Maui Land & Pineapple Company, Inc. — FY 2021 Form 10-K
Reporting period: Year ended December 31, 2021; comparative figures are for FY 2020. This is an annual filing, not a standalone fourth-quarter report. The company owns approximately 22,800 acres on Maui and operates in real estate, leasing, and resort amenities.
Financial performance
| Metric | FY 2021 | FY 2020 |
|---|---|---|
| Operating revenue | $12.443 million | $7.540 million |
| Operating income (loss) | $1.637 million | $(2.552) million |
| Loss from continuing operations | $(3.204) million | $(2.267) million |
| Net loss | $(3.420) million | $(2.604) million |
| Net loss per share | $(0.18) | $(0.14) |
| Cash from operating activities | $1.387 million | $2.200 million |
| Cash at year-end | $5.596 million | $0.869 million |
| Total liabilities | $14.329 million | $18.403 million |
Operating margin was approximately 13.2% in 2021, versus a negative 33.8% in 2020; net margin was approximately negative 27.5% versus negative 34.5%. At year-end, current assets were $10.176 million and current liabilities $2.397 million. The company reported $15.0 million of available capacity on its $15.0 million revolving credit facility; no current or long-term debt was reported on the 2021 balance sheet. It was in compliance with facility covenants.
Business results and changes
- Leasing generated $8.103 million, up from $5.948 million, and remained the largest revenue source. Higher percentage rent—$1.503 million versus $0.427 million—was a principal driver as tenant sales recovered from pandemic-related disruption.
- Real estate revenue rose to $3.400 million from $0.772 million, including sales of the Steeple House property for $1.8 million and a conservation easement for $0.9 million. Segment operating results improved, though real estate activity is cyclical.
- Resort amenities revenue increased to $0.940 million from $0.820 million, but the segment remained loss-making: $(0.415) million versus $(0.373) million.
- Operating income improved by $4.189 million, but net loss widened. The main offset was a $4.3 million pension settlement charge following purchase of an annuity covering scheduled payments for 384 participants. Other income also fell from $0.894 million to $0.013 million; most of 2020’s amount related to a return of cash collateral from a dissolved joint venture.
- Comprehensive income was $2.630 million versus a comprehensive loss of $3.504 million, reflecting a $6.050 million pension-related other-comprehensive-income gain in 2021.
- Operating cash flow declined to $1.387 million. Investing cash flow included approximately $4.2 million net proceeds from the May 2021 sale of regulated water and wastewater assets, which also ended those operations; financing cash flow was a $0.760 million use of cash.
Liquidity, transactions, outlook, and risks
In December 2021, the company agreed to sell the 46-acre Kapalua Central Resort property for $40.0 million, subject to diligence and customary closing conditions, with closing anticipated by March 31, 2022. In February 2022, it agreed to sell a 646-acre Upcountry parcel for $9.7 million; a refundable $2.0 million deposit was placed in escrow. These were pending transactions as of the filing, not completed sales. Management said near-term priorities include operating infrastructure investment and development planning and entitlements; financing may depend on asset sales and/or borrowing. No specific earnings or revenue guidance was provided.
The credit facility, extended to December 31, 2025, requires at least $2.0 million of defined liquidity, limits total liabilities to $45.0 million, and restricts new indebtedness and cash dividends. The company does not anticipate cash dividends in the foreseeable future. Management cautioned that COVID-19 impacts remain uncertain, particularly for tourism, tenants, and real estate demand. Other significant risks include Maui real-estate cyclicality, entitlement delays and costs, development execution, weather and natural disasters, environmental requirements, pension assumptions, financing access, and dependence on joint-venture partners.
A Hawaii Department of Health order concerning alleged wastewater effluent violations remains unresolved. Corrective work was completed and subsequent testing was within allowable ranges; discussions with the agency continue. The company accrued approximately $23,000 of a stated $230,000 administrative penalty but could not estimate any remaining probable liability, if any. A separate agreement could require the company to share future water-well filtration costs if specified chemical levels are exceeded; no reserve was recorded because potential costs could not be estimated.
The independent auditor gave an unqualified opinion on the financial statements and identified revenue recognition, contingencies, and accrued retirement benefits as critical audit matters. Management concluded disclosure controls and internal control over financial reporting were effective; the auditor was not required to attest to internal-control effectiveness.
Most important facts for investors to verify
- Whether and when the $40.0 million Kapalua Central Resort sale and $9.7 million Upcountry land sale closed, and the net proceeds and any resulting obligations.
- Whether leasing revenue and tenant percentage rents remain resilient as tourism, visitor spending, and local restrictions change.
- The company’s liquidity and covenant headroom after transactions, capital needs, pension funding, and any borrowing.
- Resolution and potential financial exposure from the wastewater order and any future filtration-system obligations.
- The effect of the pension annuity settlement on future benefit payments, pension expense, and funded status.