Mainland boosts
Schuler’s profits

The Hawaii company's net
soars 760% despite sagging isle sales

By Russ Lynch
Star-Bulletin

An expansion to the mainland early last year paid off big for Schuler Homes Inc.

The Honolulu-based home builder today reported a 760 percent increase in fourth-quarter earnings.

Schuler earned $2.19 million, or 11 cents a share, in the three months through Dec. 31, compared with $255,000, or 1 cent a share, for the same period of 1996. Quarterly sales of residential real estate of $66.2 million were three times the sales of $21.9 million in the year-earlier quarter.

More than half of the company's total home sales in the latest quarter were in Colorado, where Schuler acquired Melody Homes in January 1997. Schuler also had sales in California and Washington.

In the year-earlier quarter, Schuler had only Hawaii sales.

Hawaii home sales in the fourth quarter, 116 units, were down 12.1 percent from 132 homes in the 1996 quarter. The company, however, sold 247 units in Colorado, 43 in Washington, 12 in California and nine in Oregon.

Schuler said that not only were sales strong in Colorado, they carried attractive profit margins as well. That made up for the slower sales, lower prices and smaller profit margins in Hawaii where the market for new homes was still weak, the company said.

For all of 1997, Schuler had a profit of $5.9 million, or 29 cents a share, on sales of $229.6 million, compared with a net loss of $11.4 million in 1996.

The loss was caused by a change in accounting standards in 1996 otherwise the company would have seen a net for that year of $3.2 million, or 16 cents a share, on sales of $93.6 million.

The company sold 1,427 homes in 1997 -- 950 in Colorado, 371 in Hawaii, 82 in Washington, 15 in California and nine in Oregon. Hawaii sales for the year were down 27.8 percent from 514 in 1996.

James K. Schuler, chairman and chief executive officer called 1997 a year of significant change and transition for the company, "from a single-market home builder to a multi-divisional home builder with operations in five different states."

The expansion, which included the acquisition of an interest in July in Washington State home builder Stafford Homes, helped the operating results, he said.