Sealaska CEO Anthony Mallott was feeling a little under the weather on Wednesday, but even then, he didn\u2019t keep himself from smiling.<\/p>\n
For the first time since 2003, Southeast Alaska\u2019s Native corporation is making money on its own.<\/p>\n
In documents released to shareholders on Thursday and provided to the Empire in advance, the regional Alaska Native corporation reported net income of $43.3 million in 2017. The report marks a huge turnaround for the corporation, which lost $35 million in 2013 and hasn\u2019t broken even on its own operations in a decade and a half.<\/p>\n
\u201cWe\u2019re excited. There\u2019s more to come,\u201d Mallott said. \u201cWe\u2019ve spent the last five years saying this is what we\u2019re going to do, so it\u2019s exciting to show.\u201d<\/p>\n
Mallott pointed out that while the earnings are important, what the corporation does with those earnings is even moreso.<\/p>\n
Sealaska has 22,000 shareholders, making it the largest of the 13 regional Native corporations in Alaska.<\/p>\n
Since the start of the year, the corporation\u2019s board of directors has authorized a $10 million deposit into the scholarship endowment for shareholders, and it announced a spring dividend<\/a> of $23.1 million, more than twice the size of the $10.6 million dividend distributed last spring. (A second dividend is distributed in the fall.)<\/p>\n \u201cWe need to bring more of the success back home to our shareholders and our communities,\u201d said board chairman Joe Nelson by phone from Anchorage.<\/p>\n \u201cYou have to tie financial success to increased shareholder benefits, because who cares if we\u2019re high-fiving about a $43 million income year when the shareholders don\u2019t feel it?\u201d Mallott said. \u201cThis is the time to increase scholarships, to build a growing and sustainable dividend. It\u2019s exciting to see what it means to our shareholders.\u201d<\/p>\n The shift in Sealaska\u2019s fortunes corresponds with a new five-year plan approved by the corporation\u2019s board of directors in 2012. After a disastrous 2013<\/a> caused in part by a pair of failed projects in Hawaii, Sealaska made a big change. CEO Chris McNeil Jr. resigned, and Mallott, who had been serving as the corporation\u2019s treasurer and corporate investment officer, became CEO in early 2014<\/a>.<\/p>\n Talking Wednesday in a sunny conference room on the fourth floor of Sealaska Plaza, Mallott recalled a conversation he had in 2007 with Nelson, who was on the board but not yet chairman.<\/p>\n Mallott had just come back to Sealaska (his father, Alaska Lt. Gov. Byron Mallott, was the corporation\u2019s CEO from 1982 to 1992<\/a>) from a job with Bank of America in California.<\/p>\n \u201cJoe started saying: Is plastics who Sealaska is?\u201d Mallott recalled, referring to a plastics company owned by the corporation at the time.<\/p>\n \u201cThe clarity you have at a 2013 moment allows you to honestly answer that question,\u201d Mallott said. \u201cWe had \u2014 one, too many businesses \u2014 and two, businesses that Sealaska wasn\u2019t.\u201d<\/p>\n As soon as Mallott became CEO, he began championing the idea<\/a> that the corporation should divest itself of its far-flung subsidiaries and focus on a few key industries with ties to Southeast Alaska.<\/p>\n The notion had already been endorsed by the board, and Mallott ran with it.<\/p>\n \u201cThe thought was: If we\u2019re falling on our face, then at least we\u2019re making our best effort at home,\u201d Mallott said.<\/p>\n Sealaska\u2019s revenue now comes from four main areas: Natural resources (principally timber), services (mainly government contracting), food (Seattle-based seafood companies) and investments.<\/p>\n Sealaska also earns money from real estate and some other minor sources, including a stake in an as-yet-unbuilt casino in California. (Mallott said the corporation is trying to unload that stake.)<\/p>\n According to the annual audited financial statement required by ANCSA<\/a>, Sealaska earned more money in 2017 than 2016 in all four sectors.<\/p>\n The \u201cfoods\u201d sector of Sealaska\u2019s portfolio, which didn\u2019t exist before 2016<\/a>, is now its biggest component. With $124.4 million in revenue (and net income of about $750,000), it\u2019s larger than timber, which has been a Sealaska mainstay since the corporation was founded.<\/p>\n \u201cThe largest platform we have was not in full existence last year,\u201d Mallott said.<\/p>\n The corporation\u2019s 2017 performance was also boosted by exceptional investment returns, and the corporation is forecasting more modest performance in coming years.<\/p>\n