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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities
- ----- Exchange Act of 1934.
For the quarterly period ended December 31, 2003
or
Transition Report Pursuant to Section 13 or 15(d) of the Securities
- ----- Exchange Act of 1934.
For the transition period from _________ to _________.
Commission File Number 01912
SONOMAWEST HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-1069729
(State of incorporation) (IRS Employer Identification #)
2064 HIGHWAY 116 NORTH, SEBASTOPOL, CA 95472-2662
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 707-824-2001
(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
----- -----
As of February 11, 2004, there were 1,104,783 shares of common stock, no par
value, outstanding.
-1-
SONOMAWEST HOLDINGS, INC. AND SUBSIDIARY
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION Page
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets at December 31, 2003 and
June 30, 2003...................................................................3
Condensed Consolidated Statements of Operations - Three and Six months
ended December 31, 2003 and 2002................................................4
Condensed Consolidated Statement of Changes in Shareholders' Equity -
Six months ended December 31, 2003..............................................5
Condensed Consolidated Statements of Cash Flows - Six months ended
December 31, 2003 and 2002......................................................6
Notes to Condensed Consolidated Financial Statements............................7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.......................................................9
Item 4. Controls and Procedures........................................................12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings..............................................................12
Item 2. Changes in Securities and Use of Proceeds.....................................12
Item 3. Defaults Upon Senior Securities ...............................................13
Item 4. Submission of Matters to a vote of Security Holders............................13
Item 5. Other Information..............................................................13
Item 6. Exhibits and Reports on Form 8-K...............................................13
Signature................................................................................15
EXHIBIT INDEX................................................................................16
EXHIBITS.....................................................................................17
-2-
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SONOMAWEST HOLDINGS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)
ASSETS 12/31/03 6/30/03
------------- -------------
(Unaudited)
CURRENT ASSETS:
Cash $ 1,393 $ 1,939
Accounts receivable 143 136
Other receivables 23 15
Prepaid expenses and other assets 66 145
Current deferred income taxes, net 73 124
------------- -------------
Total current assets 1,698 2,359
------------- -------------
RENTAL PROPERTY, net 1,756 1,731
------------- -------------
INVESTMENT, at cost 3,001 2,696
------------- -------------
DEFERRED INCOME TAXES 312 259
------------- -------------
PREPAID COMMISSIONS AND OTHER ASSETS 132 81
------------- -------------
Total assets $ 6,899 $ 7,126
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt $ 1,824 $ 1,857
Accounts payable 132 108
Accrued payroll and related liabilities 13 104
Accrued expenses 189 271
Unearned rents and deposits 271 287
------------- -------------
Total current liabilities 2,429 2,627
OTHER LONG-TERM LIABILITIES 131 131
------------- -------------
Total liabilities 2,560 2,758
------------- -------------
SHAREHOLDERS' EQUITY:
Preferred stock: 2,500 shares authorized; no shares outstanding - -
Common stock: 5,000 shares authorized, no par value; 1,105 shares outstanding in
fiscal 2004 and 2003 2,709 2,675
Stock subscription receivable (400) (400)
Retained earnings 2,030 2,093
------------- -------------
Total shareholders' equity 4,339 4,368
------------- -------------
Total liabilities and shareholders' equity $ 6,899 $ 7,126
============= =============
The accompanying notes are an integral part of these financial statements.
-3-
SONOMAWEST HOLDINGS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX AND THREE MONTHS ENDED DECEMBER 31, 2003 AND 2002
(UNAUDITED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
Six Months Three Months
Ended December 31 Ended December 31
2003 2002 2003 2002
------- ------- ------- -------
RENTAL REVENUE $ 810 $ 757 $ 407 $ 378
OPERATING COSTS 852 1,061 403 600
------- ------- ------- -------
OPERATING PROFIT (LOSS) (42) (304) 4 (222)
INTEREST AND OTHER INCOME (EXPENSE), NET (23) (48) (21) (11)
------- ------- ------- -------
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES (65) (352) (17) (233)
BENEFIT FOR INCOME TAXES 2 93 1 70
------- ------- ------- -------
NET LOSS FROM CONTINUING OPERATIONS (63) (259) (16) (163)
GAIN ON SALE OF DISCONTINUED OPERATIONS, net of income taxes -- 120 -- 77
------- ------- ------- -------
NET LOSS $ (63) $ (139) $ (16) $ (86)
======= ======= ======= =======
WEIGHTED AVERAGE COMMON SHARES AND EQUIVALENTS:
Basic and diluted 1,105 1,105 1,105 1,105
EARNINGS (LOSS) PER COMMON SHARE:
Continuing operations
Basic and diluted $ (0.06) $ (0.23) $ (0.01) $ (0.15)
Discontinued operations:
Basic and diluted $ -- $ 0.11 $ -- $ 0.07
Net loss:
Basic and diluted $ (0.06) $ (0.13) $ (0.01) $ (0.08)
The accompanying notes are an integral part of these financial statements.
-4-
SONOMAWEST HOLDINGS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
FOR THE SIX MONTHS ENDED DECEMBER 31, 2003
(AMOUNTS IN THOUSANDS)
Common Stock
----------------------- Stock Total
Number Subscriptions Retained Shareholders'
of Shares Amount Receivable Earnings Equity
------- ------- ------- ------- -------
BALANCE, JUNE 30, 2003 1,105 $ 2,675 $ (400) $ 2,093 $ 4,368
Net loss -- -- -- (63) (63)
Non-cash stock compensation charge -- 34 -- -- 34
------- ------- ------- ------- -------
BALANCE, DECEMBER 31, 2003 1,105 $ 2,709 $ (400) $ 2,030 $ 4,339
======= ======= ======= ======= =======
The accompanying notes are an integral part of these financial statements.
-5-
SONOMAWEST HOLDINGS, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE SIX MONTHS ENDED DECEMBER 31, 2003 AND 2002
(AMOUNTS IN THOUSANDS)
2003 2002
---------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (63) $ (139)
---------------------------
Adjustments to reconcile net loss to net cash provided
by (used in) operating activities:
Loss on sale of fixed assets 24 7
Gain on sale of discontinued operations, net -- (120)
Non-cash stock compensation charge 34 42
Depreciation and amortization expense 99 156
Changes in assets and liabilities:
Accounts receivable, net (7) 18
Other receivables (8) (14)
Deferred income tax benefit (2) (94)
Prepaid income taxes -- 75
Prepaid expenses and other assets 79 64
Prepaid commissions and other assets (51) 6
Accounts payable and accrued expenses (58) 145
Accrued payroll and related liabilities (91) (93)
Unearned rents and deposits (16) (8)
---------------------------
3 184
---------------------------
Net cash provided by (used in) continuing operations (60) 45
---------------------------
Net cash provided by discontinued operations -- 71
---------------------------
Net cash provided by (used in) operating activities (60) 116
---------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of fixed assets 7 --
Capital expenditures (155) (49)
Investment in MetroPCS (305) (1,044)
---------------------------
Net cash used in investing activities (453) (1,093)
---------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments of long-term debt (33) (30)
---------------------------
Net cash used for financing activities (33) (30)
---------------------------
NET DECREASE IN CASH (546) (1,007)
CASH AT BEGINNING OF PERIOD (of which $600 was restricted in 2002) 1,939 3,369
---------------------------
CASH AT END OF PERIOD (of which $600 was restricted in 2002) $ 1,393 $ 2,362
===========================
Supplemental Cash Flow Information
2003 2002
---------------------------
Interest paid $ 69 $ 71
Taxes paid $ 1 $ 1
The accompanying notes are an integral part of these financial statements.
-6-
SONOMAWEST HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED DECEMBER 31, 2003
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim statements have been prepared pursuant to the
rules of the Securities and Exchange Commission. Certain information and
disclosures normally included in annual financial statements prepared in
accordance with accounting principles generally accepted in the United States of
America have been condensed or omitted pursuant to such rules and regulations,
although the Company believes these disclosures are adequate to make the
information not misleading. In the opinion of management, all adjustments
necessary for a fair presentation for the periods presented have been reflected
and are of a normal recurring nature. These interim financial statements should
be read in conjunction with the financial statements and notes thereto for each
of the three years in the period ended June 30, 2003. The results of operations
for the six-month period ended December 31, 2003 are not necessarily indicative
of the results that will be achieved for the entire year ending June 30, 2004.
RECLASSIFICATIONS
Certain reclassifications have been made to the 2003 unaudited interim financial
statements to conform to the current year presentation, adopted for fiscal 2004.
NOTE 2 - INVESTMENT
As of December 31, 2003, the Company has completely funded its $3 million
minority investment in the Series D preferred stock of a privately held
telecommunications company, MetroPCS, Inc. The Company accounts for the
investment using the cost method.
NOTE 3 - STOCK OPTIONS
Effective July 1, 2002, the Company elected to account for all prospective stock
options in accordance with SFAS 123, "Accounting for Stock-Based Compensation".
As a result, during the first three months of fiscal 2004 the Company incurred a
charge of $34,000 related to the issuance of 24,200 fully vested stock options
to the directors, officers and certain employees of the Company. During the
first three months of fiscal 2003 the Company incurred a charge of $42,000
related to the issuance of 24,200 fully vested stock options to the directors,
officers and certain employees of the Company.
Prior to July 1, 2002, the Company accounted for stock-based compensation plans
in accordance with Accounting Principles Board ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees," under which compensation cost was
recorded as the difference between the fair value and the exercise price at the
date of grant, and was recorded on a straight-line basis over the vesting period
of the underlying options. Prior to July 1, 2002, the Company had adopted the
disclosure only provisions of Statement of Financial Standards ("SFAS") No. 123,
"Accounting for Stock Based Compensation". The Company continues to account for
stock options granted prior to July 1, 2002 in accordance with APB 25; and thus,
continues to apply the disclosure only provisions of SFAS 123 to such options.
No compensation expense has been recognized in the six months ended December 31,
2003 pursuant to stock options issued prior to July 1, 2002 as the option terms
are fixed and the exercise price equals the market price of the underlying stock
on the date of grant for all options granted by the Company.
-7-
Had compensation cost for the stock options granted prior to July 1, 2002 been
determined based upon the fair value at grant dates for awards under those plans
consistent with the method prescribed by SFAS 123, the net loss would have been
increased to the pro forma amounts indicated below:
For the six months ended December 31,
2003 2002
---- ----
(in thousands, except per share amounts)
- ---------------------------------------------- ------------- -----------------
Net Loss, as reported $(63) $(139)
- ---------------------------------------------- ------------- -----------------
Add back: Actual Stock Compensation $ 33 $ 38
Expense--Net of taxes
- ---------------------------------------------- ------------- -----------------
Less: Pro-forma Stock Compensation $(36) $ (43)
Charge--Net of taxes
- ---------------------------------------------- ------------- -----------------
Pro-forma Net Loss $(66) $(144)
- ---------------------------------------------- ------------- -----------------
Loss Per Share:
- ---------------------------------------------- ------------- -----------------
Basic and diluted - as reported $(0.06) $(0.13)
- ---------------------------------------------- ------------- -----------------
Basic and diluted - pro-forma $(0.06) $(0.13)
- ---------------------------------------------- ------------- -----------------
The fair value of each option grant is estimated on the date of grant using
the Black-Scholes option pricing model, with the following weighted-average
assumptions used for the 2003 and 2002 grants, respectively: weighted
average risk-free interest rates of 3.54 and 4.78 percent; expected
dividend yield of 0 percent; expected life of four years for the Plan
options; and expected volatility of 22.00 and 25.83 percent.
For options granted during the six months ended December 31, 2003 and 2002,
the weighted average fair values as of the grant date were $ 1.39 and
$1.73, respectively.
-8-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
SonomaWest Holdings, Inc. (the "Company" or "Registrant") is including the
following cautionary statement in this Quarterly Report to make applicable and
take advantage of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 for any forward-looking statements made by, or on
behalf of, the Company. The statements contained in this Report that are not
historical facts are "forward-looking statements" (as such term is defined in
Section 27A of the Securities Act of 1933 and section 21E of the Securities
Exchange Act of 1934), which can be identified by the use of forward-looking
terminology such as "estimated," "projects," "anticipated," "expects,"
"intends," "believes," or the negative thereof or other variations thereon or
comparable terminology, or by discussions of strategy that involve risks and
uncertainties. Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance and underlying
assumptions. Forward-looking statements involve risks and uncertainties, which
could cause actual results or outcomes to differ materially from those expressed
in the forward-looking statements. The Company's expectations, beliefs and
projections are expressed in good faith and are believed by the Company to have
a reasonable basis, although actual results may differ materially from those
described in any such forward-looking statements. All written and oral
forward-looking statements made in connection with this Report which are
attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by the "Certain Factors" as set forth in our Annual
Report for the fiscal year ended June 30, 2003 filed on September 12, 2003, and
other cautionary statements set forth under "Management's Discussion and
Analysis of Financial Condition and Results of Operations". There can be no
assurance that management's expectations, beliefs or projections will be
achieved or accomplished, and the Company expressly disclaims any obligation to
update any forward-looking statements.
The financial statements herein presented for the three and six months ending
December 31, 2003 and 2002 reflect all the adjustments that in the opinion of
management are necessary for the fair presentation of the financial position and
results of operations for the periods then ended. All adjustments during the
periods presented are of a normal recurring nature.
CRITICAL ACCOUNTING POLICIES
The consolidated financial statements are prepared in accordance with
accounting principles generally accepted in the United States, which require the
Company to make estimates and assumptions. The Company believes that of its
significant accounting policies, the following may involve a higher degree of
judgment and complexity.
The most critical accounting policies were determined to be those
related to: valuation of the Company's investment in MetroPCS and the valuation
allowances on deferred tax assets.
Valuation of investment in MetroPCS
The investment in MetroPCS is accounted for using the cost method. The
Company continues to monitor the financial condition, cash flow, operational
performance and other relevant information about MetroPCS, to evaluate the fair
value of this investment. This process is based primarily on information
disclosed in MetroPCS' periodic filings with the Securities and Exchange
Commission, following MetroPCS' recent registration under the Securities
Exchange Act of 1934. If as a result of the review of this information, the
Company believes its investment should be reduced to a fair value below its
cost, the reduction would be charged to "loss on investments" on the
consolidated statements of operations.
-9-
Valuation Allowance on Deferred Taxes
The Company records deferred tax assets and/or liabilities based upon its
estimate of the taxes payable in future years, taking into consideration any
change in tax rates and other statutory provisions. The Company continues to
post losses from its continuing operations. The losses have generated federal
tax net operating losses ("NOLs"), some of which have been carried back to
offset prior years' taxable income. As of June 30, 2002 the Company carried back
all of its remaining allowable NOLs. After the carryback of the June 30, 2002
federal NOL the Company cannot carryback any more losses, and as a result all
taxable losses incurred subsequent to June 30, 2002 will be carried forward to
offset future taxable income. California does not allow corporations to carry
back their NOLs, and corporations can only carry forward 55% of the NOLs to
future years to offset net operating profits. Furthermore, the Company's state
NOLs will begin to expire in fiscal 2005. As a result, the Company has
established a valuation allowance against all of its state net deferred tax
assets due to the uncertainty of future realization. At December 31, 2003, the
Company had recorded, net deferred tax assets of $385,000, which compares to
$383,000 of net deferred tax assets as of June 30, 2003.
OVERVIEW
The Company's business consists of its real estate management and rental
operations and its minority investment in the Series D preferred stock of a
privately held telecommunications company, MetroPCS, Inc.
As of December 31, 2003, the Company has completely funded its $3 million
minority investment in the Series D preferred stock of MetroPCS, Inc.
-10-
RESULTS OF CONTINUING OPERATIONS
RESULTS OF OPERATIONS
The Company leases warehouse, production, and office space as well as outside
storage space at both of its properties. The two properties are located on 82
acres of land and have a combined leaseable area under roof of 390,000 square
feet. As of December 31, 2003 the Company had a total of 27 tenants as compared
to 28 tenants as of December 31, 2002. The tenants have varying original lease
terms ranging from month-to-month to ten years with options to extend the
leases. As of December 31, 2003, the tenants occupied approximately 232,000
square feet under roof, or 59% of the leasable area under roof. This compares to
223,000 square feet under roof, or 57% of the leasable area under roof as of
December 31, 2002. In addition to the area under roof, the Company had 68,000
square feet of outside area under lease as of December 31, 2003 and 82,000 as of
December 31, 2002.
RENTAL REVENUE. For the six months ended December 31, 2003 rental revenue
increased $53,000 or 7% as compared to the corresponding period in the prior
year. The increase in rental revenue is attributable to the increase in leased
square footage.
For the three months ended December 31, 2003 rental revenue increased $29,000 or
8% as compared to the three months ended December 31, 2002. This increase was a
result of tenants leasing additional space on a month-to-month basis.
OPERATING COSTS. For the six months ended December 31, 2003 operating costs
decreased $209,000 or 20% compared to the six months ended December 31, 2002.
The decrease from fiscal 2003 was primarily due to the estimated loss of
$173,000 that resulted from storm related damages to the North Property on
December 31, 2002. The Company's total operating costs exceeded the tenant
rental revenue for the six months ended December 31, 2003 and 2002. The Company
continues to closely scrutinize all discretionary spending. In addition, the
Company continues to actively search for additional tenant revenue to eliminate
these negative operating results. While the Company and its retained broker are
actively marketing the properties to prospective tenants, there can be no
assurance that tenants will be found in the near term or at rates comparable
with existing leases. As a result, the Company's operating results will be
negatively impacted as long as the tenant rental revenue stream fails to cover
existing operating costs.
For the three months ended December 31, 2003 operating costs decreased $197,000
or 33%. As discussed above this decrease is primarily a result of the costs
incurred in excess of the insurance deductible to the North Property ($173,000),
as a result of the storm on December 31, 2002.
INTEREST AND OTHER INCOME (EXPENSE), NET. Interest and other income (expense)
consist primarily of interest income on the Company's cash balances, interest
expense on mortgage debt and the change in the value of the Company's interest
rate swap contract. For the six months ending December 31, 2003, the Company
generated $14,000 of interest income, $13,000 of other income, incurred $63,000
of interest expense, recorded a loss on the sale of fixed assets of $24,000 and
recorded a positive swap contract adjustment of $37,000. This compares to
$29,000 of interest income, $72,000 of interest expense and a positive swap
contract adjustment of $2,000 for the corresponding period in the prior year.
The decrease in interest income is due to a reduced cash balance in fiscal 2004
and a decline in interest rates. As of December 1, 2003, the Company's swap
contract with its Bank had terminated. The Company's Bank extended the due date
of the note until March 1, 2004, but the swap contract was terminated.
INCOME TAXES. The effective tax rate for the six months ended December 31, 2003
decreased to a benefit of 3% from a benefit of 9% for the six months ended
December 31, 2002. Due to the uncertainty of future realization, a valuation
allowance is recorded against state net operating losses. The primary reason for
the lower effective rate for the six months ended December 31, 2003 was the
impact of permanent differences (primarily the non-cash stock compensation
charge of $34,000 in 2003 and $42,000 in 2002) on a small amount of taxable loss
in addition to the valuation allowance recorded against state net operating
losses.
-11-
LIQUIDITY AND CAPITAL RESOURCES
The Company had cash of $1.4 million at December 31, 2003 and current maturities
of long-term debt of $1.8 million. The Company's long-term debt was due and
payable on December 1, 2003, but the Company's bank agreed to an extension to
March 1, 2004. As a result, the entire debt is recorded under current maturities
of long-term debt. The Company anticipates refinancing this debt with the
Company's Bank and is in the final stages of this process. As of December 1,
2003, the Company's interest rate swap agreement with the Bank terminated and
was not extended. As a result, as of December 31, 2003 the Company no longer has
any potential liability associated with this agreement. The Company's cash
balance decreased $546,000 during the six months ended December 31, 2003, as a
result of the final payment on the MetroPCS investment of $305,000, capital
expenditures of $155,000, principal payments on debt of $33,000 and negative
cash flow from operating activities of $60,000.
As of December 31, 2003, the Company has completely funded its $3 million
minority investment in the Series D preferred stock of MetroPCS, Inc. The
Company has accounted for the investment using the cost method.
ITEM 4. CONTROLS AND PROCEDURES
As of December 31, 2003, the Company carried out an evaluation, under the
supervision and with the participation of the Company's management, including
the Company's Chairman of the Board of Directors and Chief Financial Officer, of
the effectiveness of the design and operation of the Company's disclosure
controls and procedures (as defined in Exchange Act Rule 13a-15(e) and Rule
15d-15(e)). Based upon that evaluation, the Company's Chairman of the Board of
Directors and Chief Financial Officer concluded that the Company's disclosure
controls and procedures are effective at a reasonable level in timely alerting
them to material information relating to the Company that is required to be
included in the Company's periodic filings with the Securities and Exchange
Commission. There has been no change in the Company's internal control over
financial reporting that occurred during the Company's most recent fiscal
quarter that has materially affected or is reasonably likely to materially
affect, the Company's internal control over financial reporting.
The Company's management, including the Chairman of the Board of Directors and
Chief Financial Officer, do not expect that the Company's disclosure controls or
our internal controls will prevent all error and all fraud. A control system, no
matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met due to
numerous factors, ranging from errors to conscious acts of an individual, or
individuals acting together. In addition, the design of a control system must
reflect the fact that there are resource constraints, and the benefits of
controls must be considered relative to their costs. Because of the inherent
limitations in a cost-effective control system, misstatements due to error
and/or fraud may occur and not be detected.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
None
-12-
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
At the Registrant's Annual Meeting of Stockholders held on October 29, 2003 the
following proposals were adopted by the margins indicated:
Number of Shares
----------------------------------------------
Voted For Withheld
------------------ --------------
1. To elect four Directors to hold office until the
Annual Meeting of Stockholders to be held in 2004
or until their respective successors have
been elected or appointed
David J. Bugatto 1,007,700 19,844
Gary L. Hess 1,007,650 19,894
Roger S. Mertz 1,001,960 25,584
Fredric Selinger 1,017,372 10,172
Number of Shares
------------------------
Voted For Voted
Against
------------------------
3. To ratify the appointment of the accounting firm of
Grant Thornton LLP as independent auditors for
the fiscal year ending June 30, 2004 1,025,709 1,835
ITEM 5. OTHER INFORMATION
None
-13-
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
3.1(1) Articles of Incorporation, as amended to date
3.2(2) Bylaws, as amended to date
10.1 Amendment to Independent Consultant Contract for Services
dated December 31, 2003 between SonomaWest Holdings, Inc. and
David J. Bugatto.
31.1 Chairman of the Board Certification of Periodic Financial
Report Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002*
31.2 Chief Financial Officer Certification of Periodic Financial
Report Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002*
32.1 Chairman of the Board Certification Pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002. +
32.2 Chief Financial Officer Certification Pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002. +
________________
(1) Incorporated by reference to the registrant's Annual Report on
Form 10-K for the fiscal year ended June 30, 2000.
(2) Incorporated by reference to the registrant's Annual Report on
Form 10-K for the fiscal year ended June 30, 1992.
* Filed herewith.
+ Furnished herewith.
b. Reports on Form 8-K
The Company furnished to the SEC one report on Form 8-K during the three months
ended December 31, 2003 on October 3, 2003 for the purpose of reporting under
Item 9 thereof the mailing of a letter by the Chairman of the Board to the
Company's shareholders in connection with the Company's Annual Meeting of
Shareholders.
-14-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: February 12, 2004
/s/ Thomas R. Eakin
- --------------------------------------------
Thomas R. Eakin, Chief Financial Officer
-15-
EXHIBIT INDEX
Exhibit No. Document Description
----------- --------------------
10.1 Amendment to Independent Consultant Contract for Services
dated December 31, 2003 between SonomaWest Holdings, Inc. and
David J. Bugatto
31.1 Chairman of the Board Certification of Periodic Financial
Report Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002*
31.2 Chief Financial Officer Certification of Periodic Financial
Report Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002*
32.1 Chairman of the Board Certification Pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002. +
32.2 Chief Financial Officer Certification Pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002. +
* Filed herewith
+ Furnished herewith
-16-