Macadamia nut producer Royal Hawaiian Orchards LP said startup costs associated with the November launch of 12 new products left the Hilo-based company with just a $10,000 profit in the fourth quarter and a $499,000 loss for the year.
The state’s largest macadamia nut grower said Wednesday its new flavored snack products are sold or soon will be sold in Walgreens, Longs, ABC Stores, Food Pantry and Foodland. The company expects to be in approximately 5,000 stores in Hawaii and the western U.S. by the end of 2013.
"We’re very enthusiastic about the start," CEO Dennis Simonis said. "It’s in the early stages and we think it’s well positioned. They’re very good products and everybody who has tried them has really enjoyed them. We’re very optimistic."
Royal Hawaiian, formerly known as ML Macadamia Orchards, is shifting its business from nut-in-shell bulk sales to retail branded sales because of better margins, more price stability and the opportunity to increase shareholder value.
The company has developed two product lines of macadamia snacks:
» 5-ounce bags of nuts with flavors that include Sea Salt, Hawaiian Barbecue, Wasabi Soy, Maui Onion, and Salt and Black Pepper;
» 4-ounce bags of dried fruit and nut cluster pieces with flavors that include mango, banana, papaya, lime, pomegranate, passion fruit, guava, blueberries and Kona coffee.
The products contain no artificial ingredients, are non-GMO, are gluten free, and have no sulfites.
Simonis said the most popular products are the dried fruit and macadamia nut crunch flavors of Blueberry Pomegranate, and Kona Coffee Banana.
"We have pretty full distribution in most of the Hawaii retailers," Simonis said. "All don’t have it on the shelf yet but they have accepted the product line and we’re starting on the western U.S. Most of our supply becomes available in the second half of the year."
Macadamia nut-in-shell sales made up the majority of Royal Hawaiian’s $9.6 million revenue in the fourth quarter but Simonis said the revenue mix gradually will shift to the branded snack products. The company made $9 million from macadamia nut sales, $502,000 from contract farming and $91,000 from the branded product snacks during the October-December period. In the fourth quarter of 2011, Royal Hawaiian had total revenue of $9.1 million.
For the year, Royal Hawaiian’s revenue rose 11.7 percent to $20.1 million from $18 million in 2011.
Royal Hawaiian, which had $1 million in startup costs in 2012 related to its branded snacks business, had net income of $559,000 in the fourth quarter of 2011 and $712,000 for that entire year.
The company had 284 employees as of Dec. 31. Last year, Royal Hawaiian produced 27.5 million pounds of macadamia nuts.
The partnership also said Wednesday it would be paying out a cash distribution of 2 cents a share, its first payout since Feb. 15, 2008. It will be paid on April 12 to the unit holders of record as of Friday.
Royal Hawaiian’s stock rose 2 cents to $3.75 Wednesday in the OTC (over-the-counter) market. The earnings were released after the market closed.
