SPOKANE, Washington
,
January 30, 2023
(press release)
–
Net income for the full year 2022 was $333.9 million, or $4.58 per diluted share, on revenues of $1.3 billion. Excluding after tax special items consisting of a pension settlement charge, a gain on insurance recoveries, CatchMark merger related expenses and an environmental charge, adjusted net income was $350.0 million, or $4.80 per diluted share for 2022. Net income for the full year 2021 was $423.9 million, or $6.26 per diluted share, on revenues of $1.3 billion. Excluding a net gain on insurance recoveries, adjusted net income was $421.4 million, or $6.22 per diluted share for 2021. 2022 Highlights “Each of our businesses delivered exceptional results in 2022 leading to our second highest Total Adjusted EBITDDA on record and marking our third straight year of very strong financial performance,” said Eric Cremers, president and chief executive officer. “2022 was also a very active year for successfully deploying capital, including acquiring nearly 400,000 acres of high-quality timberland and committing to expand and modernize our Waldo, Arkansas sawmill. Additionally, we returned $263 million to shareholders in 2022, including $55 million of share repurchases and a $76 million special dividend. With our disciplined capital allocation strategy and our strong balance sheet and liquidity we are well positioned to continue increasing shareholder value,” stated Mr. Cremers. Financial Highlights (in millions, except per share data - unaudited) Q4 2022 Q3 2022 Q4 2021 Revenues $ 253.1 $ 306.7 $ 248.4 Net income $ 3.8 $ 46.0 $ 39.2 Weighted average shares outstanding, diluted (in thousands) 80,578 71,632 67,974 Net income per diluted share $ 0.05 $ 0.64 $ 0.58 Adjusted Net Income $ 9.3 $ 53.2 $ 39.9 Adjusted Net Income Per Diluted Share $ 0.12 $ 0.74 $ 0.59 Total Adjusted EBITDDA $ 52.3 $ 101.1 $ 75.7 Dividends per share1 $ 1.40 $ 0.44 $ 4.44 Net cash from operations $ 33.5 $ 80.3 $ 51.6 Cash and cash equivalents $ 343.8 $ 484.0 $ 296.2 1 The regular dividend was increased 2.3% to $0.45 per quarter in Q4 2022 and a special dividend of $0.95 and $4.00 per share was paid in Q4 2022 and 2021, respectively. Business Performance: Q4 2022 vs. Q3 2022 Timberlands Fourth Quarter 2022 Highlights (in millions - unaudited) Q4 2022 Q3 2022 $ Change Timberlands Revenues $ 121.9 $ 134.6 $ (12.7 ) Timberlands Adjusted EBITDDA $ 50.6 $ 64.5 $ (13.9 ) Wood Products Fourth Quarter 2022 Highlights (in millions - unaudited) Q4 2022 Q3 2022 $ Change Wood Products Revenues $ 156.8 $ 193.4 $ (36.6 ) Wood Products Adjusted EBITDDA $ 2.4 $ 31.3 $ (28.9 ) Real Estate Fourth Quarter 2022 Highlights (in millions - unaudited) Q4 2022 Q3 2022 $ Change Real Estate Revenues $ 11.7 $ 19.0 $ (7.3 ) Real Estate Adjusted EBITDDA $ 7.2 $ 14.1 $ (6.9 ) Outlook “While higher interest rates and their expected impact on housing starts are expected to create headwinds for our operating results in 2023, we continue to remain very bullish on long-term housing-related fundamentals that drive demand in our business. We are encouraged by the recent increase in lumber prices and improvement in housing affordability. During 2023, we expect to harvest 7.7 million tons in our Timberlands segment, ship around 1.1 billion board feet in lumber in our Wood Products segment and sell about 18,000 rural acres and 150 residential lots in our Real Estate segment,” stated Mr. Cremers. 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, January 31, 2023, 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 February 7, 2023, 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. 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; expected liquidity; the U.S. economic condition, including the housing market and long-term housing-related fundamentals; the success of the company’s business strategies; the strength of the timber markets associated with the merger with CatchMark Timber Trust, Inc.; the company’s capital allocation strategies; favorable capital structure and strong balance sheet; the company’s FY 2023 outlook relating to its timber harvest volumes, lumber shipment volumes and prices, and real estate sales; expected successful implementation of our Waldo, Arkansas sawmill modernization; and similar matters. Words such as “anticipate,” “assumes,” “believe,” “can,” “could,” “estimate,” “expect,” “future,” “goal,” “intend,” “may,” “on track,” “plan,” “potential,” “predicting,” “project,” “schedule,” “seek,” “should,” “target,” “will,” 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 pandemic disease 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 shortages and disruptions; share price; the successful execution of the company’s strategic plans; the company’s ability and its contractors’ ability to implement the modernization plan for the Waldo sawmill; the company’s ability to meet expectations for the Ola sawmill’s new large log line; 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 Year Ended December 31, September 30, December 31, December 31, (in thousands, except per share amounts) 2022 2022 2021 2022 2021 Revenues $ 253,140 $ 306,693 $ 248,406 $ 1,330,780 $ 1,337,435 Costs and expenses: Cost of goods sold 214,765 220,876 178,163 806,822 715,846 Selling, general and administrative expenses 20,922 18,878 18,650 76,506 73,432 CatchMark merger-related expenses 1,318 26,007 — 27,325 — Environmental charge 5,550 — — 5,550 — (Gain) loss on fire damage — (24,913 ) 1,033 (34,505 ) (3,361 ) 242,555 240,848 197,846 881,698 785,917 Operating income 10,585 65,845 50,560 449,082 551,518 Interest expense, net (8,807 ) (8,280 ) (8,861 ) (27,400 ) (29,275 ) Pension settlement charge — — — (14,165 ) — Non-operating pension and other postretirement costs (2,592 ) (1,808 ) (3,271 ) (8,138 ) (13,227 ) Other (66 ) (1 ) — (67 ) — (Loss) income before income taxes (880 ) 55,756 38,428 399,312 509,016 Income taxes 4,723 (9,801 ) 754 (65,412 ) (85,156 ) Net income $ 3,843 $ 45,955 $ 39,182 $ 333,900 $ 423,860 Net income per share: Basic $ 0.05 $ 0.64 $ 0.58 $ 4.59 $ 6.29 Diluted $ 0.05 $ 0.64 $ 0.58 $ 4.58 $ 6.26 Dividends per share1 $ 1.40 $ 0.44 $ 4.44 $ 2.72 $ 5.67 Weighted-average shares outstanding (in thousands): . Basic 80,356 71,486 67,572 72,740 67,352 Diluted 80,578 71,632 67,974 72,922 67,719 1 The regular dividend was increased 2.3% to $0.45 per quarter in Q4 2022 and a special dividend of $0.95 and $4.00 per share was paid in Q4 2022 and 2021, respectively. PotlatchDeltic Corporation Condensed Consolidated Balance Sheets Unaudited At December 31, (in thousands, except per share amounts) 2022 2021 ASSETS Current assets: Cash and cash equivalents $ 343,809 $ 296,151 Customer receivables, net 22,813 31,028 Inventories, net 67,958 72,369 Other current assets 36,955 21,630 Total current assets 471,535 421,178 Property, plant and equipment, net 318,184 292,320 Investment in real estate held for development and sale 55,490 65,604 Timber and timberlands, net 2,508,372 1,682,671 Intangible assets, net 17,420 15,491 Other long-term assets 179,554 57,951 Total assets $ 3,550,555 $ 2,535,215 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities $ 94,861 $ 78,209 Current portion of long-term debt 39,979 42,977 Current portion of pension and other postretirement employee benefits 4,926 4,993 Total current liabilities 139,766 126,179 Long-term debt 992,701 715,279 Pension and other postretirement employee benefits 77,396 83,674 Deferred tax liabilities, net 41,790 34,874 Other long-term obligations 35,749 49,076 Total liabilities 1,287,402 1,009,082 Commitments and contingencies Stockholders’ equity: Common stock, $1 par value 79,683 69,064 Additional paid-in capital 2,294,797 1,781,217 Accumulated deficit (208,979 ) (280,910 ) Accumulated other comprehensive income (loss) 97,652 (43,238 ) Total stockholders’ equity 2,263,153 1,526,133 Total liabilities and stockholders' equity $ 3,550,555 $ 2,535,215 PotlatchDeltic Corporation Condensed Consolidated Statements of Cash Flows Unaudited Three Months Ended Year Ended December 31, September 30, December 31, December 31, December 31, (in thousands) 2022 2022 2021 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 3,843 $ 45,955 $ 39,182 $ 333,900 $ 423,860 Adjustments to reconcile net income to net cash from operating activities: Depreciation, depletion and amortization 30,274 27,707 20,060 98,234 77,425 Basis of real estate sold 4,897 6,845 4,627 29,921 27,360 Change in deferred taxes (3,898 ) 730 (3,196 ) (5,257 ) 25 Pension and other postretirement benefits 4,323 3,539 5,484 15,259 22,079 Pension settlement charge — — — 14,165 — Equity-based compensation expense 2,356 11,717 2,262 18,497 8,607 (Gain) loss on fire damage — (24,913 ) 1,033 (34,505 ) (3,361 ) Other, net (780 ) 144 (270 ) (1,235 ) 363 Change in working capital and operating-related activities, net (4,660 ) (5,901 ) (13,117 ) 9,411 (33,199 ) Real estate development expenditures (1,116 ) (1,796 ) (2,795 ) (8,102 ) (9,229 ) Funding of pension and other postretirement employee benefits (1,775 ) (1,026 ) (1,626 ) (5,065 ) (9,044 ) Proceeds from insurance recoveries — 17,250 — 26,678 — Net cash from operating activities 33,464 80,251 51,644 491,901 504,886 CASH FLOWS FROM INVESTING ACTIVITIES Property, plant and equipment additions (12,976 ) (7,223 ) (12,656 ) (56,976 ) (38,947 ) Timberlands reforestation and roads (5,498 ) (3,832 ) (4,165 ) (17,718 ) (16,401 ) Acquisition of timber and timberlands (14,029 ) (53,863 ) (17,616 ) (110,110 ) (20,066 ) Proceeds from property insurance 8,750 — 1,750 8,750 15,000 Cash acquired in CatchMark merger — 23,571 — 23,571 — Other, net 4,028 2,318 276 4,963 1,269 Net cash from investing activities (19,725 ) (39,029 ) (32,411 ) (147,520 ) (59,145 ) CASH FLOWS FROM FINANCING ACTIVITIES Distributions to common stockholders (111,555 ) (35,530 ) (305,779 ) (208,133 ) (388,241 ) Repurchase of common stock (50,022 ) (371 ) — (54,549 ) — Proceeds from long-term debt 40,000 277,500 40,000 317,500 40,000 Repayment of long-term debt (40,000 ) (300,000 ) (46,366 ) (343,000 ) (46,366 ) Other, net (1,260 ) (4,026 ) (3,083 ) (7,380 ) (6,702 ) Net cash from financing activities (162,837 ) (62,427 ) (315,228 ) (295,562 ) (401,309 ) Change in cash, cash equivalents and restricted cash (149,098 ) (21,205 ) (295,995 ) 48,819 44,432 Cash, cash equivalents and restricted cash at beginning of period 494,689 515,894 592,767 296,772 252,340 Cash, cash equivalents and restricted cash at end of period1 $ 345,591 $ 494,689 $ 296,772 $ 345,591 $ 296,772 1 Includes $1.8 million, $10.7 million and $0.6 million at December 31, 2022, September 30, 2022 and December 31, 2021, respectively, intended to be reinvested in timber and timberlands and classified as restricted cash in Other long-term assets in the Condensed Consolidated Balance Sheets. PotlatchDeltic Corporation Segment Information Unaudited Three months ended Year Ended December 31, September 30, December 31, December 31, (in thousands) 2022 2022 2021 2022 2021 Revenues Timberlands $ 121,871 $ 134,576 $ 86,772 $ 485,590 $ 449,447 Wood Products 156,805 193,431 174,158 912,612 988,888 Real Estate 11,682 19,008 14,005 91,491 63,813 290,358 347,015 274,935 1,489,693 1,502,148 Intersegment Timberlands revenues (37,218 ) (40,322 ) (26,529 ) (158,913 ) (164,713 ) Consolidated revenues $ 253,140 $ 306,693 $ 248,406 $ 1,330,780 $ 1,337,435 Adjusted EBITDDA1 Timberlands $ 50,567 $ 64,482 $ 41,804 $ 249,373 $ 262,944 Wood Products 2,442 31,258 37,204 290,907 393,858 Real Estate 7,178 14,140 10,007 73,258 47,457 Corporate (13,189 ) (12,629 ) (12,365 ) (49,314 ) (47,393 ) Eliminations and adjustments 5,335 3,839 (932 ) 9,931 (3,995 ) Total Adjusted EBITDDA 52,333 101,090 75,718 574,155 652,871 Interest expense, net2 (8,807 ) (8,280 ) (8,861 ) (27,400 ) (29,275 ) Depreciation, depletion and amortization (29,862 ) (27,329 ) (19,477 ) (96,700 ) (75,633 ) Basis of real estate sold (4,897 ) (6,845 ) (4,627 ) (29,921 ) (27,360 ) CatchMark merger-related expenses (1,318 ) (26,007 ) — (27,325 ) — Environmental charge (5,550 ) — — (5,550 ) — Gain (loss) on fire damage — 24,913 (1,033 ) 34,505 3,361 Pension settlement charge — — — (14,165 ) — Non-operating pension and other postretirement employee benefits (2,592 ) (1,808 ) (3,271 ) (8,138 ) (13,227 ) (Loss) gain on fixed assets (121 ) 23 (21 ) (82 ) (1,721 ) Other (66 ) (1 ) — (67 ) — (Loss) income before income taxes $ (880 ) $ 55,756 $ 38,428 $ 399,312 $ 509,016 Depreciation, depletion and amortization Timberlands $ 18,845 $ 16,963 $ 11,611 $ 59,532 $ 45,403 Wood Products 10,727 10,069 7,541 35,953 28,802 Real Estate 177 175 163 695 640 Corporate 113 122 162 520 788 29,862 27,329 19,477 96,700 75,633 Bond discounts and deferred loan fees2 412 378 583 1,534 1,792 Total depreciation, depletion and amortization $ 30,274 $ 27,707 $ 20,060 $ 98,234 $ 77,425 Basis of real estate sold Real Estate $ 4,899 $ 6,845 $ 4,630 $ 29,932 $ 27,381 Eliminations and adjustments (2 ) — (3 ) (11 ) (21 ) Total basis of real estate sold $ 4,897 $ 6,845 $ 4,627 $ 29,921 $ 27,360 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 Year ended December 31, September 30, December 31, December 31, (in thousands, except per share amounts) 2022 2022 2021 2022 2021 Adjusted EBITDDA Net income (GAAP) $ 3,843 $ 45,955 $ 39,182 $ 333,900 $ 423,860 Interest, net 8,807 8,280 8,861 27,400 29,275 Income taxes (4,723 ) 9,801 (754 ) 65,412 85,156 Depreciation, depletion and amortization 29,862 27,329 19,477 96,700 75,633 Basis of real estate sold 4,897 6,845 4,627 29,921 27,360 CatchMark merger-related expenses 1,318 26,007 — 27,325 — (Gain) loss on fire damage — (24,913 ) 1,033 (34,505 ) (3,361 ) Environmental charge 5,550 — — 5,550 — Pension settlement charge — — — 14,165 — Non-operating pension and other postretirement benefit costs 2,592 1,808 3,271 8,138 13,227 Loss (gain) on fixed assets 121 (23 ) 21 82 1,721 Other 66 1 — 67 — Total Adjusted EBITDDA $ 52,333 $ 101,090 $ 75,718 $ 574,155 $ 652,871 Adjusted Net Income Net income (GAAP) $ 3,843 $ 45,955 $ 39,182 $ 333,900 $ 423,860 Special items after tax: CatchMark merger-related expenses 1,318 25,823 — 27,140 — (Gain) loss on fire damage — (18,559 ) 748 (25,706 ) (2,504 ) Pension settlement charge — — — 10,553 — Environmental charge 4,135 — — 4,135 — Adjusted Net Income $ 9,296 $ 53,219 $ 39,930 $ 350,022 $ 421,356 Adjusted Net Income Per Diluted Share Net income per diluted share (GAAP) $ 0.05 $ 0.64 $ 0.58 $ 4.58 $ 6.26 Special items after tax: CatchMark merger-related expenses 0.02 0.36 — 0.37 — (Gain) loss on fire damage — (0.26 ) 0.01 (0.35 ) (0.04 ) Pension settlement charge — — — 0.14 — Environmental charge 0.05 — — 0.06 — Adjusted Net Income Per Diluted Share $ 0.12 $ 0.74 $ 0.59 $ 4.80 $ 6.22 (Investors) (Media)
Jerry Richards
509.835.1521
Anna Torma
509.835.1558
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