SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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 May 5, 2000
Common Stock, no par value 7,195,800 shares
MAUI LAND & PINEAPPLE COMPANY, INC.
AND SUBSIDIARIES
TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets,
March 31, 2000 (Unaudited) and December 31, 1999 3
Condensed Statements of Operations and Retained Earnings,
Three Months Ended March 31, 2000 and 1999 (Unaudited) 4
Condensed Statements of Cash Flows,
Three Months Ended March 31, 2000 and 1999 (Unaudited) 5
Notes to Condensed Financial Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Item 3. Quantitative and Qualitative Disclosures about Market
Risk 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 10
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES
CONDENSED BALANCE SHEETS
Unaudited
3/31/00 12/31/99
(Dollars in Thousands)
ASSETS
Current Assets
Cash and cash equivalents $ 1,362 $ 2,657
Accounts and notes receivable 12,795 15,098
Inventories 24,150 16,925
Other current assets 4,847 4,779
Total current assets 43,154 39,459
Property 228,856 224,958
Accumulated depreciation (126,447) (123,982)
Property - net 102,409 100,976
Other Assets 13,473 12,952
Total 159,036 153,387
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt
and capital lease obligations 2,787 3,056
Trade accounts payable 8,733 12,492
Other current liabilities 9,328 10,987
Total current liabilities 20,848 26,535
Long-Term Liabilities
Long-term debt and capital lease obligations 35,167 25,497
Accrued retirement benefits 23,277 23,204
Equity in losses of joint venture 9,171 8,944
Other long-term liabilities 2,656 2,361
Total long-term liabilities 70,271 60,006
Minority Interest in Subsidiary 471 446
Stockholders' Equity
Common stock, no par value - 7,200,000 shares
authorized, 7,195,800 issued and outstanding 12,455 12,455
Retained earnings 54,991 53,945
Stockholders' equity 67,446 66,400
Total $159,036 $ 153,387
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
3/31/00 3/31/99
(Dollars in Thousands
Except Share Amounts)
Revenues
Net sales $24,138 $23,284
Operating income 10,391 10,164
Other income 246 199
Total Revenues 34,775 33,647
Costs and Expenses
Cost of goods sold 15,719 14,742
Operating expenses 7,502 6,476
Shipping and marketing 4,217 5,764
General and administrative 3,612 3,447
Interest 468 491
Equity in losses of joint ventures 218 149
Total Costs and Expenses 31,736 31,069
Income Before Income Taxes 3,039 2,578
Income Tax Expense 1,094 954
Net Income 1,945 1,624
Retained Earnings, Beginning of Period 53,945 50,174
Cash Dividends (899) (899)
Retained Earnings, End of Period 54,991 50,899
Per Common Share
Net income .27 .23
Dividends $ .125 $ .125
See accompanying Notes to Condensed Financial Statements.
MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
3/31/00 3/31/99
(Dollars in Thousands)
Net Cash Provided by (Used in)
Operating Activities $(4,345) $ 4,165
Investing Activities
Purchases of property (5,405) (2,674)
Other 56 (322)
Net Cash Used in Investing Activities (5,349) (2,996)
Financing Activities
Payments of long-term debt and capital
lease obligations (3,394) (246)
Proceeds from long-term debt 12,600 --
Proceeds from short-term debt 67 --
Dividend paid (899) (899)
Other 25 --
Net Cash Provided by (Used in)
Financing Activities 8,399 (1,145)
Net Increase (Decrease) in Cash (1,295) 24
Cash and Cash Equivalents
at Beginning of Period 2,657 3,447
Cash and Cash Equivalents
at End of Period $ 1,362 $ 3,471
Supplemental Disclosure and Cash Flow Information: Interest (net
of amounts capitalized) of $372,000 and $375,000 was paid during
the three months ended March 31, 2000 and 1999, respectively.
Income taxes of $626,000 and $277,000 were paid during the three
months ended March 31, 2000 and 1999, respectively. Amounts
included in accounts payable for additions to property and other
investments totaled $1,800,000 and nil at March 31, 2000 and
1999, respectively.
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,
results of operations and cash flows for the interim periods
ended March 31, 2000 and 1999.
2. The Company's reports for interim periods utilize numerous
estimates of production cost, 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 2000 and 1999 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 $795,000 and $783,000 at March 31, 2000
and December 31, 1999, respectively.
5. Inventories as of March 31, 2000 and December 31, 1999 were
as follows (in thousands):
3/31/00 12/31/99
Pineapple products
Finished goods $10,524 $ 7,399
Work in progress 1,048 839
Raw materials 5,567 1,476
Real estate held for sale 21 577
Merchandise, materials and supplies 6,990 6,634
Total Inventories $24,150 $16,925
6. Business Segment Information (in thousands):
Three Months Ended
March 31
2000 1999
Revenues
Pineapple $ 16,771 $ 19,919
Resort 16,818 12,744
Commercial & Property 1,175 923
Other 11 61
Total Revenues 34,775 33,647
Operating Profit (Loss)
Pineapple (266) 1,843
Resort 4,093 1,658
Commercial & Property (38) (215)
Other (282) (217)
Total Operating Profit 3,507 3,069
Interest Expense (468) (491)
Income Tax Expense (1,094) (954)
Net Income $ 1,945 $ 1,624
7. Average common shares outstanding for the interim periods
ended March 31, 2000 and 1999 were 7,195,800 and 7,188,500.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS
Consolidated
Consolidated net income for the first quarter of 2000 was $1.9
million compared to $1.6 million for the first quarter of 1999.
Revenues of $34.8 million for the first quarter of 2000 exceeded
the first quarter of 1999 by 3%.
General and administrative expenses increased by about 5% in the
first quarter of 2000 compared to the first quarter of 1999
primarily due to wage increases and higher accruals for workers
compensation claims. Partially offsetting these increases was a
decrease in pension expenses principally reflecting favorable
investment results.
Interest expense decreased by approximately 5% in 2000 because
more interest was capitalized in 2000 as a result of construction
activity at Kapalua Resort. The Company's average borrowings and
interest rates were higher in the first quarter of 2000 compared
to the first quarter of 1999.
Pineapple
Pineapple operations recorded an operating loss of $266,000 for
the first quarter of 2000 compared to an operating profit of $1.8
million for the first quarter of 1999. Revenues for the first
quarter of 2000 were 16% lower than the first quarter of 1999.
The case volume of imports of canned pineapple products into the
U.S. was lower in the first two months of 2000 than the same
period in 1999; however, competitive pricing pressure in 2000
resulted in the Company's Pineapple segment realizing lower sales
volume and lower average prices for canned pineapple in the first
quarter of 2000 compared to the first quarter of 1999.
The fourth annual administrative review of duties on pineapple
imports from Thailand has been delayed and the announcement of
preliminary margins that was expected in April 2000 has been
deferred to July 2000.
In April 2000 the U.S. Department of Commerce issued preliminary
antidumping duty margins against Japanese producers of tin mill
products. The Company manufacturers all of the cans that it uses
to can pineapple at its Kahului cannery with tin-coated steel
imported from Japan. The antidumping duty, if upheld in the
final ruling, will increase the cost to the Company of tin-coated
steel purchased from Japanese suppliers. The Company is
presently soliciting bids for tin-coated steel from U.S.
producers and other foreign producers, and any cost increase
would affect the Company's 2000 cost of production.
Resort
The Kapalua Resort segment generated an operating profit of $4.1
million for the first quarter of 2000 compared to $1.7 million
for the first quarter of 1999. Revenues of $16.8 million for the
first quarter of 2000 were 32% higher than the same period in
1999. Recognition of profit on a percentage-of-completion method
from real estate sales at Plantation Estates Phase II and
improved results from golf operations, merchandise sales and
hotel ground leases were responsible for the increase in
operating profits and revenues. Paid rounds of golf, average
green fees and room occupancies throughout the Resort increased
in the first quarter of 2000 compared to the first quarter of
1999. The last two lots in Plantation Estates Phase II closed
during the first quarter of 2000 and at March 31, 2000, current
liabilities included approximately $1.4 million of deferred
revenue related to Plantation Estates Phase II.
The primary reason for the decrease in consolidated shipping and
marketing expenses for the first quarter 2000 compared to the
first quarter 1999 was because of reduced expenses for the 2000
Mercedes Championships, which were absorbed by the Company. Such
reduction was offset by a commensurate decrease in the tournament
operations fee that is reflected in Resort revenue.
Commercial & Property
The operating loss from the Company's Commercial & Property
segment decreased from $215,000 for the first quarter of 1999 to
$38,000 for the first quarter of 2000. Revenues increased from
$923,000 to $1,175,000 for the same periods. The improved
results were attributable to improved operating results and
increased electricity revenues from Kaahumanu Center.
LIQUIDITY, CAPITAL RESOURCES AND OTHER
At March 31, 2000, total debt including capital leases was $38
million, an increase of $9.4 million from year-end 1999. The
higher debt level was due primarily to increased pineapple
inventories, expenditures for Plantation Estates Phase II and
capital expenditures.
Outstanding debt is expected to continue to increase through most
of the third quarter of 2000 because of a high amount of planned
capital expenditures as well as anticipated construction of real
estate inventories and the normal seasonality of pineapple
operations that peaks in the third quarter. Unused short- and
long-term credit facilities at the end of the first quarter of
2000 totaled $21.7 million, which is expected to be adequate to
cover the Company's cash requirements.
Consolidated expenditures in 2000 for fixed assets and deferred
development costs are estimated to be $24.8 million of which $7.7
million is for replacement of equipment and facilities for
Pineapple and Resort operations.
In April 2000, the line of credit for Premium Tropicals
International, LLC, which is guaranteed by the Company, was
raised from $3 million to $4 million.
The Company's information and non-information technology systems
encountered no significant date-related problems since the year
2000 began. The Company anticipates that its Information
Services personnel will spend approximately 5% of their time in
2000 to monitor business critical systems for any date-related
problems that may occur during the year and through year-end
2000. No material future expenditures have been identified.
This report contains forward-looking statements, within the
meaning of Private Securities Litigation Reform Act of 1995, as
to the Company's expectations regarding the volume of imports of
canned pineapple into the United States in 2000, the adequacy of
credit facilities, the affect on the cost of pineapple production
of antidumping duties against Japanese tin mill producers and
other matters. Forward-looking statements contained in this
report or otherwise made by the Company are subject to certain
risks and uncertainties that could cause actual results to differ
materially from those in the forward-looking statements.
Potential risks and uncertainties include, but are not limited
to, those risks and uncertainties as disclosed in the Company's
Annual Report to Shareholders and Form 10-K filing with the
Securities and Exchange Commission.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
The Company's primary market risk exposure with regard to
financial instruments is to changes in interest rates. The
Company manages this risk by monitoring interest rates and future
cash requirements, and evaluating opportunities to refinance
borrowings at various maturities and interest rates. There were
no other material changes to the Company's market risk exposure
during the first three months of 2000.
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(27) *Financial Data Schedule
As of March 31, 2000 and for the three months then
ended.
*Filed Herewith
(b) Reports on Form 8-K
The Company filed no reports on Form 8-K 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.
May 11, 2000 /S/ PAUL J. MEYER
Date Paul J. Meyer
Executive Vice President/Finance
(Principal Financial Officer)
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