1
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, 1995
----- 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, 1995
--------------------- ----------------
$1.00 par value 6,261,272
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CONSOLIDATED-TOMOKA LAND CO.
INDEX
Page No.
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PART I - - FINANCIAL INFORMATION
Consolidated Condensed Balance Sheets -
March 31, 1995 and December 31, 1994 3
Consolidated Condensed Statements of Income and
Retained Earnings -- Three Months Ended
March 31, 1995 and 1994 4
Consolidated Condensed Statements of Cash Flows -
Three Months Ended March 31, 1995 and 1994 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
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PART I -- FINANCIAL INFORMATION
CONSOLIDATED-TOMOKA LAND CO.
CONSOLIDATED CONDENSED BALANCE SHEETS
(Unaudited)
March 31, December 31,
1995 1994
---------- ------------
ASSETS
Cash $ 396,465 $ 503,545
Investment Securities 1,372,827 1,290,955
Notes Receivable 8,687,181 9,222,968
Accounts Receivable 1,408,104 1,877,220
Inventories 631,152 660,461
Cost of Fruit on Trees 1,626,392 2,435,401
Real Estate held for Development and Sale 17,269,412 16,626,505
Net Investment in Direct Financing Lease 858,662 880,222
Refundable Income Taxes 178,892 --
Other Assets 364,750 375,486
Property, Plant, and Equipment - Net 27,509,843 27,662,652
---------- ----------
TOTAL ASSETS $60,303,680 $61,535,415
========== ==========
LIABILITIES
Customer Deposits $ 949,253 $ 924,268
Accounts Payable 1,293,752 749,277
Notes Payable 26,122,115 24,973,283
Accrued Liabilities 2,182,059 2,134,670
Deferred Income Taxes 95,504 95,504
Income Taxes Payable -- 1,481,531
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TOTAL LIABILITIES 30,642,683 30,358,533
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MINORITY INTEREST 137,657 146,790
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SHAREHOLDERS' EQUITY
Common Stock 6,261,272 6,261,272
Additional Paid-in Capital 1,782,105 1,782,105
Retained Earnings 21,479,963 22,986,715
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TOTAL SHAREHOLDERS' EQUITY 29,523,340 31,030,092
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $60,303,680 $61,535,415
========== ==========
See accompanying Notes to Consolidated Condensed Financial Statements.
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CONSOLIDATED-TOMOKA LAND CO.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS
(Unaudited)
Three Months Ended
---------------------------------
March 31, March 31,
1995 1994
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INCOME:
Citrus Operations:
Sales of Fruit and Other Income $ 3,721,100 $ 3,594,186
Production and Selling Expenses ( 3,493,453) ( 2,903,806)
---------- ----------
227,647 690,380
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Real Estate Operations:
Sales and Other Income 901,000 4,393,814
Costs and Expenses ( 822,240) ( 1,644,469)
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78,760 2,749,345
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Profit on Sales of Undeveloped
Real Estate Interests 59,698 31,017
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Interest and Other Income 173,366 43,460
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OPERATING INCOME 539,471 3,514,202
GENERAL AND ADMINISTRATIVE EXPENSES ( 963,525) ( 1,058,236)
---------- ----------
INCOME (LOSS) BEFORE MINORITY INTEREST
IN PARTNERSHIP ( 424,054) 2,455,966
MINORITY INTEREST 9,132 15,541
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INCOME (LOSS) FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES ( 414,922) 2,471,507
INCOME TAXES 160,424 ( 828,848)
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INCOME (LOSS) FROM CONTINUING OPERATIONS ( 254,498) 1,642,659
INCOME FROM DISCONTINUED RESORT OPERATIONS
(net of tax) -- 145,883
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NET INCOME (LOSS) ( 254,498) 1,788,542
RETAINED EARNINGS, Beginning of Period 22,986,715 18,823,370
DIVIDENDS ( 1,252,254) ( 939,191)
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RETAINED EARNINGS, End of Period $21,479,963 $19,672,721
========== ==========
PER SHARE INFORMATION:
Average Shares Outstanding 6,261,272 6,261,272
========== ==========
Income (Loss) From Continuing Operations (.04) .26
Income From Discontinued Resort Operations
(net of tax) -- .03
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Net Income (Loss) Per Share $ (.04) $ .29
========== ==========
Dividends Per Share $ .20 $ .15
========== ==========
See accompanying Notes to Consolidated Condensed Financial Statements.
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CONSOLIDATED-TOMOKA LAND CO.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
---------------------------------
March 31, March 31,
1995 1994
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CASH FLOW FROM OPERATING ACTIVITIES:
CASH RECEIVED FROM:
Citrus Sales and Other Income $ 4,124,995 $ 3,661,007
Real Estate Sales and Other Income 1,458,678 4,909,049
Interest and Other Income 168,457 48,729
Sales of Undeveloped Real Estate 59,698 31,017
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Total 5,811,828 8,649,802
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CASH EXPENDED FOR:
Citrus Production and Selling Expense 2,675,092 2,236,696
Real Estate Costs and Expenses 1,157,414 1,466,914
General and Administrative Expenses 522,417 694,363
Interest 173,636 553,995
Income Taxes 1,125,000 150,000
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Total 5,653,559 5,101,968
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Net Cash Provided by Operating Activities 158,269 3,547,834
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CASH FLOW FROM INVESTING ACTIVITIES:
Acquisition of Property, Plant, and Equipment ( 101,615) ( 712,821)
Net Investment in Investment Securities ( 81,872) ( 11,927)
Direct Financing Lease 21,560 19,785
Cash Flow from Discontinued Resort Operations -- 104,880
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Net Cash Used In Investing Activities ( 161,927) ( 600,083)
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CASH FLOW FROM FINANCING ACTIVITIES:
Cash Proceeds from Debt 2,100,000 400,000
Payments of Debt ( 951,168) ( 4,251,679)
Dividends Paid ( 1,252,254) ( 939,191)
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Net Cash Used in Financing Activities ( 103,422) ( 4,790,870)
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NET DECREASE IN CASH ( 107,080) ( 1,843,119)
CASH AT BEGINNING OF YEAR 503,545 2,155,712
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CASH AT END OF PERIOD $ 396,465 $ 312,593
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See accompanying Notes to Consolidated Condensed Financial Statements.
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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, 1995 and 1994
are not necessarily indicative of results to be expected for the full
year. Results of operations for the twelve months ended March 31, 1995
and 1994 are summarized as follows (in thousands):
Twelve Months Ended March 31,
-----------------------------------------------------------------
1995 1994
--------------------------- ------------------------------
Revenues Income(Loss) Revenues Income(Loss)
-------- ------------ -------- ------------
Citrus Operations $ 8,302 $( 376) $10,065 $ 1,881
Real Estate Operations 13,035 6,966 17,830 5,180
General Corporate & Other 4,182 792 750 ( 2,740)
------ ------ ------ ------
Total Revenues $25,519 $28,645
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Income From Continuing
Operations Before Income Taxes 7,382 4,321
Income Taxes ( 2,789) ( 1,505)
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Income from Continuing Operations 4,593 2,816
Loss from Discontinued Resort
Operations (net of income taxes) ( 281) ( 747)
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Net Income $ 4,312 $ 2,069
====== ======
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.
4. Notes Payable. Notes payable consist of the following:
March 31, 1995
-------------------------------------------------
Due Within
Total One Year
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Consolidated-Tomoka Land Co.
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$15,000,000 Line of Credit $ 3,900,000 $ 3,900,000
Mortgages Payable 10,027,322 377,226
Industrial Revenue Bond 3,348,671 258,313
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17,275,993 4,535,539
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Notes Payable (continued)
March 31, 1995
--------------------------------------------------
Due Within
Total One Year
-------------------------------------------------
Indigo Group Ltd.
-----------------
Industrial Revenue Bonds 2,034,700 56,400
Mortgages Payable 6,811,422 103,137
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8,846,122 159,537
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Total $26,122,115 $ 4,695,076
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Indigo Group Ltd. ("IG LTD.") is a 100% owned limited partnership in
the real estate business. Included in notes payable is a $2,589,359
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
---------------------- ------------- ----------- ----------
1996 $ 4,535,539 $ 159,537 $ 4,695,076
1997 527,241 168,267 695,508
1998 570,366 177,745 748,111
1999 617,051 2,638,838 3,255,889
2000 667,594 155,394 822,988
Thereafter 10,358,202 5,546,341 15,904,543
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$17,275,993 $ 8,846,122 $26,122,115
========== ========== ==========
Total interest expense for the three months ended March 31, 1995 was
$462,107 of which $28,590 was capitalized to land held for development
and sale. In the first three months of 1994 interest totaled $553,995,
all of which was expensed during the period.
5. Discontinued Operations. On July 14, 1994, the Company sold its resort
complex for a price of $7,175,000. The sales price of the transaction
approximated book value of the assets. Summary financial information
follows:
Three Months Ended
-------------------------
March 31, March 31,
1995 1994
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Revenues from Discontinued
Resort Operations -- 2,306,646
Income Tax Provision for
Discontinued Resort Operations -- 88,017
Earnings (Loss) Per Share from
Discontinued Resort Operations
(net of income taxes) -- $.03
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MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
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.
Citrus Operations
Citrus operation's profits fell 67% for the first three months of 1995,
compared to 1994's same period. This decline in profits to $227,647 occurred
despite a 9% rise in fruit sold during the period. Boxes harvested and sold
for the first quarter of 1995 totalled 426,924 compared to 393,168 boxes one
year earlier. This increase in production, although offset by a 3% decrease in
average pricing, lead to a 4% rise in revenues. Production and selling
expenses jumped 20% primarily due to higher grove care costs per box based on
the lower overall crop for the 1994-95 season. Also contributing to the rise
in production and selling expenses were higher packing material costs.
Real Estate Operations
Profits from real estate operations of $78,760 represent a significant
downturn when compared to 1994's first quarter profit of $2,749,345. The
downturn can be attributed to commercial sales activity with 1994's closings
consisting of one significant sale of 25 acres generating gross profits
approximating $2,900,000. Commercial sales activity for the first quarter of
1995 totalled 2 acres generating revenues of $80,000 and gross profits of
$58,000.
Income properties revenue grew 8% for the three month period while
producing breakeven bottom line results. Forestry profits increased nearly
threefold to $180,000 as revenues rose 132% due to sales of higher value timber
products and pricing increases. Residential operations posted small losses for
both 1995's and 1994's first quarter.
General Corporate and Other
Interest and other income increased to $173,366 from $43,460 on higher
interest income posted on mortgage notes receivable outstanding from year end
1994 sales. Reduced interest expense on lower outstanding borrowings was the
primary source of a 9% reduction in general and administrative expenses. Net
income in 1994 included profits of $145,883, net of income tax, from the
discontinued resort operations. The Indigo Lakes resort properties were sold
July 14, 1994.
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FINANCIAL POSITION
Overall Company profitability was disappointing for the first quarter
of 1995 with a loss of $254,498 posted, equivalent to $.04 per share. This
downturn in operating results is primarily due to the closing volume of
commercial property along with higher growing costs per box resulting from
1994-95 Company citrus crop. Cash flow for the three month period was a
negative $107,080, including the payment of dividends totaling $1,252,254,
equivalent to $.20 per share. This dividend payout represents a 33% increase
over prior year's first quarter dividends equivalent to $.15 per share. Net
cash provided by operating activities totaled $158,269, while $161,927 was used
in investing activities and $103,422 was used in financing activities,
including the dividend payment. The cash flow from investing activities
included $101,615 cash expended for the acquisition of property, plant and
equipment which was primarily spent on citrus grove development. Capital
requirements for the remainder of 1995 approximate $2.2 million and are
centered around development of the Ladies Professional Golf Association
("LPGA") mixed-use development, improvements at the citrus packinghouse and
expansion of the Winn-Dixie grocery store at the Spring Hill, Florida shopping
center. These expenditures are to be paid from current operations and, if
necessary, current financing sources.
Although profits from citrus operations have been down, prospects for
near term profitability growth look very good. The groves are in excellent
condition and this season experienced one of the most prolific and uniform
blooms in recent years. The high quality of the bloom, coupled with the new
groves coming into maturity, leads to an early optimistic forecast for the
1995-96 crop estimate. The Company is looking to attain, if not outpace, the
record production levels achieved in the 1992-93 citrus corp year. It is still
anticipated by fruit processors that the shortage of Brazilian juice for this
season, and the delayed start for next season due to the drought experienced in
1994, will bring firmer and higher prices for Florida processed products.
Significant progress continues to be achieved on the LPGA mixed-use
development. The City of Daytona Beach has reached an agreement with a major
hospitality developer for the construction of the resort hotel, the second golf
course, and the championship clubhouse facility. The resort hotel, which will
be a Radisson, and clubhouse could be under construction as early as the fist
quarter of 1996 with completion concurrent with the second golf course in early
1997. The Interstate 95 and LPGA Boulevard interchange continues on schedule
for a late summer 1995 completion. The LPGA Sprint Championship golf
tournament was held at the LPGA International golf course during April. This
tournament gives the project significant exposure both on local and national
basis, including two days of CBS television coverage. Initial construction of
homes around the LPGA International golf course are scheduled in early summer.
The activity in and around the LPGA development has led to increased sales
interest within the project and surrounding Company lands. Contract backlog
for 1995 closings totals $4.4 million with several additional properties under
contract for closing in future years and active discussions underway on many
more properties.
Prospects for improved production and profitability from citrus
operations for the 1995-96 crop year which begins in September, and the strong
commercial property contract backlog and sales activity puts the Company in a
position to expect a full year profitable 1995.
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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
Exhibit 27 - Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the
quarter covered by this report.
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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: March 12, 1995 By:/s/ Bob D. Allen
---------------------------------------
Bob D. Allen, President and
Chief Executive Officer
Date: March 12, 1995 By:/s/ Bruce W. Teeters
---------------------------------------
Bruce W. Teeters, Senior Vice President
Finance and Treasurer
Chief Financial Officer
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EXHIBIT INDEX
Page No.
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No. 11 Computation of Earnings Per Common Share 13
No. 27 Financial Data Schedule (for SEC use only) 14