Posted on: Friday, May 11, 2001

Legal dispute, pricing hurt mac nut grower

By Frank Cho
Advertiser Staff Writer

The world's largest grower of macadamia nuts said it lost money in the first quarter because of lower nut prices and an ongoing legal dispute with its exclusive customer.

ML Macadamia Orchards, L.P. yesterday reported a first-quarter net loss of $416,000, or 5 cents a share, for the three months ended March 31, compared to a profit of $65,000, or 1 cent a share, a year ago.

The Honolulu-based partnership said revenues were down 50 percent to $1.5 million in the first quarter from $3 million in the same period last year.

The partnership said it is suing Mauna Loa Macadamia Nut Corp., its exclusive buyer, over questions of payment for 1.8 million pounds in nut deliveries last year.

More than 226,000 pounds of nuts were delivered to Mauna Loa in the first quarter, for which payment has not been received.

"That is about $133,000 that almost all would go straight to the bottom line," said Gregory Sprecher, the partnership's senior vice president.

A hearing is scheduled for May 18 on a Motion of Summary Judgement.

Legal expenses related to the suit added another $160,000 in expenses to the partnership during the first quarter, Sprecher said. Total general and administrative expenses jumped 63.6 percent during the quarter when compared to 2000.

The partnership received an average of 49.5 cents per pound for its macadamia nut production in the first quarter of this year, down 14.7 percent from 58 cents a year earlier. The price the partnership receives for its nuts is based on the processing and marketing results of Mauna Loa, and the Department of Agriculture's reported maca-damia nut prices for the two preceding years.