<SEC-DOCUMENT>0000063330-00-000014-index.html : 20000515 <SEC-HEADER>0000063330-00-000014.hdr.sgml : 20000515 ACCESSION NUMBER: 0000063330-00-000014 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MAUI LAND & PINEAPPLE CO INC CENTRAL INDEX KEY: 0000063330 STANDARD INDUSTRIAL CLASSIFICATION: CANNED, FRUITS, VEG & PRESERVES, JAMS & JELLIES [2033] IRS NUMBER: 990107542 STATE OF INCORPORATION: HI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-06510 FILM NUMBER: 627071 BUSINESS ADDRESS: STREET 1: PO BOX 187 STREET 2: 120 KANE ST CITY: KAHULUI MAUI STATE: HI ZIP: 96732 BUSINESS PHONE: 8088773351 MAIL ADDRESS: STREET 1: PO BOX 187 CITY: KAHULUI STATE: HI ZIP: 96732 </SEC-HEADER> <DOCUMENT> <TYPE>10-Q <SEQUENCE>1 <TEXT> SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended MARCH 31, 2000 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 0-6510 MAUI LAND & PINEAPPLE COMPANY, INC. (Exact name of registrant as specified in its charter) HAWAII 99-0107542 (State or other jurisdiction (IRS Employer Identification No.) of incorporation or organization) P. O. BOX 187, KAHULUI, MAUI, HAWAII 96733-6687 (Address of principal executive offices) Registrant's telephone number, including area code: (808) 877-3351 NONE Former name, former address and former fiscal year, if changed since last report Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [x] No [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding at May 5, 2000 Common Stock, no par value 7,195,800 shares MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES TABLE OF CONTENTS Page PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Balance Sheets, March 31, 2000 (Unaudited) and December 31, 1999 3 Condensed Statements of Operations and Retained Earnings, Three Months Ended March 31, 2000 and 1999 (Unaudited) 4 Condensed Statements of Cash Flows, Three Months Ended March 31, 2000 and 1999 (Unaudited) 5 Notes to Condensed Financial Statements (Unaudited) 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 Item 3. Quantitative and Qualitative Disclosures about Market Risk 10 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 10 PART I FINANCIAL INFORMATION Item 1. Financial Statements MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES CONDENSED BALANCE SHEETS Unaudited 3/31/00 12/31/99 (Dollars in Thousands) ASSETS Current Assets Cash and cash equivalents $ 1,362 $ 2,657 Accounts and notes receivable 12,795 15,098 Inventories 24,150 16,925 Other current assets 4,847 4,779 Total current assets 43,154 39,459 Property 228,856 224,958 Accumulated depreciation (126,447) (123,982) Property - net 102,409 100,976 Other Assets 13,473 12,952 Total 159,036 153,387 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Current portion of long-term debt and capital lease obligations 2,787 3,056 Trade accounts payable 8,733 12,492 Other current liabilities 9,328 10,987 Total current liabilities 20,848 26,535 Long-Term Liabilities Long-term debt and capital lease obligations 35,167 25,497 Accrued retirement benefits 23,277 23,204 Equity in losses of joint venture 9,171 8,944 Other long-term liabilities 2,656 2,361 Total long-term liabilities 70,271 60,006 Minority Interest in Subsidiary 471 446 Stockholders' Equity Common stock, no par value - 7,200,000 shares authorized, 7,195,800 issued and outstanding 12,455 12,455 Retained earnings 54,991 53,945 Stockholders' equity 67,446 66,400 Total $159,036 $ 153,387 See accompanying Notes to Condensed Financial Statements. MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES CONDENSED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS (UNAUDITED) Three Months Ended 3/31/00 3/31/99 (Dollars in Thousands Except Share Amounts) Revenues Net sales $24,138 $23,284 Operating income 10,391 10,164 Other income 246 199 Total Revenues 34,775 33,647 Costs and Expenses Cost of goods sold 15,719 14,742 Operating expenses 7,502 6,476 Shipping and marketing 4,217 5,764 General and administrative 3,612 3,447 Interest 468 491 Equity in losses of joint ventures 218 149 Total Costs and Expenses 31,736 31,069 Income Before Income Taxes 3,039 2,578 Income Tax Expense 1,094 954 Net Income 1,945 1,624 Retained Earnings, Beginning of Period 53,945 50,174 Cash Dividends (899) (899) Retained Earnings, End of Period 54,991 50,899 Per Common Share Net income .27 .23 Dividends $ .125 $ .125 See accompanying Notes to Condensed Financial Statements. MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended 3/31/00 3/31/99 (Dollars in Thousands) Net Cash Provided by (Used in) Operating Activities $(4,345) $ 4,165 Investing Activities Purchases of property (5,405) (2,674) Other 56 (322) Net Cash Used in Investing Activities (5,349) (2,996) Financing Activities Payments of long-term debt and capital lease obligations (3,394) (246) Proceeds from long-term debt 12,600 -- Proceeds from short-term debt 67 -- Dividend paid (899) (899) Other 25 -- Net Cash Provided by (Used in) Financing Activities 8,399 (1,145) Net Increase (Decrease) in Cash (1,295) 24 Cash and Cash Equivalents at Beginning of Period 2,657 3,447 Cash and Cash Equivalents at End of Period $ 1,362 $ 3,471 Supplemental Disclosure and Cash Flow Information: Interest (net of amounts capitalized) of $372,000 and $375,000 was paid during the three months ended March 31, 2000 and 1999, respectively. Income taxes of $626,000 and $277,000 were paid during the three months ended March 31, 2000 and 1999, respectively. Amounts included in accounts payable for additions to property and other investments totaled $1,800,000 and nil at March 31, 2000 and 1999, respectively. See accompanying Notes to Condensed Financial Statements. MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED) 1. In the opinion of management, the accompanying condensed financial statements contain all normal and recurring adjustments necessary to present a fair statement of financial position, results of operations and cash flows for the interim periods ended March 31, 2000 and 1999. 2. The Company's reports for interim periods utilize numerous estimates of production cost, general and administrative expenses, and other costs for the full year. Consequently, amounts in the interim reports are not necessarily indicative of results for the full year. 3. The effective tax rate for 2000 and 1999 differs from the statutory federal rate of 34% primarily because of the state tax provision and refundable state tax credits. 4. Accounts and notes receivable are reflected net of allowance for doubtful accounts of $795,000 and $783,000 at March 31, 2000 and December 31, 1999, respectively. 5. Inventories as of March 31, 2000 and December 31, 1999 were as follows (in thousands): 3/31/00 12/31/99 Pineapple products Finished goods $10,524 $ 7,399 Work in progress 1,048 839 Raw materials 5,567 1,476 Real estate held for sale 21 577 Merchandise, materials and supplies 6,990 6,634 Total Inventories $24,150 $16,925 6. Business Segment Information (in thousands): Three Months Ended March 31 2000 1999 Revenues Pineapple $ 16,771 $ 19,919 Resort 16,818 12,744 Commercial & Property 1,175 923 Other 11 61 Total Revenues 34,775 33,647 Operating Profit (Loss) Pineapple (266) 1,843 Resort 4,093 1,658 Commercial & Property (38) (215) Other (282) (217) Total Operating Profit 3,507 3,069 Interest Expense (468) (491) Income Tax Expense (1,094) (954) Net Income $ 1,945 $ 1,624 7. Average common shares outstanding for the interim periods ended March 31, 2000 and 1999 were 7,195,800 and 7,188,500. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS Consolidated Consolidated net income for the first quarter of 2000 was $1.9 million compared to $1.6 million for the first quarter of 1999. Revenues of $34.8 million for the first quarter of 2000 exceeded the first quarter of 1999 by 3%. General and administrative expenses increased by about 5% in the first quarter of 2000 compared to the first quarter of 1999 primarily due to wage increases and higher accruals for workers compensation claims. Partially offsetting these increases was a decrease in pension expenses principally reflecting favorable investment results. Interest expense decreased by approximately 5% in 2000 because more interest was capitalized in 2000 as a result of construction activity at Kapalua Resort. The Company's average borrowings and interest rates were higher in the first quarter of 2000 compared to the first quarter of 1999. Pineapple Pineapple operations recorded an operating loss of $266,000 for the first quarter of 2000 compared to an operating profit of $1.8 million for the first quarter of 1999. Revenues for the first quarter of 2000 were 16% lower than the first quarter of 1999. The case volume of imports of canned pineapple products into the U.S. was lower in the first two months of 2000 than the same period in 1999; however, competitive pricing pressure in 2000 resulted in the Company's Pineapple segment realizing lower sales volume and lower average prices for canned pineapple in the first quarter of 2000 compared to the first quarter of 1999. The fourth annual administrative review of duties on pineapple imports from Thailand has been delayed and the announcement of preliminary margins that was expected in April 2000 has been deferred to July 2000. In April 2000 the U.S. Department of Commerce issued preliminary antidumping duty margins against Japanese producers of tin mill products. The Company manufacturers all of the cans that it uses to can pineapple at its Kahului cannery with tin-coated steel imported from Japan. The antidumping duty, if upheld in the final ruling, will increase the cost to the Company of tin-coated steel purchased from Japanese suppliers. The Company is presently soliciting bids for tin-coated steel from U.S. producers and other foreign producers, and any cost increase would affect the Company's 2000 cost of production. Resort The Kapalua Resort segment generated an operating profit of $4.1 million for the first quarter of 2000 compared to $1.7 million for the first quarter of 1999. Revenues of $16.8 million for the first quarter of 2000 were 32% higher than the same period in 1999. Recognition of profit on a percentage-of-completion method from real estate sales at Plantation Estates Phase II and improved results from golf operations, merchandise sales and hotel ground leases were responsible for the increase in operating profits and revenues. Paid rounds of golf, average green fees and room occupancies throughout the Resort increased in the first quarter of 2000 compared to the first quarter of 1999. The last two lots in Plantation Estates Phase II closed during the first quarter of 2000 and at March 31, 2000, current liabilities included approximately $1.4 million of deferred revenue related to Plantation Estates Phase II. The primary reason for the decrease in consolidated shipping and marketing expenses for the first quarter 2000 compared to the first quarter 1999 was because of reduced expenses for the 2000 Mercedes Championships, which were absorbed by the Company. Such reduction was offset by a commensurate decrease in the tournament operations fee that is reflected in Resort revenue. Commercial & Property The operating loss from the Company's Commercial & Property segment decreased from $215,000 for the first quarter of 1999 to $38,000 for the first quarter of 2000. Revenues increased from $923,000 to $1,175,000 for the same periods. The improved results were attributable to improved operating results and increased electricity revenues from Kaahumanu Center. LIQUIDITY, CAPITAL RESOURCES AND OTHER At March 31, 2000, total debt including capital leases was $38 million, an increase of $9.4 million from year-end 1999. The higher debt level was due primarily to increased pineapple inventories, expenditures for Plantation Estates Phase II and capital expenditures. Outstanding debt is expected to continue to increase through most of the third quarter of 2000 because of a high amount of planned capital expenditures as well as anticipated construction of real estate inventories and the normal seasonality of pineapple operations that peaks in the third quarter. Unused short- and long-term credit facilities at the end of the first quarter of 2000 totaled $21.7 million, which is expected to be adequate to cover the Company's cash requirements. Consolidated expenditures in 2000 for fixed assets and deferred development costs are estimated to be $24.8 million of which $7.7 million is for replacement of equipment and facilities for Pineapple and Resort operations. In April 2000, the line of credit for Premium Tropicals International, LLC, which is guaranteed by the Company, was raised from $3 million to $4 million. The Company's information and non-information technology systems encountered no significant date-related problems since the year 2000 began. The Company anticipates that its Information Services personnel will spend approximately 5% of their time in 2000 to monitor business critical systems for any date-related problems that may occur during the year and through year-end 2000. No material future expenditures have been identified. This report contains forward-looking statements, within the meaning of Private Securities Litigation Reform Act of 1995, as to the Company's expectations regarding the volume of imports of canned pineapple into the United States in 2000, the adequacy of credit facilities, the affect on the cost of pineapple production of antidumping duties against Japanese tin mill producers and other matters. Forward-looking statements contained in this report or otherwise made by the Company are subject to certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Potential risks and uncertainties include, but are not limited to, those risks and uncertainties as disclosed in the Company's Annual Report to Shareholders and Form 10-K filing with the Securities and Exchange Commission. Item 3. Quantitative and Qualitative Disclosures about Market Risk The Company's primary market risk exposure with regard to financial instruments is to changes in interest rates. The Company manages this risk by monitoring interest rates and future cash requirements, and evaluating opportunities to refinance borrowings at various maturities and interest rates. There were no other material changes to the Company's market risk exposure during the first three months of 2000. PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits (27) *Financial Data Schedule As of March 31, 2000 and for the three months then ended. *Filed Herewith (b) Reports on Form 8-K The Company filed no reports on Form 8-K for the period covered by this report. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. MAUI LAND & PINEAPPLE COMPANY, INC. May 11, 2000 /S/ PAUL J. MEYER Date Paul J. Meyer Executive Vice President/Finance (Principal Financial Officer) </TEXT> </DOCUMENT> <DOCUMENT> <TYPE>EX-27 <SEQUENCE>2 <TEXT> <TABLE> <S> <C> <ARTICLE> 5 <LEGEND> This schedule contains summary financial information extracted from the Maui Land & Pineapple Company, Inc. Balance sheet as of March 31, 2000 and the Statement of Operations for the three months then ended, and is qualified in its entirety by reference to such financial statements. </LEGEND> <MULTIPLIER> 1,000 <S> <C> <PERIOD-TYPE> 3-MOS <FISCAL-YEAR-END> DEC-31-2000 <PERIOD-END> MAR-31-2000 <CASH> 1,362 <SECURITIES> 0 <RECEIVABLES> 13,590 <ALLOWANCES> 795 <INVENTORY> 24,150 <CURRENT-ASSETS> 43,154 <PP&E> 228,856 <DEPRECIATION> 126,447 <TOTAL-ASSETS> 159,036 <CURRENT-LIABILITIES> 20,848 <BONDS> 35,167 <PREFERRED-MANDATORY> 0 <PREFERRED> 0 <COMMON> 12,455 <OTHER-SE> 54,991 <TOTAL-LIABILITY-AND-EQUITY> 159,036 <SALES> 24,138 <TOTAL-REVENUES> 34,775 <CGS> 15,719 <TOTAL-COSTS> 23,221 <OTHER-EXPENSES> 0 <LOSS-PROVISION> 0 <INTEREST-EXPENSE> 468 <INCOME-PRETAX> 3,039 <INCOME-TAX> 1,094 <INCOME-CONTINUING> 1,945 <DISCONTINUED> 0 <EXTRAORDINARY> 0 <CHANGES> 0 <NET-INCOME> 1,945 <EPS-BASIC> .27 <EPS-DILUTED> .27 </TABLE> </TEXT> </DOCUMENT> </SEC-DOCUMENT>