Maui Land & Pineapple Company, Inc. — FY2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023; comparisons are with FY2022. This is an annual report, not a standalone fourth-quarter filing. The company owns about 22,300 acres and 268,000 square feet of commercial property on Maui and operates Land Development & Sales, Leasing, and Resort Amenities businesses.
Financial performance and liquidity
| Metric | FY2023 | FY2022 |
|---|---|---|
| Operating revenue | $10.915 million | $20.960 million |
| Operating income (loss) | $(3.345) million | $9.607 million |
| Net income (loss) | $(3.080) million | $1.787 million |
| Net income (loss) per share | $(0.15) | $0.09 |
| Operating cash flow | $(1.371) million | $6.263 million |
| Cash and cash equivalents at year-end | $5.700 million | $8.499 million |
- Revenue fell about 48%. Real estate revenue declined to $1.626 million from $11.600 million; leasing revenue was nearly flat at $8.461 million versus $8.513 million; Resort Amenities revenue was $0.828 million versus $0.847 million.
- Operating margin was approximately -30.6% in 2023 versus 45.8% in 2022; net margin was approximately -28.2% versus 8.5%. Lower real estate sales and higher general and administrative and share-based compensation expenses contributed to the reversal.
- Year-end bond investments had a fair value of $3.139 million, bringing cash and bond investments to about $8.8 million. The company had no outstanding credit-facility borrowings and $15.0 million available under its revolver, which matures December 31, 2025. It reported compliance with covenants, including minimum defined liquidity of $2.0 million and maximum total liabilities of $45.0 million.
- Total assets were $42.223 million, liabilities $7.519 million, and stockholders’ equity $34.704 million at year-end. Interest expense was $6,000. The filing does not provide a conventional gross-margin measure.
Material changes, outlook and risks
- The August 2023 Maui wildfires devastated Lahaina, reduced tourism and commercial activity, and led to tenant rent relief and temporary Kapalua Club closures. Management said the duration of the economic and tourism recovery was uncertain. Percentage rents and tourism-related licensing revenue declined to $2.2 million from $2.9 million; management anticipated recovery toward pre-wildfire levels in 2024–2025.
- New leadership began in April 2023 and emphasized asset utilization, occupancy, community needs, and master planning. The company is planning approximately 1,050 acres across Kapalua and Hali‘imaile projects; timing, permitting, funding, and development remain uncertain.
- The company contributed about 31 acres valued at $1.6 million to a Hali‘imaile joint venture. It expects total ranch-lot sales of about $4.1 million and its share of proceeds of about $2.2 million in late 2024 to mid-2025. The land contribution was recorded as real estate revenue, not cash proceeds.
- 2024 budgeted capital needs include $0.9 million for capitalized development costs, $1.3 million for operating-asset maintenance and capital expenditures, and $3.4 million for water assets and infrastructure. Management believes cash, investments, operating cash flow, and available revolver capacity will meet liquidity needs, but development may require borrowing or asset sales.
- The frozen defined-benefit plan is expected to make lump-sum payments in the third or fourth quarter of 2024 and complete annuitization and termination in the first or second quarter of 2025. Management estimates a $7–$8 million settlement charge upon final annuitization and termination. FY2022 included a $7.5 million pension settlement expense; FY2023 pension expense was $0.436 million.
- Other risks include entitlement and construction delays or cost overruns, real-estate and tourism cyclicality, interest rates and financing access, wildfire and other catastrophe exposure, potentially inadequate insurance, environmental obligations, and compliance with credit covenants. Deposits exceeded FDIC insurance limits. The company reported no significant off-balance-sheet arrangements.
- A State of Hawai‘i wastewater-treatment order remains pending: remediation work has been performed, but the company was awaiting state feedback and approval. It had accrued about $23,000 of a $230,000 administrative penalty and could not estimate any additional probable liability. A separate water-well filtration obligation is also not estimable.
- The independent auditor issued an unqualified opinion on the financial statements. Management concluded disclosure controls and internal control over financial reporting were effective; the auditor was not required to attest to internal-control effectiveness.
Key investor verification points
- Track post-wildfire tourism, tenant collections, rent relief, occupancy, and the timing of percentage-rent recovery.
- Verify cash burn, covenant liquidity, revolver availability and maturity, and the funding plan for 2024 capital and development needs.
- Monitor land-project entitlements, joint-venture terms and proceeds, and whether projected ranch-lot sales occur on schedule.
- Confirm the pension termination timetable, participant elections, final settlement charge, and plan funding requirements.
- Follow State approval and final remediation costs for the wastewater order, and assess potential exposure from water-well filtration commitments.