PCH - Earnings call transcript Q1 2019 | PotlatchDeltic Corporation

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Operator

Good morning. My name is Rob, and I will be your conference operator today. At this time, I would like to welcome everyone to the PotlatchDeltic First Quarter 2019 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator like the now Mr. over to would call turn to I Richards, Financial Chief President for Jerry and Officer, Vice opening remarks. proceed. Sir, may you

Jerry Richards

in Thank the slides, Officer; with first This then over forward-looking website presentation morning. our press and forward-looking the concerning Mike good the to are will the measures that Operating and Mike our me I you, Officer. please a PotlatchDeltic's non-GAAP comments, first and room warning Cremers, Rob, call our Chief statements. President cover call on Also, found Chairman investor at and Chief Executive these for some with in Welcome www.potlatchdeltic.com. the contain webcast Eric on quarter SEC can XXXX in Please call quarter our to our be statements results will Covey, of review earnings. reconciliation and I'll filings With risks release, now our covering and and statements. note the associated outlook. and turn

Mike Covey

good quarter morning. first of million EBITDDA $XX We adjusted generated the and operations. our in MDF excluding Jerry, Thanks,

the log Our half Idaho Conversely, in Resource well, to weather-related us price all latter quarter. in spring breakup in of segment anticipation were the log to in due of of deliveries allowing premiums our decks substantial curtailed customers South quarter built capture early operated shortages. the log and the

into shift account deliveries in the Our for shortfall with quarter the half annual first Idaho. of harvest remains plan year the of second the to intact

expected. arrangements. were indexing in log quarter prices to first down Real our development expected, Idaho Estate fell sales the As in seasonally as due

most key land timberlands are Arkansas. in Lumber on legacy the we timber leverage continue the a be that opportunities to lumber We sales given the prices. with excited are rural REIT prices to about driver Deltic

the West; to manufacture Our issues was lumber expected. and we'd under ability lumber of hampered a weather quarter, X% extraordinary A in the including the quarter external in series delayed the South, in shortages; which spring stalled regions rainfall the in quarter, of and weather in train during just which many log the increased first incredibly in in by resulted first was level season wet Lake our price building X% Improvement prices in average lumber as the States. extreme the that country. ship the cold derailment

by lumber is adequate remain current for customers the While further building based markets deliveries, tighten improve will that by in Strong in We and the drop in prices supply-related Western and repair developments once throughout solid confidence. spending system just-in- in near Lengths term underway builder our lumber mortgage in gets new the week. obtain lumber encouraged to could prices home many issues. earnest, in Canadian we delayed inventory confidence, the time on optimistic reported Random remodel growth all improvement stronger and were season underpin sales, recent the rates, last

of Arkansas revenue on million. Roseburg During the After paying announced proceeds million assigning $XX and Forest approximately the of Dorado, taxes Products. business bonds, quarter, we El our to closed first sale $XX MDF net were previously

to first strong remains $XX We grow of per repurchases quarter. to price for an cash during excess priority average Our balance in and sheet $XX our the were provides shareholder main value. used Share our million share at XXX,XXX the flexibility quarter. shares repurchase

and the value significant outlook, yielding net Jerry it discount turn to addition trade and stock then talk now take asset X%. discuss in over quarter our over to continues we'll our about at Our questions. a to to to I'll

Jerry Richards

start of I'll X Mike. with Page Thanks, slides. the

and volumes, Real Resource improvement partially color compared in decline to is displayed more results. quarter. X% review on for a million We first prices. the the in was $XX.X in of is lower in first basis XXX,XXX to EBITDDA quarter prices by was adjusted million quarter in now million quarter. modest to the our half the from sales the ton total X. in $XX.X on compared quarter the mill, harvested compared in our due price that of sequential offset prices first first in EBITDDA the and XXX,XXX other QX tons the of in the in sawlogs a quarter Roughly quarter. slides seasonally MDF the lower of provide Information effect million first results harvest the fourth North each to Northern quarter. the $XX.X Excluding sawlog in logs. tons $XX.X of and lower to fourth fourth half of segments density due harvested fourth on is segment's per we EBITDDA the the was segment the were seasonally reflects This lumber quarter. operating The lagged increase the through lumber the adjusted decline I'll Estate down X seasonal

was harvested was tons we the South, down quarter. we the the but harvested to seasonally that This than higher fourth planned. XXX,XXX had tons XXX,XXX slightly the quarter from Turning in in we

Our a employees wet by small did caused a shortages. log good captured a premium quarter, job which managing through

sales dry hardwood Our Southern by think the seasonal activity. prices a will available. is and which prices sawlog pine X of once X% levels and The on covered sawlog in shift out were Wood harvest revert more now was decline to We quarter. I’ll pine premium conditions more weather-related Products, X. than we this normal slides are realized trading logs to effect sawlog higher sawlog on Southern offset readily that

to $X quarter. segment's fourth the the Excluding adjusted results the was of compared MDF in EBITDDA $X.X million million mill,

first in which plan to per board Lumber thousand fourth the prices X% feet feet well in quarter. board in per decreased thousand from $XXX below quarter board average XX for the the to the XXX lumber feet million first shipments board was increased $XXX quarter, our million quarter. Our feet

in the Pacific the wet caused disruption derailment to a on South quarter. mills. States shortfall the of XX. make included we most lumber cover Mike Estate's residential experienced up the Chenal This and effect still sales seasonally train in challenges to track operational now and board I'll and the feet vortex polar million approximately ship by expect mentioned, were in to our year. on in As due We're X.X billion shortages weather Lake of on first Estate Real for the log shipping slides EBITDDA and decreased our the quarter first Northwest, quarter. XX the adjusted of Real the the segment second in $X.X lot lower.

good million approximately the we acres. items, Deltic Shifting addition, the We quarter net mill expect repurchase to the of of to we shares announced to Chenal the We sale the related which per cash $XX pay mill, ended $XX.X in summarized our in million land $XXX,XXX MDF on commercial in to just land share. in was The the transaction. to Slide once The over price revenue industrial of quarter. quarter in cash. closed used no In fourth interest buyer in are were February. commercial and commercial $XXX million financial the to taxes of we compared cash bonds there of $XX assumed million $XX million There average continues $X.X of on the previously be of sales sales with first XX, quarter.

covered. well dividend Our is

LTM XXXX, Excluding quarter XX% pension ratio made on our costs an the and was basis. voluntary Deltic contribution we payout that in merger of the third

a $XXX reduces senior first on $X.X basis. quarter. in we our the expense of As million an our interest refinance notes million reminder, annual the completed This

the beginning in from the expect $X.X expense We related flow of quarter. this cash first patronage cash our in a to $X operations were further Farm in Credit million includes to first included reduce development the million expenditures XXXX. are first expenditures of interest Real annual payment Estate Capital that this which amount million Note debt in $X.X quarter statement.

due expect million XXXX. seasonally in lower breakup. the expenditures, range development, total spring outlook to in Real are including to to that now continue Slide presented be the in high-level Harvest for to some will first Estate comments. to on quarter We The provide expected $XX the second are $XX the North volumes of compared I'll details capital XX. quarter be million

sawlog QX in in seasonally lighter Northern to increase South XX% the expected prices second volumes to both second prices the due conditions. index quarter assuming price increase of the about the in lumber to resetting XX% to logs. Harvest are volume and improved reflect expect We XX% quarter to dryer

flat a increase We as higher prices seasonal elimination be to offsets sequentially for a the mix pine of expect priced wet weather of Southern sawlog in hardwood logs premium sawlogs.

basis, higher spot the is about feet a price average X% than that lumber about per realized in lumber price which on average Our first is thousand $XXX quarter. we'd board currently the

per improvement internal our to expect prices, feet. price average We quarter lumber second be in estimates further our $XXX and thousand board forecast about lumber

price represents in board a basis. EBITDDA total a $XX thousand $XX reminder, per an foot on in change annual As million about adjusted

to contemplated to sell million We million expect acre. timberland of just $XXX call prices, per prepared lumber now XX,XXX acres Shifting over increase in to harvest our transaction We X,XXX a of on the quarter Real to the $XXX the Estate. rural I sale $XXX in result higher first to conversation up to of acres Q&A. our in rural closed in a expect volume board entity like the sale nonstrategic acres second we Southern adjusted to concludes improvement of at Minnesota yesterday price feet Overall, quarter. would to approximately of Rob, second seasonal ship quarter. compared plan This the open and EBITDDA to in more an of in year. lumber land this That was remarks.

Operator

Instructions] of from America. [Operator Your Bank you. Babcock first line the comes from Thank of question John

open. is line Your

John Babcock

good afternoon. Hi,

the for optimistic you ultimately, out higher here. the Just kind of market where was from about inventory overall you on conditions how could talk right wondering in and start now, stand moving want lumber to I are and prices front. if

Eric Cremers

as in that as Yeah Lengths Lengths' prices discussed line be QX, slightly where in earlier. Eric. Index, better were QX, generally Sure did afternoon move Good bottomed mix, and We the but got depending we're in not had that's for well, quarter. so product move the Random in that is we higher or the as same Jerry would back What John, expected. Mike spoke upon We lumber prices and into prices we about thought you're QX, to happened Random we higher enough, than did with QX. morning this in at. we

in last varies increase quarter the from held of Western December markets but similar QX back the since a market. Lake studs. lot Southern little what over the we lumber or April markets response a and seen since now Inclement increase bit weather in so or we an Well, prices So ended? first starts. States to of haven't lumber with week has showed seen announced we've into got that the a out paused happened housing by as prices from it curtailments,

been a of builders have there's -- inventories last their been year. destocking lot of starting it's middle press think I that been

higher reverberated interest and they As chain. their into saw rates of But pulling through the that signs improvement. play, moving itself now all issues to come just starting we're supply inventories they see and down started affordability

last that but late now saw monthly the You And new guess I Great the affordable. week. houses has and what, houses since interest was sales both We're down, were the affordable therefore Recession. actually home more more coming making that come smaller also it builders announced, from with number rates second-highest

markets that the So as plays are move but our to see starting lumber up, how through we that view we'll firm is year. out

John Babcock

board feet confirm, – within the hear expecting are correct that you or guys, at And board thousand per least did $XXX forecast, just per I million feet? to

Mike Covey

correct John. That’s

John Babcock

Okay, thank train impacts and little you from then of essentially the just kind could operational kind also you. the about the vortex a derailment. bit of talk And if

was more April. can there carryover little If a you on if provide into detail any and below that, just also

Eric Cremers

Yes.

factors back Jerry and was was quarter. conditions impacted to really by of Mike spoke shipments XX feet Weather different pretty XX million weather shortfall. number in lumber the quarter. held were as a Actually, million by So that shipments tough roughly XX significantly million first of our a about, some in it that feet

Arkansas out the due to in wet weather. due running to was that logs of down of Some

That States. of due to vortex X Lake And polar the about some shipments in million by impact feet. that was the

normal also in backed quarter. transit that other that in Washington We had X due That a feet out above to Maries million St. derailment we inventory held also back And was about the our about challenges, Eastern mill. shipments X transportation to shipments feet. train had in up million

booked they as shipped but hadn't so they the they be they location arrived at customer's the sale. So couldn't left mill a

really in, us weather gone all into But away. million the XX have So QX, have a bit and million to eased XX tough the really moving issues things in quite impacted transportation quarter.

John Babcock

so XQ, don't that majority this resolved was about much really we the of have that in So worry of quarter? to

Eric Cremers

That’s correct.

John Babcock

I mistaken, you as I'm of the to million guidance, I thinking around if confirm. million on in not the X.X what the update of And an for thought there? X just you're volumes year was tons kind Resource kind Can to far then as just segment. wanted provide

Eric Cremers

for North, So, weak now we’re year. a say, right weather that to pricing is tons held oversupplied bit. we bit would through an even hit mills harvest X.X our have are million South, in still force the slow the in we little anxious to to, start million, go market. increases planning year. into of we'll go year on I through back We're expect normal QX into about But tons In In we're North. the the on us targets X each tough and million a X.X and this the a the off and full relatively conditions side, the wood seasonal QX, of not so little

bit That QX. We are pretty being said, had running a little behind. a we solid

in teams job wet tons dry Our great the to expect QX them just relatively a million They're impacting to Arkansas harvest our we X some taking QX. sawlog QX, the moving conditions into things for we in year. out did and one particular. got still and hit over tons into And targets nonetheless, districts prices But get XXX,XXX South. pulpwood in market. It's our expect of high the and will we these in of under advantage

John Babcock

very helpful. Okay, That’s you. thank

Operator

of Vertical from Research. line Chip comes Dillon next Your from the question

is open. line Your

Chip Dillon

is This you. for Tiano Chip. Salvator are How in

Eric Cremers

Good.

Chip Dillon

plant. my MDF So on is first the question

correctly, trying understand like. an plant little your you're look how a now essentially it's in generated Just sold to bit understood saying profitability loss EBITDDA operating if and that would revenues I And QX.

elaborate think foregoing bit So about that? you of on the the how little we for And the remaining can a year. EBITDDA should

Jerry Richards

Yes.

with, that for we $X.X million type for leading part housekeeping of was start Salvator, yes, quarter of an was to your and is first So charges to the the expenses there question kind There a number fair loss of EBITDDA unusual incurred sale. MDF. up

is that correct. So

probably in In $XX mean, terms of it to I the haven't mill, it $X recorded was in past. under EBITDDA Deltic, million we the Back EBITDDA for the separately range. million

million, terms In it's the maybe probably – that in $XX of in million somewhere so, something probably the $XX revenue, range. range or

some like. go-forward you give to will as what that So the looks sense business

Salvator Tiano

doesn't next that items few fact the essentially, So loss the sale, going from you're to had right? the benefit an a in quarters EBITDDA mean Just onetime maybe.

Jerry Richards

point Okay. the Great. MDF totally transaction gone as of February. closed we the in

Salvator Tiano

is This the from you on your and end and essentially, think I year. in Yeah, question the down debt where the it by buybacks. $XX second capital is where allocation quarter was cash is net million over the the of and build

$XX, that about of year? if $XX, So there which I'm given at $XX how attractive as the you already it rest how pretty bought only stock any you thinking were the cash, level bit, stock And – shares think earlier worth that getting M&A was price versus and do being about of little price back? about the especially the thinking was the up a are million $XX, buybacks you was

Jerry Richards

in capital So correct, discount. a first mean, continue terms I off, trade to we pretty allocation, of sizable you're at

Our attractive on is stock on it, really you level. X% top a a when of factor at yield price dividend especially

on trees your well do I certainly in public average. trees think And our in the acre, which the what is think buybacks market the below value you those we think versus math what $X,XXX trading acquisitions. are about and of implied morning on question is worth now, the that's – touched I part an was this implied how about of right

buying the about attractive trees. think much at you current that ours when point trees, are outside more any So

certainly So would any available prioritize continue we'll execute to it's we be have to opportunistic over share we repurchases plenty that continue And situation where of to continue cash acquisitions. program. a against and

Salvator Tiano

the net Great. one you're log a buyer U.S. just in mention And one, do you last

South, EBIT bit $X was help a on these were to the how weather, little won't material operations companies due Or right. higher. noted quarter? million generation? impact next What's your And immaterial Product and position this natural it price really Wood to sawlog many from

Mike Covey

time impact. an days it only at each we turn when No, year those this have of inventory inventories of was immaterial of a And over couple quickly mill.

and on have was it So it immaterial XQ. won't impact an

Salvator Tiano

very much. thank you Okay,

Eric Cremers

add, is it's I would hedged Salvador, almost again, where segment. one being in perfectly a plus

Resource Products So negative it's this quarter, the offsets Wood in the largely.

immaterial. that's of color So behind the why it's part

Salvator Tiano

Thanks. great. Okay,

Operator

BMO of Mamtora next Markets. Your line question from the Ketan from comes Capital

Your is open. line

Ketan Mamtora

Thank you. on good And congrats start to a XXXX.

Mike Covey

Thank you.

Ketan Mamtora

The kind the your you side? can bit the projects Products lumber at what have little of about going end on side, be may capacity may a question, sawmills? on that first XXXX you that the talk at debottlenecking Wood of on And

Mike Covey

Sure.

Eric Cremers

Yes.

got we're new we've a Ketan, to try At of to of So improve debottleneck in there. or out our a trying to process projects kiln increase underway different mills at production. number install to different Maries, St. the

We We have getting install XX year. done end EPA installed think the feet that'll knows, to the have year. hope production a our permit by held and XX that St. who million the mill, kiln. to Maries and We operating construct improve from been up that million, a of at and

issues. installing are the shipping We're sawmill in challenges talked South. enough or about at not getting the as we've last our over We've so We also had year cars. Waldo with down rail

allow which going spur in at So freight finally And I to the And rail going our our expand Waldo this that's new our stacker, new our improve will Warren XX Waldo labor us another we're sawmill, help mill. will another, million will our same previously, kilns capacity we've lower another shipments to we spoken but shipping cost think feet. higher mill, costs. at mill two per increase allow our other and allow addition at XX million to that, Waldo who there then And install and too, think we're installing us lumber, reduce drive our about at knows, at continuous Warren and improve Waldo XX mill, we're going hour to to us million, and a to our to sawmill. which feet. cut have us million install will quality more XX And green related

as into we million another shipments over a we So intend we to little to look get from in, or out X.X hope then shipments there up grow this and so year, to all XXXX. X%

Although I our we give yet. detailed all on you done don't – planning low I'm guidance because haven't XXXX to

Ketan Mamtora

No, And is now and to up the cedar But current where this any log on seeing you're that's North. prices markets right fair. are cedar very are? update markets turning provide in helpful. of then Can how the terms what you there

Eric Cremers

Yes.

Doug cedar, stuff prices fir at which we expected the of for sawlogs, call, full mill be back will speak year. we high A a forecast look if year, this little if as cedar take XXXX, that relatively full pressure. cedar. out Hem-Fir, look cedar sound high over really has versus logs full XX% prices year full the and prices, been year for upon but peak expect based may of I our like We full in to of so last down to got woods, had was XX% year So cedar you lot lot, have those year talked prices and cedar bit are those about came last about year. And a inventory Northern prices at to And be you like prices. about in under up over a excluding be think the

Northern something experiencing in it's So business that regular seeing really our Resource we're unit. similar

prices down our were them if in another QX up specifically QX, in quarter, in XX% . QX by then expect we XX%. look and to But XX%. go QX Now cedar versus we here

to bottomed. have feels it us now So like prices

Ketan Mamtora

what Got the big and it. those the Eric? driver third would be quarter, increases of And in the quarter second

Eric Cremers

What would the driver be of what?

Ketan Mamtora

Yes, of those big jumps.

Eric Cremers

cutting are outlook for we from that customers speak. hearing on just – it's our as we're Well, what we're deals these

Ketan Mamtora

kind QX That's that of of signs Understood. that, then you a And you of had tension it. outside the in? wood seeing Got in Obviously, guys as log well. are But helpful weather to baskets Southern any just pricing prices. in it. turning element operate of

Eric Cremers

I to and Very mean back of That expect today. a lower prices tension. QX got QX. getting little we nice we're QX. lift move around But to the we last end again may as through

Ketan Mamtora

repurchases, period more Understood. then And a you question, which anything of prevented like any back clarification, from On there of blackout limiting was buying more that one just final share factors or shares? Jerry. kind QX

Jerry Richards

Yes.

like we our had that after we So opened in day we last earnings. quarter's an mean open released about it call second I window. talked

So had what was purchased, we then at to the restrictions. and relative an open there's work normal SEC guidelines we could when it on constraint window have to level But certainly you not no, through look the done. we

Ketan Mamtora

Understood.

Thank of super for helpful. that’s Okay, rest Good XXXX. luck the you.

Eric Cremers

you. Thank

Operator

James. of next question Mings Raymond from Collin Your comes the line from

Your line is open.

Collin Mings

good out morning there. Hey,

Just me. of questions a from couple

First, the of pricing prepared remarks just that in as earlier this really point just far on question. – clarification the anticipation a in touched the you as in U.S. But an and

you actually South to levels subsided, an weeks? weather just lower kind wet will move through pricing tension ease of in as is recent quarter? expectation have that that you the revert conditions seen Or as

Eric Cremers

low. $X There's into these QX, them it's – back last as elevated, but better then but a to going or chance lower No, we I'd there's elevated. that going that decks a move chance all QX. isn't chance I these $X a it's to being had relatively it's that an mill get call a ton up prices with Collin. There's say We through think log think expectation, out really we

Collin Mings

just just helpful then little to – pressures cost Okay, broadly. about more that’s clarification want I more there. bit talk a And

or through kind some particularly conditions? in the just your out of cost given you're on identified as through of maybe transportation recognizing operations Just the of you front been things kind the efficiency you on mill can will as again, within there weather side. focused what focused seeing remain we merger expand structure, projects this labor we've the But as well obviously on kind move have on different terms of guys Deltic both and year, of improve pressures and cost that that

Eric Cremers

– we're Yes, just tend Collin, cost tough pressures things and I extraordinary. transportation go trucking months say on on would we're issues in side, come problems. are climate nothing the seem Transportation really based – season. wouldn't the The inflationary It's that be feeling today, that inflationary. the the out nonexistent, all really to rail winter and are but on Then significant. they to not issues you this some I even get say into they're are

into As the months, Idaho have we're going certainly pricing for summer we That's issue get South. shipments. see relatively to trucks becoming in out in occupation wouldn't to issues things, going kinds tougher the the these go start describe as competing We of produce and with to that's anything per into. the an be the Resource day. I truck end that. small in typical But business, X% cost get all beyond inflationary to to it of tougher X% are The at pressures year, people to

Collin Mings

Okay.

maybe an relates it following as U.S. trade relations just and WTO Canada on of lumber the recognizing Coalition an kind just picture, update some of the between part the front, Lumber U.S. and Bigger helpful. update to the That's Okay. proceedings. of

Mike Covey

of Well, in last there've few as you been some rulings weeks. the know kind technical

late this months later WTO its its dispute think way or of legal fact the year. the work to take going sort take it's to that's hearings next the time point this a if that season system – this into way through not for long to the more or things fall with year a year to countries, continue several process. to We in perhaps all going Election trade both to in those through

most a that between believe countries settlement negotiated to that's continue makes We sense. the the quota-based

Collin Mings

Okay.

to least. really that like change much near-term at the in Sounds on expecting not

Mike Covey

No.

Collin Mings

One question. last

Jerry, Just, more housekeeping.

there in was swing in taxes it – deferred big looks XQ. like Just a

what you if provide going something know just that was I one color helpful. footnotes. on I But missed item? don't some that, of can the Just with be would line that if in on there's maybe

Jerry Richards

bet, Collin. You

really swing the that MDF in to So taxes sale. deferred is related

when with So had in Deltic. low assets the so when carryover we we very merged basis we –

cash set that tax you're we purchase why a deferred that flip. due sizable we up mean, accounting. that's I that taxes So in And seeing and pretty liability mill, the now become sold

Collin Mings

you Thank all Okay, right. all much. very

Operator

Your Chercover of Davidson. next Steve from the comes line from question

line Your is open.

Steve Chercover

Thanks. Or South, pulpwood And a was forgive toggling think were could flat kind and are in things. the due prices tightening? I I QX. sawlog of we between I wet Because and seeing weather it in the to because you of there's But weather? reverse couple you me, elevated also be it heard QX. that any Is in wet say to expect continued

Jerry Richards

Yes.

So Jerry. Steve, this is

hardwood Eric as moderate during So pine rebuild but And volume of The that talk in the is will sawlog. the prices we still mix there's significant what the elevated you price heard sawlog expect part increases factor mills quarter seasonally about hardwood as for QX. inventories. sells of offsetting a harvest is higher than pine

Steve Chercover

Sure.

chatter updates Arkansas. on off this heard huge But been and in Have about any a and it would there's benefit speculative. is that mill on mean, probably – I almost Now you? you

Mike Covey

proximate point. speculative I the our our at Arkansas, consider I been the away. be on to pulp have benefit be not what remains to environmental about continues it Absolutely, But process. knowledge cited if this investor to But permits think not were it issued, Arkadelphia, although years quarters Construction work it very away, which permits, a we're expected us. to to happen, It's talking would mill would to in that's ownership. our is

Steve Chercover

value number Certainly. mentioned you even you dollar you shares? again, Thanks. me And on can But forgive repo by the then or quantify have – of it. outstanding how much and if finally,

Jerry Richards

Yes, Steve.

left overall million the So that's so – million under the authorization. in we used million. is round we numbers, $XX $XXX We authorization $XX the have, quarter, so

Steve Chercover

Thanks Jerry.

you. thank Okay,

Operator

Global. Weintraub Your Seaport next Mark question line of from comes from the

open. is line Your

Mark Weintraub

you. Thank

lumber reference announcements? you Is First, thought that you please? would expound recent had that mentioned on little Western could Canadian bit a more, you early in the your to into just factors regarding that supply come remarks play. Or a curtailment

Eric Cremers

Mark. is Yes, This Eric.

and you've in up the a of Columbia. curtailment and British number closure So in seen announcements both Pacific Northwest

totaled I heard now. the something like think XX I mills tally

in improvement so competes particularly those lumber. lumber Our products pricing there business – with Western and dimensional an been we directly for Western has

into may seen haven't the business mill in Lake that stud or Southern but over there We coming. Yellow our States over impact in be Pine, same yet

Mark Weintraub

Okay.

would reference – in clarify the something what that wanted what necessarily Just So now happening – not that. be is is to to I happening the just future?

Eric Cremers

and happened pricing or seen Yes. Lake coming. in What But improvement in the has Western be South. the improved have that is States yet we not either may has

Mark Weintraub

Okay. Estate prices. the second thanks acres relatively of at and for the updates sold sold Real a shipments. somewhat price. moderate quarter, the acres area I And outlook noticeable vis-à-vis terms It's that being any average and on the updates a lumber on expected – one harvest quite sales also in few guess and

Eric Cremers

Mark. Yes,

So business rural will, land say on side, if Real the you the side. development back-half I loaded, is well development kind on sales would particularly in as our as of Estate both

We year. of have our of will be commercial lots in tend sold year half acres also second our generally lots, sold to the two-thirds the late be more the in and

Real So Estate first business is the second the skewed half. towards half versus

Mike Covey

sell plant group me very multiyear in we a rural the on the one large that we just conservation in Minnesota a comment a Just – to Minnesota. let That commitment sale, just with that comment closed on the land. is have

$XXX an latest I tranche was think at acre. this sold

a was for $XXX an the I land a significant year makes depends us. us to think of around It the appraisals acre. still that's it lot to and annually. on But one premium sense last value embedded

It $XXX good made acre you about sense for transaction. think a concerned small number. overly an don't I should get So the

Mark Weintraub

And starting you last quarter provided this year Okay. outlook a for point is year which good full still? the

Jerry Richards

That’s correct, Mark.

Mark Weintraub

okay. then Super. Estate, guess you For one it's if – just And interesting. so last one I Real

good pretty seems cedar visibility logs. – have You on

of – some certainly all that Or you're the cutting Or quarter. you really lumber you're Northern that's and on also have is second indexed? not lumber visibility other now type just Do it for indexed? logs? is third So deals component there

Eric Cremers

more out No, it's lumber you part not a pretty portion at when small. mean indexed. indexed small is But arrangements, is of the looking start not cedar, it's indexed. is I which that there taking

Mark Weintraub

to you're maybe So ask on not people best this. the

have of the – stuff that of in outside is that is not likely mean, view you I variation window are log outside of to is Or So general cedar, be the – seeing you a that indexed? happening Northern have kind you a in on? that markets in type again,

Eric Cremers

And don't I tell you Mark. prices XX%, it's mean same. along I lumber going and portion to are view go but tends a on indexed, up what No, me prices move window down not a going to what do. are that the do tell – nonindexed exactly have we and to that to the other log think the you I'll with it, going they're

Mark Weintraub

very thanks Okay, much.

Operator

comes Markets. question line from Quinn next Capital from Paul RBC Your the of

is line Your open.

Paul Quinn

Thanks much. very

of buybacks heard M&A than I valuation. clearly are third like purchase. just think you if you're that comment given the there. in more available what on still M&A a can But seems It interested properties seeing current opportunities, wondering I that there's out you're to

Mike Covey

that Paul, of in marketplace out they're couple most have small There's a are smaller at, it's size, quiet. in of the industry players under been transactions quite XX,XXX kind I'm sure but looked acres.

quiet. the been market's So pretty

Paul Quinn

U.S. for additions side And in capacity just the the on Okay. then lumber

your anything in slowing prices? drop given seeing activity, you're lumber down what areas, in are any the you So seeing

Mike Covey

vendors have Not queues are it's six ago. that heard slots really. anecdotally in available just equipment We've months some production available that now not anecdotally, the well, weren't –

which as are impact for project So largest as as we in it in far know, of one had canceling Arkansas big people with Mississippi continuing favorably. hasn't and postponing have But projects capacity that operating all on perhaps planned projects. the will The are Interfor's the in Monticello, some or being those announcements. a us that mill are a Alabama, would our Arkansas, that impact material indicate areas underway

Paul Quinn

right? project is completion, that nearing And

Mike Covey

so. think Yes, I midsummer. I think

Paul Quinn

All I of Thanks. luck, Best all had. right, guys. that’s

Mike Covey

Thanks.

Eric Cremers

Paul. Thanks

Operator

Research. [Operator Your from line from next Chip question Vertical Instructions] Dillon the of comes

is open. Your line

Salvator Tiano

here Salvator again. Tiano Hi,

Number see couple especially one, follow-ups. not which Just timberlands, in talked we it a there is in expand your West quick or to these is M&A sawmill Is there you don't South, you consider? any said will about any all opportunity chance as of mills, with Or a you crisis. something the presence? by

Mike Covey

to just sense likely happen. with timber our of footprint in expansion timberland it Well, as only manufacturing not expand kind of Products go both we to like we to consider But and a standalone makes purchase did Products merger. us because the Wood Deltic transaction without lead, is adjacent footprint an Wood not an a for timber would that would with our manufacturing

Salvator Tiano

in that secondly, great sense. a May. And makes Okay, we're still lot of I know almost

for I it all your this about a Just following upgrades. that year assuming, next CapEx lower is budget would there direction guess, go sawmill

Jerry Richards

too give Jerry. It's to Salvator this early way is guidance on XXXX.

have We capital our or gone planning not through budgeting for process year. the

we fourth something quarter call that talk the usually on year. that's of about So the

Salvator Tiano

Thank you very much.

Operator

it I I'll questions. are there back Richards. to now am turn more time, no over Jerry showing this At

Jerry Richards

questions rest on We'll And interest any and Thanks, participating PotlatchDeltic Rob. appreciate certainly call. available good day. a I everybody day. be for modeling detailed the the has we of in everyone's hope the

Operator

Ladies for and conference participation. This today's gentlemen, thank your call. concludes you

disconnect. now may You

PotlatchDeltic (PCH) 30 Apr 192019 Q1 Earnings call transcript