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, 1996
___ 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 0-5556
CONSOLIDATED-TOMOKA LAND CO.
(Exact name of registrant as specified in its charter)
Florida 59-0483700
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
149 South Ridgewood Avenue 32114
Daytona Beach, Florida (Zip Code)
(Address of principal executive offices)
(904) 255-7558
(Registrant's telephone number, including area code)
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 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.
Outstanding
Class of Common Stock November 1, 1996
_____________________ _________________
$1.00 par value 6,261,272
1
<PAGE>
CONSOLIDATED-TOMOKA LAND CO.
INDEX
Page No.
________
PART I - - FINANCIAL INFORMATION
Consolidated Condensed Balance Sheets -
September 30, 1996 and December 31, 1995 3
Consolidated Condensed Statements of Income and
Retained Earnings - Three Months and
Nine Months Ended September 30, 1996 and 1995 4
Consolidated Condensed Statements of Cash Flows -
Nine Months Ended September 30, 1996 and 1995 5
Notes to Consolidated Condensed Financial Statements 6-8
Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-11
PART II -- OTHER INFORMATION 12
SIGNATURES 13
2
<PAGE>
PART I -- FINANCIAL INFORMATION
CONSOLIDATED-TOMOKA LAND CO.
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
September 30, December 31,
1996 1995
------------ ------------
<S> <C> <C>
ASSETS
Cash $ 129,361 $ 203,829
Investment Securities 967,697 1,603,887
Notes Receivable 10,127,773 10,937,614
Accounts Receivable 2,847,161 2,143,305
Inventories 741,623 802,515
Cost of Fruit on Trees 3,299,946 2,658,126
Real Estate Held for Development and Sale 14,043,908 13,801,477
Net Investment in Direct Financing Lease 731,760 792,530
Prepaid Income Taxes 1,048,113 --
Other Assets 432,835 499,272
Property, Plant, and Equipment - Net 22,608,025 26,250,913
---------- ----------
TOTAL ASSETS $56,978,202 $59,693,468
========== ==========
LIABILITIES
Accounts Payable $ 166,768 $ 1,213,692
Notes Payable 21,553,655 20,921,298
Accrued Liabilities 3,673,134 2,569,848
Customer Deposits 103,850 52,411
Deferred Income Taxes 69,466 69,466
Income Taxes Payable -- 2,123,691
---------- ----------
TOTAL LIABILITIES 25,566,873 26,950,406
---------- ----------
MINORITY INTEREST 87,713 110,535
---------- ----------
SHAREHOLDERS' EQUITY
Common Stock 6,261,272 6,261,272
Additional Paid-in Capital 1,782,105 1,782,105
Retained Earnings 23,280,239 24,589,150
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 31,323,616 32,632,527
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $56,978,202 $59,693,468
========== ==========
</TABLE>
See Accompanying Notes to Consolidated Condensed Financial Statements.
3
<PAGE>
CONSOLIDATED-TOMOKA LAND CO.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS
<TABLE>
<CAPTION>
(Unaudited)
Three Months Ended Nine Months Ended
-------------------------- --------------------------
September 30, September 30, September 30, September 30,
1996 1995 1996 1995
------------ ------------ ------------ ------------ <C> <C> <C>
<S> <C> <C> <C> <C>
INCOME:
Citrus Operations:
Sales of Fruit and Other Income $ 49,536 $ 21,118 $ 9,836,762 $ 5,794,311
Production and Selling Expenses ( 536,792) ( 448,902) ( 6,837,919) ( 5,741,660)
---------- ---------- ---------- ----------
( 487,256) ( 427,784) 2,998,843 52,651
---------- ---------- ---------- ----------
Real Estate Operations:
Sales and Other Income 733,116 1,380,354 4,514,824 3,938,205
Costs and Other Expenses ( 712,665) ( 1,157,023) ( 2,763,866) ( 3,285,894)
---------- ---------- ---------- ----------
20,451 223,331 1,750,958 652,311
---------- ---------- ---------- ----------
Profit On Sales of Undeveloped
Real Estate Interests 550 500 3,806 1,485,939
---------- ---------- ---------- ----------
Interest and Other Income 181,507 180,549 1,003,978 460,535
---------- ---------- ---------- ----------
OPERATING INCOME (LOSS) ( 284,748) ( 23,404) 5,757,585 2,651,436
GENERAL AND ADMINISTRATIVE EXPENSES ( 760,732) ( 819,530) ( 2,439,223) ( 2,682,709)
---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE INCOME TAXES ( 1,045,480) ( 842,934) 3,318,362 ( 31,273)
INCOME TAXES 415,107 333,672 ( 1,183,573) 37,942
---------- ---------- ---------- ----------
NET INCOME (LOSS) ( 630,373) ( 509,262) 2,134,789 6,669
RETAINED EARNINGS, Beginning of Period 25,788,994 22,250,392 24,589,150 22,986,715
DIVIDENDS ( 1,878,382) ( 1,565,318) ( 3,443,700) ( 2,817,572)
---------- ---------- ---------- ----------
RETAINED EARNINGS, End of Period $23,280,239 $20,175,812 $23,280,239 $20,175,812
========== ========== ========== ==========
PER SHARE INFORMATION:
Average Shares Outstanding 6,261,272 6,261,272 6,261,272 6,261,272
========== ========== ========== ==========
Net Income (Loss) Per Share $(.10) $(.08) $.34 --
========== ========== ========== ==========
DIVIDENDS PER SHARE $ .30 $ .25 $.55 $.45
========== ========== ========== ==========
</TABLE>
See Accompanying Notes to Consolidated Condensed Financial Statements.
4
<PAGE>
CONSOLIDATED-TOMOKA LAND CO.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(Unaudited)
Nine Months Ended
----------------------------
September 30, September 30,
1996 1995
------------- -------------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
CASH RECEIVED FROM:
Citrus Sales and Other Income $ 8,948,340 $ 6,006,455
Real Estate Sales and Other Income 5,463,337 6,797,296
Sales of Undeveloped Real Estate 47,076 1,485,939
Interest and Other Income 369,842 453,571
---------- ----------
Total Cash Received from Operating Activities 14,828,595 14,743,261
---------- ----------
CASH EXPENDED FOR:
Citrus Production and Selling Expenses 7,280,600 6,359,068
Real Estate Costs and Expenses 1,570,348 2,732,137
General and Administrative Expenses 1,643,287 1,039,480
Interest 1,233,732 1,432,010
Income Taxes 4,355,376 2,203,775
---------- ----------
Total Cash Expended for Operating
Activities 16,083,343 13,766,470
---------- ----------
Net Cash Provided by (Used In)
Operating Activities ( 1,254,748) 976,791
---------- ----------
CASH FLOW FROM INVESTING ACTIVITIES:
Acquisition of Property, Plant, and Equipment ( 324,741) ( 997,711)
Net (Increase) Decrease in Investment Securities 636,190 ( 2,710,971)
Direct Financing Lease 60,770 65,402
Proceeds from Sale of Property, Plant,
and Equipment 3,619,404 1,234,560
---------- ----------
Net Cash Provided by (Used in) Investing
Activities 3,991,623 ( 2,408,720)
---------- ----------
CASH FLOW FROM FINANCING ACTIVITIES:
Cash Proceeds from Debt 3,450,000 6,750,000
Payments of Debt ( 2,817,643) ( 1,955,478)
Dividends Paid ( 3,443,700) ( 2,817,572)
---------- ----------
Net Cash Provided by (Used in) Financing
Activities ( 2,811,343) 1,976,950
---------- ----------
NET INCREASE (DECREASE) IN CASH ( 74,468) 545,021
CASH, BEGINNING OF YEAR 203,829 503,545
---------- ----------
CASH, END OF PERIOD $ 129,361 $ 1,048,566
========== ==========
</TABLE>
See Accompanying Notes to Consolidated Condensed Financial Statements.
5
<PAGE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. Principles of Interim Statements. The information presented
in the unaudited consolidated condensed financial statements
reflects all adjustments which are, in the opinion of the
management, necessary to present fairly the Company's
financial position and the results of operations for the
interim periods. The consolidated condensed format
is designed to be read in conjunction with the last
annual report.
The consolidated condensed financial statements include
the accounts of the Company and its wholly owned
subsidiaries. Intercompany balances and transactions
have been eliminated in consolidation.
2. Seasonal Operations. The Company's citrus operations
involve a single crop agricultural commodity and are
seasonal in nature. To a lesser extent, its
forestry activities are seasonal in nature.
Accordingly, results for the nine months ended
September 30, 1996 and 1995 are not necessarily
indicative of results to be expected for the full year.
Results of operations for the twelve months ended
September 30, 1996 and 1995 are summarized as
follows (in thousands):
<TABLE>
<CAPTION>
Twelve Months Ended September 30,
-------------------------------------------------
1996 1995
--------------------- ------------------------
Revenues Income(Loss) Revenues Income(Loss)
--------- ----------- -------- ------------
<S> <C> <C> <C> <C>
Citrus Operations $12,862 $ 3,575 $ 7,746 $ ( 27)
Real Estate Operations 8,319 3,987 12,343 6,243
General Corporate & Other 6,184 2,944 5,033 1,864
------ ----- ------ -----
Total Revenues $27,365 $25,122
====== ======
Income from Continuing Operations
Before Income Taxes 10,506 8,080
Income Taxes ( 3,958) (3,019)
Income from Continuing Operations 6,548 5,061
Loss From Discontinued Resort
Operations (net of income taxes) -- ( 1)
------ -----
Net Income $ 6,548 $5,060
====== =====
</TABLE>
3. Common Stock and Earnings Per Common Share. Primary
earnings per share are based on the average number
of common shares and common share equivalents
outstanding during the period. Primary and fully
diluted earnings per share are the same for the
periods.
6
<PAGE>
4. Notes Payable. Notes payable consist of the following:
<TABLE>
<CAPTION>
September 30, 1996
-----------------------------
Due Within
Total One Year
---------- -----------
<S> <C> <C>
Consolidated-Tomoka Land Co.
----------------------------
$ 7,000,000 Line of Credit $ 3,450,000 $ 3,450,000
Mortgages Payable 9,483,033 240,414
Industrial Revenue Bonds 2,927,058 283,607
---------- ----------
15,860,091 3,974,021
---------- ----------
Indigo Group Ltd.
-----------------
Industrial Revenue Bonds 1,950,100 56,400
Mortgages Payable 3,743,464 34,439
---------- ----------
5,693,564 90,839
---------- ----------
Total $21,553,655 $ 4,064,860
========== ==========
</TABLE>
Indigo Group Ltd. ("IG LTD.") is a limited
partnership in the real estate business owned 100%
by the Company and its subsidiaries. Included in
notes payable is a $2,543,464 mortgage note
collateralized by developed real estate in a joint
venture project. IG Ltd.'s 50% partner in the joint
venture project is jointly liable on the note.
Payments applicable to reduction of principal amounts
will be required as follows:
<TABLE>
<CAPTION>
Consolidated- Indigo
Tomoka Group
Year Ending Sept. 30, Land Co. Ltd. Total
---------------------- ------------- ----------- -----------
<S> <C> <C> <C>
1997 $ 3,974,021 $ 90,839 $ 4,064,860
1998 596,249 94,324 690,573
1999 647,822 2,527,501 3,175,323
2000 703,865 56,400 760,265
2001 764,764 56,400 821,164
Thereafter 9,173,370 2,868,100 12,041,470
---------- --------- ----------
$15,860,091 $ 5,693,564 $21,553,655
========== ========= ==========
</TABLE>
7
<PAGE>
In the first nine months of 1996 interest totaled
$1,253,922 of which $137,795 was capitalized to land
held for development and sale. Total interest for
the nine months ended September 30, 1995 was
$1,646,632, of which $97,976 was capitalized to
land held for development and sale.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
The Management's Discussion and Analysis is designed to be read in
conjunction with the financial statements and Management's Discussion
and Analysis in the last annual report.
RESULTS OF OPERATIONS
Citrus Operations
-----------------
With the harvesting season completed in late spring, losses were
posted from citrus operations for the third period of 1996 as well as
1995. The $487,256 loss for the three months ended September 30, 1996
was 14% greater than the $427,784 loss recorded one year earlier. The
increased loss can be attributed primarily to repairs and maintenance
at the packinghouse.
Substantially higher fruit production combined with improved fruit
pricing resulted in a significant gain in citrus profitability for
1996's nine months to date when compared to prior year s same period.
Profits of $2,998,843 were posted for 1996's first nine months
compared to 1995's profits of $52,651. Revenues jumped 70% to
$9,836,762 as boxes of fruit harvested and sold increased 51% to
1,050,488 for the period. During 1995's first nine months revenues of
$5,794,311 were produced on the sale of 696,056 boxes. Also
contributing to the revenue gain was a 12% increase in average fruit
pricing, with the sale of both fresh and processed fruit contributing
to this gain. The significantly larger fruit volume accounted for a
19% increase in production and selling expenses.
Real Estate Operations
______________________
Real estate operations profits amounted to $20,451 for the third
quarter of 1996, a 91% decline from 1995's same period profit of
$223,331. This downturn can primarily be attributed to the lack of
commercial land closings in the third quarter of 1996. Profits of
$1,750,958 from real estate activities for the first nine months of 1996
represent a 168% improvement over 1995's same period results. Commercial
land transactions account for this gain in profits with the sale of 22
acres in 1996 generating revenues and gross profits of $1,625,000 and
$1,430,000, respectively. This compares to the sale of 32 acres in
1995's first nine months producing revenues of $849,000 and gross
profits of $390,000. Sales pricing and profits may vary substantially
from property to property based on the location and its intended use.
Profits from income properties increased slightly for the third
quarter and rose in excess of $100,000 for the nine month period to
date. These gains are due to higher occupancy and higher leasing
rates. Total revenues from income properties fell 12% and 4% for the
three month and nine month periods, respectively as the increases
achieved from occupancy and leasing rates were offset by the May 1995
sale of the 18,000 square foot Mariner Towne Square shopping center
and the June 1996 sale of the 70,000 square foot Mariner Village
shopping center both located in Spring Hill, Florida.
9
<PAGE>
Profits from forestry operations were down 53% and 20% for the
three month and nine month periods of 1996, respectively when
compared to 1995. An approximate $100,000 decline in profits
to $93,000 for the third quarter and $446,000 year to date is
the direct result of a fall in revenue on decreased harvesting.
General, Corporate and Other
----------------------------
The sale of undeveloped real estate interests produced minimal
profits for the third quarter of both 1996 and 1995, as well as
the first nine months of 1996. Profits of $1,485,939 were
realized for the first nine months of 1995 on the sale of 389
acres located primarily in Highlands County, Florida.
Interest and other income of $181,507 posted during 1996's
third period was in line with the $180,549 posted for the
third period of 1995. Year to date through September 30th
interest and other income totaled $1,003,978 representing
a 118% increase over 1995's $460,535 same period results.
This increase is primarily the result of the approximate
$450,000 gain realized on the sale of the Mariner Village
shopping center which occurred in June 1996.
Decreased interest expense on lower outstanding borrowings
primarily led to a 7% decline in general and administrative
expenses for the third quarter and a 9% fall year-to-date.
10
<PAGE>
FINANCIAL POSITION
The $630,373 loss, equivalent to $.10 per share, posted in the
third quarter of 1996 is typical for the third period due to the
seasonality of the citrus operation. Year-to-date earnings of
$2,134,789, equivalent to $.34 per share, continue to represent
a substantial turnaround from 1995's same period breakeven results.
The stronger results were led by citrus operations with significantly
increased fruit volume along with stronger pricing of both fresh
and processed fruit. Real estate operations contributed to the
improvement with the sale of higher profit margin commercial property.
Cash decreased for the nine months by $74,468, including the payment
of dividends totaling $3,443,700, equivalent to $.55 per share.
The dividend payment represents a 22% increase over the $.45 per
share paid in 1995. Cash used in operating activities amounted
to $1,254,748 with cash generated from investing activities providing
$3,991,623 and cash used in financing activities totaling $2,811,343
including the dividend payment. Included in cash from investing activities
was $3,619,404 from proceeds on sale of property, plant and
equipment, which consists primarily of the sale of the 70,000
square foot Mariner Village shopping center. Cash requirements
needed to fund capital expenditures for the remainder of 1996
approximate $750,000 and are anticipated to be funded from
operations and, if necessary, available outside financing sources.
These expenditures are centered on the LPGA mixed-use development.
The 1996-1997 citrus crop year is underway. The quality of
Company fruit appears to be very good. Production from
Company groves is expected to be approximately 1,200,000 boxes.
The USDA citrus crop forecast for the 1996-1997 season was
released in early October. The estimate for Florida oranges
totals 220 million boxes and represents an 8% increase over
the 203.2 million boxes harvest for the 1995-1996 season. The large
crop forecast was anticipated and is not expected to have a
significant impact on pricing. Pricing at this time remains
stable.
The major landscaping upgrade of the Interstate 95 interchange
at LPGA Boulevard is well under way. Installation of
irrigation systems including wells, laying of cable for outdoor
lighting, and planting of numerous trees and bushes has
already taken place. Plant formations spelling out "Daytona
Beach" and "LPGA Boulevard" can now be seen as you approach
the interchange on I-95. When completed at year end, the
landscape project will include numerous palm trees, water
fountains, flower gardens and night time lighting. The
upscale landscape design will provide an eye catching
gateway into the LPGA International community, and the
thousands of additional Company owned acres surrounding the
interchange.
With the relatively strong citrus crop and citrus pricing,
coupled with the commercial contract backlog in place the
outlook for near term profits looks positive. The Company
continues to focus on the growth of real estate sales
activity in the Daytona Beach area and sale of fresh
fruit from citrus operations.
11
<PAGE>
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceedings
to which the Company or its subsidiaries is a party.
Items 2 through 5.
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit (11) - Computation of Earnings
Per Common Share
Exhibit (27) - Financial Data Schedule
(for SEC use only)
(b) Reports on Form 8-K
None
12
<PAGE>
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.
CONSOLIDATED-TOMOKA LAND CO.
(Registrant)
Date: 11/7/96 By: /s/ Bob D. Allen
--------------------
Bob D. Allen,
President and
Chief Executive
Officer
Date: 11/7/96 By: /s/ Bruce W. Teeters
--------------------
Bruce W. Teeters,
Sr. Vice President
Finance and Treasurer
13
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
No. 11 Computation of Earnings Per Common Share 15
No. 27 Financial Data Schedule (for SEC use only) 16
</TABLE>
14
<PAGE>
EXHIBIT 11
CONSOLIDATED-TOMOKA LAND CO. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
-------------------------- -------------------------
Sept. 30, Sept. 30, Sept. 30, Sept.30,
1996 1995 1996 1995
----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
PRIMARY EARNINGS PER SHARE
NET INCOME (LOSS) (630,373) (509,262) 2,134,789 6,669
========= ========= ========= =========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 6,261,272 6,261,272 6,261,272 6,261,272
COMMON SHARES APPLICABLE TO STOCK
OPTIONS USING THE TREASURY STOCK
METHOD AT AVERAGE MARKET PRICE FOR
THE PERIOD 79,594 47,837 86,218 28,594
--------- --------- --------- ---------
TOTAL PRIMARY SHARES 6,340,866 6,309,109 6,347,490 6,289,866
========= ========= ========= =========
PRIMARY EARNINGS (LOSS) PER
COMMON SHARE ($0.10) ($0.08) $0.34 $0.00
========= ========= ========= =========
FULLY DILUTED EARNINGS PER
SHARE
TOTAL PRIMARY SHARES 6,347,490 6,289,866 6,347,490 6,289,866
COMMON SHARES APPLICABLE TO STOCK
OPTIONS IN ADDITION TO THOSE
USED IN PRIMARY COMPUTATION
DUE TO USE OF THE HIGHER OF
AVERAGE MARKET PRICE OR PERIOD
END MARKET PRICE 0 17,602 0 6,365
--------- --------- --------- ---------
TOTAL FULLY DILUTED SHARES 6,340,490 6,326,711 6,347,490 6,296,231
========= ========= ========= =========
FULLY DILUTED EARNINGS (LOSS)
PER SHARE ($0.10) ($0.08) $0.34 $0.00
========= ======== ========= =========
</TABLE>
15
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
CONSOLIDATED-TOMOKA LAND CO.'S SEPTEMBER 30, 1996 10-Q AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 129,361
<SECURITIES> 967,697
<RECEIVABLES> 12,974,934
<ALLOWANCES> 0
<INVENTORY> 18,085,477
<CURRENT-ASSETS> 0
<PP&E> 35,083,660
<DEPRECIATION> 12,475,635
<TOTAL-ASSETS> 56,978,202
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 6,261,272
<OTHER-SE> 25,062,344
<TOTAL-LIABILITY-AND-EQUITY> 56,978,202
<SALES> 14,355,392
<TOTAL-REVENUES> 15,359,370
<CGS> 6,967,655
<TOTAL-COSTS> 9,601,785
<OTHER-EXPENSES> 1,768,217
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 671,006
<INCOME-PRETAX> 3,318,362
<INCOME-TAX> 1,183,573
<INCOME-CONTINUING> 2,134,789
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,134,789
<EPS-PRIMARY> 0.44
<EPS-DILUTED> 0.44
</TABLE>
