The integration is going well. We expect to realize cost savings from operating synergies of approximately $1.0 million to $1.5 million during fiscal year 2013. From the acquisition date through the end of fiscal year 2012, the GreenLine business generated $9.1 million of revenues and $1.6 million of operating income. The drought currently being experienced in the Midwest is having an impact on green bean yields which is increasing the cost for green beans. However, with the recent rains in the Ohio Valley and good operating results in June, we still believe we can achieve our original projections for GreenLine for fiscal year 2013 of $95 million to $100 million in revenues and $10 million to $11 million of EBTIDA (earnings before taxes, interest, depreciation and amortization) assuming there are no recurrences of severe adverse weather.
5) Is the fresh-cut produce category continuing to grow?
Unit volume sales in the overall fresh-cut produce category grew 9% during our fiscal year 2012 compared to fiscal year 2011. Over the same time period, unit volume sales in our fresh-cut specialty packaged vegetable business, which excludes Apio Cooling and Apio Packaging, grew 20%, more than double the category growth.
Apio continues to add customers and introduce new products. Apio’s unit volume growth and market share continue to benefit from Apio’s focus on advancing and improving its competitive advantages in technology, customer service and product quality, all of which have been further enhanced with the acquisition of GreenLine.6) What is the status of Windset’s new Santa Maria, California operation? Windset has completed construction on the first 64 acres of greenhouses, which equates to three million square feet, along with completion of the processing facility and the water treatment plant. All 64 acres have been planted with different varieties of tomatoes. Harvesting began on the first 32 acres in October 2011 and on the second 32 acres in December 2011. Production performance is currently exceeding Windset’s original expectations. During fiscal year 2012, we recognized pre-tax income of $5.8 million from our percentage of the increase in Windset’s fair market value. In addition, during fiscal year 2012, we recognized $1.1 million of dividend income from our Windset preferred stock. For fiscal year 2013, due to the difficulty in estimating future changes in the fair market value of a minority investment, we are currently projecting that the fair market value increase in our investment in Windset will be approximately the same as fiscal year 2012 and dividend income will be exactly the same, which, when combined, results in approximately $7.0 million in pre-tax income. 7) How are the Chiquita programs progressing?
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