Trending
Maui Land & Pineapple Co. logged net income of $5.8 million, or 31 cents per share, for the January-to-March quarter while whittling down its debt that was nearly $50 million five years ago to $1.2 million at the end of the quarter, the company reported last week.
The gain compares to a net loss of $1.4 million, or 7 cents a share, in the first quarter of 2016. Revenues for the quarter were $9.7 million, up from $3 million last year, and expenses were level at $3.8 million, the company reported.
A big chunk of the revenues resulted from the February sale of the 15-acre Kapalua Golf Academy three-hole practice course for $7 million to TY Management Corp. of Hawaii, which bought the Kapalua Plantation Course for $50 million in 2009 and the Bay Course for $24 million in 2010. ML&P had to pay $150,000 to have the practice course subdivided, the first-quarter report showed.
Tadashi Yanai, one of the wealthiest men in Japan and owner of a retail clothing company, is listed as the officer of TY Management in state business reports. TY Management just purchased the Kapalua Village Center for $18 million from ML&P in a deal that closed at the end of 2016.
The three-hole-course sale netted the company $6.4 million, ML&P said. The company applied $5.6 million from the sale to reduce its total debt to $1.2 million as of March 31.
ML&P ran into serious financial trouble about a decade ago when the company invested heavily in building the luxury time-share and condo project, The Residences of Kapalua Bay, on the site that included the old Kapalua Bay Hotel in the late 2000s. The project was completed in the midst of the Great Recession, which gobbled up one of the lenders for the project, Lehman Brothers.
An entity mostly owned by ML&P, Kapalua Bay LLC, built The Residences of Kapalua Bay. The Residences ended up in a foreclosure proceeding with Island Acquisitions Kapalua LLC claiming the property in an auction in 2013 for $100 million. The site is currently home to the Montage Kapalua Bay.
The management team, led by Warren Haruki, CEO and chairman of the board, and Tim Esaki, chief financial officer, have deftly navigated the company through the difficult times. Five years ago, auditors declared serious doubts about whether the company could continue as a going concern.
"Company's recurring negative cash flows from operations and deficiency in stockholders' equity raise substantial doubt about the company's ability to continue as a going concern," said auditor Deloitte & Touche LLP in March 2013.
With limited liquidity, the leadership team settled lawsuits stemming from the Residences of Kapalua Bay financial debacle, giving up land in exchange for reduced payments, and strategically sold off land holdings and assets to keep the company solvent.
In recent years, ML&P has sold the golf courses; the 304-acre Pulelehua working-class housing development in West Maui in 2016 to an investment firm led by Paul Cheng for $15 million; the old 7-acre pineapple cannery site in Kahului for $4 million to the Nan Chul Shin Trust; and 280 acres at Lipoa Point in West Maui for $19.5 million to the state.
On Dec. 31, 2012, ML&P had a total debt of $49.3 million under two loans with $8.8 million available under a revolving line of credit, the company reported. Those loans were retired last year.
ML&P currently has only one loan, a revolving credit line with First Hawaiian Bank for $15 million that matures in Dec. 31, 2019, the quarterly report said.
The company, which owns 23,000 acres, currently has 690 acres of agricultural land for sale and none of it is held as collateral for the loan, the report said. One is a 630-acre parcel and other is an 80-acre parcel with a wastewater treatment facility.
The Kapalua-based ML&P, once one of the larger employers on the island, got out of the pineapple business in 2009 and currently develops, sells and manages residential, resort, commercial and industrial real estate.
* Lee Imada can be reached at leeimada@mauinews.com.