Potlatchdeltic corporation reports first quarter 2022 results
Spokane, wash.--(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
