PotlatchDeltic Corporation (Nasdaq:PCH) today reported net income of $20.6 million, or $0.30 per diluted share, on revenues of $226.3 million for the quarter ended September 30, 2019.

Third Quarter 2019 Highlights

  • Generated $55.0 million of Total Adjusted EBITDDA and Adjusted EBITDDA margin of 24%
  • Wood Products set quarterly records for lumber production and shipment volumes

“Our third quarter Adjusted EBITDDA was $55 million, as our businesses executed well on factors within their control,” said Mike Covey, chairman and chief executive officer. “Real Estate continues to have a strong year, selling double the number of rural acres that we expected as well as closing a commercial real estate transaction in Chenal Valley during the third quarter. Wood Products established new quarterly lumber production and shipping records and remains on pace to complete $40 million of capital projects to expand capacity and increase grade recovery. While Timberlands scaled back Southern harvest volumes in the third quarter due to full mill inventories, the segment benefited from higher than expected Southern sawlog prices. Looking forward, we remain optimistic that the lumber market will improve,” stated Mr. Covey.

Financial Highlights

($ in millions, except per share data)

 

Q3 2019

 

 

Q2 2019

 

 

Q3 2018

 

 

Revenues

 

$

 

226.3

 

 

$

 

215.6

 

 

$

 

289.2

 

 

Net income

 

$

 

20.6

 

 

$

 

17.1

 

 

$

 

60.4

 

 

Weighted average shares outstanding, diluted (in thousands)

 

 

67,545

 

 

 

67,713

 

 

 

64,722

 

 

Net income per diluted share

 

$

 

0.30

 

 

$

 

0.25

 

 

$

 

0.93

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

 

$

 

20.6

 

 

$

 

17.1

 

 

$

 

56.0

 

 

Adjusted net income per diluted share

 

$

 

0.30

 

 

$

 

0.25

 

 

$

 

0.87

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Adjusted EBITDDA

 

$

 

55.0

 

 

$

 

49.0

 

 

$

 

101.8

 

 

Dividends per share

 

$

 

0.40

 

 

$

 

0.40

 

 

$

 

0.40

 

 

Net cash from operations

 

$

 

37.9

 

 

$

 

48.5

 

 

$

 

53.0

 

 

Cash and cash equivalents

 

$

 

94.7

 

 

$

 

98.0

 

 

$

 

137.5

 

 

Business Performance: Q3 2019 vs. Q2 2019

Timberlands

Third Quarter 2019 Highlights

  • Timberlands Adjusted EBITDDA increased $16.9 million from Q2 2019 levels
  • Northern and Southern harvest volumes increased seasonally, but were below plan
  • Northern sawlog prices increased 7%, reflecting slightly higher lumber prices on indexed volume and seasonally lighter logs
  • Log & haul costs increased due to higher Northern volumes

($ in millions)

 

Q3 2019

 

 

Q2 2019

 

 

$ Change

 

Timberlands Revenues

 

$

 

98.8

 

 

$

 

66.9

 

 

$

 

31.9

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Timberlands Adjusted EBITDDA

 

$

 

43.0

 

 

$

 

26.1

 

 

$

 

16.9

 

Wood Products

Third Quarter 2019 Highlights

  • Wood Products Adjusted EBITDDA increased $7.9 million from Q2 2019 levels
  • Average lumber price was $363 per MBF Q3 2019, down 4% from Q2 2019
  • The segment set quarterly records for lumber production and shipment volumes in Q3 2019
  • Log and manufacturing costs were lower on a per-unit basis in Q3 2019
  • Lumber inventory at end of Q3 2019 was written down $3.5 million compared to $7.4 million in Q2 2019

($ in millions)

 

Q3 2019

 

 

Q2 2019

 

 

$ Change

 

Wood Products Revenues

 

$

 

143.7

 

 

$

 

138.0

 

 

$

 

5.7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wood Products Adjusted EBITDDA

 

$

 

5.9

 

 

$

 

(2.0

)

 

$

 

7.9

 

Real Estate

Third Quarter 2019 Highlights

  • Real Estate Adjusted EBITDDA decreased $16.6 million as the sale of a former Deltic tract for $19.6 million in Q2 2019 was partially offset by commercial land sales of $3.1 million in Q3 2019
  • Sold 6,225 acres of rural land Q3 2019 compared to 12,375 acres in Q2 2019

($ in millions)

 

Q3 2019

 

 

Q2 2019

 

 

$ Change

 

Real Estate Revenues

 

$

 

18.9

 

 

$

 

36.4

 

 

$

 

(17.5

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Real Estate Adjusted EBITDDA

 

$

 

14.7

 

 

$

 

31.3

 

 

$

 

(16.6

)

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 earnings 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 29, 2019, 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 1-877-823-6919 for U.S./Canada and 1-647-689-5576 for international callers. Participants will be asked to provide conference I.D. number 7868573. 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 5, 2019 by calling 1-800-585-8367 for U.S./Canada or 1-416-621-4642 for international callers. Callers must enter conference I.D. number 7868573 to access the replay.

About PotlatchDeltic

PotlatchDeltic (NASDAQ:PCH) is a leading Real Estate Investment Trust (REIT) that owns nearly 1.9 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 practices, is dedicated to long-term stewardship and sustainable management of its timber resources. 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 our stepped-up capital expenditure program, the U.S. housing market and repair and remodel market; U.S housing starts; lumber demand, pricing, revenues and Q4 costs and expenses; Q4 lumber shipments; 2019 lumber shipments; effects of announced curtailments and permanent closures of sawmills; expectation that shortfall in Southern harvest will be made up in the fourth quarter of 2019; Q4 2019 Northern and Southern timber harvest volumes and sawlog prices; expected 2020 timber harvest volumes; Q4 2019 Northern and Southern sawlog mix; 2019 harvest plan; Wood Products 2019 capital expenditures; total 2019 capital expenditures; real estate sales, pricing and cost basis; development real estate sales, pricing and land basis; the direction of our business markets; business conditions; Q4 2019 Adjusted EBITDDA; Q4 2019 interest expense; Q4 2019 corporate expense; Q4 2019 income tax; dividend payout ratio; plan to refinance debt scheduled to mature in Q4; 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 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; changes in interest rates; changes in the level of construction activity; changes in Asia 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; changes in general and industry-specific environmental laws and regulations; unforeseen environmental liabilities or expenditures; weather conditions; 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 Income

Unaudited

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

June 30,

 

 

September 30,

 

 

September 30,

 

(in thousands, except per share amounts)

 

 

2019

 

 

 

2019

 

 

 

2018

 

 

 

2019

 

 

 

2018

 

Revenues

 

$

 

226,302

 

 

$

 

215,581

 

 

$

 

289,199

 

 

$

 

623,599

 

 

$

 

757,329

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of goods sold

 

 

182,634

 

 

 

175,673

 

 

 

195,584

 

 

 

512,522

 

 

 

515,645

 

Selling, general and administrative expenses

 

 

12,472

 

 

 

14,952

 

 

 

14,901

 

 

 

43,994

 

 

 

45,449

 

Gain on sale of facility

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(9,176

)

 

 

—

 

Deltic merger-related costs

 

 

—

 

 

 

—

 

 

 

972

 

 

 

—

 

 

 

21,245

 

 

 

 

195,106

 

 

 

190,625

 

 

 

211,457

 

 

 

547,340

 

 

 

582,339

 

Operating income

 

 

31,196

 

 

 

24,956

 

 

 

77,742

 

 

 

76,259

 

 

 

174,990

 

Interest expense, net

 

 

(8,475

)

 

 

(7,882

)

 

 

(10,109

)

 

 

(21,821

)

 

 

(25,125

)

Loss on extinguishment of debt

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(5,512

)

 

 

—

 

Non-operating pension and other postretirement costs

 

 

(935

)

 

 

(889

)

 

 

(1,942

)

 

 

(2,804

)

 

 

(5,707

)

Income before income taxes

 

 

21,786

 

 

 

16,185

 

 

 

65,691

 

 

 

46,122

 

 

 

144,158

 

Income tax (expense) benefit

 

 

(1,221

)

 

 

952

 

 

 

(5,355

)

 

 

(1,860

)

 

 

(23,077

)

Net income

 

$

 

20,565

 

 

$

 

17,137

 

 

$

 

60,336

 

 

$

 

44,262

 

 

$

 

121,081

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

 

0.30

 

 

$

 

0.25

 

 

$

 

0.96

 

 

$

 

0.65

 

 

$

 

2.06

 

Diluted

 

$

 

0.30

 

 

$

 

0.25

 

 

$

 

0.93

 

 

$

 

0.65

 

 

$

 

2.03

 

Dividends per share

 

$

 

0.40

 

 

$

 

0.40

 

 

$

 

0.40

 

 

$

 

1.20

 

 

$

 

1.20

 

Weighted-average shares outstanding (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

67,446

 

 

 

67,664

 

 

 

62,986

 

 

 

67,781

 

 

 

58,765

 

Diluted

 

 

67,545

 

 

 

67,713

 

 

 

64,722

 

 

 

67,848

 

 

 

59,542

 

PotlatchDeltic Corporation

Condensed Consolidated Balance Sheets

Unaudited

 

(in thousands, except per share amounts)

 

September 30, 2019

 

 

December 31, 2018

 

ASSETS

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 

94,747

 

 

$

 

76,639

 

Customer receivables, net

 

 

27,214

 

 

 

21,405

 

Inventories, net

 

 

54,202

 

 

 

60,805

 

Other current assets

 

 

23,492

 

 

 

22,675

 

Assets held for sale

 

 

—

 

 

 

80,674

 

Total current assets

 

 

199,655

 

 

 

262,198

 

Property, plant and equipment, net

 

 

278,587

 

 

 

272,193

 

Investment in real estate held for development and sale

 

 

76,924

 

 

 

79,537

 

Timber and timberlands, net

 

 

1,649,196

 

 

 

1,672,815

 

Intangible assets, net

 

 

17,244

 

 

 

17,828

 

Other long-term assets

 

 

35,448

 

 

 

21,281

 

Total assets

 

$

 

2,257,054

 

 

$

 

2,325,852

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

 

78,274

 

 

$

 

60,993

 

Current portion of long-term debt

 

 

39,995

 

 

 

39,973

 

Current portion of pension and other postretirement employee benefits

 

 

5,997

 

 

 

5,997

 

Liabilities held for sale

 

 

—

 

 

 

29,321

 

Total current liabilities

 

 

124,266

 

 

 

136,284

 

Long-term debt

 

 

716,350

 

 

 

715,391

 

Pension and other postretirement employee benefits

 

 

110,548

 

 

 

110,659

 

Deferred tax liabilities, net

 

 

14,913

 

 

 

32,009

 

Other long-term obligations

 

 

55,248

 

 

 

16,730

 

Total liabilities

 

 

1,021,325

 

 

 

1,011,073

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

 

Preferred stock, authorized 4,000 shares, no shares issued

 

 

—

 

 

 

—

 

Common stock, $1 par value, authorized 100,000 shares, issued 67,221 and 67,570 shares

 

 

67,221

 

 

 

67,570

 

Additional paid-in capital

 

 

1,664,333

 

 

 

1,659,031

 

Accumulated deficit

 

 

(343,747

)

 

 

(282,391

)

Accumulated other comprehensive loss

 

 

(152,078

)

 

 

(129,431

)

Total stockholders’ equity

 

 

1,235,729

 

 

 

1,314,779

 

Total liabilities and stockholders' equity

 

$

 

2,257,054

 

 

$

 

2,325,852

 

 

 

 

 

 

 

 

 

 

PotlatchDeltic Corporation

Condensed Consolidated Statements of Cash Flows

Unaudited

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

(in thousands)

 

September 30, 2019

 

 

June 30, 2019

 

 

September 30, 2018

 

 

September 30, 2019

 

 

September 30, 2018

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

 

20,565

 

 

$

 

17,137

 

 

$

 

60,336

 

 

$

 

44,262

 

 

$

 

121,081

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

19,178

 

 

 

17,137

 

 

 

19,445

 

 

 

52,589

 

 

 

53,685

 

Basis of real estate sold

 

 

5,228

 

 

 

7,427

 

 

 

4,248

 

 

 

14,211

 

 

 

10,673

 

Gain on sale of facility

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(9,176

)

 

 

—

 

Loss on extinguishment of debt

 

 

—

 

 

 

—

 

 

 

—

 

 

 

5,512

 

 

 

—

 

Change in deferred taxes

 

 

295

 

 

 

(1,139

)

 

 

11,081

 

 

 

(16,943

)

 

 

13,879

 

Pension and other postretirement employee benefits

 

 

2,970

 

 

 

2,831

 

 

 

4,222

 

 

 

8,907

 

 

 

12,221

 

Equity-based compensation expense

 

 

1,913

 

 

 

1,832

 

 

 

1,629

 

 

 

5,362

 

 

 

6,518

 

Other, net

 

 

(764

)

 

 

(1,142

)

 

 

(549

)

 

 

(2,692

)

 

 

(1,220

)

Change in working capital and operating-related activities, net

 

 

(8,745

)

 

 

8,507

 

 

 

(1,982

)

 

 

13,745

 

 

 

(9,429

)

Real estate development expenditures

 

 

(1,257

)

 

 

(2,715

)

 

 

(1,416

)

 

 

(5,738

)

 

 

(3,081

)

Funding of pension and other postretirement employee benefits

 

 

(1,477

)

 

 

(1,421

)

 

 

(44,001

)

 

 

(4,612

)

 

 

(55,959

)

Net cash provided by operating activities

 

 

37,906

 

 

 

48,454

 

 

 

53,013

 

 

 

105,427

 

 

 

148,368

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant and equipment additions

 

 

(10,094

)

 

 

(11,742

)

 

 

(7,123

)

 

 

(25,596

)

 

 

(18,496

)

Timberlands reforestation and roads

 

 

(5,079

)

 

 

(3,948

)

 

 

(5,345

)

 

 

(13,269

)

 

 

(12,464

)

Acquisition of timber and timberlands

 

 

—

 

 

 

(278

)

 

 

(3

)

 

 

(278

)

 

 

(166

)

Cash and cash equivalents acquired in merger

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

3,419

 

Proceeds on disposition of property, plant and equipment

 

 

2,017

 

 

 

—

 

 

 

—

 

 

 

2,017

 

 

 

—

 

Proceeds on sale of facility

 

 

—

 

 

 

(1,252

)

 

 

—

 

 

 

58,793

 

 

 

—

 

Other, net

 

 

87

 

 

 

303

 

 

 

124

 

 

 

520

 

 

 

655

 

Net cash (used in) provided by investing activities

 

 

(13,069

)

 

 

(16,917

)

 

 

(12,347

)

 

 

22,187

 

 

 

(27,052

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions to common stockholders

 

 

(26,888

)

 

 

(26,881

)

 

 

(25,102

)

 

 

(80,834

)

 

 

(75,305

)

Proceeds from Potlatch revolving line of credit

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

100,000

 

Repayment of Potlatch revolving line of credit

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(100,000

)

Repayment of Deltic revolving line of credit

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(106,000

)

Proceeds from long-term debt

 

 

—

 

 

 

—

 

 

 

—

 

 

 

150,000

 

 

 

100,000

 

Repayment of long-term debt

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(150,000

)

 

 

(14,250

)

Premiums and fees on debt retirement

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(4,865

)

 

 

—

 

Repurchase of common stock

 

 

—

 

 

 

(15,015

)

 

 

—

 

 

 

(25,173

)

 

 

—

 

Other, net

 

 

(129

)

 

 

(51

)

 

 

(40

)

 

 

(393

)

 

 

(4,975

)

Net cash used in financing activities

 

 

(27,017

)

 

 

(41,947

)

 

 

(25,142

)

 

 

(111,265

)

 

 

(100,530

)

Change in cash, cash equivalents and restricted cash

 

 

(2,180

)

 

 

(10,410

)

 

 

15,524

 

 

 

16,349

 

 

 

20,786

 

Cash, cash equivalents and restricted cash, beginning

 

 

97,970

 

 

 

108,380

 

 

 

125,719

 

 

 

79,441

 

 

 

120,457

 

Cash, cash equivalents and restricted cash, ending

 

$

 

95,790

 

 

$

 

97,970

 

 

$

 

141,243

 

 

$

 

95,790

 

 

$

 

141,243

 

PotlatchDeltic Corporation

Segment Information

Unaudited

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

June 30,

 

 

September 30,

 

 

September 30,

 

(in thousands)

 

 

2019

 

 

 

2019

 

 

 

2018

 

 

 

2019

 

 

 

2018

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Timberlands

 

$

 

98,809

 

 

$

 

66,881

 

 

$

 

111,421

 

 

$

 

233,848

 

 

$

 

280,438

 

Wood Products

 

 

143,643

 

 

 

138,030

 

 

 

199,025

 

 

 

413,979

 

 

 

532,425

 

Real Estate

 

 

18,863

 

 

 

36,432

 

 

 

11,233

 

 

 

61,459

 

 

 

38,219

 

 

 

 

261,315

 

 

 

241,343

 

 

 

321,679

 

 

 

709,286

 

 

 

851,082

 

Intersegment Timberlands revenues

 

 

(35,013

)

 

 

(25,762

)

 

 

(32,480

)

 

 

(85,687

)

 

 

(93,753

)

Consolidated revenues

 

$

 

226,302

 

 

$

 

215,581

 

 

$

 

289,199

 

 

$

 

623,599

 

 

$

 

757,329

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDDA1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Timberlands

 

$

 

42,996

 

 

$

 

26,131

 

 

$

 

58,680

 

 

$

 

95,977

 

 

$

 

140,068

 

Wood Products

 

 

5,903

 

 

 

(2,071

)

 

 

46,446

 

 

 

11,058

 

 

 

126,962

 

Real Estate

 

 

14,678

 

 

 

31,316

 

 

 

7,467

 

 

 

48,697

 

 

 

27,769

 

Corporate

 

 

(6,930

)

 

 

(9,346

)

 

 

(8,989

)

 

 

(26,930

)

 

 

(28,969

)

Eliminations and adjustments

 

 

(1,635

)

 

 

3,050

 

 

 

(1,794

)

 

 

3,542

 

 

 

(5,080

)

Total Adjusted EBITDDA

 

 

55,012

 

 

 

49,080

 

 

 

101,810

 

 

 

132,344

 

 

 

260,750

 

Basis of real estate sold

 

 

(5,228

)

 

 

(7,427

)

 

 

(4,248

)

 

 

(14,211

)

 

 

(10,673

)

Depreciation, depletion and amortization

 

 

(18,786

)

 

 

(16,727

)

 

 

(18,836

)

 

 

(51,310

)

 

 

(51,982

)

Interest expense, net

 

 

(8,475

)

 

 

(7,882

)

 

 

(10,109

)

 

 

(21,821

)

 

 

(25,125

)

Loss on extinguishment of debt

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(5,512

)

 

 

—

 

Non-operating pension and other postretirement employee benefits

 

 

(935

)

 

 

(889

)

 

 

(1,942

)

 

 

(2,804

)

 

 

(5,707

)

Gain (loss) on fixed assets

 

 

198

 

 

 

30

 

 

 

(12

)

 

 

260

 

 

 

(11

)

Gain on sale of facility

 

 

—

 

 

 

—

 

 

 

—

 

 

 

9,176

 

 

 

—

 

Inventory purchase price adjustment in cost of goods sold

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,849

)

Deltic merger-related costs

 

 

—

 

 

 

—

 

 

 

(972

)

 

 

—

 

 

 

(21,245

)

Income before income taxes

 

$

 

21,786

 

 

$

 

16,185

 

 

$

 

65,691

 

 

$

 

46,122

 

 

$

 

144,158

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation, depletion and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

Timberlands

 

$

 

12,627

 

 

$

 

10,469

 

 

$

 

12,730

 

 

$

 

33,361

 

 

$

 

35,974

 

Wood Products

 

 

5,763

 

 

 

5,861

 

 

 

5,827

 

 

 

16,666

 

 

 

15,250

 

Real Estate

 

 

152

 

 

 

147

 

 

 

81

 

 

 

508

 

 

 

198

 

Corporate

 

 

244

 

 

 

250

 

 

 

198

 

 

 

775

 

 

 

560

 

 

 

 

18,786

 

 

 

16,727

 

 

 

18,836

 

 

 

51,310

 

 

 

51,982

 

Bond discounts and deferred loan fees2

 

 

392

 

 

 

410

 

 

 

609

 

 

 

1,279

 

 

 

1,703

 

Total depreciation, depletion and amortization

 

$

 

19,178

 

 

$

 

17,137

 

 

$

 

19,445

 

 

$

 

52,589

 

 

$

 

53,685

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basis of real estate sold

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real Estate

 

$

 

5,283

 

 

$

 

7,455

 

 

$

 

4,267

 

 

$

 

14,326

 

 

$

 

10,886

 

Eliminations and adjustments

 

 

(55

)

 

 

(28

)

 

 

(19

)

 

 

(115

)

 

 

(213

)

Total basis of real estate sold

 

$

 

5,228

 

 

$

 

7,427

 

 

$

 

4,248

 

 

$

 

14,211

 

 

$

 

10,673

 

1 Management uses Adjusted EBITDDA to evaluate company and segment performance. See the reconciliation of Total Adjusted EBITDDA on page 9, Reconciliations.

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

PotlatchDeltic Corporation

Reconciliations

Unaudited

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

June 30,

 

 

September 30,

 

 

September 30,

 

(in thousands, except per share amount)

 

 

2019

 

 

 

2019

 

 

 

2018

 

 

 

2019

 

 

 

2018

 

Total Adjusted EBITDDA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (GAAP)

 

$

 

20,565

 

 

$

 

17,137

 

 

$

 

60,336

 

 

$

 

44,262

 

 

$

 

121,081

 

Interest expense, net

 

 

8,475

 

 

 

7,882

 

 

 

10,109

 

 

 

21,821

 

 

 

25,125

 

Income taxes

 

 

1,221

 

 

 

(952

)

 

 

5,355

 

 

 

1,860

 

 

 

23,077

 

Depreciation, depletion and amortization

 

 

18,786

 

 

 

16,727

 

 

 

18,836

 

 

 

51,310

 

 

 

51,982

 

Basis of real estate sold

 

 

5,228

 

 

 

7,427

 

 

 

4,248

 

 

 

14,211

 

 

 

10,673

 

Loss on extinguishment of debt

 

 

—

 

 

 

—

 

 

 

—

 

 

 

5,512

 

 

 

—

 

Non-operating pension and other postretirement benefit costs

 

 

935

 

 

 

889

 

 

 

1,942

 

 

 

2,804

 

 

 

5,707

 

Deltic merger-related costs

 

 

—

 

 

 

—

 

 

 

972

 

 

 

—

 

 

 

21,245

 

Gain on sale of facility

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(9,176

)

 

 

—

 

Inventory purchase price adjustment in cost of goods sold

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,849

 

(Gain) loss on fixed assets

 

 

(198

)

 

 

(30

)

 

 

12

 

 

 

(260

)

 

 

11

 

Total Adjusted EBITDDA

 

$

 

55,012

 

 

$

 

49,080

 

 

$

 

101,810

 

 

$

 

132,344

 

 

$

 

260,750

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (GAAP)

 

$

 

20,565

 

 

$

 

17,137

 

 

$

 

60,336

 

 

$

 

44,262

 

 

$

 

121,081

 

Special items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on extinguishment of debt

 

 

—

 

 

 

—

 

 

 

—

 

 

 

5,512

 

 

 

—

 

Gain on sale of facility, after tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(6,790

)

 

 

—

 

Deltic merger-related costs

 

 

—

 

 

 

—

 

 

 

972

 

 

 

—

 

 

 

21,245

 

Tax adjustments(1)

 

 

—

 

 

 

—

 

 

 

(5,327

)

 

 

—

 

 

 

(5,327

)

Inventory purchase price adjustment in cost of goods sold, after tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,368

 

Adjusted net income

 

$

 

20,565

 

 

$

 

17,137

 

 

$

 

55,981

 

 

$

 

42,984

 

 

$

 

138,367

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted net income per diluted share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per diluted share (GAAP)

 

$

 

0.30

 

 

$

 

0.25

 

 

$

 

0.93

 

 

$

 

0.65

 

 

$

 

2.03

 

Special items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss on extinguishment of debt

 

 

—

 

 

 

—

 

 

 

—

 

 

 

0.08

 

 

 

—

 

Gain on sale of facility, after tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(0.10

)

 

 

—

 

Tax adjustments(1)

 

 

—

 

 

 

—

 

 

 

(0.08

)

 

 

—

 

 

 

(0.09

)

Deltic merger-related costs

 

 

—

 

 

 

—

 

 

 

0.02

 

 

 

—

 

 

 

0.36

 

Inventory purchase price adjustment in cost of goods sold, after tax

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

0.02

 

Adjusted net income per diluted share

 

$

 

0.30

 

 

$

 

0.25

 

 

$

 

0.87

 

 

$

 

0.63

 

 

$

 

2.32

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 During the third quarter of 2018 we recorded a tax benefit primarily related to deducting contributions to our qualified pension plans at the higher 2017 income tax rate.