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American Classic
Voyage’s net sinks 53%

But Hawaii's cruise line parent
has higher revenues due to
strong isle business and the
addition of a new ship

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By Russ Lynch
Star-Bulletin

Nearly $4 million in added expenses for marketing and fleet expansion pulled third-quarter earnings at American Classic Voyages Co. down 53 percent, the parent of American Hawaii Cruises, Delta Queen Steamboat and United States Lines reported today.

The Chicago-based company had a profit of $980,000, or 5 cents a share, for the three months through September, down from $2.1 million, or 11 cents a share, in the 1999 quarter.

The latest per-share results were below the average estimate of 11 cents from six Wall Street analysts, according to I/B/E/S International Inc., which monitors earnings forecasts.

American Classic's stock closed down 63 cents today at $14.25 on the Nasdaq. The stock is down 59 percent so far this year.

Third-quarter revenues of $62.5 million were up 8.7 percent from a year-earlier $57.5 million, the company said.

The rise was because of higher yields at American Hawaii Cruises, which operates the SS Independence in Hawaiian waters, and the addition of a new mainland riverboat, the Columbia Queen, in May, the company noted.

In the third quarter, American Classic had a total of $18.3 million in expenses in the latest quarter, including $3 million to market the newly acquired ms Patriot and new Delta Queen voyages along the mainland coasts, as well as $600,000 in start-up costs for new ships. That was 32.6 percent more than the $13.8 million spent in the third quarter of last year.

American Classic acquired the Nieuw Amsterdam on Oct. 18 for $114.5 million, renamed it the ms Patriot and took it to Portland where it is being refurbished.

Changes include replacing a casino with a "destination learning center" to feature Hawaiian culture and arts. Flying under the United States Lines flag, the ship will start round-the-island cruises in Hawaii Dec. 9, with a 1,212-passenger capacity.

Since the end of the third quarter, the keel was laid at a Mississippi shipyard for the first of the company's two new U.S.-built passenger liners.

The 1,900-passenger vessel will go into Hawaii service early in 2003 and will be followed by another ship in 2004. They will operate as United States Lines.