In a recent SEC filing, Maui Land & Pineapple Company, Inc. (NYSE:MLP) disclosed a reclassification of its financial statements for the fiscal year ended December 31, 2023. The real estate firm, based in Lahaina, Hawaii, will restate its previously issued financial statements due to an error in reporting operating revenue.
The company had initially reported approximately $1.6 million in operating revenue in its Land Development and Sales segment for the fiscal year 2023. This figure was related to a non-cash land transaction involving a 30-acre parcel of land in Haliimaile, Hawaii, which the company contributed as an equity to the BRE2 LLC joint venture. However, after correspondence with the SEC, it was determined that this amount should have been recorded as a gain on the derecognition of a land asset rather than operating revenue.
The error was first acknowledged in the company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024. Initially, the company and its Audit Committee believed the misclassification to be immaterial. However, after further review prompted by an SEC comment letter, the board concluded on Thursday that the financial statements for the year ended December 31, 2023, should not be relied upon.
The restatement will not impact the company's net loss, stockholders' equity, basic or diluted earnings per share, cash flow, or any non-GAAP financial measures. It also does not affect the company's compliance with loan covenants or financial statements for subsequent quarters.
The company maintains strong liquidity with a current ratio of 2.86, and InvestingPro data shows its liquid assets exceed short-term obligations. For investors seeking deeper insights into MLP's financial health metrics and growth potential, InvestingPro offers additional analysis with 5 more exclusive ProTips.
Maui Land & Pineapple Company will amend its 2023 Form 10-K to correct the classification error. The Audit Committee, board, and management have discussed the matter with the company's independent registered public accounts, Accuity LLP.
This SEC filing is based on a press release statement and contains forward-looking statements, including plans to amend and restate the financial statements for the year ended December 31, 2023. The company cautions that actual results may differ from those anticipated due to various uncertainties. Recent financial data shows revenue growth of 35% in the last twelve months, though the company remains unprofitable with a negative EBITDA of $4.63 million.
In other recent news, Maui Land & Pineapple Company, Inc. has made significant strides in supporting their local community. The company has entered into a notable agreement with the State of Hawai’i to provide land for temporary housing for Maui wildfire victims, according to a recent 8-K filing with the SEC.
The company will lease approximately 50 acres of its land at no cost to aid those displaced by the devastating fires. The State will finance the project, including an estimated $35.5 million for the necessary horizontal improvements, with MLP overseeing the construction at cost.
In addition to this humanitarian endeavor, MLP recently announced the cancellation of a $7M land sale agreement. The deal, which involved a parcel of land in Piiholo, Maui, Hawaii, was terminated by the intended purchaser, Shawn Sims. Following the cancellation, Maui Land & Pineapple is required to refund the initial deposit held in escrow. The termination implies that the 11.883-acre land parcel will be reintroduced to the market, as part of Maui Land & Pineapple's ongoing strategy to sell non-essential land parcels.
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