Printer Friendly

MAXXAM REPORTS RESULTS FOR THIRD QUARTER, FIRST NINE MONTHS OF 1993

 HOUSTON, Nov. 1 /PRNewswire/ -- MAXXAM Inc. (AMEX: MXM) today reported a net loss of $33.3 million, or $3.52 per share, for the third quarter of 1993, compared to net income of $0.7 million, or 7 cents per common share, for the third quarter of 1992. Sales in the third quarter of 1993 totaled $506.5 million, compared to $531.7 million for the same period in 1992.
 For the first nine months of 1993, the company's loss was $68.5 million, or $7.24 per share, exclusive of first-quarter, non-cash charges totaling $461.8 million for the adoption of new accounting standards and for extraordinary losses associated with the early retirement of debt at subsidiary companies. Results for the first nine months of 1993 compare to net income of $3.0 million, or 32 cents per share for the first nine months of 1992. Sales in the first nine months of 1993 were $1,528.1 million, compared to $1,626.2 million for the first nine months of 1992.
 MAXXAM's operating loss for the third quarter of 1993 was $10.8 million, compared to operating income of $37.7 million in the year- ago period. The company's operating loss for the first nine months of 1993 was $13.7 million, compared to operating income of $119.1 million in the same period of 1992.
 "MAXXAM's financial performance continues to reflect the extremely depressed level of market prices for primary aluminum and other aluminum products," said Charles E. Hurwitz, MAXXAM's chairman, president, and chief executive officer.
 MAXXAM operates in three industries: aluminum (through Kaiser Aluminum Corp.), forest products (through MAXXAM Group Inc.), and real estate management and development (primarily through MAXXAM Property company).
 Operating results for each of MAXXAM's three reporting segments are presented below.
 ALUMINUM OPERATIONS
 The company's aluminum operations reported operating losses of $16.1 million for the third quarter and $37.0 million for the first nine months of 1993, compared to operating income of $27.0 million and $86.9 million for the same periods of 1992. Sales were $428.4 million for the third quarter and $1,303.2 million for the first nine months of 1993, compared to $458.5 million and $1,413.1 million for the same periods of 1992.
 Compared to the year-ago period, the operating loss in the third quarter of 1993 was due mainly to the impact of lower average realized prices for alumina, primary aluminum and most other aluminum products. On an industry basis, margins for can sheet, in particular, are under significant pressure. Also, prices for primary aluminum reached historic lows -- in real terms -- in the third quarter as global production of aluminum continued to exceed demand. In addition, the company's level of primary aluminum shipments was below that of the year- ago periods because of partial production curtailments that began in January 1993 at two Northwest smelters.
 As previously announced, Kaiser is restructuring its flat-rolled products operation at its Trentwood plant in Spokane, Wash., to reduce that facility's annual operating costs. This effort is in response to over-capacity in the aluminum rolling industry, flat demand in can stock markets, and declining demand for aluminum products sold to customers in the commercial aerospace industry, all of which have resulted in declining prices in Trentwood's key markets. The company expects that the Trentwood restructuring, and the restructuring of operations at some other Kaiser facilities which is under consideration, are likely to result in a fourth quarter pre-tax charge of approximately $30 million to $40 million.
 NOTE: A separate press release, providing greater detail on results for Kaiser Aluminum Corp. (NYSE: KLU), also is being issued today.
 FOREST PRODUCTS OPERATIONS
 Operating income for the company's forest products operations was $9.6 million for the third quarter and $41.4 million for the first nine months of 1993, compared to $16.6 million and $50.6 million for the same periods of 1992. Sales by forest products operations amounted to $58.8 million in the third quarter and $169.5 million in the first nine months of 1993, compared to $57.1 million and $166.1 million for the same periods of 1992.
 The decline in third quarter operating income primarily reflects an increase in cost of sales, resulting from logs and lumber purchased from third parties, a decrease in shipments of Douglas fir common and upper- grade redwood lumber, and lower sales of wood chips. Partially offsetting these factors were higher prices for most of the company's lumber products.
 REAL ESTATE OPERATIONS
 The company's real estate operations reported an operating loss of $0.9 million for the third quarter of 1993, compared to an operating loss of $2.0 million in the year-ago quarter. For the first nine months of 1993, the real estate operations reported an operating loss of $7.9 million, which includes a first-quarter writedown of $5.9 million of certain real estate holdings to their net estimated realizable value, compared to an operating loss of $6.0 million for the first nine months of 1992. Sales for MAXXAM's real estate operations were $19.3 million for the third quarter and $55.4 million for the first nine months of 1993, compared to $16.1 million and $47.0 million for the same periods of 1992.
 The improved results are largely due to the continued strong performance of the company's Texas properties.
 MAXXAM INC.
 Condensed Consolidated Statement of Operations (Unaudited)
 (In millions of dollars, except share amounts)
 Periods Ended Three Months Nine Months
 Sept. 30 1993 1992 1993 1992
 Sales $506.5 $531.7 $1,528.1 $1,626.2
 Costs and expenses 517.3 494.0 1,541.8 1,507.1
 Operating income (loss) (10.8) 37.7 (13.7) 119.1
 Other income (expense):
 Investment, interest and
 other income 7.6 10.1 24.3 35.4
 Interest expense (45.0) (47.2) (141.2) (147.0)
 Income (loss) before income
 taxes, minority interests,
 extraordinary item and
 cumulative effect of changes
 in accounting principles (48.2) .6 (130.6) 7.5
 Credit (provision) for
 income taxes 25.0 .5 62.0 (1.3)
 Minority interests (3.6) (.4) .1 (3.2)
 Income (loss) before
 extraordinary item and
 cumulative effect of changes
 in accounting principles (26.8) .7 (68.5) 3.0
 Extraordinary item:
 Loss on early extinguishment
 of debt, net of related
 benefits for minority
 interests of $nil and $2.8
 and income taxes of $3.3 and
 $27.5, respectively (6.5) -- (50.6) --
 Cumulative effect of changes in
 accounting principles:
 Postretirement and postemployment
 benefits, net of related benefits
 for minority interests of $64.6
 and income taxes of $240.2 -- -- (444.3) --
 Accounting for income taxes -- -- 26.6 --
 Net income (loss) (33.3) .7 (536.8) 3.0
 Net income (loss) per common and
 common equivalent share:
 Income (loss) before extraordinary
 item and cumulative effect of
 changes in accounting
 principles $(2.83) $.07 $(7.24) $.32
 Extraordinary item $(.69) -- $(5.35) --
 Cumulative effect of changes
 in accounting principles -- -- $(44.15) --
 Net income (loss) $(3.52) $.07 $(56.74) $.32
 Weighted average common and
 common equivalent shares
 outstanding (in thousands) 9,455 9,425 9,460 9,431
 -0- 11/1/93
 /CONTACT: Scott Lamb of MAXXAM, 713-267-3826/
 (MXM KLU)


CO: MAXXAM Inc. ST: Texas IN: PAP MNG SU: ERN

SG -- SF006 -- 9005 11/01/93 09:16 EST
COPYRIGHT 1993 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Nov 1, 1993
Words:1230
Previous Article:ECONOMICAL REAL-TIME STOCK MARKET QUOTES AND INFORMATION NOW AVAILABLE IN PITTSBURGH
Next Article:RONALD B. CURTIS NAMED VICE PRESIDENT OF SALES FOR KUBOTA PACIFIC COMPUTER INC.
Topics:

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters