-----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, BOggqlYHUjQz5/sK8coDXhDwWRXOtoY2f7JR0UeRH4/L6cV4ZOTwkhpttR3H5/NT 7jOdnrlSkDf6qEHvZ+gPAA== 0000727273-95-000021.txt : 19951119 0000727273-95-000021.hdr.sgml : 19951119 ACCESSION NUMBER: 0000727273-95-000021 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CADIZ LAND CO INC CENTRAL INDEX KEY: 0000727273 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE SERVICES [0700] IRS NUMBER: 770313235 STATE OF INCORPORATION: DE FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-12114 FILM NUMBER: 95592612 BUSINESS ADDRESS: STREET 1: 10535 FOOTHILL BLVD STE 150 CITY: RANCHO CUCAMONGA STATE: CA ZIP: 91730 BUSINESS PHONE: 9099802738 MAIL ADDRESS: STREET 1: 10535 FOOTHILL BLVD SUITE 150 CITY: RANCHO CUCAMONGA STATE: CA ZIP: 91730 FORMER COMPANY: FORMER CONFORMED NAME: PACIFIC AGRICULTURAL HOLDINGS INC DATE OF NAME CHANGE: 19920602 FORMER COMPANY: FORMER CONFORMED NAME: ARIDTECH INC DATE OF NAME CHANGE: 19880523 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from............to............ Commission File Number 0-12114 ------------------------- CADIZ LAND COMPANY, INC. (Exact name of registrant specified in its charter) DELAWARE 77-0313235 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 10535 Foothill Boulevard, Suite 150 Rancho Cucamonga, CA 91730 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (909) 980-2738 ------------------------ Securities Registered Pursuant to Section 12(b) of the Act: None Name of Each Exchange Title of Each Class on Which Registered ------------------- --------------------- None None Securities Registered Pursuant to Section 12(g) of the Act: Common Stock (Title of Class) 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 ----- ----- The number of shares outstanding of each of the Registrant's classes of Common Stock at November 13, 1995, was 17,558,454 shares of Common Stock, par value $0.01. CADIZ LAND COMPANY, INC. For the Six Months Ended September 30, 1995 TABLE OF CONTENTS ----------------- Page ---- I. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS A. Balance Sheet 1-2 B. Statement of Cash Flows 3 C. Statement of Operations 4-5 D. Statement of Stockholders' Equity 6 E. Notes 7-8 II. SUPPLEMENTARY INFORMATION A. Management's Discussion and Analysis of Financial Condition and Results of Operations 9-16 B. Other Information 17 C. Signatures 18 CADIZ LAND COMPANY, INC. Condensed Consolidated Balance Sheet September 30, March 31, 1995 1995 ------ ------ (unaudited) Assets (in thousands):
Cash $ 869 $ 2,454 Accounts receivable 411 131 Inventory 322 198 Property and equipment, net 2,339 2,308 Land and improvements: Developed property, net 9,600 9,715 Unimproved land 11,874 11,792 Water transfer projects 2,238 1,764 Excess of purchase price over net assets acquired, net 5,272 5,389 Debt issue costs and other assets 899 1,137 -------- -------- $ 33,824 $ 34,888 -------- -------- -------- -------- See Accompanying Notes to the Consolidted Financial Statements
CADIZ LAND COMPANY, INC. Condensed Consolidated Balance Sheet
September 30, March 31, 1995 1995 ---------- -------- (unaudited) Liabilities and Stockholders' Equity: (in thousands except number of shares) Accounts payable $ 961 $ 1,174 Other liabilities 525 385 Debt 17,017 16,381 Contingencies (Note 4) Stockholders' equity: Common stock - $.01 par value; shares issued and outstanding - 17,558,454 at September 30, 1995 and 16,988,454 at March 31, 1995 176 170 Additional paid-in capital 64,740 62,687 Accumulated deficit (49,595) (45,909) --------- -------- Total stockholders' equity 15,321 16,948 --------- -------- $ 33,824 $ 34,888 --------- -------- --------- -------- See Accompanying Notes to the Consolidated Financial Statements
CADIZ LAND COMPANY, INC. Condensed Consolidated Statement of Cash Flows
For the Six Months Ended September 30, 1995 1994 - ----------------------------------------------------------------------------- (in thousands) (unaudited) Cash flows from operating activities: Loss from continuing operations $(3,686) $(2,246) Adjustments to reconcile loss from continuing operations to net cash used for continuing operating activities: Depreciation and amortization 949 718 Interest capitalized to debt 244 155 Extraordinary gain on debt settlement - (115) The effect on net cash used for continuing operating activities from changes in assets and liabilities: Inventory and accounts receivable (404) 11 Debt issue costs and other assets (52) 76 Accounts payable and other liabilities (73) (561) -------- -------- Net cash used for continuing operating activities (3,022) (1,962) Net cash provided by discontinued operating activities - 57 -------- -------- Net cash used for operating activities (3,022) (1,905) -------- -------- Cash flows from investing activities: Land purchase and development (175) (312) Water transfer projects (474) (616) Additions to property and equipment (234) (357) -------- -------- Net cash used for investing activities (883) (1,285) -------- -------- Cash flows from financing activities: Net proceeds from issuance of common stock 2,059 1,804 Proceeds from issuance of debt 265 - Principal payments on debt (4) (267) -------- -------- Net cash provided by financing activities 2,320 1,537 -------- -------- Net decrease in cash (1,585) (1,653) Cash, beginning of year 2,454 4,408 -------- -------- Cash, end of period $ 869 $ 2,755 -------- -------- -------- -------- See Accompanying Notes to the Consolidated Financial Statements
CADIZ LAND COMPANY, INC. Condensed Consolidated Statement of Operations
For the Three Months Ended September 30, 1995 1994 - ------------------------------------------------------------------------------- (in thousands except per share data) (unaudited) Revenues $ 596 $ 36 -------- -------- Costs and expenses: Resource development 1,486 386 General and administrative 443 348 Amortization 59 59 -------- -------- 1,988 793 -------- -------- Operating loss (1,392) (757) Interest expense, net 443 294 -------- -------- Net loss $ (1,835) $ (1,051) -------- -------- -------- -------- Loss per share: Net loss per share $ (.10) $ (.06) -------- -------- -------- -------- See Accompanying Notes to the Consolidated Financial Statements
CADIZ LAND COMPANY, INC. Condensed Consolidated Statement of Operations
For the Six Months Ended September 30, 1995 1994 - ------------------------------------------------------------------------------- (in thousands except per share data) (unaudited) Revenues $ 650 $ 64 -------- -------- Costs and expenses: Resource development 2,445 901 General and administrative 891 822 Amortization 117 117 -------- -------- 3,453 1,840 -------- -------- Operating loss (2,803) (1,776) Interest expense, net 883 585 -------- -------- Loss before extraordinary item (3,686) (2,361) Extraordinary item: Gain on debt settlement - 115 ------- -------- Net loss $(3,686) $ (2,246) ------- -------- ------- -------- Loss per share: Loss before extraordinary item $ (.21) $ (.15) Extraordinary item - .01 ------- -------- Net loss per share $ (.21) $ (.14) ------- -------- ------- -------- See Accompanying Notes to the Consolidated Financial Statements
CADIZ LAND COMPANY, INC. Condensed Consolidated Statement of Stockholders' Equity
For the Six Months Ended September 30, 1995 - ------------------------------------------------------------------------------- (in thousands except number of shares) (unaudited) Total Common Stock Paid-In Accumulated Stockholders' Shares Amount Capital Deficit Equity ------ ------ ------- ------- --------- Balance as of March 31, 1995 16,988,454 $170 $62,687 $(45,909) $16,948 Exercise of stock options (Note 3) 120,000 1 301 302 Issuance of shares in connection with private placement (Note 3) 450,000 5 1,752 1,757 Net loss (3,686) (3,686) ---------- ---- ------ -------- ------- Balance as of September 30, 1995 17,558,454 $176 $64,740 $(49,595) $15,321 ---------- ---- ------- -------- ------- ---------- ---- ------- -------- ------- See Accompanying Notes to the Consolidated Financial Statements
CADIZ LAND COMPANY, INC. Notes to the Consolidated Financial Statements NOTE 1 - CURRENT STATUS AND DESCRIPTION OF BUSINESS Business of the Company - ------------------------------- Cadiz Land Company, Inc. (the "Company") identifies, acquires and develops properties (to date in the desert regions of Southern California) which have significant indigenous supplies of water. The Company currently owns or controls approximately 41,750 acres, with its largest property totaling approximately 31,800 acres at Cadiz, California. The Company's primary objective is to maximize the long-term value of each of its properties through strategic use of the water resources associated with the properties. The alternatives available to the Company, which are evaluated by management on an ongoing basis, include the transfer of water to third party users and/or the development of the properties using indigenous water sources for agricultural, commercial or residential purposes. The transfer of water to third party users, both from the Cadiz property and from other Company properties, is being actively pursued by the Company. It is expected that water from the Cadiz water transfer project will be capable of delivering approximately 30,000 acre-feet of water per year which will be sold to various California water agencies pursuant to water delivery contracts which the Company is currently negotiating. In addition, the Company has submitted the Final Draft Feasibility Report, prepared for the project under the joint review of the Company and a public water agency, which included the various results of independent studies conducted throughout the year. The Company has also submitted a Conceptual Ground Water Management Plan which clarifies many of the hydrological features and resource management concepts of the proposed water transfer project. All remaining required environmental reports are expected to be filed within fiscal 1996. The Company has also commenced water development operations at its landholding in the Piute valley. Following the drilling of a production well on the property and the results of preliminary engineering tests, the company has determined both the quantity and the quality of the underlying water to be suitable for commercial development and that the depth of the ground water table allows for economic production of ground water. The Company believes that the Piute water transfer project is both technically and economically feasible and is currently analyzing its options for development. Additionally, agricultural development at Cadiz has been an integral part of the Company's ongoing business strategy as a means of maximizing the value of the Company's landholding as a way to generate cash flow from such landholding. As of March 31, 1995, 800 acres have been developed to table grapes, 560 acres have been developed to citrus, and 240 acres have been planted to various row crops. The Company has been able to enter into joint venture or leasing arrangements for the farming of these crops on its properties. In addition to the land improvements, seven production wells, drip and micro spray irrigation systems and facilities to accommodate a temporary contract labor force have been installed. Basis of Presentation - ------------------------- The Condensed Consolidated Financial Statements have been prepared by the Company without audit and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's latest Form 10-K for the period ended March 31, 1995. The foregoing Condensed Consolidated Financial Statements include all adjustments, consisting only of normal recurring adjustments which the Company considers necessary for a fair presentation. The results of operations for the six months ended September 30, 1995 are not necessarily indicative of the results to be expected for the full fiscal year. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES See Note 2 to the Condensed Consolidated Financial Statements included in the Company's latest Form 10-K for a discussion of the Company's accounting policies. NOTE 3 - STOCK OPTIONS EXERCISED AND PRIVATE PLACEMENTS During the six months ended September 30, 1995, 120,000 previously outstanding stock options were exercised resulting in gross proceeds to the Company of $304,000. During the quarter ended September 30, 1995, the Company completed private placements of 450,000 shares of its common stock resulting in gross proceeds to the Company of $1,800,000. NOTE 4 - CONTINGENCIES As further discussed in Note 9 to the Condensed Consolidated Financial Statements included in the Company's latest Form 10-K, the Company was awarded full reimbursement for its legal fees and costs incurred in defending a legal action for which the plaintiffs filed an appeal. In August 1995, the Arizona Court of Appeals ruled in favor of the trial court's judgment upholding the award for full reimbursement to the Company for such legal fees and costs incurred. In addition, the Court of Appeals has awarded the Company reimbursement for legal fees on appeal, the amount of which has yet to be determined. The Company has not recorded a gain contingency in connection with this matter, however, the plaintiffs have posted a cash bond from which the Company can collect its judgment which is estimated at approximately $400,000. CADIZ LAND COMPANY, INC. Management's Discussion and Analysis of Financial Condition and Results of Operations (unaudited) RESULTS OF OPERATIONS Quarter Ended September 30, 1995 Compared to Quarter ended September 30, 1994 - ----------------------------------------------------------------------------- During the quarter ended September 30, 1995, the Company incurred a net loss of $1,835,000 compared to a loss of $1,051,000 during the same period in 1994. The following table summarizes the net loss for both periods (in thousands): 1995 1994 ---- ---- Revenues $ 596 $ 36 ------ ------ Resource development 1,486 386 General and administrative 443 348 Amortization 59 59 Interest expense, net 443 294 ------ ------ $1,835 $1,051 ------ ------ ------ ------ Revenues - -------- Revenues are recognized from the Company's resource development as a result of the Company's ability to enter into joint venture or leasing arrangements with third party growers for the farming of crops on its properties. Gross crop proceeds from the summer honeydew venture totalled $427,000 for the quarter ended September 30, 1995, whereas, gross crop proceeds from the seedless watermelon venture totalled $112,000, which was less than anticipated due to unseasonably hot weather and the consequential decision to curtail harvesting. In addition, net profit of $30,000 was realized from the Company's produce brokerage during the quarter. Rental income from the vineyard lease totalled approximately $29,000 for each of the quarters ended September 30, 1995 and 1994. The Company also receives a percentage of gross revenue generated by the vineyard and will record such revenue in the quarter ended December 31, 1995. Resource Development - -------------------- Expenses recorded in this category consist of costs incurred in the agricultural, land and water resource development of the Company's landholdings. As an integral part of its strategy to control the ultimate use of the resources associated with the Cadiz project, the Company continues to maintain control of management of both the infrastructure associated with these properties as well as the development of the area for agricultural use. Accordingly, costs related to the Company's management of its infrastructure and agricultural development are included in Resource Development, as well as the Company's share of joint venture crop costs. Additionally, operating costs associated with the Company's produce brokerage and the Company's continual evaluation of additional potential land acquisition sites, such as overhead, legal and travel are included within this category. Resource development expenses totaled $1,486,000 for the quarter ended September 30, 1995 as compared to $386,000 for the same period in 1994. The Company's share of joint venture crop production costs totalled approximately $697,000 during the quarter ended September 30, 1995. Also included in resource development are operating expenses attributable to the Company's produce brokerage, which was created in April 1995, and professional fees incurred in connection with the Company's opposition to a proposed waste landfill project at a site located adjacent to its Cadiz landholding which is discussed in further detail in the Company's latest Form 10-K. The remaining increase was due to higher levels of activity related to the development of 160 acres to row crops which occurred during the last several months of fiscal 1995 and additional depreciation related to land improvements and an irrigation system installed in the latter part of the prior fiscal year. General and Administrative - -------------------------- General and administrative expenses increased by approximately $95,000 in 1995 compared to 1994, due to an overall increase in activity. Interest Expense - ---------------- Net interest expense totalled $443,000 during the quarter ended September 30, 1995 as compared to $294,000 during the same period in 1994. The following table summarizes the components of net interest expense for the three month periods ended September 30, 1995 and 1994 (in thousands): 1995 1994 ---- ---- Interest expense on outstanding debt $ 245 $ 212 Amortization of financing costs 210 120 Interest income (12) (38) ----- ----- Net interest expense $ 443 $ 294 ----- ----- ----- ----- Interest expense on outstanding debt increased during the period as a result of an increased level of borrowing. Amortization of financing costs increased as a result of debt issue costs incurred in connection with the March 1995 additional loan as further discussed in the Company's latest Form 10-K. Six Months Ended September 30, 1995 Compared to Six Months Ended September 30, 1994 - ------------------------------------------------------------------ During the six months ended September 30, 1995, the Company incurred a net loss of $3,686,000 compared to a loss of $2,246,000 during the same period in 1994. The following table summarizes the net loss for both periods (in thousands): 1995 1994 ---- ---- Revenues $ 650 $ 64 ------ ------ Resource development 2,445 901 General and administrative 891 822 Amortization 117 117 Interest expense, net 883 585 Gain on debt settlement - (115) ------ ------ $3,686 $2,246 ------ ------ ------ ------ Revenues - -------- Gross crop proceeds from the honeydew melon, seedless watermelon and radiccho joint ventures totalled $564,000 during the six months ended September 30, 1995. Net profit realized from the Company's produce brokerage totalled $30,000 for the same period. Revenues received from the vineyard lease totalled approximately $56,000 for 1995 and 1994. The Company also receives a percentage of gross revenue generated by the vineyard and will record such revenue in the quarter ended December 31, 1995. Resource Development - -------------------- Resource development expenses totalled $2,445,000 for the six months ended September 30, 1995 as compared to $901,000 for the same period in 1994. The increase is due to the Company's share of joint venture production costs of the various summer crops ($697,000), operating expenses related to the Company's produce brokerage and an increase in professional fees incurred in connection with the Company's opposition to a proposed waste landfill project adjacent to its Cadiz landholdings. The remaining increase is due to higher levels of activity related to the development of 160 acres to row crops. General and Administration - -------------------------- General and administrative expenses during both periods consisted primarily of salaries and professional expenses. These expenses increased by $69,000 during the six months ended September 30, 1995, as compared to the same period in 1994. This increase was primarily due to an increase in salaries and rent expense offset by reduced legal fees related to litigation. Interest Expense - ---------------- The following table summarizes the components of net interest expense for the six month periods ended September 30, 1995 and 1994 (in thousands): 1995 1994 ---- ---- Interest expense on outstanding debt $ 490 $ 423 Amortization of financing costs 421 240 Interest income (28) (78) ----- ----- Net interest expense $ 883 $ 585 ----- ----- ----- ----- Interest expense on outstanding debt increased during the period as a result of an increased level of borrowing. Amortization of financing costs increased as a result of debt issue costs incurred in connection with the March 1995 additional loan as further discussed in the Company's latest Form 10-K. Gain on Debt Settlement - ----------------------- In June 1994, the Company retired a note payable in the amount of $249,000 to an individual at a discounted amount resulting in an extraordinary gain on settlement of debt of $115,000. The note, which originated in 1985, was scheduled to be retired with a balloon payment in December 1996. LIQUIDITY AND CAPITAL RESOURCES Pursuant to its business strategy, the Company utilizes its working capital primarily for development purposes: that is, for purposes designed to increase the long term value of its properties. A substantial portion of these developmental expenses are being incurred in connection with the development of the Company's water transfer projects at Cadiz and Piute. As the Company does not expect to receive significant revenues from these water transfer projects until 1997, the Company has been required to obtain financing to bridge the gap between the time development expenses are incurred and the time a revenue stream will commence. Accordingly, the Company has looked to outside funding sources to address its liquidity and working capital needs. Since the beginning of the 1992 fiscal year, the Company has addressed these needs primarily through secured debt financing arrangements with its lenders, private placements and the exercise of outstanding stock options. With the implementation of the Company's program to conduct agricultural operations on its properties primarily through third party leasing and joint venture operations and the establishment of its produce brokerage, agricultural operations are anticipated to be cash flow positive in 1996 and subsequent years. Operational Arrangements - ------------------------ The Company is continuing to negotiate the specific terms of water delivery contracts with several California water agencies with respect to its Cadiz project. Such terms include institutional arrangements, quantity of delivered water, pricing concepts and formulas and ownership of the pipeline and delivery system. The Company is also proceeding with the remaining environmental reports which are required to be filed prior to commencement of construction. In addition, the Company is negotiating with several prospective purchasers of its water from the Piute project. The Company believes that much of the development work being performed for the Cadiz project will be transferrable to the Piute project, thus making it possible for water transfers from Piute to begin in parallel with or shortly after Cadiz. Agricultural development continues to be an integral part of the Company's ongoing business strategy as a means of maximizing the value of the Company's landholdings and a way to generate cash flow from such landholdings. The Company has been able to attract third party growers with significant expertise in their respective purview and to enter into joint venture or leasing arrangements for the farming of crops on its properties. Since December 1992, the Company has leased its table grape vineyard to an independent operator in return for both a fixed minimum income stream and a percentage of the gross revenue. The Company currently markets the citrus produced on its 560-acre orchard through a large international conglomerate and has entered into several ventures with established row crop growers whereby a total of 240 acres at Cadiz are planted to row crops. Such development to row crops allows for multiple harvests from the same acreage each year, thus allowing the Company an opportunity for an immediate return on capital invested in the infrastructure. In April 1995, Cadiz Fresh, the agricultural division of the Company, established a produce brokerage. Fresh fruit and vegetables grown by independent parties are sold through this brokerage. Net profit from the produce brokerage is recorded as revenue. As the volume of orders increases throughout the year, management believes this operation will become cash flow positive. Current Financing Arrangements - ------------------------------ The Company's two primary lenders are Cooperative Centrale Raiffeisen-Boerenleenbank B.A., a Netherlands commercial bank ("Rabobank") and Henry Ansbacher & Co., Limited, a banking corporation organized under the laws of England ("Ansbacher") (collectively, the "Banks"). As previously reported in the Company's latest Form 10-K, in March 1995 the Company arranged to draw $2.45 million from an additional $3 million loan facility provided by Ansbacher. From these proceeds, the Company used $250,000 to reduce the Company's existing Rabobank loan and to reimburse Rabobank for various fees and expenses with the balance to be applied towards the Company's estimated working capital requirements through March 31, 1996. The remaining $550,000 of this facility is expected to be drawn down April 1, 1996 for application towards the Company's estimated working capital requirements for the fiscal year ending March 31, 1997. Ansbacher agreed to accrue and capitalize interest on the outstanding principal amount of these advances through January 1997. Interest rates on outstanding debt to the Banks, with the exception of the March 1995 additional loan facility, are fixed until January 1997, the maturity date under the current financing arrangements. Interest on the Ansbacher portion is accrued and capitalized until maturity. Rabobank interest is paid quarterly through draw downs against a letter of credit provided by Ansbacher for that purpose. As the Company continues to pursue its business strategy, additional financing specifically in connection with the Company's water projects will be obtained. The nature of such additional financing for the water transfer projects will depend upon how the development and ownership of each project is ultimately structured, and how much of each project's funding will be the Company's responsibility. Equity Placements - ----------------- During the fiscal year ended March 31, 1995, the Company raised gross proceeds of approximately $2.3 million through the exercise of outstanding stock options and warrants. In addition, the Company raised gross proceeds of $304,000 through the exercise of outstanding stock options during the six months ended September 30, 1995. In July 1995, the Company completed a private placement of 450,000 shares of its common stock to several institutions thereby receiving gross proceeds of $1,800,000. The Company will utilize such proceeds to fund its capital projects related to development of its water transfer projects, purchase of additional acreage and for operating requirements. Working Capital Resources - ------------------------- The Company has adopted an unclassified balance sheet (eliminating the distinction between current assets and long-term assets and current liabilities and long-term liabilities). Accordingly, any historical or forward looking discussion of the Company's working capital resources should focus on the receipt and use of cash as opposed to the broader concepts of working capital and current ratio. Cash used for continuing operating activities totaled $3,022,000 for the six month period ended September 30, 1995 as compared to $1,962,000 for the same period in 1994. This change primarily resulted from a combination of increased activity at the ranch pertaining to the various ventures with independent growers, costs associated with the establishment in April 1995 of a produce brokerage to market fresh fruit and vegetables, and an increase in professional fees incurred in connection with the Company's opposition to a proposed waste landfill project adjacent to its Cadiz landholdings. The cash provided by discontinued operating activities during the 1994 quarter resulted from the sale of property during that period. Cash used for investing activities decreased by $402,000 during the six months ended September 30, 1995 compared to the same period in 1994. Although activity related to the Cadiz water transfer project increased in 1995, costs associated with such activity decreased from the prior year. The amount incurred in 1994 consisted of preliminary studies and project mobilization, whereas, the 1995 costs pertained to specific environmental issues. Additionally, property and equipment for the 1994 period included costs related to the drilling of a production well and construction of an irrigation manifold system. Financing activities provided $2,230,000 for the six months ended September 30, 1995 as compared to $1,537,000 during the six months ended September 30, 1994. Proceeds from the issuance of common stock as a result of the exercise of previously existing stock options totaled $2,059,000 and $1,804,000 during the 1995 and 1994 periods, respectively. Proceeds from the issuance of debt increased by $265,000 during the 1995 period and principal payments on debt decreased by $263,000 compared to the 1994 period. SHORT-TERM OUTLOOK Management believes it has sufficient funds available to meet the Company's short-term working capital requirements. During fiscal 1996, these working capital requirements will be funded from the remaining balance of the $2.45 million in proceeds received in March 1995 from the additional loan facility provided by Ansbacher, the $2.081 million received by the Company through the exercise of stock options and the completion of a private placement in July 1995 (see Note 3 to the Condensed Consolidated Financial Statements). During fiscal 1995, the Company's working capital requirements were funded from available cash at the beginning of the year and from proceeds from the exercise of outstanding stock options. LONG-TERM OUTLOOK Historically, the Company has financed both its working capital and property acquisitions cash requirements from outside resources via a combination of debt and equity placements. Although the Company expects the revenue stream from its agricultural operations will increase in fiscal 1996 and a revenue stream from its other landholdings and associated resources will commence in calendar 1997, no assurances can be made as to whether such revenues will be of sufficient levels by the end of fiscal 1996 to fund the Company's ongoing cash requirements. Such cash requirements will be dependent, in large part upon the form of the arrangements utilized by the Company for the development of its resources. As the Company is actively pursuing the development of its water resources, it is seeking the finalization of the regulatory approvals needed to commence construction of a water delivery project at Cadiz. The Company is also negotiating the terms of water delivery contracts with various California water agencies, which terms include institutional arrangements, financing, pricing concepts and formulas and ownership of the pipeline and the delivery system. In addition, as a result of San Bernardino County's approval of a General Plan Amendment covering 9,600 acres of the Company's landholdings at Cadiz and the increased grower interest in Cadiz as an agricultural area, the Company expects to continue further development of its landholding to agriculture. Such development will be systematic and in furtherance of the Company's business strategy to provide for maximization of the value of its assets. Such development is expected to continue to be accomplished through negotiated arrangements with third parties, which will significantly reduce any capital outlay required of the Company in connection with such development activities. CADIZ LAND COMPANY, INC. Other Information ----------------- Item 1 - Legal Proceedings ----------------- Not applicable. Item 2 - Change in Securities -------------------- Not applicable. Item 3 - Defaults Upon Senior Securities ------------------------------- Not applicable. Item 4 - Submission of Matter to a Vote of Security Holders -------------------------------------------------- A. The annual meeting of the stockholders of the Company was held on September 22, 1995. The stockholders took the following action at the meeting: 1. Re-elected Dwight W. Makins, Keith Brackpool, J.F.R. Hammond and Stephen D. Weinress to the Company's Board of Directors. Mr. Makins was elected by the vote of 8,711,724 in favor and 35,939 against, with no one abstaining and no broker non-votes. Mr. Brackpool was elected by the vote of 8,711,502 in favor and 36,161 against, with no one abstaining and no broker non-votes. Mr. Hammond was elected by the vote of 8,711,724 in favor and 35,939 against, with no one abstaining and no broker non-votes. Mr. Weinress was elected by the vote of 8,711,724 in favor and 35,939 against, with no one abstaining and no broker non-votes. 2. Ratified the selection by the Company's Board of Directors of Price Waterhouse LLP to continue as the Company's independent auditors for fiscal year 1996 by the vote of 8,700,692 in favor and 2,521 against, with 44,450 abstaining and no broker non-votes. Item 5 - Other Information ----------------- Not applicable. Item 6 - Exhibits and Reports on Form 8-K -------------------------------- A. Exhibits 1. Exhibit 27 - Financial Data Schedule B. Reports on Form 8-K 1. None CADIZ LAND COMPANY, INC. Signatures ---------- 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. CADIZ LAND COMPANY, INC. By: /s/ Keith Brackpool November 13, 1995 ------------------------------------ --------------------- Keith Brackpool Date Chief Executive Officer and Director By: /s/ Susan K. Chapman November 13, 1995 ------------------------------------- --------------------- Susan K. Chapman Date Chief Financial Officer and Secretary EX-27 2
5 1,000 6-MOS MAR-31-1996 SEP-30-1995 869 0 411 0 322 0 2,339 0 33,824 961 0 176 0 0 64,740 33,824 0 650 0 3,453 0 0 883 0 0 (3,686) 0 0 0 (3,686) (.21) 0
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