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MAXXAM Reports Improved Results for Fourth Quarter, Full Year of 1997
HOUSTON--(BUSINESS WIRE)--Jan. 27, 1998--MAXXAM Inc. (ASE:MXM) today reported net income of $14.6 million, or $1.67 per share(1), for the fourth quarter of 1997, compared to a net loss of $5.1 million, or $0.59 per share, for the fourth quarter of 1996. Net sales for the fourth quarter of 1997 totaled $682.4 million, up from $622.2 million in the same period of 1996.
MAXXAM's net income for the quarter reflected substantially improved performance by aluminum operations, its largest business sector.
For the full year 1997, MAXXAM's net income was $65.2 million, or $7.14 per share, up from $22.9 million, or $2.42 per share, for 1996. Net sales for 1997 were $2,729.1 million, up from $2,543.3 million for 1996.
Operating income was $60.8 million for the fourth quarter and $236.4 million for the full year of 1997, up from $22.5 million and $131.3 million for the comparable periods of 1996.
MAXXAM operates primarily in three areas: aluminum, forest products, and real estate.
ALUMINUM OPERATIONS
Aluminum operations reported operating income of $48.4 million for the fourth quarter and $174.0 million for the full year of 1997, up from operating income of $11.8 million and $103.7 million for the same periods of 1996. Net sales were $594.6 million in the fourth quarter and $2,373.2 million for the full year of 1997, up from $538.4 million and $2,190.5 million in the same periods of 1996.
The significant improvement in the fourth quarter is partly due to better realized prices for alumina and primary aluminum and to sharply higher shipments of fabricated aluminum products resulting from brisk demand and from production at an extruded products facility that was acquired in mid-1997.
(NOTE: A separate press release with additional details on aluminum operations is being released today by Kaiser Aluminum Corporation.)
FOREST PRODUCTS OPERATIONS
Operating income for forest products operations was $18.4 million for the fourth quarter and $84.9 million for the full year of 1997, compared to $19.5 million and $73.0 million for the same periods a year ago. Operating cash flow (operating income before depletion and depreciation) was $25.1 million for the fourth quarter and $111.0 million for the full year of 1997, compared to $26.5 million and $100.2 million for the same periods of 1996. Net sales totaled $70.7 million for the fourth quarter and $287.2 million for the full year of 1997, up from $65.0 million and $264.6 million for the same periods a year ago.
Relative to the year-ago period, net sales for the 1997 fourth quarter were higher due to increased shipments of redwood common grade lumber and higher average realized prices for upper grade redwood lumber, partially offset by lower average realized prices for common grade Douglas fir lumber.
For the full year of 1997, net sales increased primarily as a result of higher average realized prices and shipments for most categories of lumber.
Operating income for the fourth quarter was relatively flat as compared to the fourth quarter of 1996. Operating income for the full year increased from the year-ago period principally because of the increase in net sales discussed above.
REAL ESTATE AND OTHER OPERATIONS
The company's real estate and other operations segment narrowed its operating losses to $3.2 million for the fourth quarter and $5.0 million for the full year 1997, compared to operating losses of $4.7 million and $12.0 million for the comparable 1996 periods. The results are due primarily to higher earnings from sales of real property.
Net sales in the fourth quarter and full year of 1997 were $17.1 million and $68.7 million, respectively, compared to $18.8 million and $88.2 million in 1996. The decreases were primarily due to lower revenues from resort and commercial operations, reflecting various asset dispositions during 1996 and the first quarter of 1997.
CORPORATE
As previously announced, the company may from time to time purchase shares of its common stock on national exchanges or in privately negotiated transactions. |
