MAXXAM Posts Its Third Quarter 2013 and First Nine Months of 2013 Unaudited Financial Information

HOUSTON--()--MAXXAM Inc. (OTCBB:MAXX) has posted its unaudited financial information for the three months and nine months ended September 30, 2013. Attached hereto is the financial information of MAXXAM Inc. described below as of September 30, 2013. This financial information has been posted through the pink sheets financial reports service at www.otcmarkets.com, stock symbol “MAXX,” under the tab labeled “Filings and Disclosure.”

The follow exhibits are attached:

  • Exhibit I – Consolidated Balance Sheets
  • Exhibit II – Consolidated Statements of Operations
  • Exhibit III – Shares Outstanding Report

Exhibit I

 
MAXXAM INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In millions of dollars)
       
September 30,

2013

December 31,

2012

(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 10.0 $ 7.5
Marketable securities and other short-term investments 28.4 26.9
Deferred income taxes 1.1 1.1
Prepaid expenses and other current assets 0.9 0.5
Restricted cash   0.1     0.1  

Total current assets

40.5 36.1
Property and equipment, net of accumulated depreciation of $62.4

and $60.2, respectively

87.8 91.7
Real estate inventory 41.0 43.0
Deferred financing costs 1.6 1.8
Investment in PM Texas LLC 9.7 9.7
Other long-term assets and investments 0.4 0.8
Investment in FireRock, LLC 0.2 -
Restricted cash   1.6     1.6  
Total assets $ 182.8   $ 184.7  
 
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable $ 0.2 $ 0.8
Short-term borrowings and current maturities of long-term debt 3.7 3.5
Accrued interest 0.5 0.5
Deferred income 1.3 1.5
Accrued compensation and related benefits 1.4 0.6
Other accrued liabilities   3.9     4.0  
Total current liabilities 11.0 10.9
Long-term debt, less current maturities 97.0 99.7
Accrued pension 18.2 19.2
Losses in excess of investment in FireRock, LLC - 2.9
Other noncurrent liabilities   6.1     7.5  
Total liabilities   132.3     140.2  
Commitments and contingencies
Stockholders’ equity:
Preferred stock 0.3 0.3
Common stock 5.2 5.2
Additional paid in capital 225.6 225.6
Retained earnings 10.0 3.6
Accumulated other comprehensive loss (20.0 ) (19.6 )
Treasury stock, at cost   (170.6 )   (170.6 )
Total stockholders’ equity   50.5     44.5  
Total liabilities and stockholders’ equity $ 182.8   $ 184.7  
 

Exhibit II

               
MAXXAM INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions of dollars)
 

Three Months Ended

September 30,

Nine Months Ended
September 30,

2013     2012 2013     2012
Unaudited Unaudited
 
Sales:
Leased properties (1) $ 3.3 $ 3.2 $ 9.6 $ 9.4
Lot sales (2) - 0.3 1.7 0.9
Other real estate sales (2) - - 2.9 -
Realty 0.5 0.5 2.4 1.6
Racing land sale 4.7 - 4.7 -
Other   0.1     0.7     0.3     1.0  
Total sales 8.6 4.7 21.6 12.9
 
Cost of sales and operations:
Leased properties - - - -
Lot sales - 0.1 0.5 0.4
Other real estate sales - - 2.1 -
Realty 0.4 0.4 2.1 1.3
Racing land sale 0.6 - 0.6 -
Other - - - -
Selling, general and administrative expenses 2.6 3.1 8.2 9.6
Depreciation and amortization 0.9 0.8 2.7 2.7
Gain related to the Palco Debtors   -     -     -     (485.8 )
Total costs and expenses   4.5     4.4     16.2     (471.8 )
 
Operating income (loss):
Real estate 1.3 1.6 5.4 4.2
Racing (3) 4.0 (0.1 ) 3.6 (0.5 )
Corporate (1.2 ) (1.2 ) (3.6 ) (4.8 )
Forest Products   -     -     -     485.8  
Total operating income 4.1 0.3 5.4 484.7
 
Other income (expense):
Equity income (losses) from joint ventures (4) 5.4 (0.9 ) 4.8 (1.5 )
Investment, interest and other income (expense), net 0.4 0.2 2.3 0.9
Interest expense (1.9 ) (2.0 ) (5.8 ) (6.0 )
Amortization of deferred financing costs   (0.1 )   (0.1 )   (0.2 )   (0.2 )
Income (loss) before income taxes 7.9 (2.5 ) 6.5 477.9
Provision for income taxes   -     -     (0.1 )   (0.1 )
Net income (loss) $ 7.9   $ (2.5 ) $ 6.4   $ 477.8  
 

(1) As previously disclosed, a wholly owned subsidiary of the Company, Horizon Properties Corporation, leased mineral rights in certain acreage in Walker and San Jacinto Counties, Texas, in March 2012 for an initial term of three years; the subsidiary is entitled to royalty payments on future production of hydrocarbons.  In the first nine months of 2013, the subsidiary received two royalty checks totaling approximately $110,000 (lease inception to date royalty payments total approximately $155,000).

 

(2) As previously disclosed, in the first quarter of 2013 a subsidiary of the Company sold one of its two custom homes for $2.0 million. In the second quarter of 2013, the same buyer (a lottery winner) purchased five lots in the Company’s Eagles Nest development.

 

(3) In August 2013, a subsidiary of the Company sold to an unaffiliated third-party approximately one-third of the undeveloped real estate acreage adjacent to Sam Houston Race Park and received its share of the net proceeds.

 

(4) In July 2013, FireRock, LLC closed on the sale of its country club assets and recognized a significant gain on the sale and the Company received approximately $2.5 million for its share of the net proceeds.  This transaction substantially completes the joint venture’s business activities.

 

Exhibit III

       
MAXXAM INC.
SHARES OUTSTANDING REPORT
 
 
September 30,

2013

December 31,

2012

 
Preferred Stock
Par value $ 125.00 $ 125.00
Liquidation value $ 187.50 $ 187.50
Shares authorized 10,000 10,000
Shares issued 2,675 2,675
Shares outstanding 2,664 2,664
 
Common Stock
Par value $ 125.00 $ 125.00
Shares authorized 52,000 52,000
Shares issued 41,853 41,853
Shares outstanding 18,142 18,179
 
Treasury Stock
Class A Preferred Stock 11 11
Common Stock 23,711 23,674
 

As disclosed in the Stipulation of Settlement filed on November 14, 2013, in order to settle direct claims asserted by the Plaintiff in the Arbiter Action (discussed in Note 9 of the Company’s 2012 financial statements), Mr. Charles E. Hurwitz purchased all but one share of MAXXAM Common Stock owned by the Plaintiff. In this settlement transaction, Mr. Hurwitz purchased 1,408 shares of MAXXAM Common Stock for $2,323,200. As a result, as of December 13, 2013, Mr. Hurwitz and affiliated persons and entities beneficially owned approximately 99.4% of MAXXAM’s Class A Preferred Stock and approximately 81.3% of MAXXAM’s Common Stock, resulting in combined voting control of approximately 92.1% of the Company.

Contacts

MAXXAM Inc.
Emily Madison, (713) 975-7600

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Contacts

MAXXAM Inc.
Emily Madison, (713) 975-7600