PotlatchDeltic Corporation (Nasdaq: PCH) today reported net
income of $22.3 million, or $0.28 per diluted share, on revenues of
$246.1 million for the quarter ended June 30, 2023. Excluding
after-tax special items consisting of gain on insurance recoveries
and CatchMark merger-related expenses, adjusted net income was $5.2
million, or $0.06 per diluted share for the second quarter of 2023.
Net income was $120.2 million, or $1.72 per diluted share, on
revenues of $359.6 million for the quarter ended June 30, 2022.
Excluding an after-tax gain on insurance recoveries, adjusted net
income was $112.9 million, or $1.61 per diluted share for the
second quarter of 2022.
Second Quarter 2023 Highlights
- Generated Total Adjusted EBITDDA of $45.5 million and Total
Adjusted EBITDDA margin of 18.5%
- Completed stratification of acquired CatchMark timberlands
identifying higher value opportunities
- Repurchased 9,000 shares for $0.4 million, or $45 per
share
- Maintained strong liquidity position of $630 million as of June
30, 2023
“Our second quarter 2023 results reflect solid performance
across all of our business segments while navigating through an
uncertain macroeconomic environment,” said Eric Cremers, president
and chief executive officer. “We are encouraged by recent favorable
housing data and the upward trend in lumber prices. Looking further
ahead, we remain positive on long-term housing-related fundamentals
that drive demand in our business. We are well positioned with a
strong balance sheet and a portfolio of high-quality assets to grow
shareholder value under a disciplined and opportunistic capital
allocation strategy," stated Mr. Cremers.
Financial Highlights
($ in millions, except per share
data)
Q2 2023
Q1 2023
Q2 2022
Revenues
$
246.1
$
258.0
$
359.6
Net income
$
22.3
$
16.3
$
120.2
Weighted average shares outstanding,
diluted (in thousands)
80,416
80,167
69,791
Net income per diluted share
$
0.28
$
0.20
$
1.72
Adjusted Net Income
$
5.2
$
18.5
$
112.9
Adjusted Net Income per diluted share
$
0.06
$
0.23
$
1.61
Total Adjusted EBITDDA
$
45.5
$
57.7
$
175.1
Dividends per share1
$
0.45
$
0.45
$
0.44
Net cash from operations
$
37.2
$
39.1
$
147.9
Cash and cash equivalents
$
331.2
$
325.6
$
511.2
1
The regular dividend was increased 2.3% to
$0.45 per quarter in Q4 2022.
Business Performance: Q2 2023 vs. Q1 2023
Timberlands
Second Quarter 2023 Highlights
- Timberlands Adjusted EBITDDA decreased $17.2 million from Q1
2023
- Northern harvest volumes decreased due to spring breakup
- Northern sawlog prices increased 2% primarily due to seasonally
lighter sawlogs
- Southern harvest volumes were lower primarily due to wet
conditions impacting operations
- Southern sawlog prices were flat while pulpwood prices declined
5% on weaker demand
- Forest management costs increased due to seasonally higher
activities
($ in millions)
Q2 2023
Q1 2023
$ Change
Timberlands Revenues
$
88.7
$
115.2
$
(26.5
)
Timberlands Adjusted EBITDDA
$
29.4
$
46.6
$
(17.2
)
Wood Products
Second Quarter 2023 Highlights
- Wood Products Adjusted EBITDDA increased $11.9 million from Q1
2023
- Average lumber price increased 9% to $476 per MBF in Q2
2023
- Per-unit log costs decreased on lower indexed pricing in Idaho
and improved recoveries at our Southern sawmills
- Lumber shipments increased 7%
- Plywood shipments and price decreased due to lower demand
($ in millions)
Q2 2023
Q1 2023
$ Change
Wood Products Revenues
$
167.7
$
152.8
$
14.9
Wood Products Adjusted EBITDDA
$
11.9
$
—
$
11.9
Real Estate
Second Quarter 2023 Highlights
- Real Estate Adjusted EBITDDA decreased $7.3 million from Q1
2023
- Sold 941 acres of rural land at an average price of $4,859 /
acre
- Sold 42 residential lots at an average price of $107,126 /
lot
- Sold 6 commercial acres at an average price of $818,914 /
acre
($ in millions)
Q2 2023
Q1 2023
$ Change
Real Estate Revenues
$
17.0
$
23.9
$
(6.9
)
Real Estate Adjusted EBITDDA
$
12.2
$
19.5
$
(7.3
)
Non-GAAP Measures
This press release includes certain non-GAAP financial measures,
which management believes are useful to investors, securities
analysts and other interested parties. These non-GAAP financial
measures should be considered only as supplemental to, and not as
superior to, financial measures prepared in accordance with
GAAP.
Management uses Adjusted EBITDDA to evaluate the performance of
the company. This is a non-GAAP measure that represents EBITDDA
before certain items that impact comparison of the performance of
our business either period-over-period or with other
businesses.
Total Adjusted EBITDDA margin is calculated as Total Adjusted
EBITDDA divided by revenues.
Adjusted Net Income and Adjusted Net Income Per Diluted Share
are non-GAAP measures that represent GAAP net income and GAAP net
income per diluted share before certain items that impact the
ability of investors, securities analysts and other interested
parties to compare the performance of our business, either
period-over-period or with other businesses.
Reconciliations to GAAP are set forth in the accompanying
schedules.
Conference Call Information
A live conference call and webcast will be held Tuesday, August
1, 2023, at 9:00 a.m. Pacific Time (12:00 p.m. Eastern Time).
Investors may access the webcast at www.potlatchdeltic.com by
clicking on the Investors link or by conference call at
1-888-510-2008 for U.S./Canada and 1-646-960-0306 for international
callers. Participants will be asked to provide conference I.D.
number 7281983. Supplemental materials that will be discussed
during the call are available on the website.
A replay of the conference call will be available two hours
following the call until August 8, 2023 by calling 1-800-770-2030
for U.S./Canada or 1-647-362-9199 for international callers.
Callers must enter conference I.D. number 7281983 to access the
replay.
About PotlatchDeltic
PotlatchDeltic (Nasdaq: PCH) is a leading Real Estate Investment
Trust (REIT) that owns nearly 2.2 million acres of timberlands in
Alabama, Arkansas, Georgia, Idaho, Louisiana. Mississippi and South
Carolina. Through its taxable REIT subsidiary, the company also
operates six sawmills, an industrial-grade plywood mill, a
residential and commercial real estate development business and a
rural timberland sales program. PotlatchDeltic, a leader in
sustainable forest management, is committed to environmental and
social responsibility and to responsible governance. More
information can be found at www.potlatchdeltic.com.
Forward-Looking Statements
This press release contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995 as amended, including without limitation, our expectations
regarding the company’s revenues, costs and expenses; long-term
housing market fundamentals and lumber prices; disciplined and
opportunistic capital allocation strategy; and similar matters.
Words such as “looking ahead,” and similar expressions are intended
to identify such forward-looking statements. You should carefully
read forward-looking statements, including statements that contain
these words, because they discuss the future expectations or state
other “forward-looking” information about PotlatchDeltic. A number
of important factors could cause actual results or events to differ
materially from those indicated by such forward-looking statements,
many of which are beyond PotlatchDeltic’s control, such as changes
in the U.S. housing market; changes in timberland values; changes
in timber harvest levels on the company's lands; changes in timber
prices; changes in policy regarding governmental timber sales;
availability of logging contractors and shipping capacity; changes
in the United States and international economies and effects on our
customers and suppliers; changes in interest rates; credit
availability and homebuyers’ ability to qualify for mortgages;
availability of labor and developable land; changes in the level of
construction and remodeling activity; changes in foreign demand;
changes in tariffs, quotas and trade agreements involving wood
products; currency fluctuation; changes in demand for our products
and real estate; changes in production and production capacity in
the forest products industry; competitive pricing pressures for our
products; unanticipated manufacturing disruptions; disruptions or
inefficiencies in our supply chain and/or operations; changes in
general and industry-specific environmental laws and regulations;
unforeseen environmental liabilities or expenditures; weather
conditions; fires at our facilities and on our timberland and other
catastrophic events; restrictions on harvesting due to fire danger;
changes in raw material, fuel and other costs; transportation
disruptions; share price; the successful execution of the company’s
strategic plans; and the other factors described in
PotlatchDeltic’s Annual Report on Form 10-K and in the company’s
other filings with the SEC. PotlatchDeltic assumes no obligation to
update the information in this communication, except as otherwise
required by law. Readers are cautioned not to place undue reliance
on these forward-looking statements, all of which speak only as of
the date hereof.
PotlatchDeltic Corporation
Condensed Consolidated Statements
of Operations
Unaudited
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
(in thousands, except per
share amounts)
2023
2023
2022
2023
2022
Revenues
$
246,101
$
257,962
$
359,597
$
504,063
$
770,947
Costs and expenses:
Cost of goods sold
215,063
224,350
191,334
439,413
371,181
Selling, general and administrative
expenses
17,585
18,230
20,412
35,815
36,706
CatchMark merger-related expenses
244
2,209
—
2,453
—
Gain on fire damage
(23,110
)
—
(9,868
)
(23,110
)
(9,592
)
209,782
244,789
201,878
454,571
398,295
Operating income
36,319
13,173
157,719
49,492
372,652
Interest expense, net
(7,613
)
(199
)
(7,419
)
(7,812
)
(10,313
)
Pension settlement charge
—
—
—
—
(14,165
)
Non-operating pension and other
postretirement employee benefit costs
(229
)
(228
)
(1,809
)
(457
)
(3,738
)
Other
258
10
—
268
—
Income before income taxes
28,735
12,756
148,491
41,491
344,436
Income taxes
(6,429
)
3,504
(28,269
)
(2,925
)
(60,334
)
Net income
$
22,306
$
16,260
$
120,222
$
38,566
$
284,102
Net income per share:
Basic
$
0.28
$
0.20
$
1.73
$
0.48
$
4.09
Diluted
$
0.28
$
0.20
$
1.72
$
0.48
$
4.07
Dividends per share
$
0.45
$
0.45
$
0.44
$
0.90
$
0.88
Weighted-average shares outstanding:
Basic
80,145
80,027
69,580
80,087
69,502
Diluted
80,416
80,167
69,791
80,297
69,731
PotlatchDeltic Corporation
Condensed Consolidated Balance
Sheets
Unaudited
(in thousands, except per share
amounts)
June 30, 2023
December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
331,225
$
343,809
Customer receivables, net
32,903
22,813
Inventories, net
70,663
67,958
Other current assets
57,877
36,955
Total current assets
492,668
471,535
Property, plant and equipment, net
306,978
318,184
Investment in real estate held for
development and sale
55,059
55,490
Timber and timberlands, net
2,476,054
2,508,372
Intangible assets, net
16,530
17,420
Other long-term assets
175,062
179,554
Total assets
$
3,522,351
$
3,550,555
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
96,093
$
94,861
Current portion of long-term debt
39,990
39,979
Current portion of pension and other
postretirement employee benefits
4,926
4,926
Total current liabilities
141,009
139,766
Long-term debt
993,275
992,701
Pension and other postretirement employee
benefits
78,666
77,396
Deferred tax liabilities, net
39,624
41,790
Other long-term obligations
36,608
35,749
Total liabilities
1,289,182
1,287,402
Commitments and contingencies
Stockholders' equity:
Common stock, $1 par value, 200,000 and
100,000 shares authorized, and 79,911 and 79,683 shares issued and
outstanding
79,911
79,683
Additional paid-in capital
2,298,593
2,294,797
Accumulated deficit
(242,896
)
(208,979
)
Accumulated other comprehensive income
97,561
97,652
Total stockholders’ equity
2,233,169
2,263,153
Total liabilities and stockholders'
equity
$
3,522,351
$
3,550,555
PotlatchDeltic Corporation
Condensed Consolidated Statements
of Cash Flows
Unaudited
Three Months Ended
Six Months Ended
(in thousands)
June 30, 2023
March 31, 2023
June 30, 2022
June 30, 2023
June 30, 2022
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income
$
22,306
$
16,260
$
120,222
$
38,566
$
284,102
Adjustments to reconcile net income to net
cash from operating activities:
Depreciation, depletion and
amortization
27,496
32,173
20,379
59,669
40,253
Basis of real estate sold
4,884
10,631
7,325
15,515
18,179
Change in deferred taxes
(2,609
)
394
34
(2,215
)
(2,089
)
Pension and other postretirement employee
benefits
1,612
1,611
3,540
3,223
7,397
Pension settlement charge
—
—
—
—
14,165
Equity-based compensation expense
1,577
2,279
2,368
3,856
4,424
Gain on fire damage
(23,110
)
—
(9,868
)
(23,110
)
(9,592
)
Interest received under swaps with
other-than-insignificant financing element
(6,313
)
(5,454
)
—
(11,767
)
—
Other, net
1,911
1,945
(308
)
3,856
(599
)
Change in working capital and
operating-related activities, net
2,871
(17,205
)
(1,236
)
(14,334
)
19,972
Real estate development expenditures
(1,896
)
(2,408
)
(3,029
)
(4,304
)
(5,190
)
Funding of pension and other
postretirement employee benefits
(1,217
)
(1,087
)
(968
)
(2,304
)
(2,264
)
Proceeds from insurance recoveries
9,706
—
9,428
9,706
9,428
Net cash from operating activities
37,218
39,139
147,887
76,357
378,186
CASH FLOWS FROM INVESTING
ACTIVITIES
Property, plant and equipment
additions
(5,880
)
(4,255
)
(24,211
)
(10,135
)
(36,777
)
Timberlands reforestation and roads
(4,596
)
(6,118
)
(3,740
)
(10,714
)
(8,388
)
Acquisition of timber and timberlands
(1,621
)
—
(42,218
)
(1,621
)
(42,218
)
Interest received under swaps with
other-than-insignificant financing element
5,849
5,055
—
10,904
—
Other, net
242
422
(1,475
)
664
(1,383
)
Net cash from investing activities
(6,006
)
(4,896
)
(71,644
)
(10,902
)
(88,766
)
CASH FLOWS FROM FINANCING
ACTIVITIES
Distributions to common stockholders
(35,958
)
(35,962
)
(30,524
)
(71,920
)
(61,048
)
Repurchase of common stock
(394
)
—
(4,156
)
(394
)
(4,156
)
Repayment of long-term debt
—
—
—
—
(3,000
)
Other, net
(1,117
)
(838
)
(1,023
)
(1,955
)
(2,094
)
Net cash from financing activities
(37,469
)
(36,800
)
(35,703
)
(74,269
)
(70,298
)
Change in cash, cash equivalents and
restricted cash
(6,257
)
(2,557
)
40,540
(8,814
)
219,122
Cash, cash equivalents and restricted
cash, beginning
343,034
345,591
475,354
345,591
296,772
Cash, cash equivalents and restricted
cash, ending1
$
336,777
$
343,034
$
515,894
$
336,777
$
515,894
1
Includes $5.6 million, $17.4 million and
$4.7 million at June 30, 2023, March 31, 2023 and June 30, 2022,
respectively, that were or are intended to be reinvested in timber
and timberlands and classified as restricted cash in Other current
and long-term assets in the Condensed Consolidated Balance
Sheets.
PotlatchDeltic Corporation
Segment Information
Unaudited
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
(in thousands)
2023
2023
2022
2023
2022
Revenues
Timberlands
$
88,617
$
115,238
$
105,486
$
203,855
$
229,143
Wood Products
167,669
152,795
266,633
320,464
562,375
Real Estate
17,064
23,863
26,736
40,927
60,801
273,350
291,896
398,855
565,246
852,319
Intersegment Timberlands revenues
(27,243
)
(33,934
)
(39,258
)
(61,177
)
(81,372
)
Other intersegment revenues
(6
)
—
—
(6
)
—
Consolidated revenues
$
246,101
$
257,962
$
359,597
$
504,063
$
770,947
Adjusted EBITDDA1
Timberlands
$
29,316
$
46,639
$
57,890
$
75,955
$
134,324
Wood Products
11,967
(31
)
107,256
11,936
257,207
Real Estate
12,237
19,465
21,816
31,702
51,940
Corporate
(10,521
)
(10,741
)
(13,912
)
(21,262
)
(23,496
)
Eliminations and adjustments
2,446
2,445
2,120
4,891
757
Total Adjusted EBITDDA
45,445
57,777
175,170
103,222
420,732
Interest expense, net2
(7,613
)
(199
)
(7,419
)
(7,812
)
(10,313
)
Depreciation, depletion and
amortization
(27,087
)
(31,764
)
(20,007
)
(58,851
)
(39,509
)
Basis of real estate sold
(4,884
)
(10,631
)
(7,325
)
(15,515
)
(18,179
)
CatchMark merger-related expenses
(244
)
(2,209
)
—
(2,453
)
—
Gain on fire damage
23,110
—
9,868
23,110
9,592
Pension settlement charge
—
—
—
—
(14,165
)
Non-operating pension and other
postretirement employee benefits
(229
)
(228
)
(1,809
)
(457
)
(3,738
)
(Loss) gain on disposal of fixed
assets
(21
)
—
13
(21
)
16
Other
258
10
—
268
—
Income before income taxes
$
28,735
$
12,756
$
148,491
$
41,491
$
344,436
Depreciation, depletion and
amortization
Timberlands
$
15,895
$
20,461
$
11,563
$
36,356
$
23,724
Wood Products
10,948
11,035
8,136
21,983
15,157
Real Estate
121
156
173
277
343
Corporate
123
112
135
235
285
27,087
31,764
20,007
58,851
39,509
Bond discounts and deferred loan fees2
409
409
372
818
744
Total depreciation, depletion and
amortization
$
27,496
$
32,173
$
20,379
$
59,669
$
40,253
Basis of real estate sold
Real Estate
$
4,887
$
10,631
$
7,328
$
15,518
$
18,188
Eliminations and adjustments
(3
)
—
(3
)
(3
)
(9
)
Total basis of real estate sold
$
4,884
$
10,631
$
7,325
$
15,515
$
18,179
1
Management uses Adjusted EBITDDA to
evaluate company and segment performance. See the reconciliation of
Total Adjusted EBITDDA below.
2
Bond discounts and deferred loan fees are
included in interest expense, net in the Condensed Consolidated Statements of
Operations.
PotlatchDeltic Corporation
Reconciliations
Unaudited
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
(in thousands, except per share
amount)
2023
2023
2022
2023
2022
Total Adjusted EBITDDA
Net income (GAAP)
$
22,306
$
16,260
$
120,222
$
38,566
$
284,102
Interest expense, net
7,613
199
7,419
7,812
10,313
Income taxes
6,429
(3,504
)
28,269
2,925
60,334
Depreciation, depletion and
amortization
27,087
31,764
20,007
58,851
39,509
Basis of real estate sold
4,884
10,631
7,325
15,515
18,179
CatchMark merger-related expenses
244
2,209
—
2,453
—
Gain on fire damage
(23,110
)
—
(9,868
)
(23,110
)
(9,592
)
Pension settlement charge
—
—
—
—
14,165
Non-operating pension and other
postretirement benefit costs
229
228
1,809
457
3,738
Loss (gain) on disposal of fixed
assets
21
—
(13
)
21
(16
)
Other
(258
)
(10
)
—
(268
)
—
Total Adjusted EBITDDA
$
45,445
$
57,777
$
175,170
$
103,222
$
420,732
Adjusted Net Income
Net income (GAAP)
$
22,306
$
16,260
$
120,222
$
38,566
$
284,102
Special items after tax:
CatchMark merger-related expenses
244
2,209
—
2,453
—
Gain on fire damage
(17,333
)
—
(7,351
)
(17,333
)
(7,146
)
Pension settlement charge
—
—
—
—
10,553
Adjusted Net Income
$
5,217
$
18,469
$
112,871
$
23,686
$
287,509
Adjusted Net Income Per Diluted
Share
Net income per diluted share (GAAP)
$
0.28
$
0.20
$
1.72
$
0.48
$
4.07
Special items after tax:
CatchMark merger-related expenses
—
0.03
—
0.03
—
Gain on fire damage
(0.22
)
—
(0.11
)
(0.22
)
(0.10
)
Pension settlement charge
—
—
—
—
0.15
Adjusted Net Income Per Diluted Share
$
0.06
$
0.23
$
1.61
$
0.29
$
4.12
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230731051815/en/
(Investors) Wayne Wasechek 509.835.1521
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