DELTIC TIMBER CORP - 10-Q Quarterly Report

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, 2004

¨	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 March 31, 2004, was 12,094,627.

TABLE OF CONTENTS - FIRST QUARTER 2004 FORM 10-Q REPORT


		Page Number

	*PART I - Financial Information*

Item 1.	Financial Statements	3

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24

Item 4.	Controls and Procedures	24

	*PART II - Other Information*

Item 1.	Legal Proceedings	25

Item 2.	Changes in Securities, Use of Proceeds, and Issuer Purchases of Equity Securities	25

Item 3.	Defaults Upon Senior Securities	25

Item 4.	Submission of Matters to a Vote of Security Holders	25

Item 5.	Other Information	25

Item 6.	Exhibits and Reports on Form 8-K	25

Signatures		26

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

DELTIC TIMBER CORPORATION

AND SUBSIDIARIES

Consolidated Balance Sheets

(Thousands of dollars)


	March 31, 2004			Dec. 31, 2003
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	1,476		1,687
Trade accounts receivable - net		5,722		4,350
Allowance for doubtful accounts		(115	)	(107	)
Other receivables		857		1,041
Inventories		5,288		5,778
Prepaid expenses and other current assets		1,399		1,461

Total current assets		14,627		14,210

Investment in real estate held for development and sale		39,756		40,539
Investments and noncurrent receivables		4,723		6,660
Timber and timberlands - net		216,198		215,040
Property, plant, and equipment - net		35,773		36,882
Deferred charges and other assets		941		979

Total assets	$	312,018		314,310

Liabilities and Stockholders’ Equity
Current liabilities
Current maturities of long-term debt	$	64		64
Trade accounts payable		1,865		2,772
Accrued taxes other than income taxes		1,587		1,246
Income taxes payable		408		151
Deferred revenues and other accrued liabilities		3,471		2,843

Total current liabilities		7,395		7,076

Long-term debt		108,040		115,056
Deferred tax liabilities - net		12,786		12,559
Other noncurrent liabilities		9,690		9,385
Stockholders’ equity
Cumulative preferred stock - $.01 par, authorized 20,000,000 shares, none issued		—		—
Common stock - $.01 par, authorized 50,000,000 shares, 12,813,879 shares issued		128		128
Capital in excess of par value		70,344		69,459
Retained earnings		120,413		119,888
Unamortized restricted stock awards		(405	)	(14	)
Treasury stock		(16,249	)	(19,103	)
Accumulated other comprehensive income		(124	)	(124	)

Total stockholders’ equity		174,107		170,234

Total liabilities and stockholders’ equity	$	312,018		314,310

See accompanying notes to consolidated financial statements.

DELTIC TIMBER CORPORATION

AND SUBSIDIARIES

Consolidated Statements of Income (Unaudited)

Three Months Ended March 31,

(Thousands of dollars, except per share amounts)


	2004			2003
Net sales	$	27,811		32,429

Costs and expenses
Cost of sales		18,197		21,558
Depreciation, amortization, and cost of fee timber harvested		2,913		3,532
General and administrative expenses		2,809		1,900

Total costs and expenses		23,919		26,990

Operating income		3,892		5,439

Equity in Del-Tin Fiber		(234	)	(1,845	)
Interest income		58		28
Interest and other debt expense		(1,583	)	(1,623	)
Other income/(expense)		(4	)	45

Income before income taxes		2,129		2,044

Income taxes		(854	)	(830	)

Net income	$	1,275		1,214

Earnings per common share
Basic	$	.11		.10
Assuming dilution	$	.11		.10

Dividends declared per common share	$	.0625		.0625

Average common shares outstanding (thousands)		12,021		11,907

See accompanying notes to consolidated financial statements.

DELTIC TIMBER CORPORATION

AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Unaudited)

Three Months Ended March 31,

(Thousands of dollars)


	2004			2003
Operating activities
Net income	$	1,275		1,214
Adjustments to reconcile net income to net cash provided/(required) by operating activities
Depreciation, amortization, and cost of fee timber harvested		2,913		3,532
Deferred income taxes		356		(98	)
Real estate costs recovered upon sale		1,338		2,605
Timberland costs recovered upon sale		64		330
Equity in Del-Tin Fiber		234		1,845
Net increase/(decrease) in provisions for pension and other postretirement benefits		664		493
(Increase)/decrease in operating working capital other than cash and cash equivalents		(186	)	(1,674	)
Other - net		(117	)	18

Net cash provided/(required) by operating activities		6,541		8,265

Investing activities
Capital expenditures requiring cash		(3,829	)	(12,725	)
Net change in purchased stumpage inventory		71		(840	)
Advances to Del-Tin Fiber		(115	)	(1,845	)
(Increase)/decrease in funds held by trustee		1,738		(29	)
Other - net		253		279

Net cash provided/(required) by investing activities		(1,882	)	(15,160	)

Financing activities
Proceeds from borrowings		—		11,324
Repayments of notes payable and long-term debt		(7,016	)	(3,224	)
Treasury stock purchases		—		(377	)
Increase/(decrease) in bank overdraft		—		(304	)
Common stock dividends paid		(750	)	(744	)
Proceeds from stock option exercises		2,896		—

Net cash provided/(required) by financing activities		(4,870	)	6,675

Net increase/(decrease) in cash and cash equivalents		(211	)	(220	)
Cash and cash equivalents at January 1		1,687		1,057

Cash and cash equivalents at March 31	$	1,476		837

See accompanying notes to consolidated financial statements.

DELTIC TIMBER CORPORATION

AND SUBSIDIARIES

Consolidated Statements of Stockholders’ Equity (Unaudited)

Three Months Ended March 31,

(Thousands of dollars)


	2004			2003
Cumulative preferred stock - $.01 par, authorized 20,000,000 shares, none issued	$	—		—

Common stock - $.01 par, authorized 50,000,000 shares, 12,813,879 shares issued in 2004 and 2003		128		128

Capital in excess of par value
Balance at beginning of year		69,459		69,075
Exercise of stock options		510		—
Tax benefits on stock options		246		—
Restricted stock awards		129		—

Balance at end of period		70,344		69,075

Retained earnings
Balance at beginning of year		119,888		114,165
Net income		1,275		1,214
Common stock dividends		(750	)	(744	)

Balance at end of period		120,413		114,635

Unamortized restricted stock awards
Balance at beginning of year		(14	)	(133	)
Stock awards		(422	)	—
Amortization to expense		31		29

Balance at end of period		(405	)	(104	)

Treasury stock
Balance at beginning of year – 845,600 and 898,175 shares, respectively		(19,103	)	(20,273	)
Shares purchased – 15,907 shares in 2003		—		(377	)
Shares issued for incentive plans – 126,348 shares in 2004		2,854		—

Balance at end of period – 719,252 and 914,082 shares, respectively		(16,249	)	(20,650	)

Accumulated other comprehensive income		(124	)	—

Total stockholders’ equity	$	174,107		163,084

See accompanying notes to consolidated financial statements.

DELTIC TIMBER CORPORATION

AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, 2004

(Unaudited, except for December 31, 2003)

Note 1 – Interim Financial Statements

The interim financial information included herein is unaudited; however, such information reflects all adjustments which are, in the opinion of management, necessary for a fair presentation of the Company’s financial position, results of operations, and cash flows for the interim periods. All such adjustments are of a normal, recurring nature. The results of operations for the first three months of the year are not necessarily indicative of the results o

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