Royal Hawaiian Orchards, L.P. Reports 2013 Operating Results
28 Marzo 2014 - 7:25PM
Marketwired
Royal Hawaiian Orchards, L.P. Reports 2013 Operating Results
HILO, HI--(Marketwired - Mar 28, 2014) - Royal Hawaiian
Orchards, L.P. (OTCQX: NNUTU) today reported a net loss of $3.7
million, or ($0.49) per Class A Unit for the year ended 2013 on
revenues of $13.9 million as compared to a net loss of $499,000, or
($0.07) per Class A Unit on revenues of $20.1 million for the year
ended 2012. The loss in 2013 was attributable to: 1) the poor
crop, which was the second lowest harvest in the past 20 years,
resulting in a 21% decrease, or 5.8 million fewer wet-in-shell
("WIS") pounds than in 2012; 2) reduction of sales of WIS
pounds sold by the Partnership in order to build inventory for
branded product sales in 2014; and 3) the increase in selling,
general and administrative costs of our branded product segment as
we seek to invest in that segment and grow revenues.
In 2013, the Partnership produced 21.7 million WIS pounds
compared to 27.5 million WIS pounds in 2012. The lower 2013
production resulted from inadequate rainfall in Ka´u during key nut
development stages; the impact of the Macadamia Felted Coccid,
which has reduced our 2013 WIS production by an estimated 500,000
pounds, as compared to 2012; and the acceleration of our 2012
fourth quarter harvest, which contributed to lower harvest levels
in 2013. The lower 2013 production resulted in a WIS cost per
pound of $0.61 compared to $0.53 in 2012.
Macadamia nut sales were $9.9 million in 2013 compared to sales
of $18.0 million in 2012. The decrease in sales was due to
lower production and the Partnership retaining 6.1 million WIS
pounds for the expansion of its Royal Hawaiian Orchards® macadamia
snack products. This retail expansion will require that the
Partnership hold macadamias as kernel in inventory to support year
round sales. The effect of holding inventory previously sold
as WIS is a reduction in macadamia nut sales and an increase in
inventory. The inventory will not generate revenues until the
branded products are sold, which could be three to nine months
after the Partnership would typically have generated revenues
selling WIS nuts. In 2014, approximately 13.0 million WIS
pounds will be retained and used by the Partnership for the
manufacturing of its macadamia snack products. 2013 branded
product sales increased to $2.1 million as compared to $91,000 in
2012, which are reported net of trade discounts and new product
distribution expenses. The Partnership estimates that Royal
Hawaiian Orchards® products are now distributed in 3,000 retail
stores in the continental U.S. and Hawaii and expects to be in
10,000 stores by the end of 2014. The Partnership expects a
year-to-year reduction in sales until kernel held in inventory is
sold and branded sales meet or exceed current macadamia nut sales,
the timing of which is unknown. For this reason, the
Partnership believes its results going forward will not be
comparable to prior years.
In order to fully implement its branded products strategy, in
February 2014, the Partnership completed its subscription rights
offering and raised proceeds of $8.9 million, after deducting
expenses, which will be used over the next two years to build raw
materials and finished goods inventories; extend the revenue cycle
of harvested macadamias and extend credit to our customers; to
repay indebtedness incurred to fund working capital needs; to fund
promotional allowances, including slotting fees charged by food
retailers in order to have our product placed on their shelves; and
for general partnership purposes.
As the Partnership expands its sales in its branded segment, it
intends to convert more macadamia nuts previously sold as WIS into
inventory and, it will incur additional new product distribution
costs. While this inventory build and investment in retail
shelf space will negatively impact near term financial performance,
the Partnership believes that the benefits it will enjoy from its
branded business will more than offset these short term costs.
For the fourth quarter 2013, the Partnership incurred a net loss
of $674,000 on revenues of $6.9 million compared to a net income of
$10,000 on revenues of $9.6 million for the fourth quarter
2012. The net loss in the fourth quarter 2013 was mainly
attributable to 17.8% or 2.4 million fewer WIS pounds produced in
the fourth quarter 2013 and the higher cost per WIS pound, compared
to the same period in 2012.
This press release contains forward-looking statements regarding
future events and future performance of the Partnership that
involve risks and uncertainties that could cause actual results to
differ materially from those expressed or implied by such
statements. These include, among others, statements regarding
the potential market for our Royal Hawaiian Orchards® products,
expansion and future sales of our branded segment, the benefits of
investing in the branded product segment, use of nut-in-shell
inventories, use of net proceeds from the rights offering and nut
forecasts, which statements are based on certain assumptions and
forecasts. The Partnership files documents with the Securities
and Exchange Commission, such as Form 10-K, Form 10-Q and Form 8-K
reports, which contain a description of these and other risks and
uncertainties that could cause actual results to differ from
current expectations and the forward-looking statements contained
in this press release.
The Partnership is one of the leading growers and processors of
macadamia nuts in the world, processing and marketing macadamia
nuts in-shell, in bulk kernel form and as better for you
snack products marketed under the Royal Hawaiian Orchards® brand
name.
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Royal Hawaiian Orchards, L.P. |
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Consolidated Statements of Comprehensive Income (Loss)
(unaudited) |
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(in thousands, except per unit data) |
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Three months |
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Full year |
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ended December 31, |
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ended December 31, |
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2013 |
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2012 |
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2013 |
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2012 |
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Macadamia nut sales |
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$ |
5,111 |
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$ |
8,993 |
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$ |
9,916 |
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$ |
18,043 |
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Contract farming revenue |
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634 |
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|
502 |
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|
1,865 |
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|
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1,973 |
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Branded product sales |
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|
1,167 |
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|
|
91 |
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|
2,072 |
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|
91 |
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Total revenues |
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6,912 |
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9,586 |
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13,853 |
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20,107 |
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Cost of goods and services sold |
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Cost of macadamia nut sales |
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4,903 |
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7,659 |
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9,517 |
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14,586 |
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Cost of contract farming services |
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587 |
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|
|
465 |
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|
|
1,743 |
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|
|
1,841 |
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Cost of branded product sales |
|
|
971 |
|
|
|
84 |
|
|
|
1,942 |
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|
|
84 |
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Total cost of goods and services sold |
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6,461 |
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|
|
8,208 |
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|
|
13,202 |
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16,511 |
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Gross income |
|
|
451 |
|
|
|
1,378 |
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|
|
651 |
|
|
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3,596 |
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Selling, general and administrative expenses |
|
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919 |
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1,179 |
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|
|
3,831 |
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|
3,550 |
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Operating income (loss) |
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(468 |
) |
|
|
199 |
|
|
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(3,180 |
) |
|
|
46 |
|
Interest expense |
|
|
(182 |
) |
|
|
(176 |
) |
|
|
(636 |
) |
|
|
(664 |
) |
Interest and other income |
|
|
- |
|
|
|
35 |
|
|
|
191 |
|
|
|
245 |
|
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Income (loss) before income taxes |
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(650 |
) |
|
|
58 |
|
|
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(3,625 |
) |
|
|
(373 |
) |
Income tax expense |
|
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(24 |
) |
|
|
(48 |
) |
|
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(45 |
) |
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(126 |
) |
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Net income (loss) |
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(674 |
) |
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|
10 |
|
|
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(3,670 |
) |
|
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(499 |
) |
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Other comprehensive income (loss), net of tax |
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Amortization of prior service cost |
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2 |
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1 |
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7 |
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7 |
|
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Amortization of actuarial loss |
|
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379 |
|
|
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(55 |
) |
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395 |
|
|
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(43 |
) |
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Defined benefit pension plan |
|
|
381 |
|
|
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(54 |
) |
|
|
402 |
|
|
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(36 |
) |
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Other
comprehensive income (loss), net of tax |
|
|
381 |
|
|
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(54 |
) |
|
|
402 |
|
|
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(36 |
) |
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Comprehensive loss |
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$ |
(293 |
) |
|
$ |
(44 |
) |
|
$ |
(3,268 |
) |
|
$ |
(535 |
) |
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Net income (loss) per Class A Unit |
|
$ |
(0.09 |
) |
|
$ |
0.00 |
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|
$ |
(0.49 |
) |
|
$ |
(0.07 |
) |
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Cash distributions per Class A Unit |
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$ |
- |
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$ |
- |
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$ |
0.02 |
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$ |
- |
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Class A Units outstanding |
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7,500 |
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|
7,500 |
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|
|
7,500 |
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|
7,500 |
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Contact: Scott Wallace President Telephone: (949) 661-6304
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