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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
April 27, 2005
1 ALEXANDER & BALDWIN, INC.
(Exact name of registrant as specified in its charter)
Hawaii 0-565 99-0032630
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer
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incorporation) Identification No.)
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822 Bishop Street, P. O. Box 3440
Honolulu, Hawaii 96801
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(Address of principal executive offices and zip code)
(808) 525-6611
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(Registrant's telephone number,
including area code)
Item 2.02. Disclosure of Results of Operations and Financial Condition
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Alexander & Baldwin, Inc. issued a press release on April 27, 2005,
announcing its 2005 first quarter consolidated earnings. This information,
attached as Exhibit 99.1, is being furnished to the SEC pursuant to Item 2.02
of Form 8-K.
(a) Exhibits
--------
99.1 Press Release announcing 2005 first quarter
consolidated earnings issued on April 27, 2005.
SIGNATURE
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Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Date: April 27, 2005
ALEXANDER & BALDWIN, INC.
By: /s/ Christopher J. Benjamin
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Christopher J. Benjamin
Vice President and Chief Financial Officer
For further information, contact:
John B. Kelley, Vice President
Phone 808-525-8422
E-mail: invrel@abinc.com
Hold for Release:
6:30 P.M. EASTERN DAYLIGHT TIME
Wednesday, April 27, 2005
A&B REPORTS 1st QUARTER 2005 NET INCOME OF $37.7 MILLION
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Net Income Up 39%
Honolulu (April 27, 2005)--Alexander & Baldwin, Inc. (NASDAQ:ALEX)
today reported that net income for the first quarter of 2005 was $37,700,000, or
$0.86 per fully diluted share. Net income in the first quarter of 2004 was
$27,100,000, or $0.63 per fully diluted share. Revenue in the first quarter of
2005 was $365,800,000, compared with revenue of $342,300,000 in the first
quarter of 2004.
COMMENTS ON QUARTER & OUTLOOK
"The first quarter results were very strong," said Allen Doane,
president and chief executive officer of A&B. "The Transportation segment
benefited from a larger-than-expected contribution from our stevedoring joint
venture, which resulted from increased volume in the West Coast ports; from
continuing growth in our logistics services business; and from unit growth and
yield improvements in the Hawaii service. In total, Transportation operating
profit rose 67 percent.
"Real Estate also had excellent performance, but its operating profit
was 5 percent lower because the comparison was made with a first quarter in 2004
that we had called "exceptional." Nonetheless, leasing results were higher and
property sales were active. A&B Properties closed the last sales in three of its
development projects and sold two properties from the Mainland leased property
portfolio.
"HC&S had a successful start of the 2005 sugar harvest, bettering its
production over last year's first quarter. A one-time payment from the federal
government to offset the prior year's weather-related lost production
significantly increased the Food Product segment's revenue and operating profit.
"Several events of importance to the company took place during the
quarter. In February, we announced that Matson would start a new service in 2006
that would serve Hawaii, Guam and China before returning to the U.S. West Coast,
and that it would acquire two new U.S.-built containerships to do so. Earlier
that month, we announced the purchase of a prime four-acre commercial site in
Honolulu, the company's 23rd real estate investment in Hawaii since 1999 outside
of its core landholdings. The initial response from buyers has been very strong
at the Kai Malu condominium joint venture at Wailea, and preparations
accelerated near quarter-end for the marketing of the Founders program at
Kukui'ula, our 1,000-acre joint venture residential resort community on Kauai.
"All in all, it was a great start to the year. Although we continue
to expect that 2005 results will better 2004, we also remain cautionary in our
outlook--especially about any tendency to extrapolate the pace of the first
quarter improvement into expectations for the full-year."
TRANSPORTATION--OCEAN TRANSPORTATION
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Quarter Ended March 31
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Dollars in Millions 2005 2004 Change
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Revenue $ 206.2 $ 196.5 5%
Operating Profit $ 29.7 $ 18.6 60%
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Volume (Units)
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Hawaii Containers 41,300 39,700 4%
Hawaii Automobiles 35,600 36,300 - 2%
Guam Containers 4,000 4,500 - 11%
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For the first quarter of 2005, Ocean Transportation revenue of $206.2
million was $9.7 million, or 5 percent, higher than the first quarter of 2004.
This increase was due to higher Hawaii container volume, improved yields and
cargo mix, and increases in the bunker fuel surcharge necessitated by higher
fuel costs. Total Hawaii container volume was four percent higher than the first
quarter of 2004, reflecting continuing economic growth in the state. Total
Hawaii automobile volume was 2 percent lower.
Operating profit of $29.7 million was $11.1 million, or 60 percent,
higher than the first quarter of 2004. This increase was primarily the result of
higher equity in the earnings of SSA Terminals, LLC, (SSAT) of which Matson is a
minority owner (note: income from investments in joint ventures is included in
operating profit, but not revenue); improved Hawaii and Guam yields and cargo
mix; and lower operating overhead expenses, partially offset by higher vessel
operating costs and lower vessel charters. About half of the improvement at SSAT
resulted from higher international import volumes and the balance from SSAT's
January fiscal year-end closing adjustments.
TRANSPORTATION--LOGISTICS SERVICES
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Quarter Ended March 31
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Dollars in Millions 2005 2004 Change
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Revenue $ 96.1 $ 74.1 30%
Operating Profit $ 3.0 $ 1.0 3.0 X
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Logistics services revenue of $96.1 million was $22.0 million, or 30
percent, higher than the first quarter of 2004. Operating profit of $3.0 million
was three times the amount in the comparable period last year. Revenue and
operating profit improvements were the result of increased customer volume and
improved rates in all business lines. Highway volume increased 30 percent and
intermodal volume rose 7 percent. The increase in highway volume was due to both
an acquisition in late 2004 and organic growth.
The operating profit margin for the logistics services business was 3.1
percent in the first quarter of 2005, compared with 1.3 percent for the first
quarter of 2004.
REAL ESTATE--LEASING
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Quarter Ended March 31
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Dollars in Millions 2005 2004 Change
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Revenue $ 21.9 $ 20.8 5%
Operating Profit $ 10.7 $ 9.5 13%
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Occupancy Rates
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Mainland 96% 94% 2%
Hawaii 90% 90% --
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Leasable Space (Million sq. ft.)
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Mainland 3.4 3.7 - 8%
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Hawaii 1.7 1.7 --
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Property Leasing revenue for the first quarter of 2005 (before removing
amounts treated as discontinued operations) of $21.9 million was $1.1 million,
or 5 percent, higher than the first quarter of 2004. Operating profit of $10.7
million was $1.2 million, or 13 percent, higher. The improved revenue and
operating profit resulted from property acquisitions subsequent to the first
quarter of 2004, new leases and a lease termination payment received in 2005.
The higher occupancy rate for the Mainland commercial leasing portfolio was due
primarily to a 2004 vacancy at one large warehouse property. Comparing the
periods, there was a small net reduction in the leasable area on the Mainland.
As noted below, two leased properties were sold during the quarter and one, a
ground lease of a retail site in Honolulu, was acquired.
REAL ESTATE--SALES
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Quarter Ended March 31
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Dollars in Millions 2005 2004 Change
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Revenue $ 45.9 $ 40.1 14%
Operating Profit $ 16.5 $ 19.0 - 13%
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Property sales revenue in the first quarter of 2005 of $45.9 million
was $5.8 million, or 14 percent, higher than the first quarter of 2004.
Operating profit from property sales of $16.5 million was $2.5 million, or 13
percent, lower than the very strong results of the first quarter of 2004.
Sales during the first quarter of 2005 included Ontario Pacific
Business Centre, in Ontario, Calif., for $17.8 million; Northwest Business
Center, in San Antonio, Texas, for $6.3 million; 5-1/2 floors at Alakea
Corporate Tower, a Honolulu office condominium, for $5.5 million; an eight-acre
residential resort development parcel at Wailea for $4.5 million; a commercial
development parcel in Waikiki; three residential lots at Wailea Golf Vistas;
three lots at Maui Business Park Phase I and three lots at Mill Town Center on
Oahu. The sales at Wailea Golf Vistas, Alakea Corporate Tower and Maui Business
Park Phase I closed out those projects.
In the first quarter of 2004, sales included 7-1/2 floors at Alakea
Corporate Tower for $8.8 million, nine lots at Mill Town Center for $4.5
million, seven lots at Maui Business Park for $4.1 million and 21 lots at Wailea
Golf Vistas for $18.1 million. A 71-acre parcel on Maui also was sold and 11
sales of homes at the Kai Lani joint venture on Oahu closed out that project.
Discontinued operations in the first quarter of 2005 included the
Ontario Pacific Business Centre and Northwest Business Center, and the fee
interest in a parcel on Maui. They also included the operating results of an
office building on Maui that the Company plans to sell within the next 12
months. The amounts reported as continuing and discontinued operations in prior
quarters are restated each time a property is designated as discontinued.
FOOD PRODUCTS
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Quarter Ended March 31
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Dollars in Millions 2005 2004 Change
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Revenue $ 22.4 $ 13.4 67%
Operating Profit $ 9.0 $ 2.6 3.5 X
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Tons Sugar Produced 19,500 11,700 67%
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Food Products revenue in the first quarter of 2005 of $22.4 million was
$9.0 million, or 67 percent, higher than in 2004. Operating profit of $9.0
million was $6.4 million, or 3.5 times, higher than that of the first quarter of
2004. Both revenue and operating profit benefited from a $5.5 million one-time,
weather-related federal relief payment. Sugar and power sales were higher than
in the year-earlier period. Sugar sales benefited from a 7,800-ton better start
to production in the quarter, but the higher sales did not contribute
meaningfully to higher operating profit.
CORPORATE EXPENSE, TAX RATE
For the first quarter of 2005, corporate expenses of $5.3 million were
$1.2 million higher than the first quarter of 2004. The increase was due
principally to higher accruals for 2005 Sarbanes-Oxley project expenses, higher
benefits and salary costs.
The consolidated tax rate was 38 percent for the first quarter of 2005.
This compared with a rate of 37.5 percent in the first quarter of 2004, but 38
percent for full-year 2004. The Company's statutory combined federal and state
tax rate is approximately 38.2%.
BALANCE SHEET, CASH FLOW COMMENTS
Working capital increased by $52 million since year-end 2004, primarily
the combined result of higher cash balances, lower net accrued deposits to the
CCF, lower payables and lower short-term and current portion of long-term debt.
A portion of the cash balances is expected to be used in connection with the
purchase, in May 2005, of the first of two containerships that Matson has
contracted to acquire.
Comparing the cash flows in the first quarters of 2005 and 2004, there
were few changes of note. The purpose for the increase in cash has been
explained above.
Alexander & Baldwin, Inc., headquartered in Honolulu, is engaged in
ocean transportation and intermodal services, through its subsidiaries,
Matson Navigation Company, Inc. and Matson Integrated Logistics, Inc.;
in real estate, 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.
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Statements in this press release that are not historical facts are
"forward-looking statements," within the meaning of the Private Securities
Litigation Reform Act of 1995, that involve a number of risks and uncertainties
that could cause actual results to differ materially from those contemplated by
the relevant forward-looking statement. These forward-looking statements are not
guarantees of future performance. This release should be read in conjunction
with our Annual Report on Form 10-K and our other filings with the SEC through
the date of this release, which identify important factors that could affect the
forward-looking statements in this release.
ALEXANDER & BALDWIN, INC.
2005 and 2004 First-Quarter Results
2005 2004
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Three Months Ended December 31:
Revenue $365,800,000 $342,300,000
Income From Continuing Operations $33,600,000 $26,600,000
Discontinued Operations: Properties(1) $4,100,000 $500,000
Net Income $37,700,000 $27,100,000
Basic Share Earnings
Continuing Operations $0.77 $0.63
Net Income $0.87 $0.64
Diluted Share Earnings
Continuing Operations $0.76 $0.62
Net Income $0.86 $0.63
Average Shares Outstanding 43,400,000 42,300,000
Diluted Average Shares Outstanding 44,000,000 42,900,000
(1) "Discontinued Operations: Properties" consists of sales, or intended sales,
of certain lands and buildings that are material and have separately
identifiable earnings and cash flows.
ALEXANDER & BALDWIN, INC.
Industry Segment Data, Net Income
---------------------------------
(In Millions, Except Per Share Amounts, Unaudited)
Three Months Ended
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March 31,
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2005 2004
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Revenue:
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Transportation
Ocean Transportation $ 206.2 $ 196.5
Logistics Services 96.1 74.1
Real Estate
Leasing 21.9 20.8
Sales 45.9 40.1
Less Amounts Reported In
Discontinued Operations (25.2) (1.1)
Food Products 22.4 13.4
Reconciling Items (1.5) (1.5)
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Total Revenue $ 365.8 $ 342.3
=============== ================
Operating Profit, Net Income:
- ----------------------------
Transportation
Ocean Transportation $ 29.7 $ 18.6
Logistics Services 3.0 1.0
Real Estate
Leasing 10.7 9.5
Sales 16.5 19.0
Less Amounts Reported In
Discontinued Operations (6.7) (0.8)
Food Products 9.0 2.6
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Total Operating Profit 62.2 49.9
Interest Expense (2.8) (3.3)
Corporate Expenses (5.3) (4.1)
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Income From Continuing Operations
Before Income Taxes 54.1 42.5
Income Taxes (20.5) (15.9)
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Income From Continuing Operations 33.6 26.6
Discontinued Operations: Properties 4.1 0.5
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Net Income $ 37.7 $ 27.1
=============== ================
Basic Earnings Per Share, Continuing Operations $ 0.77 $ 0.63
Basic Earnings Per Share, Net Income $ 0.87 $ 0.64
Diluted Earnings Per Share, Net Income $ 0.86 $ 0.63
Average Shares 43.4 42.3
Diluted Shares 44.0 42.9
ALEXANDER & BALDWIN, INC.
Consolidated Balance Sheets
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(In Millions)
March 31, December 31,
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2005 2004
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(Unaudited)
ASSETS
Current Assets $ 311 $ 288
Investments 123 111
Real Estate Developments 89 82
Property, Net 1,139 1,133
Capital Construction Fund 23 40
Other Assets 134 124
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Total $ 1,819 $ 1,778
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LIABILITIES & EQUITY
Current Liabilities $ 206 $ 235
Long-Term Debt 212 214
Post-Retirement Benefit Obligs. 45 45
Other Long-Term Liabilities 42 41
Deferred Income Taxes 371 339
Shareholders' Equity 943 904
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Total $ 1,819 $ 1,778
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ALEXANDER & BALDWIN, INC.
Consolidated Statements of Cash Flows
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(In Millions)
Three Months Ended
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March 31,
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2005 2004
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(Unaudited)
Operating Cash Flows $ 46 $ 50
Capital Expenditures (9) (9)
CCF Withdrawals/(Deposits), Net 2 (1)
Proceeds From Issuance of
(Payment of) Debt, Net (7) (10)
Dividends Paid (10) (9)
All Other, Net 5 (6)
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Increase/(Decrease) In Cash $ 27 $ 15
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Depreciation $ (20) $ (19)
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