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 March 31, 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)
(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
May 12, 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
March 31, 1995 (unaudited) and September 30, 1994 (audited)
Consolidated Statements of Operations (unaudited) 4
Six and Three Months ended March 31, 1995 and 1994
Consolidated Statements of Cash Flows (unaudited) 5
Six Months ended March 31, 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 4
Submission of Matters to a Vote of Security Holders 16
ITEM 6
Exhibits and Reports on Form 8-K 16
SIGNATURES 16
-2-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ORANGE-CO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
March 31, September 30,
1995 1994
ASSETS (unaudited) (audited)
<S> <C> <C>
Current assets:
Cash and short-term investments $ 940 $ 765
Receivables 8,969 7,119
Advances on fruit purchases 203 475
Inventories 36,779 43,551
Prepaid and other 212 41
--------- ---------
Total current assets 47,103 51,951
--------- ---------
Property and equipment, net 103,864 101,266
--------- ---------
Other assets:
Excess of cost over net assets of
acquired companies 11,966 12,155
Property held for disposition 1,282 1,864
Other 2,781 2,168
--------- ---------
Total other assets 16,029 16,187
--------- ---------
Total assets $166,996 $169,404
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments on long-term debt $ 2,132 $ 2,136
Note payable to bank 2,000 4,000
Accounts payable 4,790 4,258
Accrued liabilities 7,318 10,121
--------- ---------
Total current liabilities 16,240 20,515
Deferred income taxes 20,925 19,317
Other liabilities 368 276
Long-term debt 34,884 38,499
--------- ---------
Total liabilities 72,417 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 18,470 14,688
--------- ---------
95,062 91,280
Less:
Treasury stock, at cost: 50,924 shares
at March 31, 1995 and September 30, 1994 (483) (483)
--------- ---------
Total stockholders' equity 94,579 90,797
--------- ---------
Total liabilities and stockholders'
equity $166,996 $169,404
========= =========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
-3-
ORANGE-CO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX AND THREE MONTHS ENDED MARCH 31, 1995 AND 1994
(unaudited)
(in thousands except for per share data)
<TABLE>
<CAPTION>
Six Months Three Months
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Sales $60,112 $34,001 $29,539 $18,289
Cost of sales 51,231 28,227 23,178 16,170
-------- -------- -------- --------
Gross profit 8,881 5,774 6,361 2,119
Other costs and expenses, net:
Selling, general and
administrative (2,259) (1,967) (1,186) (995)
Gain(loss) on disposition of
property and equipment 509 446 83 (33)
Other 8 9 - 9
Interest (915) (629) (368) (347)
-------- ------- ------- --------
Income from continuing operations
before income taxes 6,224 3,633 4,890 753
Income tax expense 2,442 1,397 1,886 258
--------- -------- -------- --------
Net income from continuing
operations 3,782 2,236 3,004 495
Discontinued operations:
Net income(loss)from operations of
discontinued Petroleum Division,
{net of applicable income tax
expense (benefit) of $(13)
and $2} - (22) - 2
-------- -------- -------- --------
Net income $ 3,782 $ 2,214 $ 3,004 $ 497
======== ======== ======== ========
Net income per common and common
equivalent shares:
Continuing operations $ .37 $ .21 $ .29 $ .05
-------- -------- -------- --------
Discontinued operations $ - $ - $ - $ -
-------- -------- -------- --------
Net income $ .37 $ .21 $ .29 $ .05
======== ======== ======== ========
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-
ORANGE-CO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED MARCH 31, 1995 AND 1994
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,782 $ 2,214
-------- --------
Adjustments to reconcile net income to net
cash provided by (used for) operating
activities:
Depreciation and amortization 2,057 1,811
Deferred income taxes 1,608 902
(Gain) on disposition of property and
equipment and other (509) (450)
Change in assets & liabilities:
(Increase)decrease in receivables (1,850) 715
Decrease in advances on fruit purchases 272 1,252
(Increase)decrease in inventory 6,772 (19,225)
(Increase) in prepaid and other (171) (145)
(Decrease) in accounts payable and
accrued liabilities (2,271) (1,679)
Other, net (389) (359)
-------- --------
Total adjustments 5,519 (17,178)
-------- --------
Net cash provided by (used for)
operating activities 9,301 (14,964)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property & equipment 41 672
Proceeds from sale of property held for
disposal 714 -
(Increase) in note & mortgage receivables (200) (128)
Additions to property & equipment (4,062) (7,594)
-------- --------
Net cash (used for) investing activities (3,507) (7,050)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from (payments on) short-term debt (2,000) 5,000
Proceeds from (payments on) long-term debt (3,619) 16,664
-------- --------
Net cash provided by (used for) financing
activities (5,619) 21,664
-------- --------
NET INCREASE(DECREASE) IN CASH AND CASH
EQUIVALENTS 175 (350)
-------- --------
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 765 1,071
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 940 $ 721
======== ========
</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 March 31, 1995
. Audited Consolidated Balance Sheet at September 30, 1994
. Unaudited Consolidated Statements of Operations for the six
and three month periods ended March 31, 1995 and 1994.
. Unaudited Consolidated Statements of Cash Flows for the six
month periods ended March 31, 1995 and 1994.
2. NOTES PAYABLE AND LONG-TERM DEBT
As of March 31, 1995, the Company had access to a $40 million
working capital credit facility payable in January, 1997. Accordingly,
the balance at March 31, 1995 was classified as long-term. This
facility is collateralized by most of the Company's current assets.
The outstanding balance at March 31, 1995 was approximately $18,333,000
and approximately $16,693,000 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.
Additionally, as of March 31, 1995 the Company had a $6,000,000
short-term capital revolving credit facility to provide interim
financing for capital projects. As of March 31, 1995 the balance on
this facility was $2,000,000. The interest rate on this facility is
variable based upon the financial institution's cost of funds plus a
margin.
At March 31, 1995, the Company's outstanding long-term debt
(including the $18,333,000 balance on the working capital line of
credit facility) was approximately $37,016,000, of which $2,132,000
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
$921,000 and $656,000 for the six months ended March 31, 1995 and
1994, respectively. Interest capitalized was approximately $219,000
and $279,000 for the six months ended March 31, 1995 and 1994
respectively.
Certain mortgage agreements contain loan covenants. At March
31, 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):
March 31, September 30,
1995 1994
<S> <C> <C>
Finished goods $29,133 $34,201
Fruit-on-tree inventory 6,336 6,982
Other 1,310 2,368
------- -------
Total $36,779 $43,551
======= =======
</TABLE>
As of March 31, 1995 the Company held contracts for net frozen
concentrated orange juice ("FCOJ") futures positions totaling
approximately $12,415,000 with unrealized gains of approximately
$727,000. 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 March 31, 1995
deposits with brokers totaled $362,500.
4. BUSINESS SEGMENTS
<TABLE>
<CAPTION>
Segment financial data for the six and three months ended March
31, 1995 and 1994, except for total assets which are as of March 31,
1995 and September 30, 1994.
SEGMENT FINANCIAL DATA
(in thousands)
Petroleum
and Related
Citrus Products Total
<S> <C> <C> <C> <C>
Sales Six months ended 3/31/95 $ 60,112 $ - $ 60,112
Three months ended 3/31/95 29,539 - 29,539
Six months ended 3/31/94 34,001 6,765 40,766
Three months ended 3/31/94 18,289 3,443 21,732
Operating Six months ended 3/31/95 6,622 - 6,622
Profit Three months ended 3/31/95 5,175 - 5,175
Six months ended 3/31/94 3,807 - 3,807
Three months ended 3/31/94 1,124 - 1,124
Total Assets March 31, 1995 166,996 - 166,996
September 30, 1994 169,404 - 169,404
Depreciation Six months ended 3/31/95 2,057 - 2,057
& amortization Three months ended 3/31/95 1,029 - 1,029
Six months ended 3/31/94 1,737 74 1,811
Three months ended 3/31/94 874 32 906
Capital Six months ended 3/31/95 4,062 - 4,062
expenditures Three months ended 3/31/95 1,498 - 1,498
Six months ended 3/31/94 7,574 18 7,592
Three months ended 3/31/94 3,350 8 3,358
</TABLE>
Intersegment sales approximate market and are not significant.
-7-
<TABLE>
<CAPTION>
RECONCILIATION OF OPERATING PROFIT TO INCOME BEFORE INCOME TAXES:
(in thousands)
Six Months Three Months
Ended March 31, Ended March 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Operating profit $6,622 $3,807 $5,175 $1,124
Gain(loss) on disposition
of property and equipment 509 446 83 (33)
Other 8 9 - 9
Interest (915) (629) (368) (347)
------- ------- ------- -------
Income from continuing
operations before income taxes $6,224 $3,633 $4,890 $ 753
====== ======= ======= =======
</TABLE>
During the six and three month periods ended March 31, 1995, the
Company had two customers who individually accounted for
approximately 17.4% and 13.0%, and 17.3% and 14.7% of total sales
for the respective periods. During the six and three month periods
ended March 31, 1994, the Company had a customer who individually
accounted for approximately 26.7% and 24.2% of total sales for the
respective periods.
5. INCOME TAXES
<TABLE>
<CAPTION>
The provision for income taxes for continuing and discontinued
operations for the six and three month periods ended March 31, 1995
and 1994 is summarized as follows (in thousands):
Six Months Three Months
Ended March 31, Ended March 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Current:
Federal income tax $ 786 $ 109 $ 756 $ 40
State income tax 49 18 49 7
------ ------ ------ ----
Total $ 835 $ 127 $ 805 $ 47
------ ------ ------ ----
Deferred:
Federal income tax 1,420 1,143 949 196
State income tax 187 114 132 17
------ ------ ------ ----
Total $1,607 $1,257 $1,081 $213
------ ------ ------ ----
Total provision for
income taxes $2,442 $1,384 $1,886 $260
====== ====== ====== ====
</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 six and three month periods ended
March 31, 1995 and 1994 (in thousands):
Six Months Three Months
Ended March 31, Ended March 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Expected income tax $2,116 $1,223 $1,662 $258
Increase(decrease) resulting from:
State income taxes, net of
federal tax benefit 236 134 183 25
Loss on foreign investments 24 36 8 14
Permanent items and other 66 (9) 33 (37)
------ ------- ------ -----
Total provision for income taxes $2,442 $1,384 $1,886 $260
====== ======= ====== =====
</TABLE>
-8-
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 fiscal 1993, the Company decided to
sell the Petroleum Division comprised of Frank Carroll Oil Company.
The sale of all the capital stock of Frank Carroll Oil Company was
completed effective September 30, 1994. The Consolidated Statements
of Operations for the six and three month periods ended March 31,
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.
-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>
Six Months (YTD) and Three Months (QTR) Ended March 31, 1995
vs Six Months (YTD) and Three Months (QTR) Ended March 31, 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 $25,689 $11,340 $22,671 $7,105 $3,018 $4,235
Grove Management Division 422 (90) 333 (97) 89 7
------- -------- ------- ------- ------- -------
Gross Profit From
Continuing Operations $26,111 $11,250 $23,004 $7,008 3,107 4,242
======= ======== ======= =======
Other costs and expenses, net:
Selling, general and administrative (292) (191)
Gain on disposition of property and equipment 63 116
Other income and expenses (1) (9)
Interest (286) (21)
------- -------
Income from continuing operations before income taxes 2,591 4,137
Provision for income taxes from continuing operations (1,045) (1,628)
------- -------
Net income from continuing operations $1,546 $2,509
======= =======
</TABLE>
RESULTS OF OPERATIONS
SALES
Sales for the six and three month periods ended March 31, 1995
increased approximately $26,111,000 or 76.8% and approximately
$11,250,000 or 61.5%, respectively compared to the same periods in
the prior year. The Beverage Division accounted for the principal
increase for the six month period with increased sales of
approximately $25,689,000. Grove Management Division sales
increased approximately $422,000 for the six month period. The
Beverage Division accounted for the principal increase for the
current three month period with an increase in sales of
approximately $11,340,000. This increase was partially offset by a
decrease in Grove Management Division sales of approximately
$90,000.
BEVERAGE DIVISION The Beverage Division sales increased
approximately $25,689,000 or 80.7% and $11,340,000 or 66.5% in the
current six and three month
-10--
respective periods compared to the same periods in the prior year.
Of these increases revenues from the sale of the Company's bulk
citrus juice products increased approximately $18,750,000 and
$6,613,000 during the current six and three month respective
periods as a result of offsetting increases and decreases. As
a part of these increases, revenues from the volume of bulk
citrus products sold increased approximately $20,912,000 and
$6,263,000 during the current six 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 increase in volume during the current six month period
was partially offset by decreased prices for bulk citrus juice
products of approximately $2,162,000 compared to the same period in
the prior year. During the current three month period an increase
in prices resulted in an increase in revenues of approximately
$350,000 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. This
estimate by the USDA was most recently revised in May 1995 to
approximately 204,700,000 boxes of round oranges which, if true,
will be historically the second largest Florida crop.
Sales of the Company's packaged citrus juices sold increased
approximately $359,000 and $347,000 during the current six and three
month respective periods compared to the same periods in the prior
year. Higher volumes of these products sold resulted in increases
in revenues of approximately $429,000 and $412,000 during the
current six and three month periods. Partially offsetting these
increases in volumes were decreases in prices of approximately
$70,000 and $65,000 during the current respective periods.
The Company's non-orange packaged juices and drink base sales
increased approximately $1,027,000 and $661,000 during the current
six and three month periods compared to the same periods in the
prior year. The volume of sales of these non-orange packaged juices
and drink base products increased approximately $1,340,000 and
$728,000 during the current six and three month periods principally
as a result of an improved sales program for the Company's drink
base products. This increase in volume was partially offset by
price decreases of approximately $313,000 and $67,000 during the
current six and three month respective periods.
Revenues from the sale of the Company's by-products, including
feed, pulp cells, and citrus oils, increased approximately
$3,459,000 and $2,676,000 during the current six and three month
periods compared to the same periods in the prior year. These
increases in revenues, were due in part to increases in the volume
of by-products being produced and sold, of approximately $1,962,000
and $1,673,000 during the current six and three month periods.
Revenues also increased approximately $1,497,000 and $1,003,000
during the current six and three month periods as a result of higher
prices for by-products sold compared to the same periods in the
prior year.
Storage, handling, processing citrus for customers under
contract, and other revenues increased approximately $2,094,000 and
$1,043,000 during the current six 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 performed
during the current six and three month periods compared to the same
periods in the prior year resulting from the earlier start of the
processing season and increased tank farm capacity.
GROVE MANAGEMENT DIVISION Grove Management sales increased
approximately $422,000 or 19.5% for the current six month period and
decreased by approximately $90,000 or 7.3% for the current three
month period compared to the same periods in the prior year. The
principal increase during the current six month period of
approximately $307,000 was due primarily to an increase in
harvesting revenues. However, harvesting revenues during the
current three month period decreased by
-11-
approximately $66,000. Revenues from grove caretaking activities
increased approximately $115,000 and $84,000 during the current
six month and three month periods. During the current three month
period revenues from the sale of fruit to third party packers and
processors decreased by approximately $108,000 compared to the same
period in the prior year.
GROSS PROFIT
Gross profit for the six and three month periods ended March 31,
1995 increased approximately $3,107,000 or 53.8% and $4,242,000 or
200.2%, respectively, compared to the same periods in the prior
year. The principal increases of approximately $3,018,000 and
$4,235,000 during the current six and three month respective periods
occurred in the Beverage Division. Gross profit for the Grove
Management Division increased during the current six and three month
periods by approximately $89,000 and $7,000, respectively.
BEVERAGE DIVISION Gross profit of the Beverage Division increased
approximately $3,018,000 and $4,235,000 for the current six 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 six and three month respective periods of approximately
$1,258,000 and $2,861,000 from the sale of bulk citrus juice
products. Of the increase during the current six month period
approximately $2,419,000 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. Partially offsetting this increase
was a decrease in gross profit of approximately $2,162,000 resulting
from decreased prices for bulk citrus juice products during the
current six month period compared to the same period in the prior
year. However, an increase in prices for bulk citrus juice products
during the current three month period resulted in an increase in
gross profit of approximately $350,000 compared to the same period
in the prior year. Additionally, gross profit increased
approximately $1,001,000 and $2,511,000 during the current six 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.
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 March 31, 1995 the Company held contracts for FCOJ
futures with unrealized gains of approximately $727,000 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.
Gross profit on the sale of packaged citrus juice products sold
primarily to the food service industry decreased approximately
$579,000 and $72,000 during the current six and three month
respective periods compared to the same periods in the prior year.
Of these decreases, approximately $70,000 and $65,000 were a result
of decreased prices during the current six and three month periods.
Additionally, increases in volume combined with higher cost of
carryover inventories resulted in decreases in gross profit of
approximately $509,000 and $7,000 from the prior year during the
current six and three month periods respectively, compared to the
same periods in the prior year.
Gross profit from the sale of the Company's non-orange packaged
juices and drink base products decreased approximately $149,000 and
$107,000 during the
-12-
current six and three month respective periods compared to the same
periods in the prior year. These decreases were principally a result
of lower prices.
By-products provided an increase in gross profit of approximately
$1,941,000 and $1,394,000 during the current six 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 and higher volume of sales in the current six and
three month periods compared to the same periods in the prior year.
In part the volume increases resulted from an earlier start of the
processing season previously mentioned. Gross profit from storage,
handling, and other activities also increased by approximately
$547,000 and $159,000 during the current six and three month periods
due to an increase in these activities compared to the same periods
in the prior year.
GROVE MANAGEMENT DIVISION Grove Management gross profit for the six
and three month periods increased approximately $89,000 and $7,000
compared to the same periods in the prior year. These increases
principally resulted from sales of fruit to third party packers and
processors which increased approximately $65,000 and $5,000 for the
current six and three month periods principally as a result of a
reduction in the cost of fruit sold and higher volumes sold.
The remaining increases in gross profit of $24,000 and $2,000
resulted from activities in harvesting and grove caretaking
services.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased approximately
$292,000 or 15% and $191,000 or 19% for the current six and three
month periods, compared to the same periods in the prior year.
These increases were primarily caused by increased staffing and
other costs.
GAIN/(LOSS) ON DISPOSITION OF PROPERTY AND EQUIPMENT
The increased gain on the disposition of property, equipment and
other of approximately $63,000 for the six month period and
approximately $116,000 for the three month period ending March 31,
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 $286,000 or 45% and
$21,000 or 6% in the current six and three month periods
respectively, compared to the same periods in the prior year. The
primary increases of approximately $365,000 and $91,000 in the
current respective periods were the result of increases in
outstanding debt. Additionally, decreases in capitalized interest
resulted in increases of approximately $60,000 and $79,000 in the
current six and three month respective periods. Partially
offsetting these increases were decreases of approximately $67,000
and $99,000 for the current six and three month periods
respectively, which were due to decreases in interest rates. Also
offsetting these increases were reductions in amortization of
deferred loan costs and other interest related charges in the amount
of $72,000 and $50,000 in the current respective periods.
-13-
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.
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 March 31,
1995 was approximately $18,333,000 and approximately $16,693,000 of
additional borrowings were available under this facility. 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.
Additionally, as of March 31, 1995 the Company had a $6 million
short-term capital revolving credit facility to provide interim
financing for capital projects. As of March 31, 1995 the
outstanding balance on this facility was $2,000,000. The interest
rate on this facility is variable based upon the financial
institution's cost of funds plus a margin. The terms of this
facility call for repayment of the principal amount in January 1996.
Current assets decreased approximately $4,848,000 as of March 31,
1995 compared to September 30, 1994. The principal component of this
was a decrease in inventories of approximately $6,772,000 in the first
six months of the current year due to the previously mentioned increases
in sales and reduced costs. The Company's accounts receivable balance
increased approximately $1,850,000 compared to the fiscal year end.
Additionally, there was an increase in cash and short-term cash
investments of approximately $175,000. Advances on fruit purchases
decreased approximately $272,000 as the Company began processing the
purchased fruit and collected these advances.
Current liabilities decreased during the first six months of
fiscal 1995 approximately $4,275,000 compared to September 30, 1994.
The principal reason for this decrease was due to payments of $2,000,000
on the previously mentioned short-term capital revolving credit
facility and payment of accrued expenses associated with fruit
purchased during the previous season.
Long-term debt decreased approximately $3,615,000 during the
current six month period. This was principally the result of a
decrease of approximately $2,644,000 on the Company's long-term
working capital facility. There was also a decrease of
approximately $971,000 which represents scheduled principal payments
made on long-term debt during the six month period.
At March 31, 1995 the Company's outstanding long-term debt was
approximately $34,884,000 including the working capital facility of
approximately $18,333,000. In addition current installments of long-
term debt were approximately $2,132,000 with the remaining amounts
due on various dates over the subsequent seventeen years. The
Company anticipates that amounts due over the next twelve months
will be paid out of working capital. At March 31, 1995 the Company
was in compliance with its loan covenants.
The Company completed the installation of new irrigation systems
on 1,002 acres of Company-owned groves, purchased new grove
equipment, and made improvements in the efficiency and capacity of
the Bartow processing facility
-14-
totaling approximately $3,392,000 during the first six months of
the current fiscal year. Irrigation improvements to an additional
1,065 acres are currently under consideration. 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 was
most recently revised again in May 1995 to approximately 204,700,000
boxes which, if true, will be historically the second largest Florida
crop.
-15-
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
<TABLE>
<CAPTION>
At the Annual Meeting of Stockholders on February 23, 1995, the
stockholders of the Company elected directors. The results of these
votes were as follows:
DIRECTOR NOMINEES FOR AUTHORITY WITHHELD
<S> <C> <C>
John R. Alexander 9,264,316 83,758
Richard A. Coonrod 9,265,536 82,538
Paul E. Coury, MD 9,261,160 86,914
Ben Hill Griffin, III 9,265,100 82,974
George W. Harris, Jr. 9,264,536 83,538
Dr. W. Bernard Lester 9,265,536 82,538
Gene Mooney 9,262,406 85,668
C. B. Myers, Jr. 9,261,098 86,976
Thomas H. Taylor 9,265,532 82,542
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
Exhibit No. EXHIBIT Page No.
<S> <C> <C>
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: May 15, 1995 By: /s/ Gene Mooney
-----------------
Gene Mooney
President and
Chief Operating Officer
Date: May 15, 1995 By: /s/ Dale A. Bruwelheide
------------------------
Dale A. Bruwelheide
Vice President and
Chief Financial Officer
-16-
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000004507
<NAME> ORANGE-CO, INC.
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> MAR-31-1995
<EXCHANGE-RATE> 1
<CASH> 940
<SECURITIES> 0
<RECEIVABLES> 9,237
<ALLOWANCES> (268)
<INVENTORY> 36,779
<CURRENT-ASSETS> 47,103
<PP&E> 137,898
<DEPRECIATION> 34,034
<TOTAL-ASSETS> 166,996
<CURRENT-LIABILITIES> 16,240
<BONDS> 0
<COMMON> 76,592
0
0
<OTHER-SE> 18,470
<TOTAL-LIABILITY-AND-EQUITY> 166,996
<SALES> 60,112
<TOTAL-REVENUES> 60,112
<CGS> (51,231)
<TOTAL-COSTS> (51,231)
<OTHER-EXPENSES> (1,742)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (915)
<INCOME-PRETAX> 6,224
<INCOME-TAX> (2,442)
<INCOME-CONTINUING> 3,782
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,782
<EPS-PRIMARY> .37
<EPS-DILUTED> .37
</TABLE>
