UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-K
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For the Fiscal Year Ended September 30, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (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 59-0918547
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
2020 U.S. Highway 17 South
P.O. Box 2158
Bartow, Florida 33831 (941)533-0551
(Address of principal executive offices) (Registrant's telephone no.)
Securities registered pursuant to Section 12(b) of the Act: Common Stock,
$.50 par value
Securities registered pursuant to Section 12(g) of the Act: NONE
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 X No
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K.
[ ]
Aggregate market value of the common stock held by non-affiliates of
Registrant at December 4, 1996 (based on the closing price on
December 4, 1996): $37,834,313.
Number of shares outstanding of common stock, $.50 par value, as of
December 4, 1996: 10,301,975 shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents are incorporated by reference in
Part III of this Annual Report on Form 10-K: Proxy Statement for the
1996 Annual Meeting of Stockholders - Items 10, 11, 12 and 13
ORANGE-CO, INC.
INDEX TO ANNUAL REPORT
ON FORM 10-K
PAGE NO.
Part I
Item 1 - Business 3
Item 2 - Properties 11
Item 3 - Legal Proceedings 11
Item 4 - Submission of Matters to a Vote of Security
Holders 11
Part II
Item 5 - Market for the Registrant's Common Stock
and Related Shareholder Matters 12
Item 6 - Selected Financial Data 12
Item 7 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 14
Item 8 - Financial Statements and Supplementary Data 23
Item 9 - Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 41
Part III
Item 10 - Directors and Executive Officers of the
Registrant 42
Item 11 - Executive Compensation 42
Item 12 - Security Ownership of Certain Beneficial
Owners and Management 42
Item 13 - Certain Relationships and Related
Transactions 42
Part IV
Item 14 - Exhibits, Financial Statement Schedule and
Reports on Form 8-K 43
-2-
PART 1
Item 1. BUSINESS
OVERVIEW
Orange-co, Inc. and subsidiaries (the "Company") is an
integrated citrus company primarily engaged in growing and
processing citrus products as well as packaging and marketing these
products and other beverages. As of November 30, 1996, the Company
owned and managed approximately 16,006 acres of Florida citrus
groves and the fruit harvested therefrom. The production from these
groves is principally used in the Company's citrus processing
operations in Bartow, Florida (the "Bartow Plant"). This processing
facility has concentrate, blending, single strength not from
concentrate ("NFC") juice, by-products, packaging and storage
operations providing the versatility to make many citrus and related
beverage products for sale in a variety of markets. The Company
also packages and sells non-citrus beverages to complement the
citrus related products supplied to its customers in the food
service business. Additionally, the Company offers a line of
formulated citrus and non-citrus beverage bases for reconstitution
by industrial and retail packers. The Company entered the
formulated beverage base business in August 1993 with the purchase
of all of the capital stock of International Fruit, Inc.
The Company's processed juice production has typically varied
from season to season depending on the size of the Florida crop, the
Company's crop and other conditions in the industry. The Florida
citrus industry experiences fluctuations, which can be wide ranging,
in the size of the citrus crop harvested from season to season
causing fluctuations in citrus juice prices and therefore presenting
significant variations in industry economic conditions and
opportunities. The Company's fruit production from its groves has
fluctuated in a manner similar to the Florida citrus industry. It
is anticipated that the continuing rehabilitation of the Company's
groves, located in DeSoto, Charlotte and Polk Counties, Florida,
which began in 1992, will provide relatively more fruit from the
Company's groves in the coming years as these efforts take effect.
As the Company enters the 1996-97 season, the United States
Department of Agriculture ("USDA") has announced an anticipated
Florida crop of approximately 220,000,000 boxes of round oranges.
It is uncertain what the effect of this size crop will be on the
Company's results for the 1996-97 fiscal year. The 1995-96 crop was
determined to be 203,200,000 boxes.
In May 1992, Stoneridge Resources, Inc. ("Stoneridge"), which
then owned approximately 52% of the Company's outstanding common
shares, sold those shares to Ben Hill Griffin, Inc. and an
affiliate, who collectively held approximately 51% of those shares
as of September 30, 1996. Ben Hill Griffin, Inc. is a privately
owned agribusiness corporation located in Frostproof, Florida.
The Company also had engaged in the sale of petroleum products
at the wholesale and retail level operating through its former
subsidiary, Frank Carroll Oil Company. A sale of all of the capital
stock of Frank Carroll Oil Company was completed effective September
30, 1994. The Petroleum Division, consisting only of Frank Carroll
Oil Company, has been reported as a discontinued operation since the
second quarter of fiscal 1993. (See Note 9 of the Notes to the
Consolidated Financial Statements "Discontinued Operations".)
During fiscal 1996 the Company sold the remaining assets of its
Mexican subsidiary OrancoMex S.A. de C.V. This subsidiary last
operated in 1992. The assets of the subsidiary represent less than
1/2 of 1% of the Company's assets at time of the final sale.
-3-
SALES BY PRODUCT LINE
<TABLE>
<CAPTION>
The following table sets forth the Company's sales by product
line for the past three years (in thousands).
Years Ended September 30,
1996 1995 1994
<S> <C> <C> <C>
Beverage Division $114,035 $106,894 $72,637
Grove Management Division 5,095 4,431 4,119
-------- -------- -------
Sales from Continuing Operations 119,130 111,325 76,756
Discontinued Petroleum Division - - 12,986
-------- -------- -------
Total Sales $119,130 $111,325 $89,742
======== ======== =======
</TABLE>
BEVERAGE DIVISION
The Company produces bulk frozen concentrated orange juice
("FCOJ") and frozen concentrated grapefruit juice ("FCGJ")
(collectively, "concentrate"), NFC orange and grapefruit juice,
reconstituted juices and several citrus by-products at its Bartow
Plant. The production of concentrate principally involves
extracting the juice from the fruit, evaporating most of the water
from the juice and then refrigerating the juice concentrate at the
proper storage temperature. The Bartow Plant's current production
capacity is estimated to be approximately 10,000,000 boxes of fruit
annually.
<TABLE>
<CAPTION>
The production of this facility over the past five years as
measured by boxes processed is as follows:
YEAR BOXES PROCESSED
<S> <C>
1991-92 3,204,000
1992-93 8,149,000
1993-94 9,296,000
1994-95 9,597,000
1995-96 9,978,000
</TABLE>
Over the past five years the Company has increased its
processing activity. This has resulted primarily from a decision by
the Company to obtain fruit from sources in addition to the
Company's groves through purchase contracts and participation
agreements. In addition the Company has increased the capacity of
its Bartow processing facility.
Additionally, in fiscal 1993-94 the Company expanded its bulk
concentrate storage capacity by approximately 3.8 million gallons
providing a total storage capacity of approximately 7.5 million
gallons of bulk frozen concentrated juices.
The Company packages a substantial portion of the processed
concentrate in various containers for sale to major food service
companies for ultimate distribution to restaurants, hotels,
hospitals and other food service customers. The remainder of the
concentrate is sold in bulk to dairies and other industrial users.
Additionally, a portion of the fruit is processed into NFC juice
products. The Company does from time to time, depending upon
conditions then existing in the citrus industry, decide to vary its
sales mix.
Within the food service market, the Company also provides a
full line of beverage products to supplement its traditional
emphasis on orange juice. The
-4-
Company's product line also includes several types of juices,
including; orange, grapefruit, non-citrus beverages such as
grape, apple, cranberry, fruit punch and lemonade, a variety
of 10% to 50% juice base drinks, and liquid concentrated tea.
In July 1996 the Company purchased the Birds Eye and Gold'N'
Rich business, constituting the frozen concentrated juice products
for the foodservice business in the United States, its territories,
Puerto Rico and the U.S. Military operating as a going concern.
Included in this purchase was a partial assignment of the rights
to use the Birds Eye trademark in the territory previously mentioned.
In August 1993 the Company expanded its drink base products to
include a line of citrus and non-citrus formulated frozen
concentrated drink bases sold to dairies and other industrial and
retail packers. This expansion took place through the purchase of
all of the outstanding stock of International Fruit, Inc., an
established producer and marketer of these products.
<TABLE>
<CAPTION>
The following table sets forth the equivalent concentrate and
NFC gallons produced at the Company's plants during each of the last
five seasons. The number of gallons shown is based on a concentrate
factor of 65 degree brix, a measure of the percent of sugar in the
fruit juice.
Bartow Bartow
Plant: Plant:
Processed Processed
Orange Grapefruit
Season Juice Juice Total
<S> <C> <C> <C>
1991-92 4,405,788 29,884 4,435,672
1992-93 6,779,429 479,954 7,259,383
1993-94 7,138,798 968,449 8,107,247
1994-95 7,132,492 844,309 7,976,801
1995-96 7,777,916 652,693 8,430,609
</TABLE>
The sales prices for bulk citrus juice sold by the Company are
determined by market prices which in the past have been subject to
fluctuations which are expected to continue. The Company has, from
time to time, used the frozen concentrate orange juice futures
market to hedge fruit, FCOJ inventory, and purchase and sales
commitments against such fluctuations.
The Bartow Plant also produces several citrus by-products. One
process extracts d'limonene oil (a chemical additive for products
such as paint thinner, cleansers and cosmetics) and other citrus
oils from orange peel and processes the remaining peel and pulp for
sale as cattle feed. A secondary extraction process is also
performed in which juice is extracted from the fruit pulp separated
from the juice during the concentrate operation. This product is
used in the production of an orange pulp wash concentrate (an
ingredient used in beverages consisting of less than 10% natural
juices) and is sold in bulk to various customers. The Bartow Plant
also produces a by-product known as pulp cells, which is sold to
manufacturers for use as a filler and flavor ingredient in citrus
juice products.
The Company operates a cold storage facility at Bartow,
Florida, which is certified by the United States Customs Service for
duty deferred customs storage and by the New York Cotton Exchange as
a delivery point for FCOJ futures
-5-
contracts. As previously mentioned the Company expanded this
facility in February, 1994 by 3.8 million gallons to a total
capacity of 7.5 million gallons of concentrate.
THE GROVES
As of November 30, 1996, the Company owned approximately 13,034
acres of citrus groves and also managed approximately 2,972 acres of
citrus groves owned by other growers (collectively, the "Groves").
The Groves constitute approximately 1.9% of Florida's total grove
acreage which is reported to be 853,742 acres. The following table
lists the locations of the Groves by county and the approximate
number of acres of groves owned by the Company or managed by the
Company for other growers in Florida as of the year ended November
30, 1996.
<TABLE>
<CAPTION>
LOCATION GROVES GROVES
OWNED MANAGED
<S> <C> <C>
Polk County 385 -
DeSoto County 11,785 2,734
Charlotte County 864 238
------ -----
Totals 13,034 2,972
====== =====
</TABLE>
<TABLE>
The following table reflects the production expressed in the
number of 90 pound boxes from Company owned and managed groves for
each of the past five seasons. The Company's harvesting and
processing activities generally begin in November of each year and
continue through the following May or June. This period of
production is referred to herein as a "season".
Average
Season Owned Managed Total Production
Groves Groves Production Per Acre (1)
(in Acres) (in boxes)
<S> <C> <C> <C> <C>
1991-92 11,129 2,494 3,903,000 287
1992-93 11,583 2,544 4,160,000 294
1993-94 11,523 2,695 3,542,218 249
1994-95 11,367 2,611 5,057,925 362
1995-96 11,023 2,396 4,919,459 367
</TABLE>
<F1>
(1)Calculated by dividing total production by total number of
productive grove acres owned and managed as of September 30,
1992, 1993, 1994, 1995 and 1996.
<TABLE>
<CAPTION>
The following table lists the actual Florida crop of round
oranges over the past five seasons expressed in the number of ninety
pound boxes.
SEASON NINETY POUND BOXES
<S> <C>
1991-92 139,800,000
1992-93 186,500,000
1993-94 174,200,000
1994-95 205,400,000
1995-96 203,200,000
</TABLE>
As previously mentioned, the USDA has announced an anticipated
Florida orange crop of approximately 220,000,000 boxes of round
oranges for the 1996-97 season.
-6-
In addition to productive grove acreage, as of November 30,
1996, the Company owns approximately 6,855 acres of land, much of it
in the vicinity of the Groves, of which approximately 2,759 acres
are prepared for citrus planting, approximately 2,487 acres are
suitable for cultivation and 1,609 acres are used as water retention
areas, roadways and similar ancillary uses or are unusable.
The Company's plan calls for, among other actions, the
continued rehabilitation of its citrus acreage thereby increasing
productivity, cash flow and market values. During fiscal 1991 the
Company completed the rehabilitation of 320 acres of the Groves.
During fiscal 1992 through fiscal 1996, the Company accelerated its
rehabilitation of the Groves by planting approximately 603,000 trees
and installing improved irrigation systems covering approximately
6,444 acres through fiscal 1996.
During the past four seasons, substantially all of the fruit
harvested from the Groves was used in the Company's processing
plant. Most of the 1996-97 crop from the Groves is expected to be
used in the Company's processing plant.
GROVE MANAGEMENT
In addition to caring for its own groves, the Company provides
grove care, harvesting and marketing services for groves owned by
others. The Company's grove care services include periodic
application of fertilizers, herbicides and pesticides, monitoring
for diseases and pests, liaison with local water control districts
as to irrigation and drainage requirements and monitoring rainfall
and temperature information. In addition to performing these
services as part of a standard-care contract, the Company also
performs other custom-care services, including trimming, topping,
application of soil conditioners, reshaping of beds and replacement
of damaged or dead trees on an "as needed" basis. As of November
30, 1996 the Company managed 2,321 acres on a standard-care basis
and 651 acres on a custom-care basis.
Grove care contracts generally provide for services at the
Company's cost plus a negotiated fee, usually expressed as a
percentage of cost. Grove care charges are payable monthly. The
Company's grove care contracts are generally short-term in nature or
terminable upon short notice.
The Company enters into marketing contracts with growers
("participation contracts"), whereby the Company purchases the fruit
for a price to be determined by the proceeds ultimately received by
the Company for the products sold from that season's fruit less
production and overhead costs, industry assessments and a service
fee. These contracts are generally renewable annually and are
terminable upon short notice. The Company's remaining fruit
purchases are either made under annual contracts that provide for
purchase based upon market prices prevailing at the time of the
agreement or are made on a "spot" basis.
PETROLEUM PRODUCTS AND RELATED BUSINESSES
Prior to fiscal 1995 the Company was engaged in the wholesale
and retail sale of petroleum products through a subsidiary, Frank
Carroll Oil Company ("Carroll Oil"). The Company completed the sale
of 100% of Carroll Oil stock effective September 30, 1994 for total
proceeds of approximately $966,000 in cash and notes and accordingly
is no longer engaged in the sale and distribution of petroleum
products.
-7-
EMPLOYEES
As of November 30, 1996, the Company employed approximately 250
full-time, non-seasonal employees in production-related activities,
including its operations at the Bartow Plant and its grove
management operations. The Company also employs approximately 90
administrative personnel. The number of employees increases to
approximately 480 during the Company's peak period of operations.
Management believes that relations between the Company and its
employees are good.
GENERAL INFORMATION REGARDING CITRUS OPERATIONS
AGRICULTURAL CONDITIONS The citrus industry is subject to various
factors over which growers and processors have limited or no
control, including weather conditions, disease, pestilence and water
supply. Although the subtropical Florida climate generally favors
cultivation of citrus fruit, no citrus-producing area of Florida is
immune from weather conditions which can damage citrus trees and
fruit. In the past, damaging frosts or freezes have occurred
throughout Florida. A freeze can adversely affect the productivity
of groves for the year in which it occurs and for several years
thereafter by causing tree damage or destruction. Other weather
conditions which could adversely affect the groves and grove
production include, but are not limited to, drought, excessive
moisture, hurricanes, wind and hail. The Company does maintain
limited crop insurance. The Company however, does not maintain
insurance on its trees.
MARKET PRICE FLUCTUATIONS Market prices for processed citrus juice
are subject to fluctuations. The variation in the size of the
citrus crop as previously mentioned has in the past resulted in
large changes in the price of FCOJ, FCGJ and related products.
Market prices are highly sensitive to crop sizes as well as other
factors such as weather and competition from foreign crops.
The Company has from time to time used the FCOJ futures market
to hedge fruit and FCOJ inventory to reduce price risk. Under this
program the Company may enter into sales contracts on the FCOJ
futures market in relation to its current and future orange juice
concentrate inventories to offset anticipated fluctuations in
concentrate prices, thereby protecting margins in advance of actual
sale and delivery. Additionally, the Company may enter into
purchase contracts for FCOJ on the futures market to reduce the
price risk and assure an adequate supply of purchased FCOJ.
The Company maintains accounts with brokers which have deposit
maintenance requirements that can fluctuate as a result of changes
in the price of FCOJ futures, which can affect liquidity.
GOVERNMENTAL REGULATIONS Fresh citrus fruit and processed juice are
produced and marketed under strict federal and state regulations and
supervision. The Company has experienced no difficulties in
complying with these regulations.
All property in the State of Florida is subject to the
jurisdiction of water management districts which manage water to
maximize its supply, quality and flood protection. Currently all
necessary water permits have been obtained for the Groves. In the
event of a water shortage, the water management districts have the
authority to restrict water usage in the Groves which could have a
material adverse effect upon the Groves and their production of
fruit. Certain of the Groves are also located within local
water management districts which are established either
by the Florida Department of Natural Resources or by the
landowners themselves. The water management districts primarily
regulate the drainage and irrigation of the lands within each
district and make annual
-8-
assessments on the landowners for the costs of related
improvements, maintenance and operations.
Certain provisions of the Immigration Reform and Control Act of
1986 could limit the availability of seasonal labor necessary to
harvest the Company's crops. The Company has not experienced a
shortage of seasonal labor to date and does not anticipate a
shortage during the 1996-97 season.
During fiscal 1996 and 1995 the Company spent approximately
$505,000 and $231,000 respectively, on its spray field system for
disposing of waste water at the Bartow facility and on other
environmental matters of which approximately $335,000 was
capitalized during fiscal 1996. The Company anticipates the
expenditure of approximately an additional $500,000 during fiscal
1997 on the new system and other environmental matters.
SEASONALITY AND WORKING CAPITAL The citrus industry is seasonal,
with the Company harvesting fruit and processing it into juice from
November through June. The juice is stored and sold throughout the
year and revenue levels are sometimes affected by seasonal price
movements. In contrast, the value-added food service business has
relatively small seasonal variations.
Inventories of processed juice are accumulated during each
season to enable the Company to cover sales and deliveries through
the beginning of the production cycle in the next season. This
cyclical peaking of processed juice inventories generally results in
a need for larger amounts of working capital during certain times of
the year. The Company principally uses a line of credit to finance
inventories. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital
Resources."
COMPETITION The Company competes with numerous growers and
processors, some of which are larger than the Company. Price,
quality and marketing are the principal competitive factors in
selling processed juices. The Company believes that its production
capacity and efficiencies, when fully utilized, enhance its ability
to compete. Because of the size of the domestic citrus industry, no
individual grower or processor can exercise appreciable influence
over the selling price of the Company's bulk citrus products nor the
price of its fruit. However, the market for the Company's value-
added beverage products sold to food service customers is
characterized by fewer producers, some of which are significantly
larger than the Company and can influence the market price for these
products. Although the Company accounted for approximately 5.9% of
Florida FCOJ production during the 1995-96 season, several other
producers accounted for greater percentages. Foreign processors
of concentrate, particularly Brazilian, are believed to produce
concentrate at a lower cost than that produced in the United States.
Brazilian processors may also receive subsidies from the Brazilian
government to which there are no comparable benefits received by
domestic processors. The effect of these cost advantages is
partially diminished by a United States import tariff.
Nevertheless, because of the volume of their exports to the United
States and other countries and their lower cost of production,
Brazilian producers may affect the selling prices for concentrate,
and Brazilian exports of concentrate have been viewed by many in the
industry as a competitive threat to domestic processors. Even so,
the Company considers Brazilian exports to be a potential source of
supply during periods when domestic citrus products are unavailable
or in short supply. The Company believes that the continued
development of markets for concentrate, such as Japan and Europe,
may offset to some extent the impact of Brazilian competition.
-9-
The North American Free Trade Agreement ("NAFTA") with Mexico,
which was implemented in January 1994, provides for the elimination
of United States tariffs on citrus products imported into the
United States from Mexico over a 15 year period which could increase
competition for domestic suppliers.
The Company has several registered trademarks which are not
currently in use. As previously mentioned the Company obtained the
Birds Eye and the Gold 'N' Rich trademarks for use in the
foodservice juice business.
FOREIGN AND DOMESTIC OPERATIONS The Company derived approximately
8.3% 13.6%, and 15.2% of its revenue from foreign sales during
fiscal 1996, 1995, and 1994 respectively. All of the Company's
foreign sales are from its Florida operations.
Substantially all of the Company's assets are located in the
State of Florida.
BUSINESS SEGMENTS During fiscal 1996 and 1995 the Company's gross
sales, net income and assets were wholly attributable to its citrus
business only. The Company has two customers that accounted for
20.5% and 17.6% of the citrus segment's revenue for fiscal 1996.
Relationships between the Company and these two customers are
currently good and are expected to remain so. All other customers in
the citrus segment individually account for less than 10% of total
sales for this segment. For further information on significant
customers over 10% of total Company Sales see Note 1 of the Notes to
Consolidated Financial Statements "Summary of Significant
Accounting Policies".
-10-
Item 2. PROPERTIES
<TABLE>
<CAPTION>
The following table sets forth certain information regarding
the principal properties owned by the Company and its wholly owned
subsidiaries as of November 30, 1996.
Location General Character Approximate Size
<S> <C> <C>
Polk, Charlotte and Citrus groves and 19,653 acres
DeSoto, Counties, FL(1) related acreage
Bartow, FL (1) Citrus processing plant 514 acres
80,000 boxes per day
average capacity
Concentrate storage 7,500,000 gallon
facility storage capacity
DeSoto County, FL Undeveloped land 967 acres
</TABLE>
<F1>
(1)Portions of these properties are encumbered by certain mortgages.
Management believes that the Company's Bartow plant and related
storage facilities are in good operating condition and are adequate
to support its current operations.
The Company has a program to consolidate certain of its grove
holdings into more contiguous and efficient parcels and has begun
the rehabilitation of selected parcels through the installation of
more effective irrigation systems and significant replanting of
citrus trees. The Company has also committed to certain other
improvements including those to its Bartow citrus processing
facility (See Management's Discussion and Analysis of Financial
Condition and Results of Operations: Liquidity and Capital
Resources).
A portion of the Company's properties are subject to mortgages
securing long-term debt or are covered by negative pledges
restricting mortgages or pledges of such properties. (See Notes 4
and 7 of the Notes to Consolidated Financial Statements "Property
and Equipment" and "Notes Payable to Banks and Long-term Debt".)
ITEM 3. LEGAL PROCEEDINGS
There are no reportable legal proceedings under this item.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
-11-
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
SHAREHOLDER MATTERS
The Company's common stock is traded on the New York Stock
Exchange under the symbol "OJ". The following table sets forth the
range of high and low closing prices per share for each full
quarterly period within the two most recent fiscal years.
<TABLE>
<CAPTION>
Fiscal 1996 High Low
<S> <C> <C>
First Quarter $8-1/4 $7-1/8
Second Quarter 9-3/8 7-1/2
Third Quarter 9-1/8 7-3/4
Fourth Quarter 8-1/8 7-3/4
Fiscal 1995 High Low
First Quarter $5-5/8 $5-1/8
Second Quarter 6-1/4 5-3/8
Third Quarter 6-3/4 6
Fourth Quarter 7-7/8 6-1/4
</TABLE>
On November 30, 1996 there were approximately 4,589 named
holders of record of the Company's common stock.
On December 19, 1996 the Company declared a divdend of $.10 per
common share to be paid on February 3, 1997 for shareholders of
record as of January 20, 1997. On February 1, 1996 the Company
paid a dividend of $.10 per common share. Prior to 1996 the
Company had last paid a dividend of $.02 per share on its common
stock in November of 1988.
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
The following selected financial data as of and for the years
ended September 30, 1996, 1995, 1994, 1993 and 1992, have been
derived from the audited financial statements of the Company. Sales
and net income from continuing operations before income taxes
reflect the treatment of the Petroleum Division as a discontinued
operation on a consistent basis. The following data should be read
-12-
in conjunction with, and is qualified in its entirety by reference
to, the financial statements and the accompanying notes contained
elsewhere in this report under the heading "Financial Statements and
Supplementary Data".
Years Ended September 30, 1996, 1995, 1994, 1993, and 1992,
Historical(1)
(in thousands, except per share data)
1996 1995 1994 1993 1992
STATEMENT OF OPERATIONS DATA
<S> <C> <C> <C> <C> <C>
Sales $119,130 $111,325 $76,756 $71,938 $79,890
======== ======== ======= ======= =======
Income from continuing
operations before income
taxes $ 14,487 $ 14,776 $ 5,886 $ 3,759 $10,298
======== ========= ======= ======= =======
Net income $ 10,091 $ 9,135 $ 3,345 $ 1,088 $ 7,981
======== ========= ======= ======= =======
Net income per common share $ .98 $ .89 $ .32 $ .11 $ .78
======== ========= ======= ======= =======
</TABLE>
<TABLE>
<CAPTION>
As of September 30, 1996,1995, 1994, 1993, and 1992
(in thousands)
1996 1995 1994 1993 1992
BALANCE SHEET DATA
<S> <C> <C> <C> <C> <C>
Total assets $199,695 $171,441 $169,404 $139,802 $136,295
======== ======== ======== ======== ========
Long-term debt (less
current portion) $ 46,663 $ 31,252 $ 38,499 $ 19,683 $ 21,437
======== ======== ======== ======== ========
Stockholders' equity $109,011 $ 99,932 $ 90,797 $ 87,452 $ 86,090
======== ======== ======== ======== ========
</TABLE>
<F1>
(1)Not covered by accountant's report.
On December 19, 1996 the Company declared a dividend of $.10 per common
share to be paid on February 3, 1997 for shareholders of record as of
January 20, 1997. On February 1, 1996 the Company paid a dividend of $.10
per common share. Prior to 1996 the Company had last paid a dividend
of $.02 per share on its common stock in November 1988.
-13-
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FISCAL 1996 VERSUS FISCAL 1995
The discussion that follows is based on the Consolidated
Statements of Operations and compares the results of the Company's
continuing operations for the year ended September 30, 1996 to the
Company's continuing operations for the year ended September 30,
1995.
<TABLE>
<CAPTION>
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.
Year Ended September 30, 1996 vs. Year Ended September 30, 1995
Increases/(Decreases)
(in thousands)
Cost of
Goods Net
Sales Sold Change
<S> <C> <C> <C>
Beverage Division . . . . . . . . $7,141 $5,653 $1,488
Grove Management Division . . . . 664 510 154
------ ------ ------
Gross Profit .. . . . . . . . . . $7,805 $6,163 $1,642
====== ======
Other costs and expense, net:
Selling, general and administrative . . . . . . . . (596)
Gain on disposition of property and equipment . . . (1,004)
Other expense . . .. . . . . . . . . . . . . . . . 112
Interest . . . . . .. . . . . . . . . . . . . . . . . . . (443)
-------
Income before income tax . . . . . . . . . . . . . . . . (289)
Income tax expense . . . . . . . . . . . . . . . . . . . 1,245
-------
Net income . . . . . . . . . . . . . . . . . . . . . . . $ 956
=======
</TABLE>
RESULTS OF OPERATIONS
SALES
Total net sales from operations increased approximately
$7,805,000 or 7.0% for the fiscal year ended September
30, 1996 compared to the prior year ended September 30, 1995. The
principal increase of approximately $7,141,000 occurred in the
Beverage Division. The Grove Management Division sales increased
approximately $664,000 compared to the prior year.
BEVERAGE DIVISION The Beverage Division sales increased
approximately $7,141,000 during fiscal 1996 compared to the prior
year. The principal component of this increase was an increase of
approximately $7,373,000 as a result of higher prices for bulk
citrus juice products sold compared to the prior year.
Additionally, there was an increase of approximately $2,857,000 in
the revenues from the Company's bulk citrus juice products due to
higher volumes of products sold. The increases in volumes were due
primarily to an improving sales program for the bulk citrus juice
products. In October 1995 the United States Department of
Agriculture ("USDA") announced a Florida crop estimate of
approximately 204,000,000 of round oranges for the 1995-96 season
which was approximately the same as the 1994-95 crop of 205,400,000
boxes of round oranges. This 1995-96 estimate by the USDA was
revised at the end of the season to approximately 203,200,000 boxes
of round oranges which is the third largest
-14-
Florida crop in history. As we enter the 1996-97 season the USDA
has estimated this crop at 220,000,000 boxes which, if true, will
be the highest Florida orange crop in history and could have
a significant impact on the prices for bulk orange concentrated
juices for fiscal 1996-97.
Sales of the Company's packaged citrus juices increased
approximately $1,138,000 during fiscal 1996 compared to the prior
year. Higher prices accounted for an increase in revenues of
approximately $592,000 during fiscal 1996. Additionally, an
increase in the revenues of approximately $546,000 compared to the
prior year resulted from higher volumes of these products being
sold.
The Company's non-orange packaged juices and drink base sales
increased approximately $4,798,000 during fiscal 1996 compared to
the prior year. Increases in the volume of sales of these products
accounted for increases of approximately $3,268,000. The principal
increase in volume of these products resulted from the purchase of
the Birds Eye food service juice business in July 1996.
Additionally, increased prices of these products accounted for
approximately $1,530,000 increases in sales.
Partially offsetting these increases were decreases in revenues
from the sale of the Company's citrus by-products, including, feed,
pulp cells, and citrus oils of approximately $5,239,000 during
fiscal 1996 compared to the prior year. The principal component of
this decrease in sales of approximately $4,556,000 resulted from a
decrease in volume of sales. Additionally, sales of these products
decreased approximately $683,000 as a result of decreased prices
during fiscal 1996 compared to the prior year. During fiscal 1996
the market for these by-products weakened significantly due to
higher production in the industry.
Storage, handling, processing citrus for customers under
contract, and other revenues decreased approximately $3,786,000
during fiscal 1996 as a result of a decrease in the volume of these
services performed compared to the prior year.
GROVE MANAGEMENT DIVISION Grove Management Division revenues
increased approximately $664,000 or 15.0% during fiscal 1996
compared to the prior year. The principal increase during fiscal
1996 of approximately $442,000 was due to an increase in caretaking
revenues. Additionally, revenues from the sale of fruit to third
parties increased by approximately $268,000 during fiscal 1996
compared to the prior year. Partially offsetting these increases
was a decrease of approximately $46,000 in harvesting revenues.
GROSS PROFIT
Gross profit for fiscal 1996 increased approximately $1,642,000
or 8.2% compared to the prior year. The Beverage Division provided
an increase in gross profit of approximately $1,488,000 and the
Grove Management Division gross profit increased approximately
$154,000 compared to the prior year.
BEVERAGE DIVISION Gross profit of the Beverage Division increased
approximately $1,488,000 as previously mentioned. The principal
increase in gross profit of approximately $5,968,000 resulted from
the sales of bulk citrus juice products. Of this increase
approximately $7,373,000 resulted primarily from higher prices
compared to the same period in the prior year. Additionally, the
increase in the volume of sales of bulk citrus products previously
mentioned provided an increase in gross profit of approximately
$596,000. Partially offsetting these increases was a decrease in
gross profit of approximately $2,001,000 as a result of higher costs
of raw fruit and purchased concentrate used
-15-
in the production of bulk citrus products during fiscal 1996
compared to 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 or in the
cost of inventories and flow through in the Consolidated Statements
of Operations as the associated products are sold. As of September
30, 1996 the Company held contracts for FCOJ futures with unrealized
gains of approximately $37,000 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 from the sale of the Company's packaged citrus
juice products increased approximately $387,000 during fiscal 1996
compared to the prior year. Increases in prices of these products
sold accounted for an increase in gross profit of approximately
$592,000. This increase was reduced approximately $205,000
principally as a result of higher costs.
Gross profit from the sale of the Company's non-orange packaged
juices and drink base products increased approximately $104,000 as a
combined result of increased price offset by higher cost of
production on higher volumes.
The sale of the Company's by-products provided a decrease in
gross profit of approximately $4,311,000 during fiscal 1996 compared
to the prior year. The principal decrease of approximately
$3,394,000 resulted from decreased volumes of these by-products
sold. Additionally, gross profit on these by-products decreased
approximately $917,000 as a combined result of lower prices and
higher production costs compared to the prior year.
Gross profit from storage, handling and other activities
decreased by approximately $660,000 principally due to decreases in
volume of these activities.
GROVE MANAGEMENT DIVISION Grove Management gross profit increased
approximately $154,000 during fiscal 1996 compared to the prior
year. The increase was primarily due to increased sales of fruit to
third parties and grove caretaking activities.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased
approximately $596,000 or 13.0% for fiscal 1996 compared to the
prior year. Of this increase approximately $332,000 resulted from
an increase in salary and benefit costs compared to the prior year.
Additionally there was an increase in other costs of approximately
$264,000 compared to the prior year.
GAIN/(LOSS) ON DISPOSITION OF PROPERTY AND EQUIPMENT
The gain on the disposition of property and equipment decreased
approximately $1,004,000 for the fiscal year ended September 30,
1996 compared to the prior year. The principal reasons for this
decrease were a gain of approximately $453,000 on the involuntary
conversion of certain assets in fiscal 1995. (See Note 8
"Nonrecurring Gains And Losses" of the Notes to the
Consolidated Financial Statements) and a gain of approximately
$385,000 on the disposition of certain commercial properties for
which there was no comparable activity for the year ended
September 30, 1996.
-16-
OTHER
Other costs decreased approximately $112,000 in fiscal 1996
compared to the prior year as a result of a charge for a valuation
adjustment of certain idle properties of approximately $591,000 in
fiscal 1995 for which there was no comparable activity in fiscal
1996. This charge was partially offset by business interruption
insurance proceeds received of approximately $450,000 for losses
incurred from the previously mentioned involuntary conversion during
the prior year. (See Note 8 "Nonrecurring Gains" of the Notes to
the Consolidated Financial Statements.)
INTEREST EXPENSE
Interest expense increased by approximately $443,000 or 27.4%
in fiscal year 1996 compared to the prior year. The primary reason
for this increase of approximately $644,000 was due to an increase
in the average outstanding debt. Additionally, an increase of
approximately $19,000 was due to an increase in interest rates.
Partially offsetting these increases were an increase in capitalized
interest of approximately $177,000 and a decrease in amortization of
deferred loan costs and other related expenses of approximately
$43,000 during fiscal 1996 compared to the prior year.
OTHER SIGNIFICANT EVENTS
As previously mentioned, the USDA has announced an anticipated
Florida orange crop of approximately 220,000,000 boxes of round
oranges for the 1996-97 season.
The Company's sales or costs were not impacted significantly by
the effects of general price level inflation during fiscal 1996.
-17-
FISCAL 1995 VERSUS FISCAL 1994
The discussion that follows is based on the Consolidated
Statements of Operations and compares the results of the Company's
continuing operations for the year ended September 30, 1995 to the
Company's continuing operations for the year ended September 30,
1994.
<TABLE>
<CAPTION>
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 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 9 of the Notes to the
Consolidated Financial Statements "Discontinued Operations".)
Year Ended September 30, 1995 vs. Year Ended September 30, 1994
Increases/(Decreases)
(in thousands)
Cost of
Goods Net
Sales Sold Change
<S> <C> <C> <C>
Beverage Division . . . . . . . . $34,257 $25,193 $9,064
Grove Management Division . . . . 312 372 (60)
------- ------- -------
Continuing operations . . . . . . $34,569 $25,565 9,004
======= =======
Other costs and expense, net:
Selling, general and administrative . . . . . . . . (546)
Gain on disposition of property and equipment . . . 542
Other expense . . .. . . . . . . . . . . . . . . . (183)
Interest . . . . . .. . . . . . . . . . . . . . . . . . . 73
-------
Income from continuing operations . . . . . . . . . . . . 8,890
Provision for income taxes from continuing operations . . (3,148)
-------
Net income from continuing operations . . . . . . . . . . $5,742
=======
RESULTS OF OPERATIONS
SALES
Total net sales from continuing operations increased
approximately $34,569,000 or 45.0% for the fiscal year ended
September 30, 1995 compared to the prior year ended September 30,
1994. The principal increase of approximately $34,257,000 occurred
in the Beverage Division. The Grove Management Division sales
increased approximately $312,000 compared to the prior year.
BEVERAGE DIVISION The Beverage Division sales increased
approximately $34,257,000 during fiscal 1995 compared to the prior
year. The principal component of this increase was an increase of
approximately $22,215,000 in the revenues from the Company's bulk
citrus juice products due to higher volumes of products sold. The
increases in 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. These increases in volume of bulk
citrus products sold during fiscal 1995 were partially offset by
decreases in prices for these products of approximately $1,162,000
compared to 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 was significantly larger than the 1993-94 crop of
174,200,000 boxes of round oranges. This 1994-95 estimate by the
USDA
-18-
was revised at the end of the season to approximately 205,400,000
boxes of round oranges which was the second largest Florida crop
in history.
Sales of the Company's packaged citrus juices increased
approximately $1,374,000 during fiscal 1995 compared to the prior
year. Higher prices accounted for an increase in revenues of
approximately $470,000 during fiscal 1995. Additionally, an
increase in the revenues of approximately $904,000 compared to the
prior year resulted from higher volumes of these products being
sold.
The Company's non-orange packaged juices and drink base sales
increased approximately $3,347,000 during fiscal 1995 compared to
the prior year. Increases in the volume of sales of these products
accounted for increases of approximately $4,559,000. Partially
offsetting this increase was a decrease in prices of these products
of approximately $1,212,000.
Revenues from the sale of the Company's citrus by-products,
including, feed, pulp cells, and citrus oils increased approximately
$5,093,000 during fiscal 1995 compared to the prior year. The
principal component of this increase in sales of approximately
$3,015,000 resulted from an increase in volume of sales.
Additionally, sales of these products increased approximately
$2,078,000 as a result of increased prices during fiscal 1995
compared to the prior year.
Storage, handling, processing citrus for customers under
contract, and other revenues increased approximately $3,390,000
during fiscal 1995 as a result of an increase in the volume of these
services performed compared to the prior year.
GROVE MANAGEMENT DIVISION Grove Management Division revenues
increased approximately $312,000 or 7.6% during fiscal 1995 compared
to the prior year. The principal increase during fiscal 1995 of
approximately $509,000 was due to an increase in harvesting revenues
as a result of the larger crop. Additionally, there was an increase
in revenues from grove caretaking activities of approximately
$211,000. Revenues from the sale of fruit to third party packers
and processors decreased by approximately $408,000 during fiscal
1995 compared to the prior year.
GROSS PROFIT
Gross profit for fiscal 1995 increased approximately $9,004,000
or 81.0% compared to the prior year. The Beverage Division provided
an increase in gross profit of approximately $9,064,000 which was
only slightly offset by a decrease in gross profit of approximately
$60,000 in the Grove Management Division.
BEVERAGE DIVISION Gross profit of the Beverage Division increased
approximately $9,064,000 as previously mentioned. The principal
increase in gross profit of approximately $4,660,000 resulted from
the sales of bulk citrus juice products. Of this increase
approximately $4,108,000 resulted primarily from lower costs of raw
fruit and purchased concentrate used in the production of bulk
citrus products during fiscal 1995 compared to the prior year.
Additionally, the increase in the volume of sales of bulk citrus
products previously mentioned provided an increase in gross profit
of approximately $1,714,000. Partially offsetting these increases
was a decrease in gross profit of approximately $1,162,000 as a
result of lower prices compared to 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 or in the
cost of inventories and flow through in the Consolidated
-19-
Statements of Operations as the associated products are sold. As
of September 30, 1995 the Company held contracts for FCOJ futures
with unrealized gains of approximately $86,000 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 expected to
sell the FCOJ.
Gross profit from the sale of the Company's packaged citrus
juice products increased approximately $459,000 during fiscal 1995
compared to the prior year. Increases in prices of these products
sold accounted for an increase in gross profit of approximately
$471,000. This increase was reduced approximately $12,000 as a
combined result of lower volumes and lower costs.
Gross profit from the sale of the Company's non-orange packaged
juices and drink base products increased approximately $58,000 as a
combined result of price and cost of production decreases on higher
volumes.
The sale of the Company's by-products provided an increase in
gross profit of approximately $2,136,000 during fiscal 1995 compared
to the prior year. This increase was the result of increases in
gross profit of approximately $4,343,000 due to higher prices and
increased volume of sales partially offset by increased costs of
approximately $2,207,000.
Gross profit from storage, handling and other activities
increased by approximately $1,751,000 due to increases in volume of
these activities, offset by some operating cost increases.
GROVE MANAGEMENT DIVISION Grove Management gross profit decreased
approximately $60,000 during fiscal 1995 compared to the prior year.
Gross profit decreased approximately $117,000 as a result of a
decrease in the volume of fruit sold to third party packers and
processors. Partially offsetting this decrease was an increase in
gross profit from grove caretaking of approximately $40,000 compared
to the prior year. The decrease was further offset by an increase
in gross profit from harvesting activities of approximately $17,000
due to a higher volume of boxes harvested.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased
approximately $546,000 or 13.5% for fiscal 1995 compared to the
prior year. Of this increase approximately $569,000 resulted from
an increase in salary and benefit costs compared to the prior year.
Offsetting this increase was a reduction in other costs of
approximately $23,000 compared to the prior year.
GAIN/(LOSS) ON DISPOSITION OF PROPERTY AND EQUIPMENT
The gain on the disposition of property and equipment increased
approximately $542,000 for the fiscal year ended September 30, 1995
compared to the prior year. The principal reason for this increase
was a gain of approximately $453,000 on the involuntary conversion
of certain assets. (See Note 8 "Nonrecurring Gains And Losses" of
the Notes to the Consolidated Financial Statements.) There was no
comparable activity in the prior year.
-20-
OTHER
Other costs increased approximately $183,000 in fiscal 1995
compared to the prior year as a result of a charge for a valuation
adjustment of certain idle properties of approximately $591,000.
This charge was partially offset by business interruption insurance
proceeds received of approximately $450,000 for losses incurred from
the previously mentioned involuntary conversion. (See Note 8
"Nonrecurring Gains" of the Notes to the Consolidated Financial
Statements.) There was no comparable activity in the prior year.
INTEREST EXPENSE
Interest expense decreased by approximately $73,000 or 4.4% in
fiscal year 1995 compared to the prior year. The primary reason for
this decrease was a reduction of approximately $101,000 due to an
increase in interest income earned during fiscal 1995.
Additionally, interest on outstanding debt decreased approximately
$43,000 due to lower outstanding balances, and capitalized interest
increased approximately $22,000. Also, amortization of deferred
loan costs and other related expenses decreased approximately
$43,000 during fiscal year 1995. Offsetting these reductions was an
increase of approximately $136,000 due to an increase in interest
rates during fiscal year 1995 as compared to the prior year.
OTHER SIGNIFICANT EVENTS
As previously mentioned, the USDA has announced an anticipated
Florida orange crop of approximately 202,000,000 boxes of round
oranges for the 1995-96 season. In July the USDA revised this
estimate to approximately 203,200,000.
The Company's sales or costs were not impacted significantly by
the effects of general price level inflation during fiscal 1995.
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
1995-96 season in late October and completed processing of fruit in
May.
The Company's ability to generate cash adequate to meet its
needs, including the refinancing of its inventories and trade
receivables, has been supported primarily by cash flow from
operations and periodic borrowings under its $40 million credit
facility. This facility is secured principally by most of the
Company's current assets. The outstanding balance at September 30,
1996 was approximately $21,086,000 and approximately $13,673,000 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 this agreement call for
repayment of the principal amount in April 1998; accordingly, it is
classified as long-term. As of November 30, 1996, the Company's
outstanding balance was approximately $16,997,000. The Company
anticipates that the working capital facility will be adequately
serviced with cash proceeds from operations.
-21-
Additionally, as of September 30, 1996 the Company had an
additional $10 million short-term capital revolving credit facility
to provide interim financing for capital projects and additional
working capital. As of September 30, 1996 there was no
outstanding balance on this facility. The interest rate on this
facility is variable based upon the financial institution's cost
of funds plus a margin.
Current assets increased approximately $12,684,000 as of
September 30, 1996 compared to September 30, 1995. The principal
component of this was an increase in inventories of approximately
$6,081,000 in the current year due principally to higher costs.
The Company's accounts receivable balance increased approximately
$5,288,000 compared to the prior fiscal year due principally to
increased sales. There was an increase in cash and short-term
cash investments of approximately $663,000 and advances on
fruit purchases decreased approximately $70,000. Additionally,
there was an increase of approximately $737,000 in current
deferred income taxes compared to the prior year.
Current liabilities increased approximately $3,339,000 during
fiscal 1996 compared to the fiscal year ended September 30, 1995.
The principal component of this increase was a $1,561,000 increase
in current installments of long-term debt. There was an increase of
approximately $1,778,000 in accounts payable and accrued liabilities
as a result of incidental differences in the timing of the payment
of participation and various trade accounts.
At September 30, 1996 the Company's outstanding long-term debt
was approximately $46,663,000 including the working capital facility
of approximately $21,086,000. In addition, current installments of
long-term debt were approximately $3,655,000 with the remaining
amounts due on various dates over the subsequent twelve years. The
Company anticipates that amounts due over the next twelve months
will be paid out of working capital. At September 30, 1996, the
Company was in compliance with its loan covenants.
The company completed the installation of new irriagation
systems for 1,224 acres of Company-owned Joshua, Polk County,
and Bermont groves during fiscal 1996 at a cost of approximately
$838,000. New irrigation systems for an additional 2,622 acres
and other projects are currently under construction for which
approximately $2,265,000 have been expended to date. In
addition, citrus groves costing approximately $578,000 were purchased
during fiscal 1996, and costs of caring for newly planted trees in
the amount of approximately $2,371,000 were capitalized.
Additional expenditures of approximately $10,896,000 were made during
the current year primarily for the purpose of improving the efficiency
and capacity of the Bartow processing facility. Also during fiscal 1996
expenditures of approximately $823,000 were made for grove operations
equipment other than for irrigation. The Company anticipates that
these improvements will be financed principally from working capital
or by securing additional funds under existing mortgages.
-22-
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX
Pages
(1) Financial Statements.
The Company's Financial Statements included in Item 8
hereof, as required at September 30, 1996, 1995 and
1994.
Report of Independent Certified Public Accountants 24
Consolidated Balance Sheets 25
Consolidated Statements of Operations 26
Consolidated Statements of Cash Flows 27
Consolidated Statements of Stockholders' Equity 28
Notes to Consolidated Financial Statements 29-40
(2) Financial Statement Schedule. Financial Statement
Schedule of the Company appended hereto, as required at
September 30, 1996, 1995 and 1994.
Schedule VIII-Allowance for Doubtful Accounts 41
(3) All other schedules to the Consolidated Financial
Statements required by Article 12 of Regulation S-X are
not required under the related instruction or are
inapplicable and therefore have been omitted.
-23-
INDEPENDENT AUDITORS REPORT
The Board of Directors and Stockholders
Orange-co, Inc. and Subsidiaries:
We have audited the accompanying consolidated balance sheets of
Orange-co, Inc. and subsidiaries as of September 30, 1996, and 1995,
and the related consolidated statements of operations, stockholders'
equity, and cash flows for each of the years in the three-year
period ended September 30, 1996. In connection with our audit of
the consolidated financial statements, we have also audited the
financial statement schedule as listed in Item 8 (2) herein. These
consolidated financial statements and financial statement schedule
are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated
financial statements and financial statement schedule based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial
position of Orange-co, Inc. and subsidiaries as of September 30,
1996 and 1995, and results of their operations and their cash flows
for each of the years in the three-year period ended September 30,
1996, in conformity with generally accepted accounting principles.
Also, in our opinion, the related financial statement schedule, when
considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly, in all material
respects, the information set forth therein.
/s/KPMG Peat Marwick LLP
- ------------------------
KPMG Peat Marwick LLP
Orlando, Florida
December 4, 1996
-24-
</TABLE>
<TABLE>
<CAPTION>
ORANGE-CO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995
(in thousands)
September 30, September 30,
1996 1995
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,508 $ 845
Receivables 14,905 9,617
Advances on fruit purchases 717 787
Inventories 42,148 36,067
Deferred income tax 1,166 429
Prepaid and other 18 33
--------- ---------
Total current assets 60,462 47,778
--------- ---------
Property and equipment, net 120,538 107,785
--------- ---------
Other assets:
Excess of cost over net assets of acquired
companies 11,401 11,778
Notes receivable 2,558 801
Other 4,736 3,299
--------- ---------
Total other assets 18,695 15,878
--------- ---------
Total assets $199,695 $171,441
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments on long-term debt $ 3,655 $ 2,094
Accounts payable 5,493 4,394
Accrued liabilities 11,997 11,318
--------- ---------
Total current liabilities 21,145 17,806
Deferred income taxes 22,247 22,014
Other liabilities 629 437
Long-term debt 46,663 31,252
--------- ---------
Total liabilities 90,684 71,509
--------- ---------
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 shares issued 5,175 5,175
Capital in excess of par value 71,417 71,417
Retained earnings 32,869 23,823
--------- ---------
109,461 100,415
Less:
Treasury stock, at cost: 47,424 shares at
September 30, 1996 and 50,924 shares
at September 30, 1995 (450) (483)
--------- ---------
Total stockholders' equity 109,011 99,932
--------- ---------
Total liabilities and
stockholders' equity $199,695 $171,441
========= =========
</TABLE>
The accompanying notes are an integral part of the financial
statements.
-25-
<TABLE>
<CAPTION>
ORANGE-CO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
(in thousands except per share data)
1996 1995 1994
<S> <C> <C> <C>
Sales $119,130 $111,325 $76,756
Cost of sales 97,374 91,211 65,646
--------- --------- --------
Gross profit 21,756 20,114 11,110
Other costs and expenses, net:
Selling, general and administrative (5,193) (4,597) (4,051)
Gain on disposition of property and
equipment 22 1,026 484
Other (35) (147) 36
Interest (2,063) (1,620) (1,693)
--------- -------- --------
Income from continuing operations before
income tax 14,487 14,776 5,886
Income tax expense 4,396 5,641 2,493
--------- -------- --------
Net income from continuing operations 10,091 9,135 3,393
--------- -------- --------
Discontinued operations:
(Loss) from operations of discontinued
Petroleum Division, net of applicable
1994 income tax (benefit) of $(71) - - (116)
Gain on disposal of Petroleum
Division, net of 1994 income
tax(benefit) of $(134) - - 68
-------- --------- -------
(Loss) from discontinued operations - - (48)
Net income $ 10,091 $ 9,135 $ 3,345
========= ======== ========
Income(loss) per common and common
equivalent shares:
Continuing operations $ .98 $ .89 $ .33
--------- -------- --------
Discontinued operations $ - $ - $ (.01)
--------- -------- --------
Net income $ .98 $ .89 $ .32
========= ======== =========
Average number of common and common
equivalent shares outstanding 10,301 10,298 10,299
========= ======== =========
</TABLE>
The accompanying notes are an integral part of the financial
statements.
-26-
<TABLE>
<CAPTION>
ORANGE-CO, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
(in thousands)
1996 1995 1994
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $10,091 $ 9,135 $ 3,345
-------- -------- --------
Adjustments to reconcile net income to net
cash provided by (used for) operating
activities:
Depreciation and amortization 4,972 4,300 3,970
Deferred income taxes (504) 2,268 1,981
Provision for disposal of nonoperating
subsidiary - 591 -
Gain on disposition of property and
equipment (22) (1,026) (484)
Loss on sale of Petroleum Division - - 66
Changes in assets & liabilities:
(Increase) in receivables (5,288) (2,498) (1,212)
Decrease(increase) in advances on fruit
purchases 70 (312) 1,662
Decrease(increase) in inventories (6,081) 7,484 (23,091)
Decrease in prepaids and other 15 8 44
Increase in accounts payable and accrued
liabilities 1,778 1,333 1,478
Other, net (537) (4) (303)
-------- -------- --------
Total adjustments (5,597) 12,144 (15,889)
-------- -------- --------
Net cash provided by (used for) operating
activities 4,494 21,279 (12,544)
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property & equipment 1,687 1,571 1,560
(Increase) in note & mortgage receivables (1,757) (346) (284)
Additions to property & equipment (18,498) (10,249) (11,187)
(Increase) in other assets (1,223) (886) (621)
-------- -------- --------
Net cash (used for) investing activities (19,791) (9,910) (10,532)
-------- --------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid (1,030) - -
Proceeds from(payments on) long-term debt 16,972 (7,289) 18,770
Proceeds from (payments on) note payable
to bank - (4,000) 4,000
Issuance of treasury stock 18 - -
-------- -------- --------
Net cash provided by (used for) financing
activities 15,960 (11,289) 22,770
-------- -------- --------
NET INCREASE/(DECREASE) IN CASH 663 80 (306)
CASH AND CASH EQUIVALENTS AT BEGINNING OF
PERIOD 845 765 1,071
-------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,508 $ 845 $ 765
======== ======== ========
</TABLE>
The accompanying notes are an integral part of the financial
statements.
-27-
<TABLE>
<CAPTION>
ORANGE-CO, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
(in thousands)
Capital
in Total
Common Stock Excess of Retained Treasury Stock Stockholders'
Shares Amount Par Value Earnings Shares Amount Equity
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at Sept.
30, 1993 10,349 $5,175 $71,417 $11,343 50 $(483) $ 87,452
Purchase of
treasury stock - - - - 1 - -
Net Income - - - 3,345 - - 3,345
------ ------ ------- ------- -- ------ --------
Balance at Sept.
30, 1994 10,349 $5,175 $71,417 $14,688 51 $(483) $ 90,797
Net Income - - - 9,135 - - 9,135
------ ------ ------- ------- -- ----- ---------
Balance at Sept.
30, 1995 10,349 $5,175 $71,417 $23,823 51 $(483) $ 99,932
Issuance of
treasury stock - - - (15) (4) 33 18
Dividend paid - - - (1,030) - - (1,030)
Net Income - - - 10,091 - - 10,091
------ ------ ------- ------- -- ------ ---------
Balance at Sept.
30, 1996 10,349 $5,175 $71,417 $32,869 47 $(450) $109,011
====== ====== ======= ======= == ====== =========
</TABLE>
The accompanying notes are an integral part of the financial statements
-28-
ORANGE-CO, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies:
Description of Operations - Orange-co, Inc. and Subsidiaries
(the "Company"), a 51% owned subsidiary of Ben Hill Griffin, Inc.
and an affiliate, is principally engaged in growing and processing
citrus products as well as packaging and marketing these products
and other beverages.
During the year ended September 30, 1996, the Company had two
customers who individually accounted for approximately 20.5% and
17.6% of its citrus segment sales. During the year ended September
30, 1995, the Company had two customers who individually accounted
for approximately 21.0% and 14.9% of its citrus segment sales.
During the year ended September 30, 1994, the Company had two
customers who accounted for approximately 30.9% and 10.3% of its
citrus segment sales.
Principles of Consolidation - The consolidated financial
statements of the Company include the accounts of Orange-co, Inc.
and its subsidiaries after elimination of all material intercompany
accounts and transactions.
Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements. These estimates
also affect the reported revenues and expenses during the period.
Actual results could differ from the estimated amounts.
Inventories - Inventories are stated at the lower of cost or
market. The cost of inventories is principally determined on the
average cost method. Costs of growing fruit are accounted for as
fruit-on-tree inventory.
The Company has in the past utilized and may in the future
utilize the frozen concentrated orange juice ("FCOJ") futures market
to hedge inventories, anticipated inventory requirements, and sales
commitments. The results of these transactions, designated and
effective as hedges, if any, are reflected in sales or in the cost
of inventories and flow through in the Consolidated Statements of
Operations as the associated products are sold.
Property and Equipment - Property and equipment is recorded
at cost less accumulated depreciation and amortization.
Depreciation and amortization are recognized principally using the
straight-line method in amounts adequate to depreciate and amortize
cost over the estimated useful lives of the applicable assets.
Costs pertaining to planting and caretaking of citrus trees are
initially capitalized and then, after the trees reach fruit-producing
age, depreciated over the estimated life of the trees.
Maintenance, repairs and minor renewals are charged to expense
as incurred while major renewals and improvements are capitalized.
The cost and related allowance for depreciation or amortization of
assets sold or otherwise disposed of are removed from the related
accounts, and the resulting gains or losses are reflected in the
results of operations.
-29-
Excess of Cost Over Net Assets of Acquired Companies - The
excess of the aggregate purchase price over the fair value of net
assets acquired is recorded at cost less accumulated amortization of
approximately $3,674,000 as of September 30, 1996 and $3,297,000 as
of September 30, 1995. Amortization is recognized over a 40-year
period using the straight-line method. Management has evaluated the
Company's excess of cost over net assets of its acquired companies
and has determined that no adjustment is necessary as no material
impairment has occurred in the opinion of the Company. In taking
this assessment the Company employs various methods including
comparing the carrying value of associated assets to their net
realizable value and analysis of anticipated profitability depending
upon the facts and circumstances.
Cash and Cash Equivalents - Cash and cash equivalents consist
principally of cash, time deposits and interest bearing investments
with maturities of three months or less. For purposes of the
Consolidated Statements of Cash Flows, all highly liquid investments
are considered to be cash equivalents.
Earnings Per Share - Net income per share is computed by
dividing net income by the weighted average number of common and
common stock equivalents issued and outstanding during the period.
Reclassifications - Certain accounts may have been
reclassified in the 1995 and 1994 financial statements to conform to
the 1996 financial statement presentation.
Income Taxes - The Company uses the asset and liability method
of accounting for income taxes. Under the asset and liability
method, 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. 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.
Future Application of Accounting Standards - In March 1995,
the Financial Accounting Standards Board ("FASB") issued SFAS 121.
"Accounting for the Impairment of Long-Lived Assets and Long-Lived
Assets to be Disposed Of" effective for financial statements with
fiscal years beginning after December 15, 1995. Among other
provisions, SFAS 121 requires that long-lived assets and certain
identifiable intangibles to be held and used by an entity be reviewed
for impairment whenever events or changes in circumstances indicated
that the amount of an asset may not be recoverable. The Company
anticipates the effect, if any, of apply SFAS No. 121 will not be
material and expects adoption in fiscal 1997.
In October 1995, the Financial Accounting Standards Board
issued SFAS 123, "Accounting for Stock-Based Compensation,"
effective for financial statements with fiscal years beginning
after December 15, 1995. Among other provisions SFAS 123
establishes a new, alternative method based on fair value for
accounting for stock-based compensation arrangements with
employees. In addition, if any entity does not adopt the
new altenative method the statement requires disclosure in
the footnotes of proforma net income and earnings per share
as if the fair value method had been adopted. For the
fiscal year ending September 30, 1997
-30-
and interim periods the Company had determined that it will
not apply the new method of accounting for employee stock
options but alternatively will provide the related
footnote disclosure as required.
Financial Instruments Fair Value, Credit Risks, and Off-Balance
Sheet Risk - The carrying amounts reported in the
Consolidated Balance Sheets for cash and cash equivalents, accounts
receivable, accounts payable and short-term debt approximates fair
market value due to the short-term maturity of these financial
instruments. The fair value of notes receivable is not considered
practical to estimate due to the nature of the accounts, the lack of
a market available to approximate their fair value and their
immateriality. The carrying value of the variable rate long-term
debt approximates fair value due to frequent repricing. The fair
value of the fixed rate long-term debt is estimated using discounted
cash flows based upon the incremental borrowing rates currently
available to the Company for mortgage loans with similar remaining
terms and maturity.
<TABLE>
<CAPTION>
Financial Instruments at
September 30, 1996 Carrying Amount Fair Value
(in thousands)
<S> <C> <C>
Cash and cash equivalents $ 1,508 $ 1,508
Accounts and notes receivable 17,463 17,463
Accounts payable 5,493 5,493
Variable rate long-term debt 21,086 21,086
Fixed rate long-term debt
with financial institutions 28,772 28,110
Other long-term debt 460 460
</TABLE>
As of September 30, 1996 the Company was subjected to a
concentration of credit risk as a result of 4.6% of its trade
accounts receivable being due from companies affiliated with a
common ownership. No collateral is required on these trade
receivables due to collection experience and trade practices.
Additionally, the Company's accounts receivable are concentrated
generally in the beverage and food service industries. Management
believes the allowance for doubtful accounts is adequate under the
circumstances.
As of September 30, 1996 the Company held contracts for FCOJ
futures positions and net options totaling approximately $752,000
and $285,000 with unrealized gains of approximately $37,000 and
$270,000 respectively. Exposure to off-balance sheet risk related
to these positions results from market fluctuations of FCOJ future
prices relative to the Company's open positions. Cash deposits
requirements with brokers as of September 30, 1996 totaled $22,500
and vary with market price fluctuations.
-31-
2. Receivables:
<TABLE>
<CAPTION>
The major components of receivables as of September 30, 1996
and 1995 are summarized as follows (in thousands):
1996 1995
<S> <C> <C>
Trade receivables $14,174 $ 8,716
7%-12.9% mortgage and promissory notes receivable 3,240 1,429
Deposits with brokers, net (8) 394
Other 975 677
Allowance for doubtful accounts (918) (798)
-------- --------
Net receivables 17,463 10,418
Less non-current portion 2,558 801
-------- --------
Current receivables $14,905 $ 9,617
======== ========
</TABLE>
3. Inventories:
<TABLE>
<CAPTION>
The major components of inventory as of September 30, 1996 and
1995, are summarized as follows (in thousands):
1996 1995
<S> <C> <C>
Finished goods $28,634 $24,086
Fruit-on-tree inventory 9,626 7,952
Other 3,888 4,029
------- -------
Total $42,148 $36,067
======= =======
</TABLE>
4. Property and Equipment:
<TABLE>
The major components of property and equipment as of September
30, 1996 and 1995 are summarized as follows (in thousands):
Estimated
1996 1995 Useful Life
Years
<S> <C> <C> <C>
Land and improvements $ 5,761 $ 5,466 5 to 30
Citrus groves 91,697 90,002 33
Buildings and improvements 7,094 6,913 10 to 33
Machinery and equipment 43,250 37,177 3 to 20
Construction in progress 11,797 3,505
________ ________
159,599 143,063
Less accumulated depreciation and
amortization 39,061 35,278
-------- --------
Total $120,538 $107,785
======== ========
</TABLE>
<TABLE>
<CAPTION>
The Company leases equipment under both short and long term
operating leases. Future minimum obligations under these leases
with initial or remaining lease terms in excess of 1 year for the
years ended September 30, are as follows:
<S> <C>
1997 $1,747,000
1998 $1,720,000
1999 $ 874,000
2000 $ 266,000
2001 $ 266,000
</TABLE>
-32-
Rent expense charged to operations amounted to approximately
$1,880,000 for the year ended September 30, 1996, $1,160,000 for the
year ended September 30, 1995, and $1,217,000 for the year ended
September 30, 1994.
5. Accrued Liabilities:
<TABLE>
<CAPTION>
The major components of accrued liabilities as of September 30,
1996 and 1995 are summarized as follows (in thousands):
1996 1995
<S> <C> <C>
Taxes $ 1,841 $ 1,046
Amounts due inventory suppliers 6,651 6,904
Other 3,505 3,368
------- -------
Total $11,997 $11,318
======= =======
</TABLE>
6. Income Taxes:
<TABLE>
<CAPTION>
Total income tax expense for the years ended September 30,
1996, 1995 and 1994 was allocated as follows (in thousands):
1996 1995 1994
<S> <C> <C> <C>
Income from continuing operations $4,396 $5,641 $2,493
Discontinued operations - - (205)
------ ------ -------
Total $4,396 $5,641 $2,288
====== ====== =======
</TABLE>
<TABLE>
<CAPTION>
Income tax expense attributable to income from continuing
operations for the years ended September 30, 1996, 1995 and 1994
consisted of the following (in thousands):
Current Deferred Total
<S> <C> <C> <C>
Year ended September 30, 1996
U.S. federal $4,219 $ (454) $3,765
State and local 681 (50) 631
------ ------- ------
Total $4,900 $ (504) $4,396
====== ======= ======
Year ended September 30, 1995
U.S. federal $3,334 $2,047 $5,381
State and local 39 221 260
------ ------- ------
Total $3,373 $2,268 $5,641
====== ======= ======
Year ended September 30, 1994
U.S. federal $ 364 $1,782 $2,146
State and local 14 333 347
------ ------- ------
Total $ 378 $2,115 $2,493
====== ======= ======
</TABLE>
-33-
<TABLE>
<CAPTION>
Income tax expense attributable to income from continuing
operations was $4,396,000, $5,641,000, and $2,493,000, for the years
ended September 30, 1996, 1995, and 1994, respectively, and differs
from the amounts computed by applying the U.S. federal income tax
rate of 34% to pretax income from continuing operations as a result
of the following (in thousands):
1996 1995 1994
<S> <C> <C> <C>
Computed "expected tax expense $4,926 $5,024 $2,001
Increase (reduction) in income
taxes resulting from:
Change in the beginning-of-the-year
balance of the valuation allowance
for deferred tax assets allocated
to income tax expense(benefit) (1,284) 222 -
Loss on foreign operations 65 40 92
Amortization of goodwill and other 128 103 133
State and local income taxes, net
of federal income tax benefit 416 247 229
Other, net 145 5 38
------- ------ ------
Total $4,396 $5,641 $2,493
====== ====== ======
</TABLE>
The reduction of $1,284,000 during fiscal 1996 in the valuation
allowance for a deferred tax asset reflects management's estimate
that the Company is more likely than not to receive benefit from
a portion of the investment tax credit carryforwards which will
expire in 1997 and thereafter.
<TABLE>
<CAPTION>
The tax effects of temporary differences that gave rise to
significant portions of the deferred tax assets and deferred tax
liabilities at September 30, 1996 and 1995 are presented below (in
thousands):
1996 1995
<S> <C> <C>
Deferred tax assets:
Allowance for doubtful accounts $ 345 $ 300
Capitalized inventory costs 84 45
Reserve on carrying value of property
and equipment 258 258
Accrued reserves and expenses 737 916
Valuation reserve 1,351 1,351
Net operating loss carryforwards 426 2,181
Investment tax credit carryforwards 1,703 1,703
Alternative minimum tax credit carryforwards 606 606
--------- ---------
Total gross deferred tax assets 5,510 7,360
Less valuation allowance (1,770) (3,054)
--------- ---------
Net deferred tax assets $ 3,740 $ 4,306
--------- ---------
Deferred tax liabilities:
Plant and equipment, principally due to
allocation of purchase price of
businesses acquired and to differences in
depreciation and capitalized interest (24,786) (24,880)
Fruit-on-tree inventory - (832)
Other (35) (179)
--------- ---------
Total gross deferred tax liabilities (24,821) (25,891)
--------- ---------
Net deferred tax liability $(21,081) $(21,585)
========= =========
</TABLE>
The valuation allowances for deferred tax assets as of
September 30, 1994 was $2,832,000. The net change in the total
valuation allowance for the years ended September 30, 1995 and 1996
was an increase of $222,000 and a decrease of $1,284,000,
respectively. The Company anticipates that the net operating loss
-34-
carryforward at September 30, 1996 will be utilized by the reversal
of timing differences.
Income taxes paid amounted to approximately $4,256,000,
$3,460,000, and $321,000 and for the years ended September 30, 1996,
1995 and 1994 respectively.
For tax reporting purposes as of September 30, 1996, the
Company had unused net operating loss carryforwards of approximately
$1,132,000 and investment tax credit carryforwards of approximately
$1,703,000 which expire in varying amounts through the year 2002. In
addition, the Company has alternative minimum tax credit
carryforwards of approximately $606,000 which are available to
reduce future federal regular income taxes, if any, over an
indefinite period.
7. Notes Payable to Banks and Long-term Debt:
<TABLE>
<CAPTION>
Notes payable to banks and long-term debt as of September 30,
1996 and 1995 consisted of the following (in thousands):
1996 1995
<S> <C> <C>
Mortgage notes payable bearing interest
6.75% to 7.65% due in varying
installments through 2003 $28,105 $15,190
Working capital line of credit bearing a
variable rate of interest based upon the
financial institution's cost of funds,
due in April 1998 21,086 17,094
Mortgage note payable bearing interest at
7% due semi-annually, principal due
annually through January 2009 667 710
Grove purchase installment notes, bearing
interest at 7% to 8% due in varying
installments through August 2005 460 352
------- -------
$50,318 $33,346
Less current installments on long-term
debt and note payable to bank 3,655 2,094
------- -------
Total $46,663 $31,252
======= =======
</TABLE>
<TABLE>
<CAPTION>
Principal payments for the years subsequent to 1997 are as
follows (in thousands):
<S> <C>
1998 $28,341
1999 $ 2,822
2000 $ 2,771
2001 $ 5,137
Thereafter $ 7,592
</TABLE>
As of September 30, 1996 the Company had a $40 million working
capital facility with an outstanding balance of $21,086,000 with
additional available borrowings of approximately $13,673,000. As of
September 30, 1996 the Company also had additional available short-
term borrowings of $10,000,000 under its revolving line of credit.
-35-
Interest paid net of amounts capitalized was approximately
$1,949,000, $1,670,000, and $1,724,000, for the years ended September
30, 1996, 1995, and 1994, respectively. Interest capitalized was
approximately $742,000, $661,000, and $543,000, for the years ended
September 30, 1996, 1995, and 1994, respectively.
8. Nonrecurring Gains And Losses:
The Company incurred property damage as a result of a fire
during the third quarter of fiscal 1995 which destroyed certain
equipment at the Bartow processing facility. This event did not
materially affect the continuing operations of the Company. The
Company maintains insurance for both property damage at replacement
value and business interruption applicable to its production
facilities. As a result the Company was awarded approximately
$903,000 to date, including $453,000 in excess of book value for
property damage during the third quarter of fiscal 1995 which is
included in "Gain on disposition of property and equipment" and
$450,000 during the fourth quarter of fiscal 1995 for business
interruption which is included in "Other" income on the Consolidated
Statement of Operations. Additionally, the Company provided an
additional charge of $591,000 during the fourth quarter of fiscal
1995 in "Other" expense as a valuation allowance against certain
properties and equipment.
9. Discontinued Operations:
During the second quarter of 1993, the Company decided to sell
the Petroleum Division comprised of Frank Carroll Oil Company. This
decision resulted in a charge of $513,000 including a write down of
the operating assets to their estimated net realizable value, and an
accrual for estimated operating losses through the anticipated phase
out period. These charges were disclosed on the Consolidated
Statements of Operations as a loss on disposal of the Petroleum
Division during fiscal 1993. The subsequent sale of the Petroleum
Division in September 1994 resulted in a gain of approximately
$68,000.
Additionally, the Consolidated Statement of Operations for
fiscal 1994 excludes 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 16 for disclosure of selected
components of the Petroleum Division. A sale of the stock of Frank
Carroll Oil Company was completed effective September 30, 1994.
Proceeds from the sale of the stock totaled approximately $966,000
in cash and notes.
10. 401k Plan:
The Company has a retirement plan (the "Plan") which meets the
qualifications under Section 401(k) of the Internal Revenue Code
(the "Code"). Employees who have completed the required service (as
defined),are eligible to make tax-deferred contributions. Employees
who have completed the required service (as defined) are eligible to
participate in an employer matching contribution. The Company
contributed approximately $61,000, $54,000, and $15,000 under the
Plan for the years ended September 30, 1996, 1995, and 1994,
respectively. The Company also accrued approximately $78,000 during
fiscal 1996 for contributions to the Plan for the 1996 Plan year.
In December 1990, the assets of the Employees Stock Ownership Trust
("ESOT") were merged into the Plan. At September 30, 1996 the Plan
held approximately 0.5% of the outstanding common stock of the
Company.
-36-
11. Profit Sharing Plan:
Effective January 1, 1993, the Company established a Profit
Sharing Retirement Plan ("Profit Sharing Plan") which meets the
qualifications of Section 401(c) of the Code. All employees begin
participation on the later of January 1, 1993 or date of employment.
Vesting is governed by a seven year graduated vesting schedule
including credit for continuous service with the Company prior to
the effective date. The Company's discretionary contribution is
determined annually and is allocated among eligible participants'
accounts in the proportion that each participant's compensation
bears to the total qualified compensation of all eligible employees
during the year. The Company contributed approximately $698,000 and
$495,000 to the Profit Sharing Plan during fiscal 1996 and 1995,
respectively, which represented discretionary contributions for the
1995 and 1994 Profit Sharing Plan years, respectively. In addition,
the Company accrued approximately $764,000 during fiscal 1996 to be
contributed to the Profit Sharing Plan for the 1996 Plan year.
12. Other Retirement Benefits:
Certain officers and employees have employment contracts for
additional retirement benefits, the cost of which is being accrued
on a present value basis over the remaining term of the employment
agreements. The lives of the officers and employees have been
insured as a means of funding such benefits. These contracts became
effective for fiscal 1994 and thereafter. The accrued liability for
these additional retirement benefits at September 30, 1996 was
approximately $316,000.
13. Stock Options:
In 1984, the Company adopted an incentive stock option plan
(the 1984 Plan) which provided for the granting of ten-year options
to purchase up to 75,000 shares of common stock. Effective in
November 1994 options could no longer be issued under this Plan. As
of December 1, 1995 all options issued under this Plan had expired.
In April 1987, the Company adopted an Employee Stock Option
Plan (the 1987 Plan) under which a committee of the Board of
Directors may grant either incentive stock options ("ISOs") or
non-qualified stock options. The 1987 Plan provides that ISOs
and non-qualified options may be granted for a period of ten years to
purchase up to an aggregate of 750,000 shares of common stock. The
option price of all common stock issued or to be issued under the
1987 Plan is at least 100% of the fair market value on the date of
grant. The options granted to purchase shares generally become
exercisable on a cumulative basis at 33-1/3% each year, commencing
with the second year. Upon the change of control in May 1992 when
Stoneridge sold its 52% interest in the Company to Ben Hill Griffin,
Inc. and an affiliate, all the options granted up to that date under
the 1987 Plan became exercisable.
-37-
<TABLE>
<CAPTION>
A summary of the changes in the shares under option for the
1987 Plan is as follows:
1987 Plan
Shares Price
<S> <C> <C>
Outstanding at
September 30, 1993 395,800 $5.4375-$10.00
Granted - -
Exercised - -
Expired 500 $9.625-$10.00
Outstanding at
September 30, 1994 395,300 $5.4375-$10.00
Granted - -
Exercised - -
Expired 351,200 $5.4375-$10.00
Outstanding at
September 30, 1995 44,100 $5.4375-$10.00
Granted - -
Exercised 3,500 $5.4375
Expired 9,375 $5.4375-$10.00
Outstanding at
September 30, 1996 31,225 $5.4375-$10.00
</TABLE>
Options granted under the 1987 Plan expire at various dates through
August 2001.
14. Related Party Transactions:
Ben Hill Griffin, Inc., and an affiliate collectively held
approximately 51% majority ownership of Orange-co, Inc. as of
September 30, 1996. Ben Hill Griffin, Inc. is a privately owned
agribusiness corporation located in Frostproof, Florida.
During the fiscal year ended September 30, 1996 the Company had
incurred an estimated $6,323,000 in fruit participation cost from
fruit purchased from its parent, Ben Hill Griffin, Inc. Of that
amount approximately $3,212,000 was paid as of September 30, 1996
with the accrued balance of $3,111,000 to be paid by March 1, 1997.
Final payment amounts under the Company's fruit participation
program are based upon returns from the ultimate disposition of the
fruit received. For the fiscal year ended September 30, 1995 the
Company incurred a total of $6,557,000 in fruit participation cost
from fruit purchased from its parent, Ben Hill Griffin, Inc. As of
September 30, 1995 a total of $2,948,000 had been paid against this
amount and an estimated balance of $3,609,000 was accrued to be paid
on March 1, 1996. Fruit purchases made from the parent company
under the Company's participation program are under terms equivalent
to fruit purchased from other grower participants. For the fiscal
year ended September 30, 1996 the Company also incurred $392,000 for
fruit purchased from Ben Hill Griffin, Inc. under a spot fruit
purchase contract. Additionally, the Company paid approximately
$2,862,000, $2,451,000 and $1,935,000 to Ben Hill Griffin, Inc. for
other goods and services, principally the purchase of fertilizer and
citrus trees at prices approximating market, during fiscal 1996,
1995 and 1994, respectively.
-38-
<TABLE>
<CAPTION>
15. Interim Financial Information (unaudited):
(in thousands except per share amounts)
Gross Earnings
Quarters Ended Sales Profit Net Income(1) Per Share
<S> <C> <C> <C> <C>
Fiscal 1996
September 30, 1996 $ 33,751 $ 6,596 $ 3,329 $ .32
June 30, 1996 34,023 5,364 2,476 .24
March 31, 1996 28,006 5,058 2,242 .22
December 31, 1996 23,350 4,738 2,044 .20
-------- ------- ------- ------
$119,130 $21,756 $10,091 $ .98
======== ======= ======= ======
Fiscal 1995
September 30, 1995 $ 24,449 $ 5,215 $ 2,005 $ .19
June 30, 1995 26,764 6,018 3,348 .33
March 31, 1995 29,539 6,361 3,004 .29
December 31, 1994 30,573 2,520 778 .08
-------- ------- ------- ------
$111,325 $20,114 $ 9,135 $ .89
======== ======= ======= ======
</TABLE>
<F1>
(1) See Note 8 of the Notes to the Consolidated Financial
Statements "Nonrecurring Gains and Losses" for the fourth quarter
1995 adjustments.
16. Business Segments:
<TABLE>
<CAPTION>
Segment financial data for the years ended September 30, 1996,
1995, and 1994 except for total assets which are as of September 30,
1996, 1995, and 1994 are as follows (in thousands):
Petroleum
and
Related
Year Citrus Products Total
<S> <C> <C> <C> <C>
Sales 1996 $119,130 - $119,130
1995 111,325 - 111,325
1994 76,756 12,986 89,742
Operating profit 1996 16,563 - 16,563
1995 15,517 - 15,517
1994 7,059 - 7,059
Total assets 1996 199,695 - 199,695
1995 171,441 - 171,441
1994 169,404 - 169,404
Depreciation and amortization 1996 4,972 - 4,972
1995 4,300 - 4,300
1994 3,816 154 3,970
Capital Expenditures 1996 18,498 - 18,498
1995 10,249 - 10,249
1994 11,077 23 11,100
</TABLE>
Intersegment sales approximate market and are not significant.
-39-
<TABLE>
<CAPTION>
RECONCILIATION OF OPERATING PROFIT TO INCOME BEFORE INCOME TAXES:
Fiscal Years Ended
September 30, September 30, September 30,
1996 1995 1994
<S> <C> <C> <C>
Operating profit $16,563 $15,517 $7,059
Gain on disposition of
property and equipment 22 1,026 484
Interest (2,063) (1,620) (1,693)
Other income (expense) (35) (147) 36
-------- -------- -------
Income from continuing
operations before income taxes $14,487 $14,776 $5,886
======== ======== =======
</TABLE>
Sales to foreign countries accounted for 8.3% and 13.6% of the
Company's citrus segment sales during fiscal 1996 and 1995,
respectively.
-40-
<TABLE>
<CAPTION>
ORANGE-CO, INC. AND SUBSIDIARIES
SCHEDULE VIII - ALLOWANCE FOR DOUBTFUL ACCOUNTS
FOR THE YEARS ENDED SEPTEMBER 30, 1996, 1995 AND 1994
(in thousands)
Column A Column B Column C Column D Column E
Additions
Balance @ Charged Balance @
Beginning to End of
Description of Period Expense Deductions Period
<S> <C> <C> <C> <C>
Year ended
September 30, 1996 $798 $120 $ - $918
Year ended
September 30, 1995 $686 $120 $ 8 $798
Year ended
September 30, 1994 $744 $140 $ 198 $686
</TABLE>
ITEM 9. Changes In And Disagreements With Accountants On
Accounting And Financial Disclosure
None
-41-
PART III
Item 10. Directors and Executive Officers of the Registrant
The information required by Item 10 will be set forth in the
Company's 1997 Proxy Statement under the caption "Nominees For
Election As Directors" and is incorporated herein by reference.
Item 11. Executive Compensation
The information required by Item 11 will be set forth in the
Company's 1997 Proxy Statement under the caption "Executive Officers
and Compensation" and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
The information required by Item 12 will be set forth in the
Company's 1997 Proxy Statement under the caption "Security Ownership
of Certain Beneficial Owners", "Nominees for Election as Directors"
and "Stock Ownership of Executive Officers", and is incorporated
herein by reference.
Item 13. Certain Relationships and Related Transactions
The information required by Item 13 will be set forth in the
Company's 1997 Proxy Statement under the caption "Transactions With
Management And Others" and is incorporated herein by reference.
-42-
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
(a) (1) The financial statements required to be filed as part
of this Report, and the report thereon by KPMG Peat Marwick LLP, are
set forth under Item 8 and listed on Page 23 herein.
(2) The financial statement schedule required to be filed
herewith are listed on Page 23 herein.
(3) The exhibits required to be filed herewith are listed
on the "Exhibit Index" commencing at Page 46 herein.
(b) During the last quarter of the period covered by this
Report the Company filed no reports on Form 8-K.
(c) The exhibits required to be filed herewith are listed on
the "Exhibit Index" commencing on Page 46 herein and incorporated
herein by reference.
(d) The financial statements required to be filed as part of
the Report and the report thereon by KPMG Peat Marwick LLP are set
forth under Item 8 and are listed on Page 23 herein and are
incorporated herein by reference.
-43-
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: December 19, 1996 By:/s/ Gene Mooney
Gene Mooney
President and
Chief Operating Officer
Date: December 19, 1996 By:/s/ Dale A. Bruwelheide
Dale A. Bruwelheide
Vice President and
Chief Financial Officer
-44-
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934,
this report has been signed below by the following persons on behalf
of the registrant and in the capacities and on the date indicated.
Date: December 19, 1996 /s/ B. H. Griffin, III
-------------------------------
B. H. Griffin, III
Chairman, CEO and Director
Date: December 19, 1996 /s/ John R. Alexander
--------------------------------
John R. Alexander
Director
Date: December 19, 1996 /s/ Richard A. Coonrod
---------------------------------
Richard A. Coonrod
Director
Date: December 19, 1996 /s/ Paul E. Coury, MD
---------------------------------
Paul E. Coury, MD
Director
Date: December 19, 1996 /s/ George W. Harris, Jr.
---------------------------------
George W. Harris, Jr.
Director
Date: December 19, 1996 /s/ Dr. W. Bernard Lester
---------------------------------
Dr. W. Bernard Lester
Director
Date: December 19, 1996 /s/ Gene Mooney
----------------------------------
Gene Mooney
Director
Date: December 19, 1996 /s/ C. B. Myers, Jr.
----------------------------------
C. B. Myers, Jr.
Director
Date: December 19, 1996 /s/ Thomas H. Taylor, Sr.
----------------------------------
Thomas H. Taylor, Sr.
Director
-45-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
For the fiscal year Commission File
ended September 30, 1996 Number 1-6442
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
ORANGE-CO, INC.
(Exact name of registrant is specified in its charter)
EXHIBITS
INDEX
-46-
EXHIBIT INDEX
Sequential
Exhibit No. Description of Exhibits Page No.
3.1 Restated Articles of Incorporation of the
company, as amended, filed as Exhibits 3.1 to
Stoneridge Resources, Inc.'s Registration
Statement No. 33-24085 on Form S-1 and
incorporated herein by reference.
3.2 By-laws of the Company, as amended filed as
Exhibit 3.2 to the Company's Annual Report on
Form 10-K for the year ended September 30,
1992 and incorporated herein by reference.
10.1 Orange-co, Inc. Management Incentive Plan
filed as Exhibit 10m to Stoneridge Resources,
Inc.'s Registration Statement No. 33-24085 on
Form S-1 and incorporated herein by
reference.
10.4 Orange-co, Inc. 1984 Incentive Stock Option
Plan, as amended filed as Exhibit 10.10 to
the Company's Registration Statement No.
33-16935, as amended, on Form S-1 and
incorporated herein by reference.
10.5 Orange-co, Inc. 1987 Employee Stock Option
Plan, as amended filed as Exhibit 10.5 to the
Company Annual Report on Form 10-K for the
year ended September 30, 1992 and
incorporated herein by reference.
10.8 Orange-co of Florida, Inc. Deferred
Compensation Plan effective December 1, 1988
originally filed as Exhibit 10.11 to the
Company's Annual Report on Form 10-K for the
fiscal year ended August 31,1989 as amended
through December 15, 1994. and incorporated
herein by reference.
10.11 Stock Purchase Agreement between Stoneridge
Resources Inc., Ben Hill Griffin, Inc. and
Ben Hill Griffin, III, dated as of April 9,
1992 filed as Exhibit (2) to the Company's
Form 8-K filed May 28, 1992 and incorporated
herein by reference.
10.12 Loan Agreement between Orange-co, Inc.,
Orange- co of Florida, Inc. and Farm Credit of
Southwest Florida, ACA, dated April 10, 1993
and filed as Exhibit 10.12 on Form 10-Q for
the fiscal quarter ended March 31, 1993 and
incorporated herein by reference.
-47-
EXHIBITS INDEX
Sequential
Exhibit No. Description of Exhibits Page No.
No.
10.13 Amended and Restated Florida Mortgage
Security Agreement and Spreader Agreement
between Orange-co of Florida, Inc. and John
Hancock Mutual Life Insurance Company, dated
April 21, 1993; Renewal Note between Orange-
co of Florida, Inc. and John Hancock Mutual
Life Insurance Company dated April 21, 1993
filed as Exhibit 10.13 on Form 10-Q for the
fiscal quarter ended March 31, 1993 and
incorporated herein by reference.
10.14 Loan Agreement By and Among Orange-co, Inc.
and Orange-co of Florida, Inc. and Sun Bank
National Association for a Revolving Line of
Credit in the amount of $20,000,000 dated
June 16, 1993 and filed as Exhibit 10.14 on
Form 10-Q for the fiscal quarter ended June
30, 1993 and incorporated herein by reference.
10.15 Thermal Energy Sales Agreement By and Between
Orange-co of Florida, Inc. and AP Cogen Ltd.,
dated May 27, 1993 and filed as Exhibit 10.15
on Form 10-Q for the fiscal quarter ended
June 30, 1993 and incorporated herein by
reference.
10.16 Stock Purchase Agreement By and Between W.
Eugene Hays and George M. Nagel Jr. and
Orange-co of Florida, Inc. for the purchase
of the stock of International Fruit, Inc.,
dated August 2, 1993 and filed as Exhibit
10.16 on Form 10-Q for the fiscal quarter
ended June 30, 1993 and incorporated herein
by reference.
10.17 Orange-co of Florida, Inc. Management
Security Plan effective October 1, 1993 filed
as Exhibit 10.17 on Form 10-Q for the fiscal
quarter ended December 31, 1993 and
incorporated herein by reference.
10.18 The First Amendment to the Loan Agreement By
and Among Orange-co, Inc. and SunBank,
National Association for a Revolving Lined of
Credit dated April 1, 1994 and filed as
Exhibit 10.18 on Form 10-Q for the fiscal
quarter ended June 30, 1994 and incorporated
herein by reference.
10.19 The Second Amendment to the Loan Agreement By
and Among Orange-co, Inc., and SunBank
National Association for a Revolving Line of
Credit dated April 1, 1994 and filed as
Exhibit 10.19 on Form 10-Q for the fiscal
quarter ended June 30, 1994 and incorporated
herein by reference.
-48-
EXHIBITS INDEX
Sequential
Exhibit No. Description of Exhibits Page No.
10.20 Stock Acquisition Agreement Between Orange-
co, Inc. and Childs Oil Company, Inc. dated
September 9, 1994 for the sale of Frank
Carroll Oil Company Stock and incorporated
herein by reference.
10.21 The Third Amendment to the Loan Agreement 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 and filed as Exhibit
10.21 on Form 10-Q for the fiscal quarter
ended December 31, 1994 and incorporated
herein by reference.
10.22 The Fourth Amendment to the Loan Agreement By
and Among Orange-co, Inc., Orange-co of
Florida, Inc. and SunTrust Bank, Central
Florida, National Association F/K/A SunBank,
National Association for a Revolving Line of
Credit dated January 23, 1996 and filed as
Exhibit 10.22 on Form 10-Q for the fiscal
quarter ended December 31, 1995 and
incorporated herein by reference.
10.23 The Fifth Amendment to the Loan Agreement By
and Among Orange-co, Inc., Orange-co of
Florida, Inc. and SunTrust Bank, Central
Florida, National Association dated April 5,
1996 and filed as Exhibit 10.23 on Form 10-Q
for the fiscal quarter ended March 31, 1996
and incorporated herein by reference.
10.24 Second Amendment to the Loan Agreement
between Orange-co, Inc. and Farm Credit of
Southwest Florida, ACA dated May 16, 1996 and
filed as Exhibit 10.24 on Form 10-Q for the
fiscal quarter ended June 30, 1996 and
incorporated herein by reference.
10.25 Asset Purchase Agreement between Kraft Foods,
Inc. and Orange-co, Inc. and filed as Exhibit
10.25 on Form 10-Q for the quarter ended June
30, 1996 and incorporated herein by reference.
10.26 Consolidated Amended and Restated Florida 51
Mortgage and Security Agreement between John
Hancock Mutual Life Insurance Company and
Orange-co of Florida, Inc. dated August 13,
1996.
16 Change in Accountants from Coopers & Lybrand
to KPMG Peat Marwick as filed on the
Company's Form 8K on August 4, 1992 and
incorporated herein by reference.
21 Subsidiaries of the Company. 72
24.1 Consent letter from KPMG Peat Marwick LLP. 73
-49-
EXHIBITS INDEX
Sequential
Exhibit No. Description of Exhibits Page No.
No.
27 Financial Data Schedule (Electronic Filing
Only)
99.1 Orange-co of Florida, Inc. Profit Sharing
Plan and Trust Agreement effective January 1,
1987, as amended and restated on January 1,
1989, including amendments through October
14, 1993 filed as Exhibit 99.1 on Form 10K
for the fiscal year 1993 and incorporated
herein by reference.
99.2 First Amendment to Orange-co of Florida,
Inc. 401(k) Salary Deferral Plan effective
December 15, 1994 and incorporated herein by
reference.
99.3 Profit Sharing Plan and Trust For Employees
of Orange-co of Florida, Inc. effective
January 1, 1993 and incorporated herein by
reference.
-50-
EXHIBIT 21
ORANGE-CO, INC. AND SUBSIDIARIES
SUBSIDIARIES OF THE COMPANY
The following is a list of subsidiaries of Orange-co, Inc. as
of December 15, 1996, other than subsidiaries which, considered in
the aggregate as a single subsidiary, would not constitute a
significant subsidiiary as defined by Securities and Exchange
Commission Regulation S-X. Al of the subsidiaries are included in
the Consolidated Financial Statements of Orange-co, Inc.
Name of Subsidiary State or Country of
Incorporation
Orange-co of Florida, Inc. (1) Florida
Florida Fresh-Pack Corporation (1) (3) Florida
Orange-co Dispenser Service, Inc. (2) (4) Florida
International Fruit, Inc. (2) Florida
Interfruit Holdings, Inc. (1) Cayman Islands
OrancoMex, S.A. de C.V. (3) (4) Mexico
Orange-co Internantional Sales, Inc. (2) U.S. Virgin Islands
(1) A wholly-owned subsidiary of Orange-co, Inc.
(2) A wholly-owned subsidiary of Orange-co of Florida, Inc.
(3) A wholly-owned subsidiary of Interfruit Holdings, Inc.
(4) Inactive subsidiary
(5) Formerly JV #1, Inc.
EXHIBIT 24.1
Consent of Independent Accountants
The Board of Directors and Stockholders
Orange-co, Inc. and Subsidiaries
We consent to incorporation by reference in the registration
statement (No. 33-17386) on Form S-8 of Orange-co, Inc. and
subsidiaries of our report Dated December 4, 1996 relating to the
consolidated balance sheet of Orange-co, Inc. and subsidiaries as of
September 30, 1996, and the related consolidated statements of
operations, stockholders' equity, and cash flows and related
schedules for the year then ended, which report appears in the
September 30, 1996 annual report on Form 10-K of Orange-co, Inc. and
subsidiaries.
/s/KPMG Peat Marwick LLP
- ---------------------
KPMG Peat Marwick LLP
Orlando, Florida
December 4, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000004507
<NAME> ORANGE-CO, INC.
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> SEP-30-1996
<EXCHANGE-RATE> 1
<CASH> 1,508
<SECURITIES> 0
<RECEIVABLES> 15,349
<ALLOWANCES> (444)
<INVENTORY> 42,148
<CURRENT-ASSETS> 60,462
<PP&E> 159,599
<DEPRECIATION> 39,061
<TOTAL-ASSETS> 199,695
<CURRENT-LIABILITIES> 21,145
<BONDS> 0
0
0
<COMMON> 76,142
<OTHER-SE> 32,869
<TOTAL-LIABILITY-AND-EQUITY> 199,695
<SALES> 119,130
<TOTAL-REVENUES> 119,130
<CGS> (97,374)
<TOTAL-COSTS> (97,374)
<OTHER-EXPENSES> (5,206)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (2,063)
<INCOME-PRETAX> 14,487
<INCOME-TAX> (4,396)
<INCOME-CONTINUING> 10,091
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,091
<EPS-PRIMARY> .98
<EPS-DILUTED> .98
</TABLE>
EXHIBIT 10.26
Thomas V. Eagan, P.A.
Steel Hector &
Davis LLP
200 South Biscayne Boulevard
Miami, Florida 33131-2398
CONSOLIDATED, AMENDED AND RESTATED
FLORIDA MORTGAGE AND SECURITY AGREEMENT
THIS CONSOLIDATED, AMENDED AND RESTATED FLORIDA
MORTGAGE AND SECURITY AGREEMENT (the "Mortgage"), made and entered
into as of this 13 day of August, 1996, by and between Orange-Co of
Florida, Inc., a Florida corporation having a mailing address at 2020 U.S.
Highway 17 South, Bartow, Florida 33830, hereinafter referred to as the
"Mortgagor," which term shall be construed to include the successors and
assigns of the Mortgagor, all of whom shall be bound hereby, and John
Hancock Mutual Life Insurance Company, a Massachusetts corporation,
having an address of P.O. Box 111, John Hancock Place, Boston,
Massachusetts 02117, hereinafter referred to as the "Mortgagee," and the
successors and assigns of the Mortgagee.
WITNESSETH:
WHEREAS, the Mortgagee is presently the owner and holder of the
following described instruments, as well as other loan documents executed
in connection with a mortgage loan (the "Loan Documents") which encumbers
certain personal property and real property situate in Polk County, Florida,
to wit:
1. That certain Renewal Promissory Note dated November 8, 1979,
representing an indebtedness in the original principal amount of SIXTEEN
MILLION THREE HUNDRED
Nota Bene: State of Florida Documentary Stamp Tax in the amount required
by law has been paid and the documentary stamps obtained upon
such payment have been affixed to that certain Loan
Modification Agreement, Notice of Advance and Restated
Florida Mortgage and Security Agreement dated the 8th day of
November, 1979 and recorded in Official Records Book 1911,
Page 1040, and that certain Future Advance Agreement dated as of
April 21, 1993 and recorded in Official Records Book 3226, Page
971, all as recorded in the Public Records of Polk County,
Florida, as well as that certain Florida Second Mortgage and
Security Agreement of even date herewith given by the Borrower
to John Hancock, recorded or to be recorded in the Public
Records of Polk County, Florida.
THOUSAND AND NO/100 DOLLARS ($16,300,000.00), which was collateralized by
that certain Loan Modification Agreement, Notice of Advance and Restated
Florida Mortgage and Security Agreement entered into by and between
Mortgagor and Mortgagee as of the 8th day of November, 1979 and recorded in
Official Records Book 1911, Page 1040, Public Records of Polk County, Florida
and Amended and Restated pursuant to that certain Amended and Restated
Florida Mortgage & Security Agreement and Spreader Agreement entered into
by and between Mortgagor and Mortgagee as of the 21st day of April, 1993 and
recorded in Official Records Book 3226, Page 937, Public Records of Polk
County, Florida (collectively, the "Amended and Restated Mortgage").
2. That certain Future Advance Promissory Note dated April 21, 1993,
executed by Mortgagor in favor of Mortgagee in the original principal amount
of EIGHT MILLION SEVEN HUNDRED FORTY-THREE THOUSAND ONE HUNDRED NINETY-ONE
AND NO/100 DOLLARS ($8,743,191.00), which was collateralized by that certain
Future Advance Agreement entered into by and between Mortgagor and Mortgagee
as of the 21st day of April, 1993 and recorded in Official Records Book 3226,
Page 971 of the Public Records of Polk County, Florida (the "Future Advance
Agreement").
3. That certain Renewal Note (the "Renewal Note") dated as of April
21, 1993 and executed by Mortgagor in favor of Mortgagee in the original
amount of $12,000,000.00 which combines and renews that certain Renewal
Promissory Note given by Mortgagor to Mortgagee dated November 8, 1979 in
the original principal amount of $16,300,000.00 of which the unpaid principal
balance was $3,256,809.00 and the Future Advance Promissory Note dated as of
the 21st day of April, 1993, and given by Mortgagor to Mortgagee in the
principal amount of $8,743,191.00, which notes were collateralized by the
Amended and Restated Mortgage and the Future Advance Agreement.
4. That certain Promissory Note (the "Second Promissory Note") dated
August 13 , 1996, executed by Mortgagor in favor of Mortgagee in the original
principal amount of TEN MILLION AND NO/100 DOLLARS ($10,000,000.00), which
was collateralized by that certain Florida Second Mortgage and Security
Agreement (the"Second Mortgage") executed by Mortgagor in favor of
Mortgagee on August 13, 1996 and recorded under Clerk's File No.
__________________, Public Records of Polk County, Florida.
WHEREAS, the principal balance remaining under the Renewal Note is
EIGHT MILLION ONE HUNDRED THOUSAND AND 00/100 DOLLARS ($8,100,000.00)
and the principal balance remaining unpaid on the Second Promissory Note is
TEN MILLION AND NO/100 DOLLARS ($10,000,000.00).
WHEREAS, Mortgagor has agreed to consolidate the Amended and Restated
Mortgage, the Future Advance Agreement and the Second Mortgage as well as to
modify and restate the terms and conditions of said documents, as set forth
in this Mortgage, and has agreed that the Renewal Note and the Second
Promissory Note are collateralized by this Mortgage.
NOW, THEREFORE, in consideration of the aforesaid premises, the mutual
benefits and the mutual promises of the parties hereto and other good and
valuable consideration, it is hereby agreed by the Mortgagor and Mortgagee
as follows:
KNOW ALL MEN BY THESE PRESENTS, that Mortgagor does hereby grant,
bargain, sell, assign and convey to Mortgagee and Mortgagee s successors and
assigns
forever, the real estate more particularly described in Exhibit A attached
hereto and made a part hereto, together with all the buildings, structures,
offices, barns, tanks, and all other improvements of whatsoever kind and
nature, now or hereafter erected thereon and located in the County of Polk,
State of Florida, together with all and singular the easements, tenements,
hereditaments, appurtenances and other rights and privileges thereunto
belonging or in any wise now or hereafter appertaining, and the rents,
issues and profits thereof; together with all tangible personal property
and fixtures of Mortgagor whether now owned or in existence of hereafter
acquired or created,including goods (but excluding inventory), accessions,
machinery, equipment, farm products and fixtures, such terms having the
meaning ascribed by the Uniform Commercial Code, including, but not limited
to, all citrus crops now and hereafter growing on the real estate described
on Exhibit A attached hereto and made a part hereof (provided that the
Mortgagee s interest as a first lienor on such citrus crops shall remain in
effect until such time as such citrus crops are harvested, processed or
packed, and thereafter the lien evidenced hereby shall be deemed to be
released and provided further that all of Mortgagor s existing and future
inventories of citrus products are specifically excluded from the lien of
this Mortgage), all minerals or the like (including oil and gas) now and
hereafter situate in, under or on the real estate described on Exhibit A
attached hereto and made a part hereof or extracted therefrom, and all
apparatus, chattels, fixtures, machinery, furniture, furnishings,
installations, equipment and other property (provided that all grove
caretaking and harvesting equipment including, but not limited to,
non-permanent irrigation equipment not necessary for proper irrigation
and care of the real estate described on Exhibit A attached hereto and
made a part hereof, sprayers, tractors, trucks, trailers, hedging and
topping equipment and movable grove caretaking and harvesting equipment of
like nature are specifically excluded from the lien of this Mortgage) now
or hereafter attached to or used or procured for use in connection with the
operation and maintenance of a citrus concentrate plant situate on the
real estate described on Exhibit A attached hereto and made a part hereof
or in connection with the operation, maintenance or protection of any
buildings, structures, offices, barns, tanks and all other improvements of
whatsoever kind and nature, whether real or personal, whether now owned or
hereafter acquired, and whether or not attached to any building, structure,
office, barn, tank, or any other improvements of whatsoever kind and nature,
and all elevators, escalators, vaults, safes, screens, awnings, storm
windows and doors, window blinds and shades, inlaid floor coverings,
shrubbery, plants, fences, gates, stoves, ranges, sinks, drinking fountains,
ventilating, refrigerating, air conditioning, incinerating, dishwashing and
cleaning equipment, pipes, wires, irrigation and sprinkler systems
(including overhead or underground systems and all wells, pumps, motors and
power units which are installed as part of same) and all apparatus associated
with the foregoing located on the real estate described on Exhibit A
attached hereto and made a part hereof, all of which shall be subject to the
lien of this Mortgage. To the extent permitted by law, the foregoing items
shall be considered part of the hereinabove described real estate.
TO HAVE AND TO HOLD said mortgaged premises, with all said tenements,
hereditaments, easements, appurtenances and other rights and privileges
thereunto belonging, or in any wise now or hereafter appertaining unto and
to the use of the Mortgagee, its successors and assigns, forever.
THE MORTGAGOR HEREBY COVENANTS AND AGREES:
1. The recitals set forth in the foregoing "WHEREAS" clauses are true
and correct and are hereby incorporated by reference and made a part hereof
as if fully set forth herein. This Mortgage is given as security for the
performance and observation of the covenants and agreements herein contained
and to secure to the Mortgagee the payment of the Renewal Note according to
its terms, the final payment of the entire indebtedness, including accrued
and unpaid interest, if any, being due and payable on May 1, 1998, unless
the term of the Renewal Note is extended pursuant to its terms and conditions
to May 1, 2003, as well as to secure to Mortgagee the payment of the
principal sum of Ten Million and No/100 Dollars ($10,000,000.00) and
interest thereon evidenced by the Mortgagor s Second Promissory Note,
payable according to its terms, to the order of the Mortgagee, the final
payment of the entire indebtedness, including accrued and unpaid interest,
if any, being due and payable on August 1, 2003. Immediately upon recording
this Mortgage among the Public Records of Polk County, Florida,
the lien of the Amended and Restated Mortgage, the Future Advance
Agreement and the Second Mortgage as consolidated, modified and restated
herein, is and shall be construed to constitute in law one first mortgage
lien on the real property described on Exhibit A attached hereto and made a
part hereof, as well as the improvements and personal property situate
thereon (as described above) securing the obligations set forth in the
Renewal Note and the Second Promissory Note, and although the Amended and
Restated Mortgage, the Future Advance Agreement and the Second Mortgage, as
consolidated, modified and restated herein, shall remain in full force and
effect as a lien and encumbrance in favor of the Mortgagee, henceforth the
recitations, terms, conditions, covenants, promises and provisions of this
Mortgage shall constitute the one first mortgage lien from Mortgagor to
Mortgagee encumbering the real property described on Exhibit A attached
hereto and made a part hereof, as well as the improvements and personal
property situate thereon (as described above), and the recitations, terms,
conditions, covenants, promises and provisions of this Mortgage shall
govern in the event of a conflict between the terms and conditions set
forth in this Mortgage and those set forth in the Amended and Restated
Mortgage, the Future Advance Agreement, the Second Mortgage and/or the
Renewal Note. Any default by the Mortgagor in the payment or performance
of the Renewal Note shall, at the option of Mortgagee, constitute a
default not only with respect to the Renewal Note and this Mortgage, but
also with respect to the Second Promissory Note, and any default by the
Mortgagor in the payment or performance of the Second Promissory Note
shall, at the option of Mortgagee, constitute a default not only with
respect to the Second Promissory Note and this Mortgage, but also with
respect to the Renewal Note, and, in any of such events, Mortgagee shall be
entitled to exercise all of the rights granted to Mortgagee in the event of
a default as set forth in the Renewal Note, the Second Promissory Note and
this Mortgage, as well as in law and/or in equity.
2. The Mortgagor is well and lawfully seized of the mortgaged
premises as a good and indefeasible estate in fee simple and has good right
and full power to sell and convey the same; that the mortgaged premises are
free and clear of all encumbrances, except this Mortgage (and other loan
documents consolidated, modified and restated herein), building and use
restrictions and easement of record, if any, zoning ordinances, if any,
and taxes and assessments not yet overdue; and that the Mortgagor will make
any further assurances of title that the Mortgagee may require and will
warrant and defend said mortgaged premises against all lawful claims
and demands whatsoever.
3. Mortgagor will pay the Renewal Note and the Second Promissory
Note (hereinafter sometimes collectively referred to as the "Notes") in
accordance with their terms and will perform and comply with all of the
terms and provisions thereof.
4. Mortgagor will keep protected and in good order, repair and
condition at all times the buildings and improvements (including fixtures)
now standing or hereafter erected or placed upon the mortgaged premises and
any and all appurtenances, apparatus and articles of personal property,
including, but not limited to, furniture, furnishings and equipment, now or
hereafter in or attached to or used in connection with said buildings or
improvements, promptly replacing any of the aforesaid which may become lost,
destroyed or unsuitable for use, and will keep insured the aforesaid real and
personal property and the interests and liabilities incident to the
ownership thereof, in manner, forms, companies, sums and length of terms
satisfactory to the Mortgagee, provided, however, that Federal Crop Insurance
shall not be required of the Mortgagor; that all insurance policies are to
be held by and, to the extent of its interests, are to be for the benefit
of and first payable in case of loss to the Mortgagee except as hereinafter
provided, and the Mortgagor shall deliver to the Mortgagee evidence of
continuing insurance coverage at least fifteen (15) days before the date any
existing policy expires. In the event of a casualty or loss as contemplated
herein for which insurance proceeds are recoverable under the policy or
policies of insurance to be kept by the Mortgagor, the amounts recoverable
shall be applied as follows:
(a) in events of casualty or loss for which the proceeds
recoverable are $50,000.00 or less, such proceeds may be collected solely
by the Mortgagor and used by the Mortgagor in any manner it deems fit and
proper, whether for restoration of the loss or casualty or otherwise;
(b) in events of casualty or loss for which the proceeds
recoverable are in excess of $50,000.00, but less than $500,000.00, and the
further event that the Mortgagor shall have, on or before the time of
collection of said proceeds, furnished to the Mortgagee evidence satisfactory
to the Mortgagee that such proceeds will and can be used to replace or
restore the lost or damaged property to a condition satisfactory to the
Mortgagee within nine (9) months from the date of the casualty or loss, then,
in such events, it shall be conclusively presumed that the Mortgagee has
agreed to the application and use of such proceeds for such replacement
and restoration and the other options of the Mortgagee regarding the
application of insurance proceeds (as set forth in subparagraph (c) below)
shall be unavailable to the Mortgagee, provided however, that in such
foregoing events the Mortgagor will remain obligated to actually apply such
proceeds to said replacement or restoration, and provided further that
should Mortgagor fail to provide Mortgagee with the aforementioned
satisfactory evidence of use of proceeds for replacement and restoration
purposes, then the Mortgagee's options regarding the application of
insurance proceeds recited in subparagraph (c) below shall remain fully
available to the Mortgagee;
(c) in events of casualty or loss for which the proceeds
recoverable are $500,000.00 or more, the proceeds collected may, at the
option of the Mortgagee, be used in any one or more of the following ways:
(1) applied against the indebtedness secured hereby, whether such
indebtedness then be matured or unmatured, (2) used to fulfill any of
the covenants contained herein as the Mortgagee may determine, (3) used
to replace or restore the property to a condition satisfactory to the
Mortgagee, or (4) released to the Mortgagor.
The Mortgagor expressly agrees that all amounts recoverable under any
policy or policies of insurance are hereby assigned to the Mortgagee and
both Mortgagor and Mortgagee expressly agree to the method and manner of
application of proceeds as set forth herein. Additionally, the Mortgagee
is hereby irrevocably appointed by the Mortgagor as attorney of the
Mortgagor to assign any policy in the event of the foreclosure of this
Mortgage or other extinguishment of the indebtedness secured hereby.
5. Mortgagor will pay before same become delinquent or any penalty
attaches thereto for non-payment, all taxes, assessments and charges of
every nature and to whomever assessed that may now or hereafter be levied
or assessed, or by reason of non-payment become a lien prior to this
Mortgage, upon the mortgaged premises or any part thereof, upon the rents,
issues, income or profits thereof, whether any or all of said taxes,
assessments or charges be levied directly or indirectly or as excise taxes
or as income taxes, and will thereupon submit to the Mortgagee such
evidence of the due and punctual payment of such taxes, etc., as the
Mortgagee may require. It is agreed by the Mortgagee and Mortgagor that
there shall be excepted from the foregoing requirement such taxes,
assessments and public charges the assessment or collection of which is being
contested by the Mortgagor, by appropriate legal proceedings, in good faith
and with due diligence, provided always however that the Mortgagee shall
retain the right, notwithstanding any contest which may be conducted by the
Mortgagor, to redeem the mortgaged premises or any part thereof from tax sale
without any obligation on the part of the Mortgagee to inquire into the
validity of such taxes, assessments and/or tax sales(the receipts of the
proper taxing officials being conclusive evidence of the validity and
amount thereof). The Mortgagor agrees that it shall give Mortgagee fifteen
(15) days' prior written notice of its intention to engage in such good
faith contests and shall bear all cost, expense and attorney fees involved
in such contest, including any costs incurred for same by the Mortgagee.
6. If Mortgagor shall neglect or refuse to keep in good repair and
condition the property referred to in paragraphs 4 and 7, to replace the
same as therein agreed, to maintain and pay the premiums for insurance which
may be required under paragraph 4 or to pay and discharge all taxes,
assessments and charges of every nature and to whomever assessed, as
provided for in paragraph 5, subject to the Mortgagor's right to bring
good faith contests as provided in said paragraph 5, the Mortgagee may, at
its election, cause such repairs or replacements to be made, obtain such
insurance or pay said taxes, assessments and charges and any amounts paid as
a result thereof, together with interest thereon at the rate of nine point
sixty-five per centum (9.65%) per annum from the date of payment, shall be
immediately due and payable by the Mortgagor to the Mortgagee, and until
paid shall be added to and become a part of the principal debt secured
hereby, and the same may be collected as a part of said principal debt in
any suit hereon or upon the Notes; or the Mortgagee, by the payment of any
tax assessment or charge, may, if it sees fit, be thereby subrogated to
the rights of the state, county, village and all political or governmental
subdivisions. No such advances shall be deemed to relieve the Mortgagor
from any default hereunder or impair any right to remedy consequent thereon,
and the exercise of the rights to make advances granted in this paragraph
shall be optional with the Mortgagee and not obligatory and the Mortgagee
shall not in any case be liable to the Mortgagor for a failure to exercise
any such right.
7. Mortgagor will keep the mortgaged premises in good order and
repair and will not commit or suffer any waste or stripping of the mortgaged
premises or any violation of any law, regulation, ordinance or contract
affecting the mortgaged premises and will not commit or suffer any
demolition, removal or material alteration of any of the buildings or
improvements (including fixtures) on the mortgaged premises without the
prior written consent of the Mortgagee. The Mortgagor shall have the right,
after prior notice to the Mortgagee, to contest by appropriate legal
proceedings diligently conducted in good faith, in the name of the Mortgagor,
without cost or expense to the Mortgagee, the validity or application of any
law, regulation, or ordinance of the nature herein referred to, subject to
the following:
(a) if by the terms of any such law, regulation or ordinance,
compliance therewith pending the prosecution of any such proceeding may
legally be delayed without the incurrence of any lien, charge or liability
of any kind against the mortgaged premises or the Mortgagor's ownership
interest therein, and without subjecting the Mortgagor or the Mortgagee to
any liability, civil or criminal, for failure so to comply, the Mortgagor,
provided it prosecutes any such proceeding with due diligence, may delay
compliance therewith until the final determination of such proceeding;
(b) if any lien, charge or civil liability would be incurred by
reason of any such delay, as provided above in subparagraph (a), the
Mortgagor may nevertheless, with the prior written consent of the Mortgagee,
contest and delay compliance with such law, regulation and ordinance as
provided in subparagraph (a), provided that such contest or delay would not
subject the Mortgagee to criminal liability and the Mortgagor furnishes to
the Mortgagee security, satisfactory to the Mortgagee, against any loss,
injury or liability by reason of such contest or delay, and prosecutes the
contest with due diligence. Upon giving the approvals required above, the
Mortgagee will execute and deliver any appropriate documents which may be
necessary or proper to permit the Mortgagor to contest the validity or
application of any such law, regulation or ordinance, provided however that
the Mortgagee shall not be required to execute and deliver any documents
which in the reasonable judgment of the Mortgagee may prejudice the
Mortgagee s interest in the mortgaged premises.
8. Mortgagor agrees that all awards heretofore or hereafter made by
any public or quasi-public authority to present and all subsequent owners of
the premises covered by this Mortgage by virtue of any exercise of the right
of eminent domain by such authority, including any award for a taking of
title, possession or right of access to a public way, or for any change of
grade of streets affecting said premises, are hereby assigned to the
Mortgagee; and the Mortgagee, at its option, is hereby authorized, directed
and empowered to collect and receive the proceeds of any such award and
awards from the authorities making the same and to give proper receipts and
acquittances therefor, and may, at the Mortgagee s election, use such
proceeds in any one or more of the following ways; (1) apply the same or
any part thereof against the indebtedness secured hereby, whether such
indebtedness then be matured or unmatured, (2) use the same or any part
thereof to fulfill any of the covenants contained herein as the Mortgagee
may determine, (3) use the same or any part thereof to replace or restore
the property to a condition satisfactory to the Mortgagee, or (4) release
the same to the Mortgagor; and the Mortgagor hereby covenants and agrees to
and with the Mortgagee, upon request by the Mortgagee, to make, execute and
delivery any and all assignments and other instruments sufficient for the
purpose of assigning all such awards to the Mortgagee free, clear and
discharged of any and all encumbrances of any kind or nature whatsoever.
9. Mortgagor will deliver to the Mortgagee, in detail satisfactory
to the Mortgagee, and within ninety (90) days after the expiration of each
fiscal year, audited financial statements and related certificates and
financial data, all in accordance with paragraph 16 hereof.
10. That if any action or proceeding be commenced, excepting an action
to foreclose this Mortgage or to collect the debt hereby secured, to which
action or proceeding the Mortgagee is made a party by reason of the execution
of this Mortgage or the Notes which it secures, or in which it becomes
necessary to defend or uphold the lien of this Mortgage, all sums paid by
the Mortgagee for the expense of any litigation to prosecute or defend the
rights and lien created hereby including all court costs, abstracting charges
and reasonable attorneys' fees (including such fees for trial, pretrial and
appellate matters), shall be paid by the Mortgagor together with interest
thereon from date of payment at the rate of nine point sixty-five per centum
(9.65%) per annum and any such sum and the interest thereon shall be
immediately due and payable and be secured hereby, having the benefit of
the lien hereby created, as a part thereof, and of its priority.
11. Subject to the Mortgagor's right to bring good faith contests as
provided above in paragraph 5, Mortgagor shall pay all sums, the failure to
pay which may result in the acquisition of a lien prior to the lien of this
Mortgage before such a prior lien may attach, or which may result in
conferring upon a tenant of any part of the mortgaged premises a right
to recover such sums as prepaid rent, or as a credit or offset against any
future rental obligation.
12. Mortgagor shall assign to the Mortgagee, upon request, as further
security for the indebtedness secured hereby, the lessor's interests in any
or all leases, and the Mortgagor s interests in all agreements, contracts,
licenses and permits affecting the property subject to this Mortgage, such
assignments to be made by instruments in from satisfactory to the Mortgagee;
but no such assignment shall be construed as a consent by the Mortgagee to
any lease, agreement, contract, license or permit so assigned, or to impose
upon the Mortgagee any obligations with respect thereto. Nothing contained
in this paragraph 12 or in paragraphs 13 or 14 below shall be construed as a
waiver or consent by the Mortgagee to any violation of the prohibitions
and restrictions set forth in subparagraph 23 (g) hereof.
13. Mortgagor shall not cancel any of the leases now or hereafter
assigned to Mortgagee pursuant to paragraph 12 above, nor terminate or
accept a surrender thereof or reduce the payment of the rent thereunder or
modify any of said leases or accept any prepayment of rent therein (except
any amount which may be required to be prepaid by the terms of any such
lease) without first obtaining, on each occasion, the written approval
of the Mortgagee.
14. Mortgagor will faithfully keep and perform all of the obligations
of the landlord under all of the leases now or hereafter assigned to the
Mortgagee pursuant to paragraph 12 above and will not permit to accrue to
any tenant under any such lease any right to prepaid rent pursuant to the
terms of any lease other than the usual prepayment of rent as would result
from the acceptance on the first day of each month of the rent for the
ensuing month, according to the terms of the various leases.
15. Except as otherwise provided herein, the Mortgagor agrees that,
during the term hereof, the Mortgagor will not acquire any equipment,
machinery, furniture, furnishings, fixtures or apparatus covered by this
Mortgage subject to any security interest, conditional sale, title retention
arrangement or other charge or lien taking precedence over this Mortgage.
The Mortgagor shall have the right to add, substitute or replace such
machinery and equipment during the term hereof, provided, however, that
the Mortgagor shall not so add, substitute or replace in such a manner as
to substantially diminish or impair the value of the security of this
Mortgage and provided further that all of the right, title and interest of
the Mortgagor in all such replacement or additional machinery and equipment
shall, when acquired by the Mortgagor, be encumbered by the lien of this
Mortgage and become an integral part of the security under this Mortgage.
Anything to the contrary contained in this Mortgage, including the specific
provisions of this paragraph 15, notwithstanding, the Mortgagor shall have
the right without being deemed to be in default of its covenants contained
herein, during the term hereof and without the prior written consent of
the Mortgagee, to remove as items included in the mortgaged premises, such
equipment, machinery, furniture, furnishings, fixtures or apparatus which
have depreciated to such extent so as to render the same a non-material
asset or assets. For the purposes of this paragraph 15, non-material assets
are those items of personal property having a salvage value of $50,000 or
less. In events of removal of non-material assets by the Mortgagor, the
Mortgagor shall not be required to replace such assets as contemplated
herein unless such removal without replacement will serve to substantially
diminish or impair the value of the security of this Mortgage or materially
affect the business operations of the Mortgagor or its ability to fulfill its
obligations hereunder. The Mortgagor expressly agrees that it shall not,
without replacing same, remove as part of the mortgaged premises any
tangible personal property having a salvage value in excess of $50,000
without having first obtained the prior written consent of the Mortgagee.
16. Mortgagor shall furnish to Mortgagee, at Mortgagor s expense,
within ninety (90) days after the end of each fiscal year, a consolidated
balance sheet and consolidated statement of income and retained earnings of
Mortgagor's parent company, Orange-co, Inc., a Florida corporation, and said
parent company's consolidated subsidiaries, certified by independent public
accountants selected by Orange-co, Inc., a Florida corporation, and
satisfactory to the Mortgagee, together with a certificate of said accountants
to the effect that their audit of the financial affairs of Orange-co, Inc.,
a Florida corporation, and its consolidated subsidiaries for such fiscal
year has not disclosed any default under the terms and provisions of this
Mortgage, or if such accountants have obtained knowledge of such default,
they shall specify in the certificate the nature and status thereof. The
foregoing audited financial statement shall be accompanied by unaudited
consolidating financial information reporting financial data for the
Mortgagor. Such supplementary financial information relating to the
condition of the Mortgagor is to be of sufficient detail in order to permit
determination of the status of the various financial and business
requirements provided for herein. The Mortgagee and its representatives
shall have the right to inspect all books of accounts relating to the
property encumbered by this Mortgage and the financial and business
requirements contained herein (and to make copies or extracts therefrom) and
to cause such books to be audited by such independent public accountants
selected by the Mortgagee as often as may be reasonably requested, provided
however, that such inspection and audit shall be at the Mortgagee s expense.
17. This Mortgage is personal to the Mortgagor herein, and no sale,
lease, encumbrance or other transfer or conveyance shall be made by
Mortgagor of the property encumbered by this Mortgage, except for the sale of
non-material personal property pursuant to paragraph 15 of this Mortgage, or
premises described herein or any part thereof without first obtaining the
prior written consent of the Mortgagee. In the event Mortgagee gives this
written consent in a sale transaction, the grantee named in the conveyance
shall assume and agree to pay the obligation evidenced by the Notes secured
hereby. Any conveyance of the property herein described or any part thereof
in violation of the terms of this paragraph shall entitle Mortgagee to
accelerate the payment of the obligation secured hereby and all sums of
money secured hereby shall, at the option of Mortgagee, and upon the giving
of notice thereof, become immediately due and payable and in default whether
or not the same are so due and payable and in default by the specific terms
hereof. In the event of sale with the approval of Mortgagee having first
been obtained, nothing herein contained shall be construed to constitute a
novation or release Mortgagor or any subsequent owner of liability or
obligation under the Notes secured hereby or this Mortgage by reason of the
aforesaid assumption of the obligation under the Notes secured hereunder,
whether real or personal, excepting that the Mortgagor shall have the right
to add, substitute or replace personal property without the prior consent of
the Mortgagee in accordance with the provisions of paragraph 15 hereof,
and excepting that the Mortgagor shall be permitted to bring good faith
contests as provided in paragraph 5 herein.
18. Mortgagor shall not at any time during the term hereof, without
having first obtained the prior written consent of the Mortgagee, mortgage,
pledge or otherwise encumber or place any lien, or permit the same, to be
filed against the real and personal property encumbered hereby, or any
portion thereof.
19. Mortgagor shall at all times during the term hereof comply with
and conform to the requirements of all federal, state and local laws,
ordinances, regulations, conditions and restrictions applicable or pertaining
to, or affecting, the property and improvements described herein or the
business and operations of the Mortgagor, and Mortgagor shall not knowingly
commit, suffer or permit any act to be done in violation thereof, including,
without limitation, all federal, state and local pollution control laws
and regulations affecting the property encumbered hereby and the operation
hereof. Mortgagor warrants and represents that:
(a) to the best of Mortgagor s knowledge, there has been no
release or discharge of hazardous materials, hazardous wastes, hazardous
substances, solid wastes or pollution upon, in, over or under the mortgaged
premises and that no such materials or pollution has migrated thereto from
neighboring land;
(b) Mortgagor has not received any notice from any governmental
agency or authority or from any tenant or other occupant or from any other
person or entity with respect to any release or discharge of hazardous
materials, hazardous wastes, hazardous substances, solid waste or pollution
upon, in, over or under the mortgaged premises;
(c) to the best of Mortgagor s knowledge, there is no asbestos or
asbestos-containing materials, PCB's, radon gas or urea formaldehyde foam
insulation at or within the mortgaged premises; and
(d) Mortgagor has fully disclosed to Mortgagee all material facts
regarding the mortgaged premises, the Mortgagor and the Mortgagor's business
operations.
If Mortgagor's warranties and representations set forth in this Mortgage
are not true and correct, then Mortgagee, at its option, shall have the
right to declare the loan immediately due and payable and to accelerate the
entire indebtedness.
Mortgagor covenants and agrees that:
(a) Mortgagor is not and will not become involved in operations
at the mortgaged premises or at other locations which would lead to the
imposition on Mortgagor of liability under Chapter 403, Florida Statutes, the
Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. 6903,
Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), 42 U.S. 9601 or any other federal, state or local ordinances,
laws or regulations regarding environmental matters or hazardous substances;
(b) Mortgagor will promptly comply with the requirements of
Chapter 403, Florida Statutes, RCRA, CERCLA and all federal, state and local
laws and regulations regarding environmental matters or hazardous substances
as the same may each be amended from time to time (including all federal,
state and local laws and regulations regarding underground storage tanks),
and all such laws and regulations relating to asbestos and
asbestos-containing materials, PCB's, radon gas, and urea formaldehyde foam
insulation, and will notify Mortgagee promptly in the event of any release
or discharge or a threatened release or discharge of hazardous materials,
hazardous wastes, hazardous substances, solid waste or pollution upon, in,
over or under the mortgaged premises as those terms are defined in Chapter
403, Florida Statutes and any federal, state or local ordinances, laws or
regulations regarding environmental matters or hazardous substances, or the
presence of asbestos or asbestos-containing materials, PCB's, radon gas or
urea formaldehyde foam insulation at the mortgaged premises, or of the
receipt by Mortgagor of any notice from any governmental agency or authority
or from any tenant or other occupant or from any other person or entity with
respect to any alleged such release or presence promptly upon discovery of
such release, or promptly upon receipt of such notice, and will promptly send
Mortgagee copies of all results of any tests regarding same on the mortgaged
premises, including, but not limited to test on underground storage tanks;
and
(c) Mortgagor indemnifies and holds Mortgagee harmless from and
against all loss, liability, damage and expense, including attorneys fees
on the trial court and appellate levels, suffered or incurred by Mortgagee,
as holder of the Mortgage, Mortgagee in possession or as successor in
interest to Mortgagor as owner of the mortgaged premises by virtue of
foreclosure or acceptance of a deed in lieu of foreclosure, under or on
account of said Chapter 403 and any federal, state or local ordinances, laws
or regulations regarding environmental matters or hazardous substances,
including the assertion of any liens taking priority over the lien of this
Mortgage relating to any such release or discharge of hazardous materials
which may occur prior to the discharge of this Mortgage.
In the event that Mortgagor fails to abide by the above-described
covenants, Mortgagee, at its option, shall have the right to declare the loan
immediately due and
payable, and to accelerate the entire indebtedness.
During the term of this Mortgage, Mortgagee may, but is not obligated
to, enter upon the mortgaged premises to make reasonable inspection of its
condition, including, but not limited to soil and groundwater sampling and
monitoring, inspection for hazardous waste, asbestos or asbestos-containing
materials, PBC's, radon gas and/or urea formaldehyde foam insulation;
provided, however, that any such inspections shall be at reasonable times
and without unreasonably disturbing the occupancy of any of the tenants
on the mortgaged premises.
In the event Mortgagor fails to comply with the requirements of said
Chapters 403 and any federal, state or local ordinances, laws or regulations
regarding environmental matters or hazardous substances, and should such
condition remain uncorrected for a period of thirty (30) days, Mortgagee may,
at its election, but without the obligation so to do, cause curative or
remedial work to be performed at the mortgaged premises, or take any and all
other actions as Mortgagee deems necessary, as shall cure said failure of
compliance, and any amounts paid as a result thereof, together with interest
thereon from the date of payment at the rate equal to the highest rate
permitted by law, but in no event to exceed twelve and one-half percent
(12.5%) per annum, shall be immediately due and payable by Mortgagor to
Mortgagee, and until paid shall be added to and become a part of the
principal debt secured hereby, having the benefit of the lien hereby
created, as a part thereof, and of its priority, and the same may be
collected as a part of said principal debt in any suit hereon or upon
the Notes secured hereby, or Mortgagee, by the payment of any assessment,
claim or charge, may, if it sees fit, be thereby subrogated to the rights of
the State of Florida, but no such advance shall be deemed to relieve
Mortgagor from any default hereunder or impair any rights or remedy
consequent thereon.
20. Mortgagor agrees that during the term hereof, the Mortgagee shall
have the right, upon reasonable notice, during normal business hours and by
appointment, to enter upon the mortgaged premises for the purpose of
inspecting same and for the purpose of ascertaining that the various
requirements and restrictions contained herein are being complied with by
the Mortgagor.
21. In the event that Mortgagor shall (1) consent to the appointment
of a receiver or trustee of all or a substantial part of Mortgagor's assets,
or (2) be adjudicated a bankrupt or insolvent, or file a voluntary petition
in bankruptcy or admit in writing its inability to pay its debts as they
become due, or (3) make a general assignment for the benefit of creditors,
or (4) file a petition or answer seeking reorganization or arrangement with
creditors, or to take advantage of any insolvency law, or (5) file an answer
admitting the material allegations of a petition filed against the Mortgagor
in any bankruptcy, reorganization or insolvency proceeding, or (6) action
shall be taken by the Mortgagor for the purpose of effecting any of the
foregoing, or (7) any order, judgment or decree shall be entered upon an
application of a creditor or Mortgagor by a court of competent jurisdiction
approving a petition seeking appointment of a receiver or trustee of all or a
substantial part of the Mortgagor s assets and such order, judgment or decree
shall continue unstayed and in effect for any period of thirty (30)
consecutive days, the Mortgagee may declare the Notes hereby secured
immediately due and payable, without notice or demand, whereupon the
principal of and the interest accrued on the Notes and all other sums
hereby secured shall become immediately due and payable as if all of the
said sums of money were originally stipulated to be paid on such day; and
thereupon the Mortgagee without notice or demand may prosecute a suit at law
and/or in equity as if all monies secured hereby had matured prior to
its institution.
22. It is agreed that nothing herein contained nor any transaction
related thereto shall be construed or so operate as to require the Mortgagor
to pay interest at a rate greater than it is now lawful in such case to
contract for, or to make any payment or to do any act contrary to law; that
if any clauses or provisions herein contained operate or would prospectively
operate to invalidate this Mortgage or the Notes in whole or in part, then,
such clauses and provisions only shall be held for naught, as though not
herein contained, and the remainder of this Mortgage shall remain operative
and in full force and effect.
23. The Mortgagor understands and agrees that the successful operation
of the mortgaged premises by the Mortgagor as a citrus concentrate plant
forms an integral part of the security given hereby and the Mortgagor
expressly agrees that it shall, during the term hereof, conduct its corporate
business in compliance with the below-listed requirements and the failure by
Mortgagor to comply with or abide by such requirements, or Mortgagor' s
misrepresentation regarding any or all of the facts hereafter recited,
shall constitute a default under this Mortgage and the Notes secured hereby.
By its execution hereof, the Mortgagor does hereby represent and warrant
all of the facts hereafter recited and covenants and agrees with the Mortgagee
that it shall comply with or abide by the below-listed requirements at all
times during the term hereof, to-wit:
(a) The Mortgagor represents, that on the date hereof, it is a
corporation duly incorporated and validly existing in good standing under the
laws of the State of Florida and that it is a wholly-owned subsidiary of
Orange-co, Inc., a Florida corporation. Additionally, Mortgagor covenants
and agrees that it shall, at all times during the term hereof, remain validly
existing and in good standing under the laws of the State of Florida, and
that it shall not enter into a merger or consolidation agreement with any
other corporation, foreign or domestic, including, without limitation,
Mortgagor's parent company, Orange-co, Inc., a Florida corporation, or its
successor, without the prior written consent of the Mortgagee.
(b) The Mortgagor represents that the execution and delivery by
it of this Mortgage, the Notes secured hereby, and related loan documents,
and the performance by the Mortgagor thereunder, have been duly authorized by
all necessary corporate action and will not violate any provision of law or
the charter or by-laws of Mortgagor or result in the breach or constitute a
default under any indenture or otheragreement or instrument to which the
Mortgagor is a party or by which the Mortgagor or the real and personal
property encumbered hereby may be bound or affected.
(c) The Mortgagor covenants and agrees that, during the term
hereof, its lines of business shall be restricted to activities directly or
substantially related to the citrus industry.
(d) The Mortgagor covenants and agrees that, except for
transactions in the ordinary course of or pursuant to the reasonable
requirements of the Mortgagor's business, all transactions between the
Mortgagor and affiliates (including is parent company, Orange-co, Inc., a
Florida corporation or its successor) shall be on terms which are not
substantially different from those which the Mortgagor could have obtained
from unrelated parties as a result of "arms-length" bargaining.
(e) The Mortgagor covenants and agrees that, during the term
hereof, it shall annually reinvest not less than 25% of its annual
depreciation (as indicated on the required financial statements and reports
to be furnished by Mortgagor to Mortgagee) in capital improvements or repairs
and maintenance of the concentrate plant which is included as part of the
security hereof and are encumbered hereby. By its execution hereof, the
Mortgagor expressly understands and agrees that for the purposes of this
subparagraph (e) relating to reinvestment requirements, sums expended in
employing practices of good husbandry (with the exception of such items as
adding or replacing irrigation and drainage pumps and equipment and
the replacement of unproductive trees) shall not qualify for inclusion
within the annual reinvestment requirement of not less than 25% of
its annual depreciation. The Mortgagor further expressly agrees that if
such amount of its annual depreciation is not so reinvested, the Mortgagor
will establish an escrow account, satisfactory in all respects to the
Mortgagee and will pay annually into such account an amount equal to the
difference between 25% of its annual depreciation and the amounts actually
reinvested, as contemplated herein, by the Mortgagor in any one given fiscal
year, and the Mortgagor shall set a reserve aside therefor. The amounts so
deposited by Mortgagor into the escrow account may be used for reinvestment
purposes within a five-year period, and to the extent not so reinvested,
such funds, at the sole option of the Mortgagee, may be applied to the then
unpaid principal balance due under the Notes secured hereby. It is agreed
between the Mortgagor and the Mortgagee that if, in any one fiscal year, the
Mortgagor shall invest an amount in excess of 25% of its annual depreciation
in capital improvements or repairs and maintenance, then, such amount in
excess of 25% of its annual depreciation may be credited toward the
Mortgagor's obligations under this subparagraph (e) in any of the Mortgagor's
next five ensuing fiscal years.
(f) Intentionally Deleted.
(g) The Mortgagor represents that, on the date hereof, all
certificates, licenses and permits applicable to the property encumbered
hereby, including, but not limited to, all necessary water usage or
consumption permits, fruit dealers and citrus packing, producing and
marketing licenses and permits, all required pollution control permits, and
State and local agricultural permits, have been obtained, and Mortgagor
agrees to keep all such certificates, licenses and permits current during
the term hereof. Additionally, the Mortgagor covenants and agrees to use its
best efforts to comply with the requirements of all Federal, State and local
pollution control laws and regulations applicable to the property encumbered
hereby and to the business and operations of the Mortgagor.
(h) The Mortgagor acknowledges that, in accordance with paragraph
15 hereof and subject to its provisions, the Mortgagor's right to substitute
and replace machinery and equipment shall exist only in those events in
which the value of the Mortgagee's security will not be reduced or impaired
by such substitution or replacement and in which the Mortgagee will obtain
the first and best lien on the machinery and/or equipment so substituted or
replaced.
(i) It is agreed that all references to Mortgagor's parent
company, Orange-co, Inc., a Florida corporation, contained in this Mortgage
shall be deemed and construed to include any successor, by any means
whatsoever, to Orange-co, Inc., a Florida corporation, and any successor to
such successor, etc.
(j) The Mortgagor covenants and agrees that it shall, upon
learning of or recognizing any non-compliance with any of the special
requirements and restrictions contained in this paragraph 23, or of
non-compliance with any of the other provisions of this Mortgage, including
without limitation, the provisions contained in paragraphs 15, 17, 18
and 19 hereof, give written notice to the Mortgagee of such non-compliance
within ten (10) days from such recognition. In the event of any default
under the terms and conditions of this paragraph 23, or under the terms and
conditions of paragraphs 15,17, 18 and 19 hereof, aforesaid, and such default
shall have continued for a period of
thirty (30) days or more after written notice thereof has been given by the
Mortgagor to the Mortgagee as provided above, or, in any event, shall have
continued for a period of thirty (30) days or more after written notice
thereof has been given by the Mortgagee to the Mortgagor (it being expressly
understood by the Mortgagor that the Mortgagee may give such notice of
default regarding the obligations to be performed by the Mortgagor hereunder
at any time the Mortgagee learns of such default by any means whatsoever
and the Mortgagee s right to give such notice is not conditioned upon having
received a notice from the Mortgagor as provided above) and such default
shall have not been cured or the Mortgagor shall not have commenced upon
the curing thereof to the satisfaction of the Mortgagee within said thirty
(30) days' period, then, at its option, the Mortgagee shall be entitled to
accelerate the payment of the obligation secured hereby and all sums of money
secured hereby shall become immediately due and payable and in default whether
or not the same are so due and payable and in default by the specific terms
hereof. It is expressly understood between the Mortgagor and the Mortgagee
that the aforesaid thirty (30) day grace period shall apply only in the
event of a default under this paragraph 23 and under paragraphs 15, 17, 18
and 19 hereof and such grace period shall not apply to any default under any
other provision, requirement, condition or covenant contained herein, in the
Notes secured hereby, or in any other related or associated loan document
given by the Mortgagor to the Mortgagee.
Of even date herewith, Orange-co, Inc., a Florida corporation, the
parent company of the Mortgagor, has issued its certificate to the Mortgagee,
in connection with this loan (the "Certificate") setting forth its agreements
and the business requirements to be maintained by Orange-co, Inc., a Florida
corporation, at all times prior to the payment in full of the indebtedness
secured hereby (the "Business Requirements"). It is agreed that it shall be
a default under the terms and conditions of this Mortgage in the event that
Orange-co, Inc., a Florida corporation, fails to maintain or otherwise
violates the Business Requirements set forth in the Certificate.
24. It is agreed that any sum or sums which may be loaned or advanced
by the Mortgagee to the Mortgagor at any time within twenty (20) years from
the date of this indenture, together with interest thereon at the rate agreed
upon at the time of such loan or advance shall be equally secured with and
have the same priority as the original indebtedness and be subject to all
the terms and provisions of this Mortgage; provided that the aggregate amount
of principal outstanding at any time shall not exceed the sum of
$22,000,000.00, plus interest thereon, and any disbursements made for the
payment of taxes, levies, or insurance on the property covered by the lien of
this Mortgage, with interest on such disbursements.
25. By its execution and delivery hereof, the Mortgagor does hereby
represent and warrant unto the Mortgagee that there are no actions, suits or
proceedings pending or, to the best of the knowledge and belief of the
Mortgagor, threatened against or affecting the Mortgagor or its subsidiaries,
at law or in equity or before or by any Federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which may result in any material
adverse change in the business, properties or assets or in the condition,
financial or otherwise, of the Mortgagor or any of its subsidiaries. The
Mortgagor expressly agrees that if the aforementioned representation and
warranty prove to be false or if the Mortgagor has misrepresented the facts
set forth above, either of such events shall constitute a default under this
Mortgage and the Notes secured hereby entitling the Mortgagee to exercise
all of the rights and remedies contained herein and in the Notes.
26. No delay by Mortgagee in exercising any right or remedy hereunder,
or otherwise afforded by law, shall operate as a waiver thereof or preclude
the exercise thereof during the continuance of any default thereunder. No
waiver by Mortgagee of any default shall constitute a waiver of or consent
to subsequent defaults. No failure of Mortgagee to exercise any option
herein given to accelerate the maturity of the debt hereby secured, no
forbearance by Mortgagee before or after the exercise of such option and no
withdrawal or abandonment of foreclosure proceedings by Mortgagee shall be
taken or construed as a waiver of its right to exercise such option or to
accelerate the maturity of the debt hereby secured by reason of any past,
present or future default on the part of Mortgagor; and, in like manner,
the procurement of insurance or the payment of taxes or other liens or
charges by Mortgagee shall not be taken or construed as a waiver of its
right to accelerate the maturity of the debt hereby secured.
27. All written notices required to be given in connection with this
Mortgage shall be deemed to have been properly given if mailed by registered
or certified mail or personally delivered, if to Mortgagee, at John Hancock
Mutual Life Insurance Company, P.O. Box 111, John Hancock Place, Boston,
Massachusetts 02117, Attention: Bond and Corporate Finance Department
(Agri Business Group); and if to the Mortgagor, at 2020 U.S. Highway 17
South, Bartow, Florida 33830. Said addresses may be changed from time to
time by any of the foregoing parties by notice to the others, mailed or
delivered as aforesaid, of the location and mailing address of the place at
which notice is thereafter to be mailed or delivered.
28. This instrument also creates a security interest in favor of
Mortgagee under the Florida Uniform Commercial Code and shall be construed
as a security agreementunder said Code, and Mortgagee shall also have all
rights and remedies of a secured party under the Florida Uniform Commercial
Code, and without limitation upon or in derogation of the rights and
remedies created under and accorded Mortgagee by this Mortgage pursuant to
the common law or any other laws of the State of Florida or of any other
jurisdiction, it being understood that the rights and remedies of Mortgagee
under the Florida Uniform Commercial Code shall be cumulative and in addition
to all other rights and remedies of Mortgagee arising under the common law,
or any other laws of the State of Florida or of any other jurisdiction.
This Mortgage creates a continuing lien to secure the full and final
payment of the Notes and the performance of all other obligations imposed
hereby and hereafter arising.
29. MORTGAGEE AND MORTGAGOR HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT EITHER MAY HAVE TO TRIAL BY JURY IN RESPECT
OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS MORTGAGE AND ANY AGREEMENT EXECUTED IN CONNECTION WITH THIS
MORTGAGE, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR MORTGAGEE ACCEPTING THIS MORTGAGE AND MAKING THE LOAN TO
MORTGAGOR.
NOW, if the payments are made as provided and all the foregoing
covenants and agreements are performed and observed, this Mortgage shall
be null and void and shall be released at the cost of the Mortgagor, which
cost the Mortgagor agrees to pay; but upon any default in the payment of the
indebtedness hereby secured or of any installment thereof or of interest
thereon, as they severally become due, or upon any default in the
performance or observance of any of the terms, covenants or agreements
of this Mortgage or of any of the assignments of leases beyond any applicable
grace period from time to time given by Mortgagor to Mortgagee as further
security for said loan, then, in any or either of said events, the whole of
the indebtedness hereby secured, at the option of the Mortgagee or the legal
holder of said indebtedness, shall become immediately due and payable
without notice, or in the event of the passage after the date of this
Mortgage of any law of the State of Florida deducting from the value of land
for the purpose of taxation any lien thereon, or changing in any way the
laws now in force for the taxation of mortgages or debts secured by mortgages
for state or local purposes, or the manner of the collection of any such
taxation so as to affect this Mortgage adversely, the holder of this
Mortgage, and of the debt which it secures, shall have the right to give
thirty (30) days' written notice to the owner of the mortgaged premises
requiring the payment of the mortgage debt, and it is hereby agreed that,
if such notice be given, the said debt shall become due, payable and
collectible at the expiration of said thirty (30) days provided, however,
that such requirement of payment of said debt shall be ineffective if
the Mortgagor is permitted by law to pay or reimburse the Mortgagee
for payment of the whole of such tax in addition to all other payment
required hereunder, without any penalty thereby accruing to the holder
of this Mortgage and the debt secured hereby, and if, in fact, the
Mortgagor does pay or reimburse the Mortgagee for payment of such tax
prior to the date on which payment is required by such notice.
Upon the Mortgage indebtedness becoming due and payable as heretofore
provided, the Mortgagor shall refrain from collecting and receiving
all rents accruing as aforesaid and upon notice from the Mortgagee all
tenants shall thereafter pay such rents to the Mortgagee, and any
payment made otherwise shall not discharge the obligations of such
tenant, and the Mortgagee may immediately cause this Mortgage to be
foreclosed in the manner prescribed by law, and upon commencement of
foreclosure proceedings shall be entitled to have a receiver appointed,
whether the mortgaged premises are homestead or not and without proof of
any other ground for his appointment than the said default, to take
possession and charge of the mortgaged premises, to rent the same and
receive and collect the rents, issues and profits thereof, under
direction of the court, and any amount so collected by such receiver
shall be applied under direction of the court to the payment of any
judgment rendered, or amounts found due upon foreclosure of this Mortgage
including the cost of collection and attorneys' fees on any trial court
and appellate levels; and, in the event of any default or defaults in the
payment of the indebtedness hereby secured, or of any installment thereof,
or of interest thereon, or in the performance or observance of any of the
terms, covenants or agreements herein contained beyond any applicable grace
period, the Mortgagee shall have the right forthwith after any such
default to enter upon and take possession of the said mortgaged premises
and to let said premises and receive the rents, issues and profits thereof,
and apply the same, after payment of all necessary charges and expenses,
on account of the indebtedness hereby secured.
The proceeds of said foreclosure shall be applied, first, to the
expenses incurred hereunder, including attorneys' fees on any trial court
and appellate levels for such services as may be rendered for the
collection of said indebtedness and the foreclosure of this Mortgage;
second, to the payment of whatever sum or sums the Mortgagee may
have paid or become liable to pay in carrying out the options, terms
and stipulations of this Mortgage, together with interest thereon; third,
to the payment and satisfaction of the Notes; and fourth, the surplus,
if any, shall be paid to the Mortgagor or otherwise as the court may
decree.
The Mortgagor hereby agrees that in the event the Notes secured
hereby is placed in the hands of an attorney for collection, or in case
the holder shall become a party either as plaintiff or as defendant in
any suit or legal proceeding in relation to the property described or the
lien created in this Mortgage, or for the recovery or protection of said
indebtedness, the Mortgagor will pay on demand all costs and expenses
arising thereof incurred by the Mortgagee, including the Mortgagee's
attorneys' fees (including such fees for prosecuting or defending any
appeal in any matter involving collection of this obligation or
foreclosure of the Mortgage securing same), all of Mortgagee's court
costs, and the cost of extending the abstract of title in the event of
foreclosure (or any other litigation which in the judgment of the
Mortgagee requires the extending of the abstract of title), with
interest thereon until paid at the rate of nine point sixty-five per
centum (9.65%) per annum.
The Mortgagor hereby assigns, transfers and conveys unto the Mortgagee,
its successors and assigns, the rents accrued and to accrue from all tenants
in occupancy of the mortgaged premises, or any part thereof, including
rentals and royalties under oil, gas and mineral leases, if any, during the
lifetime of this Mortgage, it being understood that as long as there is no
default in the performance or observance of any of the covenants or
agreements herein contained, the Mortgagor shall have the privilege of
collecting and receiving all rents accruing under the leases or contracts
of tenancy for the mortgaged premises or any part thereof. All leases,
royalty agreements, etc., must be executed pursuant to the provisions of
paragraph 17 hereof.
It is expressly agreed by and between Mortgagor and Mortgagee that
if any provision, or any part thereof, of this Mortgage, the Notes secured
hereby, or any related loan document is prohibited, unenforceable or
invalid under the laws of any jurisdiction which has jurisdiction over
same, including those of the State of Florida, the provision or part
thereof shall be ineffective to the extent of such prohibition,
unenforceability or invalidity under the applicable law without
affecting the enforceability or validity of such provision in any
such jurisdiction, and without invalidating the remainder of such
provision or other provisions of said documents.
IN WITNESS WHEREOF, the Mortgagor has caused the execution of this
Mortgage, by its authorized officers and caused its corporate seal to be
affixed this 13th day of August, 1996.
Signed, sealed and delivered ORANGE-CO OF FLORIDA, INC.,
in the presence of: a Florida corporation
/s/John R. Alexander By: /s/ Gene Mooney
- ----------------------- -------------------------
Name: John R. Alexander Name: Gene Mooney
Title: President
ATTEST:
/s/Linda S. Plage /s/Dale A. Bruwelheide
- ----------------------- ---------------------------
Name: Linda S. Plage Name: Dale A. Bruwelheide
Title: Vice President and
Chief Financial Officer
(Corporate Seal)
STATE OF FLORIDA)
)
COUNTY OF POLK )
I hereby certify that on this 13 day of August, 1996, before me an
officer duly authorized in the State and County aforesaid to take
acknowledgments, personally appeared Gene Mooney and Dale A. Bruwelheid,
respectively, the President and Chief Financial Officer of ORANGE-CO OF
FLORIDA, INC., a Florida corporation, on behalf of the corporation, who
is personally known to me/or who produced the following __________ as
identification, and they acknowledged before me that they executed the
same as their free act and deed on behalf of said corporation.
In witness whereof, I have hereunto set my hand and seal in the
State and County aforesaid as of this 13 day of August, 1996.
/s/Gwen C. Banks
----------------
Gwen C. Banks
Notary Public, State of Florida
Name:
Commission No.
My commission expires
(Notary Seal)
JOINDER AND CONSENT
The undersigned does hereby join in and consent to the foregoing
Consolidated, Amended and Restated Florida Mortgage and Security Agreement
this 7 day of August, 1996.
JOHN HANCOCK MUTUAL LIFE INSURANCE
COMPANY, a Massachusetts corporation
/s/ Susan A. Chase By: /s/Ken Hines, Jr.
- -------------------- ----------------------
Name: Susan A. Chase Name:Ken Hines, Jr.
Title: Sr. Investment Officer
/s/Sandra A. Benoit
- --------------------
Name:Sandra A. Benoit
(Corporate Seal)
COMMONWEALTH OF MASSACHUSETTS )
)
COUNTY OF SUFFOLK )
I hereby certify that on this 7th day of August, 1996, before me an
officer duly authorized in the State and County aforesaid to take
acknowledgments, personally appeared Ken Hines, Jr., as the Sr. Investment
Officer for JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY, a Massachusetts
corporation, on behalf of the corporation, who produced the following a
driver's license as identification, and he did acknowledge before me that
he executed the same as his free act and deed and the free act and deed of
said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and seal in the
State and County aforesaid as of this 7th day of August, 1996.
/s/Marie C. O'Brien
-------------------
Marie C. O'Brien
Notary Public, Commonwealth of Massachusetts
Commission No.:_______________________
My Commission expires:
MIA9510/119449-1
