Maui Land & Pineapple pany(MLP) - 2025 Q1 - Quarterly Report

Cautionary Note Regarding Forward-Looking Statements This section outlines potential risks and uncertainties that could cause actual results to differ from projections, including natural disasters, economic conditions, and financial compliance - Natural Disasters & Pandemics: Risks from events like the August 2023 Maui wildfires and contagious diseases[8] - Economic & Market Conditions: Risks related to unstable macroeconomic conditions, including interest rates, inflation, and credit markets[8] - Real Estate & Development: Risks associated with real estate demand in Hawaii, obtaining land use entitlements, and completing development projects on time and within budget[8] - Financial & Operational Risks: Risks include credit concentration, cyber-attacks, compliance with debt covenants, and availability of capital[8] PART I. FINANCIAL INFORMATION Item 1. Financial Statements This section presents the unaudited condensed consolidated interim financial statements for Q1 2025 and 2024, including balance sheets, operations, and cash flows Condensed Consolidated Balance Sheets As of March 31, 2025, total assets decreased to $47.2 million, liabilities increased to $20.5 million, and stockholders' equity decreased to $26.7 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 (unaudited) | December 31, 2024 (audited) | | :--- | :--- | :--- | | Total Assets | $47,232 | $50,139 | | Total Current Assets | $12,562 | $15,127 | | Property & Equipment, Net | $17,350 | $17,401 | | Total Liabilities | $20,516 | $16,958 | | Total Current Liabilities | $15,753 | $11,197 | | Total Stockholders' Equity | $26,716 | $33,181 | Condensed Consolidated Statements of Operations and Comprehensive Loss In Q1 2025, net loss widened to $8.6 million from $1.4 million in Q1 2024, driven by a $6.9 million pension settlement expense, despite operating revenues doubling Q1 2025 vs. Q1 2024 Statement of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Operating Revenues | $5,804 | $2,483 | | Operating Loss | $(1,779) | $(1,399) | | Pension and other post-retirement expenses | $(6,919) | $(78) | | Net Loss | $(8,640) | $(1,375) | | Net Loss Per Share | $(0.44) | $(0.07) | Condensed Consolidated Statements of Cash Flows In Q1 2025, net cash from operations was $157,000, investing provided $1.2 million, and financing used $301,000, increasing cash to $7.9 million Q1 2025 vs. Q1 2024 Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Cash Provided By (Used In) Operating Activities | $157 | $(10) | | Net Cash Provided By (Used In) Investing Activities | $1,191 | $(245) | | Net Cash Used In Financing Activities | $(301) | $(68) | | Net Increase (Decrease) in Cash | $1,047 | $(323) | | Cash and Cash Equivalents at End of Period | $7,882 | $5,377 | Notes to Condensed Consolidated Interim Financial Statements The notes detail the company's 22,300 acres of land, $15 million credit facility, a $6.8 million non-cash pension settlement expense, and its three reportable segments - The company owns approximately 22,300 acres of land, with over 20,000 acres in West Maui and 1,500 acres in Upcountry Maui[33] - In Q1 2025, the company recognized a non-cash settlement expense of $6.8 million related to the termination of its qualified pension plan, which is expected to be finalized in Q3 2025[46] - The company has a $15 million revolving credit facility with First Hawaiian Bank, of which $3 million was outstanding and $12 million was available as of March 31, 2025[41] - The company is working with the Hawaii Department of Health (DOH) to resolve a Notice of Violation regarding its Upcountry Maui wastewater treatment facility and has submitted a corrective action plan[47][48] - Share-based compensation expense increased to $1.6 million in Q1 2025 from $1.0 million in Q1 2024, primarily due to stock options vesting[61] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) The MD&A details the company's strategic shift to maximize land and commercial assets, discusses segment operational results, and outlines its land utilization and liquidity plans Overview and Strategic Initiatives New leadership is maximizing the company's 22,000 acres of land and commercial assets, focusing on increasing occupancy, activating land for housing, and launching an agave cultivation business - A new leadership team appointed in April 2023 is driving a renewed mission to maximize asset value and improve quality of life on Maui[82] - Commercial property occupancy increased from 72% to 86% between January 1, 2024, and March 31, 2025[84] - The company has a strategic plan to activate its land holdings, including providing up to 50 acres for temporary housing for Lahaina wildfire victims and developing projects for homes, farms, and resort use[87][90] - A new scalable business venture to cultivate agave has been initiated to reactivate dormant croplands, aiming to create jobs and capitalize on growing demand for agave-based products[93] Results of Operations In Q1 2025, net loss widened to $8.6 million due to a $6.9 million pension expense, despite operating revenues increasing to $5.8 million, driven by land development and leasing growth Segment Operating Results (in thousands) | Segment | Q1 2025 Revenue | Q1 2024 Revenue | Q1 2025 Operating Income/(Loss) | Q1 2024 Operating Income/(Loss) | | :--- | :--- | :--- | :--- | :--- | | Land Development & Sales | $2,298 | $0 | $(25) | $(266) | | Leasing | $3,219 | $2,216 | $1,855 | $1,224 | | Resort Amenities & Other | $287 | $267 | $(325) | $(169) | - Land development revenue of $2.3 million in Q1 2025 was primarily from the Honokeana Homes project, which supports wildfire relief[96][98] - The increase in leasing revenue reflects a return of tourism to pre-pandemic levels and successful efforts to re-tenant commercial properties at current market rates[101] - General & administrative and share-based compensation costs increased to $3.1 million in Q1 2025 from $2.0 million in Q1 2024, driven by higher option valuation expenses[107][108] Liquidity and Capital Resources The company's liquidity is supported by $7.9 million in cash, $1.6 million in investments, and $12.0 million available credit, deemed sufficient for the next twelve months Liquidity Position as of March 31, 2025 (in millions) | Resource | Amount | | :--- | :--- | | Cash and cash equivalents | $7.9 | | Investments in bond fund | $1.6 | | Available Credit Facility | $12.0 | - The company was in compliance with all financial covenants of its credit facility as of March 31, 2025[118] - Management believes that cash balances, cash from operations, and available borrowings will provide sufficient liquidity for the next twelve months and the foreseeable longer term[121] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company reports no material interest rate or foreign currency risks but is subject to consumer behavior and regulatory risks impacting travel and tourism, potentially affecting rental income - The company states it has no material exposure to interest rate or foreign currency risks[123] - The company is subject to risks from changes in consumer behavior and travel restrictions due to its location as a vacation destination, which could potentially impact rental income through deferrals and abatements[124] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no significant changes in internal controls over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of the end of the quarter[127] - There were no significant changes in internal controls over financial reporting during the first quarter of 2025[128] PART II. OTHER INFORMATION Item 1. Legal Proceedings This section details a Notice of Violation from the Hawaii DOH regarding a wastewater treatment facility, for which the company is actively pursuing a corrective action plan - The company is addressing a Notice and Finding of Violation and Order from the Hawaii DOH regarding its Upcountry Maui wastewater treatment facility[47][130] - A corrective action plan has been submitted to the DOH, and the company continues to work towards a resolution[48] Item 1A. Risk Factors The company reports no material changes to the risk factors described in its Annual Report on Form 10-K during Q1 2025 - There were no material changes to the company's risk factors during the first quarter of 2025[131] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including certifications by the CEO and CFO, and Inline XBRL financial data files - Certifications by the CEO and CFO (Exhibits 31.1, 31.2, 32.1, 32.2)[134] - Inline XBRL documents (Exhibits 101 and 104)[134]