Land sales boost
C. Brewer Homes’ net

Home sales were up too,
but selling off raw land to
other developers helped
its quarter

By Russ Lynch
Star-Bulletin

Thanks largely to a new policy of selling some of its development-approved land to other developers rather than waiting to build on it itself, C. Brewer Homes Inc. substantially improved its quarterly financial results.

After nearly tripling its revenues, the company reported a net profit of $56,000 in the three months that ended March 31, its fiscal fourth quarter. In the year-earlier quarter, C. Brewer had a net loss of $2.7 million.

A big sales boost came from selling its 17-acre Nanea subdivision, part of its Kehalani subdivision at Wailuku, Maui, for $2.2 million to another developer. The company said it has since sold a 28-acre Maui parcel not fully authorized for development for $2 million and that will show in its 1998-99 results.

Meanwhile, C. Brewer said its home sales are also up, but it did not report those numbers for the quarter.

Property sales brought in revenues of $6.3 million in the latest quarter, up 243 percent from $1.8 million in its fourth quarter last year.

Beyond those raw numbers, however, C. Brewer's financial report was complicated by accounting changes and factors outside the normal run of business.

Results for the latest quarter, for example, included an expense item of $134,000 related to the company's proposed merger with Mauna Loa Macadamia Partners L.P., a move that is intended to bring to C. Brewer the partnership tax advantages that apply to the macadamia nut business.

In mid-May, C. Brewer and Mauna Loa Macadamia announced that they will merge to form a new company, Hawaii Land & Farming Co. It will have the same low-tax status that the macadamia nut business has under a federal law favoring agricultural partnerships. Shares in the new partnership will trade on the New York Stock Exchange.

The surviving partnership will pay a 3.5 percent tax on its gross revenues instead of the 35 percent corporate rate that Brewer Homes pays on its profits. Shareholders are scheduled to vote on the proposal June 26.

C. Brewer results for the year-earlier fourth quarter included a charge of $3.5 million as an "asset impairment loss," from an accounting rule relating to the Nanea subdivision sale.

Not counting the special charges, Brewer Homes' net income for the latest quarter would have been $138,000 compared to a net loss of $442,000 in the year-earlier quarter, the company said.

For all of its 1997-98 fiscal year, Brewer Homes posted a net loss of $1.2 million, compared with a net loss of $2.97 million in the previous year.