Company Quick10K Filing
Maui Land & Pineapple
Price9.90 EPS-0
Shares19 P/E-148
MCap190 P/FCF196
Net Debt-1 EBIT-1
TEV189 TEV/EBIT-147
TTM 2019-09-30, in MM, except price, ratios
10-Q 2021-03-31 Filed 2021-05-03
10-K 2020-12-31 Filed 2021-03-02
10-Q 2020-09-30 Filed 2020-11-05
10-Q 2020-06-30 Filed 2020-08-12
10-Q 2020-03-31 Filed 2020-04-23
10-K 2019-12-31 Filed 2020-03-03
10-Q 2019-09-30 Filed 2019-11-07
10-Q 2019-06-30 Filed 2019-08-08
10-Q 2019-03-31 Filed 2019-04-26
10-K 2018-12-31 Filed 2019-03-01
10-Q 2018-09-30 Filed 2018-11-02
10-Q 2018-06-30 Filed 2018-08-09
10-Q 2018-03-31 Filed 2018-04-27
10-K 2017-12-31 Filed 2018-02-26
10-Q 2017-09-30 Filed 2017-11-03
10-Q 2017-06-30 Filed 2017-08-11
10-Q 2017-03-31 Filed 2017-04-28
10-K 2016-12-31 Filed 2017-02-24
10-Q 2016-09-30 Filed 2016-11-03
10-Q 2016-06-30 Filed 2016-08-11
10-Q 2016-03-31 Filed 2016-04-28
10-K 2015-12-31 Filed 2016-02-26
10-Q 2015-09-30 Filed 2015-11-06
10-Q 2015-06-30 Filed 2015-08-07
10-Q 2015-03-31 Filed 2015-04-29
10-K 2014-12-31 Filed 2015-02-27
10-Q 2014-09-30 Filed 2014-11-13
10-Q 2014-06-30 Filed 2014-08-01
10-Q 2014-03-31 Filed 2014-05-02
10-K 2013-12-31 Filed 2014-03-20
10-Q 2013-09-30 Filed 2013-11-12
10-Q 2013-06-30 Filed 2013-07-26
10-Q 2013-03-31 Filed 2013-05-02
10-K 2012-12-31 Filed 2013-03-01
10-Q 2012-09-30 Filed 2012-10-25
10-Q 2012-06-30 Filed 2012-08-03
10-Q 2012-03-31 Filed 2012-05-04
10-K 2011-12-31 Filed 2012-03-02
10-Q 2011-09-30 Filed 2011-11-03
10-Q 2011-06-30 Filed 2011-08-04
10-Q 2011-03-31 Filed 2011-05-05
10-K 2010-12-31 Filed 2011-03-14
10-Q 2010-09-30 Filed 2010-11-02
10-Q 2010-06-30 Filed 2010-08-04
10-Q 2010-03-31 Filed 2010-05-11
10-K 2009-12-31 Filed 2010-03-29
8-K 2020-11-04
8-K 2020-08-11
8-K 2020-04-30
8-K 2020-04-22
8-K 2020-04-22
8-K 2020-03-24
8-K 2020-02-06
8-K 2019-12-31
8-K 2019-12-20
8-K 2019-11-06
8-K 2019-08-07
8-K 2019-04-24
8-K 2018-04-25
8-K 2018-04-25
8-K 2018-02-23

MLP 10Q Quarterly Report

Part I Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 6. Exhibits
EX-31.1 ex_242323.htm
EX-31.2 ex_242324.htm
EX-32.1 ex_242325.htm
EX-32.2 ex_242326.htm

Maui Land & Pineapple Earnings 2021-03-31

Balance SheetIncome StatementCash Flow
6544232-19-402012201420172020
Assets, Equity
25191483-12012201420172020
Rev, G Profit, Net Income
20124-4-12-202012201420172020
Ops, Inv, Fin

10-Q 1 mlp20210331_10q.htm FORM 10-Q mlp20210331_10q.htm
 

 

Table of Contents



 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

(Mark One)

 

☒         QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2021

 

OR

 

☐         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Commission file number 001-06510

 

MAUI LAND & PINEAPPLE COMPANY, INC.

(Exact name of registrant as specified in its charter)

 

HAWAII

 

99-0107542

(State or other jurisdiction

 

(IRS Employer

of incorporation or organization)

 

Identification No.)

 

200 Village Road, Lahaina, Maui, Hawaii 96761

(Address of principal executive offices)

 

Registrant’s telephone number, including area code: (808) 877-3351

 

None

(Former name, former address and former fiscal year, if changed since last report)

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

Common Stock, no par value

 

MLP 

 

NYSE 

 

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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company" in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ☐

 

Accelerated filer ☐

Non-accelerated filer ☒

 

Smaller reporting company ☒

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Class

 

Outstanding at April 21, 2021

Common Stock, no par value

 

19,432,398 shares

 



 

 

 
 

MAUI LAND & PINEAPPLE COMPANY, INC.

AND SUBSIDIARIES

 

 

TABLE OF CONTENTS  
   

PART I. FINANCIAL INFORMATION         

3

   

Item 1. Financial Statements (unaudited)         

3

   

Condensed Consolidated Balance Sheets, March 31, 2021 and December 31, 2020         

3

   

Condensed Consolidated Statements of Operations and Comprehensive Loss, Three Months Ended March 31, 2021 and 2020         

4

   

Condensed Consolidated Statements of Changes in Stockholders’ Equity, Three Months Ended March 31, 2021 and 2020         

5

   

Condensed Consolidated Statements of Cash Flows, Three Months Ended March 31, 2021 and 2020         

6

   

Notes to Condensed Consolidated Interim Financial Statements         

7

   

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations         

13

   

Cautionary Note Regarding Forward-Looking Statements         

17

   

Item 3. Quantitative and Qualitative Disclosures About Market Risk         

18

   

Item 4. Controls and Procedures         

18

   

PART II. OTHER INFORMATION         

19

   
Item 1. Legal Proceedings 19
   

Item 1A. Risk Factors         

19

   

Item 6. Exhibits         

19

   

Signature         

20

   

EXHIBIT INDEX         

21

   

Exhibit 31.1

 

Exhibit 31.2

 

Exhibit 32.1

 

Exhibit 32.2

 

Exhibit 101

 

 

 

 

PART I FINANCIAL INFORMATION

 

Item 1. Financial Statements

 

MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

   

March 31,

   

December 31,

 
   

2021

   

2020

 
   

(unaudited)

   

(audited)

 
   

(in thousands except share data)

 
                 

CURRENT ASSETS

               

Cash

  $ 458     $ 869  

Accounts receivable, net

    1,493       1,362  

Prepaid expenses and other assets

    138       80  

Assets held for sale

    7,336       7,440  

Total current assets

    9,425       9,751  
                 

PROPERTY

    51,988       51,956  

Accumulated depreciation

    (33,745 )     (33,445 )

Property, net

    18,243       18,511  
                 

OTHER ASSETS

               

Deferred development costs

    8,943       8,901  

Other noncurrent assets

    1,287       1,307  

Total other assets

    10,230       10,208  
                 

TOTAL ASSETS

  $ 37,898     $ 38,470  
                 

LIABILITIES & STOCKHOLDERS' EQUITY

               
                 

CURRENT LIABILITIES

               

Accounts payable

  $ 985     $ 899  

Payroll and employee benefits

    451       970  

Long-term debt, current portion

    800       200  

Accrued retirement benefits, currernt portion

    165       165  

Deferred revenue, current portion

    472       260  

Other current liabilities

    508       453  

Total current liabilities

    3,381       2,947  
                 

LONG-TERM LIABILITIES

               

Accrued retirement benefits

    10,232       10,926  

Deferred revenue

    1,733       1,767  

Deposits

    2,636       2,680  

Other noncurrent liabilities

    75       83  

Total long-term liabilities

    14,676       15,456  
                 

COMMITMENTS AND CONTINGENCIES

               
                 

STOCKHOLDERS' EQUITY

               

Common stock--no par value, 43,000,000 shares authorized, 19,351,489 and 19,311,528 shares issued and outstanding

    81,972       81,485  

Additional paid-in-capital

    9,184       9,184  

Accumulated deficit

    (49,838 )     (48,904 )

Accumulated other comprehensive loss

    (21,477 )     (21,698 )

Total stockholders' equity

    19,841       20,067  

TOTAL LIABILITIES & STOCKHOLDERS' EQUITY

  $ 37,898     $ 38,470  

 

See Notes to Condensed Consolidated Interim Financial Statements.

 

 

 

MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

 

(UNAUDITED)

 

   

Three Months Ended March 31,

 
   

2021

   

2020

 
   

(in thousands except

 
   

per share amounts)

 

OPERATING REVENUES

               

Real estate

  $ -     $ 69  

Leasing

    1,801       1,736  

Resort amenities and other

    258       230  

Total operating revenues

    2,059       2,035  
                 

OPERATING COSTS AND EXPENSES

               

Real estate

    97       175  

Leasing

    840       776  

Resort amenities and other

    412       570  

General and administrative

    719       760  

Share-based compensation

    349       425  

Depreciation

    300       323  

Total operating costs and expenses

    2,717       3,029  
                 

OPERATING LOSS

    (658 )     (994 )

Other income

    13       -  

Pension and other post-retirement expenses

    (116 )     (117 )

Interest expense

    (33 )     (46 )

LOSS FROM CONTINUING OPERATIONS

  $ (794 )   $ (1,157 )

Income (Loss) from discontinued operations, net

    (140 )     83  

NET LOSS

  $ (934 )   $ (1,074 )

Pension, net

    221       206  

TOTAL COMPREHENSIVE LOSS

  $ (713 )   $ (868 )
                 

EARNINGS (LOSS) PER COMMON SHARE-BASIC AND DILUTED

               

Loss from Continuing Operations

  $ (0.04 )   $ (0.06 )

Income (Loss) from Discontinued Operations

  $ (0.01 )   $ -  

Net Loss

  $ (0.05 )   $ (0.06 )

 

See Notes to Condensed Consolidated Interim Financial Statements.

 

 

 

MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

 

(UNAUDITED)

 

For the Three Months Ended March 31, 2021 and 2020

 

(in thousands)

 

                                   

Accumulated

         
                   

Additional

           

Other

         
   

Common Stock

   

Paid in

   

Accumulated

   

Comprehensive

         
   

Shares

   

Amount

   

Capital

   

Deficit

   

Loss

   

Total

 
                                                 

Balance, January 1, 2021

    19,312     $ 81,485     $ 9,184     $ (48,904 )   $ (21,698 )   $ 20,067  

Share-based compensation

    60       748       163                       911  

Vested restricted stock issued

    14       163       (163 )                     -  

Shares canceled to pay tax liability

    (34 )     (424 )                             (424 )

Other comprehensive income - pension

                                    221       221  

Net loss

                            (934 )             (934 )

Balance, March 31, 2021

    19,352     $ 81,972     $ 9,184     $ (49,838 )   $ (21,477 )   $ 19,841  
                                                 
                                                 

Balance, January 1, 2020

    19,238     $ 80,606     $ 9,184     $ (46,300 )   $ (20,798 )   $ 22,692  

Share-based compensation

    68       865       186                       1,051  

Vested restricted stock issued

    17       186       (186 )                     -  

Shares canceled to pay tax liability

    (42 )     (522 )                             (522 )

Other comprehensive income - pension

                                    206       206  

Net loss

                            (1,074 )             (1,074 )

Balance, March 31, 2020

    19,281     $ 81,135     $ 9,184     $ (47,374 )   $ (20,592 )   $ 22,353  

 

See Notes to Condensed Consolidated Interim Financial Statements.

 

 

 

MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(UNAUDITED)

 

   

Three Months Ended March 31,

 
   

2021

   

2020

 
    (in thousands)  
                 

NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES

  $ (513 )   $ 1,453  
                 

CASH USED IN INVESTING ACTIVITIES

               

Payments for property and deferred development costs

    (74 )     (48 )
                 

CASH FLOWS FROM FINANCING ACTIVITIES

               

Proceeds from long-term debt

    600       700  

Payments on long-term debt

    -       (1,500 )

Debt and common stock issuance costs and other

    (424 )     (522 )

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

    176       (1,322 )
                 

NET (DECREASE) INCREASE IN CASH

    (411 )     83  

CASH AT BEGINNING OF PERIOD

    869       683  

CASH AT END OF PERIOD

  $ 458     $ 766  
                 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:                

Cash paid during the period for interest:

  $ 5     $ 14  

 

 

 

 

SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES:

 

 

Common stock issued to certain members of the Company’s management totaled $748,000 and $865,000 for the three months ended March 31, 2021 and 2020, respectively.

 

See Notes to Condensed Consolidated Interim Financial Statements.

 

 

MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES

 

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

 

(UNAUDITED)

 

 

 

1.

BASIS OF PRESENTATION

 

The accompanying unaudited condensed consolidated interim financial statements have been prepared by Maui Land & Pineapple Company, Inc. (together with its subsidiaries, collectively, the “Company”) in conformity with generally accepted accounting principles in the United States (“GAAP”) for interim financial information that are consistent in all material respects with those applied in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, and pursuant to the instructions to Form 10-Q and Article  8 promulgated by Regulation S-X of the U.S. Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes to the annual audited consolidated financial statements required by GAAP for complete financial statements. In the opinion of management, the accompanying unaudited condensed consolidated interim financial statements contain all normal and recurring adjustments necessary to fairly present the Company’s financial position, results of operations and cash flows for the interim periods ended March 31, 2021 and 2020. The unaudited condensed consolidated interim financial statements and notes should be read in conjunction with the annual audited consolidated financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended December 31, 2020.

 

 

2.

USE OF ESTIMATES AND RECLASSIFICATIONS

 

The Company’s reports for interim periods utilize numerous estimates of general and administrative expenses and other costs for the full year. Future actual amounts may differ from these estimates. Amounts reflected in interim statements are not necessarily indicative of results for a full year.

 

 

3.

SHARES BASIC AND DILUTED

 

Basic and diluted weighted-average shares outstanding for the three months ended March 31, 2021 and 2020 were 19,327,739 and 19,254,783, respectively.

 

Basic net loss per common share is computed by dividing net loss by the weighted-average number of common shares outstanding. Diluted net loss per common share is computed similar to basic net loss per common share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares from share-based compensation arrangements had been issued.

 

 

4.

PROPERTY

 

Property at March 31, 2021 and December 31, 2020 consisted of the following:

 

   

2021

   

2020

 
   

(unaudited)

   

(audited)

 
   

(in thousands)

 

Land

  $ 5,072     $ 5,072  

Land improvements

    12,943       12,943  

Buildings

    23,465       23,465  

Machinery and equipment

    10,485       10,476  

Construction in progress

    23       -  

Total property

    51,988       51,956  

Less accumulated depreciation

    33,745       33,445  

Property, net

  $ 18,243     $ 18,511  

 

 

Land

 

Most of the Company’s 22,800 acres of land were acquired between 1911 and 1932 and is carried in its consolidated balance sheets at cost. Approximately 20,700 acres of land are located in West Maui and comprise a largely contiguous parcel that extends from the sea to an elevation of approximately 5,700 feet. This parcel includes approximately 900 acres within the Kapalua Resort, a master-planned, destination resort and residential community located in West Maui encompassing approximately 3,000 acres. The Company’s remaining 2,100 acres of land are located in Upcountry Maui in an area commonly known as Hali’imaile and are mainly comprised of leased agricultural fields, including related processing and maintenance facilities.

 

Land Improvements

 

Land improvements are comprised primarily of roads, utilities, and landscaping infrastructure improvements at the Kapalua Resort. Also included is the Company’s potable and non-potable water systems in West Maui. The majority of the Company’s land improvements were constructed and placed in service in the mid-to-late 1970’s or conveyed in 2017. Depreciation expense would be considerably higher if these assets were stated at current replacement cost.

 

Buildings

 

Buildings are comprised of restaurant, retail and light industrial spaces located at the Kapalua Resort and Hali’imaile which are used in the Company’s leasing operations. The majority of the buildings were constructed and placed in service in the mid-to-late 1970’s. Depreciation expense would be considerably higher if these assets were stated at current replacement cost.

 

Machinery and Equipment

 

Machinery and equipment are mainly comprised of zipline course equipment installed in 2008 at the Kapalua Resort and used in the Company’s leasing operations.

 

 

5.

ASSETS HELD FOR SALE

 

Assets held for sale at March 31, 2021 and December 31, 2020 consisted of the following:

 

   

March 31,

   

December 31,

 
   

2021

   

2020

 
   

(unaudited)

   

(audited)

 
   

(in thousands)

 

Kapalua Resort, 46-acre Kapalua Central Resort project

  $ 2,978     $ 2,978  

Kapalua Resort, Kapalua Water and Kapalua Waste Treatment Company assets

    4,202       4,306  

Upcountry Maui, 630-acre parcel of agricultural land

    156       156  
    $ 7,336     $ 7,440  

 

In February 2020, the Company entered into an agreement to sell the Kapalua Central Resort project for $43.9 million. The closing of the transaction is contingent upon, among other things, the satisfaction of certain customary closing conditions, including a due diligence period ending on July 15, 2021. The closing date of the sale is expected to be 30 days after the last day of the due diligence period.

 

The Company entered into an Asset Purchase Agreement in December 2019 to sell the PUC-regulated assets of Kapalua Water Company, Ltd. and Kapalua Waste Treatment Company, Ltd. located in the Kapalua Resort. In March 2021, the sale was approved by the State of Hawaii PUC subject to certain closing conditions of its Decision and Order. The sale, with net proceeds of $4.2 million, was completed on May 1, 2021.  The results of discontinued operations related to the sale of the Kapalua Water Company and Kapalua Waste Treatment Company assets are reflected in Note 13.

 

The above assets held for sale have not been pledged as collateral under the Company’s credit facility.

 

 

6.

LONG-TERM DEBT

 

Long-term debt is comprised of amounts outstanding under the Company’s $15.0 million revolving line of credit facility with First Hawaiian Bank (“Credit Facility”). The Credit Facility matures on December 31, 2021. Interest on borrowings is at LIBOR plus 3.50%, or 3.62% and 3.65%, at March 31, 2021 and December 31, 2020, respectively. The Company has pledged its 800-acre Kapalua Mauka project and approximately 30,000 square feet of commercial leased space in the Kapalua Resort as security for the Credit Facility. Net proceeds from the sale of any collateral are required to be repaid toward outstanding borrowings and will permanently reduce the Credit Facility’s revolving commitment amount. There are no commitment fees on the unused portion of the Credit Facility.

 

 

The terms of the Credit Facility include various representations, warranties, affirmative, negative and financial covenants and events of default customary for financings of this type. Financial covenants include a minimum liquidity (as defined) of $2.0 million, a maximum of $45.0 million in total liabilities, and a limitation on new indebtedness.

 

The Company was in compliance with the covenants under the Credit Facility as of March 31, 2021.

 

 

7.

SHARE-BASED COMPENSATION

 

The Company’s directors, officers and certain members of management receive a portion of their compensation in shares of the Company’s common stock granted under the Company’s 2017 Equity and Incentive Award Plan (“Equity Plan”). Share-based compensation is valued based on the average of the high and low share price on the date of grant. Shares are issued upon execution of agreements reflecting the grantee’s acceptance of the respective shares subject to the terms and conditions of the Equity Plan. Restricted shares issued under the Equity Plan vest quarterly and have voting and regular dividend rights but cannot be disposed of until such time as they are vested. All unvested restricted shares are forfeited upon the grantee’s termination of directorship or employment from the Company.

 

Share-based compensation is determined and awarded annually to the Company’s officers and certain members of management based on their achievement of certain predefined performance goals and objectives under the Equity Plan. Such share-based compensation is comprised of an annual incentive paid in shares of common stock and a long-term incentive paid in restricted shares vesting quarterly over a period of three years.

 

Share-based compensation totaled $349,000 and $425,000 for the three months ended March 31, 2021 and 2020, respectively. Included in these amounts were $163,000 and $186,000 of restricted shares of common stock which vested during the first three months of 2021 and 2020, respectively.

 

 

8.

ACCRUED RETIREMENT BENEFITS

 

Accrued retirement benefits at March 31, 2021 and December 31, 2020 consisted of the following:

 

   

March 31,

   

December 31,

 
   

2021

   

2020

 
   

(unaudited)

   

(audited)

 
   

(in thousands)

 
                 

Defined benefit pension plan

  $ 8,112     $ 8,790  

Non-qualified retirement plans

    2,285       2,301  

Total

    10,397       11,091  

Less current portion

    (165 )     (165 )

Non-current portion of accrued retirement benefits

  $ 10,232     $ 10,926  

 

 

The Company has a defined benefit pension plan which covers substantially all of its former bargaining and non-bargaining full-time, part-time and intermittent employees. In 2011, pension benefits under the plan were frozen. The Company also has unfunded non-qualified retirement plans covering nine of its former executives. The non-qualified retirement plans were frozen in 2009 and future vesting of additional benefits was discontinued.

 

 

The net periodic benefit costs for pension and postretirement benefits for the three months ended March 31, 2021 and 2020 were as follows:

 

   

Three Months Ended

 
   

March 31,

 
   

(unaudited)

 
   

2021

   

2020

 
   

(in thousands)

 

Interest cost

  $ 309     $ 408  

Expected return on plan assets

    (414 )     (497 )

Amortization of net actuarial loss

    221       206  

Pension and other postretirement expenses

  $ 116     $ 117  

 

 

9.

CONTRACT ASSETS AND LIABILITIES

 

Receivables from contracts with customers were $876,000, $806,000, and $673,000 at March 31, 2021, December 31, 2020 and December 31, 2019, respectively.

 

Deferred club membership revenue

 

The Company manages the operations of the Kapalua Club, a private, non-equity club program providing members special programs, access and other privileges at certain of the amenities within the Kapalua Resort. Deferred revenues from dues received from the private club membership program are recognized on a straight-line basis over one year.

 

Deferred license fee revenue

 

The Company entered into a trademark license agreement with the owner of the Kapalua Plantation and Bay golf courses, effective April 1, 2020. Under the terms and conditions set forth in the agreement, the licensee is granted a perpetual, terminable on default, transferable, non-exclusive license to use the Company’s trademarks and service marks to promote its golf courses and to sell its licensed products. The Company received a single payment royalty of $2.0 million in March 2020. Revenue recognized on a straight-line basis over its estimated economic useful life of 15 years was $33,000 for the three months ended March 31, 2021.

 

 

10.

INCOME TAXES

 

The Company uses a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company’s provision for income taxes is calculated using the liability method. Deferred income taxes are provided for all temporary differences between the financial statement and income tax basis of assets and liabilities using tax rates enacted by law or regulation. A full valuation allowance continues to be established for deferred income tax assets as of March 31, 2021 and December 31, 2020, respectively.

 

 

11.

REPORTABLE OPERATING SEGMENTS

 

The Company’s reportable operating segments are comprised of the discrete business units whose operating results are regularly reviewed by the Company’s Chief Executive Officer – its chief decision maker – in assessing performance and determining the allocation of resources. Reportable operating segments are as follows:

 

 

Real Estate includes the planning, entitlement, development and sale of real estate inventory. The segment also included the operations of Kapalua Realty Company, Ltd., a general brokerage real estate company located in the Kapalua Resort, through June 30, 2020.

 

 

Leasing includes revenues and expenses from real property leasing activities, license fees and royalties for the use of certain of the Company’s trademarks and brand names by third parties, and the cost of maintaining the Company’s real estate assets, including conservation activities. The operating segment also includes the management of ditch, reservoir and well systems that provide non-potable irrigation water to West and Upcountry Maui areas.

 

 

Resort Amenities include a membership program that provides certain benefits and privileges within the Kapalua Resort for its members.

 

The Company’s reportable operating segment results are measured based on operating income (loss), exclusive of interest, depreciation, general and administrative, share-based compensation, pension and other postretirement expenses.

 

 

Reportable operating segment revenues and income for the three months ended March 31, 2021 and 2020 were as follows:

 

   

Three Months

 
   

Ended March 31,

 
   

(unaudited)

 
   

2021

   

2020

 
   

(in thousands)

 

Operating Segment Revenues

               

Real estate

  $ -     $ 69  

Leasing

    1,801       1,736  

Resort amenities and other

    258       230  

Total Operating Segment Revenues

  $ 2,059     $ 2,035  

Operating Segment Income (Loss)

               

Real estate

  $ (97 )   $ (106 )

Leasing

    961       960  

Resort amenities and other

    (154 )     (340 )

Total Operating Segment Income

  $ 710     $ 514  

 

 

12.

LEASING ARRANGEMENTS

 

The Company leases land primarily to agriculture operators and space in commercial buildings, primarily to restaurant and retail tenants through 2048. These operating leases generally provide for minimum rents and, in some cases, licensing fees, percentage rentals based on tenant revenues, and reimbursement of common area maintenance and other expenses. Certain leases allow the lessee an option to extend or terminate the agreement. There are no leases allowing a lessee an option to purchase the underlying asset. Total leasing income for the three months ended March 31, 2021 and 2020 were as follows:

 

   

Three Months

 
   

Ended March 31,

 
   

(unaudited)

 
   

2021

   

2020

 
   

(in thousands)

 
                 

Minimum rentals

  $ 757     $ 697  

Percentage rentals

    117       266  

Licensing fees

    125       234  

Other (primarily common area recoveries)

    214       191  

Total

  $ 1,801     $ 1,736  

 

 

 

13.

DISCONTINUED OPERATIONS

 

The results of discontinued operations related to the sale of the Kapalua Water Company and Kapalua Waste Treatment Company assets for the three months ended March 31, 2021 and 2020 were as follows:

 

   

Three Months Ended

 
   

March 31,

 
   

(unaudited)

 
   

2021

   

2020

 
   

(in thousands)

 

Operating revenues

  $ 598     $ 740  

Operating costs and expenses

    (698 )     (657 )

Impairment loss

    (40 )     -  

Income (loss) from discontinued operations

  $ (140 )   $ 83  

 

 

14.

COMMITMENTS AND CONTINGENCIES

 

On December 31, 2018, the State of Hawaii Department of Health (“DOH”) issued a Notice and Finding of Violation and Order (“Order”) for alleged wastewater effluent violations related to the Company’s Upcountry Maui wastewater treatment facility. The facility was built in the 1960’s to serve approximately 200 single-family homes developed for workers in the Company’s former agricultural operations. The facility is made up of two 1.5-acre wastewater stabilization ponds and surrounding disposal leach fields. The Order includes, among other requirements, payment of a $230,000 administrative penalty and development of a new wastewater treatment plant, which become final and binding – unless a hearing is requested to contest the alleged violations and penalties.

 

The DOH agreed to defer the Order without a hearing date while the Company continues working on a previously approved corrective action plan to resolve and remediate the facility’s wastewater effluent issues. The construction of additional leach fields was completed in December 2020. The installation of a surface aerator, sludge removal system, and natural pond cover, using water plants, were also completed during the three months ended March 31, 2021. The DOH is currently reviewing the test results of these corrective action plan items.  With these actions, the test results have been in compliance with applicable standards. No hearing date has been set since discussions with the DOH are ongoing.

 

The Company is presently unable to estimate the amount, or range of amounts, of any probable liability, if any, related to the Order and no provision has been made in the accompanying unaudited condensed consolidated interim financial statements.

 

There are various other claims and legal actions pending against the Company. The resolution of these other matters is not expected to have a material adverse effect on the Company’s consolidated financial position or results of operations after consultation with legal counsel.

 

Quarantine, travel restrictions and other public health measures to reduce the spread of COVID-19 has caused and is likely to continue to have an adverse impact on economic activity, including business closures, increased unemployment, financial market instability, and reduced tourism. Notwithstanding the administration of vaccines to residents and visitors to Maui, the duration of the disruption on global, national, and local economies cannot be reasonably estimated at this time. The Company’s future business operations, including the results of operations, cash flows and financial position will be significantly affected should the existence of the COVID-19 pandemic continue for an extended period.

 

 

15.

FAIR VALUE MEASUREMENTS

 

GAAP establishes a framework for measuring fair value, and requires certain disclosures about fair value measurements to enable the reader of the unaudited condensed consolidated interim financial statements to assess the inputs used to develop those measurements by establishing a hierarchy for ranking the quality and reliability of the information used to determine fair values. GAAP requires that financial assets and liabilities be classified and disclosed in one of the following three categories:

 

Level 1: Quoted market prices in active markets for identical assets or liabilities.

 

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

 

Level 3: Unobservable inputs that are not corroborated by market data.

 

The Company considers all cash on hand to be unrestricted cash for the purposes of the interim unaudited condensed consolidated balance sheets and interim unaudited condensed consolidated statements of cash flows. The fair value of receivables and payables approximate their carrying value due to the short-term nature of the instruments. The fair value of income tax receivables approximate their carrying value due to the certainty of collection or short-term nature of the instruments. The valuation is based on settlements of similar financial instruments all of which are short-term in nature and are generally settled at or near cost. The fair value of debt was estimated based on borrowing rates currently available to the Company for debt with similar terms and maturities. The carrying amount of debt, which approximated fair value, was $800,000 and $200,000 (audited) at March 31, 2021 and December 31, 2020, respectively. The fair value of debt was measured using the level 2 inputs, noted above.

 

 

 

16.

RECENT ACCOUNTING PRONOUNCEMENTS

 

In June 2016, the FASB issued ASU 2016-13 to update the methodology used to measure current expected credit losses (“CECL”). This ASU apples to financial assets measured at amortized cost, including loans, held-to-maturity debt securities, net investments in leases, and trade accounts receivable as well as certain off-balance sheet exposures, such as loan commitments. This ASU requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates. The guidance must be adopted using a modified retrospective transition method through a cumulative-effect adjustment to retained earnings/(accumulated deficit) in the period of adoption. ASU 2019-10 was subsequently issued delaying the effective date to the first quarter of 2023. The Company is in the process of assessing the impact of the ASU on its consolidated financial statements.

 

In December 2019, the FASB issued ASU 2019-12 to simplify the accounting in ASC Topic 740, Income Taxes. This guidance removes certain exceptions related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. The guidance also clarifies and simplifies other areas of ASC Topic 740. This ASU was effective beginning in the first quarter of 2021 with early adoption permitted. Certain adjustments in this update must be applied on a prospective basis, certain amendments must be applied on a retrospective basis, and certain amendments must be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings/(accumulated deficit) in the period of adoption. The ASU did not have a significant impact on the Company’s consolidated financial statements and related disclosures.

 

In March 2020, the FASB issued ASU 2020-04 as an update to provide optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform (ASC Topic 848) on financial reporting. The amendments in the ASU are elective and apply to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The ASU provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The ASU is effective through December 31, 2022. Management is evaluating its impact on the Company’s consolidated financial statements and related disclosures, if elected.

 

 

Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

The following discussion and analysis of our unaudited condensed consolidated interim financial condition and results of operations should be read in conjunction with our annual audited consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2020 and the unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q. Depending upon the context, the terms the “Company,” “we,” “our,” and “us,” refer to either Maui Land & Pineapple Company, Inc. alone, or to Maui Land & Pineapple Company, Inc. and its subsidiaries collectively.

 

Overview

 

Maui Land & Pineapple Company, Inc. is a Hawaii corporation and the successor to a business organized in 1909. The Company consists of a landholding and operating parent company, its principal subsidiary, Kapalua Land Company, Ltd. and certain other subsidiaries of the Company.

 

We own approximately 23,000 acres of land on the island of Maui, Hawaii and develop, sell, and manage residential, resort, commercial, agricultural and industrial real estate through the following business segments:

 

• Real Estate—Our real estate operations consist of land planning and entitlement, development and sales activities. This segment also includes the operations of Kapalua Realty Company, Ltd., a general brokerage real estate company located in the Kapalua Resort.

 

• Leasing—Our leasing operations include residential, resort, commercial, agricultural and industrial land and property leases, licensing of our registered trademarks and trade names. This operating segment also includes the management of ditch, reservoir, and well systems that provide potable and non-potable water in West and Upcountry Maui and the stewardship of conservation areas.

 

• Resort Amenities—We manage the operations of the Kapalua Club, a private, non-equity club program providing our members special programs, access and other privileges at certain amenities at the Kapalua Resort.

 

 

Results of Operations

 

Three Months Ended March 31, 2021 compared to Three Months Ended March 31, 2020

 

CONSOLIDATED

 

   

Three Months Ended March 31,

 
   

(unaudited)

 
   

2021

   

2020

 
   

(in thousands)

 
                 

Operating revenues

  $ 2,059     $ 2,035  

Operating costs and expenses

    (1,349 )     (1,521 )

General and administrative

    (719 )     (760 )

Share-based compensation

    (349 )     (425 )

Depreciation

    (300 )     (323 )

Operating loss

    (658 )     (994 )

Other income

    13       -  

Pension and other postretirement expenses

    (116 )     (117 )

Interest expense

    (33 )     (46 )

Loss from Continuing Operations

    (794 )     (1,157 )

Income (Loss) from Discontinued Operations

    (140 )     83  

Net loss

  $ (934 )   $ (1,074 )
                 

Loss from Continuing Operations per Common Share

  $ (0.04 )   $ (0.06 )

Income (loss) from Discontinuing Operations per Common Share

  $ (0.01 )   $ -  

Net loss per Common Share

  $ (0.05 )   $ (0.06 )

 

REAL ESTATE

 

   

Three Months Ended March 31,

 
   

(unaudited)

 
   

2021

   

2020

 
   

(in thousands)

 
                 

Operating revenues

  $ -     $ 69  

Operating costs and expenses

    (97 )     (175 )

Operating loss

  $ (97 )   $ (106 )

 

There were no sales of real estate for the three months ended March 31, 2021 and March 31, 2020, respectively.

 

During the three months ended March 31, 2020, our wholly-owned subsidiary, Kapalua Realty Company, Ltd., earned sales commissions from resales of properties owned by private residents in the Kapalua Resort and surrounding areas. Effective July 1, 2020, we entered into an office lease agreement and license agreement with a real estate company to provide general brokerage services to the area. No sales commissions were earned during the three months ended March 31, 2021.

 

There were no significant real estate development expenditures in the first three months of 2021 and 2020, respectively.

 

Real estate development and sales are cyclical and depend on a number of factors. Results for one period are therefore not necessarily indicative of future performance trends in this business segment. Uncertainties associated with COVID-19 may, among other things, reduce demand for real estate and impair prospective purchasers’ ability to obtain financing, which would adversely affect revenues from our real estate operations in future periods.

 

 

LEASING

 

   

Three Months Ended March 31,

 
   

(unaudited)

 
   

2021

   

2020

 
   

(in thousands)

 
                 

Operating revenues

  $ 1,801     $ 1,736  

Operating costs and expenses

    (840 )     (776 )

Operating income

  $ 961     $ 960  

 

Travel restrictions, social distancing regulations, and the threat of COVID-19 and its variants continue to adversely affect our tenants’ sales activity and ability to pay rent. Percentage rental income recognized from our leasing portfolio was $117,000 and $266,000 for the three months ended March 31, 2021 and 2020, respectively. Additional reserves of $60,000 were recorded to increase our allowance for doubtful accounts to $280,000 as of March 31, 2021. The decrease in rental income was offset by grant income for conservation programs. Grant income was $317,000 and $99,000 for the three months ended March 31, 2021 and 2020, respectively.

 

Our leasing operations face competition from other property owners in Maui and Hawaii.

 

RESORT AMENITIES AND OTHER   

 

   

Three Months Ended March 31,

 
   

(unaudited)

 
   

2021

   

2020

 
   

(in thousands)

 
                 

Operating revenues

  $ 258     $ 230  

Operating costs and expenses

    (412 )     (570 )

Operating loss

  $ (154 )   $ (340 )

 

Our Resort Amenities segment includes the operations of the Kapalua Club, a private, non-equity club providing its members special programs, access and other privileges at certain of the amenities at the Kapalua Resort, including a 30,000 square foot full-service spa and a private pool-side dining beach club. The Kapalua Club does not operate any resort amenities and the member dues collected are primarily used to pay contracted fees to provide access for its members to the spa, beach club, golf courses, and other resort amenities.

 

The increase in operating revenues for the three months ended March 31,2021, compared to the three months ended March 31, 2020, was due to a partial refund of member dues in 2020. In March 2020, access to certain facilities and amenities was restricted due to regulations related to COVID-19.

 

The decrease in operating costs and expenses for the three months ended March 31, 2021, compared to the three months ended March 31, 2020, was primarily due to lower golf course fees charged to the Company in 2021.

 

IMPACT OF COVID-19

 

During the year ended December 31, 2020, the World Health Organization declared the outbreak of COVID-19 as a pandemic. In response, many federal, state, local, and foreign governments put in place travel restrictions, “shelter-in-place” orders, and similar government orders and restrictions, in an attempt to control the spread and mitigate the impact of the disease. Such restrictions or orders resulted in the mandatory closure of “non-essential” businesses, increased unemployment rates, “social distancing” restrictions, reduced tourist activity, work-from-home policies, and other changes that have led to significant disruptions to businesses and global financial markets. The overall impact of the pandemic on our business and future results of operations is highly uncertain and subject to change, and we are not able to accurately predict the magnitude or scope of such impacts at this time.

 

 

Quarantine, travel restrictions and other public health measures to reduce the spread of COVID-19 continue to have an adverse effect on most businesses in the State of Hawaii, including our own. According to visitor statistics from the Hawaii Tourism Authority, the average daily census of visitors to Maui for the three months ended March 31, 2021 and 2020 were 29,060 and 69,281, respectively, a decrease of 58%. Although the Centers for Disease Control and Prevention released updated guidance on April 2, 2021, Hawaii’s mandatory 10-day quarantine remains in place as of the date of this filing. Currently, travelers are allowed to avoid the State of Hawaii’s quarantine rules under its Safe Travels program if proof of a negative result from a valid COVID-19 Nucleic Acid Amplification Test performed by a trusted testing partner is presented.

 

The duration of the continued disruption on global, national, and local economies cannot be reasonably estimated at this time. However, should the existence of the COVID-19 pandemic continue for an extended period, our future business operations, including the results of operations, cash flows and financial position will be significantly affected. We continue to monitor the economic impact of the COVID-19 pandemic, as well as mitigating stimulus programs from recent legislation, such as the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), Consolidated Appropriations Act of 2021 (“CAA”), and America Rescue Plan Act (“ARPA”), on us, our customers, and our vendors. Remote work arrangements continue to be established for our employees to the extent possible in order to maintain financial reporting systems.

 

LIQUIDITY AND CAPITAL RESOURCES

 

Liquidity

 

We had cash on hand of approximately $458,000 and $869,000 (audited) at March 31, 2021 and December 31, 2020, respectively. At March 31, 2021, $14.2 million remained available under our $15.0 million revolving line of credit facility with First Hawaiian Bank (“Credit Facility”).

 

The $15.0 million revolving line of credit facility matures on December 31, 2021. Interest on borrowings is at LIBOR plus 3.50% (3.62% at March 31, 2021). We have pledged our 800-acre Kapalua Mauka project and approximately 30,000 square feet of commercial leased space in the Kapalua Resort as security for the Credit Facility. Net proceeds from the sale of any collateral are required to be repaid toward outstanding borrowings and will permanently reduce the Credit Facility’s revolving commitment amount. There are no commitment fees on the unused portion of the Credit Facility.

 

The terms of the Credit Facility include various representations, warranties, affirmative, negative and financial covenants and events of default customary for financings of this type. Financial covenants include a minimum liquidity (as defined) of $2.0 million, a maximum of $45.0 million in total liabilities, and a limitation on new indebtedness.

 

As of March 31, 2021, we were in compliance with the covenants under the Credit Facility.

 

Cash Flows

 

Net cash flow used in our operating activities totaled $513,000 for the three months ended March 31, 2021. During the year ended December 31, 2020, net cash flow provided by our operating activities totaled $1.5 million, primarily due to the receipt of a single royalty payment of $2 million from a license agreement of our trademarks.

 

Interest payments on our Credit Facility totaled $5,000 and $14,000 for the three months ended March 31, 2021 and 2020, respectively. The outstanding balance of our Credit Facility increased by $600,000 during the three months ended March 31, 2020.

 

We made a minimum funding contribution of $553,000 to our defined benefit pension plan during the three months ended March 31, 2021. The CARES Act included limited funding relief provisions for single employer defined benefit plans allowing us to defer the required contributions that would have been otherwise due in 2020 until January 4, 2021. No further contributions are required to be made to the plan in 2021.

 

The sale of PUC-regulated assets of Kapalua Water Company, Ltd. and Kapalua Waste Treatment Company, Ltd. located in the Kapalua Resort was completed on May 1, 2021, with net proceeds of $4.2 million.

 

Future Cash Inflows and Outflows

 

Our business initiatives for the next year include investing in our operating infrastructure, continued planning and entitlement efforts on our development projects, and addressing the impact of COVID-19 on our business segments. Our income from leasing activities and Kapalua Club membership dues continued to be impacted for the three months ended March 31, 2021, and may continue to be impacted in the future for an uncertain period of time. This may require borrowing under our Credit Facility or other indebtedness, repayment of which may be dependent on selling of our real estate assets at acceptable prices in condensed timeframes.

 

 

Our indebtedness could have the effect of, among other things, increasing our exposure to general adverse economic and industry conditions, limiting our flexibility in planning for, or reacting to, changes in our business and industry, and limiting our ability to borrow additional funds.

 

Critical Accounting Policies and Estimates

 

The preparation of the unaudited condensed consolidated interim financial statements in conformity with accounting principles generally accepted in the United States of America requires the use of accounting estimates. Changes in these estimates and assumptions are considered reasonably possible and may have a material effect on the unaudited condensed consolidated interim financial statements and thus actual results could differ from the amounts reported and disclosed herein. Our critical accounting policies that require the use of estimates and assumptions were discussed in detail in our most recently filed Form 10-K. There have been no significant changes in our critical accounting policies during the three months ended March 31, 2021.

 

Cautionary Note Regarding Forward-Looking Statements

 

This Quarterly Report on Form 10-Q and other reports filed by us with the U.S. Securities and Exchange Commission contain “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance and are subject to known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These statements include all statements included in or incorporated by reference to this Quarterly report on Form 10-Q that are not statements of historical facts, which can generally be identified by words such as “may,” “will,” “project,” “might,” “expect,” “believe,” “anticipate,” “intend,” “could,” “would,” “estimate,” “continue” or “pursue,” or the negative or other variations thereof or comparable terminology. We caution you that the foregoing list may not include all of the forward-looking statements made in this Quarterly Report. Actual results could differ materially from those projected in forward-looking statements as a result of the following factors, among others:

 

 

the impacts of the COVID-19 pandemic, including its impacts on us, our operations, or our future financial or operational results;

 

 

unstable macroeconomic market conditions, including, but not limited to, energy costs, credit markets, interest rates and changes in income and asset values;

 

 

risks associated with real estate investments generally, and more specifically, demand for real estate and tourism in Hawaii;

 

 

risks due to joint venture relationships;

 

 

our ability to complete land development projects within forecasted time and budget expectations, if at all;

 

 

our ability to obtain required land use entitlements at reasonable costs, if at all;

 

 

our ability to compete with other developers of real estate in Maui;

 

 

potential liabilities and obligations under various federal, state and local environmental regulations with respect to the presence of hazardous or toxic substances;

 

 

changes in weather conditions, the occurrence of natural disasters, or threats of the spread of contagious diseases;

 

 

our ability to maintain the listing of our common stock on the New York Stock Exchange;

 

 

our ability to comply with funding requirements of our defined benefit pension plan;

 

 

our ability to comply with the terms of our indebtedness, including the financial covenants set forth therein, and to extend maturity dates, or refinance such indebtedness, prior to its maturity date;

 

 

our ability to raise capital through the sale of certain real estate assets;

 

 

risks related to reference rate reform

 

 

 

availability of capital on terms favorable to us, or at all; and

 

 

failure to maintain security of internal and customer electronic information.

 

Such risks and uncertainties also include those risks and uncertainties discussed in the sections entitled “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2020 and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in this Quarterly Report on Form 10-Q, as well as other factors described from time to time in our reports filed with the SEC. Although we believe that our opinions and expectations reflected in the forward-looking statements are reasonable as of the date of this report, we cannot guarantee future results, levels of activity, performance or achievements, and our actual results may differ substantially from the views and expectations set forth in this report. Thus, you should not place undue reliance on any forward-looking statements. New factors emerge from time to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Further, any forward-looking statements speak only as of the date made and, except as required by law, we undertake no obligation to publicly revise our forward-looking statements to reflect events or circumstances that arise after the date of this report. We qualify all of our forward-looking statements by these cautionary statements.

 

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

We have no material exposure to changes in interest rates related to our borrowing and investing activities used to maintain liquidity and to fund business operations. We have no material exposure to foreign currency risks.

 

We are subject to potential changes in consumer behavior and regulatory risks through travel and social distancing restrictions due to our location as a vacation destination. Potential deferrals and abatements of tenant lease rents may impact our base and percentage rental income.

 

Item 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

We maintain disclosure controls and procedures (as such term is defined in Rules 13a-15(b) and 15d-15(b) under the Securities Exchange Act of 1934, as amended) that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

 

In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

 

As required by Rules 13a-15(e) and 15d-15(e) under the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the fiscal quarter covered by this report. Based upon the foregoing, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in applicable SEC rules and forms.

 

Changes in Internal Controls Over Financial Reporting

 

There have been no significant changes in our internal controls over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f) or 15d-15(f)) during the three months ended March 31, 2021.

 

 

PART II OTHER INFORMATION

 

Item 1. LEGAL PROCEEDINGS

 

Although we are subject to legal proceedings and other disputes from time to time in the ordinary course of business, including employment, environmental, and real property claims, we believe the outcome of all pending legal proceedings and other disputes in the aggregate will not have a material adverse effect on our business, results of operations, financial condition, or liquidity. However, regardless of the outcome, resolving legal proceedings and other disputes can have an adverse impact on us because of legal costs, diversion of management's time and resources, and other factors.

 

Item 1A. RISK FACTORS

 

Potential risks and uncertainties include, among other things, those factors discussed in the sections entitled “Business,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2020 and the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Quarterly Report on Form 10-Q. Readers should carefully review those risks and the risks and uncertainties disclosed in other documents we file from time to time with the SEC. We undertake no obligation to publicly release the results of any revisions to any forward-looking statements to reflect anticipated or unanticipated events or circumstances occurring after the date of such statements. During the three months ended March 31, 2021, there were no material changes to the risks and uncertainties described in Part I, Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2020.

 

Item 6. EXHIBITS

 

   
   

31.1

Certification of Principal Executive Officer Pursuant to Rule 13a-14(d) / 15d-14(a) of the Securities Exchange Act of 1934.

   

31.2

Certification of Principal Financial Officer Pursuant to Rule 13a-14(d) / 15d-14(a) of the Securities Exchange Act of 1934.

   

32.1

Certification of Principal Executive Officer Pursuant to Rule 13a-14(b) / 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.

   

32.2

Certification of Principal Financial Officer Pursuant to Rule 13a-14(b) / 15d-14(b) of the Securities Exchange Act of 1934 and 18 U.S.C. Section 1350.

   

101.INS

XBRL Instance Document

   

101.SCH

XBRL Taxonomy Extension Schema Document

   

101.CAL

XBRL Taxonomy Extension Calculation Document

   

101.DEF

XBRL Taxonomy Extension Definition Linkbase

   

101.LAB

XBRL Taxonomy Extension Labels Linkbase Document

   

101.PRE

XBRL Taxonomy Extension Presentation Link Document

 

 

SIGNATURE

 

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.

 

   

MAUI LAND & PINEAPPLE COMPANY, INC.

     

May 3, 2021

 

/s/ Michael S. Hotta

Date

 

Michael S. Hotta

   

Chief Financial Officer

   

(Principal Financial Officer)

 

 

EXHIBIT INDEX

 

Exhibit
Number

 

Description

     
     

31.1

 

Certification of Principal Executive Officer Pursuant to Rule 13a-14(d) / 15d-14(a) of the Securities Exchange Act of 1934, as amended. (1)

     

31.2

 

Certification of Principal Financial Officer Pursuant to Rule 13a-14(d) / 15d-14(a) of the Securities Exchange Act of 1934, as amended. (1)

     

32.1

 

Certification of Principal Executive Officer Pursuant to Rule 13a-14(b) / 15d-14(b) of the Securities Exchange Act of 1934, as amended and 18 U.S.C. Section 1350. (2)

     

32.2

 

Certification of Principal Financial Officer Pursuant to Rule 13a-14(b) / 15d-14(b) of the Securities Exchange Act of 1934, as amended and 18 U.S.C. Section 1350. (2)

     

101.INS

 

XBRL Instance Document (1)

     

101.SCH

 

XBRL Taxonomy Extension Schema Document (1)

     

101.CAL

 

XBRL Taxonomy Extension Calculation Document (1)

     

101.DEF

 

XBRL Taxonomy Extension Definition Linkbase (1)

     

101.LAB

 

XBRL Taxonomy Extension Labels Linkbase Document (1)

     

101.PRE

 

XBRL Taxonomy Extension Presentation Link Document (1)

 

 

(1)         Filed herewith.

 

(2)         Furnished herewith and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

 

 

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