UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2003
OR
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 1-12147
DELTIC TIMBER CORPORATION
(Exact name of registrant as specified in its charter)
| Delaware |
71-0795870 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
| 210 East Elm Street, P. O. Box 7200, El Dorado, Arkansas |
71731-7200 | |
| (Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (870) 881-9400
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Name of each exchange on which registered | |
| Common Stock, $.01 Par Value |
New York Stock Exchange, Inc. | |
| Series A Participating Cumulative Preferred Stock Purchase Rights |
New York Stock Exchange, Inc. |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨.
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes x No ¨.
Number of shares of Common Stock, $.01 Par Value, outstanding at April 30, 2003, was 11,899,797.
TABLE OF CONTENTS—FIRST QUARTER 2003 FORM 10-Q REPORT
| Page Number | ||||
| PART I — Financial Information | ||||
| Item 1. |
3 | |||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
14 | ||
| Item 3. |
18 | |||
| Item 4. |
18 | |||
| PART II — Other Information | ||||
| Item 1. |
19 | |||
| Item 2. |
19 | |||
| Item 3. |
19 | |||
| Item 4. |
19 | |||
| Item 5. |
19 | |||
| Item 6. |
19 | |||
| 20 | ||||
| 21 | ||||
2
PART I—FINANCIAL INFORMATION
DELTIC TIMBER CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets
(Thousands of dollars)
| March 31, 2003 |
Dec. 31, 2002 |
||||||
| (unaudited) |
|||||||
| Assets |
|||||||
| Current assets |
|||||||
| Cash and cash equivalents |
$ |
837 |
|
1,057 |
| ||
| Trade accounts receivable—net |
|
4,941 |
|
3,230 |
| ||
| Other receivables |
|
2,279 |
|
2,321 |
| ||
| Inventories |
|
5,890 |
|
6,257 |
| ||
| Prepaid expenses and other current assets |
|
1,451 |
|
1,607 |
| ||
| Total current assets |
|
15,398 |
|
14,472 |
| ||
| Investment in real estate held for development and sale |
|
40,930 |
|
42,551 |
| ||
| Other investments and noncurrent receivables |
|
2,573 |
|
2,558 |
| ||
| Timber and timberlands—net |
|
218,751 |
|
209,317 |
| ||
| Property, plant, and equipment—net |
|
38,505 |
|
39,572 |
| ||
| Deferred charges and other assets |
|
1,772 |
|
2,076 |
| ||
| Total assets |
$ |
317,929 |
|
310,546 |
| ||
| Liabilities and Stockholders’ Equity |
|||||||
| Current liabilities |
|||||||
| Current maturities of long-term debt |
$ |
64 |
|
70 |
| ||
| Notes payable |
|
122 |
|
— |
| ||
| Trade accounts payable |
|
1,691 |
|
3,316 |
| ||
| Accrued taxes other than income taxes |
|
1,506 |
|
1,194 |
| ||
| Bank overdraft |
|
609 |
|
913 |
| ||
| Income taxes payable |
|
771 |
|
— |
| ||
| Deferred revenues and other accrued liabilities |
|
6,573 |
|
6,854 |
| ||
| Total current liabilities |
|
11,336 |
|
12,347 |
| ||
| Long-term debt |
|
124,104 |
|
116,120 |
| ||
| Deferred tax liabilities—net |
|
11,857 |
|
11,955 |
| ||
| Other noncurrent liabilities |
|
7,548 |
|
7,162 |
| ||
| Stockholders’ equity |
|||||||
| Cumulative preferred stock—$.01 par, authorized 20,000,000 shares, zero shares issued |
|
— |
|
— |
| ||
| Common stock—$.01 par, authorized 50,000,000 shares, 12,813,879 shares issued |
|
128 |
|
128 |
| ||
| Capital in excess of par value |
|
69,075 |
|
69,075 |
| ||
| Retained earnings |
|
114,635 |
|
114,165 |
| ||
| Unamortized restricted stock awards |
|
(104 |
) |
(133 |
) | ||
| Treasury stock |
|
(20,650 |
) |
(20,273 |
) | ||
| Total stockholders’ equity |
|
163,084 |
|
162,962 |
| ||
| Total liabilities and stockholders’ equity |
$ |
317,929 |
|
310,546 |
| ||
See accompanying notes to consolidated financial statements.
3
DELTIC TIMBER CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)
Three Months Ended March 31,
(Thousands of dollars, except per share amounts)
| 2003 |
2002 |
||||||
| Net sales |
$ |
32,429 |
|
27,095 |
| ||
| Costs and expenses |
|||||||
| Cost of sales |
|
21,558 |
|
15,047 |
| ||
| Depreciation, amortization, and cost of fee timber harvested |
|
3,532 |
|
5,264 |
| ||
| General and administrative expenses |
|
1,900 |
|
2,047 |
| ||
| Total costs and expenses |
|
26,990 |
|
22,358 |
| ||
| Operating income |
|
5,439 |
|
4,737 |
| ||
| Equity in Del-Tin Fiber |
|
(1,845 |
) |
(2,393 |
) | ||
| Interest income |
|
28 |
|
36 |
| ||
| Interest and other debt expense |
|
(1,623 |
) |
(1,148 |
) | ||
| Other income/(expense) |
|
45 |
|
144 |
| ||
| Income before income taxes |
|
2,044 |
|
1,376 |
| ||
| Income taxes |
|
(830 |
) |
(555 |
) | ||
| Net income |
$ |
1,214 |
|
821 |
| ||
| Earnings per common share |
|||||||
| Basic |
$ |
.10 |
|
.02 |
| ||
| Assuming dilution |
$ |
.10 |
|
.02 |
| ||
| Dividends declared per common share |
$ |
.0625 |
|
.0625 |
| ||
| Average common shares outstanding (thousands) |
|
11,907 |
|
11,897 |
| ||
See accompanying notes to consolidated financial statements.
4
DELTIC TIMBER CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended March 31,
(Thousands of dollars)
| 2003 |
2002 |
||||||
| Operating activities |
|||||||
| Net income |
$ |
1,214 |
|
821 |
| ||
| Adjustments to reconcile net income to net cash provided/(required) by operating activities |
|||||||
| Depreciation, amortization, and cost of fee timber harvested |
|
3,532 |
|
5,264 |
| ||
| Deferred income taxes |
|
(98 |
) |
292 |
| ||
| Real estate costs recovered upon sale |
|
2,605 |
|
870 |
| ||
| Timberland costs recovered upon sale |
|
330 |
|
104 |
| ||
| Equity in Del-Tin Fiber |
|
1,845 |
|
2,393 |
| ||
| Net increase/(decrease) in provisions for pension and other postretirement benefits |
|
493 |
|
304 |
| ||
| (Increase)/decrease in operating working capital other than cash and cash equivalents |
|
(1,674 |
) |
253 |
| ||
| Other—net |
|
18 |
|
339 |
| ||
| Net cash provided/(required) by operating activities |
|
8,265 |
|
10,640 |
| ||
| Investing activities |
|||||||
| Capital expenditures requiring cash |
|
(12,725 |
) |
(4,071 |
) | ||
| Net change in purchased stumpage inventory |
|
(840 |
) |
(611 |
) | ||
| Advances to Del-Tin Fiber |
|
(1,845 |
) |
(2,749 |
) | ||
| (Increase)/decrease in funds held by trustee |
|
(29 |
) |
(107 |
) | ||
| Other—net |
|
279 |
|
246 |
| ||
| Net cash provided/(required) by investing activities |
|
(15,160 |
) |
(7,292 |
) | ||
| Financing activities |
|||||||
| Proceeds from borrowings |
|
11,324 |
|
— |
| ||
| Repayments of notes payable and long-term debt |
|
(3,224 |
) |
(6,026 |
) | ||
| Treasury stock purchases |
|
(377 |
) |
— |
| ||
| Increase/(decrease) in bank overdraft |
|
(304 |
) |
— |
| ||
| Preferred stock dividends paid |
|
— |
|
(566 |
) | ||
| Common stock dividends paid |
|
(744 |
) |
(744 |
) | ||
| Other—net |
|
— |
|
331 |
| ||
| Net cash provided/(required) by financing activities |
|
6,675 |
|
(7,005 |
) | ||