A&B Earns $19 Million in Second Quarter 1998; Net Up Four Percent -- Led By Property Sales.HONOLULU--(BUSINESS WIRE)--July 16, 1998--Alexander & Baldwin Baldwin, cities, United States Baldwin. 1 Uninc. city (1990 pop. 22,719), Nassau co., SE N.Y., on the south shore of Long Island, on Baldwin Bay; settled 1640s. A fishing center and summer resort, it has varied manufactures. Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ALEX) today reported that its second quarter 1998 net income increased four percent to $18,970,000, or $0.42 per share. Net income in the second quarter of 1997 was $18,279,000, or $0.40 per share. Revenue in the second quarter of 1998 was $365,825,000, compared with revenue of $317,928,000 in the second quarter of 1997. Net income for the first half of 1998 was $32,744,000, or $0.73 per share, versus $39,504,000, or $0.87 per share, in the first half of 1997. Net income in the first half of 1997 included $12,478,000, or $0.28 per share, resulting from the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. settlement of long-standing long-stand·ing adj. Of long duration or existence: a long-standing friendship. long-standing Adjective existing for a long time insurance 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. . Excluding the insurance settlement, net income for the first half increased 21 percent. Revenue in the first half of 1998 was $657,232,000, compared with $614,180,000 in the first half of 1997. Property Sales, Hawaii Hawaii, island, United States Hawaii, island (1990 pop. 120,217), 4,037 sq mi (10,456 sq km), largest and southernmost island of the state of Hawaii and coextensive with Hawaii co.; known as the Big Island. Agribusiness agribusiness Agriculture operated by business; specifically, that part of a modern national economy devoted to the production, processing, and distribution of food and fibre products and byproducts. Higher In the second quarter of 1998, A&B's consolidated operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. was $40.1 million, slightly greater than the $39.9 million operating profit in the second quarter of 1997. For the first half, operating profit was $71.7 million, versus $84.9 million in the first half of 1997. Without the favorable insurance settlement ($20 million, pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern ), operating profit would have been $64.9 million for the 1997 period. In both the second quarter and first half of 1998, property sales and Hawaii agribusiness results improved, but ocean transportation, sugar refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar and marketing, and property leasing were lower. Similarly, in both periods, interest expense was lower, reflecting lower debt and lower interest rates, but corporate expenses were higher. Lower Cargo Volume Offsets Alliance Benefit In the second quarter of 1998, ocean transportation operating profit was $16.8 million. This was a decrease of $6.0 million, or 26 percent, from $22.8 million in the second quarter of 1997. The decrease was due primarily to lower cargo volume, lower average revenue per container, and less interest income. The decline in cargo volume resulted primarily from the introduction of a new barge barge, large boat, generally flat-bottomed, used for transporting goods. Most barges on inland waterways are towed, but some river barges are self-propelled. There are also sailing barges. competitor serving Hawaii during the strong summer household-goods cycle, and continued contraction contraction, in physics contraction, in physics: see expansion. contraction, in grammar contraction, in writing: see abbreviation. contraction - reduction in the Hawaii cargo market. These factors more than offset the benefits of a revised operating alliance with American President Lines American President Lines Ltd. (now simply referred to as APL) is the world's sixth largest container transportation and shipping company, providing services to more than 140 countries through a network combining intermodal freight transport operations with IT and e-commerce. Ltd. Second quarter 1998 Hawaii service container volume was seven-percent lower than in the 1997 second quarter and automobile volume was one-percent lower. In the first half of 1998, ocean transportation operating profit was $34.2 million. This was a decrease of $22.7 million, or 40 percent, from $56.9 million in the first half of 1997. The primary reason for the decrease was the favorable insurance settlement included in the first-half 1997 results. Excluding that factor, 1998 first half operating profit was $2.7 million lower than in 1997. Matson's first half 1998 Hawaii service container volume was two-percent lower than in the 1997 first half and automobile volume was one-percent lower. Income-Property Results Lower In the second quarter of 1998, property leasing operating profit was $5.6 million. This was $800,000, or 13-percent, lower than $6.4 million in the second quarter of 1997. The decrease was due primarily to the timing of sales and purchases of property and, to a lesser extent, to lower occupancy levels and lease rates. In the first half of 1998, property leasing operating profit was $11.5 million. This was nine-percent lower than $12.7 million in the first half of 1997. Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. 1998 occupancy levels for Mainland properties averaged 93 percent, versus 98 percent in the first half of 1997. Occupancy levels for Hawaii properties averaged 66 percent, versus 78 percent in the comparable period of 1997. The latter decrease was due, in part, to redevelopment, as a multi-screen theater complex, of a portion of the company's Maui Maui (mou`ē), island (1990 est. pop. 82,500), 728 sq mi (1,886 sq km), second largest island in the state of Hawaii, separated from the island of Hawaii by the Alenuihaha Channel and from Molokai by the Pailolo Channel. Mall. Two Large Property Sales Lead A sales lead is the identity of a person or entity potentially interested in purchasing a product or service, and represents the first stage of a sales process. The lead may have a corporation or business associated with the person(s). Quarter, Half Property sales totaled $60.8 million in the second quarter of 1998, compared with $14.5 million in the second quarter of 1997. In the second quarter of 1998, operating profit from property sales was $14.0 million. This was $10.9 million higher than $3.1 million in the second quarter of 1997. Results in the second quarter of 1998 included the previously announced sales of Ridgeview Court, a 246,000 square-foot R&D and office complex in Cupertino, Calif., and of the company's remaining interest in a 14-acre parcel in Maui Business Park. Other second-quarter sales included five residential properties. Sales in the second quarter of 1997 included a warehouse 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). , three developed business lots and 16 residential properties in Maui. In June 1998, A&B acquired three income properties on the U.S. Mainland, two in San Antonio, Texas “San Antonio” redirects here. For other uses, see San Antonio (disambiguation). San Antonio is the second most populous city in Texas, the third most populous metropolitan area in Texas, and is the seventh most populous city in the United States. As of the 2006 U.S. , and one in Sacramento, Calif., using tax-deferred funds from previous property sales. The total purchase price for the three properties was $36.0 million, Property sales totaled $68.6 million in the first half of 1998, compared with $18.6 million in the first half of 1997. In the first half of 1998, operating profit from property sales was $18.6 million. This was $13.9 million higher than $4.7 million in the first half of 1997. The two large sales in the second quarter of 1998 were the primary reasons for the increase. Refined Sugar Results Lower, Hawaii Agribusiness Higher In the second quarter of 1998, food products operating profit was $3.0 million. This compares with $6.9 million in the second quarter of 1997. The decrease was due primarily to lower refined sugar prices and margins, offset, in part, by greater volume and lower costs of raw sugar production. In June 1998, five-year labor agreements were reached with the two unions at the company's sugar refinery in Crockett, Calif. In the first half of 1998, food products operating profit was $6.0 million. This compares with $9.4 million in the first half of 1997. Second Quarter Results Confirm Challenges "Although not as strong as we would have liked, these earnings again demonstrate the benefits of the Company's diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. ," said John C. Couch A couch, loveseat, sofa, settee, lounge, davenport or chesterfield are items of furniture for the comfortable seating of more than one person. Compare the joiner's settle, with its separate seat cushions. , chairman of the board, president and chief executive officer of A&B. "This quarter's results, however, confirm the cautions we have expressed previously about the many challenges A&B faces this year. "While the strong Mainland real estate market has helped our property segment, Hawaii's economy remains stalled stall 1 n. 1. A compartment for one domestic animal in a barn or shed. 2. a. A booth, cubicle, or stand used by a vendor, as at a market. b. . The Islands' economic doldrums doldrums (dŏl`drəmz) or equatorial belt of calms, area around the earth centered slightly north of the equator between the two belts of trade winds. continue to adversely affect our ocean transportation and local property results. Also, the large U.S. beet sugar beet sugar: see beet; sucrose. crop is unfavorably affecting refined sugar prices and the performance of our food products segment. "As a result, we continue to actively pursue other ways to improve the Company's results. During the quarter, significant progress was made on a number of initiatives. Matson is considering several approaches to take significant costs out of its fleet operations and to seek new sources of revenue. "With new labor agreements in place at C&H, pursuing strategic alternatives for that business has been facilitated. And, the recent sales and purchases of income properties illustrate the Company's continuing efforts to monetize Monetize 1. To convert into money. 2. To convert from securities into currency that can be used to purchase goods and services. Notes: For example, you'll often hear Internet marketers talk about "monetizing website visitors. the value of its properties portfolio, as well as to strengthen it through selective acquisitions." Alexander & Baldwin Inc., headquartered in Honolulu, has two major subsidiaries: Matson Navigation Co. Inc. (ocean transportation) and A&B-Hawaii Inc. (property development and management, and food products). Additional information about A&B may be found at its Web site: www.alexanderbaldwin.com. Statements in this press release that are not historical facts are "forward-looking" statements that involve a number of risks and uncertainties described on page 27 of the company's 1997 annual report to shareholders. These factors could cause actual results to differ materially from those projected in the statements. -0-
ALEXANDER & BALDWIN INC.
1998 and 1997 Second-Quarter and First Half Results
1998 1997
Three Months Ended June 30:
Revenue $365,825,000 $317,928,000
Net Income $ 18,970,000 $ 18,279,000
Basic & Diluted Share Earnings $ 0.42 $ 0.40
Average Shares Outstanding 44,869,000 45,238,000
Six Months Ended June 30:
Revenue $657,232,000 $614,180,000
Net Income $ 32,744,000 $ 39,504,000
Basic & Diluted Share Earnings $ 0.73 $ 0.87
Average Shares Outstanding 44,855,000 45,274,000
Industry Segment Data, Net Income
(In Thousands)
Three Months Ended Six Months Ended
June 30 June 30
1998 1997 1998 1997
Revenue:
Ocean Transportation $182,124 $175,005 $360,924 $356,125
Property Devel. & Mgmt.:
Leasing 9,198 9,609 18,433 18,725
Sales 60,792 14,480 68,573 18,591
Food Products 112,994 118,131 207,868 219,319
Other 717 703 1,434 1,420
Total Revenue $365,825 $317,928 $657,232 $614,180
Operating Profit, Net Income:
Ocean Transportation $ 16,787 $ 22,807 $ 34,157 $56,857(a)
Property Devel. & Mgmt.:
Leasing 5,589 6,433 11,488 12,667
Sales 13,994 3,080 18,636 4,660
Food Products 3,047 6,949 6,045 9,392
Other 685 671 1,363 1,334
Total Operating Profit 40,102 39,940 71,689 84,910
Interest Expense (6,293) (7,803) (12,373) (15,745)
Corporate Expenses (3,459) (2,891) (6,928) (5,955)
Pretax Income 30,350 29,246 52,388 63,210
Income Taxes (11,380) (10,967) (19,644) (23,706)
Net Income $ 18,970 $ 18,279 $ 32,744 $ 39,504
-0- (a) 1997 Six-months Ocean Transportation operating profit includes $20 million from the settlement of a lawsuit lawsuit: see procedure; tort. that involved insurance claims for earthquake damage to port facilities in 1989. CONTACT: Alexander & Baldwin Inc. John B. Kelley, 808/525-8422 invrel@alexanderbaldwin.com |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion