Calista to pay dividend, first since '85

ALEX DeMARBAN

April 21, 2008 at 10:58AM AKST

A Native corporation serving one of the country’s poorest regions will award its first dividend in more than two decades.

Calista Corp., whose shareholders have roots in the Bethel region in Southwest Alaska, will begin mailing out checks April 22. With the dividend award at $1.50 a share, the average shareholder owning 100 shares of stock will get $150.

The amount isn’t huge, especially compared to payouts issued by other Native corporations, but it will go a long way toward helping residents battling tough times, shareholders said.

"It’s a start," said Alexie B. Morris Sr. of Kwethluk.

"It’s about time," said Andrew Kelly Sr. of Emmonak.

"Woo hoo!" said Shelee Chamberlain, a shareholder living in Anchorage. "I’m really excited for the people in the villages. That will help them so much."

Challenged past

The announcement reflects confidence in the company’s long-term financial strength, board Chairman Arthur Heckman Sr. said.

But Calista hasn’t always been on solid ground.

Like other regional Native corporations granted land and money under the Alaska Native Claims Settlement Act of 1971, Calista was created to benefit shareholders in part through jobs and dividends.

In Calista’s case, those shareholders were thousands of Yup’ik and Athabascan residents scattered across dozens of villages in the Yukon-Kuskokwim Delta, where unemployment often exceeds 20 percent.

A string of bad investments plunged the company deep into debt for years, and it’s issued only two dividends. The first came in 1982, with $20 going to the average shareholder. The last one in 1985 averaged $30 a shareholder, said Dixie Retherford, executive vice president and chief financial officer.

The company’s performance improved steadily in the 1990s. In 1991, Calista had a $69 million deficit and assets of $16 million, Retherford said. At the end of 2007, the deficit had shrunk to $18 million and assets grew to $118 million, she said.

A federal Small Business Administration program that aids minority businesses in the area of government contracting has helped boost the company’s bottom line, she said.

Last year marked Calista’s 14th straight profitable year. Revenues grew by 47 percent to $138 million and the company netted $18.5 million after paying federal taxes.

Tough task

Shareholders have long grumbled about Calista’s dividend drought, especially as they watched other regional Native corporations give their shareholders annual dividends in the hundreds or thousands of dollars.

Some of those corporations, such as Arctic Slope Regional Corp., Sealaska Corp. and Cook Inlet Regional Inc., received land rich in oil, gas or timber, Retherford said. Developing those resources helped them make those payouts, Retherford said.

Calista had no easily accessible mineral resources in its Southwest region, she said. It’s now trying to develop a gold mine at Donlin Creek near the middle Kuskokwim River, but the challenges of providing energy to the remote site has hampered development.

The delay also came because the board wanted to ensure dividends could continue into the future after the first one was issued, Retherford said.

That goal was made more difficult by Calista’s large shareholder base. The company, which owns Alaska Newspapers, parent of The Tundra Drums, has more than 13,000 shareholders, second only to Sealaska Corp.

But a growing dividend fund created in 1994 will help make the payout. The fund was worth more than $24 million at the end of last year, she said.

This year’s total dividend award is $2 million, she said. The company will pay for that with $895,000 from the fund, with the rest coming from operating revenues.

Good news

Morris, the city manager in Kwethluk, said the money comes at a critical time. People are coming off a long winter paying high energy prices and now need to support their subsistence lifestyle. The dividend will help many people gas up snowmachines and buy shells to hunt Canada geese.

"I’m sure there’s plenty of people that need that amount," he said.

The money is welcome, said Kelly, 69, a U.S. Fish and Wildlife Service employee in Emmonak. He’ll use it to pay off his Honda four-wheeler.

"I’m so happy because we have too many unemployed people in this area," he said. "Every little thing helps and things are not getting any cheaper, especially the gas and heating fuel."

Chamberlain, who calls herself Calista’s No. 1 critic, said she’ll give her dividend to her mom. Her mother gave her 50 of the 100 Calista shares she originally received, and Chamberlain always promised she’d give them back when Calista announced another dividend.

The dividend is small compared to a $400,000 bonus that the board awarded longtime Calista President and CEO Matthew Nicolai last year.

Still, it’s good news.

"Every little bit will help," she said.

The bonus

Willie Kasayulie, a board member for the past nine years and the shareholder relations director in Bethel, said the CEO’s bonus was awarded based on an incentive plan created by the board in 1980. The board capped the incentive bonus at $400,000 in the 1990s, Kasayulie said.

Nicolai is the first Calista CEO to receive it.

The plan was designed to award the CEO who guided the company to a profit without including the so-called "7(i) money," mineral-resource profits shared by regional Native corporations, Kasayulie said.

Under that ANCSA requirement, poorer corporations -- such as Calista -- have benefited from richer corporations, such as ASRC.

In recent years, under Nicolai’s leadership, the company has made a profit without counting 7(i) money, Kasayulie said.

Will there be another dividend next year?

"I guess those are always board decisions and not management decisions, but one goal is to sustain the dividends once we start," Retherford said.

Alex DeMarban can be reached at (907) 348-2444 or toll free at (800) 770-9830, ext. 444.