opportunity to move to Charlotte, the company has said about half will choose not to. That means Chiquita is recruiting for about 200 corporate positions in Charlotte.
Chiquita said it paid about $4 million in severance costs during the fourth quarter, and expects to pay about $5 million in severance costs during the first quarter.
