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 December 31, 1994
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)
(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 10, 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
December 31, 1994 (unaudited) and September 30, 1994
(audited) 3
Consolidated Statements of Operations (unaudited)
Three Months ended December 31, 1994 and 1993 4
Consolidated Statements of Cash Flows (unaudited)
Three Months ended December 31, 1994 and 1993 5
Notes to Consolidated Financial Statements (unaudited) 6-8
ITEM 2.
Management's Discussion and Analysis of Results of
Operations and Financial Conditions 9-13
PART II. OTHER INFORMATION
ITEM 6.
Exhibits an Reports on Form 8 K 14
SIGNATURES 14
-2-
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
ORANGE-CO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
December 31, September 30,
ASSETS 1994 1994
(unaudited) (audited)
<S> <C> <C>
Current assets:
Cash and short-term investments $ 897 $ 765
Receivables 8,283 7,119
Advances on fruit purchases 626 475
Inventories 36,415 43,551
Prepaid and other 290 41
_________ _________
Total current assets 46,511 51,951
_________ _________
Property and equipment, net 103,273 101,266
_________ _________
Other assets:
Excess of cost over net assets of
acquired companies 12,061 12,155
Property held for disposition 1,372 1,864
Other 2,386 2,168
_________ _________
Total other assets 15,819 16,187
_________ _________
Total assets $165,603 $169,404
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments on long-term $ 2,136 $ 2,136
debt
Note payable to bank 3,000 4,000
Accounts payable 4,988 4,258
Accrued liabilities 10,687 10,121
_________ _________
Total current liabilities 20,811 20,515
Deferred income taxes 19,843 19,317
Other liabilities 331 276
Long-term debt 33,043 38,499
_________ _________
Total liabilities 74,028 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 15,466 14,688
_________ _________
92,058 91,280
Less:
Treasury stock, at cost: 50,924
shares at December 31, 1994
and September 30, 1994 (483) (483)
_________ _________
Total stockholders' equity 91,575 90,797
_________ _________
Total liabilities and stockholders'
equity $165,603 $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 THREE MONTHS ENDED DECEMBER 31, 1994 AND 1993
(unaudited)
(in thousands except for per share data)
1994 1993
<S> <C> <C>
Sales $30,573 $15,712
Cost of sales 28,053 12,057
________ ________
Gross profit 2,520 3,655
Other costs and expenses, net:
Selling, general and administrative (1,073) (972)
Gain on disposition of property and equipment 426 479
Other 8 -
Interest (547) (282)
________ ________
Income from continuing operations
before income taxes 1,334 2,880
Income tax expense 556 1,139
________ ________
Net income from continuing operations 778 1,741
Discontinued operations:
Net (loss) from operations of discontinued
Petroleum Division, [net of applicable
income tax (benefit) of $(15)] - (24)
________ ________
Net income $ 778 $ 1,717
======== ========
Net income per common and common equivalent
shares:
Continuing operations $ .08 $ .17
Discontinued operations $ - $ -
________ ________
Net income $ .08 $ .17
======== ========
Average number of common and common
equivalent shares outstanding 10,298 10,299
======== ========
</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 THREE MONTHS ENDED DECEMBER 31, 1994 AND 1993
(unaudited)
(in thousands)
1994 1993
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 778 $1,717
_______ _______
Adjustments to reconcile net income to
net cash provided by (used for)
operating activities:
Depreciation and amortization 1,028 905
Deferred income taxes 526 1,044
(Gain) on disposition of property
and equipment and other (426) (479)
Change in assets & liabilities:
(Increase) in receivables (1,164) (870)
(Increase)decrease in advance on fruit
purchases (151) 131
(Increase)decrease in inventory 7,136 (5,266)
(Increase) in prepaids and other (249) (104)
Increase in accounts payable
and accrued liabilities 1,296 469
Other, net (130) (195)
_______ _______
Total adjustments 7,866 (4,365)
_______ _______
Net cash provided by (used for)
operating activities 8,644 (2,648)
_______ _______
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property & equipment 582 482
(Increase)decrease in note & mortgage
receivables (73) 1
Additions to property & equipment (2,565) (4,234)
_______ _______
Net cash (used for) investing
activities (2,056) (3,751)
_______ _______
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from (payment on) long-term debt (5,456) 6,273
(Payment on) notes payable to bank (1,000) -
_______ _______
Net cash provided by (used for) financing
activities (6,456) 6,273
_______ _______
NET INCREASE(DECREASE) IN CASH AND CASH
EQUIVALENTS 132 (126)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 765 1,071
_______ _______
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 897 $ 945
======= =======
</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 December 31, 1994
. Audited Consolidated Balance Sheet at September 30, 1994
. Unaudited Consolidated Statements of Operations and Statements of
Cash Flows for the three month periods ended December 31, 1994 and
1993.
2. NOTES PAYABLE AND LONG-TERM DEBT
As of December 31, 1994, the Company had access to a $30 million credit
facility payable in January 1996. Accordingly, the balance at December 31,
1994 was classified as long-term. This facility is collateralized by most of
the Company's current assets. The outstanding balance at December 31, 1994 was
approximately $16,019,000. Approximately $13,981,000 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. Subsequent to December 31, 1994, this facility was increased to a
$40 million working capital line of credit and the term extended to
January 1997.
Additionally, as of December 31, 1994 the Company had a $6,000,000 short-
term capital revolving credit facility to provide interim financing for capital
projects. As of December 31, 1994 the balance on this facility was $3,000,000.
The interest rate is variable based upon the financial institution's cost of
funds plus a margin.
At December 31, 1994, the Company's outstanding long-term debt (including
the $16,019,000 balance on the working capital line of credit facility) was
approximately $35,179,000, of which $2,136,000 matures in the next 12 months
and the remainder matures at various times over the subsequent seventeen
years.
Interest paid, net of amounts capitalized, was approximately $501,000 and
$239,000 for the three months ended December 31, 1994 and 1993, respectively.
Interest capitalized was approximately $110,000 and $90,000 for the three
months ended December 31, 1994 and 1993, respectively.
3. INVENTORIES
<TABLE>
<CAPTION>
The major components of inventory are summarized as follows (in thousands):
December 31, September 30,
1994 1994
<S> <C> <C>
Finished goods $28,944 $34,201
Fruit-on-tree 5,133 6,982
Other 2,338 2,368
_______ _______
Total $36,415 $43,551
======= =======
</TABLE>
-6-
As of December 31, 1994 the Company held contracts for net FCOJ futures
positions totaling $12,941,000 with unrealized gains of approximately
$826,000. 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 December 31, 1994 deposits with
brokers totaled $353,000.
4. BUSINESS SEGMENTS
The following segment financial data is for the three month periods ended
December 31, 1994 and 1993, except for total assets which are as of December
31, 1994 and September 30, 1994.
<TABLE>
<CAPTION>
SEGMENT FINANCIAL DATA
(in thousands)
Petroleum
and
Year Citrus Related Total
Products
<S> <C> <C> <C> <C>
Sales 1994 $ 30,573 $ - $30,573
1993 15,712 3,322 19,034
Operating Profit 1994 1,447 - 1,447
1993 2,683 - 2,683
Total Assets 1994 165,603 - 165,603
1993 169,404 - 169,404
Depreciation and
amortization 1994 1,028 - 1,028
1993 863 42 905
Capital expenditures 1994 2,565 - 2,565
1993 4,224 10 4,234
</TABLE>
Intersegment sales approximate market and are not significant.
<TABLE>
<CAPTION>
RECONCILIATION OF OPERATING PROFIT TO INCOME BEFORE INCOME TAXES:
(in thousands)
Three Months Three Months
Ended Ended
December 31, 1994 December 31, 1993
<S> <C> <C>
Operating profit $1,447 $2,683
Gain on disposition of
property and equipment 426 479
Other 8 -
Interest (547) (282)
_______ _______
Income from continuing
operations before income taxes $1,334 $2,880
======= =======
</TABLE>
During the three month period ended December 31, 1994 the Company had two
customers who individually accounted for approximately 17% and 11% of total
sales. 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.
-7-
5. INCOME TAXES
<TABLE>
<CAPTION>
The provision for income taxes for continuing and discontinued operations
for the quarters ended December 31, 1994 and 1993 is summarized as follows
(in thousands):
1994 1993
<S> <C> <C>
Current:
Federal income tax $ 30 $ 69
State income tax - 11
____ ______
Total $ 30 $ 80
____ ______
Deferred:
Federal income tax $471 $ 947
State income tax 55 97
____ ______
Total $526 $1,044
____ ______
Total provision for income
taxes $556 $1,124
==== ======
</TABLE>
<TABLE>
<CAPTION>
The 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, 1994 and 1993
(in thousands):
1994 1993
<S> <C> <C>
Expected income tax $454 $ 965
Increase(decrease) resulting from:
State income taxes, net of federal tax
benefit 55 108
Loss on foreign operations 16 22
Permanent items and other 31 29
____ ______
Total provision for income taxes $556 $1,124
==== ======
</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.
6. DISCONTINUED OPERATIONS
During the second quarter of 1993, the Company decided to sell the
Petroleum Division comprised of Frank Carroll Oil Company. The Consolidated
Statement of Operations for the three month period ended December 31, 1993
presented 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. The sale of all the
capital stock of Frank Carroll Oil Company was completed effective September
30, 1994.
-8-
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 1995 versus First Quarter of 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. It compares the Company's continuing operations for the
three month period ended December 31, 1994 to continuing operations for the
three month period ended December 31, 1993.
The following table reflects changes in and the effects on sales, cost of
sales and gross profit by division and other changes in the Statements of
Operations through net income from continuing operations between the
respective periods. The respective statements 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>
Three Months Ended December 31, 1994 vs Three Months Ended December 31, 1993
Increases/(Decreases)
(in thousands)
Sales Cost of Sales Net Change
<S> <C> <C> <C>
Beverage Division $14,349 $15,566 $(1,217)
Grove Management Division 512 430 82
------- ------- --------
Continuing operations $14,861 $15,996 (1,135)
======= =======
Other costs and expenses, net:
Selling, general and administrative . . . . . . . . . . . . (101)
Gain on disposition of property and equipment . . . . . . . (53)
Other income and expense . . . . . . . . . . . . . . . . . 8
Interest . . . . . . . . . . . . . . . . . . . . . . . . . (265)
--------
Income from continuing operations before income tax. . . . . $(1,546)
Provision for income taxes from continuing operations . . . 583
--------
Net income from continuing operations . . . . . . . . . . . $ (963)
========
</TABLE>
RESULTS OF OPERATIONS
SALES
Sales for the three month period ended December 31, 1994 increased
approximately $14,861,000 or 94.6% compared to the same period in the prior
year. The Beverage Division accounted for the principal increase for the
current period with increased sales of approximately $14,349,000. Grove
Management Division sales increased approximately $512,000 for the current
period compared to the same period in the prior year.
BEVERAGE DIVISION The Beverage Division sales increased approximately
$14,349,000 or 97.0% during the current three month period compared to the same
period in the prior year. Revenues from the sale of the Company's bulk citrus
juice products increased approximately $12,138,000 as a result of offsetting
increases and decreases. As a part of this increase revenues from the volume
of bulk citrus products sold increased approximately $14,737,000 during the
current period compared to the same period in the prior year. This
increase in sales volume was due primarily to an improved sales program
for the bulk citrus juice products and a higher level of carryover
inventory from the prior year.
-9-
This increase in volume was partially offset by decreased prices for
bulk citrus juice products of approximately $2,599,000 during the current
period compared to the same period 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. In February 1995 the USDA revised its
estimate for the 1994-95 Florida crop of round oranges to approximately
203,000,000 boxes which, if true, will be historically the second largest
Florida crop.
Sales of the Company's packaged citrus juices sold remained relatively
stable during the current period increasing approximately $11,000
compared to the same period in the prior year.
The Company's non-orange packaged juices and drink base sales increased
approximately $366,000 during the current period compared to the same
period in the prior year. The volume of sales of these non-orange packaged
juices and drink base products increased approximately $416,000 principally
as a result of increased sales of the Company's new line of drink base
products acquired with the purchase of International Fruit, Inc. This
increase in volume was partially offset by price decreases of approximately
$50,000 on these products during the current period compared to the same
period in the prior year.
Revenues from the sale of the Company's by-products, including feed, pulp
cells, and citrus oils, increased approximately $784,000 as a result of a
higher volume of by-products being produced and sold during the current
period compared to the same period in the prior year. This increase
in production during the current period is primarily a result of an earlier
start of the processing season during the current year compared the prior
year.
Storage, handling, processing citrus for customers under contract, and
other revenues increased approximately $1,050,000 during the current
period compared to the same period in the prior year. This increase
was also due primarily to an increase in the volume of these services
performed during the current three month period compared to the same period
in the prior year resulting from the earlier start of the processing season
as previously mentioned.
GROVE MANAGEMENT DIVISION Grove Management Division sales increased
approximately $512,000 or 56.0% in the current three month period compared to
the same period in the prior year. The principal increase of approximately
$373,000 in harvesting revenues resulted from an increase in the number of
boxes of fruit harvested. This increase in boxes harvested is primarily due
to an earlier start of the harvesting season as previously mentioned.
Additionally, revenues from the sale of fruit to third party packers and
processors and grove caretaking activities increased approximately $139,000
during the current period compared to the same period in the prior year.
GROSS PROFIT
Gross profit for the three month period ended December 31, 1994 decreased
approximately $1,135,000 or 31.1% compared to the same period in the prior
year. The principal decrease of approximately $1,217,000 occurred in the
Beverage Division. Partially offsetting this decrease was an increase in
Grove Management Division gross profit of approximately $82,000 during the
current period compared to the same period in the prior year.
BEVERAGE DIVISION The gross profit of the Company's Beverage Division
decreased approximately $1,217,000 during the current period compared to
the same period in the prior year. The principal component was a decrease
of approximately $1,604,000 which resulted from the sale of bulk citrus
juice products during the
-10-
current period compared to the same period in the prior year. Of this
amount, price decreases, which resulted from the previously mentioned
significantly larger crop announced by the USDA for the current season,
accounted for a decrease in gross profit of approximately $2,599,000.
Gross profit also decreased approximately $2,754,000 principally as a
result of higher cost of raw fruit and concentrate used in the production of
bulk citrus juice products during the current period compared to the same
period in the prior year. Partially offsetting these decreases were
increases in gross profit of approximately $3,749,000 resulting from an
increase in the volume of bulk citrus products sold during the current period
compared to the same period in the prior year as a result of the improved
bulk sales program and the higher level of carryover inventory previously
mentioned.
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 the associated products are sold.
As of December 31, 1994 the Company held contracts for FCOJ futures with
unrealized gains of approximately $826,000 which would have been realized if
said positions had 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.
Gross profit on the sale of packaged citrus juice products sold
primarily to the food service industry decreased approximately $508,000
during the current period compared to the same period in the prior year. Of
this decrease, approximately $314,000 was a result of a higher cost of
inventory in the current period compared to the same period in the prior
year. Additionally, reduced volumes in the current period decreased gross
profit by approximately $194,000 compared to the same period in the prior
year.
Gross profit from the sale of the Company's non-orange packaged juices
and drink base products decreased approximately $41,000 during the current
period compared to the same period in the prior year. This decrease was
principally a result of higher costs of production of approximately $457,000
partially offset by an increase in the volume sold of these products of
approximately $416,000.
By-products, including feed, pulp cells, and citrus oils, provided an
increase in gross profit of approximately $549,000 as a result of increased
volumes produced and sold during the current period compared to the same
period in the prior year. This increase in production was due primarily
to the earlier start of the processing season as previously mentioned.
Gross profit from storage, handling, and other activities also increased by
approximately $387,000 during the current period due to an increase
in these activities compared to the same period in the prior year.
GROVE MANAGEMENT DIVISION Grove Management Division gross profit increased
approximately $82,000 or 35.7% during the current three month period compared
to the same period in the prior year. The principal increase of
approximately $60,000 resulted from the sale of fruit to third party packers
and processors primarily due to an increase in the number of boxes sold.
Additionally, there was an increase of approximately $22,000 in gross profit
from the Company's grove caretaking and harvesting activities.
-11-
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased approximately
$101,000 for the current quarter, compared to the same period in the prior
year primarily as a result of increased staffing.
GAIN/(LOSS) ON DISPOSITION OF PROPERTY AND EQUIPMENT AND OTHER
The decreased gain on the disposition of property, equipment and other of
approximately $53,000 was principally due to differences in the gains on the
sale of commercial properties not utilized in the operations.
INTEREST EXPENSE
Interest expense increased approximately $265,000 or 94.0% during the
current three month period compared to the same period in the prior year.
The principal increase of approximately $271,000 was the result of an
increase in debt outstanding. Also, increased interest rates resulted in
an increase of approximately $29,000. Partially offsetting these increases
was a decrease in other interest charges of approximately $15,000 and an
increase in capitalized interest of approximately $20,000.
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 deliveries
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.
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 $30 million credit facility. This facility is secured principally by most
of the Company's current assets. The outstanding balance at December 31, 1994
was approximately $16,019,000 and approximately $13,981,000 of additional
borrowings were available under this facility. In January 1995 the working
capital facility was increased from $30 million to $40 million. This
increase in the working capital facility was necessary to finance the
larger inventories resulting from the increased volume of fruit being processed
and the increased inventory storage capacity. The interest rate is
variable based upon the financial institution's cost of funds plus a margin.
The terms of this agreement call for repayment of the principal amount in
January 1997; accordingly, it is classified long-term. The Company
anticipates that the working capital facility will be adequately serviced with
cash proceeds from operations.
Additionally, as of December 31, 1994, the Company had a $6 million
short-term capital revolving credit facility to provide interim financing for
capital projects. As of December 31, 1994, the outstanding balance on this
facility was $3 million. The interest rate on this facility is variable
based upon the financial institution's cost of funds plus a margin. The
terms of this agreement called for repayment of the principal amount in
January 1995; accordingly, it is classified as short-term. In January
1995 this facility was extended to January 1996.
Current assets decreased approximately $5,440,000 as of December 31, 1994
compared to the fiscal year ended September 30, 1994. The principal component
of this was a decrease in inventories of approximately $7,136,000 in the
current
-12-
three month period due to the Company's increased bulk citrus juice product
sales previously mentioned. The Company's accounts receivable balance
increased approximately $1,164,000 during the current period as a result of
increased sales. Additionally, there was an increase in cash and short-term
investments of approximately $132,000. Advances on fruit purchases
increased approximately $151,000 as the Company purchased fruit associated
with the 1994-95 season. Also there was an increase of approximately
$249,000 in prepaid expenses other current assets.
Current liabilities increased approximately $296,000 during the current
three month period compared to the fiscal year ended September 30, 1994.
There was an increase of approximately $1,296,000 in accounts payable and
accrued liabilities as a result of the beginning of the processing season.
There was a decrease of $1,000,000 in short-term borrowings. The current
portion of long-term debt remained unchanged.
At December 31, 1994 the Company's outstanding long-term debt was
approximately $33,043,000 including the working capital facility of
approximately $16,019,000. In addition, current installments of long-term debt
were approximately $2,136,000 with the remaining amounts due on various dates
over the subsequent 17 years. The Company anticipates that amounts due over
the next twelve months will be paid out of working capital. At December
31, 1994, the Company was in compliance with its loan covenants.
The Company completed the installation of new irrigation systems on 1,670
acres of Company-owned Joshua and Bermont groves during fiscal 1994 at a cost
of approximately $1,370,000. Irrigation expenditures in the current fiscal
year of approximately $621,000 have been made for the installation of new
systems on an additional 1,142 acres of Company-owned groves. Additional
expenditures of approximately $979,000 have been made during the current
year primarily for the purpose of improving the efficiency and capacity of the
Bartow processing facility. Also during the current period expenditures of
approximately $281,000 have been made for grove operations equipment.
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 orange crop of
approximately 174,200,000 boxes of round oranges. In February 1995 the USDA
revised its estimate for the 1994-95 Florida crop of round oranges to
approximately 203,000,000 boxes which, if true, will be historically the
second largest Florida crop.
As of September 30, 1994 the Company completed the sale of all of its
capital stock in Frank Carroll Oil Company.
-13-
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibit EXHIBIT Page
No. No.
10.21 The Third Amendment to the Loan Agreement 15
By and among Orange-co, Inc., Orange-co of
Florida, Inc. and SunBank, National
Association for a Revolving Line of Credit
dated January 27, 1995.
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: February 10, 1995 By:/s/ Gene Mooney
-----------------------
Gene Mooney
President and
Chief Operating Officer
Date: February 10, 1995 By:/s/ Dale A. Bruwelheide
-----------------------
Dale A. Bruwelheide
Vice President and
Chief Financial Officer
-14-
EXHIBIT 10.21
THIRD AMENDMENT TO LOAN AGREEMENT
THIS THIRD AMENDMENT TO LOAN AGREEMENT dated January 27, 1995, by and
between:
ORANGE-CO, INC., a Florida corporation and ORANGE-CO OF
FLORIDA, INC., a Florida corporation, 2020 Highway 17
South, Bartow, Florida 33830 (hereinafter collectively
referred to as the "Borrowers");
and
SUN BANK, NATIONAL ASSOCIATION, a national banking
association, 200 South Orange Avenue, Post Office Box 3833,
Orlando, Florida 32897 (hereinafter referred to as the
"Bank").
W I T N E S S E T H:
WHEREAS, pursuant to the Loan Agreement, dated June 16, 1993, by and
among the Bank and the Borrowers, the Bank agreed to extend to the
Borrowers a working capital line of credit loan in the maximum principal
amount of $20,000,000.00 (the "Working Capital Loan");
WHEREAS, pursuant to the First Amendment to Loan Agreement, dated
January 10, 1994, by and among the Bank and the Borrowers, the Bank agreed
to extend to the Borrowers a revolving line of credit loan in the maximum
principal amount of $5,000,000.00 (the "Revolving Loan"); and
WHEREAS, pursuant to the Second Amendment to Loan Agreement, dated
April 1, 1994, by and among the Bank and the Borrowers agreed to increase
the maximum principal amount of (a) the Working Capital Loan from
$20,000,000.00 to $30,000,000.00 and (b) the Revolving Loan from
$5,000,000.00 to $6,000,000.00; and
WHEREAS, the Borrowers have requested the Bank to (a) renew and extend
the maturity date of the Working Capital Loan from January 31, 1996 until
January 31, 1997 and (b) increase the maximum principal amount of the
Working Capital Loan from $30,000,000.00 to $40,000,000.00 and the Bank
has agreed to such renewal and increase; and
WHEREAS, the Revolving Loan matures on January 31, 1995 and the
Borrowers have requested the Bank to renew and extend the maturity of the
Revolving Loan until January 31, 1996, and the Bank has agreed to such
renewal.
NOW, THEREFORE, for and in consideration of the above premises, and the
mutual covenants and agreements contained herein, the Borrowers and the
Bank do hereby agree as follows:
1. Amendments to Loan Agreement. The Loan Agreement is hereby
amended as follows:
(a) The definition of "Revolving Period" is hereby deleted and,
in lieu thereof, there is substituted the following:
"'Revolving Period' shall mean the period during
the term of the Loans, which, in the case of the
Revolving Loan, shall commence on the date hereof
and end on the earlier of the occurrence of (i)
an Event of Default or (ii) January 31, 1996, or
such later date as the Bank may agree to in
writing, and in the case of the Working Capital
Loan, shall commence on the date hereof and end
on the occurrence of (i) an Event of Default or
(ii) January 31, 1997, or such later date as the
Bank may agree to in writing."
(b) The definition of "Working Capital Loan" is hereby deleted
and, in lieu thereof, there is substituted the following:
"'Working Capital Loan' shall mean the loan or
loans up to but not exceeding the principal
amount of $40,000,000.00 made to the Borrowers by
the Bank pursuant to and in accordance with the
terms of this Agreement."
(c) Section 2.01 of the Loan Agreement is hereby deleted and, in
lieu thereof, there is substituted the following:
"SECTION 2.01. The Loans. The Bank agrees from
time to time during the applicable Revolving
Period to lend to the Borrowers, upon the request
of either Borrower, or pursuant to the Cash
Management Agreement, on the terms and conditions
set forth herein, with respect to the Revolving
Loan, up to the maximum principal amount of
$6,000,000.00 and, with respect to the Working
Capital Loan, up to the lesser of (i)
$40,000,000.00 or (ii) the amount of the
Borrowing Base. During the Revolving Period, the
Borrowers shall be entitled to receive the entire
proceeds of the Loans in one or more Advances
pursuant to Section 2.02 hereof, except as
otherwise specifically set forth in this
Agreement. Advances under the Revolving Loan and
the Working Capital Loan shall be evidenced by
the Revolving Note and the Working Capital Note,
respectively, payable as provided in Section 2.08
hereof. After the expiration of the Revolving
Period, the Borrowers shall not be entitled to
receive any Subsequent Advance. The Loans may
revolve during the Revolving Period; accordingly,
during the Revolving Period, the Borrowers may
borrow up to the maximum principal amount of said
Loans, repay all or any portion of such principal
amount of said Loans, and reborrow up to such
maximum principal amount, subject to the terms
and conditions set forth herein."
2. Capitalized Terms. All capitalized terms contained herein shall
have the meanings assigned to them in the applicable Loan Documents (as
defined in the Loan Agreement) unless the context herein otherwise
dictates or unless different meanings are specifically assigned to such
terms herein.
3. Representations and Warranties. Each of the Borrowers represents
and warrants as follows:
(a) The execution, delivery and performance of this Third
Amendment to Loan Agreement and the other loan documents provided to the
Bank in connection therewith has been duly authorized by all requisite
action of the Borrowers; and
(b) The Loan Documents are valid, legal binding obligations of
the Borrowers enforceable in accordance with their terms. There are no
defenses, counterclaims, rights of setoff or recoupment thereunder.
4. Loan Fee. Upon execution of this Third Amendment to Loan
Agreement, the Borrowers shall pay a loan fee of $12,500.00, which amount is
equal to one-eighth percent (0.125) of the amount of the increase of the
Working Capital Loan.
5. Miscellaneous. The Borrowers hereby confirm the terms conditions,
representations and warranties of the Loan Agreement. The Loan Agreement,
as amended hereby, shall remain in full force and effect and this Third
Amendment to Loan Agreement shall not be deemed to be a novation.
6. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
IN WITNESS WHEREOF, the parties have executed the Third Amendment to
Loan Agreement as of the day and year first above written.
BORROWERS:
ORANGE-CO, INC., a Florida corporation
By: Dale A. Bruwelheide
-----------------------------------
Dale A. Bruwelheide, Vice President
ATTEST
John R. Alexander
____________________________
John R. Alexander, Secretary
(CORPORATE SEAL)
ORANGE-CO OF FLORIDA, INC., a Florida corporation
By: Dale A. Bruwelheide
-----------------------------------
Dale A. Bruwelheide, Vice President
ATTEST
John R. Alexander
____________________________
John R. Alexander, Secretary
(CORPORATE SEAL)
BANK:
SUN BANK, NATIONAL ASSOCIATION
By: William A. Mang
-------------------------------
William A. Mang, Vice President
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