Attached files
| file | filename |
|---|---|
| 8-K - CATCHMARK PRO FORMA FINANCIAL STATEMENTS - BANDON DISPOSITION - CatchMark Timber Trust, Inc. | ctt-20210811.htm |
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
This pro forma information should be read in conjunction with the historical consolidated financial statements and notes thereto of CatchMark Timber Trust, Inc. and subsidiaries (“CatchMark”) included in its Annual Report filed on Form 10-K for the year ended December 31, 2020 and its Quarterly Report on Form 10-Q for the period ended June 30, 2021.
On August 11, 2021, CatchMark, through a wholly-owned subsidiary, completed the previously announced sale of approximately 18,063 acres of Oregon timberlands (the “Bandon Disposition”) to Roseburg Resources Co. for $100 million in cash. The sale was completed pursuant to a purchase and sale agreement, dated as of June 21, 2021 and filed as Exhibit 10.4 to CatchMark’s Quarterly Report on Form 10-Q for the period ended June 30, 2021. CatchMark’s amended credit agreement, as amended on August 4, 2021, requires that net proceeds received from the Bandon Disposition be used to pay down the outstanding amounts of CatchMark’s Multi-Draw Term Facility and Term Loan A-3, each as defined in CatchMark’s Quarterly Report on Form 10-Q for the period ended June 30, 2021.
The following unaudited pro forma condensed consolidated financial statements give effect to the Bandon Disposition and related debt repayments as if they had been completed on June 30, 2021 with respect to the pro forma consolidated balance sheet and as of January 1, 2020 with respect to the pro forma consolidated statements of operations. The pro forma adjustments include transaction accounting adjustments to reflect the accounting for the Bandon Disposition and related debt repayment in accordance with U.S. GAAP. No autonomous entity adjustments or management adjustments were required as a result of the Bandon Disposition and related debt paydown.
The unaudited pro forma consolidated balance sheet has been developed from CatchMark’s historical consolidated balance sheet as of June 30, 2021. The unaudited pro forma consolidated statement of operations for the six months ended June 30, 2021 and for the year ended December 31, 2020 have been developed from CatchMark’s historical consolidated statement of operations for such periods.
The following unaudited pro forma condensed consolidated financial statements are presented for illustrative purposes only and are not necessarily indicative of what CatchMark’s actual financial position or results of operations would have been had the Bandon Disposition and related debt repayments been completed on the dates indicated above. In addition, the following unaudited pro forma condensed consolidated financial statements do not purport to project the future financial position or results of operations of CatchMark. A number of factors may affect our results. See the specific factors set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2020.
CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2021
(in thousands, except for per-share amounts)
| Pro Forma Adjustments | |||||||||||||||||||||||||||||
Historical (1) | Bandon Disposition | Other | Pro Forma Total | ||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 22,291 | $ | 99,439 | (A) | $ | (95,410) | (F) | $ | 26,320 | |||||||||||||||||||
| Accounts receivable | 7,615 | — | — | 7,615 | |||||||||||||||||||||||||
| Prepaid expenses and other assets | 6,349 | (108) | (B) | — | 6,241 | ||||||||||||||||||||||||
| Operating lease right-of-use asset | 2,680 | — | — | 2,680 | |||||||||||||||||||||||||
| Deferred financing costs | 125 | — | — | 125 | |||||||||||||||||||||||||
| Timber assets | — | ||||||||||||||||||||||||||||
| Timber and timberlands, net | 475,354 | — | — | 475,354 | |||||||||||||||||||||||||
| Intangible lease assets, less accumulated amortization | 3 | — | — | 3 | |||||||||||||||||||||||||
| Assets held for sale | 75,940 | (75,940) | (C) | — | — | ||||||||||||||||||||||||
| Investment in unconsolidated joint ventures | 1,907 | — | — | 1,907 | |||||||||||||||||||||||||
| Total assets | $ | 592,264 | $ | 23,391 | $ | (95,410) | $ | 520,245 | |||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||
| Accounts payable and accrued expenses | $ | 5,595 | $ | (21) | (D) | $ | — | $ | 5,574 | ||||||||||||||||||||
| Operating lease liability | 2,849 | — | — | 2,849 | |||||||||||||||||||||||||
| Other liabilities | 23,149 | — | — | 23,149 | |||||||||||||||||||||||||
| Notes payable and lines of credit, net of deferred financing costs | 430,659 | — | (95,410) | (F) | 335,249 | ||||||||||||||||||||||||
| Total liabilities | 462,252 | (21) | (95,410) | 366,821 | |||||||||||||||||||||||||
| Commitments and Contingencies | — | — | — | — | |||||||||||||||||||||||||
| Stockholders' Equity | |||||||||||||||||||||||||||||
Class A common stock, $0.01 par value: 900,000 shares authorized; 48,906 and 48,906 shares issued and outstanding, historical and pro forma, respectively (2) | 489 | — | — | 489 | |||||||||||||||||||||||||
| Additional paid-in capital | 729,155 | — | — | 729,155 | |||||||||||||||||||||||||
| Accumulated deficit and distributions | (584,368) | 23,412 | (E) | — | (560,956) | ||||||||||||||||||||||||
| Accumulated other comprehensive income | (16,731) | — | — | (16,731) | |||||||||||||||||||||||||
| Total stockholders’ equity | 128,545 | 23,412 | — | 151,957 | |||||||||||||||||||||||||
| Noncontrolling Interest | 1,467 | — | — | 1,467 | |||||||||||||||||||||||||
| Total equity | 130,012 | 23,412 | — | 153,424 | |||||||||||||||||||||||||
| Total liabilities and equity | $ | 592,264 | $ | 23,391 | $ | (95,410) | $ | 520,245 | |||||||||||||||||||||
| See accompanying notes. | |||||||||||||||||||||||||||||
(1) Historical financial information of CatchMark is derived from its Quarterly Report filed on Form 10-Q for the period ended June 30, 2021.
(2) Historical and pro forma shares issued and outstanding represent CatchMark common stock as of June 30, 2021 as filed in its Quarterly Report on Form 10-Q.
CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2021
(in thousands, except for per-share amounts)
| Pro Forma Adjustments | ||||||||||||||||||||||||||
Historical (1) | Bandon Disposition | Other | Pro Forma Total | |||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Timber sales | $ | 40,260 | $ | (8,653) | (G) | $ | — | $ | 31,607 | |||||||||||||||||
| Timberland sales | 10,989 | — | — | 10,989 | ||||||||||||||||||||||
| Asset management fee | 6,329 | — | — | 6,329 | ||||||||||||||||||||||
| Other revenues | 2,048 | (3) | (G) | — | 2,045 | |||||||||||||||||||||
| 59,626 | (8,656) | — | 50,970 | |||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||
| Contract logging and hauling costs | 17,556 | (4,325) | (G) | — | 13,231 | |||||||||||||||||||||
| Depletion | 14,382 | (5,235) | (G) | — | 9,147 | |||||||||||||||||||||
| Cost of timberland sales | 7,796 | — | — | 7,796 | ||||||||||||||||||||||
| Forestry management expenses | 3,594 | (172) | (G) | — | 3,422 | |||||||||||||||||||||
| General and administrative expenses | 6,694 | (93) | (G) | — | 6,601 | |||||||||||||||||||||
| Land rent expense | 133 | — | — | 133 | ||||||||||||||||||||||
| Other operating expenses | 3,427 | (895) | (G) | — | 2,532 | |||||||||||||||||||||
| 53,582 | (10,720) | — | 42,862 | |||||||||||||||||||||||
| Other income (expense) | ||||||||||||||||||||||||||
| Interest income | 1 | — | — | 1 | ||||||||||||||||||||||
| Interest expense | (6,265) | — | 1,095 | (H) | (5,170) | |||||||||||||||||||||
| Gain on large dispositions | 759 | — | — | 759 | ||||||||||||||||||||||
| (5,505) | — | 1,095 | (4,410) | |||||||||||||||||||||||
| Net income before unconsolidated joint ventures | 539 | 2,064 | 1,095 | 3,698 | ||||||||||||||||||||||
| Income from unconsolidated joint ventures | 663 | — | — | 663 | ||||||||||||||||||||||
| Net income | 1,202 | 2,064 | 1,095 | 4,361 | ||||||||||||||||||||||
| Net income attributable to noncontrolling interest | 3 | — | — | 3 | ||||||||||||||||||||||
| Net income attributable to common stockholders | $ | 1,199 | $ | 2,064 | $ | 1,095 | $ | 4,358 | ||||||||||||||||||
| Weighted-average common shares outstanding - basic | 48,398 | 48,398 | ||||||||||||||||||||||||
| Net income per share - basic | $ | 0.02 | $ | 0.09 | ||||||||||||||||||||||
| Weighted-average common shares outstanding - diluted | 48,513 | 48,513 | ||||||||||||||||||||||||
| Net income per share - diluted | $ | 0.02 | $ | 0.09 | ||||||||||||||||||||||
| See accompanying notes. | ||||||||||||||||||||||||||
(1) Historical financial information of CatchMark is derived from its Quarterly Report filed on Form 10-Q for the period ended June 30, 2021.
CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2020
(in thousands, except for per-share amounts)
| Pro Forma Adjustments | ||||||||||||||||||||||||||
Historical (1) | Bandon Disposition | Other | Pro Forma Total | |||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Timber sales | $ | 72,344 | $ | (11,546) | (G) | $ | — | $ | 60,798 | |||||||||||||||||
| Timberland sales | 15,642 | — | — | 15,642 | ||||||||||||||||||||||
| Asset management fee | 12,184 | — | — | 12,184 | ||||||||||||||||||||||
| Other revenues | 4,120 | (7) | (G) | — | 4,113 | |||||||||||||||||||||
| 104,290 | (11,553) | — | 92,737 | |||||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||
| Contract logging and hauling costs | 30,103 | (5,799) | (G) | — | 24,304 | |||||||||||||||||||||
| Depletion | 29,112 | (6,988) | (G) | — | 22,124 | |||||||||||||||||||||
| Cost of timberland sales | 12,290 | — | — | 12,290 | ||||||||||||||||||||||
| Forestry management expenses | 6,892 | (364) | (G) | — | 6,528 | |||||||||||||||||||||
| General and administrative expenses | 16,225 | (96) | (G) | — | 16,129 | |||||||||||||||||||||
| Land rent expense | 447 | — | — | 447 | ||||||||||||||||||||||
| Other operating expenses | 7,577 | (739) | (G) | — | 6,838 | |||||||||||||||||||||
| 102,646 | (13,986) | — | 88,660 | |||||||||||||||||||||||
| Other income (expense) | ||||||||||||||||||||||||||
| Interest income | 51 | — | — | 51 | ||||||||||||||||||||||
| Interest expense | (15,123) | — | 2,314 | (H) | (12,809) | |||||||||||||||||||||
| Gain on large dispositions | 1,274 | 23,412 | (E) | — | 24,686 | |||||||||||||||||||||
| (13,798) | 23,412 | 2,314 | 11,928 | |||||||||||||||||||||||
| Net income (loss) before unconsolidated joint ventures and income taxes | (12,154) | 25,845 | 2,314 | 16,005 | ||||||||||||||||||||||
| Income from unconsolidated joint ventures | (4,726) | — | — | (4,726) | ||||||||||||||||||||||
| Net income (loss) before income taxes | (16,880) | 25,845 | 2,314 | 11,279 | ||||||||||||||||||||||
| Income tax benefit (expense) | (658) | — | — | (658) | ||||||||||||||||||||||
| Net income (loss) | (17,538) | 25,845 | 2,314 | 10,621 | ||||||||||||||||||||||
| Net income attributable to noncontrolling interest | (30) | — | — | (30) | ||||||||||||||||||||||
| Net income (loss) attributable to common stockholders | $ | (17,508) | $ | 25,845 | $ | 2,314 | $ | 10,651 | ||||||||||||||||||
| Weighted-average common shares outstanding - basic and diluted | 48,816 | 48,816 | ||||||||||||||||||||||||
| Net loss per share - basic and diluted | $ | (0.36) | $ | 0.22 | ||||||||||||||||||||||
| See accompanying notes. | ||||||||||||||||||||||||||
(1) Historical financial information of CatchMark is derived from its Annual Report filed on Form 10-K for the year ended December 31, 2020.
CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands unless otherwise noted)
Adjustments to the Unaudited Pro Forma Condensed Consolidated Financial Statements
The unaudited pro forma consolidated balance sheet as of June 30, 2021 and the unaudited pro forma consolidated statements of operations for the six months ended June 30, 2021 and the year ended December 31, 2020 reflect the following adjustments. Unless otherwise defined herein, capitalized terms have the same meaning provided in CatchMark’s Quarterly Report on Form 10-Q for the period ended June 30, 2021.
A. Cash and Cash Equivalents Adjustment
Represents net proceeds received from the Bandon Disposition calculated as follows:
| Bandon Disposition sale price | $ | 100,000 | ||||||
| (-) Transaction costs and other adjustments | (561) | |||||||
| Pro forma adjustment | $ | 99,439 | ||||||
B. Prepaid Expenses and Other Assets Adjustment
Represents the removal of other assets related to the Bandon property.
C. Assets Held for Sale Adjustment
Represents the removal of assets related to the Bandon property, including the following amounts:
| Timber | $ | 58,809 | ||||||
| Timberland | 16,898 | |||||||
| Mainline roads | 233 | |||||||
| $ | 75,940 | |||||||
D. Accounts Payable and Accrued Expenses Adjustment
Represents the removal of accrued expenses related to the Bandon property.
E. Accumulated Deficit and Distributions Adjustment
Represents CatchMark’s pro forma gain on the Bandon Disposition as if it was consummated as of June 30, 2021. The following table summarizes the pro forma adjustment made to Accumulated Deficit and Distributions as a result of the Bandon Disposition:
| Net sale proceeds | $ | 99,439 | ||||||
| (-) Assets held for sale | (75,940) | |||||||
| (-) Other assets and accrued expenses | (108) | |||||||
| (+) Accrued expenses | 21 | |||||||
| Pro forma adjustment | $ | 23,412 | ||||||
F. Notes Payable and Lines of Credit Adjustment
Represents the repayment of outstanding debt balances as of June 30, 2021, specifically CatchMark’s Multi-Draw Term Facility ($26.8 million) and Term Loan A-3 ($68.6 million), with net proceeds from the Bandon Disposition, as required by CatchMark’s Amended Credit Agreement, as amended on August 4, 2021.
G. Revenues and Expenses Adjustments
Represents the elimination of historical revenues and expenses directly related to the Bandon property that will not recur in CatchMark's consolidated statement of operations beyond a year from the date of the Bandon Disposition.
H. Interest Expense Adjustments
Represents the removal of historical interest expense as a result of the pro forma adjustment to pay down outstanding debt, which bore interest at approximately 2.3% for the six months ended June 30, 2021 and approximately 2.4% for the year ended December 31, 2020, with net proceeds from the Bandon Disposition. Such expense will not recur in CatchMark's consolidated statement of operations beyond a year from the Bandon Disposition date.