SEC Filing - CTO Realty Growth

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

5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONSOLIDATED-TOMOKA LAND CO.'S MARCH 31, 1996 10Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.

3-MOS DEC-31-1996 MAR-31-1996 423,829 1,424,738 13,213,217 0 16,686,915 0 39,254,813 13,154,896 59,074,358 0 0 0 0 6,261,272 26,454,813 59,074,358 7,963,282 8,135,597 3,666,962 4,676,030 634,401 0 216,078 2,609,088 960,212 1,648,876 0 0 0 1,648,876 0.26 0.26