Cadiz Reports First Quarter Results.Business Editors SANTA MONICA Santa Monica (săn`tə mŏn`ĭkə), city (1990 pop. 86,905), Los Angeles co., S Calif., on Santa Monica Bay; inc. 1886. Tourism and retailing are important, and the city has motion-picture, biotechnology, and software industries. , Calif.--(BUSINESS WIRE)--May 8, 2002 Cadiz Inc. (Nasdaq: CLCI CLCI Dichlorodimethyl Ether ) today reported results for the first quarter ended March 31, 2002. Operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the quarter was $2.5 million, an improvement of $2.2 million from the operating loss before non-recurring items of $4.7 million for the first quarter of 2001. The improved operating performance resulted from improved market conditions and increased international licensing royalties from Cadiz' wholly-owned subsidiary, Sun World International, Inc. Revenues were $7.8 million for the first quarter of 2002 compared to $7.4 million in 2001. Net loss applicable to common stock for the quarter was $7.8 million ($0.22 per share). For the 2001 quarter, net loss applicable to common stock was $9.6 million ($0.27 per share) before $2.4 million of income from non-recurring items. The non-recurring items in the first quarter of 2001 were a $7.9 million special litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. recovery from the settlement of Cadiz' claims against Waste Management Inc. related to its proposed Rail-Cycle landfill offset by a $5.5 million non-cash compensation charge. Net loss applicable to common stock for the first quarter of 2001 was $7.2 million ($0.20 per share). The majority of Cadiz' annual revenues are currently generated by the harvest and sale of crops produced by Sun World. Those revenues are primarily recognized between June and October, while fixed overhead costs overhead costs see fixed costs. are incurred throughout the year. Therefore, Cadiz' quarterly results are not indicative of the results of operations for a full fiscal year. Once Cadiz' water development programs are operational, revenues are not expected to be as seasonal in nature. Earnings before income taxes, interest expense, depreciation and amortization (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ) contributed from Sun World were a $0.8 million loss for the quarter ended March 31, 2002, compared to a $2.8 million loss for the first quarter of 2001. In April 2001, the Board of Directors of Metropolitan Water District of Southern California The Metropolitan Water District of Southern California is the largest bulk water supplier for municipal use in the world. The name is usually shortened to the "Metropolitan Water District" or simply "MWD". approved definitive economic terms and responsibilities for the Cadiz Groundwater Storage and Dry-Year Supply Program (Cadiz Program). The definitive terms will serve as the basis for a final agreement to be executed between Metropolitan and Cadiz. Execution of a final agreement will be contingent upon Adj. 1. contingent upon - determined by conditions or circumstances that follow; "arms sales contingent on the approval of congress" contingent on, dependant on, dependant upon, dependent on, dependent upon, depending on, contingent and subject to completion of the environmental review process. In October 2001, Metropolitan and the U.S. Bureau of Land Management, in cooperation with the U.S. Geological Survey The term geological survey can be used to describe both the conduct of a survey for geological purposes and an institution holding geological information. A geological survey and the National Park Service, issued the Final Environmental Impact Report/Environmental Impact Statement for the Cadiz Program. In addition, the U.S. Fish and Wildlife Service issued a biological opinion on March 20, 2002 which concluded that the Cadiz Program fully complies with the Endangered Species Act The federal Endangered Species Act of 1973 (ESA) (16 U.S.C.A. §§ 1531 et seq.) was enacted to protect animal and plant species from extinction by preserving the ecosystems in which they survive and by providing programs for their conservation. and will not adversely impact the desert tortoise desert tortoise see gopherus agassizii. . The next step in the environmental review process is completion of final actions by the U.S. Bureau of Land Management through the issuance of Records of Decision, which will be shortly followed by final actions by Metropolitan. Cadiz anticipates final actions to be completed in the summer of 2002 after which construction of the Cadiz Program facilities may commence. As announced on January 16, 2002, Cadiz reached an agreement in principle with Kingdom Agricultural Development Company (KADCO), to combine the businesses of Sun World and KADCO. Following the proposed combination, KADCO's shareholders will have a 49.75% interest in the combined business, and Cadiz will retain an ownership interest of 50.25%. The proposed combination, for which negotiations are ongoing, is subject to the execution of definitive agreements and a number of other important conditions, including, among others, procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases. of governmental, third-party and lender approvals or consents, as necessary, completion of confirmatory due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. by both parties, and KADCO's completion of additional equity financing Equity Financing The act of raising money for company activities by selling common or preferred stock to individual or institutional investors. In return for the money paid, shareholders receive ownership interests in the corporation. . Cadiz management will host an earnings conference call today at 8:00 a.m. Pacific Daylight Time/11:00 a.m. Eastern Daylight Time. To hear a live webcast of the conference call, please visit Cadiz' web site at www.cadizinc.com and click on "Investor Relations Investor relations The process by which the corporation communicates with its investors. ." The call will be archived on Cadiz' web site for one week. Founded in 1983, Cadiz Inc., is a publicly held water resource management and agricultural firm. With its subsidiary, Sun World International, Inc., Cadiz is one of the largest vertically integrated agricultural companies in California California (kăl'ĭfôr`nyə), most populous state in the United States, located in the Far West; bordered by Oregon (N), Nevada and, across the Colorado River, Arizona (E), Mexico (S), and the Pacific Ocean (W). . Cadiz owns significant landholdings with substantial water resources throughout California. Further information on Cadiz and Sun World can be obtained by visiting Cadiz' corporate web site at www.cadizinc.com. This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that are subject to significant risks and uncertainties, including statements related to the future operating and financial performance of Cadiz and Sun World, the successful completion of the Sun World and KADCO combination, and the successful implementation of the Cadiz Program. Although Cadiz believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Factors that could cause actual results or events to differ materially from those reflected in the Company's forward-looking statements include price and yield fluctuations in the agricultural operations, seasonality, timing and terms of various approvals required to complete the Cadiz Program and the Sun World and KADCO combination, and other factors and considerations detailed in Cadiz' Securities and Exchange Commission filings.
CADIZ INC.
FINANCIAL SUMMARY
Three Months Ended
March 31,
2002 2001
(in thousands except per share data)
Revenues $ 7,750 $ 7,371
Special litigation recovery -- 7,929
Revenues and special litigation recovery $ 7,750 $ 15,300
Cost of sales 6,253 7,941
General and administrative 3,238 3,249
Non-recurring compensation expense -- 5,537
Depreciation and amortization 726 834
Operating loss (2,467) (2,261)
Interest expense, net 4,783 4,688
Income tax expense 23 30
Net loss (7,273) (6,979)
Preferred stock dividends 281 113
Imputed dividend on preferred stock 246 73
Net loss applicable to common stock $ (7,800) $ (7,165)
Basic and diluted net loss per common share $ (0.22) $ (0.20)
Basic weighted average shares outstanding 36,140 35,691
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