Production Cuts, Write-Downs Boost Hecla Loss

Hecla Mining Co. closed the books Thursday on a forgettable 1994 in which it lost more than $32 million, most of that from write-downs taken in the fourth quarter.

Hecla announced that it lost $22.5 million, or 47 cents a share, in the fourth quarter of 1994 compared with a loss of $9.9 million, or 25 cents a share, in the same period of 1993.

Fourth-quarter production dropped because of an accident at Hecla’s flagship silver mine at Mullan, Idaho. The Lucky Friday was idle from the beginning of September until Dec. 5 and will return to full production this month.

Hecla did begin production at its Grouse Creek gold property near Challis, Idaho. However, delays in construction at the mill there lowered output, officials said. The mill should reach full capacity by the end of the first quarter.

Hecla took an $18 million write-down from reclamation and closure costs at its Republic gold mine near Republic, Wash. The mine stopped producing Jan. 2 and will complete its shutdown by mid-February.

For the year, Hecla lost $32.7 million, or 74 cents a share, compared with a loss of $21 million, or 58 cents a share, for all of 1993.

Hecla has lost money each year since 1991. The largest annual loss occurred in 1992 when Hecla lost $49.2 million.

The company has staked its future growth on expanding its gold holdings, including Grouse Creek and La Choya gold mine in Mexico. Though it scaled back the Gold Hunter silver exploration project at its Lucky Friday mine, improving silver prices could increase the mine’s total output to historic highs for the company during the early 1980s.

Hecla’s stock closed Thursday up 38 cents at $9.75.

In another earnings report:

Egghead Software reported higher profits for the last quarter, but results were bolstered by a one-time insurance payment of $1.65 million on merchandise stolen in recent years by a shoplifting ring.

Egghead, which last month opened a national customer service center in the Spokane Valley, posted net income of $3.8 million, or 22 cents per share, on sales of $254.3 million for the fiscal third quarter ending Dec. 31, 1994. The insurance payment accounted for 6 cents per share of earnings, Egghead said.

The Issaquah, Wash.-based reseller of computer software had net income of $1.5 million, or 8 cents per share, on sales of $222.6 million for the same quarter a year earlier.

Sales to companies, government and school customers were $116.4 million for the quarter, up 11 percent from sales of $104.7 million during the same quarter a year ago. Those customers are the same served by the Egghead Solutions center near Liberty Lake, which employs about 130 people.

Egghead also operates 177 retail stores, which combined for sales of $137.9 million in the quarter, up 23 percent from same-store sales a year earlier.