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, 1996
_____ 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 32114
Daytona Beach, Florida (Zip Code)
(Address of principal executive offices)
(904) 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.
Outstanding
Class of Common Stock May 1, 1996
$1.00 par value 6,261,272
1
CONSOLIDATED-TOMOKA LAND CO.
INDEX
Page No.
PART I - - FINANCIAL INFORMATION
Consolidated Condensed Balance Sheets -
March 31, 1996 and December 31, 1995 3
Consolidated Condensed Statements of Income and
Retained Earnings -- Three Months Ended
March 31, 1996 and 1995 4
Consolidated Condensed Statements of Cash Flows -
Three Months Ended March 31, 1996 and 1995 5
Notes to Consolidated Condensed Financial Statements 6-7
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-9
PART II -- OTHER INFORMATION 10
SIGNATURES 11
2
PART I -- FINANCIAL INFORMATION
CONSOLIDATED-TOMOKA LAND CO.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
March 31, December 31,
1996 1995
--------- ------------
ASSETS
Cash $ 423,829 $ 203,829
Investment Securities 1,424,738 1,603,887
Notes Receivable 10,582,473 10,937,614
Accounts Receivable 2,630,744 2,143,305
Inventories 810,176 802,515
Cost of Fruit on Trees 2,102,044 2,658,126
Real Estate Held for Development and Sale 13,774,695 13,801,477
Net Investment in Direct Financing Lease 772,527 792,530
Other Assets 453,215 499,272
Property, Plant, and Equipment - Net 26,099,917 26,250,913
---------- ----------
TOTAL ASSETS $59,074,358 $59,693,468
========== ==========
LIABILITIES
Accounts Payable $ 936,411 $1,213,692
Notes Payable 21,209,279 20,921,298
Accrued Liabilities 2,879,818 2,569,848
Customer Deposits 51,262 52,411
Deferred Income Taxes 69,466 69,466
Income Taxes Payable 1,108,902 2,123,691
---------- ----------
TOTAL LIABILITIES 26,255,138 26,950,406
---------- ----------
MINORITY INTEREST 103,135 110,535
---------- ----------
SHAREHOLDERS' EQUITY
Common Stock 6,261,272 6,261,272
Additional Paid-in Capital 1,782,105 1,782,105
Retained Earnings 24,672,708 24,589,150
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 32,716,085 32,632,527
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $59,074,358 $59,693,468
========== ==========
See accompanying Notes to Consolidated Condensed Financial Statements.
3
CONSOLIDATED-TOMOKA LAND CO.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Unaudited)
Three Months Ended
----------------------------
March 31, March 31,
1996 1995
------------ -----------
INCOME:
Citrus Operations:
Sales of Fruit and Other Income $ 5,168,901 $3,721,100
Production and Selling Expenses ( 3,474,465) (3,493,453)
---------- ----------
1,694,436 227,647
---------- ----------
Real Estate Operations:
Sales and Other Income 2,792,325 901,000
Costs and Expenses ( 1,201,565) ( 822,240)
----------- ----------
1,590,760 78,760
----------- ----------
Profit on Sales of Undeveloped
Real Estate Interests 2,056 59,698
----------- ----------
Interest and Other Income 172,315 173,366
----------- ----------
OPERATING INCOME 3,459,567 539,471
GENERAL AND ADMINISTRATIVE EXPENSES ( 850,479) ( 954,393)
---------- ----------
INCOME (LOSS) BEFORE INCOME TAXES 2,609,088 ( 414,922)
INCOME TAXES ( 960,212) 160,424
---------- ----------
NET INCOME (LOSS) 1,648,876 ( 254,498)
RETAINED EARNINGS, Beginning of Period 24,589,150 22,986,715
DIVIDENDS ( 1,565,318) (1,252,254)
---------- ----------
RETAINED EARNINGS, End of Period $24,672,708 $21,479,963
========== ==========
PER SHARE INFORMATION:
Average Shares Outstanding 6,261,272 6,261,272
========== ==========
Net Income (Loss) Per Share $ .26 $ (.04)
========== =========
Dividends Per Share $ .25 $ .20
========== =========
See accompanying Notes to Consolidated Condensed Financial Statements.
4
CONSOLIDATED-TOMOKA LAND CO.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Unaudited
Three Months Ended
---------------------------
March 31, March 31,
1996 1995
--------- ---------
CASH FLOW FROM OPERATING ACTIVITIES:
CASH RECEIVED FROM:
Citrus Sales and Other Income $ 4,448,216 $4,124,995
Real Estate Sales and Other Income 3,415,306 1,458,678
Sales of Undeveloped Real Estate Interests 44,827 59,698
Interest and Other Income 127,766 168,457
--------- ---------
Total Cash Received from Operating Activities 8,036,115 5,811,828
--------- ---------
CASH EXPENDED FOR:
Citrus Production and Selling Expenses 2,899,312 2,675,092
Real Estate Costs and Expenses 717,263 1,157,414
General and Administrative Expenses 638,118 522,417
Interest 369,032 173,636
Income Taxes 1,975,000 1,125,000
--------- ---------
Total Cash Expended for Operating Activities 6,598,725 5,653,559
--------- ---------
Net Cash Provided by Operating Activities 1,437,390 158,269
--------- ---------
CASH FLOW FROM INVESTING ACTIVITIES:
Acquisition of Property, Plant, and Equipment ( 144,480) ( 101,615)
Net Increase (Decrease) in Investment Securities 179,149 ( 81,872)
Direct Financing Lease 20,003 21,560
Proceeds from Sale of Property, Plant and Equipment 5,275 --
--------- ---------
Net Cash Provided by (Used In)
Investing Activities 59,947 ( 161,927)
--------- ---------
CASH FLOW FROM FINANCING ACTIVITIES:
Cash Proceeds from Debt 850,000 2,100,000
Payments of Debt ( 562,019) ( 951,168)
Dividends Paid ( 1,565,318) (1,252,254)
---------- ---------
Net Cash Used in Financing Activities ( 1,277,337) ( 103,422)
---------- ----------
NET INCREASE (DECREASE) IN CASH 220,000 ( 107,080)
CASH AT BEGINNING OF YEAR 203,829 503,545
---------- ----------
CASH AT END OF PERIOD $ 423,829 $ 396,465
=========== ===========
See accompanying Notes to Consolidated Condensed Financial Statements.
5
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. Principles of Interim Statements. The information presented in the
unaudited consolidated condensed financial statements reflects 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.
The consolidated condensed financial statements include the accounts of the
Company and its wholly owned subsidiaries. Intercompany balances and
transactions have been eliminated in consolidation.
2. Seasonal Operations. The Company's citrus operations involve a single-crop
agricultural commodity and are seasonal in nature. To a lesser extent,
forestry activities are seasonal in nature. Accordingly, results for the
three months ended March 31, 1996 and 1995 are not necessarily indicative of
results to be expected for the full year. Results of operations for the
twelve months ended March 31, 1996 and 1995 are summarized as follows
(in thousands):
Twelve Months Ended March 31,
------------------------------------------------
1996 1995
------------------------------------------------
Revenues Income Revenues Income(Loss)
-------- ------------ -------- -----------
Citrus Operations $10,267 $ 2,096 $ 8,302 $( 376)
Real Estate Operations 9,634 4,400 13,035 6,966
General Corporate & Other 7,064 3,684 4,182 792
------ ----- ------ ------
Total Revenues $26,965 $25,519
====== ======
Income From Continuing
Operations Before Income Taxes 10,180 7,382
Income Taxes ( 3,857) (2,789)
------ ------
Income from Continuing Operations 6,323 4,593
Loss from Discontinued Resort
Operations (net of income taxes) -- ( 281)
------ ------
Net Income $ 6,323 $ 4,312
====== ======
3. Common Stock and Earnings Per Common Share. Primary earnings per share
are based on the average number of common shares and common share equivalents
outstanding during the periods. Primary and fully diluted earnings per share
are the same for the periods.
6
4. Notes Payable. Notes payable consist of the following:
March 31, 1996
-------------------------------------------
Due Within
Total One Year
-------------------------------------------
Consolidated-Tomoka Land Co.
----------------------------
$15,000,000 Line of Credit $ 450,000 $ 450,000
Mortgage Payable 9,595,616 230,175
Industrial Revenue Bond 3,073,234 272,521
---------- ---------
13,118,850 952,696
---------- ---------
Indigo Group Ltd.
-----------------
Industrial Revenue Bond 1,973,703 56,400
Mortgages Payable 6,116,726 97,225
---------- ---------
8,090,429 153,625
---------- ---------
Total $21,209,279 $1,106,321
========== =========
Indigo Group Ltd. ("IG LTD.") is a 100% owned limited partnership in the real
estate business. Included in notes payable is a $2,559,516 mortgage note
collateralized by developed real estate in a joint venture project.
IG Ltd.'s 50% partner is jointly liable on the note.
Payments applicable to reduction of principal amounts will be required as
follows:
Consolidated- Indigo
Tomoka Group
Year Ending March 31, Land Co. Ltd. Total
--------------------- ------------- --------- -----------
1997 $ 952,696 $ 153,625 $ 1,106,321
1998 572,028 161,947 733,975
1999 621,499 2,621,753 3,243,252
2000 675,262 137,002 812,264
2001 733,681 143,259 876,940
Thereafter 9,563,684 4,872,843 14,436,527
---------- ---------- ----------
$13,118,850 $ 8,090,429 $21,209,279
========== ========== ==========
Total interest expense for the three months ended March 31, 1996 was $426,827
of which $57,795 was capitalized to land held for development and sale. In
the first three months of 1995, interest totaled $462,107 of which $28,590
was capitalized to land held for development and sale.
7
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.
RESULTS OF OPERATIONS
Citrus Operations
Profits from citrus operations for the three months ended March 31, 1996 grew
dramatically compared to 1995's first three month period. Bottom line results
totalling $1,694,436 represent a 644% improvement over prior year's same period
$227,647 profit. The combination of a 30% rise in boxes harvested and sold
along with a 7% increase in average pricing resulted in a 39% gain in citrus
revenues. A total of 555,000 boxes were sold during 1996's first three months.
This compares to 427,000 boxes of fruit sold for 1995's same period. Both
fresh fruit and processed fruit contributed to the overall increase in average
pricing. Overall production and selling expenses were in line with last year's
charges but fell on a per box basis due to lower grove care costs and higher
handling credits from a 148% increase in fruit handled for outside growers.
Real Estate Operations
Real estate operating profits improved significantly for the three month
period. Profits of $1,590,760 were posted during 1996 compared to profits
realized one year earlier amounting to $78,760. The favorable results are
primarily due to the sale of commercial real estate, with the sale of 22 acres
in 1996's first quarter generating gross profit in excess of $1,450,000. This
sales volume compares to 1995's first quarter closing of 2 acres producing
gross profit of $60,000. When compared to 1995's first three months income
properties provided an additional $40,000 of income on higher occupancies and
leasing rates. A 23% improvement was achieved from forestry operations on
stable revenue due to a 62% reduction in expenses from the restructuring of the
business, which occurred in the first quarter of 1995.
General, Corporate and Other
Profits on the sale of undeveloped real estate interests were negligible for
1996's first quarter compared with profits of $59,698 realized on the sale of
14 acres one year earlier. Interest and other income of $172,315 was in line
with prior year results. Reduced interest expense on lower outstanding
borrowings during the period provided an 11% decrease in general and
administrative expenses.
8
FINANCIAL POSITION
Earnings of $1,648,876, equivalent to $.26 per share, were strong for the three
month period and represent a significant turnaround from the prior year first
quarter loss of $254,498, equivalent to $.04 per share. The turnaround was
achieved on substantially improved results from both citrus and real
estate operations. Citrus operation's favorable bottom line was provided by a
significant increase in fruit sold combined with higher pricing, while
increased commercial land sales contributed the profit boost from real estate
operations. Dividends declared and paid during the period amounted to $.25 per
share, a 25% increase over the $.20 dividend paid one year earlier. Cash flow
provided by operating activities for the three months ended March 31, 1996
totalled $1,437,390 with total cash generated during the period amounting to
$220,000. Debt rose $288,000 from year end 1995, while funds totalling
$144,000 were used for the acquisition of property, plant and equipment.
Property, plant and equipment acquisitions centered on citrus equipment and
forestry tree planting. Capital requirements for the remainder of 1996
approximate $3,150,000 and are comprised primarily of the development of the
Ladies Professional Golf Association (LPGA) mixed-use project and citrus
operations building and equipment additions and replacements. These funds will
be provided through operations and when necessary existing outside financing
sources.
Fruit production from company groves continues to be abundant. Total volume
for the 1995-1996 crop year is estimated at over 1,300,000 boxes, a 40%
increase over the 1994-1995 crop. It is anticipated that the volume for the
coming years will remain at this level as the groves developed during 1989-1992
begin to reach maturity and yield more fruit. The groves are in overall
excellent condition with a good bloom experienced in early spring. Company
groves experienced no damage from the several periods of cold weather
experienced during the winter season. Pricing for both fresh and processed
fruit has been strong in comparison to recent years. Wholesale processed fruit
prices increased in early spring due to the short inventory coming into the
season. It is expected the prices will stay strong into the near future.
In early May it was announced that the financing was in place for the
commencement of the clubhouse, second golf course and vacation club villas,
which are to be developed by a third party entity at the LPGA development. The
clubhouse is projected to be operational in approximately one year time, with
the second golf course, which is already in the early stages of development,
ready for use shortly thereafter. The opening of the resort villas will follow
in approximately nine months. Interest in Company owned properties in and
around the project remains strong with contract backlog scheduled to close the
remainder of 1996 totalling $10.1 million on the sale of 430 acres.
The Company intends to continue to focus on its core citrus and real estate
operations. The near future for these two segments looks bright. The
increased fruit volume and strong pricing in citrus coupled with the strong
commercial real estate sales backlog and development activity attracting
increased commercial sales interest should lead to continued profitability for
the remainder of 1996.
9
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 5.
- -----------------
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
- ------- --------------------------------
(a) Exhibits:
Exhibit 11 - Computation of Earnings Per Common Share
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the
quarter covered by this report.
10
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: May 07, 1996 By:/s/ Bob D. Allen
-----------------------------
Bob D. Allen, President and
Chief Executive Officer
Date: May 07, 1996 By:/s/ Bruce W. Teeters
----------------------------
Bruce W. Teeters, Senior Vice
President - Finance and Treasurer
Chief Financial Officer
11
EXHIBIT INDEX
Page No.
---------
No. 11 Computation of Earnings Per Common Share 13
No. 27 Financial Data Schedule 14
12
EXHIBIT 11
CONSOLIDATED-TOMOKA LAND CO. AND SUBSIDIARIES
COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER COMMON SHARE
For the Three Months Ended
--------------------------
March 30, March 30,
1996 1995
--------- ---------
PRIMARY EARNINGS Per Share
INCOME (LOSS) 1,648,876 ( 254,498)
--------- ---------
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 6,261,272 6,261,272
COMMON SHARES APPLICABLE TO STOCK OPTIONS
USING THE TREASURY STOCK METHOD
AT AVERAGE MARKET PRICE FOR
THE PERIOD 74,857 13,922
--------- ---------
TOTAL PRIMARY SHARES 6,336,129 6,275,194
========= =========
PRIMARY EARNINGS PER COMMON SHARE $0.26 ( $0.04)
========= =========
FULLY DILUTED EARNINGS PER SHARE
TOTAL PRIMARY SHARES 6,336,129 6,275,194
COMMON SHARES APPLICABLE TO STOCK
OPTIONS IN ADDITION TO THOSE
USED IN PRIMARY COMPUTATION
DUE TO USE OF THE HIGHER OF
AVERAGE MARKET PRICE OR PERIOD
END MARKET PRICE 5,341 22,540
--------- ---------
TOTAL FULLY DILUTED SHARES 6,341,470 6,297,734
========= =========
FULLY DILUTED EARNINGS PER SHARE $0.26 ($0.04)
========= =========
13