Deltic Timber Corporation (NYSE:DEL):
DELTIC TIMBER CORPORATION CONSOLIDATED FINANCIAL DATA
SUMMARY FOURTH QUARTER
2015
2014
Net sales $
49,641,000
55,070,000
Net income/(loss)
(128,000
)
3,479,000
Earnings/(loss) per common share Basic
(.01
)
.28
Assuming dilution
(.01
)
.28
Average common shares outstanding Basic
12,267,512
12,440,006
Assuming dilution
12,321,848
12,497,520
YEAR-TO-DATE
2015
2014
Net sales $
193,851,000
227,355,000
Net income
2,654,000
19,662,000
Earnings per common share Basic
.21
1.56
Assuming dilution
.21
1.55
Average common shares outstanding Basic
12,407,034
12,497,052
Assuming dilution
12,466,613
12,552,979
President and Chief Executive Officer, Ray C. Dillon, of Deltic
Timber Corporation (NYSE-DEL) announced today that the Company
reported a loss of $.1 million for the fourth quarter of 2015,
compared to net income of $3.5 million for the same period of 2014.
The decrease from the prior-year fourth quarter was primarily due
to reduced operating income for the Company’s Manufacturing segment
as a result of weak markets for wood products. For the year of
2015, net income was $2.7 million, $.21 per share, compared to $
19.7 million, $1.56 per share, for the year ended December 31,
2014. Net cash provided by operating activities was $6.1 million
for the fourth quarter of 2015, compared to $6.4 million for
the same period a year ago; while it was $29.7 million for the
year of 2015, compared to $31.5 million for the year of 2014.
Commenting on the results, Mr. Dillon stated, “Deltic’s assets
produced essentially breakeven results for the fourth quarter
despite an extremely difficult operating environment for wood
products manufacturers during 2015. While the number of housing
starts in the United States was slightly higher than in the
previous year, strengthening of the dollar and a slowing Chinese
economy led to decreased exports of both timber and lumber to Asian
markets from West Coast producers, causing more of the lumber
produced in the U.S. to remain here. The resulting lumber
oversupply condition was exacerbated as lumber producers ramped up
production during 2015 in anticipation of a stronger recovery in
the housing market than the actual modest increase in single family
home starts generated. In addition, a portion of Canadian lumber
production that had been going to China was diverted to the U.S.
with the expiration of the Softwood Lumber Agreement in
October.
“Therefore, we focused our efforts during the year on the areas
of our operations where we could create the most shareholder value
in this environment. In 2015, Deltic (1) increased the harvest of
pine sawtimber from its land holdings by some 21.3 percent,
benefitting, as planned, from recent timberland acquisitions; (2)
harvested 394,165 tons of pine pulpwood, performing critical forest
maintenance to help ensure we achieve desired sawtimber growth
rates; (3) invested in projects in our manufacturing facilities,
increasing the sawmills’ hourly lumber production rate, improving
critical operating metrics in our medium density fiberboard plant,
and improving efficiencies in all of our facilities; and (4)
developed and offered for sale 105 new residential lots in two of
our real estate developments, resulting in the sale of 100 lots for
the year. We also allocated $15.2 million of capital to our
approved share repurchase program during 2015, buying back 2
percent of the shares outstanding and effectively increasing the
number of timberland acres owned per share for our current
shareholders.”
The Woodlands segment reported operating income of $4.2 million
for the fourth quarter of 2015, compared to $3.5 million for the
same period a year ago. The pine sawtimber harvest for the fourth
quarter of 2015 was 155,027 tons, a 75 percent increase when
compared to the 88,392 tons harvested in the prior-year period. In
2015’s fourth quarter, the average pine sawtimber sales price was
$27 per ton, compared to an average price of $26 per ton for the
same period a year ago. The increase in the harvest of pine
sawtimber was due to timing and to planned increased annual harvest
for 2015 as a result of recent timberland acquisitions. In the
fourth quarter of 2015, the Company also harvested 90,128 tons of
pine pulpwood, a 27 percent increase when compared to 70,963 tons
harvested in 2014’s fourth quarter. The increase in the pine
pulpwood harvest was due to a combination of the increase in
timberland acres owned and the mix of timber inventory growing on
the tracts that were harvested in the respective periods. The
average per-ton sales price for the pine pulpwood harvested in the
fourth quarter of both 2014 and 2015 was $9 per ton. Oil and
gas revenues, consisting of lease rentals and net royalties, were
$.6 million for the fourth quarter of 2015 versus $1.5 million in
2014’s fourth quarter. The decrease was due to a lower average
sales price for natural gas; a lower volume of natural gas
produced; and a decrease in oil and gas lease rental income, as the
amortization period for previously received lease rental payments
expired with the acreage becoming held by production. There were
703 acres of non-strategic timberland sold in the fourth quarter of
2015 at an average sales price of $1,500 per acre, versus no sales
of timberland in 2014’s fourth quarter.
The Company’s Manufacturing segment reported an operating loss
of $.6 million for the fourth quarter of 2015, compared to
operating income of $5.4 million for the same period of 2014. The
decrease was primarily due to a decreased sales volume and a lower
average sales price for both lumber and MDF, primarily as a result
of weak market conditions. The Company sold 67.5 million board feet
of lumber in 2015’s fourth quarter compared to 68.9 million board
feet of lumber sold in the same quarter of 2014. The average lumber
sales price for the fourth quarter of 2015 was $307 per thousand
board feet, a $57 per thousand board feet, or 16 percent, lower
price when compared to the average sales price of $364 per thousand
board feet for lumber sold during the fourth quarter of 2014. The
MDF sales volume in the fourth quarter of 2015 was 22.4 million
square feet, a 12 percent decrease from the 25.3 million square
feet sold during the fourth quarter of 2014. The average sales
price for MDF sold during the fourth quarter of 2015 of $547 per
thousand square feet was $33 per thousand square feet lower than
the $580 per thousand square feet reported in the fourth quarter of
2014. Unplanned downtime resulting from operational issues at
Deltic’s MDF plant also negatively impacted the Manufacturing
segment’s financial results for the quarter. The Company will
continue to monitor changes in both lumber and MDF markets and
manage the operating hours at all of its facilities in order to
match production with market demand.
The Company’s Real Estate segment reported operating income of
$1.7 million in the fourth quarter of 2015, compared to an
operating income of $1 million for the same period of 2014.
Residential lot sales in 2015’s fourth quarter totaled 52 lots,
compared to 53 residential lots sold in 2014’s fourth quarter. The
average per-lot sales price in the fourth quarter of 2015 was
$101,700, compared to $76,800 per lot for 2014’s fourth quarter,
due to mix of lots sold. The Company had no commercial real estate
acreage sales in the fourth quarter of either 2015 or 2014.
Corporate expense was $3.9 million for the fourth quarter of
2015, compared to $3.1 million for the same period of 2014, as
a result of increased general and administrative expenses due to
timing. For the year of 2015, Corporate expense was $17.3 million,
compared to $17.4 million for 2014. During the fourth quarter of
2015, interest expense was $2.3 million compared to $1.6 million in
2014’s fourth quarter, while interest expense increased $2.1
million in 2015 to $7.5 million. The increases were due to
increased borrowings and a higher weighted-average interest rate
for the Company’s outstanding debt. Deltic recorded an income tax
benefit of $.5 million for 2015’s fourth quarter, due to the level
of pretax income for the period combined with a benefit from
permanent tax differences, compared to expense of $2 million
for 2014’s fourth quarter. Income tax expense for 2015 was
$1.1 million, compared to $9.6 million for 2014, primarily due
to lower pretax income.
Capital expenditures were $12.7 million in 2015’s fourth quarter
and $37.8 million for the year of 2015. Capital expenditures for
the corresponding periods of 2014 were $7.7 million and
$20.3 million, respectively. Timberland acquisition
expenditures were $.3 million in the fourth quarter of 2015 and
$.9 million for the year of 2015. For the corresponding
periods of 2014, there were no timberland acquisition expenditures
and $118.2 million, respectively.
For the year of 2015, the pine sawtimber harvest level was
755,417 tons compared to 622,607 tons harvested in 2014, while
the average pine sawtimber sales price increased 12.5 percent, to
$27 per ton for 2015. The year-over-year increase in
harvest volume was primarily due to the increase in timberland
acreage owned. The pine pulpwood harvest volume was 394,165 tons in
2015, compared to 391,434 tons in 2014, with a $1 per ton
increase in the average sales price, to $9 per ton. Sales of
non-strategic timberland for the year of 2015 totaled 763 acres
with an average sales price of $1,500 per acre, while in 2014,
the Company sold 472 acres at a per-acre sales price of $2,300. Oil
and gas lease rental and net royalty income totaled $3.4 million in
2015, compared to $5.9 million in 2014. Lumber sales volume
decreased 6.7 million board feet, from 268.5 million board feet in
2014 to 261.8 million board feet in 2015, as Deltic adjusted
sawmill operating hours to meet the market demand for lumber. The
average lumber sales price was $332 per thousand board feet in
2015, compared to $383 per thousand board feet in 2014. The MDF
sales volume decreased 17.1 million square feet, or 15 percent,
from 111.9 million square feet in 2014 to 94.8 million square feet
in 2015, as 2015 production was impacted by a fire in the press
area of the Company’s MDF plant. The average sales price for MDF
was $561 per thousand square feet in 2015 compared to $581 per
thousand square feet in 2014. Residential lot sales for the year of
2015 totaled 100 lots at an average sales price of $83,500 per lot,
compared to 98 lots at $84,200 per lot for 2014. The Company had no
commercial acreage sales during 2015 while there was a sale of 1.72
acres of commercial real estate for $500,900 per acre during
2014.
Regarding the outlook for the first quarter and
year of 2016, Mr. Dillon stated, “We currently anticipate the pine
sawtimber harvest to be 215,000 to 240,000 tons and 715,000 to
765,000 tons, respectively, depending on weather conditions in
Deltic’s operating area. Finished lumber sales are estimated to be
60 to 70 million board feet for the first quarter of 2016 and 265
to 285 million board feet for the year of 2016. MDF sales volumes
for the first quarter and year of 2016 are forecasted to be 25 to
35 million square feet and 110 to 130 million square feet,
respectively. Actual sales volumes for both finished lumber and MDF
are dependent upon market conditions. Residential lot sales are
projected at 2 to 5 lots and 90 to 120 lots for the first
quarter and year of 2016, respectively. Commercial acreage within
Chenal Valley continues to receive interest, but due to the
volatile nature of commercial real estate transactions and
significant number of factors involved, it is difficult to
anticipate future closings.”
Statements included herein that are not historical in nature are
intended to be, and are hereby identified as, “forward-looking
statements” within the meaning of the federal securities laws. Such
statements reflect the Company’s current expectations and involve
certain risks and uncertainties. Actual results could differ
materially from those included in such forward-looking statements.
Factors that could cause such differences include, but are not
limited to, the cyclical nature of the industry, changes in
interest rates, credit availability, general economic conditions,
adverse weather, cost and availability of materials used to
manufacture the Company’s products, natural gas pricing, and the
other risk factors described from time to time in the reports and
disclosure documents filed by the Company with the Securities and
Exchange Commission.
Deltic will hold a conference call on Thursday, February 25,
2016, at 10:00 a.m. Central Time to discuss fourth quarter 2015
earnings. Interested parties may participate in the call by dialing
1-866-953-6860 and referencing participant passcode identification
number 84965159. The call will also be broadcast live over the
Internet and can be accessed through the Investor Relations section
of the Deltic website, at www.deltic.com. Online replays of
the call will be available through the Deltic website, and a
recording of the call will be available until Thursday, March 3,
2016, by dialing 1-888-286-8010 and referencing replay passcode
identification number 39077885.
About Deltic
Deltic Timber Corporation is a natural resources company focused
on the efficient and environmentally responsible management of its
land holdings. The Company owns approximately 530,000 acres of
timberland, operates two sawmills and a medium density fiberboard
plant, and is engaged in real estate development. Headquartered in
El Dorado, Arkansas, the Company’s operations are located primarily
in Arkansas and north Louisiana.
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version on businesswire.com: http://www.businesswire.com/news/home/20160224006677/en/
Deltic Timber CorporationKenneth D. Mann, 870-881-6432Vice
President of Finance and Administration and CFO
Deltic Timber (NYSE:DEL)
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