April 1, 2015
Dear Bethel Native Corporation Shareholders:
Waani kalikami caliaqelput 2014-ami paivteqataranka. Quyana umek naqiyugluten. Quyanarr’qelartuci ilagautaqavci waten.
This year Bethel Native Corporation is celebrating forty-one years of successful operations! The Corporation continues to enhance capabilities and build shareholder value through the Board of Directors leadership. This annual report highlights the significant accomplishments from the past year. The economic climate in Alaska and across the United States has been difficult in recent years but the Corporation continued to stay focused on achieving growth. Bethel Native Corporation revenues reached $33 million in 2014. The year ended with a pre-tax profit of approximately $200,000. Throughout the year, staff and the Board focused attention on managing costs, minimizing risk, ensuring efficiencies and securing future contracts.
The 2014 dividend distribution marked twenty-seven years straight in which the Corporation has paid out an annual dividend. Shareholders received a dividend distribution equal to $5.19 per share. This was a total distribution of $911,714 last December. With approximately half of the shareholders still living in the Bethel area, the annual dividend distribution provides a significant boost to the local economy. Over the past twenty-seven years, in excess of $9,153,025.00 has been paid out to shareholders. The dividend amount is determined through the Board of Directors policy which states “An annual dividend shall be equal to 20% of the average consolidated pre-tax net income of the prior five years excluding any gains on sales of ANCSA land.” This Board policy provides transparency and predictability. In 2014, shareholder equity declined minimally to $26,423,342, driven largely by the payment of the dividend.
The Corporation remains firmly invested in Bethel and continues to be a major contributor to the local economy. Over the last forty years, Bethel Native Corporation has made significant capital investments in Bethel starting with the apartment complex providing approximately 100 apartment units for rent. Those apartments took some time to stabilize but they are popular housing units. Next, the Corporation engaged in building the office complex which over the period of many years, gained long-term tenants and has become Bethel’s downtown business center. The most recent investment made in Bethel is the Kipusvik complex. The Kipusvik project is consistent with the overall corporate approach BNC has taken over the last forty years, continuing to build infrastructure in Bethel to enhance services and improve business opportunities. At the direction of the Board, BNC built a theater/retail complex and the facility opened in July 2014. BNC’s investment in Kipusvik is significant and, as with other investments, it may take a number of years to stabilize and deliver returns on the investment. The Board of Directors and Management will work to ensure its long term viability.
In 2014 the Corporation continued to diversify and subsidiary companies were successful in securing new construction and environmental remediation contracts. Much of the construction work was again executed in Bethel last year. In the fall, wholly-owned subsidiary Bethel Services completed construction of the Yukon-Kuskokwim Aquatic Training Health and Safety Center for the City of Bethel. Another subsidiary, Bethel / UNIT LLC, a joint venture company, was awarded the State of Alaska’s Bethel Youth Facility expansion project last year and phase one is near completion. Another local project for Bethel Services is the LKSD Napaskiak School with a contract value of approximately $27.5 million. Bethel Services began mobilizing materials and equipment in Napaskiak and site development is in progress with vertical construction underway in early March. In addition to these contracts, Bethel subsidiaries secured work in Alaska, Hawaii, Arizona and California. The Corporation’s strong bonding capacity of $100 million for a single job and $200 million aggregate, helps BNC subsidiaries pursue and secure large construction contracts. Environmental work has also picked up over the last year and Bethel Environmental Solutions has contracts in Adak, Nome, Cold Bay, Japan, and Guam. This expansion is helpful to ensure the Corporation remains balanced.
The Board of Directors supports the Corporation’s efforts to grow operations in a responsible manner. Utilizing a variety of contracting mechanisms and participating in the Small Business Administration’s 8(a) certifications and subsequent reporting requirements provide greater opportunities for the Corporation. To expand contracting capacity, Bethel Contracting has established an SBA approved Mentor-Protégé agreement with Webcor Builders, a large national construction firm, and Bethel Environmental Solutions has established a Mentor-Protégé agreement with TetraTech, one of the largest environmental firms in the world. These relationships allow Bethel to respond to sizable government contracts. Management and the Board of Directors understand the value of these contracting mechanisms and work diligently to ensure continued access and participation by Bethel subsidiaries in these programs.
The Board of Directors sets annual goals for the Corporation and provides management with guidance for growth. Bethel Native Corporation is committed to building shareholder value through strategic participation in geographically diverse markets, while creating investment and employment opportunities at home. This approach has helped achieve a more balanced company.
I am honored to continue to serve as your President/CEO. I appreciate your trust, confidence and encouragement. Assirluku man’a Corporation-aarput aulukengnaq’laraqa. Quyana ikayurraqlua, cingumaqlua-llu.
President / CEO