SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from............to............
Commission File Number 0-12114
-------------------------
CADIZ LAND COMPANY, INC.
(Exact name of registrant specified in its charter)
DELAWARE 77-0313235
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10535 Foothill Boulevard, Suite 150
Rancho Cucamonga, CA 91730
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (909) 980-2738
------------------------
Securities Registered Pursuant to Section 12(b) of the Act: None
Name of Each Exchange
Title of Each Class on Which Registered
------------------- ---------------------
None None
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock
(Title of Class)
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
----- -----
The number of shares outstanding of each of the Registrant's
classes of Common Stock at November 13, 1995, was 17,558,454
shares of Common Stock, par value $0.01.
CADIZ LAND COMPANY, INC.
For the Six Months Ended September 30, 1995
TABLE OF CONTENTS
-----------------
Page
----
I. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
A. Balance Sheet 1-2
B. Statement of Cash Flows 3
C. Statement of Operations 4-5
D. Statement of Stockholders' Equity 6
E. Notes 7-8
II. SUPPLEMENTARY INFORMATION
A. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-16
B. Other Information 17
C. Signatures 18
<TABLE>
CADIZ LAND COMPANY, INC.
Condensed Consolidated Balance Sheet
September 30, March 31,
1995 1995
------ ------
(unaudited)
Assets (in thousands):
<CAPTION>
<S> <C> <C>
Cash $ 869 $ 2,454
Accounts receivable 411 131
Inventory 322 198
Property and equipment, net 2,339 2,308
Land and improvements:
Developed property, net 9,600 9,715
Unimproved land 11,874 11,792
Water transfer projects 2,238 1,764
Excess of purchase price over net
assets acquired, net 5,272 5,389
Debt issue costs and other assets 899 1,137
-------- --------
$ 33,824 $ 34,888
-------- --------
-------- --------
<FN>
See Accompanying Notes to the Consolidted Financial Statements
</TABLE>
<TABLE>
CADIZ LAND COMPANY, INC.
Condensed Consolidated Balance Sheet
<CAPTION>
September 30, March 31,
1995 1995
---------- --------
(unaudited)
Liabilities and Stockholders' Equity:
(in thousands except number of shares)
<S> <C> <C>
Accounts payable $ 961 $ 1,174
Other liabilities 525 385
Debt 17,017 16,381
Contingencies (Note 4)
Stockholders' equity:
Common stock - $.01 par value;
shares issued and outstanding -
17,558,454 at September 30, 1995
and 16,988,454 at March 31, 1995 176 170
Additional paid-in capital 64,740 62,687
Accumulated deficit (49,595) (45,909)
--------- --------
Total stockholders' equity 15,321 16,948
--------- --------
$ 33,824 $ 34,888
--------- --------
--------- --------
<FN>
See Accompanying Notes to the Consolidated Financial Statements
</TABLE>
<TABLE>
CADIZ LAND COMPANY, INC.
Condensed Consolidated Statement of Cash Flows
<CAPTION>
For the Six Months Ended September 30, 1995 1994
- -----------------------------------------------------------------------------
(in thousands)
(unaudited)
<S> <C> <C>
Cash flows from operating activities:
Loss from continuing operations $(3,686) $(2,246)
Adjustments to reconcile loss from
continuing operations to net cash
used for continuing operating
activities:
Depreciation and amortization 949 718
Interest capitalized to debt 244 155
Extraordinary gain on debt
settlement - (115)
The effect on net cash used for
continuing operating activities
from changes in assets and
liabilities:
Inventory and accounts receivable (404) 11
Debt issue costs and other assets (52) 76
Accounts payable and other
liabilities (73) (561)
-------- --------
Net cash used for continuing operating
activities (3,022) (1,962)
Net cash provided by discontinued operating
activities - 57
-------- --------
Net cash used for operating activities (3,022) (1,905)
-------- --------
Cash flows from investing activities:
Land purchase and development (175) (312)
Water transfer projects (474) (616)
Additions to property and equipment (234) (357)
-------- --------
Net cash used for investing activities (883) (1,285)
-------- --------
Cash flows from financing activities:
Net proceeds from issuance of common stock 2,059 1,804
Proceeds from issuance of debt 265 -
Principal payments on debt (4) (267)
-------- --------
Net cash provided by financing activities 2,320 1,537
-------- --------
Net decrease in cash (1,585) (1,653)
Cash, beginning of year 2,454 4,408
-------- --------
Cash, end of period $ 869 $ 2,755
-------- --------
-------- --------
<FN>
See Accompanying Notes to the Consolidated Financial Statements
</TABLE>
<TABLE>
CADIZ LAND COMPANY, INC.
Condensed Consolidated Statement of Operations
<CAPTION>
For the Three Months Ended September 30, 1995 1994
- -------------------------------------------------------------------------------
(in thousands except per share data)
(unaudited)
<S> <C> <C>
Revenues $ 596 $ 36
-------- --------
Costs and expenses:
Resource development 1,486 386
General and administrative 443 348
Amortization 59 59
-------- --------
1,988 793
-------- --------
Operating loss (1,392) (757)
Interest expense, net 443 294
-------- --------
Net loss $ (1,835) $ (1,051)
-------- --------
-------- --------
Loss per share:
Net loss per share $ (.10) $ (.06)
-------- --------
-------- --------
<FN>
See Accompanying Notes to the Consolidated Financial Statements
</TABLE>
<TABLE>
CADIZ LAND COMPANY, INC.
Condensed Consolidated Statement of Operations
<CAPTION>
For the Six Months Ended September 30, 1995 1994
- -------------------------------------------------------------------------------
(in thousands except per share data)
(unaudited)
<S> <C> <C>
Revenues $ 650 $ 64
-------- --------
Costs and expenses:
Resource development 2,445 901
General and administrative 891 822
Amortization 117 117
-------- --------
3,453 1,840
-------- --------
Operating loss (2,803) (1,776)
Interest expense, net 883 585
-------- --------
Loss before extraordinary item (3,686) (2,361)
Extraordinary item:
Gain on debt settlement - 115
------- --------
Net loss $(3,686) $ (2,246)
------- --------
------- --------
Loss per share:
Loss before extraordinary item $ (.21) $ (.15)
Extraordinary item - .01
------- --------
Net loss per share $ (.21) $ (.14)
------- --------
------- --------
<FN>
See Accompanying Notes to the Consolidated Financial Statements
</TABLE>
<TABLE>
CADIZ LAND COMPANY, INC.
Condensed Consolidated Statement of Stockholders' Equity
<CAPTION>
For the Six Months Ended September 30, 1995
- -------------------------------------------------------------------------------
(in thousands except number of shares)
(unaudited)
Total
Common Stock Paid-In Accumulated Stockholders'
Shares Amount Capital Deficit Equity
------ ------ ------- ------- ---------
<S> <C> <C> <C> <C> <C>
Balance as of
March 31, 1995 16,988,454 $170 $62,687 $(45,909) $16,948
Exercise of stock
options (Note 3) 120,000 1 301 302
Issuance of shares
in connection
with private
placement
(Note 3) 450,000 5 1,752 1,757
Net loss (3,686) (3,686)
---------- ---- ------ -------- -------
Balance as of
September 30,
1995 17,558,454 $176 $64,740 $(49,595) $15,321
---------- ---- ------- -------- -------
---------- ---- ------- -------- -------
<FN>
See Accompanying Notes to the Consolidated Financial Statements
</TABLE>
CADIZ LAND COMPANY, INC.
Notes to the Consolidated Financial Statements
NOTE 1 - CURRENT STATUS AND DESCRIPTION OF BUSINESS
Business of the Company
- -------------------------------
Cadiz Land Company, Inc. (the "Company") identifies, acquires and
develops properties (to date in the desert regions of Southern
California) which have significant indigenous supplies of water.
The Company currently owns or controls approximately 41,750 acres,
with its largest property totaling approximately 31,800 acres at
Cadiz, California. The Company's primary objective is to maximize
the long-term value of each of its properties through strategic use
of the water resources associated with the properties. The alternatives
available to the Company, which are evaluated by management on an
ongoing basis, include the transfer of water to third party users
and/or the development of the properties using indigenous water sources
for agricultural, commercial or residential purposes.
The transfer of water to third party users, both from the Cadiz
property and from other Company properties, is being actively pursued
by the Company. It is expected that water from the Cadiz water transfer
project will be capable of delivering approximately 30,000 acre-feet of
water per year which will be sold to various California water agencies
pursuant to water delivery contracts which the Company is currently
negotiating. In addition, the Company has submitted the Final Draft
Feasibility Report, prepared for the project under the joint review of
the Company and a public water agency, which included the various results
of independent studies conducted throughout the year. The Company has
also submitted a Conceptual Ground Water Management Plan which clarifies
many of the hydrological features and resource management concepts of
the proposed water transfer project. All remaining required environmental
reports are expected to be filed within fiscal 1996.
The Company has also commenced water development operations at its
landholding in the Piute valley. Following the drilling of a production
well on the property and the results of preliminary engineering tests,
the company has determined both the quantity and the quality of the
underlying water to be suitable for commercial development and that
the depth of the ground water table allows for economic production of
ground water. The Company believes that the Piute water transfer project
is both technically and economically feasible and is currently analyzing
its options for development.
Additionally, agricultural development at Cadiz has been an integral
part of the Company's ongoing business strategy as a means of
maximizing the value of the Company's landholding as a way to
generate cash flow from such landholding. As of March 31, 1995,
800 acres have been developed to table grapes, 560 acres have been
developed to citrus, and 240 acres have been planted to various row
crops. The Company has been able to enter into joint venture or
leasing arrangements for the farming of these crops on its properties.
In addition to the land improvements, seven production wells, drip
and micro spray irrigation systems and facilities to accommodate a
temporary contract labor force have been installed.
Basis of Presentation
- -------------------------
The Condensed Consolidated Financial Statements have been prepared
by the Company without audit and should be read in conjunction with
the consolidated financial statements and notes thereto included in
the Company's latest Form 10-K for the period ended March 31, 1995.
The foregoing Condensed Consolidated Financial Statements include
all adjustments, consisting only of normal recurring adjustments
which the Company considers necessary for a fair presentation.
The results of operations for the six months ended September 30,
1995 are not necessarily indicative of the results to be expected
for the full fiscal year.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
See Note 2 to the Condensed Consolidated Financial Statements
included in the Company's latest Form 10-K for a discussion of the
Company's accounting policies.
NOTE 3 - STOCK OPTIONS EXERCISED AND PRIVATE PLACEMENTS
During the six months ended September 30, 1995, 120,000 previously
outstanding stock options were exercised resulting in gross proceeds
to the Company of $304,000.
During the quarter ended September 30, 1995, the Company completed
private placements of 450,000 shares of its common stock resulting
in gross proceeds to the Company of $1,800,000.
NOTE 4 - CONTINGENCIES
As further discussed in Note 9 to the Condensed Consolidated
Financial Statements included in the Company's latest Form
10-K, the Company was awarded full reimbursement for its legal
fees and costs incurred in defending a legal action for which the
plaintiffs filed an appeal. In August 1995, the Arizona Court of
Appeals ruled in favor of the trial court's judgment upholding the
award for full reimbursement to the Company for such legal fees and
costs incurred. In addition, the Court of Appeals has awarded the
Company reimbursement for legal fees on appeal, the amount of
which has yet to be determined. The Company has not recorded
a gain contingency in connection with this matter, however, the
plaintiffs have posted a cash bond from which the Company can
collect its judgment which is estimated at approximately $400,000.
CADIZ LAND COMPANY, INC.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
(unaudited)
RESULTS OF OPERATIONS
Quarter Ended September 30, 1995 Compared to Quarter ended September 30, 1994
- -----------------------------------------------------------------------------
During the quarter ended September 30, 1995, the Company incurred a
net loss of $1,835,000 compared to a loss of $1,051,000 during the
same period in 1994. The following table summarizes the net loss
for both periods (in thousands):
1995 1994
---- ----
Revenues $ 596 $ 36
------ ------
Resource development 1,486 386
General and administrative 443 348
Amortization 59 59
Interest expense, net 443 294
------ ------
$1,835 $1,051
------ ------
------ ------
Revenues
- --------
Revenues are recognized from the Company's resource development as
a result of the Company's ability to enter into joint venture or
leasing arrangements with third party growers for the farming of
crops on its properties. Gross crop proceeds from the summer
honeydew venture totalled $427,000 for the quarter ended September
30, 1995, whereas, gross crop proceeds from the seedless watermelon
venture totalled $112,000, which was less than anticipated due to
unseasonably hot weather and the consequential decision to curtail
harvesting. In addition, net profit of $30,000 was realized from
the Company's produce brokerage during the quarter. Rental income
from the vineyard lease totalled approximately $29,000 for each of
the quarters ended September 30, 1995 and 1994. The Company also
receives a percentage of gross revenue generated by the vineyard and
will record such revenue in the quarter ended December 31, 1995.
Resource Development
- --------------------
Expenses recorded in this category consist of costs incurred in the
agricultural, land and water resource development of the Company's
landholdings. As an integral part of its strategy to control the
ultimate use of the resources associated with the Cadiz project,
the Company continues to maintain control of management of both the
infrastructure associated with these properties as well as the
development of the area for agricultural use. Accordingly, costs
related to the Company's management of its infrastructure and
agricultural development are included in Resource Development, as
well as the Company's share of joint venture crop costs. Additionally,
operating costs associated with the Company's produce brokerage and
the Company's continual evaluation of additional potential land
acquisition sites, such as overhead, legal and travel are included
within this category.
Resource development expenses totaled $1,486,000 for the quarter
ended September 30, 1995 as compared to $386,000 for the same period
in 1994. The Company's share of joint venture crop production costs
totalled approximately $697,000 during the quarter ended September 30,
1995. Also included in resource development are operating expenses
attributable to the Company's produce brokerage, which was created in
April 1995, and professional fees incurred in connection with the
Company's opposition to a proposed waste landfill project at a site
located adjacent to its Cadiz landholding which is discussed in
further detail in the Company's latest Form 10-K. The remaining
increase was due to higher levels of activity related to the
development of 160 acres to row crops which occurred during the
last several months of fiscal 1995 and additional depreciation
related to land improvements and an irrigation system installed
in the latter part of the prior fiscal year.
General and Administrative
- --------------------------
General and administrative expenses increased by approximately
$95,000 in 1995 compared to 1994, due to an overall increase in
activity.
Interest Expense
- ----------------
Net interest expense totalled $443,000 during the quarter ended
September 30, 1995 as compared to $294,000 during the same period
in 1994. The following table summarizes the components of net
interest expense for the three month periods ended September 30,
1995 and 1994 (in thousands):
1995 1994
---- ----
Interest expense on outstanding debt $ 245 $ 212
Amortization of financing costs 210 120
Interest income (12) (38)
----- -----
Net interest expense $ 443 $ 294
----- -----
----- -----
Interest expense on outstanding debt increased during the period
as a result of an increased level of borrowing. Amortization of
financing costs increased as a result of debt issue costs incurred
in connection with the March 1995 additional loan as further
discussed in the Company's latest Form 10-K.
Six Months Ended September 30, 1995 Compared to Six Months Ended
September 30, 1994
- ------------------------------------------------------------------
During the six months ended September 30, 1995, the Company incurred
a net loss of $3,686,000 compared to a loss of $2,246,000 during the
same period in 1994. The following table summarizes the net loss for
both periods (in thousands):
1995 1994
---- ----
Revenues $ 650 $ 64
------ ------
Resource development 2,445 901
General and administrative 891 822
Amortization 117 117
Interest expense, net 883 585
Gain on debt settlement - (115)
------ ------
$3,686 $2,246
------ ------
------ ------
Revenues
- --------
Gross crop proceeds from the honeydew melon, seedless watermelon and
radiccho joint ventures totalled $564,000 during the six months ended
September 30, 1995. Net profit realized from the Company's produce
brokerage totalled $30,000 for the same period. Revenues received
from the vineyard lease totalled approximately $56,000 for 1995 and
1994. The Company also receives a percentage of gross revenue
generated by the vineyard and will record such revenue in the quarter
ended December 31, 1995.
Resource Development
- --------------------
Resource development expenses totalled $2,445,000 for the six months
ended September 30, 1995 as compared to $901,000 for the same period
in 1994. The increase is due to the Company's share of joint venture
production costs of the various summer crops ($697,000), operating
expenses related to the Company's produce brokerage and an increase
in professional fees incurred in connection with the Company's
opposition to a proposed waste landfill project adjacent to its Cadiz
landholdings. The remaining increase is due to higher levels of
activity related to the development of 160 acres to row crops.
General and Administration
- --------------------------
General and administrative expenses during both periods consisted
primarily of salaries and professional expenses. These expenses
increased by $69,000 during the six months ended September 30, 1995,
as compared to the same period in 1994. This increase was primarily
due to an increase in salaries and rent expense offset by reduced
legal fees related to litigation.
Interest Expense
- ----------------
The following table summarizes the components of net interest
expense for the six month periods ended September 30, 1995 and
1994 (in thousands):
1995 1994
---- ----
Interest expense on outstanding debt $ 490 $ 423
Amortization of financing costs 421 240
Interest income (28) (78)
----- -----
Net interest expense $ 883 $ 585
----- -----
----- -----
Interest expense on outstanding debt increased during the period as
a result of an increased level of borrowing. Amortization of
financing costs increased as a result of debt issue costs incurred
in connection with the March 1995 additional loan as further discussed
in the Company's latest Form 10-K.
Gain on Debt Settlement
- -----------------------
In June 1994, the Company retired a note payable in the amount of
$249,000 to an individual at a discounted amount resulting in an
extraordinary gain on settlement of debt of $115,000. The note,
which originated in 1985, was scheduled to be retired with a
balloon payment in December 1996.
LIQUIDITY AND CAPITAL RESOURCES
Pursuant to its business strategy, the Company utilizes its working
capital primarily for development purposes: that is, for purposes
designed to increase the long term value of its properties. A
substantial portion of these developmental expenses are being
incurred in connection with the development of the Company's water
transfer projects at Cadiz and Piute. As the Company does not expect
to receive significant revenues from these water transfer projects
until 1997, the Company has been required to obtain financing to
bridge the gap between the time development expenses are incurred
and the time a revenue stream will commence. Accordingly, the Company
has looked to outside funding sources to address its liquidity and
working capital needs. Since the beginning of the 1992 fiscal year,
the Company has addressed these needs primarily through secured debt
financing arrangements with its lenders, private placements and the
exercise of outstanding stock options.
With the implementation of the Company's program to conduct
agricultural operations on its properties primarily through third
party leasing and joint venture operations and the establishment of
its produce brokerage, agricultural operations are anticipated to be
cash flow positive in 1996 and subsequent years.
Operational Arrangements
- ------------------------
The Company is continuing to negotiate the specific terms of water
delivery contracts with several California water agencies with respect
to its Cadiz project. Such terms include institutional arrangements,
quantity of delivered water, pricing concepts and formulas and
ownership of the pipeline and delivery system. The Company is also
proceeding with the remaining environmental reports which are required
to be filed prior to commencement of construction.
In addition, the Company is negotiating with several prospective
purchasers of its water from the Piute project. The Company believes
that much of the development work being performed for the Cadiz project
will be transferrable to the Piute project, thus making it possible for
water transfers from Piute to begin in parallel with or shortly after
Cadiz.
Agricultural development continues to be an integral part of the
Company's ongoing business strategy as a means of maximizing the
value of the Company's landholdings and a way to generate cash
flow from such landholdings. The Company has been able to attract
third party growers with significant expertise in their respective
purview and to enter into joint venture or leasing arrangements for
the farming of crops on its properties.
Since December 1992, the Company has leased its table grape vineyard
to an independent operator in return for both a fixed minimum income
stream and a percentage of the gross revenue. The Company currently
markets the citrus produced on its 560-acre orchard through a large
international conglomerate and has entered into several ventures with
established row crop growers whereby a total of 240 acres at Cadiz are
planted to row crops. Such development to row crops allows for multiple
harvests from the same acreage each year, thus allowing the Company an
opportunity for an immediate return on capital invested in the
infrastructure.
In April 1995, Cadiz Fresh, the agricultural division of the
Company, established a produce brokerage. Fresh fruit and vegetables
grown by independent parties are sold through this brokerage. Net
profit from the produce brokerage is recorded as revenue. As the
volume of orders increases throughout the year, management believes
this operation will become cash flow positive.
Current Financing Arrangements
- ------------------------------
The Company's two primary lenders are Cooperative Centrale
Raiffeisen-Boerenleenbank B.A., a Netherlands commercial bank
("Rabobank") and Henry Ansbacher & Co., Limited, a banking corporation
organized under the laws of England ("Ansbacher") (collectively, the
"Banks").
As previously reported in the Company's latest Form 10-K, in March
1995 the Company arranged to draw $2.45 million from an additional
$3 million loan facility provided by Ansbacher. From these proceeds,
the Company used $250,000 to reduce the Company's existing Rabobank
loan and to reimburse Rabobank for various fees and expenses with the
balance to be applied towards the Company's estimated working capital
requirements through March 31, 1996. The remaining $550,000 of this
facility is expected to be drawn down April 1, 1996 for application
towards the Company's estimated working capital requirements for the
fiscal year ending March 31, 1997. Ansbacher agreed to accrue and
capitalize interest on the outstanding principal amount of these
advances through January 1997. Interest rates on outstanding debt
to the Banks, with the exception of the March 1995 additional loan
facility, are fixed until January 1997, the maturity date under the
current financing arrangements. Interest on the Ansbacher portion is
accrued and capitalized until maturity. Rabobank interest is paid
quarterly through draw downs against a letter of credit provided by
Ansbacher for that purpose.
As the Company continues to pursue its business strategy, additional
financing specifically in connection with the Company's water projects
will be obtained. The nature of such additional financing for the water
transfer projects will depend upon how the development and ownership of
each project is ultimately structured, and how much of each project's
funding will be the Company's responsibility.
Equity Placements
- -----------------
During the fiscal year ended March 31, 1995, the Company raised
gross proceeds of approximately $2.3 million through the exercise
of outstanding stock options and warrants. In addition, the Company
raised gross proceeds of $304,000 through the exercise of outstanding
stock options during the six months ended September 30, 1995.
In July 1995, the Company completed a private placement of 450,000
shares of its common stock to several institutions thereby receiving
gross proceeds of $1,800,000. The Company will utilize such proceeds
to fund its capital projects related to development of its water transfer
projects, purchase of additional acreage and for operating requirements.
Working Capital Resources
- -------------------------
The Company has adopted an unclassified balance sheet (eliminating
the distinction between current assets and long-term assets and current
liabilities and long-term liabilities). Accordingly, any historical
or forward looking discussion of the Company's working capital
resources should focus on the receipt and use of cash as opposed
to the broader concepts of working capital and current ratio.
Cash used for continuing operating activities totaled $3,022,000 for
the six month period ended September 30, 1995 as compared to $1,962,000
for the same period in 1994. This change primarily resulted from a
combination of increased activity at the ranch pertaining to the
various ventures with independent growers, costs associated with
the establishment in April 1995 of a produce brokerage to market
fresh fruit and vegetables, and an increase in professional fees
incurred in connection with the Company's opposition to a proposed
waste landfill project adjacent to its Cadiz landholdings. The cash
provided by discontinued operating activities during the 1994
quarter resulted from the sale of property during that period.
Cash used for investing activities decreased by $402,000 during the
six months ended September 30, 1995 compared to the same period in
1994. Although activity related to the Cadiz water transfer project
increased in 1995, costs associated with such activity decreased
from the prior year. The amount incurred in 1994 consisted of
preliminary studies and project mobilization, whereas, the 1995
costs pertained to specific environmental issues. Additionally,
property and equipment for the 1994 period included costs related
to the drilling of a production well and construction of an irrigation
manifold system.
Financing activities provided $2,230,000 for the six months ended
September 30, 1995 as compared to $1,537,000 during the six months
ended September 30, 1994. Proceeds from the issuance of common
stock as a result of the exercise of previously existing stock
options totaled $2,059,000 and $1,804,000 during the 1995 and 1994
periods, respectively. Proceeds from the issuance of debt increased
by $265,000 during the 1995 period and principal payments on debt
decreased by $263,000 compared to the 1994 period.
SHORT-TERM OUTLOOK
Management believes it has sufficient funds available to meet the
Company's short-term working capital requirements. During fiscal
1996, these working capital requirements will be funded from the
remaining balance of the $2.45 million in proceeds received in
March 1995 from the additional loan facility provided by Ansbacher,
the $2.081 million received by the Company through the exercise of
stock options and the completion of a private placement in July
1995 (see Note 3 to the Condensed Consolidated Financial Statements).
During fiscal 1995, the Company's working capital requirements were
funded from available cash at the beginning of the year and from
proceeds from the exercise of outstanding stock options.
LONG-TERM OUTLOOK
Historically, the Company has financed both its working capital and
property acquisitions cash requirements from outside resources via a
combination of debt and equity placements. Although the Company
expects the revenue stream from its agricultural operations will
increase in fiscal 1996 and a revenue stream from its other
landholdings and associated resources will commence in calendar 1997,
no assurances can be made as to whether such revenues will be of
sufficient levels by the end of fiscal 1996 to fund the Company's
ongoing cash requirements. Such cash requirements will be dependent,
in large part upon the form of the arrangements utilized by the
Company for the development of its resources.
As the Company is actively pursuing the development of its water
resources, it is seeking the finalization of the regulatory approvals
needed to commence construction of a water delivery project at Cadiz.
The Company is also negotiating the terms of water delivery contracts
with various California water agencies, which terms include
institutional arrangements, financing, pricing concepts and formulas
and ownership of the pipeline and the delivery system.
In addition, as a result of San Bernardino County's approval of a
General Plan Amendment covering 9,600 acres of the Company's
landholdings at Cadiz and the increased grower interest in Cadiz
as an agricultural area, the Company expects to continue further
development of its landholding to agriculture. Such development
will be systematic and in furtherance of the Company's business
strategy to provide for maximization of the value of its assets.
Such development is expected to continue to be accomplished through
negotiated arrangements with third parties, which will significantly
reduce any capital outlay required of the Company in connection with
such development activities.
CADIZ LAND COMPANY, INC.
Other Information
-----------------
Item 1 - Legal Proceedings
-----------------
Not applicable.
Item 2 - Change in Securities
--------------------
Not applicable.
Item 3 - Defaults Upon Senior Securities
-------------------------------
Not applicable.
Item 4 - Submission of Matter to a Vote of Security Holders
--------------------------------------------------
A. The annual meeting of the stockholders of the Company
was held on September 22, 1995. The stockholders took
the following action at the meeting:
1. Re-elected Dwight W. Makins, Keith Brackpool, J.F.R.
Hammond and Stephen D. Weinress to the Company's
Board of Directors. Mr. Makins was elected by the
vote of 8,711,724 in favor and 35,939 against, with
no one abstaining and no broker non-votes. Mr.
Brackpool was elected by the vote of 8,711,502 in
favor and 36,161 against, with no one abstaining and
no broker non-votes. Mr. Hammond was elected by the
vote of 8,711,724 in favor and 35,939 against, with
no one abstaining and no broker non-votes. Mr.
Weinress was elected by the vote of 8,711,724 in
favor and 35,939 against, with no one abstaining
and no broker non-votes.
2. Ratified the selection by the Company's Board of
Directors of Price Waterhouse LLP to continue as
the Company's independent auditors for fiscal year
1996 by the vote of 8,700,692 in favor and 2,521
against, with 44,450 abstaining and no broker
non-votes.
Item 5 - Other Information
-----------------
Not applicable.
Item 6 - Exhibits and Reports on Form 8-K
--------------------------------
A. Exhibits
1. Exhibit 27 - Financial Data Schedule
B. Reports on Form 8-K
1. None
CADIZ LAND COMPANY, INC.
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.
CADIZ LAND COMPANY, INC.
By: /s/ Keith Brackpool November 13, 1995
------------------------------------ ---------------------
Keith Brackpool Date
Chief Executive Officer and Director
By: /s/ Susan K. Chapman November 13, 1995
------------------------------------- ---------------------
Susan K. Chapman Date
Chief Financial Officer and Secretary
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<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> SEP-30-1995
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