A&B 3rd Quarter Earnings Per Share 23-Percent Higher; Ocean Transportation, Property Transactions Lead Improvement
HONOLULU--(BUSINESS WIRE)--October 19, 2000--Alexander & Baldwin, Inc. (Nasdaq:ALEX) today reported that its third quarter 2000 net income increased 16 percent to $21,354,000, and that its third quarter earnings per share increased 23 percent, to $0.53 per share, on fewer shares outstanding. Net income in the third quarter of 1999 was $18,476,000, or $0.43 per share. Revenue in the third quarter of 2000 was $273,478,000, compared with revenue of $244,904,000 in the third quarter of 1999.
After an accounting change, net income for the first nine months of 2000 was $76,028,000, or $1.85 per share, versus $57,563,000, or $1.33 per share in the first nine months of 1999. The accounting change resulted in a one-time, non-cash increase to first quarter 2000 earnings of $12,250,000. Revenue in the first nine months of 2000 was $767,737,000, compared with $706,189,000 in the first nine months of 1999.
3rd Quarter Results Strong
"A&Bs third quarter results reflect continuing strong performance from Matson and our real estate business which, together, comprise more than 90 percent of the Company's operating assets," said W. Allen Doane, president and chief executive officer of A&B. "A 19-percent improvement in Matson's operating profit was achieved despite a significant increase in fuel prices. Auto and freight volume is increasing for the second consecutive year, after many years of declines. The real estate business also is performing positively, with good year-over-year increases in both property sales and leasing. Even U.S. raw sugar prices, which have been a drag on our food products profitability, have begun to recover recently. All in all, the third quarter was a good one."
3rd Quarter, Nine Months Consolidated Operating Profit Higher
In the third quarter of 2000, A&B's consolidated operating profit was $42.7 million. That was $7.1 million, or 20-percent, higher than the $35.6 million in the third quarter of 1999. For the first nine months of this year, operating profit was $126.4 million, an increase of $12.9 million, or 11 percent, versus $113.5 million in the first nine months of 1999. The primary drivers of the higher results in both the third quarter and the first nine months of 2000 were the improved results in property development and management and in ocean transportation.
Interest expense in both periods of 2000 was higher than in the corresponding periods in 1999, reflecting both increased debt balances and higher rates. Corporate expenses were lower in both periods.
Matson 3rd Quarter Results Up 19 Percent
In the third quarter of 2000, ocean transportation operating profit was $26.1 million. That was an increase of $4.2 million, or 19 percent, from $21.9 million in the third quarter of 1999. This improvement was made in spite of a nearly 60-percent increase in the price of bunker fuel from the year-earlier quarter, and it was due primarily to higher Hawaii service auto and container volumes and a fuel surcharge that partially offset the increase in fuel costs. Third quarter 2000 Hawaii service container volume was two percent above the 1999 third quarter, and automobile volume was 28-percent higher.
In the first nine months of 2000, ocean transportation operating profit was $73.9 million. This was an increase of $8.4 million, or 13 percent, from $65.5 million in the first nine months of 1999. Matson's Hawaii service container volume was two-percent higher and its automobile volume was 42-percent higher.
Real Estate Results Up Sharply
A&B Properties, Inc. (Properties) conducts the property management and development activities of A&B. In the third quarter of 2000, Properties operating profit was $12.9 million, an increase of $4.8 million, or 59 percent, from $8.2 million in the corresponding period a year earlier. For the first nine months of 2000, Properties operating profit of $47.3 million was up $9.7 million, or 26 percent, from $37.7 million a year earlier. Real estate sales and property management activities contributed to the improvements in both periods.
In the third quarter, operating profit from property leasing was $7.5 million. This was $0.9 million, or 14-percent, higher than $6.6 million in the third quarter of 1999. The increase was due primarily to additions to the property portfolio and higher occupancies.
In the first nine months of 2000, property leasing operating profit was $22.3 million. This was eight-percent higher than the $20.6 million earned in the first nine months of 1999, in spite of the fact that the prior year period had benefited from the one-time buyout of a long-term ground lease. Year-to-date 2000 occupancy levels for U. S. mainland properties averaged 96 percent, versus 94 percent in the first nine months of 1999; Hawaii properties improved to 85 percent, versus 78 percent in the comparable period of 1999.
Property sales totaling $14.4 million took place in the third quarter of 2000, compared with $8.0 million in the third quarter of 1999. Operating profit resulting from these property sales was $5.5 million, versus $1.6 million in the prior year period. Results in the third quarter of 2000 included the planned sale of a 13-acre parcel at Properties Maui Business Park to Home Depot.
Property sales revenue totaled $42.5 million in the first nine months of 2000, compared with $43.1 million in the first nine months of 1999. Operating profit resulting from these property sales was $25.1 million, which was $8.0 million, or 47-percent, higher than the $17.1 million in the first nine months of 1999.
Low Raw Sugar Prices, Drought Impact Food Products' Results
In the third quarter of 2000, the food products segment had operating profit of $2.9 million, compared with $4.8 million in the third quarter of 1999. In the first nine months of 2000, food products operating profit also was $2.9 million, compared with $8.3 million in the first nine months of 1999. The primary reasons for the declines were historically low U. S. raw sugar prices and lower raw sugar production that resulted from drought conditions on the island of Maui.
Alexander & Baldwin, Inc., headquartered in Honolulu, is engaged in ocean transportation, through its subsidiary, Matson Navigation Company, Inc, in property development and management, through A&B Properties, Inc., and in food products, through Hawaiian Commercial & Sugar Company and Kauai Coffee Company, Inc. 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 29 of the Company's 1999 annual report to shareholders. These factors could cause actual results to differ materially from those projected in the statements.
Alexander & Baldwin, Inc. 2000 and 1999 Third-Quarter And Nine-Months Results 2000 1999 Three Months Ended September 30: Revenue $273,478,000 $244,904,000 Net Income $21,354,000 $18,476,000 Basic Share Earnings $0.53 $0.43 Diluted Share Earnings $0.52 $0.43 Average Shares Outstanding 40,439,000 43,223,000 Nine Months Ended September 30: Revenue $767,737,000 $706,189,000 Income Before Accounting Change $63,778,000 $57,563,000 Net Income $76,028,000 $57,563,000 Basic & Diluted Share Earnings: Income Before Accounting Change $1.55 $1.33 Net Income $1.85 $1.33 Average Shares Outstanding 41,095,000 43,366,000 Industry Segment Data, Net Income (In Thousands) Three Months Ended Nine Months Ended September 30, September 30, 2000 1999 2000 1999 Revenue: Ocean Transportation $211,214 $185,529 $606,397 $542,560 Property Devel. & Mgmt. Leasing 12,759 10,852 37,064 33,272 Sales 14,435 7,985 42,474 43,096 Food Products 34,294 39,812 79,464 85,083 Other 776 726 2,338 2,178 Total Revenue $273,478 $244,904 $767,737 $706,189 Operating Profit, Net Income: Ocean Transportation $ 26,106 $ 21,896 $ 73,913 $ 65,479 Property Devel. & Mgmt. Leasing 7,467 6,562 22,257 20,578 Sales 5,472 1,590 25,090 17,079 Food Products 2,901 4,828 2,909 8,318 Other 745 693 2,218 2,033 Total Operating Profit 42,691 35,569 126,387 113,487 Interest Expense (6,661) (4,209) (17,967) (13,105) Corporate Expenses (2,392) (3,941) (8,600) (10,921) Income Before Taxes & Accounting Change 33,638 27,419 99,820 89,461 Income Taxes (12,284) (8,943) (36,042) (31,898) Income Before Acctg. Change 21,354 18,476 63,778 57,563 Cumulative Effect of Acctg. Change -- -- 12,250 -- Net Income $ 21,354 $ 18,476 $ 76,028 $57,563 Consolidated Balance Sheets (In Thousands) September 30, December 31, 2000 1999 (unaudited) Assets Current Assets $ 195,197 $ 202,450 Investments 159,123 158,726 Real Estate Developments 65,167 60,810 Property, Net 961,447 928,627 Capital Construction Fund 144,664 145,391 Other Assets 95,432 65,456 Total $1,621,030 $1,561,460 Liabilities & Equity Current Liabilities $ 151,680 $ 142,645 Long-Term Debt 332,240 277,570 Post-Retirement Benefit Obligs. 46,173 60,767 Other Long-Term Liabilities 44,788 51,161 Deferred Income Taxes 370,307 358,354 Shareholders' Equity 675,842 670,963 Total $1,621,030 $1,561,460 Consolidated Statements of Cash Flows (In Thousands, Unaudited) Nine Months Ended September 30, 2000 1999 Operating Cash Flows $ 88,075 $112,852 Capital Expenditures (78,718) (41,375) CCF Deposits, Net (797) (10,258) Proceeds From/(Payment of) Debt, Net 69,500 (91,709) Repurchases of Capital Stock (43,294) (20,724) Dividends Paid (27,722) (29,264) All Other, Net 898 (2,553) Increase/(Decrease) in Cash $ 7,942 $(83,031) Depreciation $ 52,411 $ 56,647
Alexander & Baldwin, Inc., Honolulu
John B. Kelley, Vice President, 808/525-8422