ATLANTA, Aug. 1, 2019 /PRNewswire/ -- CatchMark
Timber Trust, Inc. (NYSE: CTT) today reported solid
quarter-over-quarter and year-over-year increases in total revenues
spurred by higher-than-market-average pricing for timber sales from
its prime timberlands, asset management fees from the Triple T
joint venture and increased timberland sales. In addition,
delivered wood sales and fiber supply agreements continued to
generate steady revenue despite lower timber sales volumes due to
wet weather conditions and mill outages which had been anticipated
in the company's 2019 harvest plan.
CatchMark also declared a quarterly cash dividend of
$0.135 per share for its common
stockholders of record on August 30,
2019, payable on September 13,
2019.
Results Overview
Second quarter 2019 CatchMark operating results included:
- Increased revenues by 9% to $28.7
million, compared to $26.2
million in second quarter 2018, primarily a result of Triple
T joint venture asset management fees and higher timberland
sales.
- Incurred a net loss of $30.6
million on a GAAP basis, compared to $1.5 million in the second quarter 2018,
primarily due to a $28.6 million
allocated loss from Triple T.
- Increased Adjusted EBITDA by 8% to $15.1
million, compared to $14.0
million in the second quarter 2018.
- Generated gross timber sales revenue of $16.3 million, compared to $17.7 million in second quarter 2018, an 8%
decrease resulting primarily from a 12% reduction in timber sales
volumes, which was mitigated by a 4% increase in average per-ton
gross timber sales revenue due to realizing higher timber
pricing.
- Sold approximately 4,000 acres of timberlands for $8.2 million, compared to 3,100 acres for
$6.8 million during second quarter
2018.
- Completed a $5.5 million
timberland disposition to recycle capital, which paid down
$5.3 million in debt after quarter
end.
- Earned $2.8 million in asset
management fees, primarily from Triple T.
- Paid a dividend of $0.135 per
share to stockholders on June 14,
2019.
Timberland Quality, Mill Market Strength Buoy Pricing
Jerry Barag, CatchMark's Chief
Executive Officer, said: "The continued strength of the select mill
markets in which we operate enabled us to manage through the
seasonality of mill outages and wet weather to keep us on track to
meet our full-year harvest volume target of 2.2 million to 2.4
million tons. Our prime timberlands continue to generate a
significant pricing premium over TimberMart-South averages and we
continue to register gains in our pricing compared to prior
periods—3% higher for sawtimber and 2% higher for pulpwood this
quarter over the same quarter last year, and 4% higher for
sawtimber and 3% higher for pulpwood for the six months year over
year. We also continue to benefit from our supply agreements with
blue-chip, creditworthy customers as well as from our delivered
sales model, providing stable revenue streams. Last year's Pacific
Northwest Bandon acquisition also delivered $1.2 million in timber sales revenues from
stepped up operations during the quarter."
Barag added: "Our investment management business continues to
produce an important additional source of revenue. Triple T was the
primary contributor in delivering $2.8
million in asset management fees during the quarter and the
Dawsonville Bluffs Joint Venture has been an overwhelming success,
producing a return at the top end of our guidance and generating an
exceptional investment multiple of 1.35 to date. In accordance with
our strategic management plan, we have completed the sale of
substantially all of Dawsonville's
remaining 4,400 acres of timberland assets for $8.7 million, a transaction that will be
reflected in third quarter results. Closed on July 15, 2019, the disposition provided CatchMark
with $4.4 million of cash
distributions, a portion of which is an incentive-based management
promote in recognition of the joint venture exceeding investment
hurdles."
Barag said: "The positive results we continue to deliver,
including the pricing premiums we have been able to attain, are
based on a consistent strategic focus, which provides us a strong
foundation for future growth. The three pillars of the strategy
continue to be—disciplined acquisitions of the highest
quality timberlands which will produce durable revenue growth;
locations in high-demand mill markets which provide reliable
outlets for available merchantable inventory at favorable pricing;
and superior management which seeks to maximize cash flow
throughout the business cycle."
Capital Position
Under its ongoing capital recycling program, CatchMark completed
the disposition of 3,600 acres of wholly-owned Georgia timberlands in late June, realizing
$5.5 million in proceeds, which were
used in early July to pay down existing debt on the company's
multi-draw term facility. Last month, the company also executed a
$19.9 million sale of 10,800
wholly-owned acres in Georgia and
Alabama and used the proceeds to
repay $14.8 million of its
outstanding debt balance on the multi-draw term facility with the
remaining net proceeds expected to be used to fund general
corporate purposes, including share repurchases. These
transactions, which will be fully reflected in third quarter
results, pare portfolio holdings that are below current
underwriting criteria while capturing attractive pricing.
After the debt repayments since June 30,
2019, $185.0 million was
available under CatchMark's credit facilities for acquisitions,
working capital and share repurchases. CatchMark maintained an
appropriate debt mix of 76% fixed to 24% floating rate and the
pricing of its low-cost debt remains highly favorable.
CatchMark President and Chief Financial Officer Brian Davis said: "Our capital recycling program
spearheaded by selective larger land sales sets the stage for
expeditiously returning to more normalized debt levels and provides
additional capital for acquisitions of prime timberlands as well as
potentially entering into new joint ventures. We remain committed
to sound capital allocation, as demonstrated by our fully-covered
dividend, capital expenditures funded from operating cashflows,
long-dated debt maturities, low floating-rate debt exposure, very
attractive low cost of debt, and opportunistic share
repurchases."
Share Repurchases
Under CatchMark's $30 million
share repurchase program, the company repurchased 135,410 shares of
its common stock for approximately $1.4
million in open market transactions during the second
quarter of 2019. As of June 30,
2019, CatchMark may repurchase up to an additional
$16.3 million under the program.
Results for Three Months Ended June
30, 2019
CatchMark's revenues for the three months ended June 30, 2019 were $28.7
million, $2.4 million higher
than the three months ended June 30,
2018 primarily as a result of a $2.8
million increase in asset management fees mostly earned from
the Triple T joint venture and a $1.4
million increase in timberland sales revenue, offset by a
$1.5 million decrease in timber sales
revenue. Gross timber sales revenue decreased by 8% primarily
due to a 14% decrease in U.S. South harvest volumes offset by
increases in U.S. South net timber sales price of 3% for sawtimber
and 2% for pulpwood and harvests from the Bandon property in the
Pacific Northwest. Bandon, which was acquired in August 2018, generated timber sales revenue of
$1.2 million.
|
Three Months
Ended
June 30,
2018
|
|
Changes
attributable to:
|
|
Three Months
Ended
June 30,
2019
|
(in
thousands)
|
|
Price/Mix
|
|
Volume
(3)
|
|
Timber sales
(1)
|
|
|
|
|
|
|
|
Pulpwood
|
$
|
9,540
|
|
|
$
|
250
|
|
|
$
|
(1,551)
|
|
|
$
|
8,239
|
|
Sawtimber
(2)
|
8,205
|
|
|
206
|
|
|
(377)
|
|
|
8,034
|
|
|
$
|
17,745
|
|
|
$
|
456
|
|
|
$
|
(1,928)
|
|
|
$
|
16,273
|
|
|
|
(1)
|
Timber sales are
presented on a gross basis. Gross timber sales revenue from
delivered sales includes logging and hauling costs that customers
pay for deliveries.
|
(2)
|
Includes chip-n-saw
and sawtimber.
|
(3)
|
Changes in timber
sales revenue related to properties acquired or disposed within the
last 12 months are attributed to volume changes.
|
Net loss increased to $30.6
million for the three months ended June 30, 2019 from $1.5
million for the three months ended June 30, 2018 primarily due to a $28.6 million loss allocated from the Triple T
joint venture.
Results for the Six Months Ended June
30, 2019
Revenues for the six months ended June
30, 2019 were $51.2 million,
$0.9 million higher than revenues for
the six months ended June 30, 2018,
primarily as a result of a $5.6
million increase in asset management fees mostly earned from
the Triple T joint venture, offset by a $3.6
million decrease in timber sales and a $0.8 million decrease in timberland sales revenue
from selling fewer acres. Gross timber sales revenue decreased by
10% due to a 14% decrease in harvest volume mitigated by a 4%
increase in blended per-ton gross timber sales revenue. The Bandon
Property in the Pacific Northwest generated timber sales revenue of
$1.7 million.
|
Six Months
Ended
June 30,
2018
|
|
Changes
attributable to:
|
|
Six Months
Ended
June 30,
2019
|
(in
thousands)
|
|
Price/Mix
|
|
Volume
(3)
|
|
Timber sales
(1)
|
|
|
|
|
|
|
|
Pulpwood
|
$
|
19,204
|
|
|
$
|
591
|
|
|
$
|
(2,823)
|
|
|
$
|
16,972
|
|
Sawtimber
(2)
|
17,194
|
|
|
450
|
|
|
(1,792)
|
|
|
15,852
|
|
|
$
|
36,398
|
|
|
$
|
1,041
|
|
|
$
|
(4,615)
|
|
|
$
|
32,824
|
|
|
|
(1)
|
Timber sales are
presented on a gross basis. Gross timber sales revenue from
delivered sales includes logging and hauling costs that customers
pay for deliveries.
|
(2)
|
Includes chip-n-saw
and sawtimber.
|
(3)
|
Changes in timber
sales revenue related to properties acquired or disposed within the
last 12 months are attributed to volume changes.
|
Net loss increased to $61.0
million for the six months ended June
30, 2019 from $4.9 million for
the six months ended June 30, 2018
primarily due to the $56.1 million
loss allocated from the Triple T joint venture.
Adjusted EBITDA
The discussion below is intended to enhance the reader's
understanding of our operating performance and ability to satisfy
lender requirements. EBITDA is a non-GAAP financial measure of
operating performance. EBITDA is defined by the SEC as earnings
before interest, taxes, depreciation and amortization; however, we
have excluded certain other expenses which we believe are not
indicative of the ongoing operating results of our timberland
portfolio, and we refer to this measure as Adjusted EBITDA (see the
reconciliation table below). As such, our Adjusted EBITDA may not
be comparable to similarly titled measures reported by other
companies. Due to the significant amount of timber assets subject
to depletion, significant income (loss) from unconsolidated joint
ventures based on hypothetical-liquidation-at-book-value (HLBV) and
the significant amount of financing subject to interest and
amortization expense, management considers Adjusted EBITDA to be an
important measure of our financial performance. HLBV accounting is
a method of determining an investor's equity in earnings of an
unconsolidated joint venture based on a hypothetical liquidation of
the underlying joint venture at book value as of the reporting
date. The HLBV method is commonly applied to equity investments in
real estate, where cash distribution percentages vary at different
points in time and are not directly linked to an investor's
ownership percentage. By providing this non-GAAP financial measure,
together with the reconciliation below, we believe we are enhancing
investors' understanding of our business and our ongoing results of
operations, as well as assisting investors in evaluating how well
we are executing our strategic initiatives. We also provide the
sources of our Adjusted EBITDA, including Harvest EBITDA, Real
Estate EBITDA, Investment Management EBITDA and
Non-Allocated/Corporate EBITDA, and a reconciliation of those
financial measures to the most directly comparable GAAP measures,
because we believe they further enhance investors' understanding.
Items excluded from Adjusted EBITDA are significant components in
understanding and assessing financial performance. Adjusted EBITDA
is a supplemental measure of operating performance that does not
represent and should not be considered in isolation or as an
alternative to, or substitute for net income, cash from operations,
or other financial statement data presented in accordance with GAAP
in our consolidated financial statements as indicators of our
operating performance. Adjusted EBITDA has limitations as an
analytical tool and should not be considered in isolation or as a
substitute for analysis of our results as reported under U.S. GAAP.
Some of the limitations are:
- Adjusted EBITDA does not reflect our capital expenditures, or
our future requirements for capital expenditures;
- Adjusted EBITDA does not reflect changes in, or our interest
expense or the cash requirements necessary to service interest or
principal payments on, our debt;
- Although depletion is a non-cash charge, we will incur expenses
to replace the timber being depleted in the future, and Adjusted
EBITDA does not reflect all cash requirements for such expenses;
and
- Although HLBV income and losses are primarily hypothetical and
non-cash in nature, Adjusted EBITDA does not reflect cash income or
losses from unconsolidated joint ventures for which the HLBV method
of accounting is used to determine equity in earnings.
Due to these limitations, Adjusted EBITDA should not be
considered as a measure of discretionary cash available to us to
invest in the growth of our business. Our credit agreement contains
a minimum debt service coverage ratio based, in part, on Adjusted
EBITDA since this measure is representative of adjusted income
available for interest payments. We further believe that our
presentation of this non-GAAP financial measurement provides
information that is useful to analysts and investors because they
are important indicators of the strength of our operations and the
performance of our business.
For the three months ended June 30,
2019, Adjusted EBITDA was $15.1
million, a $1.1 million
increase from the three months ended June
30, 2018, primarily due to a $2.8
million increase in asset management fees and a $1.4 million increase in net timberland sales,
offset by a $1.4 million decrease in
Adjusted EBITDA generated by the Dawsonville Bluffs joint
venture, a $0.7 million decrease
in net timber sales, a $0.3 million
decrease in other revenue, a $0.3
million increase in general and administrative expenses and
a $0.3 million increase in forest
management and other operating expenses.
For the six months ended June 30,
2019, Adjusted EBITDA was $25.2
million, a $3.7 million
decrease from the six months ended June 30,
2018, primarily due to a $5.9
million decrease in Adjusted EBITDA generated by the
Dawsonville Bluffs joint venture, a $1.5
million decrease in net timber sales, a $0.6 million decrease in net timberland sales, a
$0.4 million decrease in other
revenue, a $0.7 million increase in
general and administrative expenses and a $0.2 million increase in forest management
expenses, offset by a $5.6 million
increase in asset management fee revenue.
Our reconciliation of net loss to Adjusted EBITDA for the three
months and six months ended June 30,
2019 and 2018 follows:
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
(in
thousands)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Net loss
|
$
|
(30,565)
|
|
|
$
|
(1,505)
|
|
|
$
|
(60,960)
|
|
|
$
|
(4,890)
|
|
Add:
|
|
|
|
|
|
|
|
Depletion
|
6,030
|
|
|
6,598
|
|
|
11,298
|
|
|
13,660
|
|
Basis of timberland
sold, lease terminations and other (1)
|
6,668
|
|
|
4,932
|
|
|
8,475
|
|
|
7,788
|
|
Amortization
(2)
|
229
|
|
|
314
|
|
|
687
|
|
|
2,039
|
|
Depletion,
amortization, basis of timberland, mitigation credits sold included
in loss from unconsolidated joint venture (3)
|
—
|
|
|
590
|
|
|
395
|
|
|
3,846
|
|
HLBV loss from
unconsolidated joint venture (4)
|
28,600
|
|
|
—
|
|
|
56,088
|
|
|
—
|
|
Stock-based
compensation expense
|
490
|
|
|
796
|
|
|
1,149
|
|
|
1,561
|
|
Interest expense
(2)
|
4,395
|
|
|
2,290
|
|
|
8,767
|
|
|
4,871
|
|
Gain from large
dispositions (5)
|
(764)
|
|
|
—
|
|
|
(764)
|
|
|
—
|
|
Other
(6)
|
4
|
|
|
—
|
|
|
114
|
|
|
35
|
|
Adjusted
EBITDA
|
$
|
15,087
|
|
|
$
|
14,015
|
|
|
$
|
25,249
|
|
|
$
|
28,910
|
|
|
|
(1)
|
Includes non-cash
basis of timber and timberland assets written-off related to
timberland sold, terminations of timberland leases and casualty
losses.
|
(2)
|
For the purpose of
the above reconciliation, amortization includes amortization of
deferred financing costs, amortization of intangible lease assets,
and amortization of mainline road costs, which are included in
either interest expense, land rent expense, or other operating
expenses in the consolidated statements of operations.
|
(3)
|
Reflects our share of
depletion, amortization, and basis of timberland and mitigation
credits sold of the unconsolidated Dawsonville Bluffs joint
venture.
|
(4)
|
Reflects HLBV
(income) losses from the Triple T joint venture, which is
determined based on a hypothetical liquidation of the underlying
joint venture at book value as of the reporting date.
|
(5)
|
Large dispositions
are sales of large blocks of timberland properties in one or
several transactions with the objective to generate proceeds to
fund capital allocation priorities. Large dispositions are
typically larger transactions in acreage and gross sales price than
recurring HBU sales and are not part of core operations, are
infrequent in nature and would cause material variances in
comparative results if not reported separately. Large dispositions
may or may not have a higher or better use than timber production
or result in a price premium above the land's timber production
value.
|
(6)
|
Includes certain cash
expenses paid, or reimbursement received, that management believes
do not directly reflect the core business operations of our
timberland portfolio on an on-going basis, including costs required
to be expensed by GAAP related to acquisitions, transactions, joint
ventures or new business initiatives.
|
The company will host a conference call and live webcast at 10
a.m. ET on Friday, August 2, 2019 to
discuss these results. Investors may listen to the conference
call by dialing 1-888-347-1165 for U.S/Canada and 1-412-902-4276 for international
callers. Participants should ask to be joined into the
CatchMark call. Access to the live webcast will be available at
www.catchmark.com. A replay of this webcast will be archived
on the company's website shortly after the call.
About CatchMark
CatchMark (NYSE: CTT) seeks to deliver consistent and growing
per share cash flow from disciplined acquisitions and superior
management of prime timberlands located in high demand U.S. mill
markets. Concentrating on maximizing cash flows throughout
business cycles, the company strategically harvests its
high-quality timberlands to produce durable revenue growth and
takes advantage of proximate mill markets, which provide a reliable
outlet for merchantable inventory. Headquartered in
Atlanta and focused exclusively on timberland ownership and
management, CatchMark began operations in 2007 and owns interests
in 1.5 million acres* of timberlands located in Alabama, Florida, Georgia, North
Carolina, Oregon,
South Carolina, Tennessee and
Texas. For more information, visit
www.catchmark.com.
* As of June 30, 2019
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, as amended.
Such forward-looking statements can generally be identified by our
use of forward-looking terminology such as "may," "will," "expect,"
"intend," "anticipate," "estimate," "believe," "continue," or other
similar words. However, the absence of these or similar words or
expressions does not mean that a statement is not forward-looking.
Forward-looking statements are not guarantees of performance and
are based on certain assumptions, discuss future expectations,
describe plans and strategies, contain projections of results of
operations or of financial condition or state other forward-looking
information. Forward-looking statements in this report include that
we remain on track to meet our harvest volume targets for 2019,
that our consistent strategic focus provides a sound foundation for
future growth; that our disciplined acquisitions of the highest
quality timberlands will produce durable revenue growth; that our
locations in high-demand mill markets will provide reliable outlets
for available merchantable inventory at favorable pricing; that our
superior management seeks to maximize cash flow throughout the
business cycle and that our capital recycling transactions
have set the stage for returning to more normalized debt levels,
focusing on acquisitions of prime timberlands, and potentially
entering into new joint ventures. Risks and uncertainties that
could cause our actual results to differ from these forward-looking
statements include, but are not limited to, (i) we may not
generate the harvest volumes from our timberlands that we currently
anticipate; (ii) the demand for our timber may not increase at the
rate we currently anticipate or at all due to changes in general
economic and business conditions in the geographic regions where
our timberlands are located; (iii) the cyclical nature of the real
estate market generally, including fluctuations in demand and
valuations, may adversely impact our ability to generate income and
cash flow from sales of higher-and-better use properties; (iv)
timber prices may not increase at the rate we currently anticipate
or could decline, which would negatively impact our revenues; (v)
the supply of timberlands available for acquisition that meet our
investment criteria may be less than we currently anticipate; (vi)
we may be unsuccessful in winning bids for timberland that are sold
through an auction process; (vii) we may not be able sell large
dispositions of timberland in capital recycling transactions at
prices that are attractive to us or at all; (viii) we may not be
able to access external sources of capital at attractive rates or
at all; (ix) potential increases in interest rates could have a
negative impact on our business; (x) our share repurchase program
may not be successful in improving stockholder value over the
long-term; (xi) our joint venture strategy may not enable us to
access non-dilutive capital and enhance our ability to make
acquisitions; (xii) we may not be successful in effectively
managing the Triple T joint venture and the anticipated benefits of
the joint venture may not be realized, including that our asset
management fee could be deferred or decreased, we may not earn an
incentive-based promote and our investment in the joint venture may
lose value; and (xiii) the factors described in Part I, Item 1A.
Risk Factors of our Annual Report on Form 10-K for the fiscal year
ended December 31, 2018 and our other
filings with the Securities and Exchange Commission. Accordingly,
readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. We undertake no obligation to update our
forward-looking statements, except as required by
law.
CATCHMARK TIMBER
TRUST, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS (UNAUDITED)
|
(in thousands,
except for per-share amounts)
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenues:
|
|
|
|
|
|
|
|
Timber
sales
|
$
|
16,273
|
|
|
$
|
17,745
|
|
|
$
|
32,824
|
|
|
$
|
36,398
|
|
Timberland
sales
|
8,224
|
|
|
6,834
|
|
|
10,314
|
|
|
11,086
|
|
Asset management
fees
|
2,841
|
|
|
25
|
|
|
5,683
|
|
|
61
|
|
Other
revenues
|
1,322
|
|
|
1,645
|
|
|
2,412
|
|
|
2,808
|
|
|
28,660
|
|
|
26,249
|
|
|
51,233
|
|
|
50,353
|
|
Expenses:
|
|
|
|
|
|
|
|
Contract logging and
hauling costs
|
7,153
|
|
|
7,959
|
|
|
14,509
|
|
|
16,541
|
|
Depletion
|
6,030
|
|
|
6,598
|
|
|
11,298
|
|
|
13,660
|
|
Cost of timberland
sales
|
6,921
|
|
|
5,233
|
|
|
8,481
|
|
|
8,380
|
|
Forestry management
expenses
|
1,592
|
|
|
1,422
|
|
|
3,326
|
|
|
3,252
|
|
General and
administrative expenses
|
3,203
|
|
|
3,173
|
|
|
6,566
|
|
|
6,118
|
|
Land rent
expense
|
133
|
|
|
176
|
|
|
275
|
|
|
337
|
|
Other operating
expenses
|
1,629
|
|
|
1,445
|
|
|
3,273
|
|
|
2,841
|
|
|
26,661
|
|
|
26,006
|
|
|
47,728
|
|
|
51,129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
income
|
32
|
|
|
96
|
|
|
62
|
|
|
160
|
|
Interest
expense
|
(4,709)
|
|
|
(2,553)
|
|
|
(9,331)
|
|
|
(6,804)
|
|
Gain on large
dispositions
|
764
|
|
|
—
|
|
|
764
|
|
|
—
|
|
|
(3,913)
|
|
|
(2,457)
|
|
|
(8,505)
|
|
|
(6,644)
|
|
|
|
|
|
|
|
|
|
Loss before
unconsolidated joint ventures
|
(1,914)
|
|
|
(2,214)
|
|
|
(5,000)
|
|
|
(7,420)
|
|
Income (loss) from
unconsolidated joint ventures:
|
|
|
|
|
|
|
|
Triple T
|
(28,600)
|
|
|
—
|
|
|
(56,088)
|
|
|
—
|
|
Dawsonville
Bluffs
|
(51)
|
|
|
709
|
|
|
128
|
|
|
2,530
|
|
|
(28,651)
|
|
|
709
|
|
|
(55,960)
|
|
|
2,530
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$
|
(30,565)
|
|
|
$
|
(1,505)
|
|
|
$
|
(60,960)
|
|
|
$
|
(4,890)
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding - basic and diluted
|
49,076
|
|
|
49,104
|
|
|
49,069
|
|
|
46,755
|
|
|
|
|
|
|
|
|
|
Net loss per-share
- basic and diluted
|
$
|
(0.62)
|
|
|
$
|
(0.03)
|
|
|
$
|
(1.24)
|
|
|
$
|
(0.10)
|
|
CATCHMARK TIMBER
TRUST, INC. AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
(in thousands,
except for per-share amounts)
|
|
|
(Unaudited)
June 30, 2019
|
|
December 31,
2018
|
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
10,817
|
|
|
$
|
5,614
|
|
Accounts
receivable
|
6,491
|
|
|
7,355
|
|
Prepaid expenses and
other assets
|
4,831
|
|
|
7,369
|
|
Operating lease
right-of-use asset, less accumulated amortization of $139 as of
June 30, 2019
|
3,261
|
|
|
—
|
|
Deferred financing
costs
|
288
|
|
|
327
|
|
Timber
assets:
|
|
|
|
Timber and
timberlands, net
|
665,616
|
|
|
687,851
|
|
Intangible lease
assets, less accumulated amortization of $947 and $945 as of June
30, 2019 and December 31, 2018, respectively
|
10
|
|
|
12
|
|
Investment in
unconsolidated joint ventures
|
39,309
|
|
|
96,244
|
|
Total
assets
|
$
|
730,623
|
|
|
$
|
804,772
|
|
|
|
|
|
Liabilities:
|
|
|
|
Accounts payable and
accrued expenses
|
$
|
4,992
|
|
|
$
|
4,936
|
|
Operating lease
liability
|
3,361
|
|
|
—
|
|
Other
liabilities
|
14,646
|
|
|
5,940
|
|
Notes payable and
lines of credit, net of deferred financing costs
|
472,631
|
|
|
472,240
|
|
Total
liabilities
|
495,630
|
|
|
483,116
|
|
|
|
|
|
Commitments and
Contingencies
|
—
|
|
|
—
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
Class A common stock,
$0.01 par value; 900,000 shares authorized; 48,965 and 49,127
shares issued and outstanding as of June 30, 2019 and December 31,
2018, respectively
|
490
|
|
|
492
|
|
Additional paid-in
capital
|
728,792
|
|
|
730,416
|
|
Accumulated deficit
and distributions
|
(483,376)
|
|
|
(409,260)
|
|
Accumulated other
comprehensive (loss) income
|
(10,913)
|
|
|
8
|
|
Total stockholders'
equity
|
234,993
|
|
|
321,656
|
|
Total liabilities and
stockholders' equity
|
$
|
730,623
|
|
|
$
|
804,772
|
|
CATCHMARK TIMBER
TRUST, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS (UNAUDITED)
|
(in
thousands)
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
|
Net loss
|
$
|
(30,565)
|
|
|
$
|
(1,505)
|
|
|
$
|
(60,960)
|
|
|
$
|
(4,890)
|
|
Adjustments to
reconcile net loss to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
Depletion
|
6,030
|
|
|
6,598
|
|
|
11,298
|
|
|
13,660
|
|
Basis of timberland
sold, lease terminations and other
|
6,668
|
|
|
4,932
|
|
|
8,475
|
|
|
7,788
|
|
Stock-based
compensation expense
|
490
|
|
|
796
|
|
|
1,149
|
|
|
1,561
|
|
Noncash interest
expense
|
314
|
|
|
262
|
|
|
564
|
|
|
1,933
|
|
Other
amortization
|
(85)
|
|
|
52
|
|
|
123
|
|
|
106
|
|
Loss (income) from
unconsolidated joint ventures
|
28,651
|
|
|
(709)
|
|
|
55,960
|
|
|
(2,530)
|
|
Operating
distributions from unconsolidated joint ventures
|
(51)
|
|
|
1,480
|
|
|
128
|
|
|
3,668
|
|
Gain on large
dispositions
|
(764)
|
|
|
—
|
|
|
(764)
|
|
|
—
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(1,328)
|
|
|
(918)
|
|
|
35
|
|
|
412
|
|
Prepaid expenses and
other assets
|
128
|
|
|
(3,529)
|
|
|
641
|
|
|
(3,453)
|
|
Accounts payable and
accrued expenses
|
1,200
|
|
|
(888)
|
|
|
91
|
|
|
396
|
|
Other
liabilities
|
1,270
|
|
|
2,805
|
|
|
465
|
|
|
1,672
|
|
Net cash provided by
operating activities
|
11,958
|
|
|
9,376
|
|
|
17,205
|
|
|
20,323
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
Timberland
acquisitions and earnest money paid
|
—
|
|
|
(31,278)
|
|
|
—
|
|
|
(33,597)
|
|
Capital expenditures
(excluding timberland acquisitions)
|
(938)
|
|
|
(572)
|
|
|
(2,197)
|
|
|
(2,117)
|
|
Distributions from
unconsolidated joint ventures
|
51
|
|
|
3,562
|
|
|
847
|
|
|
3,562
|
|
Net proceeds from
large dispositions
|
5,311
|
|
|
—
|
|
|
5,311
|
|
|
—
|
|
Net cash used in
(provided by) investing activities
|
4,424
|
|
|
(28,288)
|
|
|
3,961
|
|
|
(32,152)
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
Repayments of note
payable
|
—
|
|
|
—
|
|
|
—
|
|
|
(69,000)
|
|
Proceeds from note
payable
|
—
|
|
|
30,000
|
|
|
—
|
|
|
30,000
|
|
Financing costs
paid
|
(2)
|
|
|
(8)
|
|
|
(33)
|
|
|
(103)
|
|
Issuance of common
stock
|
—
|
|
|
—
|
|
|
—
|
|
|
72,450
|
|
Other offering costs
paid
|
—
|
|
|
(100)
|
|
|
—
|
|
|
(3,590)
|
|
Dividends paid to
common stockholders
|
(6,578)
|
|
|
(6,597)
|
|
|
(13,156)
|
|
|
(12,412)
|
|
Repurchases of common
shares under the share repurchase
|
(1,405)
|
|
|
—
|
|
|
(2,409)
|
|
|
—
|
|
Repurchase of common
shares for minimum tax withholdings
|
—
|
|
|
(374)
|
|
|
(365)
|
|
|
(1,225)
|
|
Net cash provided by
(used in) financing activities
|
(7,985)
|
|
|
22,921
|
|
|
(15,963)
|
|
|
16,120
|
|
Net change in cash
and cash equivalents
|
8,397
|
|
|
4,009
|
|
|
5,203
|
|
|
4,291
|
|
Cash and cash
equivalents, beginning of period
|
2,420
|
|
|
8,087
|
|
|
5,614
|
|
|
7,805
|
|
Cash and cash
equivalents, end of period
|
$
|
10,817
|
|
|
$
|
12,096
|
|
|
$
|
10,817
|
|
|
$
|
12,096
|
|
CATCHMARK TIMBER
TRUST, INC. AND SUBSIDIARIES
|
SELECTED DATA
(UNAUDITED)
|
|
|
2019
|
|
2018
|
|
Q1
|
|
Q2
|
|
YTD
|
|
Q1
|
|
Q2
|
|
YTD
|
Timber Sales
Volume ('000 tons) (1)
|
|
|
|
|
|
|
|
|
|
|
|
Pulpwood
|
294
|
|
|
303
|
|
|
597
|
|
|
354
|
|
|
342
|
|
|
696
|
|
Sawtimber
(2)
|
188
|
|
|
177
|
|
|
365
|
|
|
221
|
|
|
219
|
|
|
440
|
|
Total
|
482
|
|
|
480
|
|
|
962
|
|
|
575
|
|
|
561
|
|
|
1,136
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Harvest Mix
(1)
|
|
|
|
|
|
|
|
|
|
|
|
Pulpwood
|
61
|
%
|
|
63
|
%
|
|
62
|
%
|
|
62
|
%
|
|
61
|
%
|
|
61
|
%
|
Sawtimber
(2)
|
39
|
%
|
|
37
|
%
|
|
38
|
%
|
|
38
|
%
|
|
39
|
%
|
|
39
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Delivered % as of
total volume (1)
|
79
|
%
|
|
74
|
%
|
|
77
|
%
|
|
83
|
%
|
|
80
|
%
|
|
82
|
%
|
Stumpage % as of
total volume (1)
|
21
|
%
|
|
26
|
%
|
|
23
|
%
|
|
17
|
%
|
|
20
|
%
|
|
18
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Timber
Sales Price ($ per ton) (1)
|
|
|
|
|
|
|
|
|
|
|
|
Pulpwood
|
$
|
15
|
|
|
$
|
14
|
|
|
$
|
14
|
|
|
$
|
14
|
|
|
$
|
13
|
|
|
$
|
14
|
|
Sawtimber
(2)
|
$
|
24
|
|
|
$
|
24
|
|
|
$
|
24
|
|
|
$
|
23
|
|
|
$
|
24
|
|
|
$
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timberland
Sales
|
|
|
|
|
|
|
|
|
|
|
|
Gross Sales
('000)
|
$
|
2,090
|
|
|
$
|
8,224
|
|
|
$
|
10,314
|
|
|
$
|
4,252
|
|
|
$
|
6,834
|
|
|
$
|
11,086
|
|
Acres Sold
|
900
|
|
|
4,000
|
|
|
4,900
|
|
|
2,200
|
|
|
3,100
|
|
|
5,300
|
|
% of fee
acres
|
0.2
|
%
|
|
0.9
|
%
|
|
1.1
|
%
|
|
0.5
|
%
|
|
0.7
|
%
|
|
1.1
|
%
|
Price per
acre
|
$
|
2,236
|
|
|
$
|
2,072
|
|
|
$
|
2,103
|
|
|
$
|
1,955
|
|
|
$
|
2,199
|
|
|
$
|
2,099
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Large
Dispositions
|
|
|
|
|
|
|
|
|
|
|
|
Gross Sales
('000)
|
$
|
—
|
|
|
$
|
5,475
|
|
|
$
|
5,475
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Acres Sold
|
—
|
|
|
3,600
|
|
|
3,600
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Price per
acre
|
$
|
—
|
|
|
$
|
1,500
|
|
|
$
|
1,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period-end
acres ('000)
|
|
|
|
|
|
|
|
|
|
|
|
Fee
|
432
|
|
|
424
|
|
|
424
|
|
|
477
|
|
|
474
|
|
|
474
|
|
Lease
|
27
|
|
|
26
|
|
|
26
|
|
|
31
|
|
|
30
|
|
|
30
|
|
Wholly-Owned
Total
|
459
|
|
|
450
|
|
|
450
|
|
|
508
|
|
|
504
|
|
|
504
|
|
Joint Venture
Interest (3)
|
1,100
|
|
|
1,100
|
|
|
1,100
|
|
|
6
|
|
|
6
|
|
|
6
|
|
Total
|
1,559
|
|
|
1,550
|
|
|
1,550
|
|
|
514
|
|
|
510
|
|
|
510
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Excludes approximately 4,800 tons and 14,500 tons harvested in the
first quarter and second quarter of 2019, respectively, from the
Bandon Property in the Pacific Northwest.
The Bandon Property was acquired at
the end of August 2018. Total volume harvested from the Bandon
Property for the six months ended June 30, 2019 accounted for
less
than 2% of our total harvest
volume.
(2)
Includes chip-n-saw and sawtimber.
(3)
Represents properties owned Triple T Joint Venture in which
CatchMark owns a 21.6% equity interest; and Dawsonville Bluffs,
LLC, a joint venture in which CatchMark owns a
50% membership interest. CatchMark
serves as the manager for both of these joint ventures.
|
CATCHMARK TIMBER
TRUST, INC. AND SUBSIDIARIES
|
ADJUSTED EBITDA BY
SOURCE (UNAUDITED)
|
(in
thousands)
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Timber
sales
|
$
|
16,273
|
|
|
$
|
17,745
|
|
|
$
|
32,824
|
|
|
$
|
36,398
|
|
Other
revenue
|
|
1,322
|
|
|
|
1,645
|
|
|
|
2,412
|
|
|
|
2,808
|
|
(-)
Contract logging and hauling costs
|
|
(7,153)
|
|
|
|
(7,959)
|
|
|
|
(14,509)
|
|
|
|
(16,541)
|
|
(-)
Forestry management expenses
|
|
(1,592)
|
|
|
|
(1,422)
|
|
|
|
(3,326)
|
|
|
|
(3,252)
|
|
(-)
Land rent expense
|
|
(133)
|
|
|
|
(176)
|
|
|
|
(275)
|
|
|
|
(337)
|
|
(-)
Other operating expenses
|
|
(1,629)
|
|
|
|
(1,445)
|
|
|
|
(3,273)
|
|
|
|
(2,841)
|
|
(+)
Stock-based compensation
|
|
27
|
|
|
|
38
|
|
|
|
115
|
|
|
|
287
|
|
(+/-)
Other
|
|
170
|
|
|
|
138
|
|
|
|
577
|
|
|
|
182
|
|
Harvest
EBITDA
|
|
7,285
|
|
|
|
8,564
|
|
|
|
14,545
|
|
|
|
16,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timberland
sales
|
|
8,224
|
|
|
|
6,834
|
|
|
|
10,314
|
|
|
|
11,086
|
|
(-)
Cost of timberland sales
|
|
(6,921)
|
|
|
|
(5,233)
|
|
|
|
(8,481)
|
|
|
|
(8,380)
|
|
(+) Basis
of timberland sold
|
|
6,525
|
|
|
|
4,834
|
|
|
|
7,952
|
|
|
|
7,690
|
|
Real estate
EBITDA
|
|
7,828
|
|
|
|
6,435
|
|
|
|
9,785
|
|
|
|
10,396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset management
fees
|
|
2,841
|
|
|
|
25
|
|
|
|
5,683
|
|
|
|
61
|
|
Unconsolidated
Dawsonville Bluffs joint venture EBITDA
|
|
(51)
|
|
|
|
1,299
|
|
|
|
522
|
|
|
|
6,376
|
|
Investment
management EBITDA
|
|
2,790
|
|
|
|
1,324
|
|
|
|
6,205
|
|
|
|
6,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
EBITDA
|
|
17,903
|
|
|
|
16,323
|
|
|
|
30,535
|
|
|
|
33,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(-)
General and administrative expenses
|
|
(3,203)
|
|
|
|
(3,173)
|
|
|
|
(6,566)
|
|
|
|
(6,118)
|
|
(+)
Stock-based compensation
|
|
463
|
|
|
|
758
|
|
|
|
1,034
|
|
|
|
1,274
|
|
(+)
Interest income
|
|
32
|
|
|
|
96
|
|
|
|
62
|
|
|
|
160
|
|
(+/-)
Other
|
|
(108)
|
|
|
|
11
|
|
|
|
|
184
|
|
|
|
57
|
|
Non-allocated/corporate EBITDA
|
|
(2,816)
|
|
|
|
(2,308)
|
|
|
|
(5,286)
|
|
|
|
(4,627)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
15,087
|
|
|
$
|
14,015
|
|
|
$
|
25,249
|
|
|
$
|
28,910
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/catchmark-reports-second-quarter-2019-results-declares-dividend-300895334.html
SOURCE CatchMark Timber Trust, Inc.