PotlatchDeltic reports Q2 net income of US$120.2M on revenues of US$359.6M, compared with year-ago income of US$187.9M on revenues of US$447.5M; closed or pending timberland bolt-on acquisitions were US$101M

Sample article from our Forestry & Timberland

SPOKANE, Washington , July 25, 2022 (press release) –

PotlatchDeltic Corporation (Nasdaq: PCH) today reported net income of $120.2 million, or $1.72 per diluted share, on revenues of $359.6 million for the quarter ended June 30, 2022. Excluding an after-tax gain on insurance recoveries, adjusted net income was $112.9 million, or $1.61 per diluted share for the second quarter of 2022. Net income was $187.9 million, or $2.77 per diluted share, on revenues of $447.5 million for the quarter ended June 30, 2021.

Second Quarter 2022 Highlights

  • Generated Total Adjusted EBITDDA of $175.1 million and Total Adjusted EBITDDA margin of 49%
  • Entered into definitive merger agreement with CatchMark to create leading integrated timber REIT
  • Announced $131 million expansion and modernization of Waldo, Arkansas sawmill
  • Closed or pending timberland bolt-on acquisitions were $101 million
  • Widened strong liquidity position to $810 million as of June 30, 2022

“Our second quarter 2022 financial results reflect strong performance across all of our businesses,” said Eric Cremers, president and chief executive officer. “We continue to capitalize on attractive lumber prices, which we expect to remain higher than long-term averages for the rest of 2022. Key recent accomplishments include the announcement of our pending merger with CatchMark, a decision to spend $131 million to modernize and expand our Waldo, Arkansas sawmill, and returning cash of $35 million to shareholders, including $5 million of share repurchases. I am very excited about our growth opportunities and we are well-positioned with our strong balance sheet and liquidity to deliver exceptional shareholder value over the long-term,” stated Mr. Cremers.

Financial Highlights

($ in millions, except per share data)

 

Q2 2022

 

Q1 2022

 

Q2 2021

Revenues

 

$

359.6

 

 

$

411.4

 

 

$

447.5

 

Net income

 

$

120.2

 

 

$

163.9

 

 

$

187.9

 

Weighted average shares outstanding, diluted (in thousands)

 

 

69,791

 

 

 

69,623

 

 

 

67,732

 

Net income per diluted share

 

$

1.72

 

 

$

2.35

 

 

$

2.77

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income

 

$

112.9

 

 

$

174.6

 

 

$

187.9

 

Adjusted Net Income Per Diluted Share

 

$

1.61

 

 

$

2.50

 

 

$

2.77

 

 

 

 

 

 

 

 

 

 

 

Total Adjusted EBITDDA

 

$

175.1

 

 

$

245.6

 

 

$

275.0

 

Dividends per share

 

$

0.44

 

 

$

0.44

 

 

$

0.41

 

Net cash from operations

 

$

147.9

 

 

$

230.3

 

 

$

171.4

 

Cash and cash equivalents

 

$

511.2

 

 

$

470.9

 

 

$

512.0

 

Business Performance: Q2 2022 vs. Q1 2022

Timberlands

Second Quarter 2022 Highlights

  • Timberlands Adjusted EBITDDA decreased $18.5 million from Q1 2022
  • Northern harvest volumes decreased due to spring break-up and unseasonably wet weather in June
  • Northern sawlog prices increased 7.5% primarily due to higher indexed sawlog prices and seasonally lighter logs
  • Southern sawlog harvest volumes were slightly lower and saw log prices were relatively flat
  • Higher log & haul costs were primarily driven by increased fuel costs
  • Forest management costs increased due to seasonally higher activities

($ in millions)

 

Q2 2022

 

Q1 2022

 

$ Change

Timberlands Revenues

 

$

105.5

 

 

$

123.7

 

 

$

(18.2

)

 

 

 

 

 

 

 

 

 

 

Timberlands Adjusted EBITDDA

 

$

57.9

 

 

$

76.4

 

 

$

(18.5

)

Wood Products

Second Quarter 2022 Highlights

  • Wood Products Adjusted EBITDDA decreased $42.8 million from Q1 2022
  • Average lumber price decreased 20% to $865 per MBF in Q2 2022
  • Log costs increased primarily due to higher indexed pricing in Idaho
  • Lumber shipments increased 9% to 254 MMBF in Q2 2022

($ in millions)

 

Q2 2022

 

Q1 2022

 

$ Change

Wood Products Revenues

 

$

266.6

 

 

$

295.7

 

 

$

(29.1

)

 

 

 

 

 

 

 

 

 

 

Wood Products Adjusted EBITDDA

 

$

107.2

 

 

$

150.0

 

 

$

(42.8

)

Real Estate

Second Quarter 2022 Highlights

  • Real Estate Adjusted EBITDDA decreased $8.3 million from Q1 2022
  • Sold 12,749 acres of rural land at an average price of $1,290 / acre
  • Sold 45 residential lots at an average price of $134,373 / lot
  • Sold 3 commercial acres for $685,713 / acre

($ in millions)

 

Q2 2022

 

Q1 2022

 

$ Change

Real Estate Revenues

 

$

26.7

 

 

$

34.1

 

 

$

(7.4

)

 

 

 

 

 

 

 

 

 

 

Real Estate Adjusted EBITDDA

 

$

21.8

 

 

$

30.1

 

 

$

(8.3

)

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, July 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 August 2, 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 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.

 

To view the full release on the company's website, click here.

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