Thursday, May 10, 2001

Mac nut firm
posts loss as
prices fall

By Russ Lynch

ML Macadamia Orchards LP today reported a first-quarter loss of $416,000, or 5 cents a share, compared to a year-earlier profit of $65,000, or 1 cent a share. Production and revenues were both up but a 15 percent drop in prices pulled the partnership into the red.

Total revenues of $3 million in the latest quarter -- $1.7 million from the sale of nuts plus $1.3 million from contract farming -- were double the revenues of $1.5 million reported for the year-earlier period, all from macadamia nut sales.

The partnership received 49.5 cents a pound for its macadamia production in the latest quarter, down from 58 cents a pound in the same quarter of 2000.

Nut production totaled 3.5 million pounds in the 2001 quarter, up 34.6 percent from 2.6 million pounds a year earlier.

Art The partnership, which grows macadamia nuts on more than 4,000 acres on the Big Island, figures half of its price from the results of the company that has exclusive rights to buy its product, Mauna Loa Macadamia Nut Corp., and half from prices reported to the U.S. Department of Agriculture.

The USDA portion is down by 6 percent, ML Macadamia said. While the Mauna Loa results are not yet known, the partnership used results for the final quarter of last year to make the calculation.

ML Macadamia is still in a legal dispute with Mauna Loa, which ML has accused of refusing to buy nuts that it was required to buy under contract. Because of that, an additional 266,000 pounds of nuts were delivered to Mauna Loa in the latest quarter, above the sales reported for the quarter, but no revenues were reported for them because Mauna Loa has not paid for them, today's earnings statement said.

The Shansby Group, which acquired Mauna Loa Macadamia last year, has taken the position that it should not have to pay for all the nuts delivered under three long-standing purchase agreements.

ML Macadamia sued to force payment and a court hearing is scheduled for May 18.

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