PotlatchDeltic Corporation (Nasdaq: PCH) today reported net
income of $13.7 million, or $0.17 per diluted share, on revenues of
$320.7 million for the quarter ended June 30, 2024. Net income was
$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.
Second Quarter 2024 Highlights
- Generated Total Adjusted EBITDDA of $103.2 million and Total
Adjusted EBITDDA margin of 32%
- Completed the sale of 34,100 acres of four-year average age
Southern timberlands for $57 million, or $1,700 per acre
- Repurchased 610,000 shares for $25 million, or $41 per
share
- Finalizing construction of the $131 million Waldo, Arkansas
sawmill expansion and modernization project
- Maintained strong liquidity of nearly $500 million as of June
30, 2024
“All of our business segments delivered solid operational
execution in the second quarter in spite of languishing lumber
markets and the current economic backdrop,” said Eric Cremers,
President and Chief Executive Officer. “Our Real Estate business
generated strong rural sales activity that created high value
transactions with significant premiums to timberland values,
highlighted by the closing of our previously announced 34,100-acre
timberland sale to Forest Investment Associates for $57 million.
Additionally, our Wood Products business is diligently focused on
the final phase of construction on our Waldo, Arkansas sawmill
expansion and modernization project for completion in the third
quarter. As for capital allocation, our strong balance sheet and
liquidity continues to allow us the flexibility to execute on our
disciplined and opportunistic strategy, which included $25 million
of share repurchases during the quarter. Looking ahead, we continue
to believe long-term underlying housing fundamentals remain
favorable and are optimistic that lumber markets will gain renewed
momentum as inflation and interest rates improve,” stated Mr.
Cremers.
Financial Highlights
($ in millions, except per share
data)
Q2 2024
Q1 2024
Q2 2023
Revenues
$
320.7
$
228.1
$
246.1
Net income (loss)
$
13.7
$
(0.3
)
$
22.3
Weighted-average shares outstanding,
diluted (in thousands)
79,741
79,677
80,416
Net income (loss) per diluted share
$
0.17
$
—
$
0.28
Adjusted Net Income (Loss)1
$
13.7
$
(0.3
)
$
5.2
Adjusted Net Income (Loss) Per Diluted
Share1
$
0.17
$
—
$
0.06
Total Adjusted EBITDDA1
$
103.2
$
29.7
$
45.5
Total Adjusted EBITDDA Margin1
32.2
%
13.0
%
18.5
%
Dividends per share
$
0.45
$
0.45
$
0.45
Net cash from operations
$
100.6
$
16.0
$
37.2
Cash and cash equivalents
$
199.7
$
180.2
$
331.2
1
Adjusted Net Income, Adjusted Net Income
Per Diluted Share, Total Adjusted EBITDDA and Total Adjusted
EBITDDA Margin are non-GAAP measures. Refer to "Non-GAAP Measures"
and Non-GAAP Reconciliations below for
more information and reconciliations to GAAP, where applicable.
Business Performance: Q2 2024 vs. Q1 2024
Timberlands
Second Quarter 2024 Highlights
- Timberlands Adjusted EBITDDA decreased $0.5 million from Q1
2024
- Northern sawlog prices increased 9% primarily due to seasonally
lighter logs and higher cedar sawlog prices
- Southern sawlog prices remained relatively flat
- Forest management costs increased due to seasonally higher
activities
($ in millions)
Q2 2024
Q1 2024
$ Change
Timberlands Revenues
$
98.8
$
93.0
$
5.8
Timberlands Adjusted EBITDDA1
$
34.2
$
34.7
$
(0.5
)
1
Refer to Segment
Information below for additional information.
Wood Products
Second Quarter 2024 Highlights
- Wood Products Adjusted EBITDDA decreased $6.7 million from Q1
2024
- Average lumber prices decreased 2% to $423 per thousand board
feet (MBF) in Q2 2024
- Higher per-unit manufacturing costs primarily due to impacts
from the expansion project at the Waldo sawmill
($ in millions)
Q2 2024
Q1 2024
$ Change
Wood Products Revenues
$
153.6
$
148.6
$
5.0
Wood Products Adjusted EBITDDA1
$
(6.8
)
$
(0.1
)
$
(6.7
)
1
Refer to Segment
Information below for additional information.
Real Estate
Second Quarter 2024 Highlights
- Real Estate Adjusted EBITDDA increased $83.4 million from Q1
2024
- Sold 43,121 acres of rural land at an average price of $1,968
per acre, including the sale of 34,100 acres to Forest Investment
Associates for $57 million
- Sold 13 residential lots at an average price of $112,721 per
lot
- Sold 12 commercial acres for $492,746 per acre
($ in millions)
Q2 2024
Q1 2024
$ Change
Real Estate Revenues
$
95.7
$
11.1
$
84.6
Real Estate Adjusted EBITDDA1
$
89.6
$
6.2
$
83.4
1
Refer to Segment
Information below for additional information.
Non-GAAP Measures
This press release includes certain financial measures that are
not in accordance with accounting principles generally accepted in
the United States (GAAP). Management believes that these non-GAAP
measures, when read in conjunction with our GAAP financial
statements, provide useful information to investors and other
interested parties as described below. The presentation of these
non-GAAP financial measures should be considered only as
supplemental to, are not intended to be considered in isolation or
as a substitute for, or superior to, financial measures prepared in
accordance with GAAP. Additionally, these non-GAAP financial
measures may not be the same as or comparable to other similarly
titled non-GAAP measures presented by other companies due to
potential inconsistencies in methods of calculation.
Adjusted Net Income (Loss) and Adjusted Net Income (Loss) Per
Diluted Share are non-GAAP measures that represent GAAP net income
(loss) and GAAP net income (loss) per diluted share before certain
items, net of tax, that management believes impact the ability to
compare the performance of our business, either period-over-period
or with other businesses.
Total Adjusted EBITDDA and Total Adjusted EBITDDA Margin are
non-GAAP measures that remove the impact of specific items that
management believes do not directly reflect the core business
operations on an ongoing basis and can be used to evaluate the
operational performance of assets under management.
We define Total Adjusted EBITDDA Margin as Total Adjusted
EBITDDA divided by Revenues.
Reconciliations of Total Adjusted EBITDDA, Adjusted Net Income
(Loss) and Adjusted Net Income (Loss) Per Diluted Share to their
most comparable GAAP measures are set forth in the accompanying
“Non-GAAP Reconciliations” at the end of this release.
Conference Call Information
A live conference call and webcast will be held Tuesday, July
30, 2024, 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 above website.
A replay of the conference call will be available two hours
following the call until August 6, 2024 by calling 1-800-770-2030
for U.S./Canada or 1-609-800-9909 for international callers.
Callers must enter conference I.D. number 7281983 to access the
replay.
About PotlatchDeltic
PotlatchDeltic Corporation (Nasdaq: PCH) is a leading Real
Estate Investment Trust (REIT) that owns over 2.1 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, expenses and liquidity;
disciplined and opportunistic capital allocation strategy; expected
completion of the Waldo, AR sawmill expansion and modernization
project; long-term housing fundamentals, inflation, interest rates,
and demand for lumber; and similar matters. Words such as
“believe,” “looking ahead,” “long term,” 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; our ability to complete our Waldo,
Arkansas sawmill expansion and modernization project on budget and
schedule and to achieve the expected increases in production
capacity, reduction in cash processing costs, and recovery
improvement; our ability to participate in the natural climate
solutions and forest carbon sequestration markets; 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
(in thousands, except per share
amounts)
June 30, 2024
March 31, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Revenues
$
320,671
$
228,127
$
246,101
$
548,798
$
504,063
Costs and expenses:
Cost of goods sold
282,473
212,160
215,063
494,633
439,413
Selling, general and administrative
expenses
20,752
20,727
17,585
41,479
35,815
CatchMark merger-related expenses
—
—
244
—
2,453
Gain on fire damage
—
—
(23,110
)
—
(23,110
)
303,225
232,887
209,782
536,112
454,571
Operating income (loss)
17,446
(4,760
)
36,319
12,686
49,492
Interest expense, net
(8,696
)
282
(7,613
)
(8,414
)
(7,812
)
Non-operating pension and other
postretirement employee benefits
201
201
(229
)
402
(457
)
Other
(23
)
(145
)
258
(168
)
268
Income (loss) before income taxes
8,928
(4,422
)
28,735
4,506
41,491
Income taxes
4,750
4,117
(6,429
)
8,867
(2,925
)
Net income (loss)
$
13,678
$
(305
)
$
22,306
$
13,373
$
38,566
Net income (loss) per share:
Basic
$
0.17
$
—
$
0.28
$
0.17
$
0.48
Diluted
$
0.17
$
—
$
0.28
$
0.17
$
0.48
Dividends per share
$
0.45
$
0.45
$
0.45
$
0.90
$
0.90
Weighted-average shares outstanding:
Basic
79,627
79,677
80,145
79,656
80,087
Diluted
79,741
79,677
80,416
79,756
80,297
PotlatchDeltic Corporation
Condensed Consolidated Balance
Sheets
Unaudited
(in thousands, except per share
amounts)
June 30, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
199,723
$
230,118
Customer receivables, net
29,977
21,892
Inventories, net
80,097
78,665
Other current assets
47,132
46,258
Total current assets
356,929
376,933
Property, plant and equipment, net
377,060
372,832
Investment in real estate held for
development and sale
55,298
56,321
Timber and timberlands, net
2,394,709
2,440,398
Intangible assets, net
14,751
15,640
Other long-term assets
180,304
169,132
Total assets
$
3,379,051
$
3,431,256
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities:
Accounts payable and accrued
liabilities
$
95,477
$
82,383
Current portion of long-term debt
175,692
175,615
Current portion of pension and other
postretirement employee benefits
4,535
4,535
Total current liabilities
275,704
262,533
Long-term debt
858,617
858,113
Pension and other postretirement employee
benefits
68,621
67,856
Deferred tax liabilities, net
27,680
36,641
Other long-term obligations
35,830
35,015
Total liabilities
1,266,452
1,260,158
Commitments and contingencies
Stockholders' equity:
Common stock, $1 par value, 200,000 shares
authorized, 78,902 and 79,365 shares issued and outstanding
78,902
79,365
Additional paid-in capital
2,309,555
2,303,992
Accumulated deficit
(397,967
)
(315,291
)
Accumulated other comprehensive income
122,109
103,032
Total stockholders’ equity
2,112,599
2,171,098
Total liabilities and stockholders'
equity
$
3,379,051
$
3,431,256
PotlatchDeltic Corporation
Condensed Consolidated Statements
of Cash Flows
Unaudited
Three Months Ended
Six Months Ended
(in thousands)
June 30, 2024
March 31, 2024
June 30, 2023
June 30, 2024
June 30, 2023
CASH FLOWS FROM OPERATING
ACTIVITIES
Net income (loss)
$
13,678
$
(305
)
$
22,306
$
13,373
$
38,566
Adjustments to reconcile net income (loss)
to net cash from operating activities:
Depreciation, depletion and
amortization
29,674
30,802
27,496
60,476
59,669
Basis of real estate sold
56,525
4,092
4,884
60,617
15,515
Change in deferred taxes
(4,694
)
(4,145
)
(2,609
)
(8,839
)
(2,215
)
Pension and other postretirement employee
benefits
1,145
1,143
1,612
2,288
3,223
Equity-based compensation expense
2,962
2,560
1,577
5,522
3,856
Gain on fire damage
—
—
(23,110
)
—
(23,110
)
Interest received under swaps with
other-than-insignificant financing element
(7,509
)
(7,458
)
(6,313
)
(14,967
)
(11,767
)
Other, net
2,351
2,961
1,911
5,312
3,856
Change in working capital and
operating-related activities, net
9,256
(13,252
)
2,871
(3,996
)
(14,334
)
Real estate development expenditures
(1,587
)
(1,135
)
(1,896
)
(2,722
)
(4,304
)
Funding of pension and other
postretirement employee benefits
(1,221
)
(914
)
(1,217
)
(2,135
)
(2,304
)
Proceeds from insurance recoveries
—
1,680
9,706
1,680
9,706
Net cash from operating activities
100,580
16,029
37,218
116,609
76,357
CASH FLOWS FROM INVESTING
ACTIVITIES
Property, plant and equipment
additions
(21,608
)
(4,995
)
(5,880
)
(26,603
)
(10,135
)
Timberlands reforestation and roads
(4,940
)
(7,874
)
(4,596
)
(12,814
)
(10,714
)
Acquisition of timber and timberlands
(43
)
(31,438
)
(1,621
)
(31,481
)
(1,621
)
Interest received under swaps with
other-than-insignificant financing element
6,986
6,938
5,849
13,924
10,904
Other, net
245
373
242
618
664
Net cash from investing activities
(19,360
)
(36,996
)
(6,006
)
(56,356
)
(10,902
)
CASH FLOWS FROM FINANCING
ACTIVITIES
Distributions to common stockholders
(35,677
)
(35,779
)
(35,958
)
(71,456
)
(71,920
)
Repurchase of common stock
(23,905
)
—
(394
)
(23,905
)
(394
)
Other, net
(1,444
)
(792
)
(1,117
)
(2,236
)
(1,955
)
Net cash from financing activities
(61,026
)
(36,571
)
(37,469
)
(97,597
)
(74,269
)
Change in cash, cash equivalents and
restricted cash
20,194
(57,538
)
(6,257
)
(37,344
)
(8,814
)
Cash, cash equivalents and restricted
cash, beginning
180,150
237,688
343,034
237,688
345,591
Cash, cash equivalents and restricted
cash, ending1
$
200,344
$
180,150
$
336,777
$
200,344
$
336,777
1
Includes $0.7 million, $0, and $5.6
million at June 30, 2024, March 31, 2024, and June 30, 2023,
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
(in thousands)
June 30, 2024
March 31, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Revenues
Timberlands
$
98,802
$
92,950
$
88,617
$
191,752
$
203,855
Wood Products
153,579
148,598
167,669
302,177
320,464
Real Estate
95,732
11,107
17,064
106,839
40,927
348,113
252,655
273,350
600,768
565,246
Intersegment Timberlands revenues
(27,442
)
(24,528
)
(27,243
)
(51,970
)
(61,177
)
Other intersegment revenues
—
—
(6
)
—
(6
)
Consolidated revenues
$
320,671
$
228,127
$
246,101
$
548,798
$
504,063
Adjusted EBITDDA1
Timberlands
$
34,124
$
34,748
$
29,316
$
68,872
$
75,955
Wood Products
(6,805
)
(139
)
11,967
(6,944
)
11,936
Real Estate
89,568
6,228
12,237
95,796
31,702
Corporate
(11,756
)
(12,665
)
(10,521
)
(24,421
)
(21,262
)
Eliminations and adjustments
(1,958
)
1,550
2,446
(408
)
4,891
Total Adjusted EBITDDA
103,173
29,722
45,445
132,895
103,222
Interest expense, net2
(8,696
)
282
(7,613
)
(8,414
)
(7,812
)
Depreciation, depletion and
amortization
(29,268
)
(30,395
)
(27,087
)
(59,663
)
(58,851
)
Basis of real estate sold
(56,525
)
(4,092
)
(4,884
)
(60,617
)
(15,515
)
CatchMark merger-related expenses
—
—
(244
)
—
(2,453
)
Gain on fire damage
—
—
23,110
—
23,110
Non-operating pension and other
postretirement employee benefits
201
201
(229
)
402
(457
)
Gain (loss) on disposal of fixed
assets
66
5
(21
)
71
(21
)
Other
(23
)
(145
)
258
(168
)
268
Income (loss) before income taxes
$
8,928
$
(4,422
)
$
28,735
$
4,506
$
41,491
Depreciation, depletion and
amortization
Timberlands
$
16,790
$
17,625
$
15,895
$
34,415
$
36,356
Wood Products
12,227
12,516
10,948
24,743
21,983
Real Estate
136
138
121
274
277
Corporate
115
116
123
231
235
29,268
30,395
27,087
59,663
58,851
Bond discounts and deferred loan fees2
406
407
409
813
818
Total depreciation, depletion and
amortization
$
29,674
$
30,802
$
27,496
$
60,476
$
59,669
Basis of real estate sold
Real Estate
$
56,528
$
4,094
$
4,887
$
60,622
$
15,518
Eliminations and adjustments
(3
)
(2
)
(3
)
(5
)
(3
)
Total basis of real estate sold
$
56,525
$
4,092
$
4,884
$
60,617
$
15,515
1
Management uses Adjusted EBITDDA to
evaluate company and segment performance. See the reconciliation of
Total Adjusted EBITDDA in Non-GAAP
Reconciliations.
2
Bond discounts and deferred loan fees are
included in interest expense, net in the Condensed Consolidated Statements of
Operations.
PotlatchDeltic Corporation
Non-GAAP Reconciliations
Unaudited
Three Months Ended
Six Months Ended
(in thousands, except per share
amount)
June 30, 2024
March 31, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Total Adjusted EBITDDA1
Net income (loss) (GAAP)
$
13,678
$
(305
)
$
22,306
$
13,373
$
38,566
Interest expense, net
8,696
(282
)
7,613
8,414
7,812
Income taxes
(4,750
)
(4,117
)
6,429
(8,867
)
2,925
Depreciation, depletion and
amortization
29,268
30,395
27,087
59,663
58,851
Basis of real estate sold
56,525
4,092
4,884
60,617
15,515
CatchMark merger-related expenses
—
—
244
—
2,453
Gain on fire damage
—
—
(23,110
)
—
(23,110
)
Non-operating pension and other
postretirement employee benefits
(201
)
(201
)
229
(402
)
457
(Gain) loss on disposal of fixed
assets
(66
)
(5
)
21
(71
)
21
Other
23
145
(258
)
168
(268
)
Total Adjusted EBITDDA
$
103,173
$
29,722
$
45,445
$
132,895
$
103,222
Adjusted Net Income (Loss)1
Net income (loss) (GAAP)
$
13,678
$
(305
)
$
22,306
$
13,373
$
38,566
Special items after tax:
CatchMark merger-related expenses
—
—
244
—
2,453
Gain on fire damage
—
—
(17,333
)
—
(17,333
)
Adjusted Net Income (Loss)
$
13,678
$
(305
)
$
5,217
$
13,373
$
23,686
Adjusted Net Income (Loss) Per Diluted
Share1
Net income (loss) per diluted share
(GAAP)
$
0.17
$
—
$
0.28
$
0.17
$
0.48
Special items after tax:
CatchMark merger-related expenses
—
—
—
—
0.03
Gain on fire damage
—
—
(0.22
)
—
(0.22
)
Adjusted Net Income (Loss) Per Diluted
Share
$
0.17
$
—
$
0.06
$
0.17
$
0.29
1
See "Non-GAAP Measures" for further
details on management's use of these measures.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240729303934/en/
Investors Wayne Wasechek 509.835.1521 Media Anna Torma
509.835.1558
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