-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LAjjccmoOnCYzsuaRzaJtu9UJaWNoCGO/AR94n1L1Z47SYiQeKy/OtdqMLkieWJ3 gpyZObw0RP/qUFh/x9/xjw== 0000063330-96-000013.txt : 19960515 0000063330-96-000013.hdr.sgml : 19960515 ACCESSION NUMBER: 0000063330-96-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960514 SROS: NONE 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: 1934 Act SEC FILE NUMBER: 001-06510 FILM NUMBER: 96563562 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 10-Q 1 FORM 10-Q 1ST QUARTER '96 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 Commission file number 0-4674 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 96732 (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 1, 1996 Common Stock, no par value 1,797,125 shares MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES INDEX Page PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Balance Sheets - March 31, 1996 (Unaudited) & December 31, 1995 3 Condensed Statements of Operations and Retained Earnings, Three Months Ended March 31, 1996 & 1995 (Unaudited) 4 Condensed Statements of Cash Flows Three Months Ended March 31, 1996 & 1995 (Unaudited) 5 Notes to Condensed Financial Statements (Unaudited) 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 PART II. OTHER INFORMATION 9 PART I. - FINANCIAL INFORMATION Item 1. Financial Statements MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES CONDENSED BALANCE SHEETS Unaudited 03/31/96 12/31/95 (Dollars in Thousands) ASSETS Current Assets Cash $ 237 $ 166 Accounts and notes receivable 12,095 13,142 Inventories 19,713 19,675 Other current assets 3,666 3,571 -------- -------- Total current assets 35,711 36,554 Property 187,361 185,175 Accumulated depreciation (98,735) (96,618) -------- -------- Property - net 88,626 88,557 Other Assets 12,006 11,974 -------- -------- TOTAL 136,343 137,085 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Trade accounts payable 5,187 5,761 Other current liabilities 6,514 7,365 -------- -------- Total current liabilities 11,701 13,126 Long-Term Liabilities Long-term debt and capital lease obligations 35,916 36,227 Accrued retirement benefits 22,718 22,594 Other long-term liabilities 6,518 6,268 -------- -------- Total long-term liabilities 65,152 65,089 Stockholders' Equity Common stock, no par value - 1,800,000 shares authorized, 1,797,125 issued and outstanding 12,318 12,318 Retained earnings 47,172 46,552 -------- -------- Stockholders' Equity 59,490 58,870 -------- -------- $136,343 $137,085 TOTAL ======== ======== 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 3/31/96 3/31/95 (Dollars in Thousands Except Share Amounts) REVENUES Net sales $22,014 $19,893 Operating income 7,023 8,933 Other income 1,262 1,131 ------- ------- Total Revenues 30,299 29,957 ------- ------- COSTS AND EXPENSES Cost of goods sold 15,597 14,648 Operating expenses 5,540 6,327 Shipping and marketing 3,194 2,803 General and administrative 3,761 4,361 Equity in losses of joint ventures 293 1,746 Interest 930 3,035 ------- ------- Total Costs and Expenses 29,315 32,920 ------- ------- INCOME (LOSS) BEFORE INCOME TAXES 984 (2,963) INCOME TAXES (CREDIT) 364 (1,096) ------- ------- NET INCOME (LOSS) 620 (1,867) RETAINED EARNINGS, BEGINNING OF PERIOD 46,552 48,111 ------- ------- RETAINED EARNINGS, END OF PERIOD 47,172 46,244 ======= ======= PER COMMON SHARE Net Income (Loss) $ .34 $ (1.04) ======= ======= See accompanying Notes to Condensed Financial Statements. MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED) Three Months Ended 3/31/96 3/31/95 (Dollars in Thousands Except Share Amounts) Net Cash Provided By Operating Activities $ 1,412 $ 702 ------- ------- Investing Activities Purchases of property (1,592) (3,197) Proceeds from disposal of property 504 715 Other 165 (1,753) ------- ------- Net Cash Used In Investing Activities (923) (4,235) ------- ------- Financing Activities Payments of long-term debt and capital lease obligations (2,168) (571) Proceeds from long-term debt 1,750 3,311 Proceeds from short-term debt -- 944 ------- ------- Net Cash Provided By (Used In) Financing Activities (418) 3,684 ------- ------- Net Increase in Cash 71 151 Cash At Beginning of Period 166 2,269 ------- ------- Cash At End of Period $ 237 $ 2,420 ======= ======= Supplemental Disclosure and Cash Flow Information - Interest (net of amounts capitalized) of $1,536,000 and $3,709,000 was paid during the three months ended March 31, 1996 and 1995, respectively. Income tax refunds (net of payments) of $33,000 were received during the three months ended March 31, 1995. 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 and results of operations for the interim periods ended March 31, 1996 and 1995. 2. The Company's reports for interim periods utilize numerous estimates of production, 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 1996 and 1995 differs from the statutory federal rate of 34% primarily because of the state tax provision and refundable state tax credits. 4. Inventories as of March 31, 1996 and December 31, 1995 were as follows (in thousands): 03/31/96 12/31/95 Pineapple products $13,170 $13,920 Real estate held for sale 393 340 Merchandise, materials and supplies 6,150 5,415 ------- ------- Total Inventories $19,713 $19,675 ======= ======= 5. Average common shares outstanding for the interim periods ended March 31, 1996 and 1995 were 1,797,125. 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 1996 was $620,000. For the first quarter of 1995, the Company incurred a net loss of $1.9 million. Operating profits from the Company's Pineapple and Resort operations and lower interest expense resulting from a reduced debt level contributed to improved results in 1996. Additionally, the Company's equity in the losses of Kaptel Associates increased the net loss for the first quarter of 1995 by $1.1 million. Kaptel Associates joint venture was dissolved in October 1995. Pineapple The Company's Pineapple operations generated higher revenues in 1996 on similar case sales volume as the first quarter of 1995, due to improved prices. Higher prices were largely the result of the favorable ruling in 1995 on the anti-dumping case against the Thai pineapple producers and weather-related production problems experienced by foreign producers in 1995. Increased revenues resulted in an operating profit for the Company's Pineapple operations for the first quarter of 1996 compared to an operating loss for the same period a year earlier. Resort Kapalua Resort produced an operating profit in the first quarter of 1996 compared to an operating loss for the first quarter of 1995. The improved operating performance results from ongoing resort operations and reduced equity in losses from joint venture investments. Kapalua Resort's ongoing operations generated higher revenues and operating profits for the first quarter of 1996 compared to the first quarter of 1995 as merchandise sales, paid rounds of golf and resort occupancies increased. These results largely reflect higher visitor counts on the Island of Maui. Commercial & Property Revenue and operating profits from the Commercial & Property segment decreased in the first quarter of 1996 compared to the first quarter of 1995. These decreases are primarily attributed to the exclusion of Kaahumanu Center Associates (KCA) from the Company's consolidated financial statements as of April 30, 1995. Since May of 1995 the Company's interest in KCA was reduced from 99% to 50% and the Company began accounting for its investment by the equity method. LIQUIDITY AND CAPITAL RESOURCES At March 31, 1996, the Company's total debt including capital leases was $37.1 million, the Company's lowest debt level in over five years. The higher level of debt in prior years resulted largely from capital expenditures related to the expansion and renovation of Kaahumanu Center and other investment activities and, to a lesser extent, negative cash flows from operating activities. The Company's cash requirements normally increase during the months of May through August each year because that is the peak pineapple canning period. In 1996 these peak cash flow needs will be funded with short-term borrowings under lines of credit. As of March 31, 1996, the Company had $9.1 million of unused short- and long-term lines of credit available. Aside from seasonal increases in borrowing, the Company believes that total debt will be further reduced by year-end 1996 as a result of positive cash flows from operations. Capital expenditures in 1996 are expected to be approximately $6.6 million for new equipment and for replacement of existing equipment. These expenditures include $2 million to replace the processing water disposal system presently used by the Company's pineapple cannery. In addition to these capital expenditures the Company expects to contribute approximately $1.2 million to the County of Maui for its share of increased capacity in the West Maui sewer system. The Company expects to fund these expenditures with cash flows from operations and with capital leases. PART II OTHER INFORMATION Item 5. Other Information In an April 29, 1996 letter to the Harry Weinberg Family Foundation, Inc., Mary Cameron Sanford, who chairs the Company's Board of Directors and whose family owns about 40% of the Company's stock, stated she would recommend that the Company's Board of Directors appoint a Foundation representative as a director at the August 2, 1996 Board meeting based on certain understandings, including agreements that while the representative serves, for approximately two years the Foundation will not acquire additional stock of the Company or seek additional board representation, subject to various conditions and exceptions. The Foundation confirmed those understandings in a letter dated April 30, 1996. Ms. Sanford's letter was unanimously approved by Company's Board at its May 3, 1996 meeting. The Foundation is a public charitable foundation that owns 37.1% of the Company's stock. Ms. Sanford's April 29, 1996 letter, and the Foundation's April 30, 1996 letter, are filed herewith as exhibits and are incorporated herein by reference. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits (10) Material Contrasts A. Letter to Mr. Darrell D. Friedman from Mary Cameron Sanford dated April 29, 1996. Attached. B. Letter to Mary Cameron Sanford from Darrell D. Friedman dated April 30, 1996. Attached. (27) Financial Data Schedule A. As of March 31, 1996 and for the three months then ended. Attached. (b) Reports on Form 8-K There were no reports on Form 8-K filed 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 14, 1996 /S/ PAUL J. MEYER Date Paul J. Meyer Executive Vice President/Finance EX-27 2
5 This schedule contains summary financial information extracted from the Maui Land & Pineapple Company, Inc. Balance Sheet as of March 31, 1996 and the Statement of Operations for the three months then ended, and is qualified in its entirely by reference to such financial statements. 1,000 3-MOS DEC-31-1996 MAR-31-1996 237 0 12,095 0 19,713 35,711 187,361 98,735 136,343 11,701 35,916 0 0 12,318 0 136,343 22,014 30,299 15,597 21,137 0 0 930 984 364 620 0 0 0 620 .34 .34
EX-10 3 April 29, 1996 VIA FAX Mr. Darrell D. Friedman President The Harry Weinberg Family Foundation, Inc. c/o The Associated Jewish Community Federation of Baltimore Associated Krieger Building 101 West Mount Royal Avenue Baltimore, Maryland 21201-5781 Dear Mr. Friedman: Thank you very much for traveling to Honolulu with Mr. Scriggins to meet with myself and Richard Cameron. As shareholders and as directors of Maui Land & Pineapple Company, Inc., Richard and I believe that it is the best interests of Maui Land & Pineapple Company, the Harry Weinberg Family Foundation, Inc., the Cameron family and all other shareholders to include an appropriate representative of the Harry Weinberg Family Foundation, Inc. on the Maui Land & Pineapple Company board. Richard and I will recommend to the Company's board of directors that this be accomplished at its August 2 meeting. Mr. Joe Hartley, whom you met with on several occasions during his tenure as the Company's Chief Executive Officer, has offered to resign from the board in order to make a seat available for the Foundation. We will recommend to the board that at its August meeting it accept Mr. Hartley's resignation and fill the resulting vacancy with a designee of the Foundation satisfactory to the board. Mr. Himmelrich appears to be an excellent choice for that seat, both because of his business experience and because of the talent you described for working with others on a cooperative and constructive basis. Of course, we would like the Company's board members to meet with Mr. Himmelrich before they act on his appointment. For that reason, and to help Mr. Himmelrich prepare himself to assume a board seat, we hope Mr. Himmelrich can visit with us either this week or at some other time prior to August. This will provide an opportunity to meet the Company's directors, to discuss its affairs with key management personnel, and to tour the subsidiaries' facilities. We hope Mr. Himmelrich and yourself can attend the annual meeting on May 3. If that trip is possible, Mr. Himmelrich will be welcome as an observer at the May 3 board meeting. In any event, between then and the August meeting, the Company would provide Mr. Himmelrich with materials distributed to board members. Our willingness to make the foregoing recommendations (which we believe will be fully acceptable to the board) are premised on the Foundation's confirmation of agreements on two topics. First, prior to April 1, 1998, in the absence of approval from a majority of the board other than the Foundation's designee, the Foundation will not acquire direct or indirect voting or investment power over any additional securities of the Company (except as a result of stock dividends or other distributions made on a prorata basis by the Company), solicit proxies with respect to the Company's stock, enter into any agreements with respect to the voting of the Company's stock, or in any way participate in a group for the purpose of acquiring, holding, or disposing of the Company's stock. (Of course, the latter point would not in any way affect the right of the Foundation, acting independently, to dispose of the shares.) Second, until mailing of the Company's proxy statements for its 1998 annual meeting, in the absence of such approval, the Foundation will not seek any additional board seats (except in connection with any increase in board size) or assist any other party in any effort to affect the size or membership of the Company's board. Please confirm that these points (subject to the following paragraph) are acceptable to the Foundation. The foregoing agreements would not apply if there were, without the approval of the Foundation's designee, either a change in capitalization of the Company that reduces the percentage of the Company's voting securities held by the Foundation, or a change in the Company's articles, bylaws or state law that materially and adversely affects the voting rights of shares owned by the Foundation. And, of course, the foregoing agreements would not apply if Mr. Himmelrich (or another representative of the Foundation reasonably acceptable to the Company's board) is not seated as indicated at the August meeting, or if Mr. Himmelrich subsequently leaves the board and another representative of the Foundation reasonably acceptable to the board is not elected by it to fill that vacancy. As indicated above, I fully expect the board to concur with our recommendations as to the foregoing matters. However, if the board does not concur in those recommendations, Richard and I will use our best efforts as shareholders to accomplish the election to the board of Mr. Himmelrich, or another designee of the Foundation reasonably satisfactory to us, on the foregoing basis. Darrell, I was delighted to make your acquaintance, and feel we can work together for the benefit of the Company. I also believe Friday's meetings and the steps outlined above are extremely positive developments. The Company's management shares that view. If there is anything I or the Company can do to assist Mr. Himmelrich in familiarizing himself with the Company's operations and personnel, please let Gary Gifford or myself know. Very truly yours, /S/ MARY CAMERON SANFORD Mary Cameron Sanford EX-10 4 HARRY WEINBERG FAMILY FOUNDATION, INC. Associated Krieger Building 101 West Mount Royal Avenue Baltimore, Maryland 21201 301-727-4828 April 30, 1996 Mary Cameron Sanford Chairman of the Board Maui Land & Pineapple Company, Inc. 120 Kane Street, PO Box 187 Kahului, Maui, Hawaii 96732-0187 Dear Mrs. Sanford: We write to confirm our mutual agreements set forth in your letter of April 29, 1996. Let me say that we, too, enjoyed the opportunity to meet with you and Richard, as well as Gary Gifford and Paul Meyer, last Friday in Honolulu. We appreciated very much your hospitality and believe the meetings were constructive, and establish a framework for a beneficial dialogue and relationship with respect to the affairs of Maui Land & Pineapple Company, Inc. Unfortunately, Mr. Himmelrich and I do not believe we will be able to manage to attend the annual meeting on May 3. However, we would both like to visit soon thereafter and we would suggest July 9-12 as possible dates for your consideration. I will call you to confirm. As we now will be unable to attend the May 3 annual meeting in person, we are pleased to enclose our proxy for voting at the meeting. Again, many thanks for your hospitality last Friday, and we look forward to working together. Sincerely yours, /S/ DARRELL D. FRIEDMAN Darrell D. Friedman President DDF:mvk -----END PRIVACY-ENHANCED MESSAGE-----