SEC Filing - CTO Realty Growth

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 1

2 CONSOLIDATED-TOMOKA LAND CO. INDEX Page No. -------- 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 2

3 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 ---------- ---------- TOTAL LIABILITIES 30,642,683 30,358,533 ---------- ---------- MINORITY INTEREST 137,657 146,790 --------- --------- 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 ---------- ---------- TOTAL SHAREHOLDERS' EQUITY 29,523,340 31,030,092 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $60,303,680 $61,535,415 ========== ========== See accompanying Notes to Consolidated Condensed Financial Statements. 3

4 CONSOLIDATED-TOMOKA LAND CO. CONSOLIDATED CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS (Unaudited) Three Months Ended --------------------------------- March 31, March 31, 1995 1994 --------- --------- 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 ---------- ---------- Real Estate Operations: Sales and Other Income 901,000 4,393,814 Costs and Expenses ( 822,240) ( 1,644,469) ---------- ---------- 78,760 2,749,345 ---------- ---------- Profit on Sales of Undeveloped Real Estate Interests 59,698 31,017 ---------- ---------- Interest and Other Income 173,366 43,460 ---------- ---------- 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 ---------- ---------- INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES ( 414,922) 2,471,507 INCOME TAXES 160,424 ( 828,848) ---------- ---------- INCOME (LOSS) FROM CONTINUING OPERATIONS ( 254,498) 1,642,659 INCOME FROM DISCONTINUED RESORT OPERATIONS (net of tax) -- 145,883 ---------- ---------- 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) ---------- ---------- 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 ---------- ---------- Net Income (Loss) Per Share $ (.04) $ .29 ========== ========== Dividends Per Share $ .20 $ .15 ========== ========== See accompanying Notes to Consolidated Condensed Financial Statements. 4

5 CONSOLIDATED-TOMOKA LAND CO. CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended --------------------------------- March 31, March 31, 1995 1994 ----------- ---------- 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 ---------- ---------- Total 5,811,828 8,649,802 ---------- ---------- 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 ---------- ---------- Total 5,653,559 5,101,968 ---------- ---------- Net Cash Provided by Operating Activities 158,269 3,547,834 ---------- ---------- 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 ---------- ---------- Net Cash Used In Investing Activities ( 161,927) ( 600,083) ---------- ---------- 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) ---------- ---------- Net Cash Used in Financing Activities ( 103,422) ( 4,790,870) ---------- ---------- NET DECREASE IN CASH ( 107,080) ( 1,843,119) CASH AT BEGINNING OF YEAR 503,545 2,155,712 ---------- ---------- CASH AT END OF PERIOD $ 396,465 $ 312,593 ========== ========== See accompanying Notes to Consolidated Condensed Financial Statements. 5

6 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 ====== ====== Income From Continuing Operations Before Income Taxes 7,382 4,321 Income Taxes ( 2,789) ( 1,505) ------ ------ Income from Continuing Operations 4,593 2,816 Loss from Discontinued Resort Operations (net of income taxes) ( 281) ( 747) ------ ------ 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 ------------------------------------------------- Consolidated-Tomoka Land Co. ---------------------------- $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 ---------- ---------- 17,275,993 4,535,539 ---------- ---------- 6

7 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 ---------- ---------- 8,846,122 159,537 ---------- ---------- Total $26,122,115 $ 4,695,076 ========== ========== 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 ---------- ---------- ---------- $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 -------- -------- 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 7

8 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. 8

9 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. 9

10 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. 10

11 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 11

12 EXHIBIT INDEX Page No. -------- No. 11 Computation of Earnings Per Common Share 13 No. 27 Financial Data Schedule (for SEC use only) 14

1 EXHIBIT 11 CONSOLIDATED-TOMOKA LAND CO. AND SUBSIDIARIES COMPUTATION OF EARNINGS PER COMMON SHARE FOR THE THREE MONTHS ENDED MARCH 31, MARCH 31, 1995 1994 --------- --------- PRIMARY EARNINGS (IN THOUSANDS) INCOME FROM CONTINUING OPERATIONS (254,498) 1,642,659 LOSS FROM DISCONT. RESORT OPERATIONS (NET OF TAX) -- 145,883 --------- --------- NET INCOME APPLICABLE TO COMMON STOCK (254,498) 1,788,542 ========= ========= PRIMARY SHARES USED IN COMPUTATION WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 6,261,272 6,261,272 SHARES APPLICABLE TO STOCK OPTIONS USING THE TREASURY STOCK METHOD AT AVERAGE MARKET PRICE FOR THE PERIOD 13,922 39,634 --------- --------- TOTAL PRIMARY SHARES 6,275,194 6,300,906 ========= ========= PRIMARY EARNINGS PER COMMON SHARE: INCOME FROM CONTINUING OPERATIONS ($0.04) $0.26 LOSS FROM DISCONT. RESORT OPERATIONS (NET OF TAX) -- $0.03 --------- --------- NET INCOME APPLICABLE TO COMMON STOCK ($0.04) $0.29 ========= ========= FULLY DILUTED SHARES USED IN COMPUTATION TOTAL PRIMARY SHARES 6,275,194 6,300,906 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 22,540 1,947 --------- --------- 6,297,734 6,302,853 ========= ========= FULLY DILUTED EARNINGS PER SHARE: INCOME FROM CONTINUING OPERATIONS ($0.04) $0.26 LOSS FROM DISCONT. RESORT OPERATIONS (NET OF TAX) -- $0.03 --------- --------- NET INCOME APPLICABLE TO COMMON STOCK ($0.04) $0.29 ========= =========

5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FOR THE CONSOLIDATED-TOMOKA LAND CO.'S 1995 FIRST QUARTER 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FIANCIAL STATEMENTS. 1 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 396,465 1,327,827 10,095,285 0 19,526,956 0 40,727,539 13,217,696 60,303,680 0 0 6,261,272 0 0 23,262,068 60,303,680 4,681,798 4,855,164 3,381,536 4,315,693 520,876 0 433,517 (414,922) (160,424) (254,498) 0 0 0 (254,498) (0.04) (0.04)