ATLANTA, Nov. 1, 2018 /PRNewswire/ -- CatchMark
Timber Trust, Inc. (NYSE: CTT) today reported a 32% increase in
revenues, a higher GAAP net loss due to allocated losses from the
recent Triple T joint venture investment, and 60% growth in
Adjusted EBITDA for the quarter ended September 30, 2018 compared to the three-month
period ended September 30, 2017. The
year-over-year gains in revenues and Adjusted EBITDA resulted
primarily from increased timberland sales and new asset management
fees earned from the Triple T venture, which closed in early July.
Net loss for the quarter was below initial estimates as a result of
lower loss allocations from the Triple T venture and the company
further revised its forecast for full-year 2018 GAAP net loss into
a range between $116 million and
$122 million.
CatchMark today also declared a cash dividend of $0.135 per share for its common stockholders of
record on November 30, 2018, payable
on December 13, 2018.
Jerry Barag, CatchMark President
and CEO, said: "The extremely strong third quarter operating
performance kept us on track to meet full-year guidance for
Adjusted EBITDA, and resulted directly from our long-held strategy
to invest our capital only in top markets which are poised for
near-term growth. As a result, we have consistently aggregated the
industry's highest-quality timberlands, focusing primarily on the
U.S. South where our targeted micro markets continue to outperform
regional averages. Not only did we add more than 1.1 million acres
of ownership interests in premium timberlands to our portfolio
during the quarter, but the Triple T venture in Texas also has immediately contributed
significant non-volatile asset management fee income. We also have
quickly integrated our first Pacific Northwest acquisition in
Oregon, known as Bandon, into operations. Bandon will begin contributing to overall
timber sales revenue and over time help increase the sawtimber
share of our harvest mix. As a result, we remain in an extremely
favorable position to deliver sustainable growth to our
stockholders and support our dividend."
Results Overview
Third quarter 2018 CatchMark
operating results included:
- Increased revenues to $24.6
million, compared to $18.6
million in third quarter 2017.
- Incurred a net loss of $78.9
million on a GAAP basis, compared to $4.0 million in the third quarter of 2017,
primarily due to the loss from the Triple T joint venture.
- Increased Adjusted EBITDA to $11.5
million, compared to $7.2
million in the third quarter of 2017.
- Generated gross timber sales revenue of $16.7 million, a 2% decrease from third quarter
2017 due to a 12% decrease in harvest volume—the result of
management deferring harvests—mitigated by improved per-ton
pulpwood pricing and an increase in delivered wood sales.
- Acquired interests in more than 1.1 million acres of prime
timberlands in two separate transactions for $290 million.
- Sold 1,900 acres of timberlands for $3.8
million, compared to 200 acres for $342,000 in third quarter 2017.
- Paid a dividend of $0.135 per
share to stockholders on September 14,
2018.
Barag said: "Our supply agreements in leading mill markets
helped buttress results and our increase in average gross timber
pricing was directly attributable to improved net pulpwood pricing
in our micro markets as well as continued execution of our
delivered wood sales strategy. Lower year-over-year harvest volumes
stemmed from planned deferrals of harvests in anticipation of a
better pricing environment. With respect to recent events,
fortunately our acreage was not materially impacted by recent
storms in the U.S. South. Our expected annual harvest volume for
2018 will be between 2.0 million and 2.3 million tons, in line with
previous guidance, and we also remain on track for meeting our
timberland sales targets for the year."
Transaction Activity and Balance Sheet Impacts
During
the quarter CatchMark completed and/or entered into three
significant transactions to further enhance the quality of its
timberland portfolio, significantly expand the timberlands in which
the company has ownership interests, provide sustainable growth for
stockholders, and strengthen its balance sheet through capital
recycling. The three transactions were:
Triple T Timberlands Joint Venture:
Completed the acquisition of 1.1 million acres of prime
East Texas timberlands for
approximately $1.39 billion in a
joint venture with a consortium of institutional investors. For an
investment of $200 million, CatchMark
not only tripled the acreage in which it holds ownership interests
to 1.6 million acres, but also significantly expanded its fee-based
asset management business.
Bandon Property Acquisition: In its first
foray into the Pacific Northwest, acquired more than 18,000 acres
of prime Oregon timberlands for
$89.7 million. The acreage features
high quality stocking of 37 tons per acre and merchantable
inventory of 87% commercial conifers, including 77% Douglas fir,
and is located within a highly desirable, tight supply-demand
market approximately 150 miles southwest of Portland.
Southwest Region Disposition: Following the
Triple T acquisition and seeking to redeploy capital from other
assets in the region, agreed to sell 56,000 acres of nearby
timberlands in Texas and
Louisiana for $80.4 million, retaining approximately 280,000
tons of merchantable inventory for harvest over the next 18 to 24
months. With the sale on schedule to close during the fourth
quarter, proceeds will be used to repay debt.
CatchMark funded the Bandon
purchase with a combination of cash on hand and borrowing under an
amended credit facility, which closed during the quarter. The
amended facility increased total capacity by $75 million; right-sized the company's multi-draw
term loan to $200 million; and added
a new seven-year $140 million term
loan to refinance existing debt under the multi-draw term loan.
Also, during the quarter, CatchMark mitigated exposure to
rising interest rates by converting $150.0
million of outstanding debt from floating to fixed rate by
entering into three interest rate swaps. As of September 30, 2018, CatchMark has effectively
fixed interest rates on $350.0
million of its $557.6 million
of outstanding debt.
As of September 30, 2018,
CatchMark had $86.0 million of
borrowing capacity under its credit facilities, consisting of
$51.0 million from the Multi-Draw
Term Facility and $35.0 million from
the Revolving Credit Facility, and a $15.3
million cash balance. During the three months ended
September 30, 2018, CatchMark did not
repurchase any shares under its share repurchase program and as of
the end of the quarter, had capacity to purchase up to an
additional $19.8 million under the
program.
Barag said: "Our primary objectives in the near-term will be to
continue to integrate recent investments into our operations,
recycle capital opportunistically to strengthen asset
diversification and quality as well as bolster our balance sheet,
and execute on our tactical management plans to deliver on expected
performance goals. Over time, we will continue to seek new
opportunities that fit our strategic plan to advance long-term
revenue growth through prudent acquisitions and joint ventures in
high quality timberlands, concentrating in the U.S South and
Pacific Northwest. Our focus on high-quality acquisitions has paid
off to date and we expect our operational outperformance above
regional averages to continue as a result with further gains
contributed by Triple T and Bandon."
Results for Three Months and Nine Months Ended September 30, 2018
For the three months
ended September 30, 2018, revenues
totaled $24.6 million, a $6.0 million increase over the three months ended
September 30, 2017, resulting
primarily from a $3.5 million
increase in timberland sales revenue and a $2.7 million increase in asset management fees.
Asset management fee revenue increased primarily due to earning
$2.7 million from the Triple T joint
venture. Gross timber sales revenue decreased by $0.3 million, or 2%, due to a 12% decrease in
harvest volume mitigated by an increase in per-ton gross timber
sales revenue. The decrease in harvest volume was a result of
management's plan to defer some harvest until a better pricing
environment materializes. The increase in per-ton gross timber
sales revenue resulted from capturing higher pulpwood pricing from
strong micro-markets in the South and continuing to execute
CatchMark's delivered sales strategy. Delivered sales volume as a
percentage of total harvest increased from 65% in the third quarter
of 2017 to 78% in third quarter 2018.
Net loss increased to $78.9
million for the three months ended September 30, 2018 from $4.0 million for the three months ended
September 30, 2017 primarily due to a
$76.8 million loss from the Triple T
joint venture, a $1.5 million
increase in interest expense, offset by a $3.4 million increase in operating income. The
$76.8 million loss from the Triple T
investment is based on hypothetical-liquidation-at-book-value
(HLBV) accounting, which 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.
|
Three Months
Ended
September 30, 2017
|
|
Changes
attributable to:
|
|
Three Months
Ended
September 30, 2018
|
(in
thousands)
|
|
Price/Mix
|
|
Volume
(3)
|
|
Timber sales
(1)
|
|
|
|
|
|
|
|
Pulpwood
|
$
|
9,218
|
|
|
$
|
280
|
|
|
$
|
(139)
|
|
|
$
|
9,359
|
|
Sawtimber
(2)
|
7,831
|
|
|
82
|
|
|
(530)
|
|
|
7,383
|
|
|
$
|
17,049
|
|
|
$
|
362
|
|
|
$
|
(669)
|
|
|
$
|
16,742
|
|
|
|
(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)
|
Timber sales revenue
generated by properties acquired within the last 12 months are
attributed to volume change.
|
For the nine months ended September 30,
2018, revenues increased to $74.9
million from $68.6 million for
the nine months ended September 30,
2017 due to an increase in timber sales revenue of
$2.2 million, an increase in
timberland sales revenue of $1.2
million, an increase in asset management fees of
$2.7 million, and an increase in
other revenues of $0.3 million. Gross
timber sales revenue increased 4% primarily due to a 6% increase in
average gross timber sales pricing offset by a 2% decrease in
harvest volume. Average gross timber sales pricing increased
primarily as a result of continued execution of the delivered sales
strategy. Delivered sales volume as a percentage of total harvest
increased from 72% for the nine months ended September 30, 2017 to 81% for the nine months
ended September 30, 2018. Gross
timber sales revenue from delivered sales includes logging and
hauling costs that customers pay for deliveries.
Net loss increased to $83.8
million for the nine months ended September 30, 2018 from $8.5 million for the nine months ended
September 30, 2017 primarily due to
the $76.8 million loss from the
Triple T joint venture, offset by a $1.7
million increase in operating income.
|
Nine Months
Ended
September 30, 2017
|
|
Changes
attributable to:
|
|
Nine Months
Ended
September 30, 2018
|
(in
thousands)
|
|
Price/Mix
|
|
Volume
(3)
|
|
Timber sales
(1)
|
|
|
|
|
|
|
|
Pulpwood
|
$
|
26,682
|
|
|
$
|
617
|
|
|
$
|
1,995
|
|
|
$
|
29,294
|
|
Sawtimber
(2)
|
24,246
|
|
|
157
|
|
|
(557)
|
|
|
23,846
|
|
|
$
|
50,928
|
|
|
$
|
774
|
|
|
$
|
1,438
|
|
|
$
|
53,140
|
|
|
|
(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)
|
Timber sales revenue
generated by properties acquired within the last 12 months are
attributed to volume change.
|
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 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. 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. 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 September 30,
2018, Adjusted EBITDA was $11.5
million, a $4.3 million
increase from the three months ended September 30, 2017, primarily due to a
$3.3 million increase in net
timberland sales and a $2.7 million
increase in asset management fees, offset by a $1.0 million decrease in net timber sales and a
$0.7 million increase in general and
administrative expenses.
For the nine months ended September 30,
2018, Adjusted EBITDA was $40.4
million, a $8.3 million
increase from the nine months ended September 30, 2017, primarily due to $6.4 million of Adjusted EBITDA from the
Dawsonville Bluffs Joint Venture, a $2.7
million increase in asset management fees, a $0.7 million increase in net timberland sales and
a $0.3 million increase in other
revenues, offset by a $1.3 million
increase in general and administrative expenses, and a $0.5 million increase in other operating
expenses.
Our reconciliation of net loss to Adjusted EBITDA for the three
months and nine months ended September 30,
2018 and 2017 follows:
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
(in
thousands)
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net loss
|
$
|
(78,899)
|
|
|
$
|
(4,044)
|
|
|
$
|
(83,789)
|
|
|
$
|
(8,488)
|
|
Add:
|
|
|
|
|
|
|
|
Depletion
|
6,224
|
|
|
7,265
|
|
|
19,884
|
|
|
20,511
|
|
Basis of timberland
sold, lease terminations and other (1)
|
2,983
|
|
|
247
|
|
|
10,771
|
|
|
9,647
|
|
Amortization
(2)
|
493
|
|
|
308
|
|
|
2,532
|
|
|
961
|
|
Depletion,
amortization, basis of timberland, mitigation credits sold included
in loss from unconsolidated joint venture (3)
|
39
|
|
|
125
|
|
|
3,885
|
|
|
128
|
|
HLBV (income) loss
from unconsolidated joint venture (4)
|
76,755
|
|
|
—
|
|
|
76,755
|
|
|
—
|
|
Stock-based
compensation expense
|
610
|
|
|
687
|
|
|
2,171
|
|
|
2,025
|
|
Interest expense
(2)
|
3,883
|
|
|
2,553
|
|
|
8,754
|
|
|
7,266
|
|
Other
(5)
|
(632)
|
|
|
10
|
|
|
(597)
|
|
|
29
|
|
Adjusted
EBITDA
|
$
|
11,456
|
|
|
$
|
7,151
|
|
|
$
|
40,366
|
|
|
$
|
32,079
|
|
|
|
(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 accompanying 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) loss 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 rather than a liquidation at
fair value as of a date that is more in-line with the joint
venture's expected timing for a liquidity event.
|
(5)
|
Includes certain cash
expenses, or reimbursement received thereof, 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.
|
Revised 2018 Guidance
Based on revised allocations
from the Triple T joint venture under the HLBV method of
accounting, CatchMark now anticipates a full-year GAAP net loss of
$116 million to $122 million. As a result of transaction costs
and distribution preferences, CatchMark continues to expect to
incur non-cash GAAP losses from the unconsolidated Triple T joint
venture equal to its investment in the near term. Management
adjusts for such non-cash losses in its non-GAAP financial
measures, including Adjusted EBITDA, formulated on a hypothetical
liquidation scenario based on book value rather than fair
value.
Conference Call/Webcast
The company will host a
conference call and live webcast at 10 a.m. ET on Friday, November 2, 2018 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 Timber Trust, Inc. (NYSE:
CTT) is a self-administered and self-managed, publicly-traded
timberland REIT that strives to deliver superior risk-adjusted
returns for all stakeholders through disciplined acquisitions,
sustainable harvests, and well-timed real estate sales.
Headquartered in Atlanta and
focused exclusively on timberland ownership and management,
CatchMark began operations in 2007 and owns interests in over 1.6
million acres* of timberlands located in Alabama, Florida, Georgia, Louisiana, North
Carolina, Oregon,
South Carolina, Tennessee and Texas. For more information, visit
www.catchmark.com.
* As of September 30, 2018
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 relate to
the impact that the Bandon
acquisition will have on timber sales revenue and harvest mix;
anticipated harvest volume for 2018; our objectives of integrating
recent investments, recycling capital opportunistically to
strengthen asset diversification and quality and bolster our
balance sheet, and executing our tactical managements plans to
deliver on performance goals; our intention to seek new
opportunities that fit our strategic plan; our expectation of
continued operational outperformance; and financial outlook and
guidance for full-year 2018 and beyond. Forward-looking statements
related to the Triple T Timberlands transaction include, but are
not limited to, statements about the expected benefits of the
transaction, including anticipated financial and operating results
and future returns to stockholders of the company.
Forward-looking statements involve risks and uncertainties that
could cause actual results to differ materially from those
contemplated by our forward-looking statements. Risk and
uncertainties related to the Triple T Timberlands transaction
include, but are not limited to, the risks that the acquired assets
and operations may not be integrated successfully or integration
costs may be higher than anticipated; the expected benefits of and
of and growth from the transaction may not be fully realized or may
take longer to realize than expected; the diversion of management
time on integration-related matters; the potential impact of the
consummation of the transaction on relationships with customers,
suppliers, competitors, and management and other employees; and
litigation risks related to the transaction. With respect to the
ongoing business of the company, these risks and uncertainties
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 to access
external sources of capital at attractive rates or at all; (viii)
potential increases in interest rates could have a negative impact
on our business; (ix) our share repurchase program may not be
successful in improving stockholder value over the long-term; (x)
our joint venture strategy may not enable us to access non-dilutive
capital and enhance our ability to make acquisitions; and (xi) the
factors described in Item 1A. Risk Factors of our Annual Report on
Form 10-K for the fiscal year ended December
31, 2017, 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
|
(in thousands,
except for per-share amounts)
|
|
|
(Unaudited) Three Months Ended September 30,
|
|
(Unaudited) Nine Months Ended September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenues:
|
|
|
|
|
|
|
|
Timber
sales
|
$
|
16,742
|
|
|
$
|
17,049
|
|
|
$
|
53,140
|
|
|
$
|
50,928
|
|
Timberland
sales
|
3,818
|
|
|
342
|
|
|
14,904
|
|
|
13,745
|
|
Asset management
fees
|
2,698
|
|
|
40
|
|
|
2,759
|
|
|
69
|
|
Other
revenues
|
1,319
|
|
|
1,181
|
|
|
4,127
|
|
|
3,831
|
|
|
24,577
|
|
|
18,612
|
|
|
74,930
|
|
|
68,573
|
|
Expenses:
|
|
|
|
|
|
|
|
Contract logging and
hauling costs
|
7,613
|
|
|
6,876
|
|
|
24,154
|
|
|
21,857
|
|
Depletion
|
6,224
|
|
|
7,265
|
|
|
19,884
|
|
|
20,511
|
|
Cost of timberland
sales
|
3,210
|
|
|
211
|
|
|
11,590
|
|
|
9,706
|
|
Forestry management
expenses
|
1,370
|
|
|
1,737
|
|
|
4,622
|
|
|
4,874
|
|
General and
administrative expenses
|
2,484
|
|
|
2,257
|
|
|
8,602
|
|
|
7,477
|
|
Land rent
expense
|
153
|
|
|
146
|
|
|
490
|
|
|
452
|
|
Other operating
expenses
|
1,356
|
|
|
1,340
|
|
|
4,197
|
|
|
3,988
|
|
|
22,410
|
|
|
19,832
|
|
|
73,539
|
|
|
68,865
|
|
Operating
loss
|
2,167
|
|
|
(1,220)
|
|
|
1,391
|
|
|
(292)
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest
income
|
20
|
|
|
37
|
|
|
180
|
|
|
74
|
|
Interest
expense
|
(4,321)
|
|
|
(2,819)
|
|
|
(11,125)
|
|
|
(8,101)
|
|
|
(4,301)
|
|
|
(2,782)
|
|
|
(10,945)
|
|
|
(8,027)
|
|
|
|
|
|
|
|
|
|
Net loss before
unconsolidated joint ventures
|
(2,134)
|
|
|
(4,002)
|
|
|
(9,554)
|
|
|
(8,319)
|
|
Loss from
unconsolidated joint ventures
|
(76,765)
|
|
|
(42)
|
|
|
(74,235)
|
|
|
(169)
|
|
Net
loss
|
$
|
(78,899)
|
|
|
$
|
(4,044)
|
|
|
$
|
(83,789)
|
|
|
$
|
(8,488)
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding - basic and diluted
|
49,118
|
|
|
38,823
|
|
|
47,551
|
|
|
38,799
|
|
|
|
|
|
|
|
|
|
Net loss per-share
- basic and diluted
|
$
|
(1.61)
|
|
|
$
|
(0.10)
|
|
|
$
|
(1.76)
|
|
|
$
|
(0.22)
|
|
CATCHMARK TIMBER
TRUST, INC. AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
(in thousands,
except for per-share amounts)
|
|
|
(Unaudited) September 30, 2018
|
|
December 31,
2017
|
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
15,323
|
|
|
$
|
7,805
|
|
Accounts
receivable
|
6,549
|
|
|
4,575
|
|
Prepaid expenses and
other assets
|
10,495
|
|
|
5,436
|
|
Deferred financing
costs
|
348
|
|
|
403
|
|
Timber
assets:
|
|
|
|
Timber and timberlands,
net
|
773,844
|
|
|
710,246
|
|
Intangible lease
assets, less accumulated amortization of $944 and $941 as of
September 30, 2018 and December 2017, respectively
|
13
|
|
|
16
|
|
Investments in
unconsolidated joint ventures
|
128,926
|
|
|
11,677
|
|
Total
assets
|
$
|
935,498
|
|
|
$
|
740,158
|
|
|
|
|
|
Liabilities:
|
|
|
|
Accounts payable and
accrued expenses
|
$
|
6,411
|
|
|
$
|
4,721
|
|
Other
liabilities
|
3,920
|
|
|
2,969
|
|
Notes payable and
lines of credit, net of deferred financing costs
|
551,598
|
|
|
330,088
|
|
Total
liabilities
|
561,929
|
|
|
337,778
|
|
|
|
|
|
Commitments and
Contingencies
|
—
|
|
|
—
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
Class A common stock,
$0.01 par value; 900,000 shares authorized; 49,125 and 43,425
shares issued and outstanding as of September 30, 2018 and December
31, 2017, respectively
|
491
|
|
|
434
|
|
Additional
paid-in capital
|
730,814
|
|
|
661,222
|
|
Accumulated
deficit and distributions
|
(364,454)
|
|
|
(261,652)
|
|
Accumulated
other comprehensive income
|
6,718
|
|
|
2,376
|
|
Total stockholders'
equity
|
373,569
|
|
|
402,380
|
|
Total liabilities and
stockholders' equity
|
$
|
935,498
|
|
|
$
|
740,158
|
|
CATCHMARK TIMBER
TRUST, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(in
thousands)
|
|
|
(Unaudited) Three Months Ended
September 30,
|
|
(Unaudited) Nine Months Ended
September 30,
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
|
Net loss
|
$
|
(78,899)
|
|
|
$
|
(4,044)
|
|
|
$
|
(83,789)
|
|
|
$
|
(8,488)
|
|
Adjustments to
reconcile net loss to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
Depletion
|
6,224
|
|
|
7,246
|
|
|
19,884
|
|
|
20,511
|
|
Basis of timberland
sold, lease terminations and other
|
2,983
|
|
|
266
|
|
|
10,771
|
|
|
9,647
|
|
Stock-based
compensation expense
|
610
|
|
|
687
|
|
|
2,171
|
|
|
2,025
|
|
Noncash interest
expense
|
438
|
|
|
265
|
|
|
2,371
|
|
|
834
|
|
Other
amortization
|
54
|
|
|
43
|
|
|
160
|
|
|
127
|
|
Loss from
unconsolidated joint ventures
|
76,765
|
|
|
42
|
|
|
74,235
|
|
|
169
|
|
Operating
distributions from unconsolidated joint ventures
|
(10)
|
|
|
—
|
|
|
3,658
|
|
|
—
|
|
Changes in assets and
liabilities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
(3,055)
|
|
|
(337)
|
|
|
(2,643)
|
|
|
(1,005)
|
|
Prepaid expenses and
other assets
|
3,158
|
|
|
(462)
|
|
|
(295)
|
|
|
(531)
|
|
Accounts payable and
accrued expenses
|
1,231
|
|
|
523
|
|
|
1,627
|
|
|
1,632
|
|
Other
liabilities
|
(551)
|
|
|
(771)
|
|
|
1,121
|
|
|
809
|
|
Net cash provided by
operating activities
|
8,948
|
|
|
3,458
|
|
|
29,271
|
|
|
25,730
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
Timberland
acquisitions, earnest money deposits and other
|
(57,827)
|
|
|
(2,710)
|
|
|
(91,424)
|
|
|
(2,722)
|
|
Capital expenditures
(excluding timberland acquisitions)
|
(704)
|
|
|
(792)
|
|
|
(2,821)
|
|
|
(3,654)
|
|
Investments in
unconsolidated joint ventures
|
(200,000)
|
|
|
—
|
|
|
(200,000)
|
|
|
(10,539)
|
|
Distributions from
unconsolidated joint ventures
|
1,296
|
|
|
—
|
|
|
4,858
|
|
|
—
|
|
Net cash used in
investing activities
|
(257,235)
|
|
|
(3,502)
|
|
|
(289,387)
|
|
|
(16,915)
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
Repayments of note
payable
|
—
|
|
|
—
|
|
|
(69,000)
|
|
|
—
|
|
Proceeds from note
payable
|
259,000
|
|
|
—
|
|
|
289,000
|
|
|
11,000
|
|
Financing costs
paid
|
(729)
|
|
|
(119)
|
|
|
(832)
|
|
|
(202)
|
|
Issuance of common
stock
|
—
|
|
|
—
|
|
|
72,450
|
|
|
—
|
|
Other offering costs
paid
|
(33)
|
|
|
—
|
|
|
(3,623)
|
|
|
—
|
|
Dividends paid to
common stockholders
|
(6,601)
|
|
|
(5,182)
|
|
|
(19,013)
|
|
|
(15,546)
|
|
Repurchase of common
shares under the share repurchase program
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,036)
|
|
Repurchase of common
shares for minimum tax withholdings
|
(123)
|
|
|
—
|
|
|
(1,348)
|
|
|
(311)
|
|
Net cash provided by
(used in) financing activities
|
251,514
|
|
|
(5,301)
|
|
|
267,634
|
|
|
(6,095)
|
|
Net increase
(decrease) in cash and cash equivalents
|
3,227
|
|
|
(5,345)
|
|
|
7,518
|
|
|
2,720
|
|
Cash and cash
equivalents, beginning of period
|
12,096
|
|
|
17,173
|
|
|
7,805
|
|
|
9,108
|
|
Cash and cash
equivalents, end of period
|
$
|
15,323
|
|
|
$
|
11,828
|
|
|
$
|
15,323
|
|
|
$
|
11,828
|
|
CATCHMARK TIMBER
TRUST, INC. AND SUBSIDIARIES
|
SELECTED DATA
(UNAUDITED)
|
|
|
2018
|
|
2017
|
|
Q1
|
|
Q2
|
|
Q3
|
|
YTD
|
|
Q1
|
|
Q2
|
|
Q3
|
|
YTD
|
Timber Sales
Volume ('000 tons) (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pulpwood
|
354
|
|
|
342
|
|
|
343
|
|
|
1,039
|
|
|
291
|
|
|
352
|
|
|
388
|
|
|
1,031
|
|
Sawtimber
|
221
|
|
|
219
|
|
|
185
|
|
|
625
|
|
|
220
|
|
|
230
|
|
|
216
|
|
|
666
|
|
Total
|
575
|
|
|
561
|
|
|
528
|
|
|
1,664
|
|
|
511
|
|
|
582
|
|
|
604
|
|
|
1,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Delivered % as of
total volume
|
83
|
%
|
|
80
|
%
|
|
78
|
%
|
|
81
|
%
|
|
81
|
%
|
|
72
|
%
|
|
65
|
%
|
|
72
|
%
|
Stumpage % as of
total volume
|
17
|
%
|
|
20
|
%
|
|
22
|
%
|
|
19
|
%
|
|
19
|
%
|
|
28
|
%
|
|
35
|
%
|
|
28
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net timber
sales price ($ per ton) (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pulpwood
|
$
|
14
|
|
|
$
|
13
|
|
|
$
|
13
|
|
|
$
|
14
|
|
|
$
|
13
|
|
|
$
|
12
|
|
|
$
|
13
|
|
|
$
|
13
|
|
Sawtimber
|
$
|
23
|
|
|
$
|
24
|
|
|
$
|
24
|
|
|
$
|
24
|
|
|
$
|
24
|
|
|
$
|
24
|
|
|
$
|
24
|
|
|
$
|
24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timberland
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Sales
('000)
|
$
|
4,252
|
|
|
$
|
6,834
|
|
|
$
|
3,818
|
|
|
$
|
14,904
|
|
|
$
|
5,450
|
|
|
$
|
7,953
|
|
|
$
|
342
|
|
|
$
|
13,745
|
|
Acres Sold
|
2,200
|
|
|
3,100
|
|
|
1,900
|
|
|
7,200
|
|
|
2,800
|
|
|
4,000
|
|
|
200
|
|
|
7,000
|
|
% of fee
acres
|
0.5
|
%
|
|
0.7
|
%
|
|
0.4
|
%
|
|
1.5
|
%
|
|
0.6
|
%
|
|
0.9
|
%
|
|
0.1
|
%
|
|
1.5
|
%
|
Price per
acre
|
$
|
1,955
|
|
|
$
|
2,199
|
|
|
$
|
1,967
|
|
|
$
|
2,063
|
|
|
$
|
1,930
|
|
|
$
|
1,993
|
|
|
$
|
1,468
|
|
|
$
|
1,950
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct
Timberland Acquisitions, Exclusive of Transaction
Costs
|
Gross
Acquisitions ('000)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
89,700
|
|
|
$
|
89,700
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Acres
Acquired
|
—
|
|
|
—
|
|
|
18,100
|
|
|
18,100
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Price per acre
($/acre)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,956
|
|
|
$
|
4,956
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Joint Ventures'
Timberland Acquisitions, Exclusive of Transaction Costs
(2)
|
Gross
Acquisitions ('000)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,389,500
|
|
|
$
|
1,389,500
|
|
|
$
|
—
|
|
|
$
|
20,000
|
|
|
$
|
—
|
|
|
$
|
20,000
|
|
Acres
Acquired
|
—
|
|
|
—
|
|
|
1,099,800
|
|
|
|
1,099,800
|
|
|
—
|
|
|
11,000
|
|
|
—
|
|
|
11,000
|
|
Price per acre
($/acre)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,263
|
|
|
$
|
1,263
|
|
|
$
|
—
|
|
|
$
|
1,813
|
|
|
$
|
—
|
|
|
$
|
1,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period End
Acres ('000)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fee
|
477
|
|
|
474
|
|
|
490
|
|
|
490
|
|
|
465
|
|
|
461
|
|
|
460
|
|
|
460
|
|
Lease
|
31
|
|
|
30
|
|
|
30
|
|
|
30
|
|
|
32
|
|
|
31
|
|
|
31
|
|
|
31
|
|
Wholly-owned
total
|
508
|
|
|
504
|
|
|
520
|
|
|
520
|
|
|
497
|
|
|
492
|
|
|
491
|
|
|
491
|
|
Joint-venture
interest(2)
|
6
|
|
|
6
|
|
|
1,106
|
|
|
1,106
|
|
|
—
|
|
|
11
|
|
|
11
|
|
|
11
|
|
Total
|
514
|
|
|
510
|
|
|
1,626
|
|
|
1,626
|
|
|
497
|
|
|
503
|
|
|
502
|
|
|
502
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Excludes amounts
from the Bandon Property, which was acquired at the end of August
2018. Harvest volume and timber sales revenue from the Bandon
Property for one month of operations accounted for less than 1% of
our consolidated total harvest volume and total timber sales
revenue.
(2) Represents property owned
by Dawsonville Bluffs, LLC, a joint venture in which CatchMark owns
a 50% membership interest, and Triple T Joint Venture in which
CatchMark owns a 21.6% equity interest. CatchMark serves as the
manager for both of these joint ventures.
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SOURCE CatchMark Timber Trust, Inc.