Attached files
| file | filename |
|---|---|
| 8-K - 8-K - POTLATCHDELTIC CORP | pch-8k_20160131.htm |
Exhibit 99.1
|
|
|
|
|
Potlatch Corporation |
News Release
For immediate release:
|
Contact: |
(Investors) |
(Media) |
|
|
|
Jerry Richards |
Mark Benson |
|
|
|
509.835.1521 |
509.835.1513 |
|
Potlatch Corporation Reports Fourth Quarter and Full Year 2016 Results
SPOKANE, Wash – January 31, 2016 - Potlatch Corporation (Nasdaq: PCH) today reported net income of $14.4 million, or $0.35 per diluted share, on revenues of $155.7 million for the quarter ended December 31, 2016. This compares to net income of $3.5 million, or $0.09 per diluted share, on revenues of $138.0 million in the fourth quarter of 2015.
Net income for the full year of 2016 was $10.9 million, or $0.27 per diluted share, on revenues of $599.1 million. Excluding the after-tax loss of $36.7 million ($0.89 per diluted share) on the previously announced sale of 172,000 acres in central Idaho, 2016 net income was $47.6 million, or $1.16 per diluted share. Net income was $31.7 million, or $0.77 per diluted share, on revenues of $575.3 million in 2015.
"Strong performance by each of our three businesses and improved lumber prices resulted in solid earnings this year," said Mike Covey, chairman and chief executive officer. "Our mills continue to run well and we achieved new quarterly production records in the third and fourth quarters. Resource successfully managed through challenging weather conditions to achieve our planned harvest volume for the year. Real Estate continues to identify opportunities to drive value and closed a series of attractive conservation sales during 2016. Turning to the balance sheet, we also reduced net debt by $125 million this year, increasing our financial flexibility, and returned $67 million to shareholders in the form of dividends and share repurchases," stated Mr. Covey.
1
Financial Highlights (in millions, except per share data)
|
|
|
Q4 2016 |
|
|
Q3 2016 |
|
|
Q4 2015 |
|
|||
|
Revenues |
|
$ |
155.7 |
|
|
$ |
174.0 |
|
|
$ |
138.0 |
|
|
Net income |
|
$ |
14.4 |
|
|
$ |
27.6 |
|
|
$ |
3.5 |
|
|
Net income per diluted share |
|
$ |
0.35 |
|
|
$ |
0.68 |
|
|
$ |
0.09 |
|
|
Distribution per share |
|
$ |
0.375 |
|
|
$ |
0.375 |
|
|
$ |
0.375 |
|
|
Net cash from operations |
|
$ |
27.7 |
|
|
$ |
28.7 |
|
|
$ |
18.9 |
|
|
Cash and cash equivalents |
|
$ |
82.6 |
|
|
$ |
72.9 |
|
|
$ |
7.9 |
|
Business Performance: Q4 2016 vs. Q3 2016
Resource
Resource’s operating income was $22.7 million on revenues of $66.8 million in the fourth quarter, compared to operating income of $33.3 million on revenues of $85.8 million in the third quarter of 2016. Harvest volumes decreased 11% in the fourth quarter. The highest harvest volume of the year consistently occurs in the third quarter due to more favorable operating conditions. Northern sawlog prices were 13% lower in the fourth quarter due largely to a lower mix of cedar logs. Prices realized for sawlogs in the South decreased 7% primarily due to a seasonally lower mix of hardwood logs.
Wood Products
Wood Products earned $8.3 million on revenues of $95.6 million in the fourth quarter, compared to operating income of $10.6 million on revenues of $97.6 million in the third quarter of 2016. Average lumber prices were 2% lower and lumber shipments increased 3% in the fourth quarter compared to the third quarter.
Real Estate
Real Estate’s operating income was $6.0 million on revenues of $8.7 million in the fourth quarter, compared to operating income of $5.9 million on revenues of $8.4 million in the third quarter of 2016. The effect of a 15% increase in the number of acres sold was offset by a lower average sales price. The sales mix was more heavily weighted to non-strategic timberlands in the fourth quarter.
2
“We expect the U.S. housing market to continue its modest pace of recovery and our 2017 outlook assumes that at least 1.2 million housing units will be built in the U.S. this year. We also expect lumber prices to be volatile as a result of the lumber trade case which could result in an increase in our earnings this year relative to 2016. We plan to harvest 4.2 million tons in our Resource segment and anticipate selling approximately 20,000 acres in our Real Estate segment in 2017,” concluded Mr. Covey.
Conference Call Information
A live conference call and webcast will be held today, January 31, 2017, at 9:00 a.m. Pacific Time (12:00 p.m. Eastern Time). Investors may access the webcast at www.potlatchcorp.com by clicking on the Investor Resources link or by conference call at 1-866-393-8403 for U.S./Canada and 1-706-679-7929 for international callers. Participants will be asked to provide conference I.D. number 48063972. 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 February 7, 2017 by calling 1-800-585-8367 for U.S./Canada or 1-404-537-3406 for international callers. Callers must enter conference I.D. number 48063972 to access the replay.
About Potlatch
Potlatch is a Real Estate Investment Trust (REIT) with approximately 1.4 million acres of timberland in Alabama, Arkansas, Idaho, Minnesota and Mississippi. Potlatch, a certified forest practices leader, is committed to providing superior returns to stockholders through long-term stewardship of its forest resources. The company also conducts a land sales and development business and operates wood products manufacturing facilities through its taxable REIT subsidiary. More information about Potlatch can be found on the company’s website at www.potlatchcorp.com.
Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of the Private Litigation Reform Act of 1995 as amended, including without limitation, our expectations regarding U.S. housing market recovery; 1.2 million housing units to be built in the U.S. in 2017; future company performance; the direction of our business markets; business conditions in our Resource, Wood Products and Real Estate segments; volatility in lumber pricing in 2017; harvest volumes in 2017; real estate sales in 2017; and similar matters. These forward-looking statements are based on current expectations, estimates, assumptions and projections that are subject to change, and actual results may differ materially from the forward-looking statements.
3
Factors that could cause actual results to differ materially include, but are not limited to, 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; changes in the United States and international economies; changes in the level of construction activity; changes in Asia demand; changes in tariffs, quotas and trade agreements involving wood products; currency fluctuation; changes in demand for our products; changes in production and production capacity in the forest products industry; competitive pricing pressures for our products; unanticipated manufacturing disruptions; changes in general and industry-specific environmental laws and regulations; unforeseen environmental liabilities or expenditures; weather conditions; restrictions on harvesting due to fire danger; changes in raw material, fuel and other costs; changes in share price; and other risks and uncertainties described from time to time in the company's public filings with the Securities and Exchange Commission. The forward-looking statements are made as of the date of this press release and the company does not undertake to update any forward-looking statements.
4
Potlatch Corporation
Consolidated Statements of Income
Unaudited (Dollars in thousands, except per share amounts)
|
|
|
For the Three Months Ended December 31, |
|
|
For the Years Ended December 31, |
|
||||||||||
|
|
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
||||
|
Revenues |
|
$ |
155,681 |
|
|
$ |
137,989 |
|
|
$ |
599,099 |
|
|
$ |
575,336 |
|
|
Costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods sold |
|
|
116,980 |
|
|
|
116,752 |
|
|
|
462,304 |
|
|
|
470,037 |
|
|
Selling, general and administrative expenses |
|
|
12,985 |
|
|
|
11,382 |
|
|
|
52,719 |
|
|
|
46,392 |
|
|
Loss on sale of central Idaho timber and timberlands |
|
|
— |
|
|
|
— |
|
|
|
48,522 |
|
|
|
— |
|
|
|
|
|
129,965 |
|
|
|
128,134 |
|
|
|
563,545 |
|
|
|
516,429 |
|
|
Operating income |
|
|
25,716 |
|
|
|
9,855 |
|
|
|
35,554 |
|
|
|
58,907 |
|
|
Interest expense, net |
|
|
(6,924 |
) |
|
|
(8,341 |
) |
|
|
(28,941 |
) |
|
|
(32,761 |
) |
|
Income before income taxes |
|
|
18,792 |
|
|
|
1,514 |
|
|
|
6,613 |
|
|
|
26,146 |
|
|
Income tax (provision) benefit |
|
|
(4,419 |
) |
|
|
2,035 |
|
|
|
4,325 |
|
|
|
5,568 |
|
|
Net income |
|
$ |
14,373 |
|
|
$ |
3,549 |
|
|
$ |
10,938 |
|
|
$ |
31,714 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.35 |
|
|
$ |
0.09 |
|
|
$ |
0.27 |
|
|
$ |
0.78 |
|
|
Diluted |
|
$ |
0.35 |
|
|
$ |
0.09 |
|
|
$ |
0.27 |
|
|
$ |
0.77 |
|
|
Dividends per share |
|
$ |
0.375 |
|
|
$ |
0.375 |
|
|
$ |
1.50 |
|
|
$ |
1.50 |
|
|
Weighted-average shares outstanding (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
40,752 |
|
|
|
40,866 |
|
|
|
40,798 |
|
|
|
40,842 |
|
|
Diluted |
|
|
41,069 |
|
|
|
40,948 |
|
|
|
41,033 |
|
|
|
40,988 |
|
5
Condensed Consolidated Balance Sheets
Unaudited (Dollars in thousands)
|
|
|
At December 31, |
|
|||||
|
|
|
2016 |
|
|
2015 |
|
||
|
ASSETS |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
82,584 |
|
|
$ |
7,925 |
|
|
Receivables, net |
|
|
17,284 |
|
|
|
13,420 |
|
|
Inventories |
|
|
52,622 |
|
|
|
35,162 |
|
|
Other assets |
|
|
11,155 |
|
|
|
14,246 |
|
|
Total current assets |
|
|
163,645 |
|
|
|
70,753 |
|
|
Property, plant and equipment, net |
|
|
72,820 |
|
|
|
75,285 |
|
|
Timber and timberlands, net |
|
|
641,856 |
|
|
|
816,599 |
|
|
Deferred tax assets, net |
|
|
42,051 |
|
|
|
46,600 |
|
|
Other assets |
|
|
7,309 |
|
|
|
7,375 |
|
|
Total assets |
|
$ |
927,681 |
|
|
$ |
1,016,612 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
Revolving line of credit borrowings |
|
$ |
— |
|
|
$ |
30,000 |
|
|
Current portion of long-term debt |
|
|
11,032 |
|
|
|
5,007 |
|
|
Accounts payable and accrued liabilities |
|
|
43,710 |
|
|
|
39,740 |
|
|
Current portion of pension and other postretirement employee benefits |
|
|
5,839 |
|
|
|
5,973 |
|
|
Total current liabilities |
|
|
60,581 |
|
|
|
80,720 |
|
|
Long-term debt |
|
|
572,956 |
|
|
|
598,874 |
|
|
Pension and other postretirement employee benefits |
|
|
123,284 |
|
|
|
119,369 |
|
|
Other long-term obligations |
|
|
14,586 |
|
|
|
13,913 |
|
|
Total liabilities |
|
|
771,407 |
|
|
|
812,876 |
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
|
|
|
Common stock, $1 par value |
|
|
40,519 |
|
|
|
40,681 |
|
|
Additional paid-in capital |
|
|
355,274 |
|
|
|
350,541 |
|
|
Accumulated deficit |
|
|
(128,775 |
) |
|
|
(72,983 |
) |
|
Accumulated other comprehensive loss |
|
|
(110,744 |
) |
|
|
(114,503 |
) |
|
Total stockholders’ equity |
|
|
156,274 |
|
|
|
203,736 |
|
|
Total liabilities and stockholders' equity |
|
$ |
927,681 |
|
|
$ |
1,016,612 |
|
6
Potlatch Corporation
Condensed Consolidated Statements of Cash Flows
Unaudited (Dollars in thousands)
|
|
|
For the Years Ended December 31, |
|
|||||
|
|
|
2016 |
|
|
2015 |
|
||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
10,938 |
|
|
$ |
31,714 |
|
|
Adjustments to reconcile net income to net cash from operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization |
|
|
34,190 |
|
|
|
38,105 |
|
|
Basis of real estate sold |
|
|
8,011 |
|
|
|
7,012 |
|
|
Change in deferred taxes |
|
|
1,853 |
|
|
|
(5,696 |
) |
|
Employee benefit plans |
|
|
10,479 |
|
|
|
4,986 |
|
|
Equity-based compensation expense |
|
|
4,390 |
|
|
|
4,758 |
|
|
Loss on sale of central Idaho timber and timberlands |
|
|
48,522 |
|
|
|
— |
|
|
Other, net |
|
|
(1,198 |
) |
|
|
(2,046 |
) |
|
Change in: |
|
|
|
|
|
|
|
|
|
Receivables |
|
|
(3,712 |
) |
|
|
(3,864 |
) |
|
Inventories |
|
|
(17,460 |
) |
|
|
(3,672 |
) |
|
Other assets |
|
|
(473 |
) |
|
|
898 |
|
|
Accounts payable and accrued liabilities |
|
|
7,232 |
|
|
|
267 |
|
|
Other liabilities |
|
|
645 |
|
|
|
1,552 |
|
|
Funding of qualified pension plans |
|
|
(1,300 |
) |
|
|
— |
|
|
Net cash from operating activities |
|
|
102,117 |
|
|
|
74,014 |
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
|
|
|
Change in short-term investments |
|
|
— |
|
|
|
6,995 |
|
|
Transfer from company owned life insurance (COLI) |
|
|
2,417 |
|
|
|
1,492 |
|
|
Purchase of property, plant and equipment |
|
|
(5,866 |
) |
|
|
(18,987 |
) |
|
Timberlands reforestation and roads |
|
|
(13,422 |
) |
|
|
(13,745 |
) |
|
Acquisition of timber and timberlands |
|
|
(1,244 |
) |
|
|
(10,230 |
) |
|
Net proceeds from sale of central Idaho timber and timberlands |
|
|
111,460 |
|
|
|
— |
|
|
Other, net |
|
|
6 |
|
|
|
886 |
|
|
Net cash from investing activities |
|
|
93,351 |
|
|
|
(33,589 |
) |
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
Dividends to common stockholders |
|
|
(60,842 |
) |
|
|
(61,017 |
) |
|
Revolving line of credit borrowings (repayment) |
|
|
(30,000 |
) |
|
|
30,000 |
|
|
Repayment of long-term debt |
|
|
(113,335 |
) |
|
|
(22,500 |
) |
|
Repurchase of common stock |
|
|
(5,956 |
) |
|
|
— |
|
|
Proceeds from issuance of long-term debt |
|
|
93,235 |
|
|
|
— |
|
|
Other, net |
|
|
(3,911 |
) |
|
|
(3,000 |
) |
|
Net cash from financing activities |
|
|
(120,809 |
) |
|
|
(56,517 |
) |
|
Change in cash and cash equivalents |
|
|
74,659 |
|
|
|
(16,092 |
) |
|
Cash and cash equivalents at beginning of year |
|
|
7,925 |
|
|
|
24,017 |
|
|
Cash and cash equivalents at end of year |
|
$ |
82,584 |
|
|
$ |
7,925 |
|
7
Segment Information
Unaudited (Dollars in thousands)
|
|
|
For the Three Months Ended December 31, |
|
|
For the Years Ended December 31, |
|
||||||||||
|
(Dollars in thousands) |
|
2016 |
|
|
2015 |
|
|
2016 |
|
|
2015 |
|
||||
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Resource |
|
$ |
66,805 |
|
|
$ |
63,487 |
|
|
$ |
256,163 |
|
|
$ |
263,875 |
|
|
Wood Products |
|
|
95,644 |
|
|
|
79,922 |
|
|
|
367,426 |
|
|
|
336,214 |
|
|
Real Estate |
|
|
8,658 |
|
|
|
7,305 |
|
|
|
32,604 |
|
|
|
28,989 |
|
|
|
|
|
171,107 |
|
|
|
150,714 |
|
|
|
656,193 |
|
|
|
629,078 |
|
|
Intersegment Resource revenues |
|
|
(15,426 |
) |
|
|
(12,725 |
) |
|
|
(57,094 |
) |
|
|
(53,742 |
) |
|
Total consolidated revenues |
|
$ |
155,681 |
|
|
$ |
137,989 |
|
|
$ |
599,099 |
|
|
$ |
575,336 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before income taxes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Resource |
|
$ |
22,736 |
|
|
$ |
16,186 |
|
|
$ |
81,918 |
|
|
$ |
76,350 |
|
|
Wood Products |
|
|
8,279 |
|
|
|
(1,360 |
) |
|
|
24,587 |
|
|
|
(5,235 |
) |
|
Real Estate1 |
|
|
5,974 |
|
|
|
2,495 |
|
|
|
(29,495 |
) |
|
|
16,849 |
|
|
Eliminations and adjustments |
|
|
(1,551 |
) |
|
|
333 |
|
|
|
(3,001 |
) |
|
|
3,283 |
|
|
|
|
|
35,438 |
|
|
|
17,654 |
|
|
|
74,009 |
|
|
|
91,247 |
|
|
Corporate |
|
|
(9,722 |
) |
|
|
(7,799 |
) |
|
|
(38,455 |
) |
|
|
(32,340 |
) |
|
Operating income |
|
|
25,716 |
|
|
|
9,855 |
|
|
|
35,554 |
|
|
|
58,907 |
|
|
Interest expense, net |
|
|
(6,924 |
) |
|
|
(8,341 |
) |
|
|
(28,941 |
) |
|
|
(32,761 |
) |
|
Income before income taxes |
|
$ |
18,792 |
|
|
$ |
1,514 |
|
|
$ |
6,613 |
|
|
$ |
26,146 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion and amortization: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Resource |
|
$ |
6,119 |
|
|
$ |
7,494 |
|
|
$ |
24,090 |
|
|
$ |
28,807 |
|
|
Wood Products |
|
|
1,819 |
|
|
|
1,880 |
|
|
|
7,357 |
|
|
|
6,810 |
|
|
Real Estate |
|
|
1 |
|
|
|
12 |
|
|
|
4 |
|
|
|
56 |
|
|
|
|
|
7,939 |
|
|
|
9,386 |
|
|
|
31,451 |
|
|
|
35,673 |
|
|
Corporate |
|
|
152 |
|
|
|
197 |
|
|
|
760 |
|
|
|
951 |
|
|
Bond discounts and deferred loan fees |
|
|
376 |
|
|
|
368 |
|
|
|
1,979 |
|
|
|
1,481 |
|
|
Total depreciation, depletion and amortization |
|
$ |
8,467 |
|
|
$ |
9,951 |
|
|
$ |
34,190 |
|
|
$ |
38,105 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basis of real estate sold: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate |
|
$ |
1,400 |
|
|
$ |
3,763 |
|
|
$ |
8,518 |
|
|
$ |
7,394 |
|
|
Eliminations and adjustments |
|
|
(75 |
) |
|
|
(140 |
) |
|
|
(507 |
) |
|
|
(382 |
) |
|
Total basis of real estate sold |
|
$ |
1,325 |
|
|
$ |
3,623 |
|
|
$ |
8,011 |
|
|
$ |
7,012 |
|
1 In the second quarter of 2016, we sold approximately 172,000 acres of timberlands located in central Idaho for $114 million at a loss of $48.5 million before taxes.
8