1
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 June 30, 1995
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 0-5556
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 August 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 -
June 30, 1995 and December 31, 1994 3
Consolidated Condensed Statements of Income and
Retained Earnings - Six Months Ended
June 30, 1995 and 1994 4
Consolidated Condensed Statements of Cash Flows -
Six Months Ended June 30, 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)
June 30, December 31,
1995 1994
----------- ------------
ASSETS
Cash $ 126,711 $ 503,545
Investment Securities 3,691,697 1,290,955
Notes Receivable 7,108,894 9,222,968
Accounts Receivable 2,696,781 1,877,220
Inventories 985,534 660,461
Cost of Fruit on Trees 1,856,469 2,435,401
Real Estate Held for Development and Sale 17,668,181 16,626,505
Net Investment in Direct Financing Lease 836,862 880,222
Other Assets 348,883 375,486
Net - Property, Plant, and Equipment 26,534,207 27,662,652
----------- -----------
TOTAL ASSETS $61,854,219 $61,535,415
=========== ===========
LIABILITIES
Customer Deposits $ 869,574 $ 924,268
Accounts Payable 345,697 749,277
Notes Payable 27,371,377 24,973,283
Accrued Liabilities 2,571,595 2,134,670
Deferred Income Taxes 95,504 95,504
Income Taxes Payable 177,261 1,481,531
----------- -----------
TOTAL LIABILITIES 31,431,008 30,358,533
----------- -----------
MINORITY INTEREST 129,442 146,790
----------- -----------
SHAREHOLDERS' EQUITY
Common Stock 6,261,272 6,261,272
Additional Paid-in Capital 1,782,105 1,782,105
Retained Earnings 22,250,392 22,986,715
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 30,293,769 31,030,092
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $61,854,219 $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 Six Months Ended
-------------------------- ---------------------------
June 30, June 30, June 30, June 30,
1995 1994 1995 1994
-------- -------- -------- --------
INCOME:
Citrus Operations:
Sales of Fruit and Other Income $ 2,052,093 $ 2,598,558 $ 5,773,193 $ 6,192,744
Production and Selling Expenses ( 1,799,305) ( 2,684,696) ( 5,292,758) ( 5,588,502)
----------- ----------- ----------- -----------
252,788 ( 86,138) 480,435 604,242
----------- ----------- ----------- -----------
Real Estate Operations:
Sales and Other Income 1,656,851 1,895,166 2,557,851 6,288,980
Costs and Other Expenses ( 1,306,631) ( 1,183,722) ( 2,128,871) ( 2,828,191)
----------- ----------- ----------- -----------
350,220 711,444 428,980 3,460,789
----------- ----------- ----------- -----------
Profit On Sales of Undeveloped
Real Estate Interests 1,425,741 355,974 1,485,439 386,991
----------- ----------- ----------- -----------
Interest and Other Income 106,620 48,499 279,986 91,959
----------- ----------- ----------- -----------
OPERATING INCOME 2,135,369 1,029,779 2,674,840 4,543,981
GENERAL AND ADMINISTRATIVE EXPENSES ( 917,002) ( 949,922) ( 1,880,527) ( 2,008,158)
----------- ----------- ----------- -----------
INCOME BEFORE MINORITY
INTEREST IN PARTNERSHIP 1,218,367 79,857 794,313 2,535,823
MINORITY INTEREST 8,216 4,404 17,348 19,945
----------- ----------- ----------- -----------
INCOME FROM CONTINUING OPERATIONS
BEFORE INCOME TAXES 1,226,583 84,261 811,661 2,555,768
INCOME TAXES ( 456,154) ( 31,544) ( 295,730) ( 860,393)
----------- ----------- ----------- -----------
INCOME FROM CONTINUING OPERATIONS 770,429 52,717 515,931 1,695,375
INCOME (LOSS) FROM DISCONTINUED RESORT
OPERATIONS (net of tax) -- ( 51,188) -- 94,696
----------- ----------- ----------- -----------
NET INCOME 770,429 1,529 515,931 1,790,071
RETAINED EARNINGS, Beginning of Period 21,479,963 19,672,721 22,986,715 18,823,370
DIVIDENDS -- -- ( 1,252,254) ( 939,191)
----------- ----------- ----------- -----------
RETAINED EARNINGS, End of Period $22,250,392 $19,674,250 $22,250,392 $19,674,250
=========== =========== =========== ===========
PER SHARE INFORMATION:
Average Shares Outstanding 6,261,272 6,261,272 6,261,272 6,261,272
=========== =========== =========== ===========
PER SHARE INFORMATION:
Income From Continuing Operations $ .12 $ .01 $ .08 $ .27
Income (Loss) From Discontinued Resort
Operations (net of tax) -- ($.01) -- $ .02
----------- ----------- ----------- -----------
Net Income Per Share $ .12 -- $ .08 $ .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)
Six Months Ended
---------------------------------
June 30, June 30,
1995 1994
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CASH FLOW FROM OPERATING ACTIVITIES:
CASH RECEIVED FROM:
Citrus Sales of Fruit and Other Income $ 5,995,175 $ 6,090,195
Real Estate Sales and Other Income 3,622,505 6,519,939
Sales of Undeveloped Real Estate 1,485,439 386,991
Interest and Other Income 270,355 96,569
----------- -----------
Total 11,373,474 13,093,694
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CASH EXPENDED FOR:
Citrus Production and Selling Expenses 4,832,127 4,624,447
Real Estate Costs and Expenses 2,215,688 2,646,868
General and Administrative Expenses 1,364,944 1,364,042
Interest 1,059,069 1,098,721
Income Taxes 1,600,000 1,200,283
----------- -----------
Total 11,071,828 10,934,361
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Net Cash Provided by Operating Activities 301,646 2,159,333
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CASH FLOW FROM INVESTING ACTIVITIES:
Acquisition of Property, Plant, and Equipment ( 692,105) ( 990,163)
Investments in Investment Securities (2,400,742) ( 21,638)
Direct Financing Lease 43,360 39,192
Proceeds from Sale of Property, Plant,
and Equipment 1,225,167 10,432
Cash Flow from Discontinued Resort Operations -- ( 11,820)
----------- -----------
Net Cash Used in Investing Activities ( 1,824,320) ( 973,997)
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CASH FLOW FROM FINANCING ACTIVITIES:
Cash Proceeds of Debt 4,200,000 2,250,000
Payments of Debt ( 1,801,906) ( 4,396,797)
Dividends Paid ( 1,252,254) ( 939,191)
----------- -----------
Net Cash Provided by (Used in) Financing
Activities 1,145,840 ( 3,085,988)
----------- -----------
NET DECREASE IN CASH ( 376,834) ( 1,900,652)
CASH, BEGINNING OF YEAR 503,545 2,155,712
----------- -----------
CASH, END OF PERIOD $ 126,711 $ 255,060
=========== ===========
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, its forestry activities are seasonal in nature.
Accordingly, results for the six months ended June 30, 1995 and 1994
are not necessarily indicative of results to be expected for the full
year. Results of operations for the twelve months ended June 30, 1995
and 1994 are summarized as follows (in thousands):
Twelve Months Ended June 30,
----------------------------------------------------------------
1995 1994
----------------------------- -----------------------------
Revenues Income(Loss) Revenues Income(Loss)
-------- ------------ -------- ------------
Citrus Operations $ 7,755 $( 37) $ 8,763 $ 1,158
Real Estate Operations 12,797 6,605 16,614 5,908
General Corporate & Other 5,310 1,957 824 ( 2,700)
------- -------- ------- --------
Total Revenues $25,862 $26,201
======= =======
Income Before Income
Taxes 8,525 4,366
Income Taxes ( 3,214) ( 1,512)
-------- --------
Income from Continuing Operations 5,311 2,854
Loss From Discontinued Resort
Operations (net of income taxes) ( 230) ( 609)
-------- --------
Net Income $ 5,081 $ 2,245
======== ========
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 period. Primary and fully diluted
earnings per share are the same for the periods.
4. Notes Payable. Notes payable consist of the following:
June 30, 1995
---------------------------------------------------
Due Within
Total One Year
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Consolidated-Tomoka Land Co.
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$15,000,000 Line of Credit $ 6,000,000 $ 6,000,000
Mortgages Payable 9,755,565 159,949
Industrial Revenue Bonds 3,281,857 256,702
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19,037,422 6,416,651
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Indigo Group Ltd.
-----------------
Industrial Revenue Bonds 2,020,600 56,400
Mortgages Payable 6,313,355 93,264
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8,333,955 149,664
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Total $27,371,377 $ 6,566,315
=========== ===========
Indigo Group Ltd. ("IG LTD.") is a 100% owned limited partnership in
the real estate business. Included in notes payable is a $2,582,162
mortgage note collateralized by developed real estate in a joint
venture project. IG Ltd.'s 50% partner is jointly liable on the note.
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Payments applicable to reduction of principal amounts will be required
as follows:
Consolidated- Indigo
Tomoka Group
Year Ending June 30, Land Co. Ltd. Total
--------------------- ------------- ------------- ------------
1996 $ 6,416,651 $ 149,664 $ 6,566,315
1997 532,464 157,642 690,106
1998 578,488 166,315 744,803
1999 628,497 2,615,965 3,244,462
2000 682,839 141,100 823,939
Thereafter 10,198,483 5,103,269 15,301,752
----------- ----------- -----------
$19,037,422 $ 8,333,955 $27,371,377
=========== =========== ===========
In the first six months of 1995 interest totaled $1,124,335 of which
$65,265 was capitalized to land held for development and sale. Total
interest for the six months ended June 30, 1994 was $1,098,721, 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 $7,175,000. The sales price of the transaction
approximated book value of the assets. Summary financial information
follows:
Three Months Ended Six Months Ended
--------------------- ------------------
June 30, June 30, June 30, June 30,
1995 1994 1995 1994
------- ------- ------- -------
Revenues from Discontinued
Resort Operations -- 2,000,384 -- 4,307,030
Income Tax Provision (Income Tax
Credits) for Discontinued
Resort Operations -- ( 30,883) -- 57,133
Earnings (Loss) Per Share from
Discontinued Resort Operations
(net of income taxes) -- ($.01) -- $ .02
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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 totaled $252,788 for the quarter ended
June 30, 1995, a significant turnaround from the $86,138 loss recorded for
1994's second period. The profit improvement was achieved on a 33% reduction
in production and selling expenses, resulting from lower grove care and packing
material costs posted in the second quarter due to favorable crop and inventory
adjustments. Revenues for the period declined 21% to $2,052,093 on a 17%
reduction in fruit sold in addition to a 4% fall in average fruit pricing.
Fruit sold in 1995's second quarter totaled 269,131 boxes compared to 325,174
for the same period of 1994.
Year-to-date for the six months ended June 30, 1995 citrus operating profits
fell 20% to $480,435. This decline from 1994's six month profit of $604,242 is
the result of a 7% decrease in revenue on a combination of a 3% reduction in
fruit harvested and a 3% fall in average pricing. Boxes harvested and sold for
the first six months of 1995 totaled 696,057 and produced revenues of
$5,773,193. Revenues of $6,192,744 were realized in 1994 on 718,342 boxes of
fruit harvested and sold. Production and selling expenses for 1995 declined 5%
on this reduction in fruit volume.
Real Estate Operations
Overall profitability from real estate operations fell significantly
for both the quarter and six month periods. Second period results reflect a
profit of $350,220 compared to $711,444 in the prior year, while year-to-date
profit of $428,980 compares to last year's profit of $3,460,789. This downturn
in profits from real estate operations can be directly attributed to lower
profits on commercial real estate sales for both the quarter and six month
periods. Sales of commercial property for 1995's six month period totaled 31
acres generating revenues of $542,000 and profits of $303,000, with profits of
$242,000 recorded in the second quarter on the sale of 29 acres. These results
compare to the sale of 33 acres, plus the sale of impact fee credits, in 1994's
first six months producing profits over $3,750,000 on revenues exceeding
$4,000,000. Second quarter results for 1994 included the sale of 8 acres for
$950,000 producing profit of $857,000.
Forestry operations posted profit gains of over $150,000 for the second
quarter and nearly $300,000 for the six months when compared to 1994's same
periods. The improved results are attributable to substantially higher
revenues on the sale of higher quality timber and increased pricing.
Profits from income properties improved slightly for both periods on 7%
increases in revenues due to higher occupancy levels. Small losses were posted
from residential activities for the quarter and six month periods in both
years.
General, Corporate and Other
Sales of 389 acres of undeveloped real estate interests located in
Highlands County, Florida produced income of $1,485,439 for the first six
months of 1995, with $1,425,741 of the income generated in the second quarter.
Results for 1994's first six months include income of $386,991 realized on the
sale of 98 acres, of which $355,974 was posted in the second quarter of that
year. Interest and other income were up 120% and 204% for the second quarter
and six months to date of 1995, respectively. These increases result from
higher interest recorded on mortgage notes receivable outstanding from year end
1994 sales. The improvements are offset to the extent of a small loss recorded
on the sale of the Mariner Towne Square shopping center located in Spring Hill,
Florida. General and administrative expenses decreased 3% in 1995's second
three month period compared to 1994, while declining 6% for the six month
period. The reductions can be attributed to lower interest expense. Net
income for the first six months of 1994 included profits of $94,696, net of
income tax, from the discontinued resort operations, with the quarterly results
for 1994 including a loss of $51,188, net of income tax. The resort properties
were sold July 14, 1994.
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FINANCIAL POSITION
Company profits of $770,429, equivalent to $.12 per share, for 1995's
second quarter represent a significant improvement over the breakeven results
posted one year earlier; although, year-to-date earnings of $515,931,
equivalent to $.08 per share, lag the income of $1,790,071, equivalent to $.29
per share, generated in 1994's first six months. The downturn year-to-date can
substantially be attributed to lower profitability on commercial real estate
sales. Results from 1994 include one major transaction which produced gains of
$2.9 million from the sale of 26 acres. Improvements in 1995's second quarter
are primarily due to sales of undeveloped real estate interests in Highlands
County, Florida along with improved citrus and forestry results.
Cash flow for the six months of 1995 was negative $376,834 after the
payment of dividends totaling $1,252,254, equivalent to $.20 per share. The
dividend represents a 33% increase over the dividends equivalent to $.15 per
share paid in August, 1994. Operating activities generated $301,646 of cash
flow, while total cash of $1,824,320 was used in investing activities.
Investing activities included funds of $2,400,742 invested in investment
securities, with an additional $692,105 spent on the acquisition of property,
plant and equipment. Offsetting these cash uses were proceeds of $1,225,167
generated from the sale of property, plant and equipment, primarily realized
from the sale of the Mariner Towne Square shopping center. Major uses for
property, plant and equipment include $420,000 spent for the expansion of the
Mariner Village shopping center and $118,000 spent on citrus groves. Cash flow
from financing activities provided $1,145,840 as debt increased $2,398,094
offset by the dividends paid. Cash required to fund capital projects for the
remainder of the year is estimated at $1,000,000 and will be provided from
operations and when necessary existing financing sources. These capital
projects are comprised primarily of the continued development of the Ladies
Professional Golf Association ("LPGA") mixed-use project and improvements at
the citrus packing plant in Lake Placid, Florida.
Harvesting of company fruit for the 1994-95 citrus crop year ended in
late May. Boxes harvested for the crop year totalled 951,249, and although a 5%
improvement over last crop year, still down significantly from the 1.25 million
boxes harvested two years ago. Company groves are in excellent condition at
this time. With the prolific and uniform bloom experienced in early spring and
new groves coming into maturity, early signs are pointed toward an abundant
1995-96 company crop and the return to production levels achieved two years
ago. The Florida final orange crop for the 1994-95 season totaled 206.7
million boxes, which represents the second largest crop on record. This
abundant crop has led to depressed processed fruit prices. Some industry
processors feel that a short supply of frozen concentrate orange juice in late
summer, caused by a decrease in product since the end of 1994, may boost
pricing in the fall.
Commercial real estate development efforts continue to be centered on
the LPGA mixed-use development. The second golf course is nearing the end of
the design and engineering phase and permitting should begin in the third
quarter of 1995 with construction of the course scheduled for commencement in
early to mid-1996. The initial residential lot sales to third party homebuyers
occurred in the second quarter. Home construction should commence in the third
quarter. These transactions were on the 60 acres of land located in the
northern section of the development the company sold to a residential developer
at the end of 1994. The I-95 interchange at LPGA Boulevard is now scheduled to
be completed by October 1. The development activity within and around the
project has led to significant sales activity of property within the project,
along with company owned property adjacent to the project. Total commercial
real estate contract backlog for closing in 1995 amounts to $7.1 million with
additional properties under contract for closing in later years and active
discussions taking place on several other properties. The strong commercial
real estate contract backlog, along with the improved prospects for the 1995-96
citrus crop year, lead to a forecast of a profitable 1995 and the near future.
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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.
Items 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
None filed.
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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: August 4, 1995 By:/s/ Bob D. Allen
---------------------------------------
Bob D. Allen, President and
Chief Executive Officer
Date: August 4, 1995 By:/s/ Bruce W. Teeters
---------------------------------------
Bruce W. Teeters, Senior Vice President
Finance and Treasurer
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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