ATLANTA, Oct. 15, 2021 /PRNewswire/ -- CatchMark
Timber Trust, Inc. (NYSE: CTT) today announced that it reached
a definitive agreement with its joint venture partners in TexMark
Timber Treasury, L.P. (Triple T) on the redemption of its common
equity interest in Triple T for $35
million in cash and closed the transaction upon signing.
CatchMark also entered into an agreement pursuant to which it will
continue to provide certain asset management services to the joint
venture through the first quarter of 2022 in exchange for an
additional $5 million services fee,
which was also paid to CatchMark at the time of closing. The
$40 million of proceeds will be used
to pay down existing debt.
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CatchMark Chief Executive Officer Brian
M. Davis said: "One of our primary objectives over the last
year and a half has been maximizing CatchMark's exit value from
Triple T. This transaction was the best course to support long-term
growth in light of CatchMark's position in the Triple T capital
structure and the required per acre price increases needed to
satisfy our partners' accruing preferred return. It is also another
important step in delivering on our strategy of simplifying our
business model to focus on our core portfolio, strengthening our
balance sheet, and positioning the company for future growth."
Impact to Annualized Dividend Rate
CatchMark expects to pay a new annualized dividend rate of
$0.30 per common share, beginning
with the fourth quarter of 2021. This adjustment reflects the loss
of asset management fee revenue from the Triple T joint venture.
The company has declared a cash dividend of $0.075 per share for its common stockholders of
record as of November 30, 2021,
payable on December 15, 2021.
Douglas D. Rubenstein, Chairman
of the Board for CatchMark said: "We believe the right-sizing of
CatchMark's annualized dividend rate is a prudent decision that
will enable the company to prioritize investing in the growth of
its core portfolio which will ultimately enhance earnings growth
and net asset value over time. In addition, the anticipated
annualized dividend rate for 2022 should enable us to maintain our
historical payout ratio of 75% to 85% of cash available for
distribution."
Affirmation of 2021 Adjusted EBITDA Guidance
Given the continued strong performance from the execution of its
core strategy, the company expects 2021 Adjusted EBITDA to be at
the top-end of its previously announced guidance range.
Long-Term Growth Strategy Update
Davis continued: "Looking ahead, we see strong growth prospects
for CatchMark. We continue to build a robust pipeline for
acquisitions to grow our portfolio of prime timberlands in superior
mill markets in the U.S. South, the nation's premier timber basket,
and to further strengthen our industry-leading harvest EBITDA per
acre while maintaining stable merchantable inventory per acre. We
are focused on identifying and executing attractive acquisition
opportunities that include a high allocation of pine plantations
with strong site indices as well as above average operability. We
will execute on acquisitions that either enhance our near-term
timber revenue with high merchantable stocking levels with an older
average age or complement our long-term portfolio objectives that
will balance portfolio age class distribution and
productivity."
CatchMark sees additional value creation opportunities from the
following environmental initiatives that could represent up to 20%
of future cash available for distribution:
- Carbon sequestration
- Wetlands mitigation banking
- Solar projects
Consistent with its strategy since inception, the company also
intends to maximize long-term returns by achieving an optimum
balance among biological timber growth, generation of current cash
flow from harvesting, and responsible environmental stewardship.
Beginning in 2022, CatchMark expects to:
- Deliver annual harvest volume in the range of 1.6 million tons
to 1.8 million tons, excluding acquisitions. These harvest volumes
are consistent with historical productivity on a per acre
basis.
- Expand annual timberland sales targets, in light of
unprecedented retail demand, from about 2% to approximately 3% of
its fee timberland acreage, which could increase total land sales
revenue to approximately $20 million
next year compared to the $13 million
to $15 million targeted for
2021.
Note: Cash available for distribution and Adjusted EBITDA
are non-GAAP financial measures. See discussion
below.
Conference Call
The company will host a conference call and live webcast at
10:00 a.m. ET on Friday, October 15,
2021, to discuss this transaction and business updates.
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 is available at www.catchmark.com or here. A replay of this
webcast will be archived on the company's website immediately 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 372,100 acres* of timberlands located in
Alabama, Georgia, and South
Carolina. For more information, visit www.catchmark.com.
* As of October 14, 2021
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," "should," "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
press release include, but are not limited to, our expectations
about future growth, acquisition strategies, future dividend rates
and payout ratios, harvest plans, land sales, cash flows and our
affirmations of certain 2021 guidance. Risks and uncertainties that
could cause our actual results to differ from these forward-looking
statements include, but are not limited to, that (i) the supply of
timberlands available for acquisition that meet our investment
criteria may be less than we currently anticipate; (ii) we may be
unsuccessful in winning bids for timberland that are sold through
an auction process; (iii) we may not be able to access external
sources of capital at attractive rates or at all; (iv) potential
increases in interest rates could have a negative impact on our
business; (v) timber prices may not increase at the rate we
currently anticipate or could decline, which would negatively
impact our revenues; (vi) we may not generate the harvest volumes
from our timberlands that we currently anticipate; (vii) the demand
for our timber may not increase at the rate we currently anticipate
or could decline due to changes in general economic and business
conditions in the geographic regions where our timberlands are
located, including as a result of the COVID-19 pandemic and the
measures taken as a response thereto; (viii) a downturn in the real
estate market, including decreases in demand and valuations, may
adversely impact our ability to generate income and cash flow from
sales of higher-and-better use properties; (ix) we may not be able
to make large dispositions of timberland in capital recycling
transactions at prices that are attractive to us or at all; (x) our
dividends are not guaranteed and are subject to change; (xi) the
markets for carbon sequestration credits, wetlands mitigation
banking and solar projects are still developing and we maybe
unsuccessful in generating the revenues from environmental
initiatives that we currently expect or in the timeframe
anticipated; (xii) our share repurchase program may not be
successful in improving stockholder value over the long-term;
(xiii) our joint venture strategy may not enable us to access
non-dilutive capital and enhance our ability to make acquisitions;
and (xiv) the factors described in Part I, Item 1A. Risk Factors of
our Annual Report on Form 10-K for the year ended December 31, 2020 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.
Non-GAAP Financial Measures
Cash Available for Distribution is a non-GAAP financial measure.
It is calculated as cash provided by operating activities, adjusted
for capital expenditures (excluding timberland acquisitions),
working capital changes, cash distributions from unconsolidated
joint ventures and certain cash expenditures that management
believes do not directly reflect the core business operations of
its timberland portfolio on an on-going basis, including costs
required to be expensed by GAAP related to acquisitions,
transactions, joint ventures or new business activities.
Adjusted 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 management believes are not
indicative of the ongoing operating results of our timberland
portfolio, and we refer to this measure as Adjusted EBITDA. 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 (losses)
from unconsolidated joint ventures based on hypothetical
liquidation book value, 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.
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SOURCE CatchMark Timber Trust, Inc.