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Previous: TRUMP PLAZA FUNDING INC, 10-Q, 1995-05-11 |
Next: OCTEL COMMUNICATIONS CORP, 10-Q, 1995-05-11 |
<PAGE> 1
UNITED STATES
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 March 31, 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 1-9145
MAUNA LOA MACADAMIA PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
DELAWARE 99-0248088
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
827 FORT STREET, HONOLULU, HAWAII 96813
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: 808-544-6112
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 twelve 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
----- ------
As of April 30, 1995, Registrant had 7,500,000 Class A Units issued and
outstanding.
1
<PAGE> 2
MAUNA LOA MACADAMIA PARTNERS, L.P.
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I - Financial Information
Item 1. Financial Statements 3-8
Item 2. Management's Discussion and Analysis of Financial
Financial Condition and Results of Operations 9-10
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
</TABLE>
2
<PAGE> 3
MAUNA LOA MACADAMIA PARTNERS, L.P.
Balance Sheets (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
March 31,
------------------------ December 31,
ASSETS 1995 1994 1994
-------- -------- ------------
<S> <C> <C> <C>
Current Assets:
Cash $ 209 $ 9 $ 37
Receivables from related parties:
Accounts receivable 3,128 4,514 5,995
Other - 935 -
Annualized cost adjustment 22 443 -
Prepaid expenses and other assets 50 75 24
------- ------- -------
3,409 5,976 6,056
------- ------- -------
Land, orchards and equipment 73,191 73,788 73,191
Less accumulated depreciation
and amortization (12,116) (10,556) (11,715)
------- -------- -------
Land, orchards and equipment (net) 61,075 63,232 61,476
------- ------- -------
Deferred charges (net) 9 11 12
------- ------- -------
Total assets $64,493 $69,219 $67,544
======= ======= =======
LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
Line of credit payable $ - $ 3,265 $ 1,407
Mortgage note payable (current portion) 60 65 60
Accounts payable to related parties 2,295 2,031 3,784
Distribution payable 379 758 379
Other current and accrued liabilities 180 175 207
------- ------- -------
Total current liabilities 2,914 6,294 5,837
------- ------- -------
Mortgage note payable (noncurrent portion) 249 305 264
Deferred income tax expense 14,982 15,596 14,982
Partners' capital:
General partners 464 470 465
Class A limited partners 45,884 46,554 45,996
------- ------- -------
46,348 47,024 46,461
------- ------- -------
Total liabilities and partners' capital $64,493 $69,219 $67,544
======= ======= =======
----------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
3
<PAGE> 4
MAUNA LOA MACADAMIA PARTNERS, L.P.
Income Statements (Unaudited)
(In Thousands, Except Per Unit Data)
<TABLE>
<CAPTION>
For the Quarter Ended
March 31,
------------------------
1995 1994
------ ------
<S> <C> <C>
Macadamia nut sales to related party $2,574 $1,427
Cost of goods sold:
Costs expensed under farming contracts with related parties 1,624 1,044
Depreciation and amortization 279 186
Other 47 34
------ ------
1,950 1,264
------ ------
Gross profit 624 163
General and administrative expenses:
Costs expensed under management contract with related party 136 139
Amortization 3 4
Other 206 190
------ ------
345 333
------ ------
Operating income (loss) 279 (170)
Interest expense (net) 13 11
------ ------
Income (loss) before income taxes 266 (181)
Deferred income tax expense - 285
------ ------
Net income (loss) $ 266 $ (466)
====== ======
- - - - --------------------------------------------------------------------------------------------------------
Net Cash Flow (as defined in the Partnership Agreement) $ 533 $ 905
====== ======
- - - - --------------------------------------------------------------------------------------------------------
Net income (loss) per Class A Unit $ 0.04 $(0.06)
====== ======
Net cash flow per Class A Unit $ 0.07 $ 0.12
====== ======
Cash distribution per Class A Unit $ 0.05 $ 0.10
====== ======
Class A Units outstanding (average) 7,500 7,500
====== ======
- - - - --------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
4
<PAGE> 5
MAUNA LOA MACADAMIA PARTNERS, L.P.
Statements of Partners' Capital (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
For the Quarter Ended
March 31,
--------------------
1995 1994
------- -------
<S> <C> <C>
Partners' capital at beginning of period:
General partners $ 465 $ 483
Class A limited partners 45,996 47,765
------- -------
46,461 48,248
------- -------
Allocation of net income (loss):
General partners 3 (5)
Class A limited partners 263 (461)
------- -------
266 (466)
------- -------
Cash distributions:
General partners 4 8
Class A limited partners 375 750
------- -------
379 758
------- -------
Partners' capital at end of period:
General partners 464 470
Class A limited partners 45,884 46,554
------- -------
$46,348 $47,024
======= =======
- - - - --------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
5
<PAGE> 6
MAUNA LOA MACADAMIA PARTNERS, L.P.
Statements of Cash Flows (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
For the Quarter Ended
March 31,
----------------------
1995 1994
------- -------
<S> <C> <C>
Cash flows from operating activities:
Cash received from macadamia nut sales $ 5,441 $ 2,908
Cash paid under farming and
management contracts (3,139) (3,265)
Cash paid to other suppliers (316) (276)
Interest received (paid) (13) (44)
------- -------
Net cash provided (used) by operating activities 1,973 (677)
------- -------
Cash flows from investing activities:
Stabilization payment received from seller - 20
Cash flow warranty payment received from seller - -
------- -------
Net cash provided by investing activities - 20
------- -------
Cash flows from financing activities:
Line of credit drawings (repayments) (1,407) 1,428
Principal payments of mortgage note payable (15) (16)
Distributions paid (379) (757)
------- -------
Net cash provided (used) in financing activities (1,801) 655
------- -------
Net increase (decrease) in cash 172 (2)
Cash at beginning of period 37 11
------- -------
Cash at end of period $ 209 $ 9
======= =======
- - - - ----------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
6
<PAGE> 7
MAUNA LOA MACADAMIA PARTNERS, L.P.
Statements of Cash Flows (Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
For the Quarter Ended
March 31,
---------------------
1995 1994
------- -------
<S> <C>
Reconciliation of net income to net cash provided
by operating activities:
Net income (loss) $ 266 $ (466)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization 282 190
Deferred income tax expense - 285
Decrease in accounts receivable from related party 2,867 1,428
Increase in prepaid expenses and other current assets (26) (53)
Decrease in accounts payable to related parties (1,489) (1,780)
Decrease in other current and accrued liabilities (27) (11)
(Increase) decrease in annualized cost adjustment
(other than depreciation expense) 100 (249)
Net cost of developing orchard - (22)
Other - 1
------- -------
Total adjustments 1,707 (211)
------- -------
Net cash provided by operating activities $ 1,973 $ (677)
======= =======
- - - - ----------------------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
7
<PAGE> 8
MAUNA LOA MACADAMIA PARTNERS, L.P.
Notes to Financial Statements
(1) In the opinion of management, the accompanying unaudited Balance Sheets as
of March 31, 1995, March 31, 1994 and December 31, 1994 and the related
unaudited Statements of Income, Partners' Capital and Cash Flows for the
quarters ended March 31, 1995 and 1994 contain all adjustments, consisting
only of normally recurring accruals, necessary to present fairly the
financial position as of March 31, 1995, March 31, 1994 and December 31,
1994 and the results of operations, changes in partners' capital and cash
flows for the quarters ended March 31, 1995 and 1994.
(2) These interim financial statements should be read in conjunction with the
Financial Statements and the Notes to Financial Statements filed with
the Commission in the Partnership's 1994 Annual Report on Form 10-K.
(3) All production costs are annualized for interim reporting purposes, with
the difference between costs incurred to date and costs expensed to date
being reported on the balance sheet as an annualized cost adjustment.
(4) All capital allocations reflect the general partners' 1% equity interest
and the limited partners' 99% percent equity interest.
(5) Because the Partnership is not presently a taxable entity, no current
income taxes have been accrued. The Omnibus Budget Reconciliation Act of
1987 includes a provision that some publicly traded limited partnerships,
including the Partnership, are to be taxed as corporations beginning in
1998.
In 1993 the Partnership adopted Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes ("FAS No. 109") and has
applied the provisions of FAS No. 109 retroactively to January 1, 1988.
Prior year financial statements have been restated to give effect to this
standard. The Partnership is also required to accrue a deferred income
tax expense, or credit, for changes in the deferred income tax liability
balance. This charge, or credit, does not have a relationship to income,
or loss, before taxes.
(6) On March 10, 1995, the first quarter cash distribution was declared in the
amount of five (5) cents per Class A Unit, payable on May 15, 1995 to
unitholders of record as of March 31, 1995.
(7) On March 31, 1995, there were 7,500,000 Class A Units issued and
outstanding and 1,500,000 Class B Units issued and outstanding. No value
has been assigned to the Class B Units.
8
<PAGE> 9
MAUNA LOA MACADAMIA PARTNERS, L.P.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
OPERATING RESULTS -- FOR THE QUARTERS ENDED MARCH 31, 1995 AND 1994
First quarter 1995 nut sales revenues increased by 80% versus the same quarter
in 1994 as a result of higher levels of production:
<TABLE>
<CAPTION>
For the Quarter
Ended March 31,
-----------------
1995 1994 Change
----- ----- ------
<S> <C> <C> <C>
Nuts Harvested (000's Lbs. WIS) 4,020 2,458 +64%
Nut Price ($/Lb.) .6403 .6021 + 6%
----- -----
Gross Nut Sales ($000's) 2,574 1,480 +74%
Less Portion Reported on
the Balance Sheet ($000's) - (53)
----- -----
Net Nut Sales ($000's) 2,574 1,427 +80%
===== =====
</TABLE>
The increase in first quarter 1995 nut production reflects harvest timing
differences (due to this crop year's nut drop being later than last year's) as
well as an increase in production for the 1994-95 crop year compared to the
1993-94 crop year.
Weather at the Partnership's Keaau orchards has been good recently. However,
weather at the Partnership's Ka'u orchards has been drier than normal so far
this year but flowering and nut set have nonetheless been good in the younger
Ka'u orchards. Absent a return to more normal weather patterns in the next
several weeks, there is some risk that production from the mature Ka'u orchards
could be somewhat lower than normal during the 1995-96 crop year.
Nut prices used for interim reporting reflect the estimated full year
processing and marketing performance of Mauna Loa Macadamia Nut Corporation
("Mauna Loa"), which purchases all of the Partnership's nut production. As the
majority of nut purchases and nut sales occurs in the second half of the year,
nut prices are subject to subsequent adjustment based on Mauna Loa's actual
full year performance.
The nut price for the first quarter 1995 was 6% higher than for the first
quarter 1994. The 1% reduction in the USDA two-year trailing average (half of
the nut price formula) was offset by a forecasted 13% increase in the netback
(the other half of the nut price formula).
9
<PAGE> 10
Production expenses per pound were 6% lower primarily due to orchard mix (with
proportionately more pounds from the Partnership's lower cost orchards).
General and administrative expenses were 4% higher in the first quarter of 1995
than for the same quarter of 1994 primarily due to higher excise taxes
resulting from higher nut production and higher paper and postage costs related
to investor tax reporting.
Net interest expense for the first quarter of 1995 was roughly flat with the
first quarter of 1994 as higher interest rates were offset by lower line of
credit balances.
SEASONALITY, CAPITAL RESOURCES AND LIQUIDITY
Macadamia nut farming is seasonal, with production peaking late in the fall.
However, farming operations continue year round. As a result, additional
working capital is required for much of the year.
The Partnership has a $4.0 million revolving line of credit in place to fund
working capital needs. Line of credit drawings decreased from $3.3 million at
March 31, 1994 to zero at March 31, 1995 due primarily to the cash generated by
the Partnership in 1994 and 1995 year-to-date exceeding cash distributions.
Cash flow from the Ka'u orchard acquired in December 1986 was supplemented
through 1993 by stabilization payments from the seller of that orchard. Cash
flow from the Ka'u and Mauna Kea orchards acquired in October 1989 was
supplemented through 1994 by cash flow warranty payments from the sellers of
those orchards.
It is the opinion of management that the Partnership has adequate borrowing
capacity available to meet anticipated working capital needs. Except for
opportunistic orchard acquisitions, the Partnership has made no major capital
expenditures since inception and has none currently planned.
INFLATION AND TAXES
In general, prices paid to macadamia nut farmers fluctuate independently of
inflation. Those prices are influenced strongly by prices for finished
macadamia products which, in turn, depend on competition and consumer
acceptance. Farming costs, particularly materials and labor, do generally
reflect inflationary trends as do general and administrative costs.
The Omnibus Budget Reconciliation Act of 1987 ("OBRA") provides that some
publicly traded limited partnerships, including the Partnership, are to be
taxed as corporations beginning in 1998. If this provision is not modified and
if the Partnership does not modify its operating structure prior to 1998, the
amount of cash available for distribution could be reduced materially.
As a result of the OBRA provision, the Partnership implemented Financial
Accounting Standards No. 109, Accounting for Income Taxes ("FAS No. 109") in
1993, and has applied the provisions of FAS No. 109 retroactively to January 1,
1988. Prior year financial statements have been restated to give effect to
this standard. The Partnership is also required to accrue a deferred income
tax expense, or credit, for changes in the deferred income tax liability
balance. This charge, or credit, does not have a relationship to income, or
loss, before taxes.
10
<PAGE> 11
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) The following documents are filed as part of
this report:
<TABLE>
<S> <C> <C>
Exhibit Page
Number Description Number
------- ----------- ------
(11.1) Statement re Computation of Net Income 13
per Class A Unit
</TABLE>
(b) Reports on Form 8-K:
None.
11
<PAGE> 12
MAUNA LOA MACADAMIA PARTNERS, L.P.
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.
MAUNA LOA MACADAMIA PARTNERS, L.P.
(Registrant)
By Mauna Loa Resources Inc.
Managing General Partner
By /s/ E. Dunford
---------------------------------------------
E. Dunford
Vice President and Principal Financial Officer
Date: May 11, 1995
12
<PAGE> 1
Exhibit 11.1
MAUNA LOA MACADAMIA PARTNERS, L.P.
Computation of Net Income per Class A Unit
(Unaudited)
(In Thousands, Except Per Unit Data)
<TABLE>
<CAPTION>
For the quarter
ended March 31,
-----------------------
1995 1994
------- -------
<S> <C> <C>
Net income (loss) $ 266 $ (466)
Class A Unitholders
(ownership percentage) x 99% x 99%
------ ------
Net income (loss) allocable to Class A Unitholders $ 263 $ (461)
====== ======
Class A Units outstanding 7,500 7,500
====== ======
Net income (loss) per Class A Unit $ 0.04 $(0.06)
====== ======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 209
<SECURITIES> 0
<RECEIVABLES> 3,128
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,409
<PP&E> 73,191
<DEPRECIATION> 12,116
<TOTAL-ASSETS> 64,493
<CURRENT-LIABILITIES> 2,914
<BONDS> 0
<COMMON> 0
0
0
<OTHER-SE> 46,348
<TOTAL-LIABILITY-AND-EQUITY> 64,493
<SALES> 2,574
<TOTAL-REVENUES> 2,574
<CGS> 1,950
<TOTAL-COSTS> 1,950
<OTHER-EXPENSES> 345
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13
<INCOME-PRETAX> 266
<INCOME-TAX> 0
<INCOME-CONTINUING> 266
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 266
<EPS-PRIMARY> 0.04
<EPS-DILUTED> 0.04
</TABLE>
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