ML&P’s troubled financials raise concern about future

Maui Land & Pineapple Co. logged a $1.8 million loss for the first three months of the year (10 cents a share) compared to a $244,000 loss (1 cent a share) in the first quarter of 2012, according to filings with the Securities and Exchange Commission.

Revenues were $3.4 million for the quarter, down from $5.3 million in the first quarter of 2012. The major difference was the sale of an Upcountry parcel in the first quarter of 2012 for $1.5 million.

Expenses were lower in the current quarter to $4.7 million, down from $4.9 million in 2012. Among the areas of biggest savings was in the general and administrative line, which dropped nearly $350,000 to $704,000.

The company faces a host of financial issues. A $34.5 million revolving line of credit with Wells Fargo is set to mature next May; the company has $7.1 million in available borrowing capacity. A $24.1 million term loan with American Ag Credit also matures in a year. On this loan, the company is required to make a $4.1 million payment at the end of the year.

The loans are secured by company land holdings in Upcountry and West Maui, and the company must maintain liquidity and liability limits. The company said it believes that it is currently in compliance with loan provisions.

Other problems face the company. ML&P has commitments of up to $35 million to purchase the spa, beach club improvements and the sundry store of Kapalua Bay Holdings, related to the Residences at Kapalua Bay project; it also faces a lawsuit over the hiring of foreign workers and pension plan requirements.

The financial issues raise “substantial doubt about the company’s ability to continue as a growing concern,” the report said.

The company’s cash outlook is dependent on selling certain real estate assets at appropriate prices. It also plans to continue to reduce its costs and is in negotiations with lenders of the Residences of Kapalua Bay.