MAXXAM Reports Results for Second Quarter and First Half of 2000
HOUSTON--(BUSINESS WIRE)--July 26, 2000--MAXXAM Inc. (AMEX:MXM)
today reported net income of $10.3 million, or $1.36 per share, for
the second quarter of 2000, compared to a net loss of $18.1 million,
or $2.59 per share, for the second quarter of 1999. Net sales for the
second quarter of 2000 totaled $616.8 million, compared to $588.8
million in the same period of 1999.
For the first six months of 2000, MAXXAM reported net income of
$15.2 million, or $1.96 per share, compared to $94.0 million, or
$12.01 per share, for the same period of 1999. Net income for the
first six 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 the State of California recorded during the first quarter of 1999.
Net sales for the first six months of 2000 were $1,244.4 million
compared to $1,133.6 million for the first six months of 1999.
MAXXAM reported operating income of $60.6 million for the second
quarter and $99.1 million for the first six months of 2000, compared
to operating losses of $2.6 million and $37.8 million for the
comparable periods of 1999.
MAXXAM operates primarily in aluminum, forest products, real
estate, and racing.
ALUMINUM OPERATIONS
Aluminum operations reported operating income of $53.0 million for
the second quarter and operating income of $91.4 million for the first
six months of 2000, compared to operating income of $2.2 million and
an operating loss of $29.3 million for the same periods of 1999. Net
sales were $542.5 million in the second quarter and $1,108.2 million
for the first six months of 2000, compared to $525.0 million and
$1,004.4 million for the year ago periods.
Operating results relative to the 2000 second quarter include a
one-time pre-tax net gain of $15.8 million on the sale of non-federal
power in the Pacific Northwest, and a pre-tax charge of approximately
$2.0 million for costs associated with corporate restructuring
initiatives and Kaiser Aluminum's exit from the low margin air bag
canister business. Even excluding these two non-recurring items,
operating income increased sharply compared to the year ago period due
largely to higher price realizations in all four business units.
(Note: A separate press release with additional details on
aluminum operations is being released today by Kaiser Aluminum
Corporation.)
FOREST PRODUCTS OPERATIONS
Forest products operations reported operating income of $8.6
million for the second quarter and $14.4 million for the first six
months of 2000, compared to operating losses of $3.3 million and $4.7
million for the same periods of 1999. Net sales totaled $55.9 million
for the second quarter and $103.3 million for the first six months of
2000, compared to $41.4 million and $88.1 million for the same year
ago periods.
Results for the second quarter and first half of 2000 are a
reflection of higher prices for both redwood and upper grade
Douglas-fir lumber and higher shipments of common grade redwood and
Douglas-fir lumber. However, this improvement in shipments was
partially offset by lower shipments of upper grade redwood lumber due
to continuing reductions in the volume of old-growth logs available
for the production of lumber products. The failure of government
agencies to approve timber harvest plans in a timely manner continues
to adversely affect log supply and disrupt the normal functioning of
business operations.
REAL ESTATE OPERATIONS
Real estate operations reported operating income of $1.4 million
for the second quarter and an operating loss of $2.1 million for the
first six months of 2000, compared to operating income of $0.8 million
and an operating loss of $1.3 million for the same periods of 1999.
Net sales in the second quarter and first six months of 2000 were
$12.3 million and $18.5 million, compared to $17.6 million and $28.2
million for the year ago periods.
The decrease in net sales for the second quarter and first six
months of 2000 is due to lower sales of real estate at the Palmas del
Mar, Fountain Hills and Mirada development projects. Operating income
increased for the second quarter of 2000 from the same period in 1999
primarily due to an insurance reimbursement for business interruption
experienced at Palmas del Mar as a result of a 1998 hurricane.
RACING OPERATIONS
Racing operations reported operating income of $0.1 million for
the second quarter and $1.5 million for the first six months of 2000,
compared to an operating loss of $0.1 million and operating income of
$2.2 million for the same periods of 1999. Net sales in the second
quarter and first six months of 2000 were $6.1 million and $14.4
million, compared to $4.8 million and $12.9 million for the year ago
periods.
Racing operations' 2000 second quarter and six month net sales
increased primarily due to the opening of Valley Race Park in
Harlingen, Texas. Operating income for the second quarter was
comparable to the same period in 1999. However, higher marketing
expenses at Sam Houston Race Park and start-up costs related to the
grand opening of Valley Race Park caused the decline in operating
income for the first six months of 2000 compared to the same period in
1999.
CORPORATE
As previously announced in prior earnings statements, MAXXAM may
from time to time purchase shares of its common stock on national
exchanges or in privately negotiated transactions.
In that regard, MAXXAM repurchased an aggregate of 165,400 shares
of its common stock in separate transactions during the week of July
2.
MAXXAM INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(In millions of dollars, except share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
2000 1999 2000 1999
Net sales $616.8 $588.8 $1,244.4 $1,133.6
Costs and expenses (556.2) (591.4) (1,145.3) (1,171.4)
------ ------ -------- --------
Operating income (loss) 60.6 (2.6) 99.1 (37.8)
Other income (expense):
Gain on sale of
Headwaters
Timberlands -- -- -- 239.8
Investment, interest
and other income
(expense), net 11.5 15.2 34.5 24.5
Interest expense (49.1) (49.2) (98.7) (98.6)
------ ------ -------- --------
Income (loss) before
income taxes and
minority interests 23.0 (36.6) 34.9 127.9
Credit (provision) for
income taxes (9.3) 11.6 (13.8) (55.8)
Minority interests (3.4) 6.9 (7.3) 21.9
Income (loss) before
extraordinary item 10.3 (18.1) 13.8 94.0
Extraordinary item:
Gain on repurchase of
debt, net of income
tax provision of
$1.0 million -- -- 1.4 --
------ ------ -------- --------
Net income (loss) $10.3 $(18.1) $15.2 $94.0
Basic earnings (loss)
per common share:
Income (loss) before
extraordinary item $1.49 $(2.59) $1.93 $13.42
Extraordinary item -- -- 0.21 --
------ ------ -------- --------
Net income (loss) $1.49 $(2.59) $2.14 $13.42
Diluted earnings (loss)
per common and common
equivalent share:
Income (loss) before
extraordinary item $1.36 $(2.59) $1.77 $12.01
Extraordinary item -- -- 0.19 --
------ ------ -------- --------
Net income (loss) $1.36 $(2.59) $1.96 $12.01
Weighted average common
and common equivalent
shares outstanding (in
thousands):
Basic 6,914 7,001 7,065 7,001
Diluted 7,582 7,001 7,737 7,825 |
