Hines Horticulture Reports Low Sales, Plans To Sell Assets
Hines Horticulture reported a roughly 12-percent decrease in net sales for the second quarter of 2006 last week. The decreased second quarter sales largely contributed to an agreement Hines negotiated with its lender in which the company will sell its four Northeast color facilities and certain Miami, Fla., assets by Dec. 31, 2006.
The second-quarter results Hines released show net sales of $154.9 million, which is a 12.4 percent decrease from $176.9 million for the same quarter last year. The 6-month period ending June 30, 2006, brought in net sales of $211.8 million; the sales declined 12.1 percent from $240.0 million for the same time period in 2005.
The new agreement Hines negotiated and entered into with its loan provider requires the company to bring in a pre-determined minimum amount of proceeds from the sale of assets by Dec. 31, 2006, to pay down some of its debt. On Aug. 8, Hines’ board of directors approved the sales of four color facilities in the Northeast and some assets in Miami, Fla. At this time, it is unclear what Miami assets will be sold and whether or not these assets include the company’s Miami production facility, which was formerly Lovell Farms.
A Hines Horticulture earnings conference call (http://www.fulldisclosure.com/company.asp?client=cb&ticker=hort) indicated the company plans to keep operating in Florida but only service the immediate surrounding market and not ship out of state. Representatives on the call remained very general about what they planned to sell beyond “land and certain assets.” The four Northeast facilities are, however, for sale in full.
The poor second quarter results and Hines’ financial troubles seem to indicate the company is getting out of the color business. According to GPN sources, the company’s most salable assets are its color operations, and Hines’ sale of assets will help keep the company out of further financial troubles.
Hines is currently a national supplier of ornamental shrubs, color and container-grown plants with commercial nursery facilities in Arizona, California, Florida, Georgia, New York, Oregon, Pennsylvania, South Carolina and Texas. During the past few years, Hines has aggressively expanded its offering of flowering color plants. Founded in 1920, the company completed an initial public offering of 5.1 million shares of its common stock on June 22, 1998.
GPN will continue to deliver details of this developing story as they become available.