Charge leavesA one-time, noncash accounting charge relating to an old land inventory in Hawaii resulted in a third-quarter net loss of $10.8 million at Schuler Homes Inc., compared to a profit of $6.7 million in the year-earlier quarter, the company said today.
But the home builder would
have had a 70.8% gain in profits
without the one-time
By Russ Lynch
The loss in the latest period was equal to 54 cents a share, compared to a profit of 34 cents a share in the 1999 quarter.
The company said that if it hadn't taken the charge, it would have shown a profit of $11.4 million, a 70.8 percent increase from the year-earlier quarter's $6.7 million. Investors apparently acted on Schuler's operating results and ignored the writedown, as Schuler's shares rose nearly 8 percent today to close at $8.25 on the Nasdaq, up 63 cents.
Schuler had warned of the special charge earlier, in its Sept. 12 announcement that it had agreed to a stock-swap acquisition of Western Pacific Housing, sixth-largest home builder in California.
Schuler's business operations were strong in the latest quarter, with a 25 percent increase in revenues to $160.4 million, from $128.3 million in last year's third quarter.
Schuler said it took a $22.2 million charge, after taxes, in the latest period to account for impairment of long-lived assets. It was related to reducing the firm's investment in long-term land in Hawaii for which it has no immediate plans, while shifting its emphasis to new projects on Oahu, Maui, Kauai and the Big Island.
James K. Schuler, chairman, president and CEO, said the company expects to show a profit of at least 41 cents a share in the final quarter, bringing the full year's earnings to at least $1.91 a share before the third-quarter charge, up nearly 50 percent from last year's $1.28 a share.
By that estimate, fourth-quarter net earnings this year after the accounting charge would work out at a little more than 80 cents a share.
Schuler plans to acquire Western Pacific Housing in early 2001 and merge the two companies into a new Schuler Homes Inc., to be run by a board made up of five Schuler representatives and four from Western Pacific.
Schuler's mainland sales are already strong. In Colorado, the company had to raise prices to try to slow down sales so it can keep up with the demand.
The Honolulu-headquartered company sold 641 homes and lots on the mainland in the latest quarter, up 12.3 percent from 571 in the 1999 quarter. There were 77 sales in Hawaii in the 2000 quarter, including activity at non-consolidated joint ventures, compared to a year-earlier 76.
Founded as a Hawaii company, Schuler now also operates in Colorado, California, Oregon, Washington and Arizona.