Table
of Contents
UNITED STATES
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 June 30, 2008
OR
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
|
Commission
File Number 1-9145
ML
MACADAMIA ORCHARDS, L.P.
(Exact
Name of registrant as specified in its charter)
DELAWARE
|
|
99-0248088
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
26-238
Hawaii Belt Road, HILO, HAWAII
|
|
96720
|
(
Address of principal executive offices)
|
|
(Zip Code)
|
Registrants telephone
number, including area code:
(808) 969-8057
Registrants
website:
www.mlmacadamia.com
SECURITIES REGISTERED
PURSUANT TO SECTION 12(b) OF THE ACT:
Title of
Each Class
|
|
Name of
Each Exchange on Which Registered
|
Depositary Units Representing
|
|
|
Class A Limited Partners Interests
|
|
New York Stock Exchange
|
SECURITIES REGISTERED
PURSUANT TO SECTION 12(g) OF THE ACT:
NONE
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 twelve 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
o
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of large
accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2
of the Exchange Act.
Large accelerated filer
o
|
|
Accelerated filer
o
|
|
Non-accelerated filer
x
|
|
Smaller reporting company
o
|
|
|
|
|
(Do not check if a smaller reporting
|
|
|
|
|
|
|
company)
|
|
|
Indicate by check mark whether the Registrant is a shell company as defined
by Rule 12b-2 of the Securities Exchange Act of 1934. Yes
o
No
x
As of June 30, 2008, Registrant had 7,500,000 Class A Units
issued and outstanding.
Table
of Contents
ML Macadamia Orchards, L.P.
Consolidated Balance Sheets
(in thousands)
|
|
June 30,
|
|
December 31,
|
|
|
|
2008
|
|
2007
|
|
2007
|
|
|
|
(unaudited)
|
|
|
|
Assets
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
79
|
|
$
|
495
|
|
$
|
283
|
|
Accounts receivable
|
|
1,821
|
|
997
|
|
2,275
|
|
Inventory of kernel
|
|
759
|
|
|
|
1,024
|
|
Inventory of nuts
|
|
|
|
|
|
946
|
|
Inventory of farming supplies
|
|
214
|
|
295
|
|
234
|
|
Deferred farming costs
|
|
2,520
|
|
2,894
|
|
|
|
Other current assets
|
|
266
|
|
306
|
|
172
|
|
Total current assets
|
|
5,659
|
|
4,987
|
|
4,934
|
|
Land, orchards and equipment, net
|
|
44,591
|
|
46,406
|
|
45,540
|
|
Goodwill
|
|
306
|
|
306
|
|
306
|
|
Intangible assets, net
|
|
13
|
|
12
|
|
8
|
|
Total assets
|
|
$
|
50,569
|
|
$
|
51,711
|
|
$
|
50,788
|
|
|
|
|
|
|
|
|
|
Liabilities and partners capital
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
$
|
400
|
|
$
|
400
|
|
$
|
400
|
|
Short-term borrowing
|
|
4,200
|
|
|
|
3,000
|
|
Accounts payable
|
|
776
|
|
41
|
|
631
|
|
Cash distributions payable
|
|
|
|
375
|
|
225
|
|
Accrued payroll and benefits
|
|
492
|
|
562
|
|
804
|
|
Other current liabilities
|
|
108
|
|
56
|
|
73
|
|
Total current liabilities
|
|
5,976
|
|
1,434
|
|
5,133
|
|
Non-current accrued benefits
|
|
374
|
|
406
|
|
374
|
|
Long-term debt
|
|
400
|
|
800
|
|
800
|
|
Deferred income tax liability
|
|
1,169
|
|
1,208
|
|
1,169
|
|
Total liabilities
|
|
7,919
|
|
3,848
|
|
7,476
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
Partners capital
|
|
|
|
|
|
|
|
General partner
|
|
81
|
|
81
|
|
81
|
|
Class A limited partners, no par or assigned value, 7,500 units
authorized, issued and outstanding
|
|
42,635
|
|
47,852
|
|
43,297
|
|
Accumulated other comprehensive loss
|
|
(66
|
)
|
(70
|
)
|
(66
|
)
|
Total partners capital
|
|
42,650
|
|
47,863
|
|
43,312
|
|
Total liabilities and partners capital
|
|
$
|
50,569
|
|
$
|
51,711
|
|
$
|
50,788
|
|
See accompanying notes to consolidated
financial statements.
3
Table of Contents
ML Macadamia Orchards, L.P.
Consolidated Income Statements (unaudited)
(in thousands, except per unit data)
|
|
Three months
|
|
Six months
|
|
|
|
ended June 30,
|
|
ended June 30,
|
|
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
Macadamia nut sales
|
|
$
|
937
|
|
$
|
599
|
|
$
|
3,618
|
|
$
|
2,923
|
|
Contract farming revenue
|
|
666
|
|
626
|
|
1,629
|
|
1,667
|
|
Total revenues
|
|
1,603
|
|
1,225
|
|
5,247
|
|
4,590
|
|
Cost of goods and services
|
|
|
|
|
|
|
|
|
|
Costs of macadamia nut sales
|
|
927
|
|
552
|
|
3,437
|
|
2,174
|
|
Costs of contract farming services
|
|
622
|
|
573
|
|
1,505
|
|
1,526
|
|
Total cost of goods sold
|
|
1,549
|
|
1,125
|
|
4,942
|
|
3,700
|
|
Gross income
|
|
54
|
|
100
|
|
305
|
|
890
|
|
General and administrative expenses
|
|
|
|
|
|
|
|
|
|
Other
|
|
388
|
|
443
|
|
802
|
|
870
|
|
Total general and administrative expenses
|
|
388
|
|
443
|
|
802
|
|
870
|
|
Operating income (loss)
|
|
(334
|
)
|
(343
|
)
|
(497
|
)
|
20
|
|
Other income (expense)
|
|
13
|
|
(1
|
)
|
12
|
|
13
|
|
Interest expense
|
|
(75
|
)
|
(28
|
)
|
(166
|
)
|
(61
|
)
|
Interest income
|
|
|
|
19
|
|
|
|
49
|
|
Income (loss) before tax
|
|
(396
|
)
|
(353
|
)
|
(651
|
)
|
21
|
|
Income tax expense
|
|
2
|
|
3
|
|
11
|
|
31
|
|
Net loss
|
|
$
|
(398
|
)
|
$
|
(356
|
)
|
$
|
(662
|
)
|
$
|
(10
|
)
|
|
|
|
|
|
|
|
|
|
|
Net cash flow (as defined in the Partnership Agreement)
|
|
$
|
(357
|
)
|
$
|
(693
|
)
|
$
|
(356
|
)
|
$
|
59
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per Class A Unit
|
|
$
|
(0.05
|
)
|
$
|
(0.05
|
)
|
$
|
(0.09
|
)
|
$
|
(0.00
|
)
|
|
|
|
|
|
|
|
|
|
|
Net cash flow per Class A Unit
|
|
$
|
(0.05
|
)
|
$
|
(0.09
|
)
|
$
|
(0.05
|
)
|
$
|
0.01
|
|
|
|
|
|
|
|
|
|
|
|
Cash distributions per Class A Unit
|
|
$
|
0.00
|
|
$
|
0.05
|
|
$
|
0.00
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
Class A Units outstanding
|
|
7,500
|
|
7,500
|
|
7,500
|
|
7,500
|
|
See accompanying notes to financial statements.
4
Table of Contents
ML Macadamia Orchards, L.P.
Consolidated Statements of Partners Capital (unaudited)
(in thousands)
|
|
Three months
|
|
Six months
|
|
|
|
ended June 30,
|
|
ended June 30,
|
|
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
Partners capital at beginning of period:
|
|
|
|
|
|
|
|
|
|
General partner
|
|
$
|
81
|
|
$
|
81
|
|
$
|
81
|
|
$
|
81
|
|
Class A limited partners
|
|
43,033
|
|
48,583
|
|
43,297
|
|
48,612
|
|
Accumulated other comprehensive loss
|
|
(66
|
)
|
(70
|
)
|
(66
|
)
|
(70
|
)
|
|
|
43,048
|
|
48,594
|
|
43,312
|
|
48,623
|
|
|
|
|
|
|
|
|
|
|
|
Allocation of net loss
|
|
|
|
|
|
|
|
|
|
Class A limited partners
|
|
(398
|
)
|
(356
|
)
|
(662
|
)
|
(10
|
)
|
|
|
(398
|
)
|
(356
|
)
|
(662
|
)
|
(10
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash distributions:
|
|
|
|
|
|
|
|
|
|
Class A limited partners
|
|
|
|
375
|
|
|
|
750
|
|
|
|
|
|
375
|
|
|
|
750
|
|
|
|
|
|
|
|
|
|
|
|
Partners capital at end of period:
|
|
|
|
|
|
|
|
|
|
General partner
|
|
81
|
|
81
|
|
81
|
|
81
|
|
Class A limited partners
|
|
42,635
|
|
47,852
|
|
42,635
|
|
47,852
|
|
Accumulated other comprehensive loss
|
|
(66
|
)
|
(70
|
)
|
(66
|
)
|
(70
|
)
|
|
|
$
|
42,650
|
|
$
|
47,863
|
|
$
|
42,650
|
|
$
|
47,863
|
|
See accompanying notes to financial statements.
5
Table of Contents
ML Macadamia Orchards, L.P.
Consolidated Statements of Cash Flows (unaudited)
(in thousands)
|
|
Three months
|
|
Six months
|
|
|
|
ended June 30,
|
|
ended June 30,
|
|
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Cash received from goods and services
|
|
$
|
2,223
|
|
$
|
1,418
|
|
$
|
5,720
|
|
$
|
6,441
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid to suppliers and employees
|
|
(2,733
|
)
|
(3,716
|
)
|
(6,362
|
)
|
(8,005
|
)
|
Interest paid
|
|
(7
|
)
|
(28
|
)
|
(98
|
)
|
(61
|
)
|
Interest received
|
|
|
|
19
|
|
|
|
49
|
|
Net cash used in operating activities
|
|
(517
|
)
|
(2,307
|
)
|
(740
|
)
|
(1,576
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Acquisition of capital equipment
|
|
(5
|
)
|
(45
|
)
|
(29
|
)
|
(130
|
)
|
Net cash used in investing activities
|
|
(5
|
)
|
(45
|
)
|
(29
|
)
|
(130
|
)
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Financing cost
|
|
|
|
|
|
(10
|
)
|
|
|
Proceeds from line of credit
|
|
400
|
|
|
|
1,500
|
|
|
|
Payments on line of credit
|
|
|
|
|
|
(300
|
)
|
|
|
Payments on long term borrowings
|
|
(400
|
)
|
(400
|
)
|
(400
|
)
|
(400
|
)
|
Cash distributions paid
|
|
|
|
(375
|
)
|
(225
|
)
|
(750
|
)
|
Net cash provided by (used in) financing activities
|
|
|
|
(775
|
)
|
565
|
|
(1,150
|
)
|
|
|
|
|
|
|
|
|
|
|
Net increase (decrease) in cash
|
|
(522
|
)
|
(3,127
|
)
|
(204
|
)
|
(2,856
|
)
|
Cash at beginning of period
|
|
601
|
|
3,622
|
|
283
|
|
3,351
|
|
Cash at end of period
|
|
$
|
79
|
|
$
|
495
|
|
$
|
79
|
|
$
|
495
|
|
Reconciliation of net loss to net cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(398
|
)
|
$
|
(356
|
)
|
$
|
(662
|
)
|
$
|
(10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to reconcile net loss to cash used in operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
41
|
|
63
|
|
306
|
|
468
|
|
Decrease in accounts receivable
|
|
533
|
|
100
|
|
453
|
|
1,691
|
|
Decrease (increase) in inventories
|
|
854
|
|
248
|
|
1,231
|
|
(23
|
)
|
Increase in deferred farming costs
|
|
(1,459
|
)
|
(1,920
|
)
|
(1,854
|
)
|
(2,401
|
)
|
Decrease (increase) in other current assets
|
|
7
|
|
(46
|
)
|
(84
|
)
|
(208
|
)
|
Increase (decrease) in accounts payable
|
|
(15
|
)
|
(66
|
)
|
146
|
|
(365
|
)
|
Decrease in accrued payroll and benefits
|
|
(148
|
)
|
(252
|
)
|
(311
|
)
|
(296
|
)
|
Increase in other current liabilities
|
|
68
|
|
(78
|
)
|
35
|
|
(432
|
)
|
Total adjustments
|
|
(119
|
)
|
(1,951
|
)
|
(78
|
)
|
(1,566
|
)
|
Net cash used in operating activities
|
|
$
|
(517
|
)
|
$
|
(2,307
|
)
|
$
|
(740
|
)
|
$
|
(1,576
|
)
|
Supplemental schedule of non cash financing activities Distributions
declared not paid
|
|
$
|
|
|
$
|
375
|
|
$
|
|
|
$
|
375
|
|
See accompanying notes to financial statements.
6
Table
of Contents
ML
MACADAMIA ORCHARDS, L.P.
Notes to Consolidated Financial
Statements
(1)
BASIS OF PRESENTATION
In the opinion of management, the accompanying unaudited consolidated
financial statements of ML Macadamia Orchards, L.P. and its subsidiary (the
Partnership) include all adjustments, consisting only of normal recurring
adjustments, necessary to present fairly its financial position as of June 30,
2008, June 30, 2007 and December 31, 2007 and the results of
operations, changes in partners capital and cash flows for the three and
six-month periods ended June 30, 2008 and 2007. The results of operations for the period
ended June 30, 2008 are not necessarily indicative of the results to be
expected for the full year or for any future period.
The year-end
condensed balance sheet data was derived from audited financial statements, but
does not include all disclosures required by accounting principles generally
accepted in the United States of America.
These interim consolidated financial statements should be read in
conjunction with the Consolidated Financial Statements and the Notes to
Consolidated Financial Statements filed with the Securities and Exchange
Commission in the Partnerships 2007 Annual Report on Form 10-K.
(2)
LIQUIDITY
At June 30,
2008 the Partnership had a cash balance of $79,000 compared to $495,000 at June 30,
2007. Cash flows used in operating
activities for the six-month periods ended June 30, 2008 and 2007 totaled
$740,000 and $1.6 million, respectively.
Cash flows used in operating activities for the three-month periods
ended June 30, 2008 and 2007 totaled $517,000 and $2.3 million,
respectively. The improvement in
operating cash flows was attributable to the implementation of cost-cutting
measures and the sale of nut and kernel inventory on hand at the end of 2007.
At June 30,
2008 the Partnership had a working capital deficit of $317,000 and a current
ratio 0.95 to 1 compared to positive working capital of $3.6 million and a
current ratio of 3.48 to 1 at June 30, 2007. The deterioration in working capital was
attributable to the $4.2 million in short-term borrowings outstanding at June 30,
2008 compared to no short-term borrowings outstanding at June 30, 2007.
Management
believes that the Partnership has adequate liquidity to sustain its operations
and will generate positive operating cash flows going into the second half of
2008. In addition, the Partnership has
taken the following actions:
On July 8,
2008, the Partnership renegotiated it working capital line of credit with
American AgCredit, PCA to increase its short-term borrowing capacity from $4.5
million to $6.0 million; and
In July 2008,
the Partnership executed an addendum to its nut purchase contract with Mauna
Loa Macadamia Nut Corporation to sell between 9 and 12 million additional
pounds of nuts between July 2008 and June 2009 at $0.60 per pound,
assuming wet-in-shell (WIS) at 20% and saleable kernel (SK) / dry-in-shell
(DIS) at 30%. This addendum will enable
the Partnership to sell the nuts previously under contract to Hamakua Macadamia
Nut Company.
(3)
CONSOLIDATION
The consolidated financial statements include the accounts of the
Partnership and ML Resources, Inc. (MLR), its General Partner. All significant intercompany balances and
transactions, including management fees and distributions, have been
eliminated.
7
Table
of Contents
(4)
SEGMENT INFORMATION
The Partnership has two reportable segments, the owned-orchard segment
and the farming segment, which are organized on the basis of revenues and
assets. The owned-orchard segment
derives its revenues from the sale of macadamia nuts grown in orchards owned or
leased by the Partnership. The farming
segment derives its revenues from the farming of macadamia orchards owned by
other growers. It also farms those
orchards owned or leased by the Partnership.
Management
evaluates the performance of each segment on the basis of operating
income. The Partnership accounts for
intersegment sales and transfers at cost. Such intersegment sales and transfers
are eliminated in consolidation. The Partnerships reportable segments are
distinct business enterprises that offer different products or services. Revenues from the owned-orchard segment are
subject to long-term nut purchase contracts and tend to vary from year to year
due to changes in the prices paid under its various nut contracts. The farming segments revenues are based on
long-term farming contracts which generate a farming profit based on a
percentage of farming cost or based on a fixed fee per acre and tend to be less
variable than revenues from the owned-orchard segment.
The following
tables summarize each reportable segments operating income (loss) and assets
as of and for the three and six-month periods ended, June 30, 2008 and
2007 (000s). Due to seasonality of crop
patterns, interim results are not necessarily indicative of annual performance.
|
|
Three months
|
|
Six months
|
|
|
|
ended June 30,
|
|
ended June 30,
|
|
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
Owned orchards
|
|
$
|
937
|
|
$
|
599
|
|
$
|
3,618
|
|
$
|
2,923
|
|
Contract farming
|
|
1,568
|
|
2,436
|
|
4,341
|
|
5,123
|
|
Intersegment
elimination (all contract farming)
|
|
(902
|
)
|
(1,810
|
)
|
(2,712
|
)
|
(3,456
|
)
|
Total
|
|
$
|
1,603
|
|
$
|
1,225
|
|
$
|
5,247
|
|
$
|
4,590
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss):
|
|
|
|
|
|
|
|
|
|
Owned orchards
|
|
$
|
(378
|
)
|
$
|
(396
|
)
|
$
|
(621
|
)
|
$
|
(121
|
)
|
Contract farming
|
|
44
|
|
53
|
|
124
|
|
141
|
|
Total
|
|
$
|
(334
|
)
|
$
|
(343
|
)
|
$
|
(497
|
)
|
$
|
20
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation:
|
|
|
|
|
|
|
|
|
|
Owned orchards
|
|
$
|
8
|
|
$
|
27
|
|
$
|
240
|
|
$
|
396
|
|
Contract farming
|
|
31
|
|
34
|
|
62
|
|
68
|
|
Total
|
|
$
|
39
|
|
$
|
61
|
|
$
|
302
|
|
$
|
464
|
|
|
|
|
|
|
|
|
|
|
|
Expenditures for
property and equipment:
|
|
|
|
|
|
|
|
|
|
Owned orchards
|
|
$
|
5
|
|
$
|
45
|
|
$
|
29
|
|
$
|
130
|
|
Contract farming
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
5
|
|
$
|
45
|
|
$
|
29
|
|
$
|
130
|
|
|
|
|
|
|
|
|
|
|
|
Segment assets:
|
|
|
|
|
|
|
|
|
|
Owned orchards
|
|
|
|
|
|
$
|
44,009
|
|
$
|
44,928
|
|
Contract farming
|
|
|
|
|
|
6,560
|
|
6,783
|
|
Total
|
|
|
|
|
|
$
|
50,569
|
|
$
|
51,711
|
|
All revenues are from sources within the United States.
8
Table
of Contents
(5)
DEFERRED FARMING COSTS
AND NUT INVENTORY
Orchard costs (e.g. irrigation, fertilizer, pruning, etc.) related to
nuts sold under nut purchase contracts and services provided under farming
contracts are expensed to cost of goods sold and cost of services provided
based on annualized standard unit costs for interim reporting purposes, with
the difference between costs incurred-to-date and costs expensed-to-date (based
on projected annual cost per nut harvested) reported on the balance sheet as
deferred farming costs. The standard
unit costs of harvested nuts not sold under nut purchase contracts and
available for sale on the open market, are capitalized to inventory. Additional costs to store and process unsold
nuts into kernel are also capitalized to inventory and expensed to cost of
goods sold upon sale.
Deferred farming costs amounted to $2.5 million and $2.9 million at June 30,
2008 and 2007, respectively. Nut
inventory amounted to $759,000 and June 30, 3008. There was no nut inventory at June 30,
2007. There were no inventory
write-downs during the three and six-month periods ended June 30, 2008.
(6)
GENERAL EXCISE TAXES
The Partnership records Hawaii general excise taxes when goods and
services are sold on a gross basis as components of revenues and expenses. For the three months ended June 30, 2008
and 2007, Hawaii general excise taxes charged or passed on to customers and
reflected in revenues and expenses amounted to $10,000 and $12,000,
respectively. For the six months ended June 30,
2008 and 2007, Hawaii general excise taxes charged or passed on to customers
and reflected in revenues and expenses amounted to $29,000 and $32,000,
respectively.
(7)
LONG-TERM DEBT
The Partnership had a $4.5 million revolving credit facility with
American AgCredit, PCA, which expired on July 1, 2008. Amounts drawn on the line accrued interest at
the prime lending rate. There was $4.2
million in drawings at June 30, 2008 and no outstanding drawing on the
line at June 30, 2007.
On July 8, 2008, the Partnership signed a Second Amended and
Restated Credit Agreement with American AgCredit, PCA, increasing its
short-term borrowing capacity under the line of credit from $4.5 million to
$6.0 million. Drawing on the new line
will accrue interest at the banks base rate, as defined, and the Partnership
will have the ability to convert all or a portion of any outstanding drawings
to a fixed rate, as defined. The line of
credit will expire on June 30, 2009.
The Partnership paid financing cost of $20,000 related to the amended
credit agreement, which was capitalized and will be amortized over the term of
the agreement.
In addition to the revolving credit facility, the Partnership has a $4
million promissory note payable to American AgCredit, PCA, which is scheduled
to mature on May 1, 2010. Amounts
outstanding under the promissory note agreement bear interest at rates ranging
from 5.1435 percent to 6.87 percent. At June 30,
2008 and 2007, the outstanding balance under the promissory note agreement
amounted to $800,000 and $1.2 million, respectively.
The credit agreements with American AgCredit, PCA, contain various
financial covenants. The Partnership was
in compliance with all debt covenants at June 30, 2008. At June 30, 2007 the Partnership was in
compliance with all debt covenants except for minimum tangible net worth. The Partnership was less than 0.4% below the
required amount. The lender has provided
a waiver to the loan covenant for the quarter ended June 30, 2007. Had the lender not waived this violation, the
Partnership would have been restricted in its ability to pay distributions to
the limited partners.
9
Table
of Contents
(8)
PARTNERS CAPITAL
Net income (loss) per Class A Unit is calculated by dividing 100%
of Partnership net income (loss) by the average number of Class A Units
outstanding for the period.
(9)
CASH DISTRIBUTIONS
The credit agreements with American AgCredit, PCA prohibit the
declaration and payment of cash distributions through July 10, 2009.
(10)
PENSION PLAN
The Partnership sponsors a defined benefit pension plan covering
employees that are members of a union bargaining unit. The Partnerships funding policy is to
contribute an amount to the plan sufficient to meet the minimum funding
requirements set forth in the Employee Retirement Income Security Act of 1974.
COMPONENTS OF NET PERIODIC BENEFIT COST
|
|
Pension Benefits
|
|
Pension Benefits
|
|
|
|
3 months ended
|
|
6 months ended
|
|
|
|
6/30/08
|
|
6/30/07
|
|
6/30/08
|
|
6/30/07
|
|
Service Cost
|
|
$
|
14,127
|
|
$
|
15,003
|
|
$
|
28,255
|
|
$
|
30,006
|
|
Interest Cost
|
|
7,792
|
|
7,116
|
|
15,583
|
|
14,232
|
|
Expected Return
on Assets
|
|
(11,582
|
)
|
(9,880
|
)
|
(23,164
|
)
|
(19,760
|
)
|
Amortization of
Unrecognized Prior Service Costs
|
|
1,661
|
|
1,661
|
|
3,322
|
|
3,322
|
|
Net Periodic
Pension Cost
|
|
$
|
11,998
|
|
$
|
13,900
|
|
$
|
23,996
|
|
$
|
27,800
|
|
(11)
INTERMITTENT SEVERANCE PLAN
The Partnership sponsors a defined
intermittent severance benefit plan covering employees that are members of a
union bargaining unit and not covered by the defined benefit pension plan. Payment of the severance benefits is made
when covered employees cease employment with the Partnership under certain
terms and conditions as defined in the union bargaining agreement.
COMPONENTS OF NET PERIODIC BENEFIT COST
|
|
Intermittent Severance
Benefits
|
|
|
|
3 months ended
|
|
6 months ended
|
|
|
|
6/30/08
|
|
6/30/07
|
|
6/30/08
|
|
6/30/07
|
|
Service Cost
|
|
$
|
3,887
|
|
$
|
4,624
|
|
$
|
7,774
|
|
$
|
9,248
|
|
Interest Cost
|
|
4,679
|
|
4,740
|
|
9,357
|
|
9,479
|
|
Net Periodic Intermittent Severance Cost
|
|
$
|
8,566
|
|
$
|
9,364
|
|
$
|
17,131
|
|
$
|
18,727
|
|
(12) EMPLOYEES
The Partnership has two bargaining agreements with the ILWU Local
142. These agreements cover all
production, maintenance, and agricultural employees of the Kau Orchard
Division and the Keaau and Mauna Kea Orchard Division. These labor contracts expired on May 1,
2008 and were extended for a 60-day
period. On June 30, 2008 the
parties agreed to a one-year contract, which will expire on June 30, 2009.
Although the Partnership believes that relations with its employees and the
ILWU are generally very good, there is uncertainty with respect to the ultimate
outcome of the bargaining unit negotiations.
10
Table
of Contents
(13) LEGAL PROCEEDINGS
In May 2008, the Partnership
received five additional Notice of
Charge of Discrimination from the U.S. Equal Employment Opportunity Commission
(EEOC) for charge of discrimination filed by five H-2A workers who were
employed by Global Horizons, Inc., an unrelated third party labor
contractor used by the Partnership.
These Notices are similar to the two Notices received by the Partnership
in November 2007. The FEP Agency
has implicitly asserted that the Partnership exercised sufficient control over
the Thai workers so that the Partnership should be deemed to be the Employer
for the purpose of applying anti-discrimination laws. The Charging Parties have asserted that the
Partnership discriminated on the basis of race or country of origin because all
workers whom the Partnership discharged were Thai. Management has defended these charges on the
bases, inter alia, that the Partnership did not exercise control over the
workers, should not be deemed to be the Employer, and that it did not
discharge the workers. The Partnership
has asserted that the Federal Government debarred Global Horizons from
providing contract foreign workers and ordered Global Horizons to discharge
workers, which it did. Management is of
the opinion that the claim is without merit, but that the Partnership may be
forced to litigate the claim.
In the second quarter of 2008 a
complaint was brought before the Hawaii Civil Rights Commission alleging that
the Partnership refused to hire the complainant for a welders job because he
admittedly smoked marijuana. The
complainant further asserted that he had a medical certificate, issued under
Hawaii state law, prescribing that he could smoke marijuana for medical
reasons. The Partnership asserts, inter
alia, that federal law makes possessing marijuana a crime and that the
Partnership could not violate federal law.
The Partnership further defends upon a basis that the job description
required the employee to operate heavy equipment in addition to being a welder
and that the employee would be a threat to himself and others if he smoked
marijuana and operated dangerous equipment while impaired. Management is of the opinion that the claim
is without merit, but that the Partnership may be force to litigated the claim.
The Partnerships lawsuit against
Hamakua Macadamia Nut Company is continuing but no change in the status has
occurred as of the date of this report.
11
Table
of Contents
ML MACADAMIA ORCHARDS, L.P.
Managements
Discussion and Analysis of
Financial
Condition and Results of Operations
Significant Accounting Policies and Estimates
The
Partnership prepares its consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America.
Certain of our accounting policies, including the estimated lives assigned to
our assets, determination of bad debt, inventory valuation, deferred farming
costs, asset impairment, goodwill and goodwill impairment, self-insurance
reserves, assumptions used to determine employee benefit obligations and the
calculation of our income tax liabilities, require that we apply significant
judgment in defining the appropriate assumptions for calculating financial
estimates. By their nature, these judgments are subject to an inherent degree
of uncertainty. Our judgments are based on our historical experience, terms of
existing contracts, our observance of trends in the industry and crop,
information provided by our customers and information available from outside
sources, as appropriate. There can be no assurance that the actual results will
not differ from our estimates. To provide an understanding of the methodology
we apply, our significant accounting policies are discussed where appropriate
in this discussion and analysis and in the notes to consolidated financial
statements in the 2007 Form 10-K.
Results of Operations
The Partnerships
financial results are principally driven by nut production, which is seasonal
and highly contingent upon Hawaiis climactic conditions and nut prices which
are either fixed or market based.
Traditionally, nut production is highest during the third and fourth
quarters, with very low production in the first and second quarters.
For the six-month
period ended June 30, 2008, the Partnership had net loss of $662,000
(negative $0.09 per Class A Unit) compared to a net loss of $10,000 ($0.00
per Class A Unit) for the six-month period ended June 30, 2007. Unusual climactic conditions in late 2006
resulted in higher than normal production in the first quarter of 2007 and more
normal climactic conditions in late 2007 resulted in normal production in the
first quarter of 2008. Net cash flow per
class A unit for the six-month periods ended June 30, 2008 and 2007, as
defined in the Partnership Agreement, amounted to $(0.05) and $0.01,
respectively.
The Partnership
incurred a net loss of $398,000 for the second quarter of 2008 from revenues of
$1.6 million. Net loss for the second
quarter of 2007 was $356,000 from revenues of $1.2 million. Net loss per Class A Unit for the second
quarters of 2008 and 2007 amounted to ($0.05) and ($0.05), respectively. Net cash flow per Class A Unit for the
second quarters of 2008 and 2007, as defined in the Partnership Agreement, was
($0.05) and ($0.09), respectively. The
increase in the net loss for the second quarter 2008 compared to 2007 is
attributable to the higher standard cost utilized in 2008 compared to 2007 and
the sales of inventory with a 102% cost of goods sold component.
Owned-orchard
Segment
For the three and six-month periods ended June 30, 2008 and 2007,
nut production, nut prices and nut revenues based upon contract terms with
moisture at 20% (WIS @ 20%) and recovery at 30% (SK/DIS @ 30%) were as follows:
12
Table
of Contents
|
|
For the Three Months
|
|
|
|
|
|
Ended June 30,
|
|
|
|
|
|
2008
|
|
2007
|
|
Change
|
|
Nuts harvested
(000s pounds @
WIS
20% and SK/DIS @ 30%)
|
|
155
|
|
344
|
|
-55
|
%
|
First quarter
adjustment
|
|
(36
|
)
|
|
|
|
|
Processed and
sold as kernel
|
|
|
|
(202
|
)
|
|
|
Net pounds of
nuts harvested and sold
|
|
119
|
|
142
|
|
-16
|
%
|
Nut price (per
pound)
|
|
0.5200
|
|
0.6690
|
|
-22
|
%
|
Net nut sales
($000s)
|
|
62
|
|
95
|
|
-35
|
%
|
Kernel sales
|
|
875
|
|
504
|
|
|
|
Total nut sales
($000s)
|
|
937
|
|
599
|
|
56
|
%
|
|
|
For the Six Months
|
|
|
|
|
|
Ended June 30,
|
|
|
|
|
|
2008
|
|
2007
|
|
Change
|
|
Nuts harvested
(000s pounds @
WIS
20% and SK/DIS @ 30%)
|
|
2,907
|
|
4,070
|
|
-29
|
%
|
Processed and
sold as kernel
|
|
|
|
(629
|
)
|
|
|
Net pounds of
nuts harvested and sold
|
|
2,907
|
|
3,441
|
|
-16
|
%
|
Nut-in-shell
sold from inventory
|
|
941
|
|
|
|
|
|
Total pounds of
nuts sold
|
|
3,848
|
|
3,441
|
|
12
|
%
|
Nut price (per
pound)
|
|
0.6214
|
|
0.7030
|
|
-12
|
%
|
Net nut sales
($000s)
|
|
2,391
|
|
2,419
|
|
-1
|
%
|
Kernel sales
|
|
1,227
|
|
504
|
|
|
|
Total nut sales
($000s)
|
|
3,618
|
|
2,923
|
|
24
|
%
|
Contract pounds delivered to customers under nut
purchase contracts for the three and six-month periods ended June 30, 2008
were 16% less and 12% more than 2007.
The decrease was primarily attributable to the timing of nuts falling
from trees and the increase was attributable to the sale of nuts harvested in
the 4
th
quarter of 2007 that were sold from inventory. Production during the first quarter of 2007
was unusually high due to an extended flowering period in 2006.
The average nut price received during the three and
six-month periods ended June 30, 2008 were 22% and 12% lower than the same
periods in 2007. The decrease in the
second quarter 2008 was primarily attributable to the effect of the
market-based pricing of the Partnerships nut purchase contracts with Island
Princess and Mac Farms of Hawaii, LLC, which are tied to the Hawaii and
Australia market prices.
Cost of goods sold, exclusive of additional inventory
processing costs, for the three and six-month periods ended June 30, 2008
amounted to $0.57 and $0.59 per pound.
Cost of goods sold for the three and six-month periods ended June 30,
2007 amounted to $0.42 and $0.43, respectively.
The increase during 2008 compared to 2007 was attributable to a second
quarter revision in
13
Table
of Contents
managements full year cost forecast, resulting in an
increase in standard unit cost per pound harvested and recognized as
expense. Management anticipates higher
costs for the remainder of 2008 related to labor and materials, as well as an
increase in harvesting activity during the second half of 2008 to improve nut
quality. The spring nut production
quality is historically lower than the annual average because of the
seasonality of the nut drop and longer related harvest intervals. As a greater quantity of nuts fall, the
harvest intervals are shortened, improving the quality of the nuts harvested.
During the three and six-month periods ended June 30,
2008, sales of kernel separate from nut purchase contracts amounted to $875,000
and $1.2 million, respectively, compared to $504,000 of kernel sales for the
three and six-month periods ended June 30, 2007. Cost of goods sold, inclusive of inventory
processing costs, for the three and six-month periods ended June 30, 2008
amounted to $859,000 and $1.2 million, respectively, compared to $476,000 costs
of goods sold for the three and six-month periods ended June 30, 2007.
Crop Year Production Results
Macadamia nut production for the 2007-2008 crop year (July 1
to June 30) totaled 18.7 million pounds, which was 5.5 million pounds less
than the 2006-2007 crop year. Warm
temperatures that contributed to a late and abbreviated flower/pollination
season significantly affected nut production at the Keaau and Mauna Kea
regions. Additionally, Hamakua Macadamia
Nut Companys inability to accept nut deliveries from the Keaau region further
affected nut production. The Kau region
recorded a normal flower/pollination season.
However, below average rainfall during the critical nut development
period had a negative impact on overall production.
Comparative crop year results by orchard area are
shown below (in thousands of pounds):
|
|
For the Crop Year
Ended June 30,
|
|
2008
Under
|
|
2007
Over
|
|
|
|
2008
|
|
2007
|
|
2006
|
|
2007
|
|
2006
|
|
Keaau
|
|
4,929
|
|
8,932
|
|
6,478
|
|
-
45
|
%
|
+
38
|
%
|
Kau
|
|
12,385
|
|
13,634
|
|
10,832
|
|
-
9
|
%
|
+
26
|
%
|
Mauna Kea
|
|
1,439
|
|
1,731
|
|
1,500
|
|
-
17
|
%
|
+
15
|
%
|
Total Production
|
|
18,753
|
|
24,297
|
|
18,810
|
|
-
23
|
%
|
+
29
|
%
|
A review of the orchards by the Partnerships
operations personnel indicates that the annual nut production for calendar year
2008 should be near historical levels of 20 to 21 million field pounds. The changes in weather have resulted in a
maturation pattern that has affected nut production such that the annual
production should approximate historical trends even though the spring
production is greater than normal.
Farming Segment
Service revenue generated from the farming of
macadamia orchards owned by other growers for the three and six-month periods
ended June 30, 2008 were 6% higher and 2% lower than 2007. Costs of services provided for the three and
six-month periods ended June 30, 2008 were 9% higher and 1% lower than
2007. The fluctuation in revenues was
attributable to the timing of services rendered and fluctuating production
levels. The fluctuation in expense was
attributable to a revision in standard costs causing a 2% deterioration of
gross margin in 2008 compared to 2007.
14
Table
of Contents
General and Administrative Expense
General and administrative expense for the three and six-month periods
ended June 30, 2008 decreased by 12% and 8%, respectively, compared to
2007. In 2007, the Partnership incurred
significant costs related to the attempted acquisition of Mac Farms of Hawaii,
LLC, which was abandoned in late 2007.
The absence of such costs in 2008 has been offset by increased legal
fees associated with the Partnerships lawsuit against Hamakua Macadamia Nut
Company and certain complaints filed against the Partnership by the EEOC.
Other Income and Expenses
Interest expense for the three and six-month periods ended June 30,
2008 was $75,000 and $166,000, respectively, compared to $28,000 and $61,000 in
2007. The increase was attributable to
the Partnership maintaining an outstanding balance on the revolving line of
credit in 2008.
Due to cash constraints, the Partnership has not earned any interest
income during 2008 compared to $19,000 and $49,000 for the three and six-month
periods ended June 30, 2007.
Other income for the first and second quarters of 2008 and 2007 was
primarily attributable to cash distributions received from American AgCredit,
PCA in the amount of $13,000 and $14,000, respectively.
Liquidity and Capital Resources
Macadamia nut
farming is seasonal, with production normally peaking in the fall and winter,
however, farming operations continue year round. In general, a significant amount of working
capital is required for much of the harvesting season.
At June 30,
2008, the Partnership had a master Credit Agreement with American AgCredit, PCA
comprised of a $4.5 million revolving line of credit and a 10-year, $4.0
million term loan. On July 8, 2008
the Partnership signed a Second Amended and Restated Credit Agreement with
American AgCredit, PCA which replaced the extended credit agreement. The Second Amended and Restated Credit
Agreement provides the Partnership with a $6.0 million revolving line of credit
and left the 10-year, $4.0 million term loan unchanged. The Credit Agreement contains certain
restrictions, which are discussed in Part II Item 2 below.
At June 30,
2008, the Partnership had a cash balance of $79,000 compared to $495,000 at June 30,
2007. Cash flows used in operating
activities for the six-month periods ended June 30, 2008 and 2007 totaled
$740,000 and $1.6 million, respectively.
Cash flows used in operating activities for the three-month periods ended
June 30, 2008 and 2007 totaled $517,000 and $2.3 million,
respectively. The improvement in
operating cash flows was attributable to the implementation of cost-cutting
measures and the sale of nut inventory on hand at the end of 2007. However, due to net cash outflows from
operations during the first half of 2008 and 2007, the Partnership has had to
deplete its cash reserves and draw on its revolving credit facility to make
distributions to unit holders, acquire capital assets, and make debt service payments
on the term loan.
At June 30,
2008 the Partnership had a working capital deficit of $317,000 and a current
ratio of 0.95 to 1 compared to positive working capital of $3.6 million and a
current ratio of 3.48 to 1 at June 30, 2007. The deterioration in working capital was
attributable to the $4.2 million in short-term borrowings outstanding at June 30,
2008 compared to no short-term borrowings outstanding at June 30, 2007.
15
Table of
Contents
At June 30,
2008, the Partnership had $5.0 million in outstanding debt, comprised of
$800,000 under the 10-year term loan and $4.2 million in drawings on the
revolving line of credit.
Management
anticipates additional draws on the revolving line of credit as necessary to
fund working capital needs arising from the normal seasonal requirements of
macadamia nut farming, however believes that the amended credit facility with
American AgCredit, PCA will provide the Partnership with adequate borrowing
capacity to meet anticipated working capital needs for operations as presently
conducted and the amendment to the nut purchase contract with Mauna Loa
Macadamia Nut Corporation will positively impact the Partnerships cash flow
from operations. However, the
Partnerships nut purchase contracts require all purchasers to make nut
payments 30 days after the date of delivery.
During certain parts of the year, if payments are not received as the
contracts require, available cash resources could be depleted.
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
The Partnership is
exposed to market risks resulting from changes in interest rates. The Partnership has market risk exposure on
its Credit Agreement due to its variable rate pricing that is based on rates
based on LIBOR, the Farm Credit Discount Note Rate and the Farm Credit Medium
Term Note Rate. As of June 30,
2008, a one percentage point increase or decrease in the applicable rate under
the Credit agreement will result in an annual interest expense fluctuation of
approximately $8,000.
The Partnership is
exposed to market risks resulting from changes in the market price of macadamia
kernel. Pricing for two of its nut
purchase contracts is adjusted every six months based upon the prevailing
market price of macadamia kernel from Australia and Hawaii. During the first
half of 2008 global macadamia prices have remained stable. A $0.25 increase or
decrease in the kernel price would affect the price received by the Partnership
by $0.038 per pound at 20% WIS and 30% SK/DIS.
The Partnership
has two bargaining agreements with the ILWU Local 142. Both agreements had been negotiated for a
one-year period.
Item 4. Controls and Procedures
(a)
As of the end of the period covered by this
Quarterly Report (the Evaluation Date) on Form 10-Q, the Partnership
carried out an evaluation, under the supervision and with the participation of
management, including the Chief Executive Officer and the Chief Financial
Officer, of the effectiveness of the design and operation of the Partnerships
disclosure controls and procedures (as defined in Rule 13a-15(e) of
the Securities Exchange Act of 1934, as amended (the Exchange Act)). Based upon that evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that, as of the
Evaluation Date, the Partnerships disclosure controls and procedures were
effective. The Partnerships disclosure
controls and procedures are designed to ensure that information required to be
disclosed by the Partnership in the reports that it files or submits under the
Exchange Act is (i) recorded, processed, summarized and reported within
the time periods specified in the applicable SECs rules and forms, and (ii) accumulated
and communicated to the Partnerships management, including the Chief Executive
Officer and Chief Financial Officer to allow timely decisions regarding
required disclosure.
(b) There have been no significant
changes to internal control over financial reporting during the second quarter
of 2008 that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting.
16
Part II -
Other Information
Item
1. Legal Proceedings
In May 2008, the Partnership received five additional Notice
of Charge of Discrimination from the U.S. Equal Employment Opportunity
Commission (EEOC) for charge of discrimination filed by five H-2A workers who
were employed by Global Horizons, Inc., an unrelated third party labor
contractor used by the Partnership.
These Notices are similar to the two Notices received by the Partnership
in November 2007. The FEP Agency
has implicitly asserted that the Partnership exercised sufficient control over
the Thai workers so that the Partnership should be deemed to be the Employer
for the purpose of applying anti-discrimination laws. The Charging Parties have asserted that the
Partnership discriminated on the basis of race or country of origin because all
workers whom the Partnership discharged were Thai. Management has defended these charges on the
bases, inter alia, that the Partnership did not exercise control over the
workers, should not be deemed to be the Employer, and that it did not
discharge the workers. The Partnership
has asserted that the Federal Government debarred Global Horizons from
providing contract foreign workers and ordered Global Horizons to discharge
workers, which it did. Management is of
the opinion that the claim is without merit, but that the Partnership may be
forced to litigate the claim.
In the second quarter of 2008 a complaint was brought
before the Hawaii Civil Rights Commission alleging that the Partnership refused
to hire the complainant for a welders job because he admittedly smoked
marijuana. The complainant further
asserted that he had a medical certificate, issued under Hawaii state law,
prescribing that he could smoke marijuana for medical reasons. The Partnership asserts, inter alia, that
federal law makes possessing marijuana a crime and that the Partnership could
not violate federal law. The Partnership
further defends upon a basis that the job description required the employee to
operate heavy equipment in addition to being a welder and that the employee
would be a threat to himself and others if he smoked marijuana and operated
dangerous equipment while impaired.
Management is of the opinion that the claim is without merit, but that
the Partnership may be force to litigated the claim.
The Partnerships lawsuit against Hamakua Macadamia Nut
Company is continuing but no change in the status has occurred as of the date
of this report.
Item 2.
Changes in Securities
In connection with
the Amended Credit Agreement with American AgCredit, PCA, certain restrictions
are placed on the Partnership in regard to indebtedness, sales of assets and
maintenance of certain financial minimums.
The restrictive covenants consist of the following:
1.
No restricted payments shall be declared
or made during fiscal year 2008.
2.
Minimum tangible net worth as of December 31,
2008 shall not be below $41.0 million.
3.
The minimum quarterly consolidated EBITDA
amount shall not be less than the amount set forth as follows:
Fiscal quarter
ended March 31, 2008
|
|
$
|
(55,000
|
)
|
Fiscal quarter
ended June 30, 2008
|
|
$
|
(300,000
|
)
|
Fiscal quarter
ended September 30, 2008
|
|
$
|
600,000
|
|
Fiscal quarter
ended December 31, 2008
|
|
$
|
1,150,000
|
|
4
.
The Addendum to Nut Purchase Agreement
shall not be terminated prior to June 30, 2009 without prior written
consent of Lender.
17
Table of
Contents
The Partnership
was in compliance with all debt covenants at June 30, 2008. At June 30, 2007 the Partnership was in
compliance with all debt covenants except for minimum tangible net worth. The Partnership was less than 0.4% below the
required amount. The lender provided a
waiver to the loan covenant for the quarter ended June 30, 2007.
Item 6. Exhibits and Reports on Form 8-K
(a) The following documents are filed as part
of this report:
Exhibit
Number
|
|
Description
|
|
|
|
11.1
|
|
Statement re Computation of Net Income (loss) per
Class A Unit
|
|
|
|
31.1
|
|
Form of
Rule 13a-14(a) [Section 302] Certifications
|
|
|
|
31.2
|
|
Form of
Rule 13a-14(a) [Section 302] Certifications
|
|
|
|
32.1
|
|
Certification pursuant to 18 U.S.C Section 1350
As adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32.2
|
|
Certification pursuant to 18 U.S.C Section 1350
As adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002
|
(b) Reports on Form 8-K:
On
May 5, 2008, the Partnership filed a Regulation FD Disclosure on Form 8-K,
which included a copy of a press release issued by the Partnership setting
forth the results of operations for the quarter ended March 31, 2008.
On May 9, 2008, the Partnership filed a Regulation
FD Disclosure on Form 8-K, which included a copy of a press release
issued by the Partnership related to the entering into a Direct Financial
Obligation.
18
SIGNATURE
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.
|
|
|
ML MACADAMIA ORCHARDS, L.P.
|
|
|
|
(Registrant)
|
|
|
|
|
|
By
|
ML Resources, Inc.
|
|
|
|
Managing General Partner
|
|
|
|
Date: August 12, 2008
|
|
By
|
/s/ Dennis J. Simonis
|
|
|
|
|
|
|
Dennis J.
Simonis
|
|
|
|
President and
|
|
|
|
Chief
Executive Officer
|
|
|
|
(and Duly Authorized Officer)
|
|
|
|
|
|
By
|
/s/ Wayne W.
Roumagoux
|
|
|
|
|
|
|
Wayne W. Roumagoux
|
|
|
|
Principal Accounting
Officer
|
|
|
|
|
|
|
|
|
|
19
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