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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 21, 2004
ALEXANDER & BALDWIN, INC.
(Exact name of registrant as specified in its charter)
Hawaii 0-565 99-0032630
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(State or other (Commission (I.R.S. Employer Identification No.)
jurisdiction of File Number)
incorporation)
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 12. Disclosure of Results of Operations and Financial Condition
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Alexander & Baldwin, Inc. issued a press release on April 21, 2004,
announcing its 2004 first quarter consolidated earnings. This information,
attached as Exhibit 99.1, is being furnished to the SEC pursuant to Item 12 of
Form 8-K.
(a) Exhibits
--------
99.1 Press Release announcing 2004 first quarter
consolidated earnings issued on April 21, 2004.
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 21, 2004
ALEXANDER & BALDWIN, INC.
By: /s/ Christopher J. Benjamin
---------------------------
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 21, 2004
A&B REPORTS 1st QUARTER 2004 EARNINGS OF $27.1 MILLION
Earnings Per Share Of $0.64 Up 49 Percent
Honolulu (April 21, 2004) -- Alexander & Baldwin, Inc. (NASDAQ:ALEX)
today reported first quarter 2004 net income of $27,100,000, or $0.64 per share.
Net income in the first quarter of 2003 was $17,600,000, or $0.43 per share.
Revenue in the first quarter of 2004 was $344,900,000, compared with revenue of
$273,400,000 in the first quarter of 2003.
COMMENTS ON QUARTER, OUTLOOK
"Results in the quarter were excellent," said Allen Doane, president
and chief executive officer of A&B. "A&B's real estate business had exceptional
performance--the combination of our increased investments coinciding with
favorable market conditions in Hawaii. Most importantly, having acquired all the
undeveloped land at Wailea on Maui in October 2003, we are encouraged by the
strong initial sales at Golf Vistas, our first transactions at Wailea. In
addition, sales performance was strong at a number of other Hawaii development
projects.
"Matson had a good quarter, in line with our expectations.
Container volume continued to grow, reflecting improved economic conditions in
Hawaii. The first quarter is generally the weakest for Matson. Although we do
not expect year-to-year increases in Matson's quarterly profitability as
significant as was experienced in the first quarter of 2004, profit margins
should increase for the remaining three quarters due to normal seasonality.
"Improved income for food products is likely to be a one-quarter event.
Sugar prices are lower than the prior year and sugar production is significantly
below plan as heavy rainfall has delayed harvesting.
"Overall, A&B is on track to achieve increased earnings in 2004."
TRANSPORTATION--OCEAN TRANSPORTATION
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Quarter Ended March 31
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Dollars in Millions 2004 2003 Change
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Revenue $ 196.5 $ 186.1 6%
Operating Profit $ 18.6 $ 12.1 54%
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Volume (Units)
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Hawaii Containers 39,700 39,000 2%
Hawaii Automobiles 36,300 37,500 - 3%
Operating profit improved strongly in ocean transportation. During the
first quarter of 2003, Matson's expenses were higher than normal due to
aftereffects of West Coast labor disruptions late in 2002. The improvement this
quarter was primarily due to improved cargo yield and mix, higher container
volumes in the Hawaii and Guam services, several one-time vessel
revenue-charters and improved operating results from joint ventures. Partially
offsetting the improvements were higher costs for longshore services, vessel
operating expenses and depreciation. The decrease in automobile carriage was
primarily the result of an unusually high level of carryover volume in early
2003, following the port disruptions on the West Coast.
TRANSPORTATION--LOGISTICS SERVICES
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Quarter Ended March 31
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Dollars in Millions 2004 2003 Change
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Revenue $ 74.1 $ 51.0 45%
Operating Profit $ 1.0 $ 0.5 100%
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Record revenue for Matson Integrated Logistics, Inc. in the first
quarter of 2004 was due mainly to greater customer volume, principally in the
highway sector. Along with internal growth, the revenue boost reflected an
acquisition in late 2003. At $1.0 million, operating profit in the quarter
doubled from the same period in 2003.
PROPERTY DEVELOPMENT & MANAGEMENT--LEASING
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Quarter Ended March 31
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Dollars in Millions 2004 2003 Change
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Revenue $ 20.8 $ 19.1 9%
Operating Profit $ 9.5 $ 8.6 10%
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Occupancy Rates
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Mainland 94% 87% 7%
Hawaii 90% 89% 1%
Growth in first quarter 2004 revenue and operating profit was primarily
the result of higher occupancies in the Mainland leasing portfolio and higher
contributions from replacement income-producing properties acquired since the
first quarter of 2003.
PROPERTY DEVELOPMENT & MANAGEMENT--SALES
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Quarter Ended March 31
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Dollars in Millions 2004 2003 Change
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Revenue 1 40.1 $ 16.7 2.4X
Operating Profit 1 19.0 $ 11.6 64%
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1 Before removing amounts treated as discontinued operations.
The first quarter of 2004 was an unusually strong period for property
sales. Lots or units in residential and industrial projects were a large part of
the mix, as opposed to sales of large developed or undeveloped properties.
Prominent among the sales during the first quarter of 2004 were seven lots at
Maui Business Park, nine lots at Mill Town Center on Oahu, seven and one-half
floors at Alakea Corporate Tower in Honolulu and 21 resort residential lots at
Wailea Golf Vistas. A 71-acre parcel on Maui also was sold and there were 11
sales of homes at the Kai Lani joint venture on Oahu, closing out that project.
Among the larger sale transactions in the first quarter of 2003 were a
seven-acre commercial parcel on Maui, three lots at Maui Business Park, and five
residential lots at The Summit at Kaanapali. Joint venture sales included 15
homes at Kai Lani and 17 at Holoholo Ku on the island of Hawaii.
FOOD PRODUCTS
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Quarter Ended March 31
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Dollars in Millions 2004 2003 Change
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Revenue $ 13.4 $ 14.9 - 10%
Operating Profit $ 2.6 $ 1.9 37%
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Tons Sugar Produced 11,700 18,700 - 37%
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In the first quarter of 2004, lower food products revenue resulted
primarily from lower production and lower prices for raw sugar. Wet weather
unfavorably affected harvest operations. The improvement in operating profit was
due to a combination of higher electrical power sales and greater sales of
specialty sugars.
COMMENTS ON TAX RATE, BALANCE SHEET
Net income reflects an estimated tax rate of 37.5 percent. Comparing
the quarter-end balance sheets with year-end 2003, the changes were relatively
few and quite small. The investments account rose by $14 million, primarily
reflecting investment in the Hokua luxury high-rise joint venture. The $24
million rise in shareholders equity was primarily due to income, but a portion
of the increase also was due to the exercise of stock options.
COMMENTS ON CASH FLOW, CAPEX
Comparing the first quarters of 2004 and 2003, operating cash flows
increased by a net $43 million. The increase was due principally to better
operating results in 2004 and, especially, the sales of real estate. Capital
expenditures were $3 million lower, primarily the result of timing.
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 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 21 of the Company's Annual Report on
Form 10-K, which is included in the Company's 2003 annual report to
shareholders. These factors could cause actual results to differ materially
from those projected in the statements.
ALEXANDER & BALDWIN, INC.
2004 and 2003 First-Quarter Results
2004 2003
---- ----
Three Months Ended March 31:
Revenue $344,900,000 $273,400,000
Income From Continuing Operations $26,800,000 $10,700,000
Discontinued Operations: Properties1 $300,000 $6,900,000
Net Income $27,100,000 $17,600,000
Basic Share Earnings
Continuing Operations $0.63 $0.26
Net Income $0.64 $0.43
Diluted Share Earnings
Continuing Operations $0.62 $0.26
Net Income $0.63 $0.42
Average Shares Outstanding 42,300,000 41,400,000
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.
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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2004 2003
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Revenue:
Transportation
Ocean Transportation $ 196.5 $ 186.1
Logistics Services 74.1 51.0
Property Development & Management
Leasing 20.8 19.1
Sales 40.1 16.7
Less Amounts Reported In
Discontinued Operations - (14.4)
Food Products 13.4 14.9
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Total Revenue $ 344.9 $ 273.4
========== ==========
Operating Profit, Net Income:
Transportation
Ocean Transportation $ 18.6 $ 12.1
Logistics Services 1.0 0.5
Property Development & Management
Leasing 9.5 8.6
Sales 19.0 11.6
Less Amounts Reported In
Discontinued Operations (0.4) (11.2)
Food Products 2.6 1.9
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Total Operating Profit 50.3 23.5
Interest Expense (3.3) (2.6)
Corporate Expenses (4.1) (4.1)
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Income From Continuing Operations
Before Income Taxes 42.9 16.8
Income Taxes (16.1) (6.1)
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Income From Continuing Operations 26.8 10.7
Discontinued Operations: Properties 0.3 6.9
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Net Income $ 27.1 $ 17.6
========== ==========
Basic Earnings Per Share, Continuing Operations $ 0.63 $ 0.26
Basic Earnings Per Share, Net Income $ 0.64 $ 0.43
Average Shares 42.3 41.4
Consolidated Balance Sheets
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(In Millions)
March 31, December 31,
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2004 2003
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(Unaudited)
ASSETS
Current Assets $ 253 $ 247
Investments 82 68
Real Estate Developments 82 77
Property, Net 1,061 1,079
Capital Construction Fund 165 165
Other Assets 123 124
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Total $ 1,766 $ 1,760
======== =========
LIABILITIES & EQUITY
Current Liabilities $ 177 $ 183
Long-Term Debt 320 330
Post-Retirement Benefit Obligs. 44 44
Other Long-Term Liabilities 37 36
Deferred Income Taxes 353 356
Shareholders' Equity 835 811
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Total $ 1,766 $ 1,760
======== =========
Consolidated Statements of Cash Flows
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(In Millions)
Quarter Ended
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March 31,
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2004 2003
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(Unaudited)
Operating Cash Flows $ 50 $ 7
Capital Expenditures (9) (12)
CCF Withdrawals/(Deposits), Net (1) (1)
Proceeds From Issuance of
(Payment of) Debt, Net (9) 14
Dividends Paid (9) (9)
All Other, Net (7) 2
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Increase/(Decrease) In Cash $ 15 $ 1
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Depreciation $ 19 $ 18
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