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Hawaii cruise
line parent loses
$6.4 million

Expansion and marketing
costs hurt the bottom line

By Russ Lynch
Star-Bulletin

American Classic Voyages Inc., parent of American Hawaii Cruises and Delta Queen Steamboat Co., said today it had a first-quarter loss of $6.4 million vs. $6.3 million a year ago, substantially better than analysts' projections.

The first-quarter loss of 33 cents a share was stronger than the 46 cents average estimate of five Wall Street analysts who follow the company. It also was an improvement from the 44 cents a share loss for the first quarter of 1999.

Although the net first-quarter loss was virtually flat, the difference in the per share loss was greater because the Chicago-based company had 19.6 million shares outstanding, a 37 percent increase from 14.3 million in the year-earlier period.

The company's Nasdaq-traded shares closed up 50 cents today at $20.50.

The shares are down 41.4 percent so far in 2000 but are 13.9 percent higher than a year ago.

First-quarter revenues of $39 million were down 4 percent from a year-earlier $40.6 million.

The company has been spending large amounts of money to expand and market its cruises.

Revenues were down because the company had vessels out of service for repairs but occupancy levels and fares were both up, said Philip C. Calian, chief executive officer.

Future bookings are strong, he said. American Hawaii Cruises, operating one ship, the 1,021-passenger Independence, in round-the-islands cruises, is 104 percent booked from now through September, Calian said. Fares are up, at an average of $210 per passenger per night.

In the same period last year, American Hawaii Cruises was 99 percent booked at an average of $198 per passenger per night.

Calian said the company is pleased with its future bookings for a second Hawaii ship, the 1,214-passenger Patriot, to go into service in December.

American Classic is building two new 1,900-passenger liners for the Hawaii cruise business, to sail under the United States Lines brand, the largest cruise ships ever built in the United States.

It is also constructing a fleet of smaller vessels to cruise the Eastern Seaboard, the Great Lakes the Caribbean and Central America and later, Alaska and the West Coast. Its mainland business consists of riverboat cruises on inland waterways and the recently added Columbia Queen in the Pacific Northwest.

In other news, American Classic said it has received a U.S. Maritime Administration guarantee to back $78.3 million in borrowing to complete two of the five new vessels its Delta Queen Coastal Voyages subsidiary plans to use for cruises along the Atlantic Coast.