Exhibit 99.1
| | | | | | | | |
Deltic Timber Corporation | |  | | | | NEWS RELEASE | | 210 EAST ELM STREET EL DORADO, AR 71730 NYSE: DEL |
| | | | | | |
| FOR RELEASE | | April 20, 2009 | | CONTACT: | | Kenneth D. Mann |
| | | | | | Investor Relations |
| | | | | | (870) 881-6432 |
Deltic Announces Preliminary First Quarter 2009 Results
El Dorado, AR – President and Chief Executive Officer, Ray C. Dillon, of Deltic Timber Corporation (NYSE-DEL) announced today that the financial results for the first quarter of 2009 were a loss of $1.2 million, $.09 a share compared to a loss of $.4 million, $.03 a share, a year ago. The decrease in the first quarter results was due mainly to a lower pine sawtimber harvest volume and lower average per-ton sales price, fewer acres of non-strategic timberland sold, and reduced real estate sales activity. These decreases were partially offset by improvements in Mill operations due to increased hourly production rates and lower log costs. Net cash provided by operating activities was $.5 million for the first quarter of 2009, which compares to $1.9 million a year ago.
Commenting on the results, Mr. Dillon stated, “The economic uncertainty resulting from the financial crisis and the resulting recession continued to have a strong negative impact on both lumber and real estate markets during the first quarter. While we weather this storm, we are intensely focused on operating efficiency and cost control in every aspect of each of our business lines. We are also concentrating our attention on those aspects of our operations that have the greatest potential for achieving a positive financial impact during this business environment. These include our program to sell non-strategic, recreational-use hardwood bottomland acreage; our efforts to work with interested buyers of commercial properties in Chenal Valley; and our intent to maintain lumber production levels consistent with what the market can absorb. A bright spot in these difficult times is that Del-Tin Fiber, our medium density fiberboard joint-venture, again reported positive financial results.”
Operating income for Deltic’s Woodlands segment was $5.7 million in the first quarter of 2009, a decrease of $2.7 million when compared to $8.4 million for the same period a year ago. Pine sawtimber
harvest levels decreased 24,843 tons to 155,531 tons in the first quarter of 2009 compared to 180,374 tons for the same period of 2008 due to timing. The average sales price was $29 per ton in the first quarter of 2009, a 22 percent decrease from $37 per ton for 2008’s first quarter due to less demand caused by the continuation of a weak lumber market and the resulting curtailments and closures of area sawmills. Sales of pine pulpwood decreased $.6 million from a year ago on reduced volume and sales prices due to lower demand for fiber by area papermills. Oil and gas lease rental and royalty income totaled $.9 million during the first quarter of 2009 compared to $.7 million for the same quarter of 2008. The Company sold approximately 277 acres of non-strategic hardwood bottomland at an average sales price of $1,485 per acre in the current period versus approximately 674 acres at an average sales price of $2,128 per acre in the prior-year quarter. The lower per-acre sales price in 2009 was due to location and quality of land sold.
The Company’s Mills segment reported an operating loss of $3.6 million in 2009’s first quarter compared to a loss of $4.4 million in the corresponding quarter of 2008. The Mills segment benefited from year-over-year improved hourly production rates and from lower log costs in 2009 versus 2008. The average finished lumber sales price decreased $6, from the prior-year quarter or three percent, to $234 per thousand board feet. Lumber sales volume decreased from 62.5 million board feet in the first quarter a year ago to 52.3 million board feet in the current quarter, as operating hours were reduced to balance production with market demand.
The Real Estate segment lost $1 million in the first quarter of 2009, which compares to a $.6 million loss for the same period of 2008. There were no residential lot sales in the first quarter of 2009 versus seven lots sold at an average lot price of $68,000 in the same period a year ago. There were no sales of commercial real estate acreage in the first quarter of either year.
Corporate operating expense was $2.9 million in the first quarter of 2009, which compares to $3.5 million for the corresponding period of 2008. Deltic’s equity in earnings of Del-Tin Fiber was income of $.8 million for the current-year quarter compared to $.7 million for the same period of 2008. Income taxes in the current-year period were essentially zero as a result of the expected federal benefit due to the current-period operating loss being offset by a one-time state tax provision.
Capital expenditures were $4.8 million for the first quarter of 2009, while expenditures for the same period of 2008 were $5.8 million.
In regard to the outlook for the second quarter and year of 2009, Mr. Dillon stated, “We currently anticipate the pine sawtimber harvest to be 160,000 to 170,000 tons and 525,000 to 575,000 tons, respectively. Finished lumber production and sales volumes are estimated at 55 to 65 million board feet for the second quarter and 220 to 260 million board feet for the year, depending upon market conditions. Residential lot sales are projected at three to six lots and 10 to 20 lots for the second quarter and year of 2009, respectively.”
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 and 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 21, 2009, at 10:00 a.m. Central Time to discuss first quarter 2009 earnings. Interested parties may participate in the call by dialing 1-888-713-4218 and referencing participant passcode identification number 15823059. The call will also be broadcast live over the Internet and can be accessed through the Investor Relations section of the Deltic website, and a recording of the call will be available until Tuesday, April 28, by dialing 1-888-286-8010 and referencing replay passcode identification number 27820591.
Summary financial data and operating statistics for the first quarter of 2009 with comparisons to 2008 are contained in the following tables.
Deltic Timber Corporation
SEGMENT INFORMATION
(Preliminary and Unaudited)
(Millions of dollars)
| | | | | | | | | | | | | |
| | | Three Months Ended
March 31, 2009 | | | Three Months Ended
March 31, 2008 | |
| | Net
Sales | | | Operating
Income/
(Loss) | | | Net
Sales | | | Operating
Income/
(Loss) | |
Woodlands | | $ | 9.9 | | | 5.7 | | | 12.6 | | | 8.4 | |
Mills | | | 16.0 | | | (3.6 | ) | | 19.8 | | | (4.4 | ) |
Real Estate | | | 1.6 | | | (1.0 | ) | | 2.3 | | | (0.6 | ) |
Corporate | | | — | | | (2.9 | ) | | — | | | (3.5 | ) |
Eliminations | | | (4.6 | ) | | 0.6 | | | (6.9 | ) | | (0.2 | ) |
| | | | | | | | | | | | | |
Total net sales/operating income/(loss) | | $ | 22.9 | | | (1.2 | ) | | 27.8 | | | (0.3 | ) |
| | | | | | | | | | | | | |
Deltic Timber Corporation
CONSOLIDATED STATEMENTS OF INCOME
(Preliminary and Unaudited)
(Thousands of dollars, except per share amounts)
| | | | | | | |
| | | Three Months Ended
March 31, | |
| | 2009 | | | 2008 | |
Net sales | | $ | 22,862 | | | 27,822 | |
| | | | | | | |
| | |
Costs and expenses | | | | | | | |
Cost of sales | | | 17,447 | | | 20,588 | |
Depreciation, amortization, and cost of fee timber harvested | | | 3,416 | | | 3,767 | |
General and administrative expenses | | | 3,208 | | | 3,743 | |
| | | | | | | |
Total costs and expenses | | | 24,071 | | | 28,098 | |
| | | | | | | |
| | |
Operating income/(loss) | | | (1,209 | ) | | (276 | ) |
| | |
Equity in earnings of Del-Tin Fiber | | | 757 | | | 714 | |
Interest income | | | 2 | | | 109 | |
Interest and other debt expense | | | (903 | ) | | (1,275 | ) |
Interest capitalized | | | 63 | | | 149 | |
Other income/(expense) | | | 133 | | | 67 | |
| | | | | | | |
| | |
Income/(loss) before income taxes | | | (1,157 | ) | | (512 | ) |
| | |
Income taxes | | | (17 | ) | | 144 | |
| | | | | | | |
| | |
Net income/(loss) | | $ | (1,174 | ) | | (368 | ) |
| | | | | | | |
| | |
Earnings/(loss) per common share | | | | | | | |
Basic | | $ | (0.09 | ) | | (0.03 | ) |
Assuming dilution | | $ | (0.09 | ) | | (0.03 | ) |
| | |
Dividends per common share | | $ | 0.075 | | | 0.075 | |
| | |
Average common shares outstanding (thousands) | | | 12,414 | | | 12,413 | |
Deltic Timber Corporation
CONSOLIDATED BALANCE SHEETS
(Preliminary and Unaudited)
(Thousands of dollars)
| | | | | | | |
| | | Mar. 31
2009 | | | Dec. 31,
2008 | |
Assets | | | | | | | |
Current assets | | | | | | | |
Cash and cash equivalents | | $ | 304 | | | 2,413 | |
Trade accounts receivable - net | | | 4,547 | | | 2,991 | |
Other receivables | | | 48 | | | 58 | |
Inventories | | | 5,904 | | | 6,511 | |
Prepaid expenses and other current assets | | | 5,318 | | | 4,223 | |
| | | | | | | |
Total current assets | | | 16,121 | | | 16,196 | |
| | | | | | | |
| | |
Investment in real estate held for development and sale | | | 54,210 | | | 54,081 | |
Investment in Del-Tin Fiber | | | 10,012 | | | 8,962 | |
Other investments and noncurrent receivables | | | 2,743 | | | 5,710 | |
Timber and timberlands - net | | | 213,066 | | | 210,035 | |
Property, plant, and equipment - net | | | 37,067 | | | 38,657 | |
Deferred charges and other assets | | | 1,029 | | | 1,092 | |
| | | | | | | |
| | |
Total assets | | $ | 334,248 | | | 334,733 | |
| | | | | | | |
| | |
Liabilities and Stockholders’ Equity | | | | | | | |
Current liabilities | | | | | | | |
Trade accounts payable | | $ | 2,137 | | | 1,727 | |
Current maturities of long-term debt | | | 1,111 | | | 1,111 | |
Accrued taxes other than income taxes | | | 2,192 | | | 1,758 | |
Income taxes payable | | | 33 | | | 16 | |
Deferred revenues and other accrued liabilities | | | 6,101 | | | 6,777 | |
| | | | | | | |
Total current liabilities | | | 11,574 | | | 11,389 | |
| | | | | | | |
| | |
Long-term debt | | | 77,834 | | | 75,833 | |
Deferred tax liabilities - net | | | 5,235 | | | 4,758 | |
Guarantee of indebtedness of Del-Tin Fiber | | | 345 | | | 518 | |
Other noncurrent liabilities | | | 29,060 | | | 29,071 | |
Commitments and contingencies | | | — | | | — | |
Stockholders’ equity | | | | | | | |
Common stock, 12,813,879 shares issued | | | 128 | | | 128 | |
Capital in excess of par value | | | 76,955 | | | 78,660 | |
Retained earnings | | | 153,576 | | | 155,683 | |
Treasury stock, 395,111 and 412,177 shares held, respectively | | | (13,642 | ) | | (14,400 | ) |
Accumulated other comprehensive loss | | | (6,817 | ) | | (6,907 | ) |
| | | | | | | |
Total stockholders’ equity | | | 210,200 | | | 213,164 | |
| | | | | | | |
| | |
Total liabilities and stockholders’ equity | | $ | 334,248 | | | 334,733 | |
| | | | | | | |
Deltic Timber Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Preliminary and Unaudited)
(Thousands of dollars)
| | | | | | | |
| | | Three Months Ended
March 31, | |
| | 2009 | | | 2008 | |
Operating activities | | | | | | | |
Net loss | | $ | (1,174 | ) | | (368 | ) |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | |
Depreciation, amortization, and cost of fee timber harvested | | | 3,416 | | | 3,767 | |
Deferred income taxes | | | 574 | | | 677 | |
Real estate costs recovered upon sale | | | — | | | 296 | |
Timberland costs recovered upon sale | | | 100 | | | 238 | |
Equity in earnings of Del-Tin Fiber | | | (757 | ) | | (714 | ) |
Stock-based compensation expense | | | 412 | | | 373 | |
Net decrease in liabilities for pension and other postretirement benefits | | | 247 | | | (16 | ) |
Net decrease in deferred compensation for stock-based liabilities | | | (1,069 | ) | | (734 | ) |
(Increase)/decrease in operating working capital other than cash and cash equivalents | | | (1,469 | ) | | (1,239 | ) |
Other changes in assets and liabilities | | | 211 | | | (387 | ) |
| | | | | | | |
Net cash provided by operating activities | | | 491 | | | 1,893 | |
| | | | | | | |
| | |
Investing activities | | | | | | | |
Capital expenditures | | | (4,720 | ) | | (5,573 | ) |
Net change in purchased stumpage inventory | | | (502 | ) | | (520 | ) |
Advances to Del-Tin Fiber | | | (1,850 | ) | | (1,718 | ) |
Distributions from Del-Tin Fiber | | | 1,385 | | | 1,785 | |
Increase in funds held by trustee | | | 2,765 | | | (175 | ) |
Other - net | | | 435 | | | 232 | |
| | | | | | | |
Net cash required by investing activities | | | (2,487 | ) | | (5,969 | ) |
| | | | | | | |
| | |
Financing activities | | | | | | | |
Proceeds from borrowings | | | 3,500 | | | — | |
Repayments of notes payable and long-term debt | | | (1,500 | ) | | — | |
Treasury stock purchases | | | (1,112 | ) | | (11 | ) |
Common stock dividends paid | | | (933 | ) | | (932 | ) |
Proceeds from stock option exercises | | | 7 | | | 401 | |
Excess tax benefits from stock-based compensation | | | — | | | 357 | |
Other - net | | | (75 | ) | | — | |
| | | | | | | |
Net cash provided/(required) by financing activities | | | (113 | ) | | (185 | ) |
| | | | | | | |
| | |
Net increase/(decrease) in cash and cash equivalents | | | (2,109 | ) | | (4,261 | ) |
Cash and cash equivalents at January 1 | | | 2,413 | | | 10,673 | |
| | | | | | | |
| | |
Cash and cash equivalents at March 31 | | $ | 304 | | | 6,412 | |
| | | | | | | |
Deltic Timber Corporation
OTHER DATA
(Preliminary and Unaudited)
| | | | | |
| | | Three Months Ended
March 31, |
| (Thousands of dollars) | | 2009 | | 2008 |
Capital expenditures | | | | | |
Woodlands | | $ | 3,966 | | 3,291 |
Mills | | | 579 | | 1,624 |
Real Estate | | | 168 | | 862 |
Corporate | | | 42 | | 45 |
| | | | | |
Total | | $ | 4,755 | | 5,822 |
| | | | | |
| | |
Woodlands | | | | | |
Pine sawtimber harvested from fee lands - tons | | | 155,531 | | 180,374 |
Pine sawtimber price - per ton | | $ | 29 | | 37 |
| | |
Timberland sales - acres | | | 277 | | 674 |
Timberland sales price - per acre | | $ | 1,485 | | 2,128 |
| | |
Mills | | | | | |
Finished lumber sales - thousands of board feet | | | 52,347 | | 62,466 |
Finished lumber price - per thousand board feet | | $ | 234 | | 240 |
| | |
Real Estate | | | | | |
Residential | | | | | |
Lots sold | | | — | | 7 |
Average sales price - per lot | | $ | — | | 68,200 |
| | |
Commercial | | | | | |
Acres sold | | | — | | — |
Average sales price - per acre | | $ | — | | — |
| | |
Undeveloped | | | | | |
Acres sold | | | — | | — |
Average sales price - per acre | | $ | — | | — |
