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Deltic Timber 8-K 2011

Documents found in this filing:

  1. 8-K
  2. Ex-99.1
  3. Graphic
  4. Graphic
Press Release

Exhibit 99.1

LOGO

 

FOR RELEASE    April 25, 2011          CONTACT:    Kenneth D. Mann
               Investor Relations
               (870) 881-6432

Deltic Announces Preliminary First Quarter 2011 Results

EL DORADO, AR – President and Chief Executive Officer, Ray C. Dillon, of Deltic Timber Corporation (NYSE-DEL) announced today preliminary net income for the first quarter of 2011 was $.1 million, $.01 a share, compared to net income of $2.3 million, $.18 a share, a year ago. The decrease in 2011’s first quarter results was due primarily to a lower average lumber sales realization when compared to the first quarter of 2010. Lumber prices in 2010 benefitted from a supply-side driven price increase primarily caused by a sawmill log supply shortage due to inclement weather in the southeast portion of the U.S. Net cash required by operating activities was $1.2 million for the first quarter of 2011, which compares to net cash provided of $4.4 million a year ago.

Commenting on results, Mr. Dillon stated, “While first quarter earnings were lower when compared to a year ago, I am pleased to report profitable financial results for the eighth consecutive quarter. This was achieved despite the continued depressed economic conditions for the forest and building products and residential and commercial real estate development businesses. We remained profitable even with persistent record-low prices for pine sawtimber, lack of the usual spring building-season benefit to lumber prices, continuation of a depressed residential real estate market, and absence of a commercial acreage real estate sale. The positive results are attributable to our diverse asset base and intensive, cost-conscious management of all of our operations.”

Operating income for Deltic’s Woodlands segment was $4.7 million in the first quarter of 2011, a decrease of $.4 million when compared to $5.1 million for the same period a year ago. The Company harvested 146,089 tons of pine sawtimber in 2011’s first quarter, a slight decrease from the first quarter of 2010’s harvest of 146,488 tons, due to timing of the planned annual harvest for 2011. The average per-ton sales price for pine sawtimber was $26 for both periods. Pine pulpwood harvested in 2011’s first


quarter totaled 125,467 tons at a sales price of $8 per ton, which compares to 79,379 tons harvested at $16 per ton for the same period of 2010. Pulpwood prices in the first quarter of 2010 also benefitted from the inclement weather, which hampered logging conditions. Oil and gas lease rentals and net royalty income totaled $1.6 million during the first quarter of 2011 compared to $1.4 million for the same quarter of 2010. During the current quarter, the Company sold approximately 307 acres of timberland, consisting mostly of non-strategic recreational-use hardwood bottomland, at an average sales price of $1,400 per acre versus 2010’s first quarter sales of 232 acres at an average sales price of $1,600 per acre.

Deltic’s Mills segment reported operating income of $.7 million in the first quarter of 2011, which compares to $2.5 million for the same period of 2010. The decrease was due to a lower current-quarter average lumber sales price of $266 per thousand board feet, which was a reduction of $44 per thousand board feet, or 14 percent, from the first quarter of 2010’s average sales price. Lumber sales volume of 62.5 million board feet in 2011’s first quarter decreased 1.2 million board feet when compared to 63.7 million board feet sold in the first quarter a year ago. The Company’s operating plan for its sawmills is to continue matching lumber production with market demand.

The Company’s Real Estate segment reported an operating loss of $.8 million in the first quarter of 2011 compared to a $.7 million loss for the same period of 2010. Residential lot sales totaled three lots in 2011’s current period compared to six lots sold in the same period of 2010. The current quarter’s average per-lot sales price was $85,300, a $44,300 per-lot decrease when compared to 2010’s first quarter average price of $129,600 per lot, which was due to the mix of lots sold. There were no sales of commercial real estate acreage in the first quarter of either year.

Corporate operating expense was $4 million in the first quarter of 2011, which compares to $3.5 million for the corresponding period of 2010. The increase is due to higher general and administrative expenses, mainly employee incentive plan expense related to equity awards resulting from recent increases in the Company’s share price. Deltic’s equity in earnings of Del-Tin Fiber was $.5 million for the first quarter of both 2011 and 2010. Income taxes in the current-year period were $.1 million compared to $1.1 million in the prior year primarily due to lower pretax income. The effective tax rate in the first quarter of 2011 was 40 percent. Whereas, the 2010 effective tax rate was 33 percent due to benefits from permanent tax differences and a discrete state tax benefit.


Capital expenditures were $4 million for the first quarter of 2011, while expenditures for the same period of 2010 were $2.8 million.

Regarding the outlook for the second quarter and year of 2011, Mr. Dillon stated, “Currently, we anticipate the pine sawtimber harvest to be 150,000 to 175,000 tons and 550,000 to 600,000 tons, respectively. Finished lumber production and sales volumes are estimated at 60 to 70 million board feet for the second quarter and 230 to 270 million board feet for the year, depending upon market conditions. Residential lot sales are projected at 5 to 10 lots and 20 to 40 lots for the second quarter and year of 2011, respectively. Although commercial acreage within Chenal Valley continues to receive interest, because of its highly uncertain nature and the significant number of factors involved, the Company is unable to predict the closing of any commercial real estate transactions at this time.”

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, 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, 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.

Deltic will hold a conference call on Tuesday, April 26, 2011, at 10:00 a.m. Central Time to discuss the first quarter of 2011 earnings. Interested parties may participate in the call by dialing 1-888-396-2386 and referencing participant passcode identification number 92934212. The call will also be broadcast live over the Internet and can be accessed through the Investor Relations section of the Deltic website, at www.deltic.com. Online replays of the call will be available through the Deltic website, and a recording of the call will be available until Tuesday, May 3, 2011, by dialing 1-888-286-8010 and referencing replay passcode identification number 26704038.

Summary financial data and operating statistics for the first quarter of 2011 with comparisons to 2010 are contained in the following tables.


Deltic Timber Corporation

SEGMENT INFORMATION

(Preliminary and Unaudited)

(Millions of dollars)

 

     Three Months Ended
March 31, 2011
    Three Months Ended
March 31, 2010
 
     Net
Sales
    Operating
Income/
(Loss)
    Net
Sales
    Operating
Income/
(Loss)
 

Woodlands

   $ 10.0        4.7        9.0        5.1   

Mills

     21.6        0.7        24.6        2.5   

Real Estate

     1.7        (0.8     2.3        (0.7

Corporate

     —          (4.0     —          (3.5

Eliminations

     (3.9     —          (4.0     0.3   
                                

Total net sales/operating income

   $ 29.4        0.6        31.9        3.7   
                                


Deltic Timber Corporation

CONSOLIDATED STATEMENTS OF INCOME

(Preliminary and Unaudited)

(Thousands of dollars, except per share amounts)

 

     Three Months Ended
March  31,
 
     2011     2010  

Net sales

   $ 29,395        31,935   
                

Costs and expenses

    

Cost of sales

     21,337        21,464   

Depreciation, amortization, and cost of fee timber harvested

     3,162        3,049   

General and administrative expenses

     4,346        3,763   
                

Total costs and expenses

     28,845        28,276   
                

Operating income

     550        3,659   

Equity in earnings of Del-Tin Fiber

     537        488   

Interest income

     7        98   

Interest and other debt expense

     (965     (913

Interest capitalized

     23        16   

Other income

     3        2   
                

Income before income taxes

     155        3,350   

Income taxes

     (63     (1,097
                

Net income

   $ 92        2,253   
                

Earnings per common share

    

Basic

   $ 0.01        .18   

Assuming dilution

   $ 0.01        .18   

Dividends per common share paid

   $ 0.075        0.075   

Average common shares outstanding (thousands)

    

Basic

     12,409        12,349   

Assuming dilution

     12,509        12,396   


Deltic Timber Corporation

CONSOLIDATED BALANCE SHEETS

(Preliminary and Unaudited)

(Thousands of dollars)

 

     Mar. 31,     Dec. 31,  
     2011     2010  

Assets

    

Current assets

    

Cash and cash equivalents

   $ 2,876        3,831   

Trade accounts receivable - net

     5,595        4,604   

Other receivables

     60        98   

Inventories

     6,359        6,061   

Prepaid expenses and other current assets

     4,643        3,593   
                

Total current assets

     19,533        18,187   
                

Investment in real estate held for development and sale

     56,130        56,101   

Investment in Del-Tin Fiber

     8,508        8,249   

Other investments and noncurrent receivables

     478        479   

Timber and timberlands - net

     227,632        226,090   

Property, plant, and equipment - net

     32,132        32,557   

Deferred charges and other assets

     2,498        1,610   
                

Total assets

   $ 346,911        343,273   
                

Liabilities and Stockholders’ Equity

    

Current liabilities

    

Trade accounts payable

   $ 3,203        2,395   

Current maturities of long-term debt

     1,111        1,111   

Accrued taxes other than income taxes

     2,404        1,986   

Income taxes payable

     —          13   

Deferred revenues and other accrued liabilities

     7,512        10,162   
                

Total current liabilities

     14,230        15,667   
                

Long-term debt

     70,111        65,611   

Deferred tax liabilities - net

     5,374        5,345   

Other noncurrent liabilities

     26,411        26,639   

Commitments and contingencies

     —          —     

Stockholders’ equity

    

Common stock, 12,813,879 shares issued

     128        128   

Capital in excess of par value

     78,639        79,081   

Retained earnings

     163,437        164,286   

Treasury stock, 248,832 and 308,846 shares held, respectively

     (8,688     (10,758

Accumulated other comprehensive loss

     (2,731     (2,726
                

Total stockholders’ equity

     230,785        230,011   
                

Total liabilities and stockholders’ equity

   $ 346,911        343,273   
                


Deltic Timber Corporation

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Preliminary and Unaudited)

(Thousands of dollars)

 

     Three Months Ended
March 31,
 
     2011     2010  

Operating activities

    

Net income

   $ 92        2,253   

Adjustments to reconcile net income to net cash provided by operating activities:

    

Depreciation, amortization, and cost of fee timber harvested

     3,162        3,049   

Deferred income taxes

     39        356   

Real estate development capital expenditures

     (298     (394

Real estate costs recovered upon sale

     130        415   

Timberland costs recovered upon sale

     142        99   

Equity in earnings of Del-Tin Fiber

     (537     (488

Stock-based compensation expense

     507        480   

Net increase in liabilities for pension and other postretirement benefits

     147        246   

Net decrease in deferred compensation for stock-based liabilities

     (694     (625

Increase in operating working capital other than cash and cash equivalents

     (3,805     (817

Other changes in assets and liabilities

     (120     (217
                

Net cash provided/(required) by operating activities

     (1,235     4,357   
                

Investing activities

    

Capital expenditures, excluding real estate development

     (2,822     (2,438

Net change in purchased stumpage inventory

     (770     (453

Advances to Del-Tin Fiber

     (597     (677

Repayments from Del-Tin Fiber

     875        690   

Net change in funds held by trustee

     —          (25

Other - net

     170        142   
                

Net cash required by investing activities

     (3,144     (2,761
                

Financing activities

    

Proceeds from borrowings

     5,500        —     

Repayments of notes payable and long-term debt

     (1,000     —     

Treasury stock purchases

     (55     (26

Common stock dividends paid

     (941     (937

Proceeds from stock option exercises

     646        154   

Excess tax benefits from stock-based compensation

     498        60   

Deferred financing costs

     (1,094     —     

Other - net

     (130     (78
                

Net cash provided/(required) by financing activities

     3,424        (827
                

Net increase/(decrease) in cash and cash equivalents

     (955     769   

Cash and cash equivalents at January 1

     3,831        4,783   
                

Cash and cash equivalents at March 31

   $ 2,876        5,552   
                


Deltic Timber Corporation

OTHER DATA

(Preliminary and Unaudited)

 

     Three Months Ended
March 31,
 
(Thousands of dollars)    2011      2010  

Capital expenditures

     

Woodlands

   $ 2,351         1,423   

Mills

     1,232         825   

Real Estate (includes development expenditures)

     323         535   

Corporate

     70         49   
                 

Total capital expenditures

   $ 3,976         2,832   
                 

Woodlands

     

Pine sawtimber harvested from fee lands - tons

     146,089         146,488   

Pine sawtimber price - per ton

   $ 26         26   

Timberland sales - acres

     307         232   

Timberland sales price - per acre

   $ 1,358         1,587   

Mills

     

Finished lumber sales - thousands of board feet

     62,456         63,730   

Finished lumber price - per thousand board feet

   $ 266         310   

Real Estate

     

Residential

     

Lots sold

     3         6   

Average sales price - per lot

   $ 85,300         129,600   
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