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Deltic Announces Preliminary Fourth Quarter 2017 Results

Deltic Timber Corporation (NYSE:DEL):

 

DELTIC TIMBER CORPORATION

CONSOLIDATED FINANCIAL DATA SUMMARY

 

 

 

 

 

FOURTH QUARTER

2017

2016

 

Net sales

$

72,041,000

58,493,000

 

Net income

189,000

3,143,000

 

Earnings per common share

Basic

.02

.26

Assuming dilution

.02

.26

 

Average common shares outstanding

Basic

12,078,004

12,022,689

Assuming dilution

12,162,947

12,110,305

 

 

 

 

YEAR-TO-DATE

2017

2016

 

Net sales

$

242,265,000

219,363,000

 

Net income

6,488,000

9,245,000

 

Earnings per common share

Basic

.53

.76

Assuming dilution

.53

.76

 

Average common shares outstanding

Basic

12,070,270

12,009,534

Assuming dilution

12,150,185

12,073,888

 

Deltic Timber Corporation (NYSE:DEL), a natural resources company, today
announced financial results for the fourth quarter of 2017.
Fourth Quarter 2017 HighlightsNet sales totaled $72.1 million, compared to $58.5 million for
fourth quarter 2016Net income was $.2 million, or $.02 per diluted share for the
fourth quarter of 2017, compared to net income of $3.1 million, or
$.26 per diluted share, for the same period of 2016Fourth quarter 2017 Adjusted Net income1,
which excludes Potlatch merger-related costs, was $11.3 million, or
$.92 per diluted share, compared to net income of $3.1 million, or
$.26 per diluted share, for the same period of 2016
Financial results for the fourth quarter of 2017 benefited from
increased operating income in the Woodlands and Manufacturing segments
as demand for the Company’s timber and wood products remained strong
during the fourth quarter, but were offset by significantly increased
corporate general and administration expenses related to the Agreement
and Plan of Merger agreed upon by Deltic and Potlatch on October 22,
2017.
Woodlands SegmentFourth Quarter 2017 Highlights
Sold 327,570 tons of pine sawtimber, 83% above Q4 2016

Pine sawtimber prices averaged $28/ton, an increase of $1/ton from
previous-year fourth quarter

Sold 185,200 tons of pine pulpwood, 74% above Q4 2016

Pine pulpwood prices averaged $7/ton, a decrease of $1/ton from
previous-year fourth quarter

Sold approximately 851 acres of Higher Better Use (“HBU”) timberland
for $2,400/acre, compared to no sales in Q4 2016
Woodlands Segment Financial Results
($ in millions)

 

 

 
Q4 2017
 

 

 
Q4 2016
 

 

 
Q3 2017
Segment net sales

 

 

 

$

18.8

 

 

 

 

9.3

 

 

 

 

11.3

Segment operating income

$

9.9

4.2

5.4

Woodlands segment operating income increased in fourth quarter of 2017
compared to fourth quarter 2016 due to higher volumes of sawtimber and
pulpwood sold combined with sales of 851 acres of HBU timberland. The
increase in timber volume sold was mainly due to Company sales of timber
through timber deeds as part of the Company’s strategic initiatives.
Manufacturing SegmentFourth Quarter 2017 Highlights
Sold 68.1 million board feet of lumber, 7% above Q4 2016

Lumber prices averaged $22/MBF higher than Q4 2016

Sold 24.7 million square feet of Medium Density Fiberboard (“MDF”), 4%
above Q4 2016

MDF prices increased $8/MSF compared to Q4 2016
Manufacturing Segment Financial Results
($ in millions)

 

 
Q4 2017
 

 
Q4 2016
 

 
Q3 2017
Segment net sales

 

 

$

45.8

 

 

 

40.7

 

 

 

48.3

Segment operating income

$

5.2

3.2

3.7

Manufacturing segment operating income increased in fourth quarter 2017
compared to fourth quarter 2016, principally as a result of increased
lumber sales volumes and price per MBF sold, combined with a higher
sales volume of MDF and lower per-unit cost at the MDF plant.
Real Estate SegmentFourth Quarter 2017 Highlights
Sold 78 residential lots compared to 77 lots in Q4 2016

Residential lot sales prices averaged $98,000/lot, an increase of 19%
from Q4 2016, due to mix

Sold 4.8 acres of commercial acreage, which included the
35,000-square-foot retail center, compared to 23 acres in Q4 2016

Commercial sales price averaged $1,068,000 per acre, compared to
$232,000 per acre in Q4 2016
Real Estate Segment Financial Results
($ in millions)

 
Q4 2017
 
Q4 2016
 
Q3 2017
Segment net sales

 

$

13.9

 

 

13.6

 

 

6.2

Segment operating income/(loss)

$

5.1

6.4

1.0

Real Estate segment operating income was lower in the fourth quarter of
2017 compared to fourth quarter 2016 as increased revenue from
residential lot sales was offset by a write-down to the basis of the
Company’s speculative homes in our Red Oak Ridge development. Lot sales
reflect the closings of successful lot offerings in three Chenal Valley
neighborhoods and in the Wildwood development during the fourth quarter
of 2017.
Corporate Segment General and Administrative
Expense, Interest Expense, and Income Tax Expense
Corporate segment general and administrative expense was $20.5 million,
compared to $8.1 million for the same period of 2016. The increase is
primarily due to higher legal and professional fees related to the
merger with Potlatch. The provision for income tax was a benefit of $2.8
million, compared to an expense of $.3 million in the prior-year’s
fourth quarter. The current year provision included a $2.5 million
benefit from the remeasurement of deferred tax liabilities due to the
Tax Cuts and Jobs Act of 2017.
Capital Expenditures
Capital expenditures were $4 million in the fourth quarter 2017 compared
to $11 million for the fourth quarter of 2016. There were no timberland
acquisition expenditures in the fourth quarter of 2017 compared to
timberland acquisition expenditures of $.6 million during the same
period of 2016.
1Supplemental Disclosure Regarding Non-GAAP
Financial Information
The following table sets forth the Company’s Adjusted Net Income for the
three and twelve months ended December 31, 2017 and 2016. Adjusted Net
Income is not a measure that is prepared in accordance with U.S.
generally accepted accounting principles (GAAP).

We use Adjusted Net Income in our operational and financial
decision-making, believing that the measure is useful to eliminate
certain items in order to focus on ongoing operating performance and our
ability to generate cash flow from operations. We believe that this
Non-GAAP measure, when used in conjunction with our GAAP financials,
provides useful information to investors by presenting a key measure
that we use internally when making operating decisions and evaluating
our overall performance.

 

 

Three Months Ended

Twelve Months Ended

December 31,

December 31,

(Millions of dollars)

2017

 

2016

2017

 

2016

 

Net Income

$

0.2

3.1

$

6.5

9.2

Potlatch merger costs

16.9

16.9

Income tax effect of merger costs

(5.8

)

 

(5.8

)


1Adjusted Net Income

$

11.3

 

3.1

 

$

17.6

 

9.2

 

Earnings per share assuming dilution

$

0.02

0.26

0.53

0.76

Potlatch merger costs

1.37

1.37

Income tax effect of merger costs

(0.47

)

 

(0.47

)


2Adjusted Earnings per share assuming dilution

$

0.92

 

0.26

 

$

1.43

 

0.76

 
Forward-Looking Statements
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, pending
merger with Potlatch Corporation, 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 volumes
produced, 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.
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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20180214006490/en/


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