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Press Release: Maui Land & Pineapple
February 22, 2005
KAHULUI, HI -- Maui Land & Pineapple Company, Inc. (AMEX:MLP) reported net income of $2.6 million ($0.36 per
share) for the fourth quarter of 2004 compared to net income of $1.2 million ($.17 per share) for the fourth quarter
of 2003. For the year 2004, the Company had a net loss of $383,000 ($0.05 per share) compared to net income of
$6.0 million ($0.83 per share) for 2003.
In July 2004, the Company began selling lots in the Honolua Ridge residential subdivision and through year-end
2004, the sale of 17 lots had closed escrow. The Company is recognizing revenues and profits from the Honolua Ridge
lot sales on a percentage-of-completion method as the subdivision improvements are completed, and these sales contributed
$9.6 million and $12.4 million, respectively, to operating profit for the Development segment for the fourth quarter
and year 2004. Contributions to operating profit from Honolua Ridge lot sales were largely offset by operating
losses from the Company's Pineapple and Resort segments.
"Our resort and development segments are generally on track while our agricultural operations continue to
struggle," said David C. Cole, Chairman, President and CEO of the Company. "In 2004 we invested heavily
in future crops to smooth fruit delivery schedules, extend fresh fruit shelf life, and dramatically improve quality.
We also took steps to bolster our real estate programs and reposition the Kapalua resort."
Consolidated operating revenues for the fourth quarter of 2004 increased by $1.1 million (2%) to $48.5 million,
compared to $47.4 million for the fourth quarter of 2003. For the year 2004, consolidated operating revenues increased
by $2.1 million (1%) to $153.4 million, compared to $151.3 million 2003.
Net income for 2003 included the Company's $1.9 million gain (pre-tax) from the sale of the Napili Plaza in August
2003 and $13.5 million (pre-tax) attributable to the September 2003 sale of Queen Kaahumanu Center (primarily representing
the reversal of the accumulated losses of joint venture in excess of investment). Net income for 2003 also included
$2.9 million gain (pre-tax) from the sale of the Company's Costa Rican assets. The Napili Plaza and Costa Rican
operations are reported as discontinued operations.
Consolidated interest expense was lower by 62% and 54%, respectively, for the fourth quarter and year 2004 primarily
because of lower average borrowings.
The Pineapple segment produced an operating loss from continuing operations of $2.7 million in the fourth quarter
of 2004 compared to an operating profit of $2.1 million in the fourth quarter of 2003. Revenues from Pineapple
operations decreased by $14.0 million (38%) to $22.4 million for the fourth quarter of 2004 compared to $36.4 million
for the fourth quarter of 2003. For the year 2004, the Pineapple segment incurred an operating loss of $11.3 million
compared to an operating loss of $4.8 million for 2003. Pineapple segment revenues for the year 2004 decreased
by $20.5 million (20%) to $80.0 million compared to $100.5 million for 2003. Pineapple revenues for the fourth
quarter of 2004 included $1.7 million from U. S. Customs pursuant to the Continued Dumping and Subsidy Offset Act
of 2000, compared to $5.4 million from this program in 2003. Revenues for 2003 also included $3 million relating
to the settlement of lawsuits.
The case volume of fresh fruit sales increased in 2004 compared to 2003 and partially compensated for the decrease
in case volume of canned pineapple sales. Contributing to the reduction in Pineapple segment revenues was a decrease
in the average prices for fresh fruit sales of 18% and 5%, respectively, for the fourth quarter and the year 2004
compared to 2003, reflecting an unusually high level of pineapple from Central and South America in November and
December of 2004. The average sales prices for canned pineapple products were higher by 10% and 9%, respectively,
in the fourth quarter and year 2004 compared to the 2003.
The operating loss for the fourth quarter of 2004 and the increased operating loss for the year 2004 compared to
2003 was also the result of higher per unit cost of sales. In 2004, the Company invested in future crops in an
effort to reduce fluctuations in fruit deliveries, to expand supply and improve quality. These costs were included
in cost of sales for 2004 because, under the Company's accounting method, all pineapple production costs incurred
at the plantations are charged to the cost of crops harvested for the year. Significantly lower shipping costs
in 2004 because of increased use of surface shipment, partially mitigated increased growing costs incurred in 2004.
The Company was able to increase use of surface shipment, which is less costly, because of the extended shelf life
of its fresh pineapple due to improved post-harvest practices.
The Resort segment produced an operating loss of $1.3 million for the fourth quarter of 2004, compared to an operating
loss of $1.7 for the fourth quarter of 2003. Revenues from the resort segment increased by $854,000 (8%) to $11.2
million compared to $10.4 million for the fourth quarter of 2003. For the year 2004, the Resort segment produced
an operating loss of $1.6 million compared to an operating loss of $1.8 million for 2003. Revenues for the year
2004 increased by $4.6 million (10%) to $49.0 million compared to $44.5 million for 2003.
Kapalua Resort's hotel and condominium occupancies were higher in the fourth quarter and year 2004 compared to
2003. Operating profit for the fourth quarter and year 2004 from the Resort's golf, merchandise and Kapalua Realty
operations exceeded 2003. Improved results from these operations were partially offset by lower lease revenues
and lower results from the Villas rental operations. In August 2004, the Company cancelled the Kapalua Bay Hotel
ground lease in connection with the purchase of the hotel by Kapalua Bay Holdings LLC, in which the Company has
a 51% membership interest. Lower results from the Villas operations were largely due to maintenance and other expenditures
to upgrade and improve the facilities and level of service provided by the Kapalua Villas.
The Development segment reported an operating profit of $7.9 million for the fourth quarter of 2004 compared to
an operating profit of $115,000 for the fourth quarter of 2003. For the year 2004, Development had an operating
profit of $12.7 million compared to an operating loss of $46,000 for 2003. Revenues from Development operations
were $14.6 million for the fourth quarter of 2004 compared to $641,000 for the fourth quarter of 2003. For the
year 2004, Development revenues were $24.0 million compared to $4.5 million for the same period in 2003. Development
segment results for 2004 also include the sale of a 6.5-acre conservation-zoned parcel at Kapalua, which contributed
$4.0 million to operating profit for 2004. In addition to real estate sales, the Development segment operating
profit for 2004 includes $780,000 of losses from the Company's equity investment in Kapalua Bay Holdings LLC.
MAUI LAND & PINEAPPLE COMPANY, INC.
Report of Consolidated Operations - Segment Basis (unaudited)
(Dollars in Thousands Except Per Share Amounts)
Three Months Ended Twelve Months Ended
December 31 December 31
2004 2003 2004 2003
---- ---- ---- ----
Operating Revenues
Pineapple $ 22,420 $ 36,387 $ 80,023 $ 100,508
Resort 11,221 10,367 49,033 44,478
Development 14,618 641 24,017 4,509
Commercial & Property 280 8 322 1,838
---------- ---------- ---------- ----------
Total Operating
Revenues 48,539 47,403 153,395 151,333
========== ========== ========== ==========
Operating Profit (Loss)
Pineapple (2,698) 2,126 (11,251) (4,761)
Resort (1,255) (1,730) (1,553) (1,761)
Development 7,870 115 12,725 (46)
Commercial & Property 85 (203) 230 12,643
---------- ---------- ---------- ----------
Total Operating Profit
(Loss) 4,002 308 151 6,075
Interest Expense (193) (513) (1,159) (2,526)
Interest Income 6 11 23 167
Income Tax (Expense)
Benefit (1,150) (286) 528 (1,500)
---------- ---------- ---------- ----------
Income (Loss) -
Continuing Operations 2,665 (480) (457) 2,216
Income (Loss) -
Discontinued
Operations (net) (40) 1,687 74 3,781
---------- ---------- ---------- ----------
Net Income (Loss) $ 2,625 $ 1,207 $ (383) $ 5,997
========== ========== ========== ==========
Earnings Per
Common Share -
basic and diluted
Income (Loss) -
Continuing
Operations .37 (.06) (.06) .31
Income (Loss) -
Discontinued
Operations (.01) .23 .01 .52
---------- ---------- ---------- ----------
Net Income (Loss) $ .36 $ .17 $ (.05) $ .83
========== ========== ========== ==========
Average Common Shares
Outstanding
Basic 7,201,770 7,195,800 7,197,808 7,195,800
Diluted 7,238,408 7,215,682 7,197,808 7,200,811
NOTES:
The Company's reports for interim periods utilize numerous estimates of production, general and administrative
expenses, and other costs for the full year. Consequently, amounts in the interim reports are not necessarily indicative
of results for the full year.
In 2004, the Company reorganized its reportable business segments and prior year amounts were restated for comparability.
The new Development segment is primarily comprised of all of the Company's real estate entitlement, development,
construction and sales activity. These activities were previously reported as part of the Resort segment or the
Commercial & Property segment. The Resort segment now includes the operation of recreation and retail facilities
and utility companies and property management activities at the Kapalua Resort.
In 2004, operating revenues and expenses exclude the Company's equity in the earnings and losses of joint ventures,
and prior year amounts were restated for consistency. As in prior years, the Company's equity in the earnings and
losses of joint ventures for 2004 is included in the segment operating profits.
In the fourth quarter of 2004, the Company began to allocate all corporate general and administrative expenses
to its business segments and prior year amounts were restated for comparability. Such allocations are consistent
with management's evaluation of the business segments.
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CONTACT: Maui Land & Pineapple Company, Inc. Fred W. Rickert, 808-877-3871