SPOKANE, Wash., April 26, 2017 (GLOBE NEWSWIRE) — Potlatch Corporation (Nasdaq:PCH) today reported net income of $16.9 million, or $0.41 per diluted share, on revenues of $149.7 million for the quarter ended March 31, 2017. Net income was $0.2 million, or $0.00 per diluted share, on revenues of $127.9 million in the first quarter of 2016.

“Higher lumber prices continue to drive results in our Resource and Wood Products segments, resulting in strong first quarter earnings,” said Mike Covey, chairman and chief executive officer.  “We were pleased with the preliminary countervailing duty announcement on Canadian lumber earlier this week and look forward to the antidumping announcement near the end of June.  Record cedar log prices in Idaho contributed to our strong results as well as closing a land conservation sale for almost $2,600 per acre,” stated Mr. Covey.

Financial Highlights (in millions, except per share data)

    Q1 2017     Q4 2016     Q1 2016  
Revenues   $ 149.7     $ 155.7     $ 127.9  
Net income   $ 16.9     $ 14.4     $ 0.2  
Net income per diluted share   $ 0.41     $ 0.35     $  
Distribution per share   $ 0.375     $ 0.375     $ 0.375  
Net cash from operations   $ 41.9     $ 27.7     $ 28.9  
Cash and cash equivalents   $ 101.7     $ 82.6     $ 7.8  

Business Performance: Q1 2017 vs. Q4 2016

Resource

Resource’s operating income was $14.9 million on revenues of $51.8 million in the first quarter, compared to operating income of $22.7 million on revenues of $66.8 million in the fourth quarter of 2016. Harvest volumes were seasonally lower. A 3% increase in Northern sawlog prices was due largely to the strength of cedar sawlog prices. Southern sawlog prices decreased 9% primarily due to a seasonally lower mix of hardwood logs.

Wood Products

Wood Products earned $8.7 million on revenues of $95.6 million in the first quarter, compared to operating income of $8.3 million on revenues of $95.6 million in the fourth quarter of 2016. Average lumber prices were 7% higher in the first quarter compared to the fourth quarter while lumber shipments were 7% lower as a result of a scheduled boiler maintenance shutdown and capital project at the Warren, Arkansas sawmill.

Real Estate

Real Estate’s operating income was $8.6 million on revenues of $14.5 million in the first quarter, compared to operating income of $6.0 million on revenues of $8.7 million in the fourth quarter of 2016.  A higher average sales price offset the effect of selling fewer acres.

Outlook

“Due to strong lumber demand and the favorable duty determination, we expect significantly improved operating results in our Wood Products segment in the second quarter.  Due to seasonal harvest restrictions in Idaho we expect Resource income to decline due to lower harvest volumes.  We are very pleased with the outlook for our three business segments and believe that our significant leverage to lumber pricing will translate into strong earnings for the balance of the year,” concluded Mr. Covey.

Conference Call Information

A live conference call and webcast will be held today, April 27, 2017, at 9:00 a.m. Pacific Time (12:00 p.m. Eastern Time). Investors may access the webcast at www.potlatchcorp.com by clicking on the Investor Resources link or by conference call at 1-866-393-8403 for U.S./Canada and 1-706-679-7929 for international callers. Participants will be asked to provide conference I.D. number 99765039. Supplemental materials that will be discussed during the call are available on the website.

A replay of the conference call will be available two hours following the call until May 2, 2017 by calling 1-800-585-8367 for U.S./Canada or 1-404-537-3406 for international callers. Callers must enter conference I.D. number 99765039 to access the replay.

About Potlatch

Potlatch is a Real Estate Investment Trust (REIT) with approximately 1.4 million acres of timberland in Alabama, Arkansas, Idaho, Minnesota and Mississippi. Potlatch, a certified forest practices leader, is committed to providing superior returns to stockholders through long-term stewardship of its forest resources. The company also conducts a land sales and development business and operates wood products manufacturing facilities through its taxable REIT subsidiary. More information about Potlatch can be found on the company’s website at www.potlatchcorp.com

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the Private Litigation Reform Act of 1995 as amended, including without limitation, our expectations regarding U.S. housing market recovery; 1.25 to 1.3 million housing units to be built in the U.S. in 2017; strong repair and remodel market; lumber demand, implementation of duties in the Canadian lumber trade case; future company performance; the direction of our business markets; business conditions, pricing, EBITDDA and earnings in our Resource, Wood Products and Real Estate segments; company earnings in the second quarter of 2017;  improved wood products markets in the second quarter of 2017; harvest volumes in the second quarter of 2017 and for the full year; percentage of North and South harvest and sawlogs to be harvested in the North and the South in the second quarter of 2017; robust cedar sawlog market resulting in an increase in EBITDDA compared to 2016; increased lumber shipments in the second quarter of 2017 and for the year; real estate sales in the second quarter of 2017; corporate expenses and interest expense in the second quarter of 2017; tax rate for the second quarter of 2017 and full year; debt maturities; and similar matters. These forward-looking statements are based on current expectations, estimates, assumptions and projections that are subject to change, and actual results may differ materially from the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the U.S. housing market, changes in timberland values; changes in timber harvest levels on the company’s lands; changes in timber prices; changes in policy regarding governmental timber sales; availability of logging contractors; changes in the United States and international economies; changes in the level of construction activity; changes in Asia demand; changes in tariffs, quotas and trade agreements involving wood products; currency fluctuation; changes in demand for our products; changes in production and production capacity in the forest products industry; competitive pricing pressures for our products; unanticipated manufacturing disruptions; changes in general and industry-specific environmental laws and regulations; unforeseen environmental liabilities or expenditures; weather conditions; restrictions on harvesting due to fire danger; changes in raw material, fuel and other costs; changes in share price; and other risks and uncertainties described from time to time in the company’s public filings with the Securities and Exchange Commission. The forward-looking statements are made as of the date of this press release and the company does not undertake to update any forward-looking statements.

Potlatch Corporation
Consolidated Statements of Income
Unaudited (Dollars in thousands, except per share amounts)
 
    Three Months Ended March 31,  
    2017     2016  
Revenues   $ 149,681     $ 127,896  
Costs and expenses:                
Cost of goods sold     112,783       109,815  
Selling, general and administrative expenses     12,989       13,009  
      125,772       122,824  
Operating income     23,909       5,072  
Interest expense, net     (4,970 )     (6,025 )
Income (loss) before income taxes     18,939       (953 )
Income tax (provision) benefit     (2,018 )     1,110  
Net income   $ 16,921     $ 157  
                 
Net income per share:                
Basic   $ 0.41     $  
Diluted   $ 0.41     $  
Dividends per share   $ 0.375     $ 0.375  
Weighted-average shares outstanding (in thousands):                
Basic     40,778       40,875  
Diluted     41,071       40,960  

Potlatch Corporation
Condensed Consolidated Balance Sheets
Unaudited (Dollars in thousands)
 
    March 31, 2017     December 31, 2016  
ASSETS                
Current assets:                
Cash and cash equivalents   $ 101,664     $ 82,584  
Receivables, net     16,328       17,284  
Inventories     45,347       52,622  
Other assets     8,675       11,155  
Total current assets     172,014       163,645  
Property, plant and equipment, net     74,466       72,820  
Timber and timberlands, net     637,319       641,856  
Deferred tax assets, net     41,550       42,051  
Other assets     7,322       7,309  
Total assets   $ 932,671     $ 927,681  
                 
LIABILITIES AND STOCKHOLDERS EQUITY                
Current liabilities:                
Current portion of long-term debt   $ 25,408     $ 11,032  
Accounts payable and accrued liabilities     44,209       43,710  
Current portion of pension and other postretirement employee benefits     5,839       5,839  
Total current liabilities     75,456       60,581  
Long-term debt     558,510       572,956  
Pension and other postretirement employee benefits     123,939       123,284  
Other long-term obligations     15,504       14,586  
Total liabilities     773,409       771,407  
Commitments and contingencies                
Stockholders’ equity:                
Common stock, $1 par value     40,608       40,519  
Additional paid-in capital     355,174       355,274  
Accumulated deficit     (127,109 )     (128,775 )
Accumulated other comprehensive loss     (109,411 )     (110,744 )
Total stockholders’ equity     159,262       156,274  
Total liabilities and stockholders’ equity   $ 932,671     $ 927,681  

 

Potlatch Corporation
Condensed Consolidated Statements of Cash Flows
Unaudited (Dollars in thousands)
 
    Three Months Ended March 31,  
    2017     2016  
CASH FLOWS FROM OPERATING ACTIVITIES                
Net income   $ 16,921     $ 157  
Adjustments to reconcile net income to net cash from operating activities:                
Depreciation, depletion and amortization     6,702       8,605  
Basis of real estate sold     4,790       2,034  
Change in deferred taxes     (351 )     (1,110 )
Employee benefit plans     3,292       2,737  
Equity-based compensation expense     1,157       954  
Other, net     (528 )     (531 )
Change in working capital and operating-related activities, net     9,966       16,047  
Net cash from operating activities     41,949       28,893  
CASH FLOWS FROM INVESTING ACTIVITIES                
Purchase of property, plant and equipment     (3,636 )     (932 )
Timberlands reforestation and roads     (2,645 )     (2,242 )
Other, net     (102 )     116  
Net cash from investing activities     (6,383 )     (3,058 )
CASH FLOWS FROM FINANCING ACTIVITIES                
Dividends to common stockholders     (15,228 )     (15,258 )
Repayment of revolving line of credit borrowings           (30,000 )
Repayment of long-term debt           (5,000 )
Proceeds from issuance of long-term debt           27,500  
Change in book overdrafts           (2,836 )
Other, net     (1,258 )     (342 )
Net cash from financing activities     (16,486 )     (25,936 )
Change in cash and cash equivalents     19,080       (101 )
Cash and cash equivalents at beginning of period     82,584       7,925  
Cash and cash equivalents at end of period   $ 101,664     $ 7,824  

Potlatch Corporation
Segment Information
Unaudited (Dollars in thousands)
 
    Three Months Ended March 31,  
    2017     2016  
Revenues:                
Resource   $ 51,768     $ 48,710  
Wood Products     95,592       83,238  
Real Estate     14,504       5,566  
      161,864       137,514  
Intersegment Resource revenues     (12,183 )     (9,618 )
Total consolidated revenues   $ 149,681     $ 127,896  
                 
Income (loss) before income taxes:                
Resource   $ 14,929     $ 10,207  
Wood Products     8,684       956  
Real Estate     8,643       2,075  
Eliminations and adjustments     1,059       1,465  
      33,315       14,703  
Corporate     (9,406 )     (9,631 )
Operating income     23,909       5,072  
Interest expense, net     (4,970 )     (6,025 )
Income (loss) before income taxes   $ 18,939     $ (953 )
                 
Depreciation, depletion and amortization:                
Resource   $ 4,384     $ 6,128  
Wood Products     1,827       1,901  
Real Estate     1       2  
      6,212       8,031  
Corporate     117       208  
Bond discounts and deferred loan fees     373       366  
Total depreciation, depletion and amortization   $ 6,702     $ 8,605  
                 
Basis of real estate sold:                
Real Estate   $ 4,809     $ 2,245  
Eliminations and adjustments     (19 )     (211 )
Total basis of real estate sold   $ 4,790     $ 2,034  
CONTACT: (Investors)
Jerry Richards
509.835.1521

(Media)
Mark Benson
509.835.1513