SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1997
Commission file number 0-6510
MAUI LAND & PINEAPPLE COMPANY, INC.
(Exact name of registrant as specified in its charter)
HAWAII 99-0107542
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
P. O. BOX 187, KAHULUI, MAUI, HAWAII 96733-6687
(Address of principal executive offices)
Registrant's telephone number, including area code: (808) 877-
3351
NONE
Former name, former address and former fiscal year, if changed
since last report
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 the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at August 1, 1997
Common Stock, no par value 1,797,125 shares
MAUI LAND & PINEAPPLE COMPANY, INC.
AND SUBSIDIARIES
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets - June 30, 1997 (Unaudited)
& December 31, 1996 3
Condensed Statements of Operations and Retained Earnings,
Three Months Ended June 30, 1997 & 1996 (Unaudited) 4
Condensed Statements of Operations and Retained Earnings,
Six Months Ended June 30, 1997 & 1996 (Unaudited) 5
Condensed Statements of Cash Flows
Six Months Ended June 30, 1997 & 1996 (Unaudited) 6
Notes to Condensed Financial Statements (Unaudited) 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 4. Submission of Matters to a Vote of Security-Holders 10
Item 6. Exhibits and Reports on Form 8-K 11
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES
CONDENSED BALANCE SHEETS
Unaudited
6/30/97 12/31/96
(Dollars in Thousands)
ASSETS
Current Assets
Cash $ 1,923 $ 453
Accounts and notes receivable 11,418 14,343
Inventories 21,148 16,484
Other current assets 3,852 4,028
Total current assets 38,341 35,308
Property 196,377 190,999
Accumulated depreciation (108,313) (104,389)
Property - net 88,064 86,610
Other Assets 12,049 10,933
TOTAL 138,454 132,851
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt
and capital lease obligations 1,549 1,254
Trade accounts payable 5,401 7,661
Other current liabilities 8,156 6,926
Total current liabilities 15,106 15,841
Long-Term Liabilities
Long-term debt and capital lease obligations 33,926 28,898
Accrued retirement benefits 22,031 21,983
Other long-term liabilities 7,697 8,096
Total long-term liabilities 63,654 58,977
Stockholders' Equity
Common stock, no par value - 1,800,000 shares
authorized, 1,797,125 issued and outstanding 12,318 12,318
Retained earnings 47,376 45,715
Stockholders' Equity 59,694 58,033
TOTAL $138,454 $ 132,851
See accompanying Notes to Condensed Financial Statements.
MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(UNAUDITED)
Three Months Ended
6/30/97 6/30/96
(Dollars in Thousands
Except Share Amounts)
REVENUES
Net sales $22,417 $22,301
Operating income 6,396 5,909
Other income 4,297 89
Total Revenues 33,110 28,299
COSTS AND EXPENSES
Cost of goods sold 15,882 15,083
Operating expenses 6,704 5,541
Shipping and marketing 3,436 3,620
General and administrative 3,587 3,712
Equity in losses of
joint ventures 270 265
Interest 760 841
Total Costs and Expenses 30,639 29,062
INCOME (LOSS) BEFORE INCOME TAXES 2,471 (763)
INCOME TAXES (CREDIT) 914 (287)
NET INCOME (LOSS) 1,557 (476)
RETAINED EARNINGS, BEGINNING OF PERIOD 45,819 47,172
RETAINED EARNINGS, END OF PERIOD 47,376 46,696
PER COMMON SHARE
Net Income (Loss) $ .86 $(.26)
See accompanying Notes to Condensed Financial Statements.
MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(UNAUDITED)
Six Months Ended
6/30/97 6/30/96
(Dollars in Thousands
Except Share Amounts)
REVENUES
Net sales $43,469 $44,315
Operating income 13,849 12,932
Other income 4,680 884
Total Revenues 61,998 58,131
COSTS AND EXPENSES
Cost of goods sold 30,413 30,098
Operating expenses 12,730 11,308
Shipping and marketing 6,811 6,814
General and administrative 7,464 7,361
Equity in losses of
joint ventures 513 558
Interest 1,431 1,771
Total Costs and Expenses 59,362 57,910
INCOME BEFORE INCOME TAXES 2,636 221
INCOME TAXES 975 77
NET INCOME 1,661 144
RETAINED EARNINGS, BEGINNING OF PERIOD 45,715 46,552
RETAINED EARNINGS, END OF PERIOD 47,376 46,696
PER COMMON SHARE
Net Income $ .92 $ .08
See accompanying Notes to Condensed Financial Statements.
MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
6/30/97 6/30/96
(Dollars in Thousands)
Net Cash Provided By (Used In)
Operating Activities $ (202) $ 2,569
Investing Activities
Purchases of property (5,760) (3,465)
Proceeds from disposal of property 3,380 526
Contributions to joint ventures (877) --
Proceeds from surrender of insurance policies-- 3,125
Other (394) 553
Net Cash Provided by (Used In)
Investing Activities (3,651) 739
Financing Activities
Payments of long-term debt and capital
lease obligations (5,032) (7,669)
Proceeds from long-term debt 10,355 5,050
Net Cash Provided By (Used In)
Financing Activities 5,323 (2,619)
Net Increase in Cash 1,470 689
Cash at Beginning of Period 453 166
Cash at End of Period $ 1,923 $ 855
Supplemental Disclosure and Cash Flow Information - Interest (net
of amounts capitalized) of $1,669,000 and $1,989,000 was paid
during the six months ended June 30, 1997 and 1996, respectively.
Income taxes of $185,000 were paid during the six months ended
June 30, 1996.
See accompanying Notes to Condensed Financial Statements.
MAUI LAND & PINEAPPLE COMPANY, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
1. In the opinion of management, the accompanying condensed
financial statements contain all normal and recurring adjustments
necessary to present a fair statement of financial position and
results of operations for the interim periods ended June 30, 1997
and 1996.
2. The Company's reports for interim periods utilize numerous
estimates of production, general and administrative expenses, and
other costs for the full year. Consequently, amounts in the
interim reports are not necessarily indicative of results for the
full year.
3. The effective tax rate for 1997 and 1996 differs from the
statutory federal rate of 34% primarily because of the state tax
provision and refundable state tax credits.
4. Accounts and notes receivable are reflected net of allowance
for doubtful accounts of $688,000 and $698,000 at June 30, 1997
and December 31, 1996, respectively.
5. Inventories as of June 30, 1997 and December 31, 1996 were
as follows (in thousands):
6/30/97 12/31/96
Pineapple products
Finished goods $11,228 $ 7,306
Work in progress 2,242 1,645
Raw materials 644 789
Real estate held for sale 339 339
Merchandise, materials and supplies 6,695 6,405
Total Inventories $21,148 $16,484
6. Average common shares outstanding for the interim periods
ended June 30, 1997 and 1996 were 1,797,125.
7. In June of 1997, the sale of a 50% interest in the 12-acre
parcel of property adjacent to the Kapalua Bay Hotel to YCP, the
owners of the hotel, was concluded. The Company recognized a
gain of $4.2 million from this transaction. The Company and YCP
also concluded a joint venture in the form of a Hawaii limited
liability company, to own, develop and sell the parcel.
8. Certain prior period amounts have been reclassified to
conform with the presentation for the current period.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS
Consolidated
Consolidated net income for the second quarter of 1997 was
$1,557,000 compared to a net loss of $476,000 for the second
quarter of 1996. Revenues for the second quarter of 1997 were
higher by 17% compared to the second quarter of 1996.
For the first half of 1997 net income was $1,661,000 compared to
$144,000 for the first half of 1996. Revenues for the same
period increased by 7%.
Improved results for the second quarter and first half of 1997
principally reflects the sale of a 50% interest in the 12 acre
parcel adjacent to the Kapalua Bay Hotel in June of 1997.
Interest expense for the second quarter and first half of 1997
were lower by 10% and 19% respectively compared to the same
periods in 1996 due to lower average borrowings and to lower
average interest rates.
Pineapple
Revenue from Pineapple operations was $20 million for the second
quarter of 1997 compared to $19.7 million for the second quarter
of 1996. For the first half of 1997 revenue was $38.4 million
compared to $38.7 million for the same period in 1996. This
segment generated operating profits of $667,000 for the second
quarter of 1997 compared to $926,000 for the second quarter of
1996; and $1 million for the first half of 1997 compared to $1.6
million for the first half of 1996.
Higher average prices in 1997 contributed approximately $450,000
and $750,000 to revenue for the second quarter and first half of
1997 respectively. However a change in product mix sold (fruit,
juice, concentrate) more than offset price increases for the
first half of 1997. Higher average cost per case sold was also
responsible for the decline in operating profits for the second
quarter and first half of 1997.
Resort
Revenue from the Kapalua Resort was $12 million for the second
quarter of 1997 compared to $7.6 million for the second quarter
of 1996. For the first half of 1997 revenue from this segment
was $21 million compared to $17 million for the same period in
1996. Operating profit from the Resort segment was $3.7 million
for the second quarter of 1997 compared to $226,000 for the
second quarter of 1996. For the first half of 1997 Resort
operating profit was $5.4 million compared to $2.2 million for
the first six months of 1996.
Revenue and operating profit for the second quarter and first six
months of 1997 includes $4.2 million from a land sale at Kapalua
(see Note 7 to Condensed Financial Statements). Revenue from the
Kapalua Villa program increased in 1997 as a result of the higher
number of units in the program since September of 1996. The
Resort's realty operations and Resort membership program also
reported significant revenue increases. These increases were
offset by a planned reduction in ground lease rent and decreases
in other resort revenues related to the closure of the Kapalua
Bay Hotel. The hotel closed on April 1, 1997 for major
restoration work and is scheduled to reopen in mid-August 1997.
Commercial & Property
Revenue from the Commercial & Property segment was $1.1 million
for the second quarter of 1997 compared to $1 million for the
second quarter of 1996. For the first six months of 1997
revenues were $2.2 million compared to $2.4 million for the first
half of 1996. The segment generated an operating loss of
$119,000 for the second quarter of 1997 compared to an operating
loss of $147,000 for the same period in 1996. For the first six
months of 1997 these operations produced an operating loss of
$209,000 compared to an operating profit of $89,000 for the same
period a year earlier.
Revenue and operating profit for the first half of 1996 includes
approximately $500,000 from the sale of a land parcel. Naplili
Plaza and the Company's Kaahumanu Center operations produced
improved results in the second quarter and first half of 1997
compared to the same periods in 1996.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1997 the Company's total debt including capital
leases was $35.5 million, an increase of $5.3 million compared to
December 31, 1996. The increase in debt was principally used to
finance capital expenditures and the Company's share of cash
calls by joint ventures. Unused short- and long-term lines of
credit and equipment financing facilities were $18.7 million at
the end of the second quarter of 1997.
Consolidated capital expenditures are expected to be
approximately $10 million in 1997 of which approximately 40% are
for the replacement of existing equipment. The largest item in
capital expenditures for 1997 is $1.9 million for the Company's
cannery waste water disposal system which was completed and
operational as of June 23, 1997. The Company expects to finance
approximately $3.2 million of the 1997 capital expenditures with
capital leases or other equipment financing arrangements and the
remainder will be financed with operating cash flows and cash
from property disposals.
At June 30, 1997 the Company had commitments under letters of
credit totaling $2.1 million.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Antidumping Petition
As previously reported, on November 8, 1996, the United States
Court of International Trade ("USCIT") announced its decision
regarding appeals filed by the Thai respondents. The USCIT
remanded certain issues back to the Department of Commerce for
recalculation. The Company strongly disagrees with the USCIT's
decision on these issues which could substantially reduce the
duties being imposed on canned pineapple fruit from Thailand. In
the second quarter of 1997, both the Company and the United
States Department of Commerce appealed the decision by the USCIT
to the United States Court of Appeals for the Federal Circuit.
The appeal process is expected to take nine to twelve months.
During this time and subject to periodic review, duties at the
rates originally determined by the Department of Commerce will
continue to be imposed on canned pineapple imported into the
U.S. from Thailand.
Background information for this issue is discussed at Part I,
Item 3.A. of Form 10-K, for the year ended December 31, 1996.
Item 4. Submission of Matters to a Vote of Security-Holders
On May 2, 1997, the annual meeting of the Company's shareholders
was held. Proxies for the meeting were solicited pursuant to
Regulation 14A under the Securities Exchange Act of 1934. The
number of outstanding shares as of March 7, 1997, record date for
the annual meeting was 1,797,125. The results of the matters
voted upon were as follows:
Election of Class One directors for a three-year term:
Shares Voted For Shares Withheld
Randolph G. Moore 1,627,052 39,771
Fred E. Trotter III 1,627,051 39,772
Election of the firm Deloitte & Touche LLP as auditor of the
Company for the fiscal year 1997:
Shares voted for: 1,640,431
Shares voted against: 25,293
Shares abstained: 1,099
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(27) Financial Data Schedule
As of June 30, 1997 and for the six months then ended.*
*Filed Herewith
(b) Reports on Form 8-K
There were no reports on Form 8-K filed for the period covered by
this report.
SIGNATURE
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.
MAUI LAND & PINEAPPLE COMPANY, INC.
August 12, 1997 /S/ PAUL J. MEYER
Date Paul J. Meyer
Executive Vice President/Finance
(Principal Financial Officer)
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This schedule contains summary financial information extracted from the Maui
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