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, 1997
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, 1997 (based on the closing price on December 4, 1997):
$39,847,586.
Number of shares outstanding of common stock, $.50 par value, as of November 30,
1997: 10,309,475 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 1998 Annual Meeting of
Stockholders - Items 10, 11, 12 and 13
-1-
ORANGE-CO, INC.
INDEX TO ANNUAL REPORT
ON FORM 10-K
PAGE NO.
PART I
Item 1 - Business 3
Item 2 - Properties 10
Item 3 - Legal Proceedings 10
Item 4 - Submission of Matters to a Vote of Security Holders 10
PART II
Item 5 - Market for the Registrant's Common Stock and Related
Shareholder Matters 11
Item 6 - Selected Financial Data 11
Item 7 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 13
Item 8 - Financial Statements and Supplementary Data 23
Item 9 - Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 39
PART III
Item 10 - Directors and Executive Officers of the Registrant 40
Item 11 - Executive Compensation 40
Item 12 - Security Ownership of Certain Beneficial Owners
and Management 40
Item 13 - Certain Relationships and Related Transactions 40
PART IV
Item 14 - Exhibits, Financial Statement Schedule and
Reports on Form 8-K 41
-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,
1997, the Company owned and managed approximately 16,635 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 foodservice 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 1997-98 season, the United States Department
of Agriculture ("USDA") has announced an anticipated Florida crop of
approximately 254,000,000 boxes of round oranges. It is uncertain what the
effect of this size crop will be on the Company's results for the 1997-98 fiscal
year. The 1996-97 crop was determined to be 226,200,000 boxes of round oranges.
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 and beneficially
held approximately 50.4% of those shares as of September 30, 1997. Ben Hill
Griffin, Inc. is a privately owned agribusiness corporation located in
Frostproof, Florida.
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 represented less than 1/2 of 1% of the Company's assets
at time of the final sale. In September of 1997, the Company dissolved
OrancoMex S.A. de C.V.
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,
1997 1996 1995
<S> <C> <C> <C>
Beverage Division $104,480 $114,035 $106,894
Grove Management Division 4,857 5,095 4,431
-------- -------- --------
Total Sales $109,337 $119,130 $111,325
======== ======== ========
</TABLE>
-3-
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 11,000,000 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>
1992-93 8,149,000
1993-94 9,296,000
1994-95 9,597,000
1995-96 9,978,000
1996-97 10,230,000
</TABLE>
The increased processing activity over the past five years resulted from a
combination of increased production of the Company's owned and managed groves
and an increased amount of 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.
In fiscal 1994, 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 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
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(R) and Gold 'N' Rich(R)
foodservice frozen concentrated juice products business for the foodservice
business in the United States, its territories, Puerto Rico and the
U.S. Military. Included in this purchase was a partial assignment of the
rights to use the Birds Eye(R) trademark in the territories 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.
-4-
<TABLE>
<CAPTION>
The following table sets forth the equivalent concentrate and NFC gallons produced at the Company's
Bartow plant during each of the last five seasons. The number of gallons shown is based on a concentrate
factor of 65 degree brix, which is 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>
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
1996-97 7,979,675 805,825 8,785,500
</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
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, 1997, the Company owned approximately 13,721 acres of
citrus groves and also managed approximately 2,914 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
857,687 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 November 30, 1997.
<TABLE>
<CAPTION>
GROVES OWNED GROVES MANAGED
LOCATION
<S> <C> <C>
Polk County 547 -
DeSoto County 12,311 2,686
Charlotte County 863 228
------ -----
Totals 13,721 2,914
====== =====
</TABLE>
-5-
<TABLE>
<CAPTION>
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
PRODUCTION
SEASON OWNED GROVES MANAGED GROVES TOTAL PRODUCTION PER ACRE(1)
(IN ACRES) (IN BOXES)
<S> <C> <C> <C> <C>
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
1996-97 11,601 1,965 5,261,841 388
</TABLE>
<F1>
(1)Calculated by dividing total production by total number of productive
grove acres owned and managed as of September 30, 1993, 1994, 1995, 1996 and
1997.
<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>
1992-93 186,500,000
1993-94 174,200,000
1994-95 205,500,000
1995-96 203,300,000
1996-97 226,200,000
</TABLE>
As previously mentioned, the USDA has announced an anticipated Florida
orange crop of approximately 254,000,000 boxes of round oranges for the 1997-98
season.
In addition to productive grove acreage, as of November 30, 1997 the
Company owned approximately 5,735 acres of land, much of it in the vicinity of
the Groves, of which approximately 2,112 acres are prepared for citrus planting,
approximately 1,295 acres are suitable for cultivation and 2,328 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 1992 through fiscal 1997, the Company
accelerated its rehabilitation of the Groves by planting approximately 719,000
trees and installing improved irrigation systems covering approximately 9,086
acres.
During the past five seasons, substantially all of the fruit harvested from
the Groves was used in the Company's processing plant. Most of the 1997-98 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,
-6-
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, 1997, the Company managed 2,271 acres on a standard-care basis and
643 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.
EMPLOYEES
As of November 30, 1997 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 500 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
-7-
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 Environmental
Protection or by the landowners themselves. The water management districts
primarily regulate the drainage and irrigation of the lands within each
district and make annual 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 1997-98 season.
During fiscal 1997 and 1996, the Company spent approximately $133,000 and
$505,000 respectively, on its spray field system for disposing of waste water at
the Bartow facility and on other environmental matters none of which was
capitalized during fiscal 1997. The Company anticipates the expenditure of
approximately an additional $100,000 during fiscal 1998 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 5.0% of
Florida FCOJ production during the 1996-97 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
-8-
government for 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.
The North American Free Trade Agreement ("NAFTA") with Mexico and Canada,
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 rights to use the Birds
Eye(R) and the Gold 'N' Rich(R) trademarks for use in the foodservice juice
business.
FOREIGN AND DOMESTIC OPERATIONS The Company derived approximately 9.5%, 8.3% and
13.6%, of its revenue from foreign sales during fiscal 1997, 1996, and 1995
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 1997 and 1996 the Company's gross sales, net
income and assets were wholly attributable to the citrus business. The
Company has two customers that accounted for 22.3% and 14.1% of revenue for
fiscal 1997. Relationships between the Company and these two customers are
currently good and are expected to remain so. All other customers individually
accounted for less than 10% of total sales for fiscal 1997. 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".
-9-
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, 1997.
LOCATION GENERAL CHARACTER APPROXIMATE SIZE
<S> <C> <C>
Polk, Charlotte and Citrus groves and related acreage 18,543 acres
DeSoto, Counties, FL(1)
Bartow, FL (1) Citrus processing plant 551 acres
80,000 boxes per day
average capacity
Concentrate storage facility 7,500,000 gallon storage
capacity
DeSoto County, FL Undeveloped land 363 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
None.
-10-
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 1997 HIGH LOW
<S> <C> <C>
First Quarter $8.0000 $6.7500
Second Quarter 8.1250 7.5000
Third Quarter 7.8750 7.5000
Fourth Quarter 8.1875 7.6250
FISCAL 1996 HIGH LOW
First Quarter $8.2500 $7.1250
Second Quarter 9.3750 7.5000
Third Quarter 9.1250 7.7500
Fourth Quarter 8.1250 7.7500
</TABLE>
On November 30, 1997, there were approximately 4,378 named holders of
record of the Company's common stock.
On February 3, 1997 the Company paid a dividend of $.10 per common share
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
previously last paid a dividend of $.02 per share on its common stock in
November 1988. Any payment of cash dividends in the future will be dependent
upon the Company's financial condition, loan covenants, capital requirements,
earnings, and other factors that the Company deems relevant.
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
The following selected financial data as of and for the years ended September 30, 1997, 1996, 1995, 1994 and 1993, 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 Company completed the sale
of the Petroleum Division in September 1994.
The following data should be read 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".
-11-
<CAPTION>
YEARS ENDED SEPTEMBER 30, 1997, 1996, 1995, 1994, AND 1993,
HISTORICAL(1)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
1997 1996 1995 1994 1993
STATEMENT OF OPERATIONS DATA
<S> <C> <C> <C> <C> <C>
Sales $109,337 $119,130 $111,325 $76,756 $71,938
======== ======== ======== ======= =======
Income from continuing
operations before income
taxes $ 1,833 $ 14,487 $ 14,776 $ 5,886 $ 3,759
======== ======== ======== ======= =======
Net income $ 1,079 $ 10,091 $ 9,135 $ 3,345 $ 1,088
======== ======== ======== ======= =======
Net income per common share $ .10 $ .98 $ .89 $ .32 $ .11
======== ======== ======== ======= =======
</TABLE>
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1997, 1996, 1995, 1994, AND 1993
(IN THOUSANDS)
1997 1996 1995 1994 1993
BALANCE SHEET DATA
<S> <C> <C> <C> <C> <C>
Total assets $201,129 $199,695 $171,441 $169,404 $139,802
======== ======== ======== ======== ========
Long-term debt (less current portion) $ 46,764 $ 46,663 $ 31,252 $ 38,499 $ 19,683
======== ======== ======== ======== ========
Stockholders' equity $109,100 $109,011 $ 99,932 $ 90,797 $ 87,452
======== ======== ======== ======== ========
</TABLE>
<F1>
(1)Not covered by accountant's report.
On February 3, 1997 the Company paid a dividend of $.10 per common share
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
previously last paid a dividend of $.02 per share on its common stock in
November 1988.
-12-
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FISCAL 1997 VERSUS FISCAL 1996
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, 1997 to the Company's continuing operations for the
year ended September 30, 1996.
<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, 1997 VS. YEAR ENDED SEPTEMBER 30, 1996
INCREASES/(DECREASES)
(IN THOUSANDS)
COST OF
GOODS NET CHANGES
SALES SOLD TO INCOME
<S> <C> <C> <C>
Beverage Division . . . . . . . . . . . . $(9,555) $2,551 $(12,106)
Grove Management Division . . . . . . . . (238) (6) (232)
-------- ------ ---------
Gross Profit .. . . . . . . . . . . . . . $(9,793) $2,545 $(12,338)
======== ======
Other costs and expense, net:
Selling, general and administrative . . . . . . . . . . . . . (117)
Gain on disposition of property and equipment . . . . . . . . 416
Other income/(expense) . . .. . . . . . . . . . . . . . . . . 49
Interest . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . (664)
--------
Income before income tax . . . . . . . . . . . . . . . . . . . . . (12,654)
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . 3,642
--------
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(9,012)
========
</TABLE>
SALES
Total net sales from operations decreased approximately $9,793,000 or 8.2%
for the fiscal year ended September 30, 1997 compared to the prior year ended
September 30, 1996. The principal decrease of approximately $9,555,000 occurred
in the Beverage Division. The Grove Management Division sales decreased
approximately $238,000 compared to the prior year.
BEVERAGE DIVISION The Beverage Division sales decreased approximately
$9,555,000 during fiscal 1997 compared to the prior year. A principal component
of this reduction was a decrease of approximately $14,783,000 in revenues as a
result of lower prices for bulk citrus juice products sold compared to the prior
year. Partially offsetting this price decrease was an increase of approximately
$4,088,000 from the Company's bulk citrus juice products due to higher volumes
of these products sold. The increase in volumes was due primarily to an
expanding sales program for bulk citrus juice products. In October 1996, the
USDA announced a Florida crop estimate of approximately 220,000,000 boxes of
round oranges for the 1996-97 season. This represented a significant increase
from the 1995-96 actual of approximately 203,300,000 boxes of round oranges.
The anticipation of this significant increase had a deflating effect on prices
throughout fiscal 1997 compared to the prior year. The actual final crop for
the 1996-97 season was approximately 226,200,000 boxes of round oranges. As we
entered the 1997-98 season, the USDA has estimated a Florida orange crop of
approximately 254,000,000 boxes of round oranges.
-13-
Sales of the Company's packaged citrus juices increased approximately
$576,000 during fiscal 1997 compared to the prior year. Of this increase, the
sales increase of approximately $2,315,000 was due to increased volumes compared
to the prior year principally as a result of the purchase of the Birds Eye(R)
foodservice juice business in July 1996. Partially offsetting this increase
was a decrease of approximately $1,739,000 as a result of lower prices for
packaged citrus juice products compared to the prior year.
The Company's non-orange and packaged juices and drink base sales increased
approximately $2,219,000 during fiscal 1997 compared to the prior year. The
principal component of this increase of approximately $1,786,000 resulted from
increased prices for these products. Additionally, volume increases for these
products accounted for an increase of approximately $433,000 compared to the
prior year.
Storage, handling, processing citrus for customers under contract, and
other revenues decreased approximately $1,078,000 during fiscal 1997 compared to
the prior year principally as a result of a decrease in the volume of these
services being performed.
Additionally, revenues from the sale of citrus by-products, including feed,
pulp cells, and citrus oils, decreased approximately $577,000 during fiscal 1997
compared to the prior year principally as a result of decreased prices for these
products in the current year.
GROVE MANAGEMENT DIVISION Grove Management Division revenues decreased
approximately $238,000 during fiscal 1997 compared to the prior year. The
principal decrease during fiscal 1997 of approximately $390,000 was due to a
reduction in the volume of fruit sold to third party packers and processors.
Revenues from grove caretaking also decreased during fiscal 1997 by
approximately $15,000. Partially offsetting these decreases were increases in
harvesting revenues of approximately $167,000 due to a higher volume of boxes
harvested.
GROSS PROFIT
Gross profit for fiscal 1997 decreased approximately $12,338,000 or 56.7%
compared to the prior year. The Beverage Division accounted for the principal
decrease with a decrease in gross profit of approximately $12,106,000 while the
Grove Management Division gross profit decreased approximately $232,000.
BEVERAGE DIVISION The decrease in gross profit of approximately $12,106,000 in
the Beverage Division resulted from numerous increases and decreases. However,
the principal decrease in gross profit of approximately $14,783,000 resulted
from decreased prices for the Company's bulk citrus juice products during fiscal
1997 compared to the prior year. This decrease was partially offset by an
increase in gross profit of approximately $2,043,000 as a combined result of
higher volumes of citrus juice products sold and lower costs of raw fruit and
purchased concentrate used in the production of these products during fiscal
1997 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, 1997 the Company held contracts for FCOJ futures with
unrealized gains of approximately $267,000 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 the equivalent futures
obligations and do not necessarily represent prices at which the Company expects
to sell the FCOJ.
-14-
Gross profit from the sale of the Company's packaged citrus juice products
increased approximately $470,000 during fiscal 1997 compared to the prior year.
The principal increase of approximately $1,415,000 resulted from an increase in
volumes of packaged citrus juice products sold. Additionally, gross profit
increased approximately $794,000 as a result of lower costs of production
resulting principally from lower costs of raw fruit and purchased solids
utilized in the production of these products during fiscal 1997. Partially
offsetting these increases was a decrease in gross profit of approximately
$1,739,000 as a result of lower prices for these products being sold compared to
the prior year.
Gross profit from the sale of the Company's non-orange packaged juices and
drink base products increased approximately $616,000 during fiscal 1997 compared
to the prior year. The principal increase of approximately $1,786,000 was the
result of increased prices compared to the prior year primarily due to the
change in product mix resulting from the purchase of the Birds Eye(R)
foodservice juice business in July 1996. Additionally there was an increase in
volumes of these products of approximately $293,000. These increases were
partially offset by a decrease in gross profit of approximately $1,463,000 as a
result of higher cost of production for these products.
The sale of the Company's by-products decreased gross profit approximately
$1,119,000 during fiscal 1997 compared to the prior year. The principal
decrease of approximately $577,000 was primarily the result of decreased prices.
Additionally cost of sales increased approximately $542,000 compared to the
prior year.
Gross profit from storage, handling and other activities increased by
approximately $667,000 during fiscal 1997 compared to the same period in the
prior year. The primary increase of approximately $917,000 resulted from a
reduction in operating costs. Additionally, gross profit increased by
approximately $389,000 as a result of an increase in service fees collected.
Partially offsetting this increase was a decrease in gross profit of
approximately $639,000 resulting from a reduction in the volume of citrus
processed for customers under contract and related storage and handling
activities.
GROVE MANAGEMENT DIVISION Grove Management Division gross profit decreased
by approximately $232,000 during fiscal 1997 compared to the prior year. Gross
profit decreased approximately $236,000 as a result of a decrease in the volume
of fruit sold to third party packers and processors. Additionally, gross profit
from caretaking activities decreased by approximately $77,000. Partially
offsetting these decreases was an increase in gross profit from harvesting
activities of approximately $81,000 due to a higher volume of boxes harvested.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Selling, general and administrative expenses increased approximately
$117,000 or 2.3% for fiscal 1997 compared to the prior year. Of this increase
approximately $705,000 resulted from an increase in salary and benefit costs
compared to the prior year principally as a result of increased staffing.
Partially offsetting this increase was a decrease in other costs of
approximately $588,000 compared to the prior year.
GAIN/(LOSS) ON DISPOSITION OF PROPERTY AND EQUIPMENT
The gain on the disposition of property and equipment increased
approximately $416,000 for fiscal 1997 compared to the prior year.
The principal reason for this increase was a gain of approximately $438,000
on the disposition of certain commercial properties for which there was no
comparable activity for fiscal 1996.
-15-
OTHER
Other income increased approximately $49,000 in fiscal 1997 compared to the
prior year primarily as a result of a reclassification of expenses and an
increase in miscellaneous income.
INTEREST EXPENSE
Interest expense increased by approximately $664,000 or 32.2% in fiscal
1997 compared to the prior year. The primary increase of approximately
$596,000 was due to an increase in the average outstanding debt. Additionally,
an increase of approximately $144,000 was due to an increase in interest rates.
Partially offsetting these increases were an increase in capitalized interest of
approximately $57,000 and a decrease in other related interest charges of
approximately $19,000.
OTHER SIGNIFICANT EVENTS
As previously mentioned, the USDA has announced an anticipated Florida
orange crop of approximately 254,000,000 boxes of round oranges for the 1997-98
season.
The Company's sales or costs were not impacted significantly by the effects
of general price level inflation during fiscal 1997.
-16-
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 CHANGES
SALES SOLD TO INCOME
<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>
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. A 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 USDA announced a
Florida crop estimate of approximately 204,000,000 boxes of round oranges for
the 1995-96 season which was approximately the same as the 1994-95 crop of
205,500,000 boxes of round oranges. The 1995-96 estimate by the USDA was
revised at the end of the season to 203,300,000 boxes of round oranges which is
the third largest Florida crop in history. As we entered the 1996-97 season,
the USDA has estimated this crop at 220,000,000 boxes which, if true, would
have been the highest Florida orange crop in history and have a significant
impact on the prices for bulk orange concentrated juices for fiscal 1996-97.
The final crop as reported by the USDA was 226,200,000 boxes of round oranges.
-17-
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 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(R) food service juice business in
July 1996. Additionally, increased prices of these products accounted for
approximately $1,530,000 in increased 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 as a result
of multiple increases and decreases. A principal component of this increase was
an 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 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.
-18-
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
activity.
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.
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.)
-19-
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
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 final crop for the 1996-97 season reported by the USDA was
226,200,000 boxes of round oranges.
The Company's sales or costs were not impacted significantly by the effects
of general price level inflation during fiscal 1996.
-20-
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 1996-97 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 $45 million credit facility. This facility is secured principally by most
of the Company's current assets. The outstanding balance at September 30, 1997
was approximately $28,380,000 and approximately $266,000 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 1999;
accordingly, it is classified as long-term. Management anticipates that this
facility will continue to be renewed as long term each year. As of November 30,
1997, the Company's outstanding balance was approximately $22,643,000, and
approximately $3,441,000 of additional borrowings were available under this
facility. The Company anticipates that the working capital facility will be
adequately serviced with cash proceeds from operations.
Additionally, as of September 30, 1997 the Company had another $10 million
short-term credit facility. As of September 30, 1997, 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. As of November
30, 1997, the Company's outstanding balance on this facility was $4,000,000.
Current assets decreased approximately $391,000 as of September 30, 1997
compared to September 30, 1996. The principal component of this was a decrease
in accounts receivable of approximately $6,464,000 in the current year due
principally to lower fourth quarter sales in fiscal 1997. There was a decrease
in cash and short-term cash investments of approximately $499,000 and advances
on fruit purchases decreased approximately $266,000. The Company's inventory
increased approximately $4,941,000 compared to the prior fiscal year.
Additionally, there was an increase of approximately $1,232,000 in current
deferred income taxes compared to the prior year.
Current liabilities decreased approximately $602,000 during fiscal 1997
compared to the fiscal year ended September 30, 1996. The principal component
of this decrease was a $4,223,000 decrease in accounts payable and accrued
liabilities. There was an increase of approximately $3,621,000 in current
installments on long term debt primarily as a result of a $4,370,000 balance on
a mortgage note payable becoming current.
At September 30, 1997 the Company's outstanding long-term debt was
approximately $46,764,000 including the working capital facility of
approximately $28,380,000. In addition, current installments of long-term debt
were approximately $7,276,000 with the remaining amounts due on various dates
over the subsequent eleven years. The Company anticipates that amounts due over
the next twelve months will be paid out of working capital or from additional
funds provided from refinancing the $4,370,000 currently payable note
previously mentioned existing mortgages. At September 30, 1997, the Company
was in compliance with its loan covenants.
The Company completed the installation of new irrigation systems for 2,642
acres of Company-owned Joshua, Polk County, and Bermont groves during fiscal
1997 at a cost of approximately $1,808,000. New irrigation systems for an
additional 1,941 acres and other projects are currently under construction for
which approximately $883,000 has been expended to date. In addition, citrus
groves
-21-
costing approximately $341,000 were purchased during fiscal 1997, and
costs of caring for newly planted trees in the amount of approximately
$2,891,000 were capitalized. Additional expenditures of approximately
$3,544,000 were made during the current year primarily for the purpose of
improving the efficiency and capacity of the Bartow processing facility.
Also during fiscal 1997, expenditures of approximately $217,000 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, 1997, 1996 and 1995.
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 29-38
(2) Financial Statement Schedule. Financial Statement Schedule of
the Company appended hereto, as required at September 30, 1997,
1996 and 1995.
Schedule VIII-Allowance for Doubtful Accounts 39
(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, 1997, and 1996, 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, 1997. 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, 1997 and 1996, and results of their operations
and their cash flows for each of the years in the three-year period ended
September 30, 1997, 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, 1997
-24-
<TABLE>
<CAPTION>
ORANGE-CO, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1997 AND SEPTEMBER 30, 1996
(IN THOUSANDS)
SEPTEMBER 30, SEPTEMBER 30,
1997 1996
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,009 $ 1,508
Receivables 8,441 14,905
Advances on fruit purchases 451 717
Inventories 47,089 42,148
Deferred income taxes 2,398 1,166
Prepaid and other 683 18
--------- ----------
TOTAL CURRENT ASSETS 60,071 60,462
--------- ----------
Property and equipment, net 123,271 120,538
--------- ----------
Other assets:
Excess of cost over net assets of acquired
Companies 11,024 11,401
Notes receivable 1,458 2,558
Other 5,305 4,736
--------- -----------
TOTAL OTHER ASSETS 17,787 18,695
--------- ----------
TOTAL ASSETS $201,129 $ 199,695
========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current installments on long-term debt $ 7,276 $ 3,655
Accounts payable 4,113 5,493
Accrued liabilities 9,154 11,997
--------- -----------
TOTAL CURRENT LIABILITIES 20,543 21,145
Deferred income taxes 23,676 22,247
Other liabilities 1,046 629
Long-term debt 46,764 46,663
--------- ----------
TOTAL LIABILITIES 92,029 90,684
--------- ----------
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 32,887 32,869
--------- ----------
109,479 109,461
Less:
Treasury stock, at cost: 39,924 shares at
September 30, 1997 and 47,424 shares
at September 30, 1996 (379) (450)
--------- -----------
TOTAL STOCKHOLDERS' EQUITY 109,100 109,011
--------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $201,129 $ 199,695
========= ===========
</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, 1997, 1996 AND 1995
(IN THOUSANDS EXCEPT PER SHARE DATA)
1997 1996 1995
<S> <C> <C> <C>
SALES $109,337 $119,130 $111,325
Cost of sales 99,919 97,374 91,211
--------- --------- ---------
GROSS PROFIT 9,418 21,756 20,114
Other costs and expenses, net:
Selling, general and administrative (5,310) (5,193) (4,597)
Gain on disposition of property and equipment 438 22 1,026
Other 14 (35) (147)
Interest (2,727) (2,063) (1,620)
--------- --------- ---------
Income from operations before income tax 1,833 14,487 14,776
Income tax expense 754 4,396 5,641
--------- --------- ---------
Net income 1,079 10,091 9,135
--------- --------- ---------
Income per common and common equivalent shares:
NET INCOME $ .10 $ .98 $ .89
========= ========= =========
Average number of common and common equivalent
shares outstanding 10,307 10,301 10,298
========= ========= =========
</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, 1997, 1996 AND 1995
(IN THOUSANDS)
1997 1996 1995
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,079 $10,091 $ 9,135
-------- -------- --------
Adjustments to reconcile net income to net cash
Provided by (used for) operating activities:
Depreciation and amortization 6,275 4,972 4,300
Increase(decrease) deferred income taxes 197 (504) 2,268
Provision for disposal of non-operating subsidiary - - 591
(Gain) on disposition of property and equipment (438) (22) (1,026)
Changes in assets & liabilities:
Decrease(increase) in receivables 6,464 (5,288) (2,498)
Decrease(increase) in advances on fruit purchases 266 70 (312)
Decrease(increase) in inventories (4,941) (6,081) 7,484
Decrease(increase) in prepaids and other (665) 15 8
(Decrease)increase in accounts payable and
accrued Liabilities (4,223) 1,778 1,333
Other, net 191 (537) (4)
-------- -------- --------
Total adjustments 3,126 (5,597) 12,144
-------- -------- --------
Net cash provided by operating activities 4,205 4,494 21,279
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property & equipment 1,807 1,687 1,571
Decrease(increase) in note & mortgage receivables 1,100 (1,757) (346)
Additions to property & equipment (9,654) (18,498) (10,249)
(Increase) in other assets (689) (1,223) (886)
-------- -------- --------
Net cash (used for) investing activities (7,436) (19,791) (9,910)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid (1,031) (1,030) -
Proceeds from(payments on) long-term debt 3,722 16,972 (7,289)
(Payments on) note payable to bank - - (4,000)
Issuance of treasury stock 41 18 -
-------- -------- --------
Net cash provided by (used for) financing
Activities 2,732 15,960 (11,289)
-------- -------- --------
NET (DECREASE)/INCREASE IN CASH AND CASH
EQUIVALENTS (499) 663 80
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 1,508 845 765
-------- -------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,009 $ 1,508 $ 845
======== ======== ========
</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, 1997, 1996 AND 1995
(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. 30,1994 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
------ ------ ------- -------- ----- ------ ---------
Issuance of treasury stock - - - (30) (7) 71 41
Dividend paid - - - (1,031) - - (1,031)
Net Income - - - 1,079 - - 1,079
------ ------ ------- ------- ----- ------ ---------
Balance at Sept. 30, 1997 10,349 $5,175 $71,417 $32,887 40 $(379) $109,100
====== ====== ======= ======== ===== ====== =========
</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 50.4% beneficially 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, 1997, the Company had two customers who
accounted for approximately 22.3% and 14.1% of sales. During the year ended
September 30, 1996, the Company had two customers who individually accounted for
approximately 20.5% and 17.6% of sales. During the year ended September 30,
1995, the Company had two customers who individually accounted for approximately
21.0% and 14.9% of 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 are 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 that extend useful lives 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.
Interest is capitalized in connection with the construction of major
facilities and to young trees planted prior to their productive stage. The
interest is amortized over the related asset's useful life through depreciation.
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 $4,051,000 as of
September 30, 1997 and $3,674,000 as of September 30, 1996. Amortization is
-29-
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 making 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
1996 and 1995 financial statements to conform to the 1997 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.
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 for 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
carrying amount of an asset may not be recoverable. The Company has reviewed its
long-lived assets for impairment and has determined that no adjustment to the
carrying value of long-lived assets is required.
In October 1995, the FASB issued SFAS 123, "Accounting for Stock-Based
Compensation", effective for financial statements for fiscal years beginning
after December 15, 1995. Among other provisions, SFAS 123 establishes a new,
alternative method based on fair values for accounting for stock-based
compensation arrangements with employees. In addition, if any entity does not
adopt the new alternative 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 and
interim periods, the Company adopted SFAS 123. The adoption of SFAS 123
resulted in no adjustments or additional required disclosures because the
Company did not grant any options after December 15, 1995.
Effective for interim and annual financial statements for fiscal year
ending after December 15, 1997, the FASB has issued SFAS 128 "Earnings per
Share" which changes the requirements for the calculation and disclosure of
earnings per share in the financial statements. The Company will adopt SFAS 128
for its interim and annual reporting periods beginning in its 1998 fiscal year.
It is anticipated that its adoption will have no material effect on the
financial statements.
-30-
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 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, 1997 CARRYING AMOUNT FAIR VALUE
(IN THOUSANDS)
<S> <C> <C>
Cash and cash equivalents $ 1,009 $ 1,009
Accounts and notes receivable 9,899 9,899
Accounts payable 4,113 4,113
Variable rate long-term debt 32,755 32,755
Fixed rate long-term debt with
Financial institutions 20,893 20,169
Other long-term debt 392 392
</TABLE>
As of September 30, 1997, the Company was subjected to a concentration of
credit risk as a result of 18.2% 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 foodservice industries. Management believes the allowance for
doubtful accounts is adequate under the circumstances.
As of September 30, 1997 the Company held contracts for FCOJ futures
positions and net options totaling approximately $9,265,000 and $167,000 with
unrealized gains of approximately $267,000 and $343,000, 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 deposit requirements with brokers as of September 30, 1997 totaled $412,000
and will vary with market price fluctuations.
2. RECEIVABLES
<TABLE>
<CAPTION>
The major components of receivables as of September 30, 1997 and 1996 are summarized as follows (in thousands):
1997 1996
<S> <C> <C>
Trade receivables $ 6,699 $14,174
7%-12.9% mortgage and promissory notes receivable 2,237 3,240
Deposits with brokers, net 312 (8)
Other 1,689 975
Allowance for doubtful accounts (1,038) (918)
-------- --------
Net receivables 9,899 17,463
Less non-current portion 1,458 2,558
-------- --------
Current receivables $ 8,441 $14,905
======== ========
</TABLE>
-31-
3. INVENTORIES
<TABLE>
<CAPTION>
The major components of inventory as of September 30, 1997 and 1996, are summarized as follows (in thousands):
1997 1996
<S> <C> <C>
Finished goods $32,095 $28,634
Fruit-on-tree inventory 10,514 9,626
Other 4,480 3,888
------- -------
Total $47,089 $42,148
======= =======
</TABLE>
4. PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
The major components of property and equipment as of September 30, 1997 and 1996 are summarized as follows (in thousands):
ESTIMATED
1997 1996 USEFUL LIFE
YEARS
<S> <C> <C> <C>
Land and improvements $ 4,838 $ 5,761 5 to 30
Citrus groves 94,887 91,697 33
Buildings and improvements 8,089 7,094 10 to 33
Machinery and equipment 56,794 43,250 3 to 20
Construction in progress 3,391 11,797
-------- --------
$167,999 $159,599
Less accumulated depreciation and
Amortization 44,728 39,061
-------- --------
Total $123,271 $120,538
======== ========
</TABLE>
<TABLE>
<CAPTION>
The Company leases equipment under both short and long term operating
leases. Approximate 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>
1998 $1,764,000
1999 $ 989,000
2000 $ 214,000
2001 $ 128,000
2002 $ 16,000
</TABLE>
Rent expense charged to operations amounted to approximately $2,003,000 for
the year ended September 30, 1997, $1,880,000 for the year ended September 30,
1996, and $1,160,000 for the year ended September 30, 1995.
-32-
5. ACCRUED LIABILITIES
The major components of accrued liabilities as of September 30, 1997 and
1996 are summarized as follows (in thousands):
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Taxes $ 944 $ 1,841
Amounts due inventory suppliers 4,932 6,651
Other 3,278 3,505
------ -------
Total $9,154 $11,997
====== =======
</TABLE>
6. INCOME TAXES
<TABLE>
<CAPTION>
Total income tax expense for the years ended September 30, 1997, 1996 and
1995 was as follows (in thousands):
1997 1996 1995
<S> <C> <C> <C>
Income tax expense $ 754 $4,396 $5,641
</TABLE>
<TABLE>
<CAPTION>
Income tax expense attributable to income from continuing operations for the years ended September 30, 1997, 1996 and 1995
consisted of the following (in thousands):
CURRENT DEFERRED TOTAL
<S> <C> <C> <C>
Year ended September 30, 1997
U.S. Federal $ 498 $ 169 $ 667
State and Local 59 28 87
------ ------- ------
Total $ 557 $ 197 $ 754
====== ======= ======
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
====== ======= ======
</TABLE>
-33-
<TABLE>
<CAPTION>
Income tax expense attributable to income from continuing operations was $754,000, $4,396,000, and $5,641,000, for the years
ended September 30, 1997, 1996, and 1995, 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):
1997 1996 1995
<S> <C> <C> <C>
Computed "expected" tax expense $ 623 $4,926 $5,024
Increase (reduction) in income taxes resulting from:
Change in the valuation allowance for
deferred tax assets allocated to income
tax expense(benefit) 100 (1,284) 222
Loss on foreign operations 7 65 40
Amortization of goodwill and other 93 128 103
State and local income taxes, net of
federal income tax benefit 58 416 247
Foreign sales corporation benefit (97) (106) -
Other, net (30) 251 5
-------- ------- ------
Total $ 754 $4,396 $5,641
======== ======= ======
</TABLE>
<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, 1997 and 1996 are presented below (in thousands):
1997 1996
<S> <C> <C>
Deferred tax assets:
Allowance for doubtful accounts $ 390 $ 345
Capitalized inventory costs 119 84
Reserve on carrying value of property
and equipment 69 258
Accrued reserves and expenses 1,479 737
Valuation reserve - 1,351
Net capital loss carryforwards 589 -
Net operating loss carryforwards - 426
Investment tax credit carryforwards 507 1,703
Alternative minimum tax credit carryforwards 974 606
--------- ---------
Total gross deferred tax assets 4,127 5,510
Less valuation allowance (674) (1,770)
--------- ---------
Net deferred tax assets $ 3,453 $ 3,740
--------- ---------
Deferred tax liabilities:
Plant and equipment, principally due to
allocation of purchase price of businesses
acquired and to differences in depreciation
and capitalized interest (24,670) (24,786)
Other (61) (35)
--------- --------
Total gross deferred tax liabilities (24,731) (24,821)
--------- --------
Net deferred tax liability $(21,278) $(21,081)
========= =========
</TABLE>
The valuation allowance for deferred tax assets as of September 30, 1995
was $3,054,000. The net change in the total valuation allowance for the years
ended September 30, 1996 and 1997 was a decrease of $1,284,000 and a decrease of
$1,096,000, respectively. The decrease in 1997 was principally as a result of
investment tax credits expiring unutilized and unreserved. The Company utilized
all of the net operating loss carryforward as of September 30, 1997.
Additionally, previously fully reserved net capital loss with a tax benefit of
$1,196,000 was utilized during fiscal 1997.
-34-
Income taxes paid, net of refunds applied for, amounted to approximately
$820,000, $4,256,000, and $3,460,000 for the years ended September 30, 1997,
1996 and 1995 respectively.
For tax reporting purposes as of September 30, 1997, the Company had unused
net capital loss carryforwards of approximately $1,565,000 and investment tax
credit carryforwards of approximately $507,000 which expire in varying amounts
through the year 2002. In addition, the Company has alternative minimum tax
credit carryforwards of approximately $974,000 which are available to reduce
future federal regular income taxes, if any, over an indefinite period.
Management believes that the net deferred tax assets of $3,453,000 are
materially recoverable.
7. NOTES PAYABLE TO BANKS AND LONG-TERM DEBT
<TABLE>
<CAPTION>
Notes payable to banks and long-term debt as of September 30, 1997 and 1996 consisted of the following (in thousands):
1997 1996
<S> <C> <C>
Mortgage notes payable bearing interest from 6.9% to 7.65% due in varying
installments through 2003 $24,645 $28,105
Working capital line of credit bearing a variable rate of interest based
upon the financial institution's cost of funds, due in April 1999 28,380 21,086
Mortgage note payable bearing interest at 7% due semi-annually, principal
due annually through January 2009 623 667
Grove purchase installment notes, bearing interest at 7% to 8% due in
varying installments through August 2005 392 460
------- -------
$54,040 $50,318
Less current installments on long-term debt and note payable to bank 7,276 3,655
------- -------
Total $46,764 $46,663
======= =======
</TABLE>
<TABLE>
<CAPTION>
Principal payments for the years subsequent to 1998 are as follows (in thousands):
<S> <C>
1999 $ 31,223
2000 $ 2,792
2001 $ 5,147
2002 $ 2,272
Thereafter $ 5,330
</TABLE>
As of September 30, 1997 the Company had a $45 million working capital
facility with an outstanding balance of $28,380,000 with additional available
borrowings of approximately $266,000. As of September 30, 1997, 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 $2,737,000,
$1,949,000, and $1,670,000, for the years ended September 30, 1997, 1996, and
1995, respectively. Interest capitalized was approximately $799,000, $742,000,
and $661,000, for the years ended September 30, 1997, 1996, and 1995,
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, 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. In July of fiscal 1997 a storm with heavy winds and rain severely
damaged one of the Company's product storage freezers, which as of September 30,
1997 was in the process of being replaced. The Company has adequate replacement
cost insurance to cover the loss and experienced no material disruption in
operations as a result of the damages.
9. 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 and to participate in an employer matching
contribution. The Company contributed approximately $66,000, $61,000, and
$54,000, under the Plan for the years ended September 30, 1997, 1996, and 1995,
respectively. The Company also accrued approximately $60,000 during fiscal 1997
for contributions to the Plan for the 1997 Plan year. In December 1990, the
assets of the Employees Stock Ownership Trust ("ESOT") were merged into the
Plan. At September 30, 1997 the Plan held approximately .45% of the outstanding
common stock of the Company.
10. 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 $694,000 and $698,000 to the Profit Sharing Plan during fiscal
1997 and 1996, respectively, which represented discretionary contributions for
the 1996 and 1995 Profit Sharing Plan years, respectively. In addition, the
Company accrued approximately $250,000 during fiscal 1997 to be contributed to
the Profit Sharing Plan for the 1997 Plan year.
11. 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
-36-
contracts became effective for fiscal 1994 and thereafter. The accrued
liability for these additional retirement benefits at September 30, 1997 was
approximately $576,000.
12. STOCK OPTIONS
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. The 1987 Plan expired
during fiscal 1997 and no further options can be granted. There are options
on 19,325 shares issued and outstanding as of September 30, 1997.
<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, 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
Granted - -
Exercised 7,500 $5.4375
Expired 4,400 $9.625-$10.00
Outstanding at
September 30, 1997 19,325 $5.4375-$9.625
</TABLE>
Options granted under the 1987 Plan expire at various dates through August 2001.
13. RELATED PARTY TRANSACTIONS
Ben Hill Griffin, Inc. and an affiliate collectively and beneficially held
approximately 50.4% majority ownership of Orange-co, Inc. as of September 30,
1997. Ben Hill Griffin, Inc. is a privately owned agribusiness corporation
located in Frostproof, Florida.
During the fiscal year ended September 30, 1997 the Company had incurred an
estimated $9,224,000 in fruit participation cost from fruit purchased from its
parent, Ben Hill Griffin, Inc. Of that amount approximately $6,085,000 was paid
as of September 30, 1997 with the accrued balance of $3,139,000 to be paid by
March 1, 1998. 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, 1996 the Company incurred a
total of $6,323,000 in fruit participation cost from fruit purchased from its
parent, Ben Hill Griffin, Inc. As of September 30, 1996 a total of $3,212,000
-37-
had been paid against this amount and an estimated balance of $3,111,000 was
accrued to be paid on March 1, 1997. 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 $2,539,000, $2,862,000, and $2,451,000 to Ben Hill
Griffin, Inc. for other goods and services, principally the purchase of
fertilizer and citrus trees at prices approximating market, during fiscal 1997,
1996 and 1995, respectively.
<TABLE>
<CAPTION>
14. INTERIM FINANCIAL INFORMATION (UNAUDITED)
(in thousands except per share amounts)
GROSS EARNINGS
QUARTERS ENDED SALES PROFIT NET INCOME PER SHARE
<S> <C>
Fiscal 1997
September 30, 1997 $ 25,399 $ 959 $ (280) $ (.04)
June 30, 1997 26,360 998 (455) (.04)
March 31, 1997 29,154 2,750 276 .03
December 31, 1996 28,424 4,711 1,538 .15
-------- ------- ------- -------
$109,337 $ 9,418 $ 1,079 $ .10
======== ======= ======= =======
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 31,1995 23,350 4,738 2,044 .20
-------- ------- ------- -------
$119,130 $21,756 $10,091 $ .98
======== ======= ======= =======
</TABLE>
-38-
<TABLE>
<CAPTION>
ORANGE-CO, INC. AND SUBSIDIARIES
SCHEDULE VIII - ALLOWANCE FOR DOUBTFUL ACCOUNTS
FOR THE YEARS ENDED SEPTEMBER 30, 1997, 1996 AND 1995
(IN THOUSANDS)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
ADDITIONS
BALANCE @ CHARGED TO BALANCE @
BEGINNING EXPENSE END OF
DESCRIPTION OF PERIOD DEDUCTIONS PERIOD
<S> <C> <C> <C> <C>
Year ended
September 30, 1997 $918 $120 $ - $1,038
==== ==== ===== ======
Year ended
September 30, 1996 $798 $120 $ - $ 918
==== ==== ===== ======
Year ended
September 30, 1995 $686 $120 $ 8 $ 798
==== ==== ===== ======
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None
-39-
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 1998
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 1998
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 1998
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 1998
Proxy Statement under the caption "Transactions With Management And Others" and
is incorporated herein by reference.
-40-
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 44 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 44 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.
-41-
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, 1997 By:/s/ Gene Mooney
---------------
Gene Mooney
President and
Chief Operating Officer
Date: December 19, 1997 By:/s/ Dale A. Bruwelheide
-----------------------
Dale A. Bruwelheide
Vice President and
Chief Financial Officer
-42-
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, 1997 /s/ B. H. Griffin, III
------------------------------
B. H. Griffin, III
Chairman, CEO and Director
Date: December 19, 1997 /s/ John R. Alexander
------------------------------
John R. Alexander
Director
Date: December 19, 1997 /s/ Richard A. Coonrod
------------------------------
Richard A. Coonrod
Director
Date: December 19, 1997 /s/ Paul E. Coury, MD
------------------------------
Paul E. Coury, MD
Director
Date: December 19, 1997 /s/ George W. Harris, Jr.
------------------------------
George W. Harris, Jr.
Director
Date: December 19, 1997 /s/ Dr. W. Bernard Lester
------------------------------
Dr. W. Bernard Lester
Director
Date: December 19, 1997 /s/ Gene Mooney
------------------------------
Gene Mooney
Director
Date: December 19, 1997 /s/ C. B. Myers, Jr.
------------------------------
C. B. Myers, Jr.
Director
Date: December 19, 1997 /s/ Thomas H. Taylor, Sr.
------------------------------
Thomas H. Taylor, Sr.
Director
-43-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
For the fiscal year Commission File
ended September 30, 1997 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
-44-
EXHIBITS 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.
-45-
EXHIBITS INDEX
SEQUENTIAL
EXHIBIT NO. DESCRIPTION OF EXHIBITS PAGE 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 Line 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.
-46-
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 Mortgage and
Security Agreement between John Hancock Mutual Life
Insurance Company and Orange-co of Florida, Inc. dated
August 13, 1996 and filed as Exhibit 10.26 on Form 10-K
for the fiscal year ended September 30, 1996 and
incorporated herein by reference.
10.27 The Sixth 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 25, 1997 and filed as Exhibit 10.27 on
Form 10-Q for the fiscal quarter ended March 31, 1997
and incorporated herein by reference.
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. 49
-47-
EXHIBITS INDEX SEQUENTIAL
PAGE NO.
EXHIBIT NO. DESCRIPTION OF EXHIBITS
24.1 Consent letter from KPMG Peat Marwick LLP. 50
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.
-48-
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
4, 1997, other than subsidiaries which, considered in the aggregate as a single
subsidiary, would not constitute a significant subsidiary as defined by
Securities and Exchange Commission Regulation S-X. All 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) Florida
Orange-co Dispenser Service, Inc. (2) Florida
International Fruit, Inc. (2) Florida
Orange-co International 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.
-49-
EXHIBIT 24.1
Consent of Independent Auditors
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, 1997 relating to the consolidated balance sheet of Orange-co Inc.
and subsidiaries as of September 30, 1997, and the related consolidated
statements of operations, stockholders' equity, and cash flows and related
schedule for the year then ended, which report appears in the September 30,
1997 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, 1997
-50-
<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-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 1,009
<SECURITIES> 0
<RECEIVABLES> 9,005
<ALLOWANCES> (564)
<INVENTORY> 47,089
<CURRENT-ASSETS> 60,071
<PP&E> 167,999
<DEPRECIATION> 44,728
<TOTAL-ASSETS> 201,129
<CURRENT-LIABILITIES> 20,543
<BONDS> 0
0
0
<COMMON> 76,213
<OTHER-SE> 32,887
<TOTAL-LIABILITY-AND-EQUITY> 201,129
<SALES> 109,337
<TOTAL-REVENUES> 109,337
<CGS> (99,919)
<TOTAL-COSTS> (99,919)
<OTHER-EXPENSES> (4,858)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (2,727)
<INCOME-PRETAX> 1,833
<INCOME-TAX> (754)
<INCOME-CONTINUING> 1,079
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,079
<EPS-PRIMARY> .10
<EPS-DILUTED> .10
</TABLE>
