Hilo-based ML Macadamia Orchards LP, the state's largest grower of macadamia nuts, swung to a $432,000 profit in the first quarter from a year-earlier loss largely due to a $330,000 legal settlement against another Big Island nut company.

The partnership also was helped out by lower interest expense of $15,000 versus $91,000 a year ago because of a lower outstanding balance on ML Macadamia's revolving line of credit.

ML Macadamia sued Kawaihae-based Hamakua on Jan. 30, 2008, for allegedly breaching a contract by buying and processing only 3 million pounds of nuts in 2007 rather than the required 6 million. The two sides reached a settlement in March.

Richard Schnitzler, president and co-owner of Hamakua, called the settlement at the time “;a business decision”; and said the litigation had kept Hamakua from being able to focus on its operations for more than a year.

ML Macadamia said it sold all of its production in the first quarter to Mauna Loa Macadamia Nut Corp. at an average contract price of 76 cents a pound compared with 67 cents a pound paid by various buyers a year ago.

The price that ML Macadamia receives for its nuts is based upon the terms and conditions of its nut purchase contracts with the various buyers.

ML Macadamia, which lost $264,000 in the first quarter of 2008, said the majority of its financial results are determined by the third- and fourth-quarter harvest levels and the nut prices paid under the respective nut purchase contracts.

The price per Class A unit last quarter was 6 cents versus a loss of 4 cents a unit a year ago.

Revenue fell 18.5 percent to $3 million from $3.6 million a year ago. Macadamia nut sales fell 28.5 percent to $1.9 million from $2.7 million as the partnership sold 2.4 million pounds of macadamia nuts-in-shell versus 2.8 million pounds a year ago.

Contract farming revenue rose 9.3 percent to $1.1 million from $963,000.