Barnwell earnings slip
but stock keeps rising

Two weeks ago, Barnwell Industries Inc. split its stock for the first time in the company's 49-year history. At the rate things are going, the company might want to consider splitting its shares again before the end of the year.

Barnwell's stock soared $4.17 yesterday after the company reported its fiscal 2005 first-quarter revenue climbed 51.1 percent from a year ago.

Net income fell 16.2 percent to $2.4 million, or 86 cents a share, from $2.9 million, or $1.05 a share, in the first quarter of 2004 after $1.5 million in Canadian tax benefits boosted the year-ago quarter.

However, earnings before taxes last quarter were $3.8 million, a 59.4 percent gain from $1.4 million a year ago.

The company also saw its general and administrative expenses rise $675,000 last quarter due to stock option appreciation rights resulting from the increase in Barnwell's stock during the quarter.

Revenue rose to $12.4 million from $8.2 million.

Earnings-per-share numbers are adjusted for the 2-for-1 stock split that went into effect Jan. 28.

Barnwell's stock, the top Hawaii-based performer last year with a 134.3 percent gain, already is up more than 30 percent this year. The shares were trading at $52.80 when Barnwell announced its stock split in December, and closed yesterday at $50.20.

"This has been one of Barnwell's best quarters," said Morton Kinzler, chairman and chief executive of Barnwell.

Kinzler said the company's net natural gas production increased 14 percent over a year ago, while oil prices rose 56 percent, natural gas prices gained 30 percent and natural gas liquids prices increased 34 percent.

Barnwell said it used its cash flow to raise its investment in its oil and gas exploration and development programs by 41 percent to $4.4 million from $1.3 million a year ago.

The company, which has oil and natural gas operations in Alberta, Canada, and real estate holdings on the Big Island, also declared a dividend of 5 cents a share payable March 15 to shareholders as of March 1. The company, which distributes irregular dividends, paid a dividend of 12.5 cents a share on Jan. 5. The upcoming dividend will mark the fifth dividend that Barnwell has distributed since January 2004, when it made its first payment in more than two years.