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PotlatchDeltic Corporation Reports First Quarter 2022 Results

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SPOKANE, Wash., April 25, 2022--(BUSINESS WIRE)--PotlatchDeltic Corporation (Nasdaq: PCH) today reported net income of $163.9 million, or $2.35 per diluted share, on revenues of $411.4 million for the quarter ended March 31, 2022. Excluding after tax special items consisting of a non-cash pension settlement charge and a net loss on fire damage, adjusted net income was $174.6 million, or $2.50 per diluted share for the first quarter of 2022. Net income was $131.1 million, or $1.94 per diluted share, on revenues of $354.2 million for the quarter ended March 31, 2021.

First Quarter 2022 Highlights

  • Generated Total Adjusted EBITDDA of $245.6 million and Total Adjusted EBITDDA margin of 60%

  • Highest first quarter Adjusted EBITDDA on record and second highest quarterly Adjusted EBITDDA in our history

  • Transferred $70 million in pension obligations to American General Life

  • Expanded strong liquidity position to $770 million as of March 31, 2022

"2022 is off to a phenomenal start with each of our businesses delivering exceptional results leading to our highest first quarter financial performance on record," said Eric Cremers, president and chief executive officer. "Our operating results reflect our integrated operating model and leverage-to-lumber strategy combined with strong execution by our teams across all of our operations. Looking forward, we remain upbeat on lumber demand fundamentals despite the current rising interest rate environment. Our commitment to a disciplined capital allocation strategy and our strong balance sheet position us to continue to enhance shareholder value," stated Mr. Cremers.

Financial Highlights

($ in millions, except per share data)

Q1 2022

Q4 2021

Q1 2021

Revenues

$

411.4

$

248.4

$

354.2

Net income

$

163.9

$

39.2

$

131.1

Weighted average shares outstanding, diluted (in thousands)

69,623

67,974

67,607

Net income per diluted share

$

2.35

$

0.58

$

1.94

Adjusted Net Income

$

174.6

$

39.9

$

131.1

Adjusted Net Income Per Diluted Share

$

2.50

$

0.59

$

1.94

Total Adjusted EBITDDA

$

245.6

$

75.7

$

195.0

Dividends per share1

$

0.44

$

4.44

$

0.41

Net cash from operations

$

230.3

$

51.6

$

169.9

Cash and cash equivalents

$

470.9

$

296.2

$

382.0

1The regular dividend was increased 7.3% to $0.44 per quarter and a special dividend of $4 per share was paid Q4 2021.

Business Performance: Q1 2022 vs. Q4 2021

Timberlands

First Quarter 2022 Highlights

  • Timberlands Adjusted EBITDDA increased $34.6 million from Q4 2021

  • Increased Northern harvest volumes driven by favorable logging conditions

  • Northern sawlog price increased 54% primarily due to higher indexed sawlog prices

  • Southern sawlog prices increased 2% as higher pine sawlog prices partially offset the effect of seasonally lower hardwood volumes

  • Higher log & haul costs were primarily driven by increased fuel costs

  • Forest management costs declined due to seasonally lower Northern activity

($ in millions)

Q1 2022

Q4 2021

$ Change

Timberlands Revenues

$

123.7

$

86.8

$

36.9

Timberlands Adjusted EBITDDA

$

76.4

$

41.8

$

34.6

Wood Products

First Quarter 2022 Highlights

  • Wood Products Adjusted EBITDDA increased $112.8 million from Q4 2021

  • Average lumber price increased 91% to $1,075 per MBF in Q1 2022

  • Higher manufacturing cost reflects inflationary cost increases and planned mill maintenance

  • Log costs increased due to higher index pricing in Idaho

  • Plywood shipments and price realizations increased due to strong demand and mix

($ in millions)

Q1 2022

Q4 2021

$ Change

Wood Products Revenues

$

295.7

$

174.2

$

121.5

Wood Products Adjusted EBITDDA

$

150.0

$

37.2

$

112.8

Real Estate

First Quarter 2022 Highlights

  • Real Estate Adjusted EBITDDA increased $20.1 million from Q4 2021

  • Sold 4,751 acres of rural land at an average price of $4,556/acre, including a tract for $13.2 million

  • Sold 64 residential lots at an average price of $112,725/lot

  • Sold 3 commercial acres for $917,236/acre

($ in millions)

Q1 2022

Q4 2021

$ Change

Real Estate Revenues

$

34.1

$

14.0

$

20.1

Real Estate Adjusted EBITDDA

$

30.1

$

10.0

$

20.1

Non-GAAP Measures

This press release includes certain non-GAAP financial measures, which management believes are useful to investors, securities analysts and other interested parties. These non-GAAP financial measures should be considered only as supplemental to, and not as superior to, financial measures prepared in accordance with GAAP.

Management uses Adjusted EBITDDA to evaluate the performance of the company. This is a non-GAAP measure that represents EBITDDA before certain items that impact comparison of the performance of our business either period-over-period or with other businesses.

Adjusted net income and adjusted net income per diluted share are non-GAAP measures that represent GAAP net income and GAAP net income per diluted share before certain items that impact the ability of investors, securities analysts and other interested parties to compare the performance of our business, either period-over-period or with other businesses.

Reconciliations to GAAP are set forth in the accompanying schedules.

Conference Call Information

A live conference call and webcast will be held Tuesday, April 26, 2022, 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 website.

A replay of the conference call will be available two hours following the call until May 3, 2022, by calling 1-800-770-2030 for U.S./Canada or 1-647-362-9199 for international callers. Callers must enter conference I.D. number 7281983 to access the replay.

About PotlatchDeltic

PotlatchDeltic (Nasdaq: PCH) is a leading Real Estate Investment Trust (REIT) that owns approximately 1.8 million acres of timberlands in Alabama, Arkansas, Idaho, Louisiana, Minnesota and Mississippi. 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 and expenses; favorable housing market fundamentals and demand for lumber; disciplined capital allocation strategy; business conditions and strategies; and similar matters. Words such as "anticipate," "expect," "will," "intend," "plan," "target," "project," "believe," "seek," "schedule," "estimate," "could," "can," "may," 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, including the impact of COVID-19 and its variants, governmental responses to such outbreaks, and anticipated recovery from the pandemic on our business, suppliers, customers and employees; 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; the successful execution of the company’s strategic plans; the company’s ability to meet expectations; 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

March 31,

December 31,

March 31,

(in thousands, except per share amounts)

2022

2021

2021

Revenues

$

411,350

$

248,406

$

354,193

Costs and expenses:

Cost of goods sold

179,847

178,163

169,302

Selling, general and administrative expenses

16,294

18,650

16,758

Net loss on fire damage

276

1,033

196,417

197,846

186,060

Operating income

214,933

50,560

168,133

Interest expense, net

(2,894

)

(8,861

)

(3,574

)

Pension settlement charge

(14,165

)

Non-operating pension and other postretirement employee benefit costs

(1,929

)

(3,271

)

(3,414

)

Income before income taxes

195,945

38,428

161,145

Income taxes

(32,065

)

754

(30,039

)

Net income

$

163,880

$

39,182

$

131,106

Net income per share:

Basic

$

2.36

$

0.58

$

1.95

Diluted

$

2.35

$

0.58

$

1.94

Dividends per share1

$

0.44

$

4.44

$

0.41

Weighted-average shares outstanding:

Basic

69,419

67,572

67,207

Diluted

69,623

67,974

67,607

1The regular dividend was increased 7.3% to $0.44 per quarter and a special dividend of $4 per share was paid Q4 2021.

PotlatchDeltic Corporation

Condensed Consolidated Balance Sheet

Unaudited

(in thousands, except per share amounts)

March 31, 2022

December 31, 2021

ASSETS

Current assets:

Cash and cash equivalents

$

470,918

$

296,151

Customer receivables, net

40,094

31,028

Inventories, net

67,673

72,369

Other current assets

21,938

21,630

Total current assets

600,623

421,178

Property, plant and equipment, net

297,710

292,320

Investment in real estate held for development and sale

61,562

65,604

Timber and timberlands, net

1,671,330

1,682,671

Intangible assets, net

15,296

15,491

Other long-term assets

87,095

57,951

Total assets

$

2,733,616

$

2,535,215

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued liabilities

$

101,589

$

78,209

Current portion of long-term debt

39,983

42,977

Current portion of pension and other postretirement employee benefits

4,993

4,993

Total current liabilities

146,565

126,179

Long-term debt

715,499

715,279

Pension and other postretirement employee benefits

90,359

83,674

Deferred tax liabilities, net

37,642

34,874

Other long-term obligations

31,353

49,076

Total liabilities

1,021,418

1,009,082

Commitments and contingencies

Stockholders' equity:

Common stock, $1 par value, authorized 100,000 shares, issued and outstanding 69,372 and 69,064 shares

69,372

69,064

Additional paid-in capital

1,782,940

1,781,217

Accumulated deficit

(147,632

)

(280,910

)

Accumulated other comprehensive income (loss)

7,518

(43,238

)

Total stockholders’ equity

1,712,198

1,526,133

Total liabilities and stockholders' equity

$

2,733,616

$

2,535,215

PotlatchDeltic Corporation

Condensed Consolidated Statements of Cash Flows

Unaudited

Three Months Ended

(in thousands)

March 31, 2022

December 31, 2021

March 31, 2021

CASH FLOWS FROM OPERATING ACTIVITIES

Net income

$

163,880

$

39,182

$

131,106

Adjustments to reconcile net income to net cash from operating activities:

Depreciation, depletion and amortization

19,874

20,060

18,399

Basis of real estate sold

10,854

4,627

8,823

Change in deferred taxes

(2,123

)

(3,196

)

1,490

Pension and other postretirement employee benefits

3,857

5,484

5,627

Pension settlement charge

14,165

Equity-based compensation expense

2,056

2,262

1,930

Net loss on fire damage

276

1,033

Other, net

(291

)

(270

)

(387

)

Change in working capital and operating-related activities, net

21,208

(13,117

)

6,713

Real estate development expenditures

(2,161

)

(2,795

)

(2,315

)

Funding of pension and other postretirement employee benefits

(1,296

)

(1,626

)

(1,421

)

Net cash from operating activities

230,299

51,644

169,965

CASH FLOWS FROM INVESTING ACTIVITIES

Property, plant and equipment additions

(12,566

)

(12,656

)

(7,762

)

Timberlands reforestation and roads

(4,648

)

(4,165

)

(3,956

)

Acquisition of timber and timberlands

(17,616

)

Proceeds from property insurance

1,750

Other, net

92

276

189

Net cash from investing activities

(17,122

)

(32,411

)

(11,529

)

CASH FLOWS FROM FINANCING ACTIVITIES

Distributions to common stockholders

(30,524

)

(305,779

)

(27,484

)

Proceeds from issuance of long-term debt

40,000

Repayment of long-term debt

(3,000

)

(46,366

)

Other, net

(1,071

)

(3,083

)

(591

)

Net cash from financing activities

(34,595

)

(315,228

)

(28,075

)

Change in cash, cash equivalents and restricted cash

178,582

(295,995

)

130,361

Cash, cash equivalents and restricted cash, beginning

296,772

592,767

252,340

Cash, cash equivalents and restricted cash, ending

$

475,354

$

296,772

$

382,701

Note: PotlatchDeltic issued 1.96 million shares of common stock and assumed debt of $6.6 million to acquire Loutre Land and Timber Company in December 2021. The debt was paid off after the transaction closed.

PotlatchDeltic Corporation

Segment Information

Unaudited

Three Months Ended

March 31,

December 31,

March 31,

(in thousands)

2022

2021

2021

Revenues

Timberlands

$

123,657

$

86,772

$

111,916

Wood Products

295,742

174,158

269,296

Real Estate

34,065

14,005

20,313

453,464

274,935

401,525

Intersegment Timberlands revenues

(42,114

)

(26,529

)

(47,332

)

Consolidated revenues

$

411,350

$

248,406

$

354,193

Adjusted EBITDDA1

Timberlands

$

76,434

$

41,804

$

67,858

Wood Products

149,951

37,204

125,555

Real Estate

30,124

10,007

16,593

Corporate

(9,584

)

(12,365

)

(10,710

)

Eliminations and adjustments

(1,363

)

(932

)

(4,310

)

Total Adjusted EBITDDA

245,562

75,718

194,986

Interest expense, net

(2,894

)

(8,861

)

(3,574

)

Depreciation, depletion and amortization

(19,502

)

(19,477

)

(17,996

)

Basis of real estate sold

(10,854

)

(4,627

)

(8,823

)

Net loss on fire damage

(276

)

(1,033

)

Pension settlement charge

(14,165

)

Non-operating pension and other postretirement employee benefits

(1,929

)

(3,271

)

(3,414

)

Gain (loss) on disposal of fixed assets

3

(21

)

(34

)

Income before income taxes

$

195,945

$

38,428

$

161,145

Depreciation, depletion and amortization

Timberlands

$

12,161

$

11,611

$

11,417

Wood Products

7,021

7,541

6,203

Real Estate

170

163

155

Corporate

150

162

221

19,502

19,477

17,996

Bond discounts and deferred loan fees2

372

583

403

Total depreciation, depletion and amortization

$

19,874

$

20,060

$

18,399

Basis of real estate sold

Real Estate

$

10,860

$

4,630

$

8,829

Eliminations and adjustments

(6

)

(3

)

(6

)

Total basis of real estate sold

$

10,854

$

4,627

$

8,823

1 Management uses Adjusted EBITDDA to evaluate company and segment performance. See the reconciliation of Total Adjusted EBITDDA below.

2 Bond discounts and deferred loan fees are included in interest expense, net in the Condensed Consolidated Statements of Operations.

PotlatchDeltic Corporation

Reconciliations

Unaudited

Three Months Ended

March 31,

December 31,

March 31,

(in thousands, except per share amount)

2022

2021

2021

Total Adjusted EBITDDA

Net income (GAAP)

$

163,880

$

39,182

$

131,106

Interest expense, net

2,894

8,861

3,574

Income taxes

32,065

(754

)

30,039

Depreciation, depletion and amortization

19,502

19,477

17,996

Basis of real estate sold

10,854

4,627

8,823

Net loss on fire damage

276

1,033

Pension settlement charge

14,165

Non-operating pension and other postretirement benefit costs

1,929

3,271

3,414

(Gain) loss on disposal of fixed assets

(3

)

21

34

Total Adjusted EBITDDA

$

245,562

$

75,718

$

194,986

Adjusted Net Income

Net income (GAAP)

$

163,880

$

39,182

$

131,106

Special items:

Net loss on fire damage, after tax

205

748

Pension settlement charge, after tax

10,553

Adjusted net income

$

174,638

$

39,930

$

131,106

Adjusted Net Income Per Diluted Share

Net income per diluted share (GAAP)

$

2.35

$

0.58

$

1.94

Special items:

Net loss on fire damage, after tax

0.01

Pension settlement charge, after tax

0.15

Adjusted net income per diluted share

$

2.50

$

0.59

$

1.94

View source version on businesswire.com: https://www.businesswire.com/news/home/20220425005776/en/

Contacts

(Investors)
Jerry Richards
509.835.1521

(Media)
Anna Torma
509.835.1558

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