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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-6510
MAUI LAND & PINEAPPLE COMPANY, INC.
(Exact name of registrant as specified in its charter)
HAWAII 99-0107542
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
P. O. BOX 187, KAHULUI, MAUI, HAWAII 96733-6687
(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
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 [x] No [ ]
Indicate by check mark whether the registrant is an accelerated
filer (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [x]
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 May 1, 2003
Common Stock, no par value 7,195,800 shares
MAUI LAND & PINEAPPLE COMPANY, INC.
AND SUBSIDIARIES
TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Balance Sheets,
March 31, 2003 (Unaudited) and December 31, 2002 3
Condensed Statements of Operations and Retained Earnings,
Three Months Ended March 31, 2003 and 2002 (Unaudited) 4
Condensed Statements of Comprehensive Income
Three Months Ended March 31, 2003 and 2002 (Unaudited) 5
Condensed Statements of Cash Flows,
Three Months Ended March 31, 2003 and 2002 (Unaudited) 6
Notes to Condensed Financial Statements (Unaudited) 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosures About Market
Risk 15
Item 4. Controls and Procedures 15
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 16
Item 6. Exhibits and Reports on Form 8-K 16
Signatures 17
Certifications Pursuant to Section 302 of The
Sarbanes-Oxley Act of 2002 18
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES
CONDENSED BALANCE SHEETS
Unaudited
3/31/03 12/31/02
(Dollars in Thousands)
ASSETS
Current Assets
Cash and cash equivalents $ 346 $ 658
Accounts and notes receivable 24,390 22,315
Inventories 22,530 23,365
Other current assets 8,415 8,385
Total current assets 55,681 54,723
Property 266,715 264,647
Accumulated depreciation (155,497) (152,449)
Property - net 111,218 112,198
Other Assets 16,781 17,274
Total 183,680 184,195
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Current portion of long-term debt
and capital lease obligations 5,959 6,846
Trade accounts payable 9,987 13,057
Other current liabilities 8,945 9,318
Total current liabilities 24,891 29,221
Long-Term Liabilities
Long-term debt and capital lease obligations 47,003 43,252
Accrued retirement benefits 33,166 33,089
Equity in losses of joint venture 13,112 12,840
Other long-term liabilities 1,845 1,867
Total long-term liabilities 95,126 91,048
Minority Interest in Subsidiary 1,548 1,187
Stockholders' Equity
Common stock, no par value - 7,200,000 shares
authorized, 7,195,800 issued and outstanding 12,455 12,455
Retained earnings 54,731 55,357
Accumulated other comprehensive loss (5,071) (5,073)
Stockholders' equity 62,115 62,739
Total $183,680 $ 184,195
See accompanying Notes to Condensed Financial Statements.
MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF OPERATIONS AND RETAINED EARNINGS
(UNAUDITED)
Three Months Ended
3/31/03 3/31/02
(Dollars in Thousands
Except Share Amounts)
Revenues
Net sales $27,155 $25,110
Operating income 9,958 10,359
Other income 160 816
Total Revenues 37,273 36,285
Costs and Expenses
Cost of goods sold 16,862 16,056
Operating expenses 8,371 8,344
Shipping and marketing 5,076 4,748
General and administrative 6,581 5,067
Interest 634 581
Equity in losses of joint ventures 256 240
Total Costs and Expenses 37,780 35,036
Income (Loss) Before Income Taxes
and Minority Interest (507) 1,249
Income tax (expense) benefit 309 (417)
Minority interest in income
of consolidated subsidiary (428) (56)
Net Income (Loss) (626) 776
Retained Earnings, Beginning of Period 55,357 61,066
Retained Earnings, End of Period 54,731 61,842
Per Common Share
Net income (Loss) $ (.09) $ .11
See accompanying Notes to Condensed Financial Statements.
MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
Three Months Ended
3/31/03 3/31/02
(Dollars in Thousands)
Net Income (Loss) $ (626) $ 776
Other Comprehensive Income - Foreign
Currency Translation Adjustment 2 24
Comprehensive Income (Loss) $ (624) $ 800
See accompanying Notes to Condensed Financial Statements.
MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months Ended
3/31/03 3/31/02
(Dollars in Thousands)
Net Cash Provided by (Used in)
Operating Activities $(1,063) $ 22
Investing Activities
Purchases of property (2,206) (2,474)
Other (268) 72
Net Cash Used in Investing Activities (2,474) (2,402)
Financing Activities
Payments of long-term debt and capital
lease obligations (4,986) (5,504)
Proceeds from long-term debt 8,848 6,100
Proceeds from (payment of)
short-term debt (920) 300
Other 283 90
Net Cash Provided by
Financing Activities 3,225 986
Net Decrease in Cash (312) (1,394)
Cash and Cash Equivalents
at Beginning of Period 658 2,173
Cash and Cash Equivalents
at End of Period $ 346 $ 779
Supplemental Disclosures of Cash Flow Information - Interest (net
of amounts capitalized) of $634,000 and $590,000 was paid during
the three months ended March 31, 2003 and 2002, respectively.
Income taxes of $(291,000) and $1,480,000 were (received) paid
during the three months ended March 31, 2003 and 2002, respectively.
See accompanying Notes to Condensed Financial Statements.
MAUI LAND & PINEAPPLE COMPANY, INC. AND SUBSIDIARIES
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. In the opinion of management, the accompanying condensed
financial statements contain all normal and recurring adjustments
necessary to fairly present the statement of financial position,
results of operations and cash flows for the interim periods
ended March 31, 2003 and 2002.
2. The Company's reports for interim periods utilize numerous
estimates of production cost, general and administrative
expenses, and other costs for the full year. Future actual
amounts may differ from the estimates. Amounts in the interim
reports are not necessarily indicative of results for the full
year.
3. The effective tax rate for 2003 and 2002 differs from the
statutory federal rate of 34% primarily because of the state tax
provision and refundable state tax credits.
4. Accounts and notes receivable are reflected net of allowance
for doubtful accounts of $803,000 and $572,000 at March 31, 2003
and December 31, 2002, respectively.
5. Inventories as of March 31, 2003 and December 31, 2002 were
as follows (in thousands):
3/31/03 12/31/02
Pineapple products
Finished goods $ 8,697 $11,829
Work in progress 4,437 963
Raw materials 2,633 1,696
Real estate held for sale 667 2,134
Merchandise, materials and supplies 6,096 6,743
Total Inventories $22,530 $23,365
6. Business Segment Information (in thousands):
Three Months Ended March 31
2003 2002
Revenues
Pineapple $ 20,898 $ 19,342
Resort 13,295 15,220
Commercial & Property 3,079 1,723
Other 1 --
Total Revenues 37,273 36,285
Operating Profit (Loss)
Pineapple (1,537) (1,141)
Resort 1,294 2,956
Commercial & Property 349 319
Other (407) (360)
Total Operating Profit (Loss) (301) 1,774
Interest Expense (634) (581)
Income Tax (Expense) Benefit 309 (417)
Net Income (Loss) $ (626) $ 776
7. Average common shares outstanding for the interim periods
ended March 31, 2003 and 2002 were 7,195,800. The Company has no
securities outstanding that would potentially dilute common
shares outstanding.
8. At March 31, 2003 and 2002, the Company did not hold
derivative instruments and did not enter into hedging
transactions.
9. On January 1, 2003, the Company adopted Statement of Financial
Accounting Standard No. 146, Accounting for Costs Associated
with Exit or Disposal Activities ("SFAS No. 146"). SFAS No.
146 requires that a liability for a cost associated with an
exit or disposal activity be recognized when the liability is
incurred, and not at the date of an entity's commitment to an
exit plan, as was previously required. The adoption of SFAS
No 146 did not have a material effect on the Company's
financial statements.
On January 1, 2003, the Company adopted Financial Accounting
Standards Board Interpretation No. 45, Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others ("FIN No. 45"). FIN No.
45 requires an entity to disclose in its financial statement
footnotes many of the guarantees or indemnification agreements
that it issues. In addition, under certain circumstances, an
entity will have to recognize a liability at the time it
enters into the guarantee. The adoption of FIN No. 45 did not
have a material impact on the Company's financial statements.
10. Certain amounts for the prior year have been reclassified to
conform to the current year presentation.
11. Contingencies
Pursuant to a 1999 settlement agreement resulting from a
lawsuit filed by the County of Maui, the Company and several
chemical manufacturers have agreed that until December 1,
2039, they will pay for 90% of the capital cost to install
filtration systems in any future water wells if the presence
of a nematocide commonly known as DBCP exceeds specified
levels, and for the ongoing maintenance and operating cost for
filtration systems on existing and future wells. To secure
its obligations the Company and the other defendants in the
lawsuit are required to furnish to the County of Maui an
irrevocable standby letter of credit throughout the entire
term of the agreement. The Company had estimated a range of
its share of the cost to operate and maintain the filtration
systems for the existing wells and its share of the cost of
the letter of credit, and recorded a reserve for this
liability in 1999. The reserve recorded in 1999 and
adjustments thereto through March 31, 2003, did not have a
material effect on the Company's financial statements. The
Company is unable to estimate the range of potential financial
impact for the possible filtration cost for any future wells
acquired or drilled by the County of Maui and, therefore, has
not made a provision in its financial statements for such
costs. The level of DBCP in the existing wells should decline
over time as the wells are pumped, which may end the
requirement for filtration before 2039. There are procedures
in the settlement agreement to minimize the DBCP impact on
future wells by relocating the wells to areas unaffected by
DBCP or by using less costly methods to remove DBCP from the
water.
In connection with pre-development planning for a land parcel
in Upcountry Maui, pesticide residues in the parcel's soil
were discovered in levels that are in excess of Federal and
Hawaii State limits. Studies by environmental consultants, in
consultation with the State Department of Health, indicate
that remediation probably will be necessary. The cost of
remediation will depend on the various alternatives as to the
use of the property and the method of remediation. Until the
Company makes further progress on obtaining proper
entitlements for the parcel, the ultimate use of the property
remains uncertain and, therefore, an estimate of the
remediation cost cannot be made.
In addition to the matters noted above, there are various
other claims and legal actions pending against the Company.
In the opinion of management, after consultation with legal
counsel, the resolution of these other matters will not have a
material adverse effect on the Company's financial position or
results of operations.
Premium Tropicals International, LLC (PTI) is a joint venture
between Royal Coast Tropical Fruit Company, Inc. (a wholly
owned subsidiary of Maui Pineapple Company, Ltd.) and an
Indonesian pineapple grower and canner. The joint venture
markets and sells Indonesian canned pineapple in the United
States. The Company is a guarantor of a $3 million line of
credit, which supports letters of credit to be issued on
behalf of PTI for import trading purposes and a $1 million
line of credit used for working capital purposes. Both lines
expire on August 31, 2003.
The Company, as a partner in various partnerships, may under
particular circumstances be called upon to make additional
capital contributions.
The Company has guaranteed the payment of up to $10 million of
the $58 million mortgage loan of Kaahumanu Center Associates, a
limited partnership of which the Company is the general
partner.
At March 31, 2003, the Company had purchase commitments under
signed contacts totaling $652,000, which relate primarily to
equipment for its Central American operations and to real
estate projects.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
RESULTS OF OPERATIONS
Consolidated
The Company incurred a net loss of $626,000 or $.09 per share for
the first quarter of 2003 compared to net income of $776,000 or
$.11 per share for the first quarter of 2002. Net results from
the Company's two major business segments, Pineapple and Resort,
were lower in the first quarter of 2003. Consolidated revenues
for the first quarter of 2003 were $37.3 million or 3% higher
than the first quarter of 2002. The Pineapple and Commercial &
Property segments were responsible for the increased revenues
Consolidated general and administrative expense increased by 30%
compared to the first quarter of 2002 to $6.6 million for the
first quarter of 2003. General and administrative expenses are
incurred at the segment level and at the corporate level.
Approximately 70% of the general and administrative expenses
incurred at the corporate level are allocated to the business
segments. Operating profit (loss) reported for the business
segment is after allocation of corporate general and
administrative expense, but before interest expense and income
taxes. Insurance expense in the first quarter of 2003 increased
by approximately 53%, with the most significant increases for
workers' compensation and liability, and affected all of the
business segments. Pension expense charged to the business
segments in the first quarter of 2003 increased by 45%,
reflecting the decline in pension asset values in 2002 and the
decrease in assumed discount rate as of December 31, 2002. In
addition, general and administrative expense for the Pineapple
segment for litigation costs and other outside consultants, and
depreciation expense were higher in the first quarter of 2003
compared to the same period in 2002.
Interest expense was higher in the first quarter of 2003 compared
to the first quarter of 2002 because of higher average
borrowings. Borrowings were higher in 2003 because of decreased
cash flows from operating activities. See Liquidity and Capital
Resources for further discussion of cash flows. The Company's
average interest rates were lower in the first quarter of 2003
compared to the first quarter of 2002.
Pineapple
Pineapple operations produced an operating loss of $1.5 million
for the first quarter of 2003 compared to an operating loss of
$1.1 million for the first quarter of 2002. Revenues for the
first quarter of 2003 were higher by 8% compared to the first
quarter of 2002, reflecting increased sales of pineapple from
Central America by the Company's 100% owned subsidiary, Royal
Coast Tropical Fruit Company, Inc., increased sales of Hawaiian
GoldTM (fresh whole pineapple) and higher average sales prices
for the Company's canned pineapple products. Cost of sales as a
percentage of sales was lower in the first quarter of 2003
compared to 2002 primarily because of the larger proportion of
fresh pineapple sales, which generally have a higher profit
margin compared to canned sales, and because of lower production
cost (primarily at the plantations) in 2003.
The increased operating loss for the Pineapple segment for the
first quarter of 2003 was primarily due to increased general and
administrative expenses as discussed above. General and
administrative expense for the Pineapple segment increased by
$1.3 million in the first quarter of 2003 compared to the first
quarter of 2002. Litigation cost to defend the Company's right
to grow certain hybrid pineapple varieties is expected to
continue through the third quarter of 2003. Higher depreciation
charged to Pineapple general and administrative expense is
attributable to the integrated accounting system that was fully
placed in service as of January 2003. This depreciation expense
is expected to be approximately $1.7 million in 2003, declining
to approximately $1 million in 2007.
Production costs are expected to be lower in 2003 because of a
reduction in the number of acres that will be planted as compared
to 2002. In accordance with Hawaii industry practice, the
Company's policy is to charge the costs of growing pineapple to
production in the year incurred rather than deferring these costs
until the year of harvest. This reduction in acres to be planted
in 2003 is expected to reduce cost of sales for the year 2003 by
approximately $1.0 million.
The Company's canned pineapple is sold in competition with
product produced in foreign countries; thus, the volume of
imports of canned pineapple and the average unit value declared
on these imports influences the competitive environment of the
market for the Company's products. The effect on the marketplace
of a change in the volume or average unit value is not
necessarily immediate, and other factors also influence the
market, but the import statistics may be indicative of future
market condition. For the first two months of 2003, the volume
of imports of canned pineapple into the United States increased
by 6% and the average unit value increased by 11%.
Over the last several years, the Company has been reducing the
acreage planted in Champaka pineapple (primarily a canning
variety) and increasing the acreage in Hawaiian GoldTM pineapple
(primarily sold as fresh whole fruit). The net reduction in
planted acreage has resulted in a gradual reduction in the need
for seasonal labor as well as reductions in the full-time labor
force. Acceleration of the reduction in canned pineapple
production would result in decreases to the size of the
workforce. The Company's labor force needs are being evaluated
and charges for severance and termination benefits may be
necessary in future periods. The Company is also evaluating the
fixed assets used in its Pineapple operations in an effort to
determine the most efficient usage of its assets based on an
overall reduction in canned pineapple production. This
evaluation may result in additional depreciation or impairment
charges.
Resort
Kapalua Resort produced an operating profit of $1,294,000 for the
first quarter of 2003 compared to an operating profit of
$2,956,000 for the first quarter of 2002. Revenues from the
Resort were $13.3 million for the first quarter of 2003 compared
to $15.2 million for the first quarter of 2002.
Lower operating profit and revenue for the first quarter of 2003
were due to fewer sales of new real estate product and to lower
results from most other resort operations, with the exception of
merchandise sales. Sales of merchandise carrying the Kapalua
logo were higher in the first quarter of 2003 compared to the
first quarter of 2002, primarily reflecting an increase in
Company-operated retail space at Kapalua Resort. The overall
visitor occupancy at the Resort and paid rounds of golf were
lower in the first quarter of 2003.
For the first two months of 2003 hotel and condominium room
occupancies for the State of Hawaii and for the island of Maui
declined by less than 1% as compared to the same period in 2002.
Room occupancies at the Kapalua Resort decreased by almost 6% for
the first two months of 2003 compared to the first two months of
2002. Part of the decreased occupancy at Kapalua is due to a
greater number of units available in The Kapalua Villas, the
Company's short-term condominium rental program. In addition, a
large portion of the accommodations at the Kapalua Resort is
highly dependent on group business, which was significantly lower
in the first quarter of 2003 compared to the first quarter of
2002. Based on advance bookings, it appears that Kapalua Resort
occupancies for the summer of 2003 may exceed the prior year, but
for the full-year, room occupancies may continue to be lower than
2002.
Operating profit attributable to real estate development
decreased by $1.1 million in the first quarter of 2003 compared
to 2002, reflecting lower inventory of new real estate product
available for sale. A house on a lot at Pineapple Hill Estates
that the Company constructed through a joint venture was
completed in March 2003 and placed on the market. A 6.5-acre
oceanfront parcel at Kapalua presently is also on the market. The
next phase of Plantation Estates at Kapalua, may be available for
sale before year-end 2003, but revenues from this large-lot
subdivision would probably not be recognized until 2004.
Resort real estate sales are cyclical and depend on a number of
factors. Results of real estate sales activity for the first
quarter of 2003 are not necessarily indicative of future
performance trends for this segment.
Commercial & Property
The Commercial & Property segment reported operating profit of
$349,000 for the first quarter of 2003 compared to $319,000 for
the first quarter of 2002. Revenues from this segment were $3.1
million for the first quarter of 2003 compared to $1.7 million
for the first quarter of 2002. Revenues and operating profit for
2002 included a $624,000 gain on the sale of a land parcel.
Results for the first quarter of 2003 included the closing of 21
lot sales at the Kapua Village employee subdivision. The closing
of lot sales in this subdivision began in December 2002 and as of
March 31, 2003, there were 11 lots remaining in inventory. Sales
of the remaining lots are expected to close in the second quarter
of 2003. The Company's equity in the losses of Queen Kaahumanu
Center for the first quarter of 2003 was consistent with the
first quarter of 2002, as increased revenues were offset by
higher expense for advertising, professional services and
allowance for uncollectible accounts.
LIQUIDITY, CAPITAL RESOURCES AND OTHER
At March 31, 2003, total debt, including capital leases was $53.0
million, an increase of $2.9 million from December 31, 2002.
Most of the increased debt was the result of decreased accounts
receivables collections in the Pineapple segment in the first
quarter of 2003. Accounts receivable for the Pineapple segment
were higher than usual at the end of 2002 because of a high
volume of sales made later in 2002. These accounts receivable
were subsequently collected in January of 2003. In January 2003,
the sales, manufacturing and payroll modules of the integrated
accounting system, which the Company began implementing in August
2000 "went live." During the first quarter of 2003, a
significant amount of previously unforeseen issues in the new
system and a higher than anticipated learning curve for Company
employees resulted in lower productivity and a backlog of
invoicing and collections. While all first quarter pineapple
sales were properly recorded, invoicing was approximately three
weeks in arrears as of the end of March 2003. The Pineapple
sales division reallocated staff and is considering hiring
additional personnel to alleviate the invoicing backlog.
At March 31, 2003, unused short- and long-term lines of credit
totaled $5.4 million. The Company's borrowings normally increase
in the second and third quarters of the year as the seasonal
pineapple inventory financing reaches its peak. However, unlike
prior years, the debt level is not expected to increase
significantly in 2003 from the March 31 level. The high debt
level at March 31 was caused by a short-term issue that the
Company believes will be corrected before the Company's cash
requirements increase for seasonal inventory financing. It is
anticipated that cash flows from operating activities, as the
invoicing and collection backlog in the Pineapple segment is
resolved, together with the credit lines currently available to
the Company will be sufficient to cover the Company's peak cash
requirements in 2003. Should additional credit become necessary
the Company would seek additional credit from its lenders.
The Company's capital expenditures and expenditures for general
planning and land entitlements are expected to be approximately
$9.7 million in 2003. Approximately $3.8 million is estimated to
be for replacement of existing equipment and facilities. Some of
these expenditures may be funded with capital leases or new
equipment financing loans.
In the second quarter of 2003, the Company expects to record a
charge to general and administrative expenses of approximately
$1.3 million and make cash payments of approximately $770,000 for
termination benefits related to management changes. In April
2003, the Company received a non-recurring cash receipt of
$850,000, which was recorded as other income in the Pineapple
segment.
This report contains forward-looking statements, within the
meaning of Private Securities Litigation Reform Act of 1995,
which are provided to assist in the understanding of certain
aspects of the Company's anticipated future financial
performance. The words "estimate," "project," "intend,"
"expect," "believe" and similar expressions are intended to
identify forward-looking statements. Among other things, the
forward-looking statements in this report address the Company's
belief regarding the effect of imports on canned pineapple
pricing and the Company's expectations regarding the adequacy of
credit facilities and operating cash flows. Forward-looking
statements contained in this report or otherwise made by the
Company are subject to significant risks and uncertainties, many
of which are outside of the Company's control. Although the
Company believes that the assumptions underlying its forward-
looking statements are reasonable, any assumption could prove to
be inaccurate and that could cause actual results to differ
materially from those in the forward-looking statements.
Potential risks and uncertainties include, but are not limited
to, those risks and uncertainties as disclosed in the Company's
Annual Report to Shareholders and Form 10-K filing with the
Securities and Exchange Commission. Unless expressly stated, the
Company does not undertake and specifically disclaims any
obligation to update any forward-looking statements to reflect
events or circumstances after the date of such statements.
Item 3. Quantitative and Qualitative Disclosures about
Market Risk
The Company's primary market risk exposure with regard to
financial instruments is to changes in interest rates. The
Company attempts to manage this risk by monitoring interest rates
and future cash requirements, and evaluating opportunities to
refinance borrowings at various maturities and interest rates.
There were no material changes to the Company's market risk
exposure during the first three months of 2003.
Item 4. Controls and Procedures
(a) Evaluation of disclosure controls and procedures. Within
the 90-day period prior to the date of this report, the Company's
principal executive officer and principal financial officer
evaluated the effectiveness of the Company's disclosure controls
and procedures. Based on this evaluation, it was concluded that
the Company's disclosure controls and procedures are effective in
timely identifying material information that should be disclosed
in this report.
(b) Changes in internal controls. There have been no changes in
the Company's internal controls or other factors that could
significantly affect the Company's disclosure controls and
procedures subsequent to the date the evaluation was undertaken.
PART II OTHER INFORMATION
Item 1. Legal Proceedings
On April 12, 2001, the Company filed a lawsuit against Del Monte
Fresh as well as Fresh Del Monte Produce, Inc. and Del Monte
Corporation, Maui Pineapple Company, Ltd., et al. v. Del Monte
Corporation, et al., Case No: C 01-01449 CRB, in the United
States District Court For the Northern District of California
(San Francisco Division). On April 17, 2003, a settlement
agreement was executed to resolve the disputes and fully settle
and compromise the claims related to the Company's allegations
that Del Monte's use of the names "Del Monte Hawaiian Gold," "Del
Monte Hawaii Gold," and "Del Monte Gold" infringed upon the
Company's HAWAIIAN GOLD trademarks. One of the defendants in
this action, Del Monte Fresh Produce N.A., Inc., had filed a
counterclaim alleging that the Company has infringed on its
patent on one of the pineapple hybrid varieties. A motion to
dismiss the counterclaim was filed by Del Monte Fresh Produce
N.A. and on April 4, 2003, the motion was granted.
On April 21, 2003, a final judgment was entered that terminated
Del Monte Fresh Produce (Hawaii) Inc. v. Maui Pineapple Company,
Ltd., Civil No. 01-1-2671-09, First Circuit Court of the State of
Hawaii. On August 29, 2002, a motion had been granted declaring
that the plaintiff has the right to use the Ginaca machines,
which are the subject of this action, in a mainland fresh fruit
operation.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 99.1 - Certification of Paul J. Meyer
Pursuant To 18 U.S.C. Section 1350, As Adopted
Pursuant To Section 906 Of The Sarbanes-Oxley Act
Of 2002
Exhibit 99.2 - Certification of Gary L. Gifford
Pursuant To 18 U.S.C. Section 1350, As Adopted
Pursuant To Section 906 Of The Sarbanes-Oxley Act
Of 2002
(b) Reports on Form 8-K
The Company filed no reports on Form 8-K for the period
covered by this report.
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 7, 2003 /S/ PAUL J. MEYER
Date Paul J. Meyer
Executive Vice President/Finance
(Principal Financial Officer)
CERTIFICATIONS PURSUANT TO
SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002
CERTIFICATION
I, Paul J. Meyer, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Maui
Land & Pineapple Company, Inc.;
2. Based on my knowledge, this quarterly report does not
contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results
of operations and cash flows of the registrant as of, and for,
the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and 15d-
14 ) for the registrant and we have:
a. designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which
this quarterly report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
function):
a. all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b. any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors that
could significantly affect internal controls subsequent to the
date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
Date: May 7, 2003
/S/ PAUL J. MEYER
Name: Paul J. Meyer
Title: Executive Vice President/Finance
CERTIFICATION
I, Gary L. Gifford, certify that:
1. I have reviewed this quarterly report on Form 10-Q of
Maui Land & Pineapple Company, Inc.;
2. Based on my knowledge, this quarterly report does not
contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made,
in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by
this quarterly report;
3. Based on my knowledge, the financial statements, and
other financial information included in this quarterly report,
fairly present in all material respects the financial
condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
quarterly report;
4. The registrant's other certifying officers and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-
14 and 15d-14 ) for the registrant and we have:
a. designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including
its consolidated subsidiaries, is made known to us by others
within those entities, particularly during the period in which
this quarterly report is being prepared;
b. evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c. presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrant's auditors and the audit committee of the
registrant's board of directors (or persons performing the
equivalent function):
a. all significant deficiencies in the design or
operation of internal controls which could adversely
affect the registrant's ability to record, process,
summarize and report financial data and have identified
for the registrant's auditors any material weaknesses in
internal controls; and
b. any fraud, whether or not material, that involves management
or other employees who have a significant role in the
registrant's internal controls; and
6. The registrant's other certifying officers and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent
to the date of our most recent evaluation, including any
corrective actions with regard to significant deficiencies and
material weaknesses.
Date: May 7, 2003
/S/ GARY L. GIFFORD
Name: Gary L. Gifford
Title: President & Chief Executive Officer