PotlatchDeltic reports Q3 income of US$46.0M on revenues of US$306.7M, compared with year-ago income of US$65.7M on revenues of US$287.3M; CEO notes company has acquired almost 500,000 acres of timberlands in the last year at relatively attractive prices

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SPOKANE, Washington , October 24, 2022 (press release) –

PotlatchDeltic Corporation (Nasdaq: PCH) today reported net income of $46.0 million, or $0.64 per diluted share, on revenues of $306.7 million for the quarter ended September 30, 2022. Excluding after tax special items consisting of a gain on insurance recoveries and CatchMark merger related expenses, adjusted net income was $53.2 million, or $0.74 per diluted share for the third quarter of 2022. Net income was $65.7 million, or $0.97 per diluted share, on revenues of $287.3 million for the quarter ended September 30, 2021. Excluding an after-tax gain on insurance recoveries, adjusted net income was $62.4 million, or $0.92 per diluted share for the third quarter of 2021.

Third Quarter 2022 Highlights

  • Generated Total Adjusted EBITDDA of $101.1 million and Total Adjusted EBITDDA margin of 33%
  • Successfully completed our merger with CatchMark creating a leading integrated timber REIT
  • Used existing interest rate swaps to reduce the combined company's annual interest expense by $8.5 million, reducing our weighted average cost of debt from 3.1% to 2.4%
  • Achieved $15 million of CatchMark CAD synergies and now expect $21 million versus our $16 million target
  • Restarted the large log line at the Ola, Arkansas sawmill on schedule
  • Maintained strong liquidity position of $773 million as of September 30, 2022

“Third quarter 2022 marked another important milestone in our company’s history as we successfully closed our merger with CatchMark, further diversifying our timberland ownership into some of the strongest markets in the U.S. South,” said Eric Cremers, president and chief executive officer. “Overall, we have acquired almost 500,000 acres of timberlands in the last year at relatively attractive prices, increasing our stable cash flows. All of our businesses continue to perform well and we generated Total Adjusted EBITDDA of $101 million in the third quarter. Our strong balance sheet and liquidity provide a high degree of flexibility as we navigate the current economic environment, along with the ability to continue growing shareholder value,” stated Mr. Cremers.

Financial Highlights

($ in millions, except per share data)

 

Q3 2022

 

 

Q2 2022

 

 

Q3 2021

 

Revenues

 

$

306.7

 

 

$

359.6

 

 

$

287.3

 

Net income

 

$

46.0

 

 

$

120.2

 

 

$

65.7

 

Weighted average shares outstanding, diluted (in thousands)

 

 

71,632

 

 

 

69,791

 

 

 

67,648

 

Net income per diluted share

 

$

0.64

 

 

$

1.72

 

 

$

0.97

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income

 

$

53.2

 

 

$

112.9

 

 

$

62.4

 

Adjusted Net Income per diluted share

 

$

0.74

 

 

$

1.61

 

 

$

0.92

 

 

 

 

 

 

 

 

 

 

 

Total Adjusted EBITDDA

 

$

101.1

 

 

$

175.1

 

 

$

107.2

 

Dividends per share

 

$

0.44

 

 

$

0.44

 

 

$

0.41

 

Net cash from operations

 

$

80.3

 

 

$

147.9

 

 

$

111.9

 

Cash and cash equivalents

 

$

484.0

 

 

$

511.2

 

 

$

592.8

 

Business Performance: Q3 2022 vs. Q2 2022

Timberlands

Third Quarter 2022 Highlights

  • Timberlands Adjusted EBITDDA increased $6.6 million from Q2 2022
  • Northern and southern harvest volumes increased seasonally
  • Northern sawlog prices decreased 25% due largely to lower indexed sawlog prices
  • Southern sawlog prices were relatively flat
  • Higher log & haul costs were primarily driven by increased fuel costs and constrained capacity

($ in millions)

 

Q3 2022

 

 

Q2 2022

 

 

$ Change

 

Timberlands Revenues

 

$

134.6

 

 

$

105.5

 

 

$

29.1

 

 

 

 

 

 

 

 

 

 

 

Timberlands Adjusted EBITDDA

 

$

64.5

 

 

$

57.9

 

 

$

6.6

 

 

 

 

 

 

 

 

 

 

 

Wood Products

Third Quarter 2022 Highlights

  • Wood Products Adjusted EBITDDA decreased $75.9 million from Q2 2022
  • Average lumber price decreased 34% to $572 per MBF in Q3 2022
  • Lumber production increased in Q3 2022 leading to higher fixed cost absorption
  • Plywood shipments and price realizations declined on lower demand

($ in millions)

 

Q3 2022

 

 

Q2 2022

 

 

$ Change

 

Wood Products Revenues

 

$

193.4

 

 

$

266.6

 

 

$

(73.2

)

 

 

 

 

 

 

 

 

 

 

Wood Products Adjusted EBITDDA

 

$

31.3

 

 

$

107.2

 

 

$

(75.9

)

Real Estate

Third Quarter 2022 Highlights

  • Real Estate Adjusted EBITDDA decreased $7.7 million from Q2 2022
  • Sold 1,622 acres of rural land at an average price of $3,811 per acre
  • Sold 48 residential lots at an average price of $78,344 per lot
  • Sold 35 commercial acres for $182,520 per acre

($ in millions)

 

Q3 2022

 

 

Q2 2022

 

 

$ Change

 

Real Estate Revenues

 

$

19.0

 

 

$

26.7

 

 

$

(7.7

)

 

 

 

 

 

 

 

 

 

 

Real Estate Adjusted EBITDDA

 

$

14.1

 

 

$

21.8

 

 

$

(7.7

)

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, October 25, 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 November 1, 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 nearly 2.2 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.

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