Summer 2019

Page 1

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IN THIS ISSUE:

LIFE DOESN’T JUST HAND YOU LEMONS…

IT TAKES VISION

MORRISON SNAPSHOTS

Vision, foresight, and strategic thinking

Check out some our latest adventures.

have long been Ventura Pacific hallmarks. The company pioneered the packing of lemons in cardboard cartons of 38-pound increments in the 1950s, at a time when hard-to-handle

80-pound

wooden

crates were the standard. Over the years, Ventura Pacific has adopted mechanized fruit receiving and cleaning processes along with electronic technologies that

STRATEGIC PLANNING Principals Shawn Miller and Toni Scott share highlights of successful strategic planning performed for some of our clients.

sort incoming lemons by size, color, and On July 1, 1941, Carl Samuelson and John Davies held their breath and signed a lease

now be utilized at high efficiency.

California, that was believed to have been

It has been said that yellow, not green, is

lease,” Samuelson said, “and we had to borrow $1,000 of it!”

attack on Pearl Harbor brought the United States into World War II – arguably not the

Brent

Morrison

most opportune time for two citrus novices and

Geoff

Chinnock break down the challenges of borrowing for your business.

storage

lemon growers who reorganized as Ventura County Lemon Cooperative, a growerDoing

for

holding

yet still be harvested at a size in line with

also

provides

for

handling

and

marketing year-round, as do the climates

selling the business to a group of California

enterprise.

allows

lemons to color naturally for up to 150 days

It

handling and marketing.

business

as

now markets as one of the largest lemon producers for Sunkist, the well-known

WWW.MORRISONCO.NET

controlled

succeeded, becoming innovators in citrus

Ventura Pacific Company, the company

See what’s new with some of our clients.

a grapefruit. Temperature and humidity

what buyers require.

owned

CLIENT CORNER

Buyers want yellow lemons but those left

to be entering a new venture. But they

Samuelson and Davies retired in 1976,

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the color of money in the lemon business. to color on the tree can grow to the size of

It was less than six months before the

Morrison’s

challenge for California food handlers, can

on a citrus packinghouse in Montalvo, built in 1888. “It cost us $1,050 to sign the

WISE BORROWING

quality at dizzying speeds. Labor, always a

citrus marketing organization owned by grower cooperatives like Ventura Pacific.

in the regions farmed by Ventura Pacific’s members. Today, the company’s members grow lemons in Ventura County, Monterey County, the San Joaquin Valley, and the California and Arizona desert regions. Headquartered in Oxnard, California, the cooperative operates a 220,000 square foot handling and storage facility there in

CONTINUED ON INSIDE LEFT PANEL

NEWSLETTER | SUMMER 2019


C OVER ST OR Y, C ON T IN UED

addition to the original 70,000 square foot

Pacific’s team and growers. “Both are

facility in Montalvo, which is now used for

extremely

storage. The company employs 150 people

innovative. Our future success depends on

year-round.

them,” Olmos said.

From just a handful of members in 1976, the

Morrison has been honored to serve Ventura

cooperative today handles the crop of 120

Pacific and its progressive leadership in

grower-members. The families of five of the

planning for the future, including conducting

seven original directors are members today;

strategic planning with the executive team

three of those family members sit on the

and Board of Directors, conducting analysis

board. With a culture dedicated to serving its

of

members, employees, and buyers, Ventura

financial modeling under various scenarios,

Pacific’s mission is as simple as it has been

and an assessment of accounting processes.

successful: to be the lemon industry leader

We are thankful that life has handed us

in grower returns. President and CEO Gabe

lemons, and look forward to continued

Olmos says he takes special pride in Ventura

service to Ventura Pacific Company.

MORRISON

SNAPSH TS

dedicated,

operational

hardworking,

strategies,

and

performing

RESCUE 42 Sometimes

we

get

to hang out with our clients and play with power tools. Checkout Brent

cutting

glass

with Rescue 42’s new Ripper®.

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*

ARCHERY TAG

CONGRATULATIONS JANAE & COREY Morrison Consultant Janae recently tied

We had an opportunity to play archery tag

the knot and said “I do” to Corey Swartz.

for a little team bonding. Each of our team

Feel free to drop a line congratulating

members has their strengths, like dodging

Mr. & Mrs. Swartz by emailing Janae at

arrows, precise aim, and…hiding?

jswartz@morrisonco.net.

MORRISON SUMMER BBQ We hosted our annual Summer BBQ at Brent’s house. The day was full of face painting, pony rides, a scavenger hunt, corn hole, swimming, and a painting party.


STRATEGIC PLANNING:

SPENDING TIME TO SHARPEN THE AX One of the favorite quotes shared at our

It’s also important not to miss that key

achieve success and fulfill their mission.

Morrison team meetings is attributed to

members of our teams—our “axes” or tools

Failing to plan or short circuiting a strategic

Abraham Lincoln: “Give me six hours to chop

for success—can provide valuable sharpening

planning process can result in missed details

down a tree and I will spend the first four

to our plans, and the needed energy and

and opportunities. Making the process too

sharpening the ax.”

support to take a swing on the ax and help

complicated or detailed can be tedious and

us chop the tree down, giving us energy to go

frustrating for participants, and ultimately

on to the next tree. Involving the right people

yield in less desirable results.

We relay this saying often to our team and to our clients as a reminder that planning—

in key stages of planning makes for better

and a focused strategy—is integral to the

understanding of the goals and approaches,

success of any endeavor, large or small.

and, most importantly, better results.

Leaders in successful organizations often

At Morrison, we’ve been blessed to provide a

succinct

and

appropriately

structured

approach to strategic planning for a number

have the determination and talent to achieve

Every organization—whether a for-profit

of organizations as they endeavored to plan

continued outcomes, but even the best can

businesses,

organization,

for success. Here are some of the recent

shortcut dedicating time to focus solely on

government board, or academic institution—

engagements we’ve been honored to be a

research, planning, and strategy.

must continually spend time to plan to

part of.

non-profit

NORTH STATE HULLING

CALIFORNIA FARM BUREAU FEDERATION Celebrating

100

North

State

Hulling,

an

almond hulling cooperative

years

of

serving

formed in 1968, had been

California farmers and ranchers in 2019,

successfully

providing

its

the California Farm Bureau Federation

members almond hulling and shelling services from its west

sought

mission

Chico, CA location for five decades. However, the character of the

statement and develop a detailed and

facility’s neighborhood had changed over time, with increased

well-constructed

help

residential growth and associated traffic presenting challenges.

usher in their second century. Using a

In addition, financial investments in equipment and technology

number of diagnostic tools, Morrison

upgrades were needed to sustain operational efficiency. With

gathered

to

a new General Manager at the helm, and a strong vision for

assist key leadership in their strategic planning and decision

growth, the cooperative’s leadership knew they needed to

making. Morrison then facilitated a one day retreat where

dedicate time to determine and come to agreement on how to

key leaders in the organization leveraged that information to

best position the organization and their grower-members for

review and refine the organization’s mission, create a simple

the future. Morrison facilitated a one-day streamlined SWOT

and easily understood purpose statement and a defined set of

(strengths, weaknesses, opportunities, and threats) analysis

core values. This revamped and simplified mission provided

and led the board through strategy formulation exercises. After

a foundation for a follow-up two-day strategy development

much discussion, the board came to an agreement to present

process, facilitated by Morrison. Over the course of several

a recommendation to their entire membership to explore a

days, the leadership of CFBF developed a number of strategies

facility relocation that would include the construction of a new

core to their purpose and values that CFBF personnel then

state-of-art facility. Just one year later, the cooperative has

cascaded through the organization.

purchased property 10 miles from their existing operation and

to

review

their

strategy

valuable

to

information

facility construction is underway.


ADAMS GROUP

VENTURA PACIFIC COMPANY

Both the ownership and executive team of Adams

Ventura

Group—a multi-generational company specializing in

one

unique grain and naturally derived food oil—had been

handlers

of

Pacific the

Company,

largest

marketing

lemon through

regularly discussing the company’s evolution and needed strategies

Sunkist, recognized the need

to carry forward the company’s previous success. Adams Group

to both refine their mission

desired to convene their ownership and executive team together

statement

to agree on a detailed organization mission and strategic plan, but

effective

and

develop

strategic

plan

an to

scheduling everyone in a room together for three to four days was

address changing conditions. The company’s Board and

infeasible. Morrison was engaged to determine a solution to achieve

Management had a good sense of the direction needed,

the desired outcomes of Adams Group, within the framework of

but sought assistance in the process of reaching final

two one-day in-person sessions. Through a process of surveys,

agreement. Morrison developed a succinct plan to facilitate

interviews, and diagnostic tools, Morrison successfully provided the

development of concise and straightforward statements of

Adams Group leadership team with the needed resources to achieve

purpose, core values, and key business statements to create

their desired results. During a one-day strategic planning meeting,

a succinct mission statement. The Board built upon this to

facilitated by Morrison, company leadership effectively formulated

develop a strategic plan to position the company for the

a succinct purpose statement, a set of core values, and a number

future. Due to Board and Management’s understanding of

of business statements to guide company decisions (mission). A

their overall mission and general agreement on necessary

second one-day meeting resulted in the leadership of Adams Group

strategies, this approach resulted in one of the most

formulating detailed strategies for growth.

streamlined planning sessions in Morrison’s experience. The Ventura Pacific Board created their purpose statement, core values, and business statements in half a day and formulated their strategic plan in less than one full day,

EXPLORE BUTTE COUNTY Newly-formed and representing board members from almost every community in the county, the governing body of Explore Butte County, a tourism business improvement district, sought to define their strategic objectives for a 12-month period.

a significant accomplishment given the importance of the changes. They understood that a good plan need not take an extraordinary amount of time if the overall needs are mutually understood and the strategy sessions are guided and structured appropriately. (See also the cover story on Ventura Pacific in this issue.)

With a well-crafted mission already in existence, board members were guided through a SWOT analysis by Morrison to help refine the

What are the trees you need to chop down in your organization?

key strategic objectives the organization needed to implement for

Are you taking the time to sharpen your ax like these

success. Following the strategic planning session, the organization’s

organizations? Invest in planning—whether it be a process

leadership generated timelines and specific action steps to help the

facilitated by your own team or with outside assistance—you’ll

organization achieve their defined strategic objectives.

certainly find that defining and executing and a strategy will save you some sore biceps and shoulders.

Morrison Principals Shawn Miller & Toni Scott provide services to Morrison clients primarily in the areas of strategic planning, recruitment, competitive grant writing, and special projects. You can contact Shawn at smiller@morrisonco.net, and Toni at tscott@morrisonco.net.


WISE

BORROWING Apple Inc., which was reported to have $245

is an input as much as labor or parts and it

billion in cash on hand at the end of the first

has a cost (interest) like any other input. But

quarter of 2019, also showed about $122 billion

if you’re using your operating line to acquire

in debt. If Apple has—or chooses—to borrow,

long-term assets, you’ve mismatched short-

it’s certainly no shame if your company borrows

term debt with a long-term asset and you

as well, if done wisely.

might be headed towards a debt restructuring

Borrowing needs depend on factors including

or capital call.

A FEW TIPS: • Before entering loan agreements, plan your needs and repayment scenarios under a number of assumptions, optimistic and

capital needs for facilities and working capital

Use long-term debt when acquiring long-

pessimistic. Match your needs with

to manage seasonality of production and sales.

term assets. This may seem pretty basic but

the right loan facility and length of

If a company makes products that require

is often overlooked in the zeal to proceed

term.

buildings and equipment, it will likely need

with a new project. Short-term interest rates

long-term debt. Likewise if business is seasonal

can be attractive, but they are also variable.

in terms of either production or sales, it’s not

In a time of rising rates you could get caught

unusual to require a line of credit or similar

with high debt service costs. Instead, look

short-term credit facilities.

at fixing your long-term rates and get loans

Awhile back we met with a prospective client who needed assistance with cash flow forecasting, a

with a low (or no) pre-payment penalty to give yourself options later if you need them.

• There are different functions within a lending institution including sales, relationship management, and analysts. You might meet all of these, but there are others you may not meet directly including legal counsel and people higher up the

common request. They had recently completed

If you find yourself in a tight spot with a

loan approval chain. That’s where a

a debt restructuring and now had a number of

maxed out operating line, but you have good

lot of the hang-ups can occur and it’s

bank covenants they needed to hit by the end of

equity in your long-term assets, you can

important to anticipate and explore

the year. Frankly, the forecasting should have

probably restructure your debt, pull capital

those needs as early as possible.

been done before the loan agreements were

out of your long-term assets and pay down

signed.

your operating line. This is fairly common

As they spoke we must have been nodding our head a bit too much while taking notes because at one point the prospective client said “I take it you’ve seen this before, right?” We proceeded to chat about how easy it can be when times are good to use both profits and short-term financing to launch into the next long-term project or asset acquisition. Then when profits slow down and the operating line is maxed out, there are really only three options: sell something off, have ownership inject capital, or restructure long-term debt to pay-down the short-term debt. The match between the need and the loan is critical. An operating line of credit for normal working capital and seasonal needs is fine. Cash

“get-out-of-jail” maneuver, but it’s not “free”; expect to receive a good kicking when it comes to loan fees on the new debt.

• When the negotiation of new landing arrangements gets serious, a lending institution may require you to sign a mandate requiring that you negotiate solely with them

We have worked with many companies

during a set timeframe. This is

that have found themselves in challenging

understandable given the work that

lending situations, ranging from relatively

can be involved but you should be

small and new businesses to well-established

reasonably certain they are the right

companies approaching a billion dollars

match before doing so.

in sales. The situations range from those

• Larger deals may require

who’ve encountered unforeseen (though not necessarily

unforeseeable)

difficulties

to

those planning out debt needs and covenant compliance before finalizing agreements and starting projects. Planning certainly comes with challenges

syndication, the joint participation of two or more lending institutions. This can be due to regulatory or internal lending limits and is perfectly acceptable but does add another layer of complexity.

and costs but it will spare you a lot of pain in the end.

Morrison’s Brent Morrison and Geoff Chinnock provide services to Morrison clients primarily in the areas of business planning (including budgeting, cash flow forecasting, and financial modeling), feasibility studies, interim controller/CEO/CFO services, and special projects. You can contact Brent at bmorrison@morrisonco.net, and Geoff at gchinnock@morrisonco.net.


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10 Landing Circle, Suite 5 Chico, California 95973

PERMIT #1833 CHICO,CA

PHONE: 530.893.4764 • FAX: 530.893.4978

INTERIM / OUTSOURCE • PL ANNING & FEA SIBILIT Y PEOPLE SOLUTIONS • RECRUITMENT • GR ANTS FOLLOW US

C L I E N T CORNER The Morrison Client Corner is a regular feature of our newsletter.

If you’re a client of ours, we’d love to stay up to date with what is going

Here, you’ll find updates on what a number of our clients are up to,

on within your organization and invite you to share your highlights

their achievements and milestones, and the generally great things

in this space. Feel free to send any press releases, newsletters, or

happening in their companies or organizations.

happenings to Michelle at MGenova@morrisonco.net.

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NEW BRAND CHAMPIONS CALIFORNIA GROWN PRUNES The California Prune Board introduced

SPONSOR AN AG TEACHER

a new brand this May with a familiar

Through a new Sponsor an Ag Teacher

name:

program, California State University, Chico

referring to them as “dried plums” the

President & CEO Audrey Taylor opened

is partnering with agriculture companies

new brand represents a positive embrace

the doors of Chabin Concepts in June of

and organizations to support student

of California Prunes, their premium

1989. Over the last 30 years Audrey has

teachers seeking to become credentialed

nature, and an expansive view of all their

grown and expanded her team to provide

agriculture teachers with tuition, books,

benefits. Along with the new name comes

the

economic

and living expenses. Chico State will

a new logo, website, and opportunity

development consulting. Having assisted

place 29 agricultural student teachers in

to reach new audiences signifying that

over 200 jurisdictions, Chabin Concepts is

California classrooms this fall semester. To

California Prunes are good for your life,

committed to customizing to the needs of

learn more on how to support these efforts,

at every stage of your life. The California

the economic development professional,

contact Dustin Bush, College of Agriculture

Prune Board has long served as a resource

as well as the area, to create initiatives and

associate

at

for consumers and members of the prune

solutions for their competitive advantage.

dwbush@csuchico.edu

530-898-

industry and represents approximately

Morrison is proud to have partnered with

6605, or Tommy Henderson, professor in

800 prune growers and 28 prune, juice,

Audrey and her team at Chabin Concepts

agricultural education, at tmhenderson@

and

on various projects. We look forward to

csuchico.edu or 559-393-1616 or visit www.

authority of the California Secretary of

continuing our partnership with Chabin

csuchico.edu/ag/degrees-options/aged-

Food and Agriculture. To learn more visit

Concepts and cheers to another 30 years!

sponsorship.shtml.

www.californiaprunes.org.

CHABIN CONCEPTS TURNS 30!

very

best

services

in

director

of

development, or

California

ingredient

Prunes.

handlers

No

longer

under

the

WELCOME NEW CLIENTS

*Morrison provided and granted use of these photos by CSU Chico; Ventura Pacific; Three Lilies Photography; Chabin Concepts.

WWW.MORRISONCO.NET

NEWSLETTER | SUMMER 2019


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