UNITED STATES
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 (NO FEE REQUIRED)
For the Quarter Ended Commission File No.
December 31, 1993 1-6442-1
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
ORANGE-CO, INC.
(Exact name of registrant as specified in its charter)
FLORIDA
(State or other jurisdiction of incorporation or organization)
59-0918547
(IRS Employer Identification Number)
2020 U.S. Highway 17 South, P. O. Box 2158, Bartow, Florida 33830
(Address of principal executive offices)
(813) 533-0551
(Registrant's telephone no.)
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 XX No
Number of shares outstanding of common stock, $.50 par value, as of
February 11, 1994: 10,298,475 shares
1
PAGE
<PAGE>
ORANGE-CO, INC. AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS
PAGE NO.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets
December 31, 1993 (unaudited) and September 30, 1993 (audited). . 3
Consolidated Statements of Operations (unaudited)
Three Months ended December 31, 1993 and 1992 . . . . . 4
Consolidated Statements of Cash Flows (unaudited)
Three Months ended December 31, 1993 and 1992 . . . . . 5
Notes to Consolidated Financial Statements (unaudited) 6-9
ITEM 2.
Management's Discussion and Analysis of Results of Operations
and Financial Conditions . . . . . . . . . . . . . . 10-14
PART II. OTHER INFORMATION
Item 6 . . . . . . . . . . . . . . . . . . . . . . . . 14
Signatures . . . . . . . . . . . . . . . . . . . . . . 15
2
PAGE
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
ORANGE-CO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, September 30,
1993 1993
ASSETS (unaudited) (audited)
<S> <C> <C>
Current assets:
Cash and short-term investments $ 945 $ 1,071
Receivables 6,777 5,907
Advances on fruit purchases 2,006 2,137
Inventories 25,726 20,460
Prepaid and other 189 85
--------- --------
Total current assets 35,643 29,660
--------- --------
Property and equipment, net 97,930 94,486
--------- --------
Other assets:
Excess of cost over net assets of
acquired companies 12,743 12,841
Property held for disposition 1,779 1,777
Other 1,236 1,038
--------- ---------
Total other assets 15,758 15,656
--------- ---------
Total assets $149,331 $139,802
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments on long-term debt $ 2,178 $ 2,182
Accounts payable 3,911 3,062
Accrued liabilities 9,459 9,839
--------- ---------
Total current liabilities 15,548 15,083
Deferred income taxes 18,380 17,336
Other liabilities 274 248
Long-term debt 25,960 19,683
--------- ---------
Total liabilities 60,162 52,350
--------- ---------
Stockholders' equity:
Preferred stock,$.10 par value, 10,000,000
shares authorized; none issued - -
Common stock,$.50 par value, 30,000,000
shares authorized; 10,349,399 issued. 5,175 5,175
Capital in excess of par value 71,417 71,417
Retained earnings 13,060 11,343
--------- ---------
89,652 87,935
Less:
Treasury stock, at cost: 50,924 and
50,240 shares at December 31 and September
30, 1993, respectively (483) (483)
--------- ---------
Total stockholders' equity 89,169 87,452
--------- ---------
Total liabilities and
stockholders' equity $149,331 $139,802
========= =========
<FN>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
3
PAGE
<PAGE>
<TABLE>
<CAPTION>
ORANGE-CO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1993 AND 1992
(unaudited)
(in thousands except for per share data)
1993 1992
<S> <C> <C>
Sales $15,712 $11,897
Cost of sales 12,057 10,340
-------- --------
Gross profit 3,655 1,557
Other costs and expenses, net:
Selling, general and administrative (972) (1,048)
Gain on disposition of property and
equipment 479 13
Other - (9)
Interest (282) (535)
-------- --------
Income(loss) from continuing operations
before income taxes 2,880 (22)
Income tax expense (benefit) 1,139 (9)
-------- -------
Net income(loss) from continuing operations 1,741 (13)
Discontinued operations:
Net income(loss) from operations of
discontinued Petroleum Division,
[net of applicable income tax expense
(benefit) of $(15), and $15] (24) 25
Net income $ 1,717 $ 12
======== =======
Net income per common and common
equivalent shares:
Continuing operations $ .17 $ -
--------- --------
Discontinued operations $ - $ -
--------- --------
Net income $ .17 $ -
========= ========
Average number of common and common
equivalent shares outstanding 10,299 10,273
========= ========
<FN>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
4
PAGE
<PAGE>
<TABLE>
<CAPTION>
ORANGE-CO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1993 AND 1992
(unaudited)
(in thousands)
1993 1992
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,717 $ 12
-------- --------
Adjustments to reconcile net income to
net cash provided by (used for) operating
activities:
Depreciation and amortization 905 787
Deferred income taxes 1,044 6
(Gain) on disposition of property
and equipment and other (479) (8)
Change in assets & liabilities:
Increase in receivables (870) (284)
Decrease in advance on fruit purchases 131 28
(Increase) in inventory (5,266) (3,435)
(Increase) in prepaids and other (104) (95)
Increase(decrease) in accounts payable
and accrued liabilities 469 (991)
Other, net (195) 27
-------- -------
Total adjustments (4,365) (3,965)
-------- -------
Net cash used for operating activities (2,648) (3,953)
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property & equipment 482 9
Decrease in note & mortgage receivables 1 20
Additions to property & equipment (4,234) (2,068)
-------- --------
Net cash provided by (used for) investing
activities (3,751) (2,039)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt 6,273 2,740
Issuance of treasury stock - 275
-------- --------
Net cash provided by (used for) financing
activities 6,273 3,015
-------- --------
NET (DECREASE) IN CASH AND CASH EQUIVALENTS (126) (2,977)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 1,071 3,659
-------- --------
CASH AND CASH EQUIVALENTS AT END OF $ 945 $ 682
PERIOD ======== ========
<FN>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
5
PAGE
<PAGE>
ORANGE-CO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. MANAGEMENT'S OPINION
The Consolidated Financial Statements include the accounts of
Orange-co, Inc. and Subsidiaries (the "Company"), after elimination of
material intercompany accounts and transactions.
In the opinion of the management of the Company, the accompanying
financial statements reflect adjustments, consisting only of normal recurring
adjustments unless otherwise disclosed,which are necessary to present fairly
the financial position, results of operations and cash flows for the periods
presented:
. Unaudited Consolidated Balance Sheet at December 31, 1993
. Audited Consolidated Balance Sheet at September 30, 1993
. Unaudited Consolidated Statements of Operations and Statements of
Cash Flows for the three month periods ended December 31, 1993
and 1992.
2. NOTES PAYABLE AND LONG-TERM DEBT
As of December 31, 1993, the Company had access to a $20 million credit
facility payable in January, 1996. Accordingly, the balance at
December 31, 1993 was classified as long-term. This facility is
collateralized by most of the Company's current assets. The
outstanding balance at December 31, 1993 was approximately $6,756,000.
Due to borrowing base restrictions approximately $11,076,000 were
additionally available to be borrowed under this facility. The
interest rate on the facility is variable based upon the financial
institution's cost of funds plus a margin with a maximum rate of prime
less 1/2 of 1%.
At December 31, 1993, the Company's outstanding long-term debt
(including the $6,756,000 balance on the line of credit facility) was
approximately $28,138,000, of which $2,178,000 matures in the next 12
months and the remainder matures at various times over the subsequent
eighteen years.
Interest paid, net of amounts capitalized, was approximately $239,000
and $499,000 for the three months ended December 31, 1993 and 1992,
respectively. Interest capitalized was approximately $90,000 and
$63,000 for the three months ended December 31, 1993 and 1992,
respectively.
Certain mortgage agreements contain loan covenants. At December 31,
1993, the Company was in compliance with its loan covenants.
<TABLE>
3. INVENTORIES
The major components of inventory are summarized as follows:
<CAPTION>
December 31, September 30,
1993 1993
<S> <C> <C>
Finished goods $19,057 $12,764
Fruit-on-tree inventory 5,743 6,636
Other 925 1,060
------- -------
Total $25,726 $20,460
======= =======
</TABLE>
6
PAGE
<PAGE>
<TABLE>
4. BUSINESS SEGMENT
Segment financial data for the three months ended December 31, 1993 and
1992, except for total assets which are as of December 31, 1993 and
September 30, 1993, is as follows (in thousands):
<CAPTION>
Petroleum
and Related
Year Citrus Products Total
<S> <C> <C> <C> <C>
Sales 1993 $ 15,712 $3,322 $ 19,034
1992 11,897 3,903 15,800
Operating
Profit(Loss) 1993 2,683 - 2,683
1992 509 - 509
Total Assets 1993 146,384 2,947 149,331
1993 136,783 3,019 139,802
Depreciation and
amortization 1993 863 42 905
1992 745 42 787
Capital
expenditures 1993 4,224 10 4,234
1992 2,060 8 2,068
<FN>
Intersegment sales approximate market and are not significant.
</TABLE>
<TABLE>
<CAPTION>
RECONCILIATION OF OPERATING PROFIT(LOSS) TO INCOME(LOSS) BEFORE INCOME TAXES:
Three Months Three Months
Ended Ended
December 31, 1993 December 31, 1992
<S> <C> <C>
Operating profit $2,683 $ 509
Gain on disposition of property
and equipment 479 13
Other - (9)
Interest (282) (535)
------- ------
Income(loss) from continuing
operations before income taxes $2,880 $ (22)
======= ======
</TABLE>
During the three month period ended December 31, 1993 the Company had two
customers who individually accounted for approximately 29% and 10% of total
sales for the period. During the three month period ended December 31, 1992
the Company had two customers who individually accounted for approximately 35%
and 13% of total sales for the period.
7
PAGE
<PAGE>
<TABLE>
<CAPTION>
5. INCOME TAXES AND OTHER The provision for income taxes for continuing and
discontinued operations for the quarters ended December 31, 1993 and 1992 is
summarized as follows (in thousands):
1993 1992
<S> <C> <C>
Current:
Federal income tax $ 69 $12
State income tax 11 1
------ ----
Total $ 80 $13
------ ----
Deferred:
Federal income tax $ 947 $(6)
State income tax 97 (1)
------ ----
Total $1,044 $(7)
------ ----
Total provision for income
taxes $1,124 $ 6
====== ====
</TABLE>
<TABLE>
<CAPTION>
Following is a reconciliation of the expected income tax expense computed
at the U.S. Federal statutory rate of 34% and the actual income tax provisions
for the quarters ended December 31, 1993 and 1992 (in thousands):
1993 1992
<S> <C> <C>
Expected income tax $ 965 $ 6
Increase(decrease) resulting from:
State income taxes, net of
federal tax benefit 109 6
Loss on foreign operations 22 48
Permanent items and other 28 (54)
------ ----
Total provision for income
taxes $1,124 $ 6
====== ====
</TABLE>
In February 1992, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 109 "Accounting for Income Taxes"
(FAS No. 109). FAS No. 109 required a change from the deferred method of
accounting for income taxes of APB Opinion 11 to the asset and liability method
of accounting for income taxes. Under the asset and liability method of
FAS No. 109, deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled. Under FAS No. 109, the
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.
The Company adopted FAS No. 109 during the fourth quarter of fiscal 1993
and has applied the provisions of FAS No. 109 retroactively to October 1, 1990.
The cumulative effect of this change of a one-time decrease in earnings of
$3,444,000 was reported separately by the Company in the restated Consolidated
Statement of Operations for fiscal 1991. The financial statements for fiscal
1992 and the previously reported quarterly earnings for fiscal 1993 were
restated accordingly.
6. DISCONTINUED OPERATIONS During the second quarter of 1993, the Company
decided to sell the Petroleum Division comprised of Frank Carroll Oil Company.
This decision resulted in a charge of $513,000 during that quarter, including a
write down of the operating assets to their estimated net realizable value and
an accrual for operating losses through the anticipated phase-out period. These
charges were disclosed on the Consolidated Statement of Operations during fiscal
1993 for the respective periods. The Consolidated Statements of Operations
have been restated deleting sales, cost of sales, gross profit, selling, general
and administrative
8
PAGE
<PAGE>
expenses, interest expense, and all other items of profit
and loss related to the Petroleum Division from net income from continuing
operations. See Note 4, for disclosure of selected components of the Petroleum
Division. As of February 11, 1994 the Company had not completed the sale of
this division. See Management's Discussion and Analysis, "Other Significant
Events".
7. EMPLOYEE BENEFITS Certain officers and employees have employment contracts
for additional retirement benefits, the cost of which is being accrued on a
present value basis over the remaining term of the employment agreements. The
lives of the officers and employees have been insured as a means of funding
such benefits. These contracts become effective for fiscal 1994 and thereafter.
The accrued liability for these additional retirement benefits at
December 31, 1993 was approximately $23,000.
9
PAGE
<PAGE>
ORANGE-CO, INC. AND SUBSIDIARIES
PART I - ITEM 2
Management's Discussion and Analysis
of Financial Condition and Results of Operations
First Quarter of Fiscal 1994 versus First Quarter of Fiscal 1993
The following is management's discussion and analysis of significant factors
which have affected the Company's continuing operations during the periods
included. It compares the Company's continuing operations for the quarter ended
December 31, 1993 to continuing operations for the quarter ended
December 31, 1992.
The following table reflects changes in sales, cost of sales and gross
profit by product line and other changes in the Statements of Operations through
net income from continuing operations. The respective periods have been
restated deleting sales, cost of sales, gross profit, selling, general and
administrative expenses, interest expense and all other items of profit and
loss related to the Petroleum Division. Additionally, the quarter ended
December 31, 1992 has been adjusted and restated to reflect the effects of
retroactive implementation of FAS No. 109. (See Note 5 "Income Taxes" of the
Notes to the Consolidated Financial Statements.)
<TABLE>
<CAPTION>
Three Months Ended December 31, 1993 vs Three Months Ended December 31, 1992
Increases/(Decreases)
(in thousands)
Sales Cost of Sales Net Change
<S> <C> <C> <C>
Beverage Division . . . . . . . $4,014 $1,884 $ 2,130
Grove Management . . . . . . . . (199) (167) (32)
------- ------- --------
Continuing operations . . . . . $3,815 $1,717 2,098
======= =======
Other costs and expenses, net:
Selling, general and administrative . . .. . . . . . . . . . 76
Gain on disposition of property and equipment . . . . . . . 466
Other expense . . . . . . . . . . . . . . . . . . . . . . . 9
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 253
---------
Income from continuing operations before income tax . . . . . 2,902
Provision for income taxes from continuing operations . . . . (1,148)
---------
Net income from continuing operations . . . . . . . . . . . . $ 1,754
=========
</TABLE>
RESULTS OF OPERATIONS
SALES
Sales for the current quarter ended December 31, 1993 increased approximately
$3,815,000 or 32.1% compared to the same period in the prior fiscal year. The
Beverage Division had a sales increase of approximately $4,014,000 or 37.2%
compared to the same period in the prior fiscal year. Offsetting this increase
was a decrease of approximately $199,000 or 17.8% in the Grove Management
Division in the current quarter compared to the same period in the prior fiscal
year.
10
PAGE
<PAGE>
BEVERAGE DIVISION The Beverage Division experienced an increase in sales of
approximately $4,014,000 or 37.2% during the first quarter of fiscal 1994
compared to the same period in the prior fiscal year. The principal increase of
approximately $4,911,000 resulted from increased sales volume of bulk Frozen
Concentrated Orange Juice (FCOJ) which resulted from the development of an
improved bulk sales program and the availability of bulk FCOJ resulting from a
larger carryover inventory. This larger carryover inventory was the result of
the significantly larger Florida crop of approximately 186,500,000 boxes of
oranges for the 1992-93 season compared to approximately 139,800,000 boxes for
the 1991-92 season. Additionally, increased prices for bulk FCOJ provided an
increase in revenues of approximately $866,000 during the current quarter
compared to the same period in the prior fiscal year. Prices during the
first quarter in the prior fiscal year decreased sharply as a result of the
United States Department of Agriculture's (U.S.D.A.) announcement of the much
larger crop for the 1992-93 season in October 1992.
The Company experienced a decrease in sales of food service orange juice
products of approximately $1,741,000 compared to the same period in the prior
fiscal year primarily as a result of lower volumes. The reduction in volume
was due in part to the decision of one of the Company's food service customers
to move its business to an alternate supplier.
The Company also experienced a decrease in revenues of food service
non-orange juice beverage products as a result of lower volumes of approximately
$581,000 compared to the same period in the prior fiscal year. The reduction in
sales volumes of the non-orange juice beverage products was also due in part to
the movement of a food service customer to an alternate supplier as previously
mentioned. Lower prices accounted for decreases of approximately $121,000
compared to the same period in the prior fiscal year. Partially offsetting
these decreases were sales of the Company's new line of drink base products
acquired with the purchase of International Fruit, Inc. in August 1993 of
approximately $319,000 for which there were no comparable sales during the
same period in the prior fiscal year.
During the current quarter the Company experienced an increase in revenues
of approximately $965,000 from the sale of a higher volume of bulk frozen
concentrated grapefruit juice (FCGJ) compared to the same period in the prior
fiscal year. Additionally, revenues from storage, handling and other
activities increased approximately $124,000 in the current quarter. Partially
offsetting these increases was a decrease in revenues from the sale of
by-products of approximately $441,000.
Revenues from processing citrus into concentrate for customers under
contract decreased approximately $287,000 for the current quarter, primarily
as a result of a comparatively higher volume of fruit processed from the
Company's groves, participation contracts and purchase contracts.
GROVE MANAGEMENT DIVISION Grove Management sales in the first quarter decreased
approximately $199,000 compared to the first quarter in the prior fiscal year.
The primary decrease of approximately $137,000 was attributed to reduced
harvesting revenues due to a reduced number of boxes harvested for other
parties in the current quarter principally due to a later maturity of the fruit.
Additionally, revenues from sales of fruit to third party packers and processors
decreased approximately $64,000. Of this decrease, approximately $45,000 was
due to the reduced volume of fruit sold and approximately $19,000 was due to
reduced prices. Offsetting these decreases was an increase of approximately
$2,000 in grove caretaking revenues.
GROSS PROFIT
Gross profit for the quarter ended December 31, 1993 increased approximately
$2,098,000 or 134.7% compared to the same period in the prior fiscal year. The
principal increase of approximately $2,130,000 occurred in the Beverage
Division. Partially offsetting this increase was a decrease in Grove Management
gross profit of approximately $32,000 during the current quarter compared to
the same period in the prior fiscal year.
11
PAGE
<PAGE>
BEVERAGE DIVISION Gross profit of the Beverage Division increased approximately
$2,130,000 or 153.3% during the current quarter compared to the same period in
the prior fiscal year. The principal increase of approximately $1,953,000
resulted from the sale of bulk FCOJ. Of this current period increase, higher
prices for FCOJ accounted for an increase in gross profit of approximately
$866,000. As previously mentioned, lower prices during the first quarter in
the prior fiscal year resulted from the U.S.D.A. announcement in October 1992
of the much larger crop for the 1992-93 season. Additionally, gross profit for
the current quarter increased approximately $1,087,000 as a result of a lower
cost of bulk FCOJ inventory being sold compared to the same period in the prior
fiscal year. Management expects the cost of bulk FCOJ inventory sold as bulk
FCOJ and utilized in its value added products to be higher over the next three
quarters compared to the first quarter of fiscal 1994 as a result of a higher
cost of fruit and purchased FCOJ compared to the prior fiscal year's carryover
FCOJ inventory. The Florida citrus industry is subject to varying weather
conditions and other natural phenomena, which may create wide swings in economic
conditions and opportunities.
The Company has in the past utilized and may in the future utilize the FCOJ
futures market to hedge fruit inventory, anticipated requirements and sales
commitments of FCOJ. The effects of this hedging activity, if any, are
reflected in the cost of inventories and flow through cost of sales in the
Consolidated Statements of Operations as a component of the cost of FCOJ as the
associated product is sold. As of December 31, 1993 the Company held long
positions (obligations to purchase) in FCOJ futures with unrealized losses of
approximately $1,232,000 which would have been realized if said positions would
have been prematurely liquidated on that date. These unrealized losses are
based upon the closing market price of equivalent futures positions on that
date compared to the Company's futures obligations and do not necessarily
represent prices at which the Company expects to sell the FCOJ once acquired for
resale or utilized in the production of value added products.
Gross profit in the Beverage Division also increased approximately $266,000
in the current quarter from the sale of food service orange juice products.
Of this current period increase, approximately $496,000 was a result of lower
cost FCOJ food service inventory being sold compared to the same period in
the prior fiscal year. Offsetting this increase was a decrease in gross profit
of approximately $230,000 resulting from reduced volume compared to the same
period in the prior fiscal year.
Additionally, the Company experienced an increase in gross profit from the
sale of non-orange juice beverage products of approximately $213,000 for the
current period compared to the same period in the prior fiscal year. This
increase was primarily a result of lower cost of ingredients and conversion
cost in the current period.
Offsetting these increases was a decrease in the gross profit during the
current quarter from the sale of bulk FCGJ of approximately $121,000. However,
during the current period the Company experienced an increase in gross profit
from storage, handling and other activities of approximately $139,000 compared
to the same period in the prior fiscal year. The Company experienced a
decrease in gross profit from the sale of by-products of approximately $282,000
in the current quarter. This decrease was a combined result of reduced volumes
and lower prices during the current period compared to the same period in
the prior fiscal year.
A decrease in gross profit during the current quarter of approximately
$38,000 resulted from a reduction in the volume of citrus processed into
concentrate for customers under contract.
GROVE MANAGEMENT Grove Management gross profit in the first quarter decreased
approximately $32,000 compared to the first quarter in the prior fiscal year.
The primary decrease of $61,000 was due to the previously mentioned reductions
in the prices and volume of fruit sold. Offsetting this decrease was an
increase of approximately $28,000 in gross profit from grove caretaking
operations. Additionally, gross profit from harvesting operations
12
PAGE
<PAGE>
increased approximately $1,000.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses decreased approximately $76,000
for the current quarter, compared to the same period in the prior fiscal year as
a result of lower salaries and reduced costs.
GAIN/(LOSS) ON DISPOSITION OF PROPERTY AND EQUIPMENT AND OTHER
The increased gain on the disposition of property, equipment and other of
approximately $466,000 was principally due to a gain on a sale of commercial
property in the first quarter of fiscal 1994. There was no comparable sale
during the same period in the prior fiscal year.
INTEREST EXPENSE
Interest expense decreased approximately $253,000 or 47.3% during the current
quarter compared to the same period in the prior fiscal year. The principal
decrease of approximately $295,000 was the result of a decline in interest
rates, amortized loan costs and increased capitalized interest. Offsetting this
decrease was an increase of approximately $42,000 due to increased debt
outstanding during the current quarter compared to the same period in the prior
fiscal year.
LIQUIDITY AND CAPITAL RESOURCES
The Company's Bartow processing plant normally operates from early December
through late May or June. While the plant is in operation, the inventory of
processed juice increases to a level which will cover anticipated deliveries
until the following December when the plant begins operation again. The
Company's working capital credit facility is generally utilized to finance
the inventories. Borrowings under this credit facility normally peak in late
May or June. The Company began processing activities for the current season in
late November.
The Company's ability to generate cash adequate to meet its needs, including
the financing of its inventories and trade receivables, is supported primarily
by cash flow from operations and periodic borrowings under its primary $20
million credit facility. This facility is secured principally by most of the
Company's current assets. At December 31, 1993 due to borrowing base
restrictions, approximately $11,076,000 of additional borrowings were available
under this facility. The interest rate is variable based upon the financial
institution's variable cost of funds. The terms of the agreement call for
repayment of the principal amount in January 1996; accordingly, it is classified
as long-term. The outstanding balance at December 31, 1993 was approximately
$6,756,000. As of January 31, 1994, the Company's outstanding balance was
approximately $10,995,000. The Company anticipates that the working capital
facility will be adequately serviced with cash proceeds from operations.
Current assets increased approximately $5,983,000 as of December 31, 1993
compared to the fiscal year ended September 30, 1993. The principal component
of this was an increase in inventories of approximately $5,266,000 in the first
quarter of the current year due to the start of the processing season in
November 1993. Additionally, the Company's accounts receivable balance
increased approximately $870,000 compared to the fiscal year end . Offsetting
these increases was a decrease in cash and short-term cash investments of
approximately $126,000. Additionally, advances on fruit purchases decreased
approximately $131,000 as the Company began processing the purchased fruit.
Current liabilities increased during the first quarter of fiscal 1994
approximately $465,000 compared to the fiscal year ended September 30, 1993.
13
PAGE
<PAGE>
The principal reason for this increase was due to the preparation for and
beginning of the processing season.
Long term debt increased approximately $6,277,000 during the current quarter.
This was principally the result of an increase of approximately $6,756,000 on
the Company's long-term working capital facility due to the beginning of the
processing season. Offsetting this increase was a decrease of approximately
$479,000 which represents scheduled principal payments made on long-term
debt during the current quarter.
At December 31, 1993 the Company's long-term outstanding debt was
approximately $25,960,000 including the working capital facility of
approximately $6,756,000. In addition current installments of long-term debt
are approximately $2,178,000 with the remaining amounts due on various dates
over the subsequent 18 years. The Company anticipates that amounts due over the
next twelve months will be paid out of working capital. At December 31, 1993,
the Company was in compliance with its loan covenants.
The Company completed the installation of a new irrigation system covering
an additional 1,360 acres during fiscal 1993 and planted an additional 112,000
trees at a cost of approximately $2,909,000. Irrigation improvements to an
additional 1,565 acres in the Joshua and Bermont Groves at a cost of
approximately $1,200,000 are in varying stages of completion. Additional
expenditures, primarily for grove operations equipment totaling approximately
$1,034,000, have been approved. Certain other capital projects totaling
approximately $4.6 million are in progress for the purpose of improving
efficiency and capacity of the Bartow processing facility, including an increase
in bulk FCOJ storage capacity of approximately 3.8 million gallons.
The Company anticipates that these improvements will be financed principally
by securing additional funds under existing mortgages.
OTHER SIGNIFICANT EVENTS
In October 1993 the USDA announced a Florida crop estimate of approximately
172,000,000 boxes of oranges for the 1993-94 season. This estimate was
revised in January 1994 to approximately 176,000,000 boxes of oranges. Even
though this is a decrease from the prior season's crop of 186,500,000
boxes of oranges, expectations of ample supplies resulting froman unusually
large Florida citrus industry carryover of concentrated orange juice into the
current season has caused sharply decreased prices for bulk FCOJ.
The Company's effort to sell its Petroleum Division continue. However, the
sale has been delayed beyond the anticipated closing in the second quarter of
fiscal 1994. The Company has negotiated with several potential purchasers for
the sale of the Petroleum Division and continues at this time discussions with
one. The Company is continuing to operate the Petroleum Division as discussion
continue.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBIT:
Exhibit No. Page No.
10.17 Orange-co of Florida, Inc. Management 16
Security Plan effective October 1, 1993.
14
PAGE
<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.
ORANGE-CO, INC.
(Registrant)
Date: February 11, 1994 By:/s/ Gene Mooney
Gene Mooney
President and
Chief Operating Officer
Date: February 11, 1994 By:/s/ Dale A. Bruwelheide
Dale A.Bruwelheide
Vice President and
Chief Financial Officer
15
<PAGE>
