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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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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