Growing conditions for macadamia nuts benefited ML Macadamia Orchards LP in the second quarter, but growth plans to produce a retail line of packaged snacks ate up earnings of the Hilo-based company.

ML Macadamia reported a $797,000 net loss Thursday for the three months ended June 30 compared with a $66,000 profit in the same period last year.

The company said costs related to its expansion plan outstripped revenue and put earnings in the red.

The first and second quarters of the year historically produce relatively few mac nuts because of the crop’s seasonal flowering cycle. In the second quarter of last year, ML Macadamia earned its modest profit mainly due to a $534,000 crop insurance claim.

In the recent quarter, ML Macadamia harvested and sold more nuts due to beneficial weather. Revenue nearly doubled to $745,000 from $384,000 a year earlier. But expenses more than doubled to $975,000 in the recent quarter from $389,000 a year earlier.

Expenses in the recent quarter included $133,000 for retail product development and $310,000 in legal fees for an effort to sell shares in the company that was canceled in June. The share sale was intended to help finance the retail development plan announced in March.

Despite the suspension of share sales, ML Macadamia is still moving ahead with the creation of two retail product lines featuring flavored macadamia nuts and clusters of nuts and dried fruits.

Construction on a nut-drying facility is scheduled to begin in the fourth quarter and be completed by March. The company also signed two agreements last month to process nuts and package retail product.

One deal is with MacFarms of Hawaii to process between 1.5 million pounds and 7 million pounds of nuts next year. The other deal is with California firm American Bounty to make macadamia nut crunch products under ML Macadamia’s new Royal Hawaiian Orchards brand name.

ML Macadamia said product tests have gone well, and the retail product is scheduled to reach consumers in the fourth quarter.

"Consumer testing has been conducted and initial reactions from the trade regarding packaging, product and pricing have been positive," the company said in a Thursday filing with the Securities and Exchange Commission.

Because ML Macadamia is under contract to sell all its nuts this year to Hershey Co.’s Mauna Loa Macadamia Nut Corp., the grower is buying nuts from other sources for the retail line. Contracts with Mauna Loa expire in each of the next three years, and ML Macadamia has already said it won’t extend the contract expiring next year for about a third of the company’s nut production.