POTLATCHDELTIC CORPORATION Q1 2024 EARNINGS
April 30, 2024
FORWARD-LOOKING STATEMENTS & NON-GAAP MEASURES
FORWARD-LOOKING STATEMENTS
This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended, including without limitation, our expectations regarding the company's revenues, costs and expenses; expected liquidity; the U.S. economic condition; the success of the company's business strategies; the company's disciplined and opportunistic capital allocation strategies, including share repurchases and dividend expectations; maintaining the company's investment grade credit rating; favorable capital structure and strong balance sheet; our ability to capitalize on market opportunities; the company's debt metrics and decision to repay or refinance maturing debt; interest rates and expenses; corporate expenses; the effect of an increase in lumber prices on our EBITDDA; pension expenses; taxes; Q2 and FY 2024 outlook; favorable long-term housing fundamentals, including expectations about interest rates, the housing market, repair and remodel market, and housing starts; lumber supply, demand and pricing; lumber shipment volumes; our corporate responsibility commitments and goals; expected implementation of our Waldo, Arkansas sawmill modernization project on schedule and on budget, and corresponding increase in production capacity, reduction in cash processing costs, recovery improvement, and incremental EBITDDA generation; expected timber harvest volumes, sawlog and pulpwood mix, pricing, and region of origin; rural real estate and development real estate pipeline, interest, demand and sales; land basis and average price per acre and per developed lot; potential for real estate solar energy deals to close; natural climate solutions opportunities, including potential carbon capture and storage and bioenergy projects; the timing and amount of credits to be generated by our Southern timberland carbon credit initiative; planned capital expenditures; business conditions; the expected price and closing of the sale of 34,000 acres of rural timberland in the South; expected returns on a recent timberland acquisition, and similar matters. Words such as "anticipate," "believe," "can," "committed," "constantly," "continue," "emerging," "estimate," "expect," "forecast," "future," "likely," "long term," "looking ahead," "on track," "opportunities," "outlook," "over time," "plan," "potential," "preliminary," "projected," "schedule," "target," "upcoming," "will," and similar expressions are intended to identify such forward-looking statements.
You should carefully read forward-looking statements, including statements that contain these words, because they discuss the future expectations or state other "forward-looking" information about PotlatchDeltic. A number of important factors could cause actual results or events to differ materially from those indicated by such forward-looking statements, many of which are beyond PotlatchDeltic's control, such as changes in 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 and shipping capacity; changes in the United States and international economies and effects on our customers and suppliers; changes in interest rates, credit availability, and homebuyers' ability to qualify for mortgages; availability of labor and developable land; changes in the level of construction and remodeling activity; changes in foreign demand; changes in tariffs, quotas and trade agreements involving wood products; currency fluctuation; changes in demand for our products and real estate; changes in production and production capacity in the forest products industry; competitive pricing pressures for our products; unanticipated manufacturing disruptions; disruptions or inefficiencies in our supply chain and/or operations; changes in general and industry-specific environmental laws and regulations; unforeseen environmental liabilities or expenditures; the impact of pandemic disease or other human health threats; weather conditions; fires at our facilities and on our timberland and other catastrophic events; restrictions on harvesting due to fire danger; changes in raw material, fuel and other costs; transportation shortages and disruptions; share price; the successful execution of the company's strategic plans; the company's ability and its contractors' ability to implement the modernization plan for the Waldo sawmill; the company's ability and timing to obtain and sell carbon credits; the company's ability to achieve its corporate responsibility commitments and goals; the failure of announced real estate transactions to close on time, at the price and on the terms discussed, or at all; and the other factors described in PotlatchDeltic's Annual Report on Form 10-K and in the company's other filings with the SEC. PotlatchDeltic assumes no obligation to update the information in this communication, except as otherwise required by law. Readers are cautioned not to place undue reliance on these forward-looking statements, all of which speak only as of the date hereof.
NON-GAAP MEASURES
This presentation includes non-GAAP financial information. A reconciliation of those numbers to U.S. GAAP is included in this presentation, which is available on the company's website at www.PotlatchDeltic.com.
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KEY HIGHLIGHTS
Q1 2024
STRATEGY | PERFORMANCE | CAPITAL ALLOCATION | |||
Leverage to lumber prices | Total Adjusted EBITDDA1 | Return of cash | |||
• | Mills & indexed Idaho logs | • | $29.7MM | • $143MM annual dividend run rate | |
• | Strategy aligned with fundamentals | • | 13.0% margin | • | Dividend yield of 3.8% 3 |
• | Provides discretionary capital | Segment Adjusted EBITDDA | |||
Growth | |||||
• Timberlands - $34.7MM | |||||
Timberlands provide stability | • ~$31MM timberland bolt-on acquisition | ||||
• | 1.9MM tons harvested | ||||
• >80% of gross asset value | • | Waldo, Arkansas sawmill expansion | |||
• Sustainable management benefits society | • | Wood Products - $(0.1)MM | |||
• | Supports sustainable dividend | ||||
• | 271MMBF lumber shipped | Capital expenditures4 | |||
Real Estate captures incremental value | • | Real Estate - $6.2MM | • | $14.0MM spent YTD | |
• | $100MM - $110MM planned 2024 | ||||
• Opportunistic rural land sales | • | Sold: | |||
• Includes $44MM in 2024 for Waldo sawmill | |||||
• | Chenal master-planned community | • 1.8K rural acres | |||
• 24 residential lots |
Strong liquidity position | ||
TTM Cash Available for Distribution (CAD)2 | • | Investment grade rated |
• $(19.6)MM | • | $479MM of liquidity |
• Net debt to enterprise value5 is 18.6% |
OUR CORPORATE RESPONSIBILITY COMMITMENT 6
1 | Total Adjusted EBITDDA is a non-GAAP measure; see appendix for definition and reconciliation. Total Adjusted EBITDDA margin is Total Adjusted EBITDDA divided by revenues.
2 | Cash Available for Distribution (CAD) is for the trailing twelve months ended March 31, 2024. Includes reductions to CAD of $135.8MM for the following items: $74.8MM of payments for the Waldo, Arkansas sawmill expansion; $33.3MM of payments for timber and timberland acquisitions; $27.7MM of interest rate swap proceeds classified outside operating activity. CAD is a non-GAAP measure; see appendix for definition and reconciliation.
3 | Based on closing stock price of $47.02 on March 28, 2024.
4 | Includes property, plant and equipment, Timberlands reforestation and roads, Real Estate development; excludes acquisition of timber and timberlands.
5 | Net debt to enterprise value is a non-GAAP measure; see appendix for definition. Based on closing stock price of $47.02 on March 28, 2024.
6 | Corporate Responsibility data as of December 31, 2022.
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CONSOLIDATED RESULTS
Q1 2024 Total Adjusted EBITDDA of $29.7 million reflects fewer rural and
development real estate sales partially offset by higher lumber prices.
Total Adjusted EBITDDA - Q4 2023 to Q1 2024 Variance
Key Consolidated Highlights:
Total Adjusted EBITDDA decreased $11.0 million from Q4 2023
Timberlands Adjusted EBITDDA increased primarily due to lower log and haul costs and seasonally lower forest management costs Wood Products Adjusted EBITDDA increased primarily due to higher lumber prices
Real Estate Adjusted EBITDDA decreased due to fewer rural and development real estate closings
Note: Total Adjusted EBITDDA is a non-GAAP measure. See appendix for definition and reconciliation. | 4 |
TI MBERLANDS RESULTS
Q1 2024 Timberlands Adjusted EBITDDA of $34.7 million reflects lower logging, hauling, and forest management costs partially offset by lower Northern sawlog prices.
Timberlands Adjusted EBITDDA - Q4 2023 to Q1 2024 Variance
Key Timberlands Highlights:
Timberlands Adjusted EBITDDA increased $1.4 million from Q4 2023
Northern sawlog prices decreased 5% primarily due to seasonally heavier logs
Southern sawlog prices decreased 3% on seasonally lower mix of hardwood volumes and smaller diameter logs
Lower log and haul costs were primarily driven by decreased fuel costs and shorter haul distances
Forest management costs decreased due to seasonally lower activity
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TI MBERLANDS RESULTS
NORTHERN REGI ON
Northern Sawlog Pricing and Volume | Northern Pulpwood Pricing and Volume | ||||||||||||||||||||||
$250 | 500 | $60 | |||||||||||||||||||||
$200 | 400 | $50 | |||||||||||||||||||||
327 | |||||||||||||||||||||||
$40 | |||||||||||||||||||||||
$150 | 300 | $35 | |||||||||||||||||||||
PriceTon$ / | Volume:(thousands)Tons | Price:Ton$ / | $30 | Volume:(thousands)Tons | |||||||||||||||||||
$100 | $103 | 200 | $20 | ||||||||||||||||||||
$50 | 100 | $10 | 2 | ||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q 1 | Q 2 | Q 3 | Q 4 | Q 1 | Q 2 | Q 3 | Q 4 | Q 1 | ||||||
2022 | 2023 | 2024 | 2 0 2 2 | 2 0 2 3 | 2 0 2 4 |
Northern Timberlands Adjusted EBITDDA ($ in millions) | Northern Timberlands - Key Results |
$60
$50
$40
$30
$20 | $11.1 | ||||||||||||||
$10 | |||||||||||||||
Q 1 | Q 2 | Q 3 | Q 4 | Q 1 | Q 2 | Q 3 | Q 4 | Q | 1 | ||||||
2 0 2 2 | 2 0 2 3 | 2 0 | 2 4 | ||||||||||||
($ in millions except per ton amounts) | Q4 2023 | Q1 2024 | Change | |||||
Revenues | $ | 36.4 | $ | 34.2 | $ | (2.2) | ||
Adjusted EBITDDA | $ | 10.1 | $ | 11.1 | $ | 1.0 | ||
Margin (%) | 27.7 | % | 32.5 | % | 4.8 pts | |||
Sawlog harvest volume ('000 tons) | 328 | 327 | (1) | |||||
Sawlog price ($ / ton) | $ | 109 | $ | 103 | $ | (6) | ||
Pulpwood harvest volume ('000 tons) | 4 | 2 | (2) | |||||
Pulpwood price ($ / ton) | $ | 39 | $ | 35 | $ | (4) |
Volumes include tonnage harvested from company-owned fee land, while pricing data includes revenue generated from both company-owned fee land and non-fee stumpage purchased from third parties.
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TI MBERLANDS RESULTS | |||||||||||||||||||||||||||
SOUTHERN REGI ON | |||||||||||||||||||||||||||
Southern Sawlog Pricing and Volume | Southern Pulpwood Pricing and Volume | ||||||||||||||||||||||||||
655 | 700 | $35 | 700 | ||||||||||||||||||||||||
$50 | $31 | ||||||||||||||||||||||||||
$48 | 600 | TonsVolume:(thousands) | $30 | 600 | TonsVolume:(thousands) | ||||||||||||||||||||||
505 | |||||||||||||||||||||||||||
Price$ / Ton | $10 | Price:$ / Ton | $5 | 100 | |||||||||||||||||||||||
100 | |||||||||||||||||||||||||||
$40 | 500 | $25 | 500 | ||||||||||||||||||||||||
$30 | 400 | $20 | 400 | ||||||||||||||||||||||||
$20 | 300 | $15 | 300 | ||||||||||||||||||||||||
200 | $10 | 200 | |||||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | ||||||||||
2022 | 2023 | 2024 | 2022 | 2023 | 2024 | ||||||||||||||||||||||
Southern Timberlands Adjusted EBITDDA ($ in millions) | Southern Timberlands - Key Results | ||||||||||||||||||||||||||
$30 | ($ in millions except per ton amounts) | Q4 2023 | Q1 2024 | Change | |||||||||||||||||||||||
$23.6 | Revenues | $ | 61.0 | $ | 58.8 | $ | (2.2) | ||||||||||||||||||||
$25 | |||||||||||||||||||||||||||
Adjusted EBITDDA | $ | 23.2 | $ | 23.6 | $ | 0.4 | |||||||||||||||||||||
$20 | Margin (%) | 38.0 | % | 40.1 | % | 2.1 | pts | ||||||||||||||||||||
$15 | Sawlog harvest volume ('000 tons) | 622 | 655 | 33 | |||||||||||||||||||||||
$10 | Sawlog price ($ / ton) | $ | 49 | $ | 48 | $ | (1) | ||||||||||||||||||||
Pulpwood harvest volume ('000 tons) | 619 | 505 | (114) | ||||||||||||||||||||||||
$5 | |||||||||||||||||||||||||||
Pulpwood price ($ / ton) | $ | 31 | $ | 31 | $ | - | |||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | Stumpage harvest volume ('000 tons) | 413 | 434 | 21 | |||||||||||||||
Stumpage price ($ / ton) | $ | 16 | $ | 18 | $ | 2 | |||||||||||||||||||||
2022 | 2023 | 2024 |
Volumes include tonnage harvested from company-owned fee land, while pricing data includes revenue generated from both company-owned fee land and non-fee stumpage purchased from third parties.
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W OOD PRODUCTS RESULTS
Wood Products Adjusted EBITDDA in Q1 2024 increased primarily due to higher lumber prices and lower manufacturing costs. Lumber shipments of 271 MMBF marks the Company's second-largest Q1 shipment volume on record.
Wood Products Adjusted EBITDDA - Q4 2023 to Q1 2024 Variance
Lumber
Key Wood Products Highlights:
Wood Products Adjusted EBITDDA increased $6.4 million from Q4 2023
Average lumber price increased 4% to $430 per thousand board feet (MBF) in Q1 2024
Lumber production increased in Q1 2024 leading to improved fixed cost absorption
Lumber inventory charges were $2.3 million lower compared to Q4 2023
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W OOD PRODUCTS
RESULTS
Lumber Pricing and Shipments
$1,200 | 400 | |||||||||||||||||||||
$1,000 | 350 | |||||||||||||||||||||
271 | 300 | |||||||||||||||||||||
Price:$/ MBF | $800 | Shipments(MMBF) | ||||||||||||||||||||
250 | ||||||||||||||||||||||
$600 | 200 | |||||||||||||||||||||
$400 | $430 | 150 | ||||||||||||||||||||
$200 | 100 | |||||||||||||||||||||
50 | ||||||||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | ||||||||||||||
2022 | 2023 | 2024 | ||||||||||||||||||||
Wood Products Adjusted EBITDDA ($ in millions)
$190
$140
$90 | |||||||||||||||||
$40 | $(0.1) | ||||||||||||||||
Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | Q1 | |||||||||
2022 | 2023 | 2024 |
Wood Products - Key Results
($ in millions except per MBF amounts) | Q4 2023 | Q1 2024 | Change | ||||
Revenues | $ | 150.1 | $ | 148.6 | $ | (1.5) | |
Adjusted EBITDDA | $ | (6.5) | $ | (0.1) | $ | 6.4 | |
Margin (%) | (4.3) % | - % | 4.3 | pts | |||
Lumber shipment volume (MMBF) | 285 | 271 | (14) | ||||
Lumber price ($ / MBF) | $ | 415 | $ | 430 | $ | 15 |
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REAL ESTATE RESULTS
Real Estate Adjusted EBITDDA decreased in Q1 2024 primarily due to fewer rural land sales and no commercial sales in Chenal Valley. We expect to close on the sale of 34,000 acres of rural timberland in the South in Q2 2024 for approximately $58 million.
Real Estate Adjusted EBITDDA - Q4 2023 to Q1 2024 Variance
Key Real Estate Highlights:
Real Estate Adjusted EBITDDA decreased $15.7 million from Q4 2023
Real Estate - Rural: | Real Estate - Development: |
Sold 1,801 acres | Sold 24 residential lots |
Average price $3,069 / acre | Average price of $119,750 / lot |
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PotlatchDeltic Corporation published this content on 29 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 May 2024 17:16:08 UTC.
