Hines Horticulture Profit Blossoms in 2nd Quarter

Hines Horticulture Inc. said Tuesday that it grew a profit in the second quarter, helped in part by good weather.

The Irvine-based supplier of nursery plants to mass retailers such as Home Depot Inc., Wal-Mart Stores Inc. and Target Corp., said net income in the second quarter rose 10.8% to $20.6 million, or 93 cents a share, from $18.6 million, or 84 cents, in the same period a year earlier.

Revenue for the period ended June 30 rose 3% to $187.9 million, from $182.1 million.

Hines’ business, which is growing 5,500 varieties of ornamental shrubs and color plants at locations across the country, is to a large degree a spring and summer industry.

During the second quarter, which falls during the months of April, May and June, Hines rings up more than half of its $330 million in annual sales. Home-improvement centers and mass retailers account for 81% of its revenue.

Chief Operating Officer Robert Ferguson said that heading into April this year, sales were down by more than $10 million from the previous year but the company “made significant progress” in boosting revenue because Easter fell in April instead of March, and good weather, particularly in the Midwest and Northeast, encouraged plantings.

“Considering the challenges we faced with the tentative retail environment and the persistence of bad weather well into spring, our achievements during the quarter are even more noteworthy,” Ferguson said.

Hines’ stock rose after the release of its financial results, climbing 27 cents, or 16%, to $1.92 on Nasdaq.

However, its shares have not participated in the broad stock market rally and have fallen 34% this year, reflecting sluggish sales of shrubs, bedding plants and perennials in the Midwest and Northeast during the first quarter.

Through the first half of 2003, Hines sales dipped to $246.4 million from $250.9 million.

The company earned $19.3 million during the same period, compared with a loss of $42.5 million during the first half of 2002.

Hines farms nearly 2,200 acres of nurseries in California, including more than 400 acres in Irvine. The grower also has nurseries in Arizona, Florida, Georgia, New York, Oregon, Pennsylvania, South Carolina and Texas.