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 June 30, 1995
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
Commission File No. 1-6442
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)
(941) 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
August 14, 1995: 10,298,475 shares
ORANGE-CO, INC. AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS
PAGE NO.
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Consolidated Balance Sheets 3
June 30, 1995 (unaudited) and September 30, 1994 (audited)
Consolidated Statements of Operations (unaudited) 4
Nine and Three Months ended June 30, 1995 and 1994
Consolidated Statements of Cash Flows (unaudited) 5
Nine Months ended June 30, 1995 and 1994
Notes to Consolidated Financial Statements (unaudited) 6-9
ITEM 2.
Management's Discussion and Analysis of Results of
Operations and Financial Conditions 10-15
PART II. OTHER INFORMATION
ITEM 6
Exhibits and Reports on Form 8-K 16
SIGNATURES 16
-2-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
ORANGE-CO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, September 30,
1995 1994
ASSETS (unaudited) (audited)
----------- -------------
<S> <C> <C>
Current assets:
Cash and short-term investments $ 610 $ 765
Receivables 6,158 7,119
Advances on fruit purchases - 475
Inventories 40,609 43,551
Prepaid and other 143 41
--------- ---------
Total current assets 47,520 51,951
--------- ---------
Property and equipment, net 105,517 101,266
--------- ---------
Other assets:
Excess of cost over net assets of
acquired companies 11,872 12,155
Property held for disposition 1,282 1,864
Other 3,141 2,168
--------- ---------
Total other assets 16,295 16,187
--------- ---------
Total assets $169,332 $169,404
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments on long-term debt $ 2,089 $ 2,136
Note payable to bank - 4,000
Accounts payable 5,047 4,258
Accrued liabilities 9,307 10,121
Income taxes payable 1,206 -
--------- ---------
Total current liabilities 17,649 20,515
Deferred income taxes 21,026 19,317
Other liabilities 406 276
Long-term debt 32,324 38,499
--------- ---------
Total liabilities 71,405 78,607
--------- ---------
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 21,818 14,688
--------- ---------
98,410 91,280
Less:
Treasury stock, at cost: 50,924 shares
at June 30, 1995 and September 30, 1994 (483) (483)
--------- ---------
Total stockholders' equity 97,927 90,797
--------- ---------
Total liabilities and stockholders' equity $169,332 $169,404
========= =========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
-3-
<TABLE>
<CAPTION>
ORANGE-CO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE AND THREE MONTHS ENDED JUNE 30, 1995 AND 1994
(unaudited)
(in thousands except for per share data)
Nine Months Three Months
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales $86,876 $57,201 $26,764 $23,200
Cost of sales 71,977 49,343 20,746 21,116
-------- -------- -------- --------
Gross profit 14,899 7,858 6,018 2,084
Other costs and expenses, net:
Selling, general and administrative (3,338) (3,076) (1,079) (1,109)
Gain on disposition of property
and equipment 561 453 52 7
Other income 467 15 459 6
Interest (1,320) (1,113) (405) (484)
-------- -------- -------- --------
Income from continuing operations
before income taxes 11,269 4,137 5,045 504
Income tax expense 4,139 1,492 1,697 95
-------- -------- -------- --------
Net income from continuing operations 7,130 2,645 3,348 409
Discontinued operations:
Net (loss)from operations of
discontinued Petroleum Division,
{net of applicable income tax
(benefit) of $(27) and ($14)} - (45) - (23)
-------- -------- -------- --------
Net income $ 7,130 $ 2,600 $ 3,348 $ 386
======== ======== ======== ========
Net income per common and common
equivalent shares:
Continuing operations $ .69 $ .25 $ .33 $ .04
-------- -------- -------- --------
Discontinued operations $ - $ - $ - $ -
-------- -------- -------- --------
Net income $ .69 $ .25 $ .33 $ .04
======== ======== ======== ========
Average number of common and
common equivalent shares outstanding 10,298 10,299 10,298 10,298
======== ======== ======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
-4-
<TABLE>
<CAPTION>
ORANGE-CO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JUNE 30, 1995 AND 1994
(unaudited)
(in thousands)
1995 1994
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 7,130 $ 2,600
-------- --------
Adjustments to reconcile net income to net
cash provided by (used for) operating activities:
Depreciation and amortization 3,051 2,823
Increase in deferred income taxes 1,709 832
(Gain) on disposition of property and
equipment and other (1,039) (453)
Change in assets & liabilities:
(Increase)decrease in receivables 961 (1,039)
Decrease in advances on fruit purchases 475 2,137
(Increase)decrease in inventory 2,942 (30,527)
(Increase) in prepaid and other (102) (88)
Increase(decrease) in accounts payable and
accrued liabilities (25) 3,798
Increase in income taxes payable 1,206 -
Other, net (528) (555)
-------- --------
Total adjustments 8,650 (23,072)
-------- --------
Net cash provided by (used for)
operating activities 15,780 (20,472)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property & equipment 780 934
Proceeds from sale of property held for disposal 714 -
(Increase) in note & mortgage receivables (371) (143)
Additions to property & equipment (6,836) (9,856)
-------- --------
Net cash (used for) investing activities (5,713) (9,065)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from (payments on) short-term debt (4,000) 5,000
Proceeds from (payments on) long-term debt (6,222) 24,067
-------- --------
Net cash provided by (used for) financing
activities (10,222) 29,067
-------- --------
NET (DECREASE) IN CASH AND CASH EQUIVALENTS (155) (470)
-------- --------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 765 1,071
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 610 $ 601
======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
-5-
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 June 30, 1995
. Audited Consolidated Balance Sheet at September 30, 1994
. Unaudited Consolidated Statements of Operations for the nine
and three month periods ended June 30, 1995 and 1994.
. Unaudited Consolidated Statements of Cash Flows for the nine
month periods ended June 30, 1995 and 1994.
2. NOTES PAYABLE AND LONG-TERM DEBT
As of June 30, 1995, the Company had a $40 million working
capital line of credit payable in January, 1997. Accordingly, the
balance at June 30, 1995 was classified as long-term. This facility
is collateralized by most of the Company's current assets. The
outstanding balance at June 30, 1995 was approximately $17,671,000
leaving $18,283,000 additional funds available under a borrowing base
calculation. The interest rate is variable based upon the financial
institution's cost of funds plus a margin.
Additionally, as of June 30, 1995 the Company had a $6,000,000
short-term capital revolving credit facility to provide interim
financing for capital projects. As of June 30, 1995 there was no
outstanding balance.
At June 30, 1995, the Company's outstanding long-term debt
(including the $17,671,000 balance on the working capital line of
credit) was approximately $34,413,000 of which $2,089,000 matures
in the next 12 months and the remainder matures at various
times over the subsequent thirteen years.
Interest paid, net of amounts capitalized, was approximately
$1,353,000 and $1,096,000 for the nine months ended June 30, 1995
and 1994, respectively. Interest capitalized was approximately
$427,000 and $373,000 for the nine months ended June 30, 1995 and
1994 respectively.
Certain mortgage agreements contain loan covenants. At June
30, 1995, the Company was in compliance with these loan covenants.
-6-
3. INVENTORIES
<TABLE>
<CAPTION>
The major components of inventory are summarized as follows (in
thousands):
June 30, September 30,
1995 1994
---- ----
<S> <C> <C>
Finished goods $33,503 $34,201
Fruit-on-tree 5,834 6,982
Other 1,272 2,368
------- -------
Total $40,609 $43,551
======= =======
</TABLE>
As of June 30, 1995 the Company held futures contracts for frozen
concentrated orange juice ("FCOJ"). The net futures positions totaled
approximately $10,799,000 with unrealized gains of approximately
$1,464,000. Exposure to off-balance sheet risk related to these
positions results from market fluctuations of FCOJ futures prices
relative to the Company's open positions. As of June 30, 1995
deposits with brokers totaled $571,000.
4. BUSINESS SEGMENTS
<TABLE>
<CAPTION>
Segment financial data for the nine and three months ended June
30, 1995 and 1994, except for total assets which are as of June 30,
1995 and September 30, 1994 are as follows.
SEGMENT FINANCIAL DATA
(in thousands)
Petroleum
and Related
Citrus Products Total
------ ------------ -----
<S> <C> <C> <C> <C>
Sales Nine months ended 6/30/95 $ 86,876 $ - $ 86,876
Three months ended 6/30/95 26,764 - 26,764
Nine months ended 6/30/94 57,201 10,044 67,245
Three months ended 6/30/94 23,200 3,279 26,479
Operating Nine months ended 6/30/95 11,561 - 11,561
profit Three months ended 6/30/95 4,939 - 4,939
Nine months ended 6/30/94 4,782 - 4,782
Three months ended 6/30/94 975 - 975
Total assets June 30, 1995 169,332 - 169,332
September 30, 1994 169,404 - 169,404
Depreciation Nine months ended 6/30/95 3,051 - 3,051
& amortization Three months ended 6/30/95 994 - 994
Nine months ended 6/30/94 2,713 110 2,823
Three months ended 6/30/94 975 34 1,009
Capital Nine months ended 6/30/95 6,836 - 6,836
expenditures Three months ended 6/30/95 2,774 - 2,774
Nine months ended 6/30/94 9,832 22 9,854
Three months ended 6/30/94 2,255 6 2,261
</TABLE>
-7-
Intersegment sales approximate market and are not significant.
<TABLE>
<CAPTION>
RECONCILIATION OF OPERATING PROFIT TO INCOME BEFORE INCOME TAXES:
(in thousands)
Nine Months Three Months
Ended June 30, Ended June 30,
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operating profit $11,561 $4,782 $4,939 $975
Gain on disposition of property
and equipment 561 453 52 7
Other income 467 15 459 6
Interest (1,320) (1,113) (405) (484)
-------- ------- ------- -----
Income from continuing
operations before income taxes $11,269 $4,137 $5,045 $504
======== ======= ======= =====
</TABLE>
During the nine and three month periods ended June 30, 1995, the
Company had two customers who individually accounted for
approximately 17.4% and 13.9%, and 24.1% and 15.9% of total sales
for the respective periods. During the nine and three month periods
ended June 30, 1994, the Company had a customer who individually
accounted for approximately 25.4% and 23.5% of total sales for the
respective periods.
5. INCOME TAXES
<TABLE>
<CAPTION>
The provision for income taxes for continuing and discontinued
operations for the nine and three month periods ended June 30, 1995
and 1994 is summarized as follows (in thousands):
Nine Months Three Months
Ended June 30, Ended June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Current:
Federal income tax $2,431 $ 148 $1,645 $39
State income tax - 24 (48) 6
------ ------ ------- ---
Total 2,431 172 1,597 45
Deferred:
Federal income tax $1,543 $1,161 $ 123 $20
State income tax 165 132 (23) 16
------ ------ ------- ---
Total 1,708 1,293 100 36
------ ------ ------- ---
Total provision for
income taxes $4,139 $1,465 $1,697 $81
====== ====== ======= ===
</TABLE>
-8-
<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 nine and three month periods ended
June 30, 1995 and 1994 (in thousands):
Nine Months Three Months
Ended June 30, Ended June 30,
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Expected income tax $3,831 $1,382 $1,715 $159
Increase(decrease) resulting
from:
State income taxes, net
of federal tax benefit 165 156 (71) 22
Loss on foreign investments 33 47 9 11
Permanent items and other 110 (120) 44 (111)
------ ------ ------ -----
Total provision for
income taxes $4,139 $1,465 $1,697 $ 81
====== ======= ======= =====
</TABLE>
Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 109 "Accounting for Income Taxes"
("FAS No. 109") requires the use of 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.
6. DISCONTINUED OPERATIONS
During the second quarter of fiscal 1993, the Company decided to
sell the Petroleum Division comprised of Frank Carroll Oil Company.
The sale of all of the capital stock of that subsidiary was
completed effective September 30, 1994. The Consolidated Statements
of Operations for the nine and three month periods ended June 30,
1994 exclude all components of profit or loss of the Petroleum
Division from continuing operations. The effect of these items has
been reclassified net of the applicable tax effect as "Discontinued
Operations: Loss from operations of discontinued Petroleum
Division". See Note 4 for disclosure of selected components of the
Petroleum Division.
7. OTHER INCOME
During the third quarter of fiscal 1995 the Company was awarded
insurance proceeds of approximately $453,000 in excess of the book
value to replace certain equipment destroyed by a fire in the Bartow
processing facility. This event did not materially affect the
operations of the Company.
-9-
ORANGE-CO, INC. AND SUBSIDIARIES
PART I - ITEM 2
Management's Discussion and Analysis of
Financial Condition and Results of Operations
Fiscal 1995 versus Fiscal 1994
The following is management's discussion and analysis of
significant factors which have affected the Company's continuing
operations during the periods included.
The following table reflects changes in sales, cost of sales and
gross profit by division and other changes in the Statements of
Operations through net income from continuing operations. The
respective periods have excluded 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. (See Note 6 "Discontinued Operations" of the Notes to the
Consolidated Financial Statements.)
<TABLE>
<CAPTION>
Nine Months (YTD) and Three Months (QTR) Ended June 30, 1995
vs Nine Months (YTD) and Three Months (QTR) Ended June 30, 1994
Increases/(Decreases)
(in thousands)
Sales Cost of Sales Net Change
YTD QTR YTD QTR YTD QTR
--- ---- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C>
Beverage Division $29,371 $3,682 $22,271 $(400) $7,100 $4,082
Grove Management Division 304 (118) 363 30 (59) (148)
------- ------- ------- ------ ------- -------
Gross Profit From
Continuing Operations $29,675 $3,564 $22,634 $(370) 7,041 3,934
======= ======= ======= ======
Other costs and expenses, net:
Selling, general and administrative (262) 30
Gain on disposition of property and equipment 108 45
Other income 452 453
Interest (207) 79
------- -------
Income from continuing operations before income taxes 7,132 4,541
Provision for income taxes from continuing operations (2,647) (1,602)
------- -------
Net income from continuing operations $4,485 $2,939
======= =======
</TABLE>
RESULTS OF OPERATIONS
SALES
Sales for the nine and three month periods ended June 30, 1995
increased approximately $29,675,000 or 51.9% and approximately
$3,564,000 or 15.4%, respectively compared to the same periods in
the prior year. The Beverage Division accounted for the principal
increase for the nine month period with increased sales of
approximately $29,371,000. Grove Management Division sales
increased approximately $304,000 for the nine month period. The
Beverage Division also accounted for the principal increase for the
current three month period with an increase in sales of
approximately $3,682,000. This increase during the current three
months was partially offset by a decrease in Grove Management Division
sales of approximately $118,000.
-10-
BEVERAGE DIVISION The Beverage Division sales increased
approximately $29,371,000 or 54.9% and $3,682,000 or 17.0% in the
current nine and three month respective periods compared to the same
periods in the prior year. Of the increases for the current nine
month period, revenues from the sale of the Company's bulk citrus
juice products accounted for an increase of approximately
$18,706,000. During the current three month period revenues from
these same bulk citrus products decreased approximately $43,000
compared to the same period in the prior year. As a part of these
changes, revenues from the volume of bulk citrus products sold
increased approximately $20,813,000 and $291,000 during the current
nine and three month respective periods. These increases in sales
volumes were due primarily to an improved sales program for the bulk
citrus juice products and a higher level of carryover inventory from
the prior year. The increases in volume during the current nine and
three month periods were partially offset by decreased prices for
bulk citrus juice products of approximately $2,107,000 and $334,000
respectively compared to the same periods in the prior year. In
October 1994 the United States Department of Agriculture ("USDA")
announced a Florida crop estimate of approximately 196,000,000 boxes
of round oranges for the 1994-95 season which would be significantly
larger than the 1993-94 crop of 174,200,000 boxes of round oranges.
This estimate by the USDA was revised in July 1995 to approximately
205,400,000 boxes of round oranges which will be the second largest
Florida crop in history.
Sales of the Company's packaged citrus juices increased
approximately $897,000 and $537,000 during the current nine and
three month respective periods compared to the same periods in the
prior year. Of these increases, higher volumes sold resulted in
increases in revenues of approximately $769,000 and $341,000 during
the current nine and three month periods. Additionally, sales
increased due to increased prices of approximately $128,000 and
$196,000 during the current respective periods.
The Company's non-orange packaged juices and drink base sales
increased approximately $2,410,000 and $1,384,000 during the current
nine and three month periods compared to the same periods in the
prior year. Of these increases the volume of sales of these
products increased approximately $1,563,000 and $1,336,000 during the
current nine and three month periods principally as a result of an
improved sales program for the Company's drink base products.
Additionally, sales of these products increased as a result of
increased prices of approximately $847,000 and $48,000 during the
current nine and three month respective periods.
Revenues from the sale of the Company's by-products, including
feed, pulp cells, and citrus oils increased approximately $4,489,000
during the current nine month period compared to the same period in
the prior year. These increases in revenues were due in part to an
increase in the volume of by-products being produced and sold of
approximately $1,812,000. Revenues also increased approximately
$2,677,000 during the current nine period as a result of higher
prices compared to the same period in the prior year. Revenues
from the sale of these by-products increased approximately
$1,030,000 during the current three month period compared to
the same period in the prior year as a result of increased prices.
Storage, handling, processing citrus for customers under
contract, and other revenues increased approximately $2,869,000 and
$774,000 during the current nine and three month periods compared to
the same periods in the prior year. These increases were due
primarily to an increase in the volume of these services
-11-
performed during the current nine and three month periods compared
to the same periods in the prior year.
GROVE MANAGEMENT DIVISION Grove Management sales increased
approximately $304,000 or 8.3% for the current nine month period and
decreased by approximately $118,000 or 7.8% for the current three
month period compared to the same respective periods in the prior year.
The principal increase during the current nine month period of
approximately $509,000 was due to an increase in the number of boxes
harvested. There was also an increase in harvesting revenues during
the current three month period of approximately $202,000 due primarily
to an increase in the volume of boxes harvested. Revenues from grove
caretaking activities increased approximately $207,000 and $92,000
during the current nine and three month periods compared to the same
periods in the prior year. Revenues from the sale of fruit to third
party packers and processors decreased by approximately $412,000
during the current nine and three month periods compared to the same
periods in the prior year.
GROSS PROFIT
Gross profit for the nine and three month periods ended June 30,
1995 increased approximately $7,041,000 or 89.6% and $3,934,000 or
188.8%, respectively, compared to the same periods in the prior
year. The principal increases of approximately $7,100,000 and
$4,082,000 during the current nine and three month respective
periods occurred in the Beverage Division. Gross profit for the
Grove Management Division decreased during the current nine and
three month periods by approximately $59,000 and $148,000,
respectively.
BEVERAGE DIVISION Gross profit of the Beverage Division increased
approximately $7,100,000 and $4,082,000 for the current nine and
three month periods compared to the same periods in the prior year.
Contributing to the increases in gross profit were increases during
the current nine and three month respective periods of approximately
$2,384,000 and $1,124,000 from the sale of bulk citrus juice
products. Of the increase during the current nine month period
approximately $2,095,000 was a result of an increase in the volume
of bulk citrus products sold compared to the same period in the
prior year. This increase in sales volume is a combined result of
an improved bulk sales program and the higher level of carryover
inventory previously mentioned. Additionally, gross profit increased
approximately $2,396,000 and $1,458,000 during the current nine and
three month respective periods as a result of lower costs of raw
fruit and concentrate used in the production of bulk citrus juice
products compared to the same periods in the prior year. Partially
offsetting this increase were decreases in gross profit of
approximately $2,107,000 and $334,000 resulting from decreased
prices for bulk citrus juice products during the current nine and
three month periods compared to the same period in the prior year.
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 sales and in the
cost of inventories and flow through cost of sales in the
Consolidated Statements of Operations as the associated products are
sold. As of June 30, 1995 the Company held contracts for FCOJ
futures with unrealized gains of approximately $1,464,000 which
would have been realized if said positions had been prematurely
liquidated on that date. These unrealized gains are based upon
the closing market price of equivalent futures obligations and do
not necessarily represent prices at which the Company expects to
sell the FCOJ.
-12-
Gross profit from the sale of packaged citrus juice products
remained approximately at the same levels during the current nine
month period compared to the same period in the prior year.
However, gross profit from the same products increased approximately
$571,000 during the current three month period compared to the same
period in the prior year. Of the increases during the current
three month period, approximately $196,000 resulted from increased
prices. Additionally, gross profit increased approximately $375,000
during the current three month period as a result of lower costs of
raw fruit and concentrate used in the production of these products.
Gross profit from the sale of the Company's non-orange packaged
juices and drink base products decreased approximately $120,000 and
increased approximately $31,000 during the current nine and three
month respective periods compared to the same periods in the prior
year. The decrease for the current nine month period was
principally due to higher raw material costs of production for these
products. The increase for the current three month period was
principally due to higher prices compared to the same period in the
prior year.
Gross profit from by-products increased approximately $2,377,000
and $435,000 during the current nine and three month respective
periods compared to the same periods in the prior year. These
increases were principally the result of higher market prices for
these products partially offset by increased costs in the
current nine and three month periods compared to the same periods
in the prior year. Gross profit from storage, handling, and
other activities also increased by approximately $2,959,000 and
$2,412,000 during the current nine and three month periods due to
an increase in the volume of these activities compared to the same
periods in the prior year.
At the end of the third quarter the Company had a for a write-
down of approximately $491,000 to certain bulk inventories relative
to the anticipated market prices for these products as of June
30, 1995. The Florida citrus industry is highly cyclical with
market prices for processed citrus juices subject to wide
fluctuations.
GROVE MANAGEMENT DIVISION Grove Management gross profit for the
nine and three month periods decreased approximately $59,000 and
$148,000 compared to the same periods in the prior year. Decreases
of approximately $127,000 and $192,000 for the current nine and
three month periods were primarily a result of reduction in volume
of fruit sold to third party packers and processors. Gross profit
from grove caretaking for the nine and three month periods increased
approximately $53,000 and $35,000 compared to the same periods in
the prior year. The decrease was further offset by an increase in
gross profit from harvesting activities of approximately $15,000 and
$9,000 during the current nine and three month periods principally
due to increased volumes.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased approximately
$262,000 or 9% and decreased approximately $30,000 or 3% for the
current nine and three month respective periods compared to the same
periods in the prior year. The increase in the current nine month
period was primarily caused by increased staffing. The decrease in
the current three month period was due to decreased other costs and
was partially offset by increased staffing compared to the same
period in the prior year.
-13-
GAIN/(LOSS) ON DISPOSITION OF PROPERTY AND EQUIPMENT
The increased gains on the disposition of property, equipment and
other of approximately $108,000 for the nine month period and
approximately $45,000 for the three month period ending June 30,
1995 compared to the same periods in the prior year was principally
due to differences in gains on sales of commercial properties not
utilized in citrus production or processing.
INTEREST EXPENSE
Interest expense increased approximately $207,000 or 19% and
decreased approximately $79,000 or 16% in the current nine and three
month periods respectively, compared to the same periods in the
prior year. During the nine month period, increased interest rates
and outstanding debt resulted in increases in interest expense of
$199,000 and $174,000, respectively. Partially offsetting these
increases for the current nine month period were increases in
capitalized interest of approximately $54,000 and decreases in
amortization of deferred loans costs and other interest related
charges in the amount of approximately $112,000. During the current
three month period, increases in capitalized interest and decreases
in amortization of deferred loan costs and other related interest
charges resulted in decreases of approximately $113,000 and $41,000,
respectively. Partially offsetting these decreases in the current
three month period were increases of approximately $39,000 and
$36,000 as a result of increases in interest rates and debt
outstanding.
LIQUIDITY AND CAPITAL RESOURCES
The Company's Bartow processing plant normally operates from
early November through late May or June. While the plant is in
operation, the inventory of processed juice increases to a level
which will cover anticipated sales until the following November when
the plant begins operation again. The Company's working capital
credit facility is generally utilized to finance these inventories.
Borrowings under this credit facility normally peak in late May or
June. The Company began processing activities for the 1994-95
season in late October and completed these activities in May 1995.
The Company's ability to generate cash adequate to meet its
needs, including the financing of its inventories and trade
receivables, has been supported primarily by cash flow from
operations and periodic borrowings under its primary $40 million
credit facility. This facility is secured principally by most of
the Company's current assets. The outstanding balance at June 30,
1995 was approximately $17,671,000 and approximately $18,283,000 of
additional borrowings were available. The interest rate is
variable based upon the financial institution's cost of funds plus
a margin. The terms of the agreement call for repayment of the
principal amount in January 1997; accordingly, it is classified as
long-term. The Company anticipates that the working capital
facility will be adequately serviced with cash proceeds from
operations. Management believes this facility will provide sufficient
working capital over the next two years.
Additionally, as of June 30, 1995, the Company had a $6 million
short-term capital revolving credit line to provide interim
financing for capital projects. As of June 30, 1995, there was no
outstanding balance on this facility.
Current assets decreased approximately $4,431,000 as of June 30,
1995 compared to September 30, 1994. The principal component of
this was a decrease in inventories of approximately $2,942,000 in
the first nine months of the current
-14-
year due to the previously mentioned increases in sales and
reduced costs. The Company's accounts receivable balance
decreased approximately $961,000 compared to the fiscal year end.
Additionally, there was a decrease in cash and short-term cash
investments of approximately $155,000. Advances on fruit purchases
decreased approximately $475,000 as the Company processed the
purchased fruit and collected these advances.
Current liabilities decreased during the first nine months of
fiscal 1995 approximately $2,866,000 compared to September 30, 1994.
The principal reason for this decrease was due to payments of
$4,000,000 on the previously mentioned short-term capital revolving
credit facility. Offsetting this decrease was an increase in income
taxes payable of approximately $1,206,000.
Long-term debt decreased approximately $6,175,000 during the
current nine month period. This was principally the result of a
decrease of approximately $3,306,000 on the Company's long-term
working capital facility. There was also a decrease of
approximately $2,869,000 resulting primarily from scheduled
principal payments made on long-term debt.
At June 30, 1995 the Company's outstanding long-term debt was
approximately $32,324,000 including the working capital facility of
approximately $17,671,000. In addition current installments of long-
term debt were approximately $2,089,000 with the remaining amounts
due on various dates over the subsequent thirteen years. The
Company anticipates that amounts due over the next twelve months
will be paid out of working capital. At June 30, 1995 the Company
was in compliance with its loan covenants.
During the first nine months of the fiscal year the Company made
improvements to and replaced equipment at its Bartow processing facility
and groves totaling approximately $5,923,000. The Company anticipates
that these improvements will be financed principally from working
capital or by securing additional funds under existing mortgages.
OTHER SIGNIFICANT EVENTS
In October 1994 the USDA announced a Florida crop estimate of
approximately 196,000,000 boxes of round oranges for the 1994-95
season which would be significantly larger than the 1993-94 round
orange crop of approximately 174,200,000 boxes. This estimate by the
USDA was revised in July 1995 to approximately 205,400,000 boxes
which will be the second largest Florida crop in history.
-15-
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibit EXHIBIT Page
No. No.
27 Financial Data Schedule (Electronic Filing
Only)
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: August 14, 1995 By: /s/Gene Mooney
-----------------------
Gene Mooney
President and
Chief Operating Officer
Date: August 14, 1995 By: /s/Dale A. Bruwelheide
------------------------
Dale A. Bruwelheide
Vice President and
Chief Financial Officer
-16-
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