MAXXAM Reports Results for Third Quarter, Nine Months of 1999
HOUSTON--(BUSINESS WIRE)--Oct. 20, 1999--MAXXAM Inc. (ASE:MXM)
today reported a net loss of $37.4 million, or $5.35 per share, for
the third quarter of 1999, compared to a net loss of $44.5 million, or
$6.35 per share, for the third quarter of 1998. (Included in the 1998
third quarter was an extraordinary loss of $42.5 million, or $6.07 per
share, for prepayment premiums and the write off of deferred financing
costs related to the refinancing of the forest products segment's
debt.)
For the first nine months of 1999, MAXXAM had net income of $56.6
million, or $7.23 per share, compared to a net loss of $30.2 million,
or $3.86 per share, for the same period of 1998. Net income for the
first nine months of 1999 included a one-time pre-tax gain of $239.8
million ($142.1 million net of deferred taxes) for the landmark sale
of the Headwaters timberlands to the governments of the United States
and State of California recorded during the first quarter of 1999.
Net sales for the third quarter and first nine months of 1999
totaled $585.3 million and $1,718.9 million, respectively, compared to
$628.8 million and $1,992.4 million for the same periods of 1998.
MAXXAM reported operating losses of $19.1 million for the third
quarter and $56.9 million for the first nine months of 1999, compared
to operating income of $40.4 million and $162.7 million for the
comparable periods of 1998.
MAXXAM operates primarily in aluminum, forest products, real
estate and racing.
ALUMINUM OPERATIONS
Aluminum operations reported an operating loss of $10.6 million
for the third quarter and $39.9 million for the first nine months of
1999, compared to operating income of $32.3 million and $135.4 million
for the same periods of 1998. Net sales were $520.3 million in the
third quarter and $1,524.7 million for the first nine months of 1999,
compared to $541.6 million and $1,753.4 million in the same periods of
1998.
Operating results declined between 1998 and 1999 due to lower
average realized prices in all four of Kaiser's business segments and
lower shipments of alumina and flat-rolled products. In addition,
Kaiser's operating loss for the third quarter of 1999 includes a
non-cash pre-tax charge of $19.1 million to reduce the carrying value
of the company's Micromill assets.
(NOTE: A separate press release with additional details on
aluminum operations is being released today by Kaiser Aluminum
Corporation.)
FOREST PRODUCTS OPERATIONS
MAXXAM's forest products operations recorded a loss of $3.8
million for the third quarter and $8.5 million for the first nine
months of 1999, compared to operating income of $12.9 million and
$37.7 million for the same periods a year ago. Net sales totaled $49.0
million for the third quarter and $137.1 million for the first nine
months of 1999, compared to $65.9 million and $181.3 million for the
same periods a year ago.
Results for the third quarter and for the first nine months of
1999 are a reflection of the diminished supply of approved timber
harvest plans due to the complexity of managing the new regulatory
structure put in place with the Headwaters agreement. These events
brought about a reduced supply of logs for production and caused
manufacturing inefficiencies from sawmill production curtailments.
REAL ESTATE AND RACING OPERATIONS
MAXXAM'S real estate and racing operations segments reported an
overall operating loss of $2.6 million for the third quarter and $1.7
million for the first nine months of 1999, compared to operating
losses of $0.9 million and $0.1 million for the comparable 1998
periods. Net sales in the third quarter and first nine months of 1999
were $16.0 million and $57.1 million, respectively, compared to $21.3
million and $57.7 million in 1998.
The increase in operating losses for the quarter and first nine
months of 1999 is in part a reflection of lower sales from the
company's Palmas Del Mar project.
CORPORATE
As previously announced, MAXXAM may from time to time purchase
shares of its common stock on national exchanges or in privately
negotiated transactions. |
