SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
___ OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
___ TRANSITION REPORT PURSUANT TO SECTIONS 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___ to ___
Commission file number 0-5556
CONSOLIDATED-TOMOKA LAND CO.
(Exact name of registrant as specified in its charter)
Florida 59-0483700
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
149 South Ridgewood Avenue
Daytona Beach, Florida 32114
(Address of principal executive offices) (Zip Code)
(386) 255-7558
(Registrant's telephone number, including area code)
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 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 of Common Stock Outstanding
May 1, 2001
$1.00 par value 5,565,784
1
CONSOLIDATED-TOMOKA LAND CO.
INDEX
Page No.
--------
PART I - FINANCIAL INFORMATION
Consolidated Condensed Balance Sheets -
March 31, 2001 and December 31, 2000 3
Consolidated Condensed Statements of Income -
Three Months Ended March 31, 2001 and 2000 4
Consolidated Statement of Shareholders' Equity -
Three Months Ended March 31, 2001 5
Consolidated Condensed Statements of Cash Flows -
Three Months Ended March 31, 2001 and 2000 6
Notes to Consolidated Condensed Financial Statements 7-8
Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-12
PART II -- OTHER INFORMATION 13
SIGNATURES 14
2
PART I -- FINANCIAL INFORMATION
CONSOLIDATED-TOMOKA LAND CO.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
March 31, December 31,
2001 2000
--------- ------------
ASSETS
Cash $ 7,355,762 $12,909,722
Investment Securities 5,104,724 8,178,186
Notes Receivable 9,810,530 11,602,477
Real Estate Held for Development and Sale 9,715,351 9,767,635
Refundable Income Taxes 625,122 743,801
Other Assets 2,956,778 2,516,635
Property, Plant, and Equipment - Net 26,877,160 17,635,458
---------- ----------
TOTAL ASSETS $62,445,427 $63,353,914
========== ==========
LIABILITIES
Accounts Payable $ 112,073 $ 220,515
Accrued Liabilities 4,642,057 4,561,561
Deferred Income Taxes 1,995,917 2,171,438
Notes Payable 9,744,504 9,845,827
---------- ----------
TOTAL LIABILITIES 16,494,551 16,799,341
---------- ----------
SHAREHOLDERS' EQUITY
Common Stock 5,565,784 5,584,684
Retained Earnings 40,385,092 40,969,889
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 45,950,876 46,554,573
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $62,445,427 $63,353,914
========== ==========
See accompanying Notes to Consolidated Condensed Financial Statements.
3
CONSOLIDATED-TOMOKA LAND CO.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
---------------------------
March 31, March 31,
2001 2000
---------- -----------
INCOME:
Real Estate Operations:
Sales and Other Income $2,234,391 $1,497,678
Costs and Expenses (1,772,531) (1,285,785)
--------- ---------
461,860 211,893
--------- ---------
Profit on Sales of Undeveloped
Real Estate Interests 1,340 82,527
--------- ---------
Interest and Other Income 390,404 443,539
--------- ---------
853,604 737,959
General and Administrative Expenses (1,009,332) (1,008,798)
--------- ---------
Loss Before Income Taxes ( 155,728) ( 270,839)
Income Taxes 56,841 100,003
--------- ---------
Net Loss ( 98,887) ( 170,836)
========= =========
PER SHARE INFORMATION:
Basic and Diluted
Net Loss $ (0.02) $ (0.03)
========= =========
Dividends $ 0.05 $ 0.05
========= =========
See accompanying Notes to Consolidated Condensed Financial Statements.
4
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Common Retained
Stock Earnings Total
--------- ----------- -----------
Balance, December 31, 2000 $5,584,684 $40,969,889 $46,554,573
Net Loss ( 98,887) ( 98,887)
Cash Dividends
($.05 per share) ( 278,289) ( 278,289)
Repurchase of 18,900 Shares ( 18,900) ( 207,621) ( 226,521)
---------- ---------- ----------
Balance, March 31, 2001 $5,565,784 $40,385,092 $45,950,876
========== ========== ==========
5
CONSOLIDATED-TOMOKA LAND CO.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
---------------------------
March 31, March 31,
2001 2000
----------- ----------
CASH FLOW FROM OPERATING ACTIVITIES:
Net Loss $( 98,887) $( 170,836)
Adjustments to Reconcile Net Income to Net Cash
Provided By (Used In) Operating Activities:
Depreciation and Amortization 170,680 71,310
Decrease (Increase) in Assets:
Notes Receivable 1,791,947 94,013
Real Estate Held for Development 52,284 67,849
Refundable Income Taxes 118,679 --
Other Assets ( 440,143) ( 120,194)
(Decrease) Increase in Liabilities:
Accounts Payable ( 108,442) ( 95,518)
Accrued Liabilities 80,496 ( 143,322)
Deferred Income Taxes ( 175,521) --
Income Taxes Payable -- ( 100,003)
---------- ----------
Net Cash Provided By (Used In) Operating
Activities 1,391,093 ( 396,701)
---------- ----------
CASH FLOW FROM INVESTING ACTIVITIES:
Acquisition of Property, Plant, and Equipment ( 9,412,382) ( 348,531)
Net Decrease (Increase) in Investment Securities 3,073,462 (10,369,967)
---------- ----------
Net Cash Used In Investing Activities ( 6,338,920) (10,718,498)
---------- ----------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from Notes Payable 688,000 --
Payments on Notes Payable ( 789,323) ( 108,814)
Funds Used to Repurchase Common Stock ( 226,521) ( 4,221,280)
Dividends Paid ( 278,289) ( 315,707)
---------- ---------
Net Cash Used in Financing Activities ( 606,133) ( 4,645,801)
---------- ---------
Net (Decrease) In Cash ( 5,553,960) (15,761,000)
Cash, Beginning of Period 12,909,722 16,458,208
---------- ----------
Cash, End of Period $ 7,355,762 $ 697,208
========== ==========
See accompanying Notes to Consolidated Condensed Financial Statements.
6
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. Principles of Interim Statements. The following
unaudited condensed financial statements have been
prepared pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information
and note disclosures which are normally included in annual
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or
omitted pursuant to those rules and regulations. The
consolidated condensed financial statements reflect
all adjustments which are, in the opinion of the
management, necessary to present fairly the Company's financial
position and the results of operations for the interim periods.
The consolidated condensed format is designed to be read
in conjunction with the last annual report. For
further information refer to the consolidated financial
statements and the notes thereto included in the Company's
Annual Report on Form 10-K for the year ended December 31, 2000.
The consolidated condensed financial statements include
the accounts of the Company and its wholly owned
subsidiaries. Inter-company balances and transactions have
been eliminated in consolidation.
2. Common Stock and Earnings Per Common Share. Pursuant to
the stock repurchase program, approved by the Board
of Directors at their July 21, 1999 meeting, the Company
repurchased 18,900 shares of its common stock at a
cost of $226,521 during the quarter ended March 31, 2001.
Basic earnings per common share are computed by
dividing net income by the weighted average number of
shares of common stock outstanding during the period.
Diluted earnings per common share are determined
based on the assumption of the conversion of stock options
at the beginning of each period using the treasury stock
method at average cost for the periods.
Three Months Ended
March 31, March 31,
2001 2000
---------- ----------
Net Loss $( 98,887) $( 170,836)
========= =========
Weighted Average Shares Outstanding 5,566,148 6,233,448
Common Shares Applicable to Stock
Options Using the Treasury Stock Method 3,408 --
--------- ---------
Total Shares Applicable to Diluted
Earnings Per Share 5,569,556 6,233,448
========= =========
Basic and Diluted Loss Per Share:
Net Loss $ ( 0.02) $ (0.03)
========= =========
7
3. Notes Payable. Notes payable consist of the following:
March 31, 2001
------------------------------------
Due Within
Total One Year
------------------------------------
$ 7,000,000 Line of Credit $ -- $ --
Mortgage Notes Payable 9,415,484 355,694
Industrial Revenue Bond 329,020 107,771
---------- --------
$ 9,744,504 $ 463,465
========== ========
Payments applicable to reduction of principal amounts will be
required as follows:
Year Ending March 31,
---------------------
2002 $ 463,465
2003 7,976,454
2004 104,585
2005 --
2006 & Thereafter 1,200,000
---------
$9,744,504
=========
In the first three months of 2001 and 2000 interest totaled
$213,060 and $218,321 respectively. No interest was capitalized
during either period.
8
MANAGEMENT'S DISCUSSION AND ANALYSIS
The Management's Discussion and Analysis is designed to be read
in conjunction with the financial statements and Management's
Discussion and Analysis in the last annual report.
Certain statements contained in this report (other than the financial
statements and statements of historical fact), are forward-looking
statements. The words "before," "estimate," "intend," "anticipate,"
"will," "could," "may," "should," "plan," "potential," "predict,"
"forecast," and similar expressions and variations thereof identify
certain of such forward-looking statements, which speak only as of the
dates on which they were made. Forward-looking statements are made
based upon management's expectations and beliefs concerning future
developments and their potential effect upon the Company. There can
be no assurance that future developments will be in accordance with
management's expectations or that the effect of future developments
on the Company will be those anticipated by management.
The Company wishes to caution readers that the assumptions which form
the basis for forward-looking statements with respect to or that
may impact earnings for the year ended December 31, 2001, and
thereafter include many factors that are beyond the Company's ability
to control or estimate precisely. These risks and uncertainties
include, but are not limited to, the market demand of the Company's
real estate parcels; the impact of competitive real estate; changes
in pricing by the Company or its competitors; the costs and other
effects of complying with environmental and other regulatory
requirements; losses due to natural disasters and changes in national,
regional or local economic and political conditions, such as
inflation, deflation, or fluctuation in interest rates.
While the Company periodically reassesses material trends and
uncertainties affecting its results of operations and financial
condition, the Company does not intend to review or revise any
particular forward-looking statement referenced herein in light of
future events.
RESULTS OF OPERATIONS
Real Estate Operations
-----------------------
For the first three months of 2001, profits from real estate
operations totaled $461,860. This represents a 118% improvement when
compared to prior year's same period income of $211,893.
Increased commercial land sales gross profits, coupled with
higher profits from income properties generated the gain during
the period. Gross profits of approximately $550,000 were
realized in 2001's first three months on the sale of eleven
acres of land. This compares favorably to the sale of eight
acres during the first quarter of 2000, resulting in gross profits
approximating $45,000.
9
Real Estate Operations (Continued)
---------------------------------
The addition of two income properties at the end of 2000, along with
the acquisition of two properties in January 2001, generated
significant improvements in bottom line results from
income properties. Revenues increased to $369,000 in the first
three months of 2001, from $18,000 in the prior year, with profits
rising to $271,000 from $10,000 one year earlier.
Offsetting the gains from land sales and income properties was a
188% fall in earnings from golf operations. Golf activities
generated a loss of $84,000 during the period, compared to
profits of $96,000 posted one year earlier. The loss occurred
despite a 15% increase in revenues, which was generated primarily due
to increased food and beverage activity associated with the opening
of the clubhouse facility in January 2001. Golf expenses increased
36% primarily due to expenses associated with the additional
food and beverage activities, increased costs associated
with the clubhouse, and the related depreciation.
Forestry operations generated a $13,000 loss during the first
quarter of 2001, as no harvesting activities took place during
the period. During 2000's first quarter revenues of $216,000
were realized, producing a profit of $191,000. Harvesting
activities are anticipated to resume during the second quarter.
General, Corporate and Other
----------------------------
The release of 33 acres of surface entry rights produced $1,340
during 2001's first quarter. This compares to $82,257
recognized on the release of 2,523 acres of surface entry rights
during 2000's first three months.
Interest and other income declined 12% to 390,404 in 2001 on lower
investment interest realized on reduced investable funds. This
decrease was somewhat offset by higher interest earned on notes
receivable received as proceeds from year end 2000 real
estate closings. General and administrative expenses were in line
with prior year's results.
10
FINANCIAL POSITION
-------------------
The Company reported a loss of $98,887, equivalent to $.02 per share,
for the first quarter of 2001. This loss represents a 42%
improvement over the $170,836 loss, equivalent to $.03 per share,
posted in 2000's same period. Losses before depreciation and
deferred taxes were also equivalent to $.02 and $.03 per share for
the first three months of 2001 and 2000, respectively. The improved
results over the prior year were achieved on increased profits
from commercial closing activity and higher earnings generated on
new income properties put in place in the fourth quarter 2000
and January 2001.
The balance sheet remains strong with approximately
$12.5 million in cash and investment securities in place at
March 31, 2001. Of this amount, $4.0 million is held in escrow
to purchase a Walgreens site in Palm Bay, Florida. Cash and
investment securities declined $8.6 million during the quarter.
Acquisitions of property and equipment included $8.7 million used
to purchase the Barnes & Nobles income properties in Daytona Beach
and Lakeland, Florida. An additional $630,000 was used for
the completion of the clubhouse facility at the LPGA International
development. During the period, dividends were paid totaling $278,239,
equivalent to $.05 per share, and $226,521 was used to repurchase
18,900 shares of common stock. Offsetting these cash outflows was
approximately $1.4 million in cash provided from operating activities.
Capital requirements for the remainder of the year include $4.2
million for the purchase of the above mentioned Walgreens
income property, along with approximately $1.0 million for road
and entrance feature additions on lands adjacent to Interstate 95.
The Company also intends to continue the stock buyback program.
The funds required for these expenditures will be available from
cash and short-term investments on hand, operating activities and,
if necessary, existing financing sources. Additionally, the income
properties owned by the Company are free of debt at this time. The
Company has the ability to borrow against these properties on a
non-recourse basis if additional funds are needed. The Company
also intends to use the proceeds available from 2001 real
estate closings, which qualify for like-kind exchange treatment,
to invest in additional income properties.
Development activities on Company owned and surrounding lands
continue to progress. The clubhouse at the LPGA International
golf courses was opened the first quarter of 2001.
Renar Development Company ("Renar") continues its
development and homebuilding activities within the
LPGA International development and the United States Tennis
Association held a groundbreaking ceremony for its Florida
district facility located on lands to be donated by the Company.
In addition, construction of the multi-dealership auto mall
on lands sold by the Company at the LPGA Boulevard I-95
interchange is moving forward. This development and
construction activity has created additional interest in Company lands.
11
Financial Position (Continued)
-----------------------------
Despite negative reports on the national economy, the local economy,
along with interest and sales of Company lands remains strong. A
significant contract sales backlog is in place for closing in
2001 and forward. Management's focus will continue to be to convert
these contracts to closings. As closings occur, management intends
to invest the proceeds into income properties, which meet the
Company's strict criteria. As properties qualify, this investment
will be carried out through the tax deferred like-kind exchange
process.
12
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings
There are no material pending legal proceedings to
which the Company or its subsidiaries is a party.
Item 2 through 3.
Not Applicable
Item 4. Submission of matters to a vote of security holders.
The annual meeting of Shareholders was held April 25, 2001.
The following votes were received for each of the three
nominees for Class I directors:
Number of Number of Votes
Nominee votes for Withheld
John C. Adams, Jr. 4,701,038 37,712
Bob D. Allen 4,701,638 37,112
David D. Peterson 4,700,241 38,509
The following votes were received for the 2001 Stock Option
Plan:
Number of Votes For 4,429,745
Number of Votes Against 252,257
Number of Votes Abstaining 56,748
Item 5. Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
Exhibit 11 - Incorporated by Reference on Page 7
of this 10-Q report.
(b) Reports on Form 8-K
No Form 8-K reports were filed during the first
quarter.
13
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.
CONSOLIDATED-TOMOKA LAND CO.
(Registrant)
Date: ___________ By:/s/ William H. McMunn
----------------------------
William H. McMunn, President
and Chief Executive Officer
Date: ___________ By:/s/ Bruce W. Teeters
----------------------------
Bruce W. Teeters, Senior
Vice President - Finance
and Treasurer
14