BRISTOL BAY Native Corp.

This organization's 6,5000 shareholders reap the benefits of the company's sound investments.

Lately, the economic news out of Alaska's Bristol Bay fisheries has been bleak: Some years, the world-renown sockeye salmon runs failed to appear and the years that the fish arrived, the prices offered for the fish were a fraction of what they were in the 1980s.

While its largest natural resource is fluctuating wildly, Bristol Bay Native Corp. is a quiet port in the storm.

Bristol Bay has recorded profits for most of the past 20 years and paid a steady quarterly dividend to its shareholders for the past 18 years.

"We've taken a more conservative approach to growth," Chief Financial Officer Stephen Tolton says. "In 18 years the dividend has not gone down on a quarterly basis. You can't say that for a lot of public companies. Our shareholders have learned to expect something in the mail."

The Dillingham-based Alaska Native regional corporation was granted $32.7 million and 2.9 million acres of land under the 1971 Alaska Native Claims Settlement Act.

BBNC has approximately 6,500 shareholders who are Indian, Eskimo and Aleut. The Bristol Bay region is located 150 miles southwest of Anchorage and encompasses 40,000 square miles, about the size of Ohio.

Bristol Bay is a holding company that oversees a diversified investment portfolio; sells petroleum products to commercial customers; furnishes oilfield and environmental cleanup labor; and provides architectural, surveying, engineering and environmental remediation services.

In fiscal year 2000, Bristol Bay's total revenues topped $100 million. Net earnings grew to more than $11 million. Over its life span, BBNC has paid out more than $45 million to shareholders, more than its initial nest egg, points out Tom Hawkins, senior vice president and chief operating officer.

Dividends started at about 22 cents a share and are at about $1.50 a share today. Most shareholders own 100 shares. The Bristol Bay region has the world's largest runs of sockeye salmon, and all five major species of salmon spawn in the area. One of the state's largest herring fisheries is also found in Bristol Bay.

Eleven of 12 board members are or have been commercial fishermen. Hawkins and Tolton say that's one of the keys to the corporation's success. "Because our board members are small-business owners, they understand no matter how careful you are, you can't predict the future," Tolton says. "They understand the decisions you need to make to run a small business."

Translating this to overseeing millions of dollars isn't easy, but Bristol Bay understands its strengths: The board started off investing in what they knew: salmon.

BBNC's first big investment was Peter Pan Seafoods Inc. in 1975, one of the biggest Bristol Bay canneries at the time. The venture was a moneymaker, but a few years later the cannery's deteriorating wharves and buildings required a $40 million upgrade. In the late 1970s, interest rates hovered around 20 percent and BBNC found it too expensive to borrow money to fix the infrastructure. Bristol Bay sold the cannery to a Japanese company, Nichiro Corp., netting a profit of nearly $14 million.

BBNC started looking at other investments, buying Pacific Food Products, which manufactured peanut butter and pet food, among other things. The investment wasn't a success, but Bristol Bay managed to sell it without a loss.

"We tend not to duplicate mistakes," Tolton says. "We're not an organization that can buy into a company that needs to be turned around."

Bristol Bay has focused on investing in businesses that have the potential for shareholder hire. When they bought the Anchorage Hilton in 1977 for $20 million, they thought the hotel would be a good source of jobs, but shareholders preferred fishing to working inside in Anchorage, Tolton says.

Today, their environmental and oil-field services companies provide the best opportunities for shareholder hire, Hawkins says. The corporation also tries to make sure shareholders share BBNC's big successes.

When Bristol Bay sold the Hilton in 1997 for $67 million, they immediately sent checks of about $3,000 each to shareholders.

"BBNC has been pretty predictable and every time they sell off a major asset the shareholders get their piece of it," says Hawkins. "It's not been lucrative, but it's something that's been predictable."

Bristol Bay's investment portfolio has provided a strong foundation for growth. Although its return fell to 5 percent for the nine months ending December 2000 from the previous year's 15 percent return, the portfolio performed much better than the general stock market, which had double-digit losses in some indexes.

"We expect our investment methodology to do better than the market during stressful times," BBNC says in its analysis of third-quarter results for fiscal year 2001.

Bristol Bay also has been on the hunt for operating companies to invest in. In 1997, BBNC acquired 80 percent of Washington state's Petrocard Systems Inc., a network of commercial cardlock gas stations.

In 1998, BBNC acquired 80 percent of the outstanding stock of CCI Inc. and SpecPro, which provide casual labor for environmental support services, oil-spill response and other project services on Alaska's North Slope and throughout Alaska.

SpecPro purchased Vista Technologies Inc. in early 2000. Vista provides engineering, environmental and information technology services in 14 Lower 48 states and Moscow, Russia. The purchase of Vista gave Bristol Bay another entry into the Small Business Administration's 8(a) program, which gives a minority-owned business preference in contracts with the federal government. Two other subsidiaries, Bristol Environmental & Engineering Services Corp. (BEESC) and CCI also work under the SBA 8(a) program.

BEESC is working on construction of National Guard buildings in the Bristol Bay region and recently secured a major U.S. Navy contract for cleanup on Amchitka Island.

CCI negotiated contracts with the Coast Guard in Kodiak and Valdez, which allowed it to return to profitability after losses stemming from a reduction on North Slope oil-field contracts. Cook Inlet Region Inc. recently chose Bristol Bay's architectural design subsidiary BBkp Inc. to design a 40-unit senior housing facility in Anchorage. Working with the Alaska Native Tribal Health Consortium, BBkp is also completing upgrades to Samuel Simmonds Memorial Hospital in Barrow. A $2.3 million investment in the Alaska Marketplace grocery chain failed in 2000.

One area in which Bristol Bay has worked hard is shareholder relations, says Tolton.

"One of our strengths is we deal with our shareholders in terms of disclosure; we do that fairly forthrightly," CFO Tolton says. "We try to tell our shareholders the good and the not-so-good."

In the 1970s, BBNC held its first Bristol Bay Village Leadership Workshop with the objective of building a team of local organizations that could provide guidance to corporate leadership. Held annually, the two-day workshop gives village and corporate leaders a chance to meet with business, government and Native leaders, discuss issues, share problems and brainstorm new opportunities. Today, the workshop attracts more than 200 people.

Bristol Bay is looking to its shareholders to provide future leadership. BBNC has set up a training program called Training Without Walls that follows a traditional path of education in which tribal elders gradually train the people who replace them.

Created in 1994, the program lasts for three years. During that time, the shareholder attends two day-long training sessions a year focusing on management effectiveness, team building, dealing with change and understanding the legal aspects of management. Participants also work with a mentor committee and receive monthly professional development opportunities. So far, 13 students have graduated and more are in the program.

The nonprofit BBNC Education Foundation was launched in 1991 to help shareholders get post-secondary degrees and vocational training. Since then, it has awarded almost $350,000 in scholarships.

A retired elementary school teacher, Frank Hill, a BBNC shareholder and administrative director of the Alaska Federation of Natives, told BBNC shareholders in BBNC's 2000 annual report, "To ensure a strong corporation, the education system has to teach shareholders about how the corporation benefits them and how they can increase, maintain and protect the corporation."

It won't happen overnight, but slow and steady wins the race.