10QSB 1 p17923_10qsb.txt FORM 10-QSB SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1954 For Quarter Ended: September 30, 2003 Commission File Number: 33-10196 (Exact name of registrant as specified in its charter) California Almond Investors I -------------------------------- A California Limited Partnership California 94-3021790 -------------------------------------------------------------------------------- (State or other jurisdiction of I.R.S. Employer Identification No.) incorporation or organization) 2210 Northpoint Parkway, Santa Rosa, CA 95407 -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (707) 579-3742 -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) -------------------------------------------------------------------------------- (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. |X| Yes |_| No PART I - FINANCIAL INFORMATION Item 1. Financial Statements. See following pages. See accompanying notes. CALIFORNIA ALMOND INVESTORS I (A CALIFORNIA LIMITED PARTNERSHIP) BALANCE SHEET September 30, 2003 (UNAUDITED) ASSETS CURRENT ASSETS Cash and cash equivalents $ 300,698 Accounts Receivable, no allowance deemed necessary 98,658 Inventory-In Process 350,133 Deferred crop costs 39,594 Accrued Interest Receivable 12,335 Current portion of notes receivable 14,666 ----------- Total Current Assets 816,084 ----------- NOTES RECEIVABLE-LONG TERM 477,588 ----------- PROPERTY AND EQUIPMENT Land 718,609 Orchards 1,418,254 Equipment 754,871 Buildings 38,913 ----------- 2,930,647 Less accumulated depreciation (2,190,060) ----------- 740,587 ----------- $ 2,034,259 =========== LIABILITIES AND PARTNERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued liabilities $ 63,764 Current portion of long-term debt 24,000 ----------- Total Current Liabilities 87,764 LONG-TERM DEBT, less current portion 252,000 PARTNERS' EQUITY 1,694,495 ----------- $ 2,034,259 =========== The financial statements, in the opinion of management, reflect all adjustments necessary to fairly state the financial position and the results of operations. These results are not necessarily to be considered indicative of the results for the entire year. See accompanying notes. CALIFORNIA ALMOND INVESTORS I (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENT OF INCOME UNAUDITED
Three Months Ended Nine Months Ended September 30, September 30, 2003 2002 2003 2002 -------------------------------------------------------------- REVENUES Interest Income $ 8,584 $ 16,435 $ 27,912 $ 16,435 Gain on sale of almond orchards 180,219 -------------------------------------------------------------- $ 8,584 16,435 27,912 196,654 EXPENSES -- -------------------------------------------------------------- NET INCOME $ 8,584 $ 16,435 $ 27,912 $196,654 ============================================================== NET INCOME PER LIMITED PARTNERSHIP UNIT $ 0.71 $ 1.36 $ 2.31 $ 16.28 ============================================================== NUMBER OF PARTNERSHIP UNITS 12,079 12,079 12,079 12,079
See accompanying notes. CALIFORNIA ALMOND INVESTORS I (A CALIFORNIA LIMITED PARTNERSHIP) STATEMENT OF ICASH FLOWS UNAUDITED Nine Months Ended September 30, 2003 2002 ------------------------ CASH FLOWS FROM OPERATING ACTIVITIES Net Income $ 27,912 $ 196,654 Adjustment to reconcile net income to net cash from operating activities Gain on sale of almond orchards (180,219) Changes In: Accounts receivable 269,850 290,300 Interest receivable (6,987) Deferred crop costs (343,296) (521,108) Advances fro farm costs 1,500 5,400 Accounts payable and accrued liabilities (4,738) 171,460 Payable to related parties (3,636) ------------------------ Net cash from operating activities (59,395) (37,513) ------------------------ CASH FLOW FROM INVESTING ACTIVITIES Payments received on notes receivable 9,082 5,663 Proceeds from sale of almond orchards 112,515 ------------------------ Net cash from investing activities 9,082 118,178 CASH FLOW FROM FINANCING ACTIVITIES Payments on long-term debt (12,000) (12,000) ------------------------ NET CHANGE IN CASH (62,313) 68,665 CASH, beginning of period 363,011 111,300 CASH, end of period $ 300,698 $ 179,965 ======================== SUPPLEMENTAL CASH-FLOW INFORMATION Non-cash investing activities Notes receivable from sale of almond orchards $ 0 $ 507,000 See accompanying notes. PART I-FINANCIAL INFORMATION NOTES TO FINANCIAL STATEMENTS NOTE 1 - BASIS OF PRESENTATION The financial statements included herein have been prepared by the Partnership, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. It is believed, however, that the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the Partnership's December 31, 2002, audited financial statements and notes thereto. NOTE 2 - INTEREST INCOME During 2002, the Partnership sold three ranches due to low production. The Partnership financed the three sales through long-term mortgage notes, with interest ranging from 6% to 7.5%. Interest income is recognized as earned, as it does not relate to the current year farming operations. PART I-FINANCIAL INFORMATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Introduction In the ordinary course of business, the Partnership has made a number of estimates and assumptions relating to the reporting of results of operations and financial condition in the preparation of its financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ significantly from those estimates under different assumptions and conditions. The Partnership believes the following discussion addresses the most critical accounting policies, which are those that are most important to the portrayal of the Partnership's financial condition and results. The Partnership re-evaluates these significant factors as necessary and makes adjustments where facts and circumstances dictate. Historically, actual results have not significantly deviated from those determined using the necessary estimates inherent in the preparation of financial statements. Estimates and assumptions include, but are not limited to: estimated price per pound, useable lives of the orchards and related assets, collectibility of receivables, and the deferral of certain crop costs. These accounting policies are applied consistently for all years presented. Information about the impact on our operating results is included in the footnotes to our consolidated financial statements. " Liquidity and Capital Resources The partnership generally receives payments from crop sales in installments over the twelve months following harvest. The partnership retained sufficient cash proceeds from the 2002 crop and has secured sufficient additional crop financing necessary to sustain production of the 2003 crop. The portion of the additional financing expected for the 2003 crop, if needed, will be supplied by the almond processor. This practice is common to the industry since final cash receipts for any crop year may extend beyond twelve months from the harvest. The General Partner believes that these sources provide adequate capital for the operating needs of the Partnership in 2003. Results of Operations The Partnership continued to operate at a break-even rate in the third quarter 2003. This result is not indicative of the results for the entire fiscal year, due to the seasonal nature of the almond growing business. Almonds are harvested in August through October and the crop revenues and expenses are recognized at the completion of the harvest. Since the partnership's crop care has not been completed for this growing season, it is not possible to say if cultural costs will be higher or lower than last year's costs. At this time though, it seems that cultural costs will be substantially the same as last year. Future Property Sales The California Almond Industry is currently going through a period in which supply exceeds demand. In the last few years, almond production has increased more rapidly than the markets have expanded. This has resulted in lower than normal prices for almonds and depressed prices for almond properties. This trend is expected to continue, until supply and demand can be brought into balance. At this time there is no way to know when this will be. Because of the current condition of the almond industry and the aging of the almond trees on the Partnership properties, the General Partner has decided to put the three remaining properties up for sale. It is intended that the properties will be listed for sale after the harvest of the 2003 crop so that the Partnership can retain the crop income. After the sale of the last property, the liquidation of the Partnership will start. At this time there is no way to estimate the time of the final liquidation, due to the delayed payment for the 2003 crop and the notes the Partnership holds on the three properties that were sold in 2002. Almond Market The Objective Forecast for the 2003 almond crop is one billion pounds. The final 2002 crop was one billion, 82 million pounds. In spite of the projected large almond crop, almond prices have stabilized and started to increase. At this time, there has been no change in the current value of almond orchards. The market for almond orchards still has many sellers and few buyers, which continues to depress real estate values. Item 3. Controls and Procedures Within the 90 day period prior to the date of this report, the Partnership carried out an evaluation, under the supervision of the General Partner and the General Partner's management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Partnership's disclosure controls and procedures pursuant to Exchange Act Rule 15d-14 ( c ). Based *on that evaluation, the General Partner concluded that the Partnership's disclosure controls and procedures are effective in a timely manner to alert them to material information relating to the Partnership which is required to be included in the Partnership's periodic Securities and Exchange Commission filings. There have been no significant changes in the Partnership's internal controls or in other factors that could significantly affect these controls subsequent to the evaluation date. PART II Item No. -------- 1. Material developments in connection with legal proceeding - not applicable 2. Material modification of rights of registrant's securities - not applicable 3. Defaults on senior securities - not applicable 4. Submission of matters to a vote of security holders - not applicable 5. Other events of importance - not applicable 6. Exhibits and Reports on Form 8-K - None 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. CALIFORNIA ALMOND INVESTORS I A California limited partnership By: Vintech Almond Advisers, Inc. A California corporation, Managing General Partner By: ------------------------------------- David A. Bade President