Hawaii macadamia farm and snack food maker Royal Hawaiian Orchards LP eked out a second-quarter profit after dialing back its 3-year-old push into packaged snack sales in favor of selling more raw nuts in bulk.
The Hilo-based company, which is the biggest mac nut producer in the state, earned $71,000 in the April-June period compared with a $3 million loss in the same quarter last year.
Royal Hawaiian said it cut back on sales of its branded snack line in favor of raw nut sales so it could improve cash flow, according to a financial report filed with the U.S. Securities and Exchange Commission on Friday.
Revenue from bulk nut sales roughly tripled to $3.7 million in the second quarter from $1.2 million a year earlier and produced a gross profit of $1.3 million compared with $194,000 in the same period.
Revenue from Royal Hawaiian’s snack line slid to $923,000 from $1.2 million. The company had been revving up snack sales over the past three years, though establishing the new line of packaged foods in stores has been an expensive proposition with marketing and promotions. Snack products in the second quarter generated a $31,000 gross loss compared with an $18,000 gross profit a year earlier.
Total revenue for Royal Hawaiian more than doubled in the second quarter to $5.1 million from $2.3 million a year earlier.
One other major factor that helped the company improve second-quarter earnings was having almost no loss — just $1,000 — from disposing of assets. A year earlier Royal Hawaiian lost $1.9 million from ending a lease for 326 acres of mac nut trees on Hawaii island after a dispute with the landowner.
Royal Hawaiian farms 5,385 acres on Hawaii island, including 736 acres the company bought in June for $8.1 million.
Shares in the company that typically are lightly traded on an over-the-counter exchange closed after the earnings announcement at $2.86, unchanged from Thursday. Shares over the last 52 weeks have traded between a low of $2.31 on Oct. 3 and a high of $3.15 on Nov. 5.