Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries PotlatchDeltic Corporation Reports Third Quarter 2023 Results By: PotlatchDeltic Corporation via Business Wire October 30, 2023 at 16:10 PM EDT PotlatchDeltic Corporation (Nasdaq: PCH) today reported net income of $23.7 million, or $0.29 per diluted share, on revenues of $265.5 million for the quarter ended September 30, 2023. Excluding an after-tax gain on insurance recoveries, adjusted net income was $11.4 million, or $0.14 per diluted share for the third quarter of 2023. Net income was $46.0 million, or $0.64 per diluted share, on revenues of $306.7 million for the quarter ended September 30, 2022. Excluding an after-tax gain on insurance recoveries and CatchMark merger-related expenses, adjusted net income was $53.2 million, or $0.74 per diluted share, for the third quarter of 2022. Third Quarter 2023 Highlights Generated Total Adjusted EBITDDA of $56.3 million and Total Adjusted EBITDDA margin of 21.2% Repurchased 283,000 shares for $12.7 million, or $45 per share Maintained strong liquidity position of $602 million as of September 30, 2023 “Our third quarter 2023 results reflect improved financial performance across all of our business segments,” said Eric Cremers, president and chief executive officer. “Each of our teams delivered solid results amid the backdrop of higher interest rates and an uncertain macroeconomic environment. During the third quarter, we continued to focus on strategically deploying our capital including returning $49 million to shareholders in the form of dividends and share repurchases. We remain positive on long-term housing-related fundamentals that drive demand in our business. Our balance sheet and liquidity remains strong, providing flexibility to navigate the current economic environment and grow shareholder value over the long-term," stated Mr. Cremers. Financial Highlights ($ in millions, except per share data) Q3 2023 Q2 2023 Q3 2022 Revenues $ 265.5 $ 246.1 $ 306.7 Net income $ 23.7 $ 22.3 $ 46.0 Weighted average shares outstanding, diluted (in thousands) 80,379 80,416 71,623 Net income per diluted share $ 0.29 $ 0.28 $ 0.64 Adjusted Net Income1 $ 11.4 $ 5.2 $ 53.2 Adjusted Net Income per diluted share1 $ 0.14 $ 0.06 $ 0.74 Total Adjusted EBITDDA1 $ 56.3 $ 45.5 $ 101.1 Total Adjusted EBITDDA Margin1 21.2 % 18.5 % 33.0 % Dividends per share2 $ 0.45 $ 0.45 $ 0.44 Net cash from operations $ 41.0 $ 37.2 $ 80.3 Cash and cash equivalents $ 302.8 $ 331.2 $ 484.0 1 Adjusted Net Income, Adjusted Net Income per diluted share, Total Adjusted EBITDDA and Total Adjusted EBITDDA Margin are non-GAAP measures. Refer to "Non-GAAP Measures" and "Non-GAAP Reconciliations" below for more information and reconciliations to GAAP, where applicable. 2 The regular dividend was increased 2.3% to $0.45 per quarter in Q4 2022. Business Performance: Q3 2023 vs. Q2 2023 Timberlands Third Quarter 2023 Highlights Timberlands Adjusted EBITDDA increased $12.6 million from Q2 2023 Northern and Southern harvest volumes increased seasonally Northern sawlog prices increased 12% primarily due to higher indexed sawlog prices Southern sawlog and pulpwood prices were stable ($ in millions) Q3 2023 Q2 2023 $ Change Timberlands Revenues $ 109.8 $ 88.7 $ 21.1 Timberlands Adjusted EBITDDA1 $ 42.0 $ 29.4 $ 12.6 1 Refer to "Segment Information" below for additional information. Wood Products Third Quarter 2023 Highlights Wood Products Adjusted EBITDDA increased $3.2 million from Q2 2023 Average lumber price increased 1% to $481 per MBF, or thousand board feet, in Q3 2023 Per-unit log costs decreased on lower log costs and improved recoveries ($ in millions) Q3 2023 Q2 2023 $ Change Wood Products Revenues $ 165.1 $ 167.7 $ (2.6 ) Wood Products Adjusted EBITDDA1 $ 15.1 $ 11.9 $ 3.2 1 Refer to "Segment Information" below for additional information. Real Estate Third Quarter 2023 Highlights Real Estate Adjusted EBITDDA increased $2.0 million from Q2 2023 Sold 3,275 acres of rural land at an average price of $3,546 / acre Sold 32 residential lots at an average price of $89,122 / lot Sold 1 commercial lot for $1.4 million, or $972,222 / acre ($ in millions) Q3 2023 Q2 2023 $ Change Real Estate Revenues $ 19.2 $ 17.0 $ 2.2 Real Estate Adjusted EBITDDA1 $ 14.2 $ 12.2 $ 2.0 1 Refer to "Segment Information" below for additional information. Non-GAAP Measures This press release includes certain financial measures that are not in accordance with accounting principles generally accepted in the United States (GAAP). Management believes that these non-GAAP measures, when read in conjunction with our GAAP financial statements, provide useful information to investors and other interested parties as described below. The presentation of these non-GAAP financial measures should be considered only as supplemental to, are not intended to be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may not be the same as or comparable to other similarly titled non-GAAP measures presented by other companies due to potential inconsistencies in methods of calculation. Adjusted Net Income and Adjusted Net Income per diluted share are non-GAAP measures that represent GAAP net income and GAAP net income per diluted share before certain items, net of tax, that management believes impact the ability to compare the performance of our business, either period-over-period or with other businesses. Total Adjusted EBITDDA and Total Adjusted EBITDDA Margin are non-GAAP measures that remove the impact of specific items that management believes do not directly reflect the core business operations on an ongoing basis and can be used to evaluate the operational performance of assets under management. We define Total Adjusted EBITDDA Margin as Total Adjusted EBITDDA divided by Revenues. Reconciliations of Total Adjusted EBITDDA, Adjusted Net Income and Adjusted Net Income per diluted share to their most comparable GAAP measures are set forth in the accompanying “Non-GAAP Reconciliations” at the end of this release. Conference Call Information A live conference call and webcast will be held Tuesday, October 31, 2023, at 9:00 a.m. Pacific Time (12:00 p.m. Eastern Time). Investors may access the webcast at www.potlatchdeltic.com by clicking on the Investors link or by conference call at 1-888-510-2008 for U.S./Canada and 1-646-960-0306 for international callers. Participants will be asked to provide conference I.D. number 7281983. Supplemental materials that will be discussed during the call are available on the above website. A replay of the conference call will be available two hours following the call until November 7, 2023 by calling 1-800-770-2030 for U.S./Canada or 1-647-362-9199 for international callers. Callers must enter conference I.D. number 7281983 to access the replay. About PotlatchDeltic PotlatchDeltic Corporation (Nasdaq: PCH) is a leading Real Estate Investment Trust (REIT) that owns nearly 2.2 million acres of timberlands in Alabama, Arkansas, Georgia, Idaho, Louisiana, Mississippi and South Carolina. Through its taxable REIT subsidiary, the company also operates six sawmills, an industrial-grade plywood mill, a residential and commercial real estate development business and a rural timberland sales program. PotlatchDeltic, a leader in sustainable forest management, is committed to environmental and social responsibility and to responsible governance. More information can be found at www.potlatchdeltic.com. Forward-Looking Statements This press release 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; long-term housing market fundamentals; disciplined and opportunistic capital allocation strategy; and similar matters. Words such as “over the long term,” 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; 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 disruptions; share price; the successful execution of the company’s strategic plans; 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. PotlatchDeltic Corporation Condensed Consolidated Statements of Operations Unaudited Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, (in thousands, except per share amounts) 2023 2023 2022 2023 2022 Revenues $ 265,509 $ 246,101 $ 306,693 $ 769,572 $ 1,077,640 Costs and expenses: Cost of goods sold 226,303 215,063 220,876 665,716 592,057 Selling, general and administrative expenses 19,303 17,585 18,878 55,118 55,584 CatchMark merger-related expenses — 244 26,007 2,453 26,007 Gain on fire damage (16,326 ) (23,110 ) (24,913 ) (39,436 ) (34,505 ) 229,280 209,782 240,848 683,851 639,143 Operating income 36,229 36,319 65,845 85,721 438,497 Interest expense, net (7,971 ) (7,613 ) (8,280 ) (15,783 ) (18,593 ) Pension settlement charge — — — — (14,165 ) Non-operating pension and other postretirement employee benefit costs (228 ) (229 ) (1,808 ) (685 ) (5,546 ) Other 370 258 (1 ) 638 (1 ) Income before income taxes 28,400 28,735 55,756 69,891 400,192 Income taxes (4,725 ) (6,429 ) (9,801 ) (7,650 ) (70,135 ) Net income $ 23,675 $ 22,306 $ 45,955 $ 62,241 $ 330,057 Net income per share: Basic $ 0.30 $ 0.28 $ 0.64 $ 0.78 $ 4.70 Diluted $ 0.29 $ 0.28 $ 0.64 $ 0.78 $ 4.69 Dividends per share $ 0.45 $ 0.45 $ 0.44 $ 1.35 $ 1.32 Weighted-average shares outstanding: Basic 80,132 80,145 71,486 80,102 70,171 Diluted 80,379 80,416 71,632 80,279 70,308 PotlatchDeltic Corporation Condensed Consolidated Balance Sheets Unaudited (in thousands, except per share amounts) September 30, 2023 December 31, 2022 ASSETS Current assets: Cash and cash equivalents $ 302,799 $ 343,809 Customer receivables, net 30,762 22,813 Inventories, net 82,537 67,958 Other current assets 56,606 36,955 Total current assets 472,704 471,535 Property, plant and equipment, net 334,350 318,184 Investment in real estate held for development and sale 55,928 55,490 Timber and timberlands, net 2,459,508 2,508,372 Intangible assets, net 16,085 17,420 Other long-term assets 209,703 179,554 Total assets $ 3,548,278 $ 3,550,555 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities $ 115,334 $ 94,861 Current portion of long-term debt 39,996 39,979 Current portion of pension and other postretirement employee benefits 4,926 4,926 Total current liabilities 160,256 139,766 Long-term debt 993,562 992,701 Pension and other postretirement employee benefits 80,581 77,396 Deferred tax liabilities, net 38,419 41,790 Other long-term obligations 36,363 35,749 Total liabilities 1,309,181 1,287,402 Commitments and contingencies Stockholders' equity: Common stock, $1 par value, 200,000 and 100,000 shares authorized and 79,628 and 79,683 shares issued and outstanding 79,628 79,683 Additional paid-in capital 2,301,301 2,294,797 Accumulated deficit (267,725 ) (208,979 ) Accumulated other comprehensive income 125,893 97,652 Total stockholders’ equity 2,239,097 2,263,153 Total liabilities and stockholders' equity $ 3,548,278 $ 3,550,555 PotlatchDeltic Corporation Condensed Consolidated Statements of Cash Flows Unaudited Three Months Ended Nine Months Ended (in thousands) September 30, 2023 June 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 23,675 $ 22,306 $ 45,955 $ 62,241 $ 330,057 Adjustments to reconcile net income to net cash from operating activities: Depreciation, depletion and amortization 30,658 27,496 27,707 90,327 67,960 Basis of real estate sold 6,109 4,884 6,845 21,624 25,024 Change in deferred taxes (1,764 ) (2,609 ) 730 (3,979 ) (1,359 ) Pension and other postretirement employee benefits 1,610 1,612 3,539 4,833 10,936 Pension settlement charge — — — — 14,165 Equity-based compensation expense 2,616 1,577 11,717 6,472 16,141 Gain on fire damage (16,326 ) (23,110 ) (24,913 ) (39,436 ) (34,505 ) Interest received under swaps with other-than-insignificant financing element (6,884 ) (6,313 ) — (18,651 ) — Other, net 1,792 1,911 144 5,648 (455 ) Change in working capital and operating-related activities, net (9,773 ) 2,871 (5,901 ) (24,107 ) 14,071 Real estate development expenditures (2,939 ) (1,896 ) (1,796 ) (7,243 ) (6,986 ) Funding of pension and other postretirement employee benefits 128 (1,217 ) (1,026 ) (2,176 ) (3,290 ) Proceeds from insurance recoveries 12,049 9,706 17,250 21,755 26,678 Net cash from operating activities 40,951 37,218 80,251 117,308 458,437 CASH FLOWS FROM INVESTING ACTIVITIES Property, plant and equipment additions (17,933 ) (5,880 ) (7,223 ) (28,068 ) (44,000 ) Timberlands reforestation and roads (6,299 ) (4,596 ) (3,832 ) (17,013 ) (12,220 ) Acquisition of timber and timberlands (55 ) (1,621 ) (53,863 ) (1,676 ) (96,081 ) Proceeds from property insurance 1,356 — — 1,356 — Cash acquired in CatchMark merger — — 23,571 — 23,571 Interest received under swaps with other-than-insignificant financing element 6,375 5,849 — 17,279 — Other, net 36 242 2,318 700 935 Net cash from investing activities (16,520 ) (6,006 ) (39,029 ) (27,422 ) (127,795 ) CASH FLOWS FROM FINANCING ACTIVITIES Distributions to common stockholders (35,960 ) (35,958 ) (35,530 ) (107,880 ) (96,578 ) Repurchase of common stock (11,012 ) (394 ) (371 ) (11,406 ) (4,527 ) Proceeds from issuance of long-term debt — — 277,500 — 277,500 Repayment of long-term debt — — (300,000 ) — (303,000 ) Other, net (360 ) (1,117 ) (4,026 ) (2,315 ) (6,120 ) Net cash from financing activities (47,332 ) (37,469 ) (62,427 ) (121,601 ) (132,725 ) Change in cash, cash equivalents and restricted cash (22,901 ) (6,257 ) (21,205 ) (31,715 ) 197,917 Cash, cash equivalents and restricted cash, beginning 336,777 343,034 515,894 345,591 296,772 Cash, cash equivalents and restricted cash, ending1 $ 313,876 $ 336,777 $ 494,689 $ 313,876 $ 494,689 1 Includes $11.1 million, $5.6 million and $10.7 million at September 30, 2023, June 30, 2023 and September 30, 2022, respectively, that were or are intended to be reinvested in timber and timberlands and classified as restricted cash in Other current and long-term assets in the Condensed Consolidated Balance Sheets. PotlatchDeltic Corporation Segment Information Unaudited Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, (in thousands) 2023 2023 2022 2023 2022 Revenues Timberlands $ 109,808 $ 88,617 $ 134,576 $ 313,663 $ 363,719 Wood Products 165,108 167,669 193,431 485,572 755,806 Real Estate 19,152 17,064 19,008 60,079 79,809 294,068 273,350 347,015 859,314 1,199,334 Intersegment Timberlands revenues (28,559 ) (27,243 ) (40,322 ) (89,736 ) (121,694 ) Other intersegment revenues — (6 ) — (6 ) — Consolidated revenues $ 265,509 $ 246,101 $ 306,693 $ 769,572 $ 1,077,640 Adjusted EBITDDA1 Timberlands $ 42,062 $ 29,316 $ 64,482 $ 118,017 $ 198,806 Wood Products 15,039 11,967 31,258 26,975 288,465 Real Estate 14,165 12,237 14,140 45,867 66,080 Corporate (11,696 ) (10,521 ) (12,629 ) (32,958 ) (36,125 ) Eliminations and adjustments (3,292 ) 2,446 3,839 1,599 4,596 Total Adjusted EBITDDA 56,278 45,445 101,090 159,500 521,822 Interest expense, net2 (7,971 ) (7,613 ) (8,280 ) (15,783 ) (18,593 ) Depreciation, depletion and amortization (30,248 ) (27,087 ) (27,329 ) (89,099 ) (66,838 ) Basis of real estate sold (6,109 ) (4,884 ) (6,845 ) (21,624 ) (25,024 ) CatchMark merger-related expenses — (244 ) (26,007 ) (2,453 ) (26,007 ) Gain on fire damage 16,326 23,110 24,913 39,436 34,505 Pension settlement charge — — — — (14,165 ) Non-operating pension and other postretirement employee benefits (228 ) (229 ) (1,808 ) (685 ) (5,546 ) (Loss) gain on disposal of fixed assets (18 ) (21 ) 23 (39 ) 39 Other 370 258 (1 ) 638 (1 ) Income before income taxes $ 28,400 $ 28,735 $ 55,756 $ 69,891 $ 400,192 Depreciation, depletion and amortization Timberlands $ 19,267 $ 15,895 $ 16,963 $ 55,623 $ 40,687 Wood Products 10,740 10,948 10,069 32,723 25,226 Real Estate 120 121 175 397 518 Corporate 121 123 122 356 407 30,248 27,087 27,329 89,099 66,838 Bond discounts and deferred loan fees2 410 409 378 1,228 1,122 Total depreciation, depletion and amortization $ 30,658 $ 27,496 $ 27,707 $ 90,327 $ 67,960 Basis of real estate sold Real Estate $ 6,111 $ 4,887 $ 6,845 $ 21,629 $ 25,033 Eliminations and adjustments (2 ) (3 ) — (5 ) (9 ) Total basis of real estate sold $ 6,109 $ 4,884 $ 6,845 $ 21,624 $ 25,024 1 Management uses Adjusted EBITDDA to evaluate company and segment performance. See the reconciliation of Total Adjusted EBITDDA below. 2 Bond discounts and deferred loan fees are included in interest expense, net in the Condensed Consolidated Statements of Operations. PotlatchDeltic Corporation Non-GAAP Reconciliations Unaudited Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, (in thousands, except per share amount) 2023 2023 2022 2023 2022 Total Adjusted EBITDDA1 Net income (GAAP) $ 23,675 $ 22,306 $ 45,955 $ 62,241 $ 330,057 Interest expense, net 7,971 7,613 8,280 15,783 18,593 Income taxes 4,725 6,429 9,801 7,650 70,135 Depreciation, depletion and amortization 30,248 27,087 27,329 89,099 66,838 Basis of real estate sold 6,109 4,884 6,845 21,624 25,024 CatchMark merger-related expenses — 244 26,007 2,453 26,007 Gain on fire damage (16,326 ) (23,110 ) (24,913 ) (39,436 ) (34,505 ) Pension settlement charge — — — — 14,165 Non-operating pension and other postretirement benefit costs 228 229 1,808 685 5,546 Loss (gain) on disposal of fixed assets 18 21 (23 ) 39 (39 ) Other (370 ) (258 ) 1 (638 ) 1 Total Adjusted EBITDDA $ 56,278 $ 45,445 $ 101,090 $ 159,500 $ 521,822 Adjusted Net Income1 Net income (GAAP) $ 23,675 $ 22,306 $ 45,955 $ 62,241 $ 330,057 Special items after tax: CatchMark merger-related expenses — 244 25,823 2,453 25,823 Gain on fire damage (12,244 ) (17,333 ) (18,559 ) (29,577 ) (25,706 ) Pension settlement charge — — — — 10,553 Adjusted Net Income $ 11,431 $ 5,217 $ 53,219 $ 35,117 $ 340,727 Adjusted Net Income Per Diluted Share1 Net income per diluted share (GAAP) $ 0.29 $ 0.28 $ 0.64 $ 0.78 $ 4.69 Special items after tax: CatchMark merger-related expenses — — 0.36 0.03 0.37 Gain on fire damage (0.15 ) (0.22 ) (0.26 ) (0.37 ) (0.37 ) Pension settlement charge — — — — 0.15 Adjusted Net Income Per Diluted Share $ 0.14 $ 0.06 $ 0.74 $ 0.44 $ 4.84 1 See "Non-GAAP Measures" above for further details on management's use of these measures. View source version on businesswire.com: https://www.businesswire.com/news/home/20231030652243/en/Contacts Investors Wayne Wasechek 509.835.1521 Media Anna Torma 509.835.1558 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
PotlatchDeltic Corporation Reports Third Quarter 2023 Results By: PotlatchDeltic Corporation via Business Wire October 30, 2023 at 16:10 PM EDT PotlatchDeltic Corporation (Nasdaq: PCH) today reported net income of $23.7 million, or $0.29 per diluted share, on revenues of $265.5 million for the quarter ended September 30, 2023. Excluding an after-tax gain on insurance recoveries, adjusted net income was $11.4 million, or $0.14 per diluted share for the third quarter of 2023. Net income was $46.0 million, or $0.64 per diluted share, on revenues of $306.7 million for the quarter ended September 30, 2022. Excluding an after-tax gain on insurance recoveries and CatchMark merger-related expenses, adjusted net income was $53.2 million, or $0.74 per diluted share, for the third quarter of 2022. Third Quarter 2023 Highlights Generated Total Adjusted EBITDDA of $56.3 million and Total Adjusted EBITDDA margin of 21.2% Repurchased 283,000 shares for $12.7 million, or $45 per share Maintained strong liquidity position of $602 million as of September 30, 2023 “Our third quarter 2023 results reflect improved financial performance across all of our business segments,” said Eric Cremers, president and chief executive officer. “Each of our teams delivered solid results amid the backdrop of higher interest rates and an uncertain macroeconomic environment. During the third quarter, we continued to focus on strategically deploying our capital including returning $49 million to shareholders in the form of dividends and share repurchases. We remain positive on long-term housing-related fundamentals that drive demand in our business. Our balance sheet and liquidity remains strong, providing flexibility to navigate the current economic environment and grow shareholder value over the long-term," stated Mr. Cremers. Financial Highlights ($ in millions, except per share data) Q3 2023 Q2 2023 Q3 2022 Revenues $ 265.5 $ 246.1 $ 306.7 Net income $ 23.7 $ 22.3 $ 46.0 Weighted average shares outstanding, diluted (in thousands) 80,379 80,416 71,623 Net income per diluted share $ 0.29 $ 0.28 $ 0.64 Adjusted Net Income1 $ 11.4 $ 5.2 $ 53.2 Adjusted Net Income per diluted share1 $ 0.14 $ 0.06 $ 0.74 Total Adjusted EBITDDA1 $ 56.3 $ 45.5 $ 101.1 Total Adjusted EBITDDA Margin1 21.2 % 18.5 % 33.0 % Dividends per share2 $ 0.45 $ 0.45 $ 0.44 Net cash from operations $ 41.0 $ 37.2 $ 80.3 Cash and cash equivalents $ 302.8 $ 331.2 $ 484.0 1 Adjusted Net Income, Adjusted Net Income per diluted share, Total Adjusted EBITDDA and Total Adjusted EBITDDA Margin are non-GAAP measures. Refer to "Non-GAAP Measures" and "Non-GAAP Reconciliations" below for more information and reconciliations to GAAP, where applicable. 2 The regular dividend was increased 2.3% to $0.45 per quarter in Q4 2022. Business Performance: Q3 2023 vs. Q2 2023 Timberlands Third Quarter 2023 Highlights Timberlands Adjusted EBITDDA increased $12.6 million from Q2 2023 Northern and Southern harvest volumes increased seasonally Northern sawlog prices increased 12% primarily due to higher indexed sawlog prices Southern sawlog and pulpwood prices were stable ($ in millions) Q3 2023 Q2 2023 $ Change Timberlands Revenues $ 109.8 $ 88.7 $ 21.1 Timberlands Adjusted EBITDDA1 $ 42.0 $ 29.4 $ 12.6 1 Refer to "Segment Information" below for additional information. Wood Products Third Quarter 2023 Highlights Wood Products Adjusted EBITDDA increased $3.2 million from Q2 2023 Average lumber price increased 1% to $481 per MBF, or thousand board feet, in Q3 2023 Per-unit log costs decreased on lower log costs and improved recoveries ($ in millions) Q3 2023 Q2 2023 $ Change Wood Products Revenues $ 165.1 $ 167.7 $ (2.6 ) Wood Products Adjusted EBITDDA1 $ 15.1 $ 11.9 $ 3.2 1 Refer to "Segment Information" below for additional information. Real Estate Third Quarter 2023 Highlights Real Estate Adjusted EBITDDA increased $2.0 million from Q2 2023 Sold 3,275 acres of rural land at an average price of $3,546 / acre Sold 32 residential lots at an average price of $89,122 / lot Sold 1 commercial lot for $1.4 million, or $972,222 / acre ($ in millions) Q3 2023 Q2 2023 $ Change Real Estate Revenues $ 19.2 $ 17.0 $ 2.2 Real Estate Adjusted EBITDDA1 $ 14.2 $ 12.2 $ 2.0 1 Refer to "Segment Information" below for additional information. Non-GAAP Measures This press release includes certain financial measures that are not in accordance with accounting principles generally accepted in the United States (GAAP). Management believes that these non-GAAP measures, when read in conjunction with our GAAP financial statements, provide useful information to investors and other interested parties as described below. The presentation of these non-GAAP financial measures should be considered only as supplemental to, are not intended to be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may not be the same as or comparable to other similarly titled non-GAAP measures presented by other companies due to potential inconsistencies in methods of calculation. Adjusted Net Income and Adjusted Net Income per diluted share are non-GAAP measures that represent GAAP net income and GAAP net income per diluted share before certain items, net of tax, that management believes impact the ability to compare the performance of our business, either period-over-period or with other businesses. Total Adjusted EBITDDA and Total Adjusted EBITDDA Margin are non-GAAP measures that remove the impact of specific items that management believes do not directly reflect the core business operations on an ongoing basis and can be used to evaluate the operational performance of assets under management. We define Total Adjusted EBITDDA Margin as Total Adjusted EBITDDA divided by Revenues. Reconciliations of Total Adjusted EBITDDA, Adjusted Net Income and Adjusted Net Income per diluted share to their most comparable GAAP measures are set forth in the accompanying “Non-GAAP Reconciliations” at the end of this release. Conference Call Information A live conference call and webcast will be held Tuesday, October 31, 2023, at 9:00 a.m. Pacific Time (12:00 p.m. Eastern Time). Investors may access the webcast at www.potlatchdeltic.com by clicking on the Investors link or by conference call at 1-888-510-2008 for U.S./Canada and 1-646-960-0306 for international callers. Participants will be asked to provide conference I.D. number 7281983. Supplemental materials that will be discussed during the call are available on the above website. A replay of the conference call will be available two hours following the call until November 7, 2023 by calling 1-800-770-2030 for U.S./Canada or 1-647-362-9199 for international callers. Callers must enter conference I.D. number 7281983 to access the replay. About PotlatchDeltic PotlatchDeltic Corporation (Nasdaq: PCH) is a leading Real Estate Investment Trust (REIT) that owns nearly 2.2 million acres of timberlands in Alabama, Arkansas, Georgia, Idaho, Louisiana, Mississippi and South Carolina. Through its taxable REIT subsidiary, the company also operates six sawmills, an industrial-grade plywood mill, a residential and commercial real estate development business and a rural timberland sales program. PotlatchDeltic, a leader in sustainable forest management, is committed to environmental and social responsibility and to responsible governance. More information can be found at www.potlatchdeltic.com. Forward-Looking Statements This press release 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; long-term housing market fundamentals; disciplined and opportunistic capital allocation strategy; and similar matters. Words such as “over the long term,” 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; 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 disruptions; share price; the successful execution of the company’s strategic plans; 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. PotlatchDeltic Corporation Condensed Consolidated Statements of Operations Unaudited Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, (in thousands, except per share amounts) 2023 2023 2022 2023 2022 Revenues $ 265,509 $ 246,101 $ 306,693 $ 769,572 $ 1,077,640 Costs and expenses: Cost of goods sold 226,303 215,063 220,876 665,716 592,057 Selling, general and administrative expenses 19,303 17,585 18,878 55,118 55,584 CatchMark merger-related expenses — 244 26,007 2,453 26,007 Gain on fire damage (16,326 ) (23,110 ) (24,913 ) (39,436 ) (34,505 ) 229,280 209,782 240,848 683,851 639,143 Operating income 36,229 36,319 65,845 85,721 438,497 Interest expense, net (7,971 ) (7,613 ) (8,280 ) (15,783 ) (18,593 ) Pension settlement charge — — — — (14,165 ) Non-operating pension and other postretirement employee benefit costs (228 ) (229 ) (1,808 ) (685 ) (5,546 ) Other 370 258 (1 ) 638 (1 ) Income before income taxes 28,400 28,735 55,756 69,891 400,192 Income taxes (4,725 ) (6,429 ) (9,801 ) (7,650 ) (70,135 ) Net income $ 23,675 $ 22,306 $ 45,955 $ 62,241 $ 330,057 Net income per share: Basic $ 0.30 $ 0.28 $ 0.64 $ 0.78 $ 4.70 Diluted $ 0.29 $ 0.28 $ 0.64 $ 0.78 $ 4.69 Dividends per share $ 0.45 $ 0.45 $ 0.44 $ 1.35 $ 1.32 Weighted-average shares outstanding: Basic 80,132 80,145 71,486 80,102 70,171 Diluted 80,379 80,416 71,632 80,279 70,308 PotlatchDeltic Corporation Condensed Consolidated Balance Sheets Unaudited (in thousands, except per share amounts) September 30, 2023 December 31, 2022 ASSETS Current assets: Cash and cash equivalents $ 302,799 $ 343,809 Customer receivables, net 30,762 22,813 Inventories, net 82,537 67,958 Other current assets 56,606 36,955 Total current assets 472,704 471,535 Property, plant and equipment, net 334,350 318,184 Investment in real estate held for development and sale 55,928 55,490 Timber and timberlands, net 2,459,508 2,508,372 Intangible assets, net 16,085 17,420 Other long-term assets 209,703 179,554 Total assets $ 3,548,278 $ 3,550,555 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities $ 115,334 $ 94,861 Current portion of long-term debt 39,996 39,979 Current portion of pension and other postretirement employee benefits 4,926 4,926 Total current liabilities 160,256 139,766 Long-term debt 993,562 992,701 Pension and other postretirement employee benefits 80,581 77,396 Deferred tax liabilities, net 38,419 41,790 Other long-term obligations 36,363 35,749 Total liabilities 1,309,181 1,287,402 Commitments and contingencies Stockholders' equity: Common stock, $1 par value, 200,000 and 100,000 shares authorized and 79,628 and 79,683 shares issued and outstanding 79,628 79,683 Additional paid-in capital 2,301,301 2,294,797 Accumulated deficit (267,725 ) (208,979 ) Accumulated other comprehensive income 125,893 97,652 Total stockholders’ equity 2,239,097 2,263,153 Total liabilities and stockholders' equity $ 3,548,278 $ 3,550,555 PotlatchDeltic Corporation Condensed Consolidated Statements of Cash Flows Unaudited Three Months Ended Nine Months Ended (in thousands) September 30, 2023 June 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 23,675 $ 22,306 $ 45,955 $ 62,241 $ 330,057 Adjustments to reconcile net income to net cash from operating activities: Depreciation, depletion and amortization 30,658 27,496 27,707 90,327 67,960 Basis of real estate sold 6,109 4,884 6,845 21,624 25,024 Change in deferred taxes (1,764 ) (2,609 ) 730 (3,979 ) (1,359 ) Pension and other postretirement employee benefits 1,610 1,612 3,539 4,833 10,936 Pension settlement charge — — — — 14,165 Equity-based compensation expense 2,616 1,577 11,717 6,472 16,141 Gain on fire damage (16,326 ) (23,110 ) (24,913 ) (39,436 ) (34,505 ) Interest received under swaps with other-than-insignificant financing element (6,884 ) (6,313 ) — (18,651 ) — Other, net 1,792 1,911 144 5,648 (455 ) Change in working capital and operating-related activities, net (9,773 ) 2,871 (5,901 ) (24,107 ) 14,071 Real estate development expenditures (2,939 ) (1,896 ) (1,796 ) (7,243 ) (6,986 ) Funding of pension and other postretirement employee benefits 128 (1,217 ) (1,026 ) (2,176 ) (3,290 ) Proceeds from insurance recoveries 12,049 9,706 17,250 21,755 26,678 Net cash from operating activities 40,951 37,218 80,251 117,308 458,437 CASH FLOWS FROM INVESTING ACTIVITIES Property, plant and equipment additions (17,933 ) (5,880 ) (7,223 ) (28,068 ) (44,000 ) Timberlands reforestation and roads (6,299 ) (4,596 ) (3,832 ) (17,013 ) (12,220 ) Acquisition of timber and timberlands (55 ) (1,621 ) (53,863 ) (1,676 ) (96,081 ) Proceeds from property insurance 1,356 — — 1,356 — Cash acquired in CatchMark merger — — 23,571 — 23,571 Interest received under swaps with other-than-insignificant financing element 6,375 5,849 — 17,279 — Other, net 36 242 2,318 700 935 Net cash from investing activities (16,520 ) (6,006 ) (39,029 ) (27,422 ) (127,795 ) CASH FLOWS FROM FINANCING ACTIVITIES Distributions to common stockholders (35,960 ) (35,958 ) (35,530 ) (107,880 ) (96,578 ) Repurchase of common stock (11,012 ) (394 ) (371 ) (11,406 ) (4,527 ) Proceeds from issuance of long-term debt — — 277,500 — 277,500 Repayment of long-term debt — — (300,000 ) — (303,000 ) Other, net (360 ) (1,117 ) (4,026 ) (2,315 ) (6,120 ) Net cash from financing activities (47,332 ) (37,469 ) (62,427 ) (121,601 ) (132,725 ) Change in cash, cash equivalents and restricted cash (22,901 ) (6,257 ) (21,205 ) (31,715 ) 197,917 Cash, cash equivalents and restricted cash, beginning 336,777 343,034 515,894 345,591 296,772 Cash, cash equivalents and restricted cash, ending1 $ 313,876 $ 336,777 $ 494,689 $ 313,876 $ 494,689 1 Includes $11.1 million, $5.6 million and $10.7 million at September 30, 2023, June 30, 2023 and September 30, 2022, respectively, that were or are intended to be reinvested in timber and timberlands and classified as restricted cash in Other current and long-term assets in the Condensed Consolidated Balance Sheets. PotlatchDeltic Corporation Segment Information Unaudited Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, (in thousands) 2023 2023 2022 2023 2022 Revenues Timberlands $ 109,808 $ 88,617 $ 134,576 $ 313,663 $ 363,719 Wood Products 165,108 167,669 193,431 485,572 755,806 Real Estate 19,152 17,064 19,008 60,079 79,809 294,068 273,350 347,015 859,314 1,199,334 Intersegment Timberlands revenues (28,559 ) (27,243 ) (40,322 ) (89,736 ) (121,694 ) Other intersegment revenues — (6 ) — (6 ) — Consolidated revenues $ 265,509 $ 246,101 $ 306,693 $ 769,572 $ 1,077,640 Adjusted EBITDDA1 Timberlands $ 42,062 $ 29,316 $ 64,482 $ 118,017 $ 198,806 Wood Products 15,039 11,967 31,258 26,975 288,465 Real Estate 14,165 12,237 14,140 45,867 66,080 Corporate (11,696 ) (10,521 ) (12,629 ) (32,958 ) (36,125 ) Eliminations and adjustments (3,292 ) 2,446 3,839 1,599 4,596 Total Adjusted EBITDDA 56,278 45,445 101,090 159,500 521,822 Interest expense, net2 (7,971 ) (7,613 ) (8,280 ) (15,783 ) (18,593 ) Depreciation, depletion and amortization (30,248 ) (27,087 ) (27,329 ) (89,099 ) (66,838 ) Basis of real estate sold (6,109 ) (4,884 ) (6,845 ) (21,624 ) (25,024 ) CatchMark merger-related expenses — (244 ) (26,007 ) (2,453 ) (26,007 ) Gain on fire damage 16,326 23,110 24,913 39,436 34,505 Pension settlement charge — — — — (14,165 ) Non-operating pension and other postretirement employee benefits (228 ) (229 ) (1,808 ) (685 ) (5,546 ) (Loss) gain on disposal of fixed assets (18 ) (21 ) 23 (39 ) 39 Other 370 258 (1 ) 638 (1 ) Income before income taxes $ 28,400 $ 28,735 $ 55,756 $ 69,891 $ 400,192 Depreciation, depletion and amortization Timberlands $ 19,267 $ 15,895 $ 16,963 $ 55,623 $ 40,687 Wood Products 10,740 10,948 10,069 32,723 25,226 Real Estate 120 121 175 397 518 Corporate 121 123 122 356 407 30,248 27,087 27,329 89,099 66,838 Bond discounts and deferred loan fees2 410 409 378 1,228 1,122 Total depreciation, depletion and amortization $ 30,658 $ 27,496 $ 27,707 $ 90,327 $ 67,960 Basis of real estate sold Real Estate $ 6,111 $ 4,887 $ 6,845 $ 21,629 $ 25,033 Eliminations and adjustments (2 ) (3 ) — (5 ) (9 ) Total basis of real estate sold $ 6,109 $ 4,884 $ 6,845 $ 21,624 $ 25,024 1 Management uses Adjusted EBITDDA to evaluate company and segment performance. See the reconciliation of Total Adjusted EBITDDA below. 2 Bond discounts and deferred loan fees are included in interest expense, net in the Condensed Consolidated Statements of Operations. PotlatchDeltic Corporation Non-GAAP Reconciliations Unaudited Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, (in thousands, except per share amount) 2023 2023 2022 2023 2022 Total Adjusted EBITDDA1 Net income (GAAP) $ 23,675 $ 22,306 $ 45,955 $ 62,241 $ 330,057 Interest expense, net 7,971 7,613 8,280 15,783 18,593 Income taxes 4,725 6,429 9,801 7,650 70,135 Depreciation, depletion and amortization 30,248 27,087 27,329 89,099 66,838 Basis of real estate sold 6,109 4,884 6,845 21,624 25,024 CatchMark merger-related expenses — 244 26,007 2,453 26,007 Gain on fire damage (16,326 ) (23,110 ) (24,913 ) (39,436 ) (34,505 ) Pension settlement charge — — — — 14,165 Non-operating pension and other postretirement benefit costs 228 229 1,808 685 5,546 Loss (gain) on disposal of fixed assets 18 21 (23 ) 39 (39 ) Other (370 ) (258 ) 1 (638 ) 1 Total Adjusted EBITDDA $ 56,278 $ 45,445 $ 101,090 $ 159,500 $ 521,822 Adjusted Net Income1 Net income (GAAP) $ 23,675 $ 22,306 $ 45,955 $ 62,241 $ 330,057 Special items after tax: CatchMark merger-related expenses — 244 25,823 2,453 25,823 Gain on fire damage (12,244 ) (17,333 ) (18,559 ) (29,577 ) (25,706 ) Pension settlement charge — — — — 10,553 Adjusted Net Income $ 11,431 $ 5,217 $ 53,219 $ 35,117 $ 340,727 Adjusted Net Income Per Diluted Share1 Net income per diluted share (GAAP) $ 0.29 $ 0.28 $ 0.64 $ 0.78 $ 4.69 Special items after tax: CatchMark merger-related expenses — — 0.36 0.03 0.37 Gain on fire damage (0.15 ) (0.22 ) (0.26 ) (0.37 ) (0.37 ) Pension settlement charge — — — — 0.15 Adjusted Net Income Per Diluted Share $ 0.14 $ 0.06 $ 0.74 $ 0.44 $ 4.84 1 See "Non-GAAP Measures" above for further details on management's use of these measures. View source version on businesswire.com: https://www.businesswire.com/news/home/20231030652243/en/Contacts Investors Wayne Wasechek 509.835.1521 Media Anna Torma 509.835.1558
PotlatchDeltic Corporation (Nasdaq: PCH) today reported net income of $23.7 million, or $0.29 per diluted share, on revenues of $265.5 million for the quarter ended September 30, 2023. Excluding an after-tax gain on insurance recoveries, adjusted net income was $11.4 million, or $0.14 per diluted share for the third quarter of 2023. Net income was $46.0 million, or $0.64 per diluted share, on revenues of $306.7 million for the quarter ended September 30, 2022. Excluding an after-tax gain on insurance recoveries and CatchMark merger-related expenses, adjusted net income was $53.2 million, or $0.74 per diluted share, for the third quarter of 2022. Third Quarter 2023 Highlights Generated Total Adjusted EBITDDA of $56.3 million and Total Adjusted EBITDDA margin of 21.2% Repurchased 283,000 shares for $12.7 million, or $45 per share Maintained strong liquidity position of $602 million as of September 30, 2023 “Our third quarter 2023 results reflect improved financial performance across all of our business segments,” said Eric Cremers, president and chief executive officer. “Each of our teams delivered solid results amid the backdrop of higher interest rates and an uncertain macroeconomic environment. During the third quarter, we continued to focus on strategically deploying our capital including returning $49 million to shareholders in the form of dividends and share repurchases. We remain positive on long-term housing-related fundamentals that drive demand in our business. Our balance sheet and liquidity remains strong, providing flexibility to navigate the current economic environment and grow shareholder value over the long-term," stated Mr. Cremers. Financial Highlights ($ in millions, except per share data) Q3 2023 Q2 2023 Q3 2022 Revenues $ 265.5 $ 246.1 $ 306.7 Net income $ 23.7 $ 22.3 $ 46.0 Weighted average shares outstanding, diluted (in thousands) 80,379 80,416 71,623 Net income per diluted share $ 0.29 $ 0.28 $ 0.64 Adjusted Net Income1 $ 11.4 $ 5.2 $ 53.2 Adjusted Net Income per diluted share1 $ 0.14 $ 0.06 $ 0.74 Total Adjusted EBITDDA1 $ 56.3 $ 45.5 $ 101.1 Total Adjusted EBITDDA Margin1 21.2 % 18.5 % 33.0 % Dividends per share2 $ 0.45 $ 0.45 $ 0.44 Net cash from operations $ 41.0 $ 37.2 $ 80.3 Cash and cash equivalents $ 302.8 $ 331.2 $ 484.0 1 Adjusted Net Income, Adjusted Net Income per diluted share, Total Adjusted EBITDDA and Total Adjusted EBITDDA Margin are non-GAAP measures. Refer to "Non-GAAP Measures" and "Non-GAAP Reconciliations" below for more information and reconciliations to GAAP, where applicable. 2 The regular dividend was increased 2.3% to $0.45 per quarter in Q4 2022. Business Performance: Q3 2023 vs. Q2 2023 Timberlands Third Quarter 2023 Highlights Timberlands Adjusted EBITDDA increased $12.6 million from Q2 2023 Northern and Southern harvest volumes increased seasonally Northern sawlog prices increased 12% primarily due to higher indexed sawlog prices Southern sawlog and pulpwood prices were stable ($ in millions) Q3 2023 Q2 2023 $ Change Timberlands Revenues $ 109.8 $ 88.7 $ 21.1 Timberlands Adjusted EBITDDA1 $ 42.0 $ 29.4 $ 12.6 1 Refer to "Segment Information" below for additional information. Wood Products Third Quarter 2023 Highlights Wood Products Adjusted EBITDDA increased $3.2 million from Q2 2023 Average lumber price increased 1% to $481 per MBF, or thousand board feet, in Q3 2023 Per-unit log costs decreased on lower log costs and improved recoveries ($ in millions) Q3 2023 Q2 2023 $ Change Wood Products Revenues $ 165.1 $ 167.7 $ (2.6 ) Wood Products Adjusted EBITDDA1 $ 15.1 $ 11.9 $ 3.2 1 Refer to "Segment Information" below for additional information. Real Estate Third Quarter 2023 Highlights Real Estate Adjusted EBITDDA increased $2.0 million from Q2 2023 Sold 3,275 acres of rural land at an average price of $3,546 / acre Sold 32 residential lots at an average price of $89,122 / lot Sold 1 commercial lot for $1.4 million, or $972,222 / acre ($ in millions) Q3 2023 Q2 2023 $ Change Real Estate Revenues $ 19.2 $ 17.0 $ 2.2 Real Estate Adjusted EBITDDA1 $ 14.2 $ 12.2 $ 2.0 1 Refer to "Segment Information" below for additional information. Non-GAAP Measures This press release includes certain financial measures that are not in accordance with accounting principles generally accepted in the United States (GAAP). Management believes that these non-GAAP measures, when read in conjunction with our GAAP financial statements, provide useful information to investors and other interested parties as described below. The presentation of these non-GAAP financial measures should be considered only as supplemental to, are not intended to be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may not be the same as or comparable to other similarly titled non-GAAP measures presented by other companies due to potential inconsistencies in methods of calculation. Adjusted Net Income and Adjusted Net Income per diluted share are non-GAAP measures that represent GAAP net income and GAAP net income per diluted share before certain items, net of tax, that management believes impact the ability to compare the performance of our business, either period-over-period or with other businesses. Total Adjusted EBITDDA and Total Adjusted EBITDDA Margin are non-GAAP measures that remove the impact of specific items that management believes do not directly reflect the core business operations on an ongoing basis and can be used to evaluate the operational performance of assets under management. We define Total Adjusted EBITDDA Margin as Total Adjusted EBITDDA divided by Revenues. Reconciliations of Total Adjusted EBITDDA, Adjusted Net Income and Adjusted Net Income per diluted share to their most comparable GAAP measures are set forth in the accompanying “Non-GAAP Reconciliations” at the end of this release. Conference Call Information A live conference call and webcast will be held Tuesday, October 31, 2023, at 9:00 a.m. Pacific Time (12:00 p.m. Eastern Time). Investors may access the webcast at www.potlatchdeltic.com by clicking on the Investors link or by conference call at 1-888-510-2008 for U.S./Canada and 1-646-960-0306 for international callers. Participants will be asked to provide conference I.D. number 7281983. Supplemental materials that will be discussed during the call are available on the above website. A replay of the conference call will be available two hours following the call until November 7, 2023 by calling 1-800-770-2030 for U.S./Canada or 1-647-362-9199 for international callers. Callers must enter conference I.D. number 7281983 to access the replay. About PotlatchDeltic PotlatchDeltic Corporation (Nasdaq: PCH) is a leading Real Estate Investment Trust (REIT) that owns nearly 2.2 million acres of timberlands in Alabama, Arkansas, Georgia, Idaho, Louisiana, Mississippi and South Carolina. Through its taxable REIT subsidiary, the company also operates six sawmills, an industrial-grade plywood mill, a residential and commercial real estate development business and a rural timberland sales program. PotlatchDeltic, a leader in sustainable forest management, is committed to environmental and social responsibility and to responsible governance. More information can be found at www.potlatchdeltic.com. Forward-Looking Statements This press release 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; long-term housing market fundamentals; disciplined and opportunistic capital allocation strategy; and similar matters. Words such as “over the long term,” 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; 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 disruptions; share price; the successful execution of the company’s strategic plans; 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. PotlatchDeltic Corporation Condensed Consolidated Statements of Operations Unaudited Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, (in thousands, except per share amounts) 2023 2023 2022 2023 2022 Revenues $ 265,509 $ 246,101 $ 306,693 $ 769,572 $ 1,077,640 Costs and expenses: Cost of goods sold 226,303 215,063 220,876 665,716 592,057 Selling, general and administrative expenses 19,303 17,585 18,878 55,118 55,584 CatchMark merger-related expenses — 244 26,007 2,453 26,007 Gain on fire damage (16,326 ) (23,110 ) (24,913 ) (39,436 ) (34,505 ) 229,280 209,782 240,848 683,851 639,143 Operating income 36,229 36,319 65,845 85,721 438,497 Interest expense, net (7,971 ) (7,613 ) (8,280 ) (15,783 ) (18,593 ) Pension settlement charge — — — — (14,165 ) Non-operating pension and other postretirement employee benefit costs (228 ) (229 ) (1,808 ) (685 ) (5,546 ) Other 370 258 (1 ) 638 (1 ) Income before income taxes 28,400 28,735 55,756 69,891 400,192 Income taxes (4,725 ) (6,429 ) (9,801 ) (7,650 ) (70,135 ) Net income $ 23,675 $ 22,306 $ 45,955 $ 62,241 $ 330,057 Net income per share: Basic $ 0.30 $ 0.28 $ 0.64 $ 0.78 $ 4.70 Diluted $ 0.29 $ 0.28 $ 0.64 $ 0.78 $ 4.69 Dividends per share $ 0.45 $ 0.45 $ 0.44 $ 1.35 $ 1.32 Weighted-average shares outstanding: Basic 80,132 80,145 71,486 80,102 70,171 Diluted 80,379 80,416 71,632 80,279 70,308 PotlatchDeltic Corporation Condensed Consolidated Balance Sheets Unaudited (in thousands, except per share amounts) September 30, 2023 December 31, 2022 ASSETS Current assets: Cash and cash equivalents $ 302,799 $ 343,809 Customer receivables, net 30,762 22,813 Inventories, net 82,537 67,958 Other current assets 56,606 36,955 Total current assets 472,704 471,535 Property, plant and equipment, net 334,350 318,184 Investment in real estate held for development and sale 55,928 55,490 Timber and timberlands, net 2,459,508 2,508,372 Intangible assets, net 16,085 17,420 Other long-term assets 209,703 179,554 Total assets $ 3,548,278 $ 3,550,555 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued liabilities $ 115,334 $ 94,861 Current portion of long-term debt 39,996 39,979 Current portion of pension and other postretirement employee benefits 4,926 4,926 Total current liabilities 160,256 139,766 Long-term debt 993,562 992,701 Pension and other postretirement employee benefits 80,581 77,396 Deferred tax liabilities, net 38,419 41,790 Other long-term obligations 36,363 35,749 Total liabilities 1,309,181 1,287,402 Commitments and contingencies Stockholders' equity: Common stock, $1 par value, 200,000 and 100,000 shares authorized and 79,628 and 79,683 shares issued and outstanding 79,628 79,683 Additional paid-in capital 2,301,301 2,294,797 Accumulated deficit (267,725 ) (208,979 ) Accumulated other comprehensive income 125,893 97,652 Total stockholders’ equity 2,239,097 2,263,153 Total liabilities and stockholders' equity $ 3,548,278 $ 3,550,555 PotlatchDeltic Corporation Condensed Consolidated Statements of Cash Flows Unaudited Three Months Ended Nine Months Ended (in thousands) September 30, 2023 June 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 23,675 $ 22,306 $ 45,955 $ 62,241 $ 330,057 Adjustments to reconcile net income to net cash from operating activities: Depreciation, depletion and amortization 30,658 27,496 27,707 90,327 67,960 Basis of real estate sold 6,109 4,884 6,845 21,624 25,024 Change in deferred taxes (1,764 ) (2,609 ) 730 (3,979 ) (1,359 ) Pension and other postretirement employee benefits 1,610 1,612 3,539 4,833 10,936 Pension settlement charge — — — — 14,165 Equity-based compensation expense 2,616 1,577 11,717 6,472 16,141 Gain on fire damage (16,326 ) (23,110 ) (24,913 ) (39,436 ) (34,505 ) Interest received under swaps with other-than-insignificant financing element (6,884 ) (6,313 ) — (18,651 ) — Other, net 1,792 1,911 144 5,648 (455 ) Change in working capital and operating-related activities, net (9,773 ) 2,871 (5,901 ) (24,107 ) 14,071 Real estate development expenditures (2,939 ) (1,896 ) (1,796 ) (7,243 ) (6,986 ) Funding of pension and other postretirement employee benefits 128 (1,217 ) (1,026 ) (2,176 ) (3,290 ) Proceeds from insurance recoveries 12,049 9,706 17,250 21,755 26,678 Net cash from operating activities 40,951 37,218 80,251 117,308 458,437 CASH FLOWS FROM INVESTING ACTIVITIES Property, plant and equipment additions (17,933 ) (5,880 ) (7,223 ) (28,068 ) (44,000 ) Timberlands reforestation and roads (6,299 ) (4,596 ) (3,832 ) (17,013 ) (12,220 ) Acquisition of timber and timberlands (55 ) (1,621 ) (53,863 ) (1,676 ) (96,081 ) Proceeds from property insurance 1,356 — — 1,356 — Cash acquired in CatchMark merger — — 23,571 — 23,571 Interest received under swaps with other-than-insignificant financing element 6,375 5,849 — 17,279 — Other, net 36 242 2,318 700 935 Net cash from investing activities (16,520 ) (6,006 ) (39,029 ) (27,422 ) (127,795 ) CASH FLOWS FROM FINANCING ACTIVITIES Distributions to common stockholders (35,960 ) (35,958 ) (35,530 ) (107,880 ) (96,578 ) Repurchase of common stock (11,012 ) (394 ) (371 ) (11,406 ) (4,527 ) Proceeds from issuance of long-term debt — — 277,500 — 277,500 Repayment of long-term debt — — (300,000 ) — (303,000 ) Other, net (360 ) (1,117 ) (4,026 ) (2,315 ) (6,120 ) Net cash from financing activities (47,332 ) (37,469 ) (62,427 ) (121,601 ) (132,725 ) Change in cash, cash equivalents and restricted cash (22,901 ) (6,257 ) (21,205 ) (31,715 ) 197,917 Cash, cash equivalents and restricted cash, beginning 336,777 343,034 515,894 345,591 296,772 Cash, cash equivalents and restricted cash, ending1 $ 313,876 $ 336,777 $ 494,689 $ 313,876 $ 494,689 1 Includes $11.1 million, $5.6 million and $10.7 million at September 30, 2023, June 30, 2023 and September 30, 2022, respectively, that were or are intended to be reinvested in timber and timberlands and classified as restricted cash in Other current and long-term assets in the Condensed Consolidated Balance Sheets. PotlatchDeltic Corporation Segment Information Unaudited Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, (in thousands) 2023 2023 2022 2023 2022 Revenues Timberlands $ 109,808 $ 88,617 $ 134,576 $ 313,663 $ 363,719 Wood Products 165,108 167,669 193,431 485,572 755,806 Real Estate 19,152 17,064 19,008 60,079 79,809 294,068 273,350 347,015 859,314 1,199,334 Intersegment Timberlands revenues (28,559 ) (27,243 ) (40,322 ) (89,736 ) (121,694 ) Other intersegment revenues — (6 ) — (6 ) — Consolidated revenues $ 265,509 $ 246,101 $ 306,693 $ 769,572 $ 1,077,640 Adjusted EBITDDA1 Timberlands $ 42,062 $ 29,316 $ 64,482 $ 118,017 $ 198,806 Wood Products 15,039 11,967 31,258 26,975 288,465 Real Estate 14,165 12,237 14,140 45,867 66,080 Corporate (11,696 ) (10,521 ) (12,629 ) (32,958 ) (36,125 ) Eliminations and adjustments (3,292 ) 2,446 3,839 1,599 4,596 Total Adjusted EBITDDA 56,278 45,445 101,090 159,500 521,822 Interest expense, net2 (7,971 ) (7,613 ) (8,280 ) (15,783 ) (18,593 ) Depreciation, depletion and amortization (30,248 ) (27,087 ) (27,329 ) (89,099 ) (66,838 ) Basis of real estate sold (6,109 ) (4,884 ) (6,845 ) (21,624 ) (25,024 ) CatchMark merger-related expenses — (244 ) (26,007 ) (2,453 ) (26,007 ) Gain on fire damage 16,326 23,110 24,913 39,436 34,505 Pension settlement charge — — — — (14,165 ) Non-operating pension and other postretirement employee benefits (228 ) (229 ) (1,808 ) (685 ) (5,546 ) (Loss) gain on disposal of fixed assets (18 ) (21 ) 23 (39 ) 39 Other 370 258 (1 ) 638 (1 ) Income before income taxes $ 28,400 $ 28,735 $ 55,756 $ 69,891 $ 400,192 Depreciation, depletion and amortization Timberlands $ 19,267 $ 15,895 $ 16,963 $ 55,623 $ 40,687 Wood Products 10,740 10,948 10,069 32,723 25,226 Real Estate 120 121 175 397 518 Corporate 121 123 122 356 407 30,248 27,087 27,329 89,099 66,838 Bond discounts and deferred loan fees2 410 409 378 1,228 1,122 Total depreciation, depletion and amortization $ 30,658 $ 27,496 $ 27,707 $ 90,327 $ 67,960 Basis of real estate sold Real Estate $ 6,111 $ 4,887 $ 6,845 $ 21,629 $ 25,033 Eliminations and adjustments (2 ) (3 ) — (5 ) (9 ) Total basis of real estate sold $ 6,109 $ 4,884 $ 6,845 $ 21,624 $ 25,024 1 Management uses Adjusted EBITDDA to evaluate company and segment performance. See the reconciliation of Total Adjusted EBITDDA below. 2 Bond discounts and deferred loan fees are included in interest expense, net in the Condensed Consolidated Statements of Operations. PotlatchDeltic Corporation Non-GAAP Reconciliations Unaudited Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, (in thousands, except per share amount) 2023 2023 2022 2023 2022 Total Adjusted EBITDDA1 Net income (GAAP) $ 23,675 $ 22,306 $ 45,955 $ 62,241 $ 330,057 Interest expense, net 7,971 7,613 8,280 15,783 18,593 Income taxes 4,725 6,429 9,801 7,650 70,135 Depreciation, depletion and amortization 30,248 27,087 27,329 89,099 66,838 Basis of real estate sold 6,109 4,884 6,845 21,624 25,024 CatchMark merger-related expenses — 244 26,007 2,453 26,007 Gain on fire damage (16,326 ) (23,110 ) (24,913 ) (39,436 ) (34,505 ) Pension settlement charge — — — — 14,165 Non-operating pension and other postretirement benefit costs 228 229 1,808 685 5,546 Loss (gain) on disposal of fixed assets 18 21 (23 ) 39 (39 ) Other (370 ) (258 ) 1 (638 ) 1 Total Adjusted EBITDDA $ 56,278 $ 45,445 $ 101,090 $ 159,500 $ 521,822 Adjusted Net Income1 Net income (GAAP) $ 23,675 $ 22,306 $ 45,955 $ 62,241 $ 330,057 Special items after tax: CatchMark merger-related expenses — 244 25,823 2,453 25,823 Gain on fire damage (12,244 ) (17,333 ) (18,559 ) (29,577 ) (25,706 ) Pension settlement charge — — — — 10,553 Adjusted Net Income $ 11,431 $ 5,217 $ 53,219 $ 35,117 $ 340,727 Adjusted Net Income Per Diluted Share1 Net income per diluted share (GAAP) $ 0.29 $ 0.28 $ 0.64 $ 0.78 $ 4.69 Special items after tax: CatchMark merger-related expenses — — 0.36 0.03 0.37 Gain on fire damage (0.15 ) (0.22 ) (0.26 ) (0.37 ) (0.37 ) Pension settlement charge — — — — 0.15 Adjusted Net Income Per Diluted Share $ 0.14 $ 0.06 $ 0.74 $ 0.44 $ 4.84 1 See "Non-GAAP Measures" above for further details on management's use of these measures. View source version on businesswire.com: https://www.businesswire.com/news/home/20231030652243/en/
