Earnings call transcript Q4 2022

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Operator

Good morning. My name is Devon, and I will be your conference operator today. At this time, I would like to welcome everyone to the PotlatchDeltic Fourth Quarter 2022 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. Instructions] [Operator

to President call for and Sir, may like Jerry to opening turn you Vice Richards, Chief proceed. now would over the Mr. remarks. I Financial Officer,

Jerry Richards

quarter and to morning, Good Devon. conference call. you, PotlatchDeltic's Thank fourth XXXX earnings welcome

is on President and Cremers, me Officer. Joining Eric Executive PotlatchDeltic's call the Chief

statements. This with the SEC in statements our with forward-looking the in these presentation our review contain call the and Please press the slides associated risks regarding forward-looking will statements. warning release, on filings

note reconciliation at be a please found on can Also, non-GAAP measures that of our www.potlatchdeltic.com. website

for turn comments, fourth now the XXXX I'll call and over results then our outlook. to Eric review some I'll our and quarter

Eric Cremers

Well, thank you, Jerry.

$XXX our Cumulative EBITDDA reported of billion. EBITDDA second lumber after for performance. highest XXXX closed third strong that record financial our the $X.X by We strategy of period the it and straight over company's adjusted three-year on total year marks million to leverage yesterday. EBITDDA generated market That is was

contributed adjusted billion board Products last XXXX, shipped performance. in X over Wood terms million strong EBITDDA just another three of years. of million lumber the had $XXX and segment and feet in over Our year XXXX We in $XXX we safety of

successfully we schedule Ola, large the log As in last quarter's line the and restarted discussed on call, rebuild our on sawmill, of completed Arkansas the third quarter.

reach of on to we the relative to on by quarter. hoped track had our the capacity run XXX start-up the than feet rate the a has basis phase mill goal, longer While a million end annual is bit taken stretch board its

and processing lowers significantly Ola's improves As the rebuild also a its recovery. log cash costs mill's reminder,

cash mill's three to is by increase weeks and tie costs. a expand Activity new be in announced mill and sawmill. Waldo, operate XXXX in on capacity the significantly board of existing XX focused will of just to delivery also Project end we will million the by XXXX. come The reduce our downtime next prep in installation and during expected modernize feet equipment project XXXX, site million completion processing project Arkansas the with $XXX project to will annual continue with expected XXXX, to the year. The equipment. In

generated below XXXX, record of million the timberlands in Timberland addition segment the CatchMark's harvest $XXX segment to which XXXX. planned just the X.X We of million was set which EBITDDA adjusted in primarily Our exceeded our in mid-September. due tons, harvested

front. in timberlands of of of Speaking we year CatchMark had acres some CatchMark, on M&A the nearly U.S. and an markets log strongest high-quality XXX,XXX excellent the added the

acquired Arkansas in timberlands acres also Separately, timberlands timberland XXX,XXX Mississippi acres nearly attractive the well-stocked we of in bolt-on of and transactions. U.S. XX,XXX we South. and Overall, three added

portfolio our XXXX. in to South

contributing Our segment year, Real EBITDDA of also strong Estate adjusted had million. $XX a

$X,XXX acres future nearly an X,XXX for On sold over the Those the is deals. we we first built included $XX business, of XX,XXX $X,XXX at $XXX what potential or rural acre. backlog of has acre. deal, a Real believe comprising acres per solar estate million industry's million sales of the side solar

CatchMark's acres stratifying XXXX. We expect in finishes as the increase that will team figure

projects Our potential good credit in made carbon team and also capture carbon progress on XXXX.

efforts higher take timberland providing returns While to and natural off, tied climate will about optimistic higher it growth believe we for well as to we as these efforts are time these solutions, result pay values. will in

average in estate Little lot Rock. $XXX,XXX real we business, price at per our XXX community development the On side an Chenal in Valley master-planned of sold lots of our

over of in We in quarter XXXX, commercial million at also acre. per average $XX price revenue an $XXX,XXX every closed of resulting sales

deteriorated Turning in to housing. U.S. XXXX. sentiment quickly

due that continue fundamental over construction is the favorable market crisis largely term. underbuilding caused of backdrop the after clearly form housing combination financial slow, to on to decline significant great believe and a to the This long based demographics a stock in the the favorable While has the housing we in Millennials. of is affordability shortage U.S. of

also is could apparent rate shift are historic and pace decline. predicting interest Many XXXX. that to the an middle economy Fed's the causing as It economists has as of into easing that is inflation rate of cycle slowed the the increases Fed soon

In this fact, markets in dropped over have the are points pricing mortgage basis expectation; recently. rates XXX

expect become In of housing will units we meantime, take it starts under X.X the the long-term year above number at average remains million million December. time, will homes units return in housing units Acknowledging to X.X the more continue affordable. the levels to per of construction elevated U.S. once

the construction season. building that lumber demand elevated under during We housing level will Spring support units of expect the

In buyers are builders responding and addition, affordability to home issues.

less For needed to are the other examples of that key back costly to a the to remaining get or confidence or of improved possibility parts a lot track. homes in opened product are work for fewer country example, occurring. Builder mix on move and people. shift ingredients to mortgage housing amenities smaller rates consumer concessions construction Lower the remote are

typically is Existing Shifting favorable at stock to continue demand, which the in oldest the remains for U.S. underlying be history remodel, repair housing and fundamentals XX variety the of largest a the lumber for significantly market much homes new segment people statistic to the and rates of reasons. mortgage average. average smaller more on stay This important older existing are in Higher older years to homes is than likely because need repairs. their that homes. are more mean homes on

given the remains is that home levels U.S., for homeowners fact job a Remodeling very equity shape. attractive that market consumer remain of sheets balance and a the good across strong, strong option in

on effect less than have usually an rates demand. interest higher factors other remodel addition, repair and In of

leading and home of remains X.X% of remodel forecast be positive fourth year. spending indicator customer to activity in grow report supported year-over-year R&R sentiment and takeaway, this Harvard's is continue by strong. the will growth This this remain to our spending remodeling center higher year. which repair expect quarter Pundits

row price X,XXX board reached Lengths' a lumber to premium to lumber $XXX in a We bottom be futures composite segment. continue three increased to per Lumber demand has optimistic market trading The recently at $XXX R&R and prices. feet. about weeks in are cash the Random

the as chain stocks improve supply up lumber will season. current expect from We for spring prices continue building levels to

transactions The the dividend dividend sustainably. stable completed Moving returned increased We cash special growing the bolt-on our million accretive our acquisitions, we million $XXX which in half $XX X.X% and key XXXX. shareholders We is flows that the CatchMark the amount year. our regular our driven That such strong to dividend, to by a through increasing results of included so of remain to first regular by doing XXXX. timberland December. capital was to in committed in We as allocation. in cash merger

payout cash for available XXXX. in our XX% regular represented distribution of dividend Our

a also shareholder at to discount that overall only as over stock a new is We of part $XXX when Board share, on of growing during repurchasing remain our shares price share end, average below committed approved $XX our million well which To time. focus million year value in at our they repurchase of trade significant $XX NAV. our an program We bought the August. back per estimated

rates borrowing Our from also applies to by XX our costs. XXXX which average the increased percentage interest in approach basis rate Fed utilized points in our opportunistic borrowing weighted a over X year points. swaps reduce we by In to cost XXXX, interest

lowest X.X%, the costs are timber average REITs. of the now weighted borrowing Our

the the sheet balance cash nearly At we had million. year, and of $XXX $XXX liquidity end the million on of of

shareholder strength financial our growing and low remains value. to continue provides a leverage platform solid Our

ESG of social very report our reporting in third and first environmental, launched ESG published our September, we year gears, QX. were May, for named carbon our report Most Newsweek's climate busy XXXX. list team Shifting governance our year We the in and also Companies in website had annual to a We row. second in a Responsible and in

across year. a committed of ESG do change and strong Finally, to the commitment has we to our goals we at part PotlatchDeltic gas our announced and mitigate continue the ESG reduction are legacy greenhouse our spectrum. to story climate end responsibility the

was for hard rebuild real timberland the another That PotlatchDeltic. three to results. allowed dedication to on year us acquisitions work and merger, In startup, lot and and a summary, delivering XXXX plate. who while is bolt-on our financial great older CatchMark the employees Their had all their complete excellent a tribute

to sheet, strong balance a continue provide shareholder Our and solid platform increasing liquidity value. strategy

quarter to XXXX fourth over outlook. Jerry now and turn our will it our I to discuss results

Jerry Richards

Eric. you, Thank

Starting was seasonally primarily EBITDDA was to in in million $XX fourth lower million quarter the decline the to quarter-over-quarter lower of X $XXX compared prices, EBITDDA in Page prices The due volumes. slide. lower and Adjusted the with sawlog lumber third quarter. index harvest

quarter. results. third I'll segment adjusted segments X each in quarter of the color our provide on for is from now quarter to The Information segment's operating our Timberlands fourth in Slides $XX million fourth X. EBITDDA more through review million decreased on and the $XX displayed our

flat is was Our XXX,XXX sawlog the third in compared the fourth which harvest quarter. the tons to North quarter, in

plan quarter's in issues. we fell our As primarily harvest availability volume last the of quarter, third to due discussed call, on log-and-haul short contractor

good a contractors did fourth additional team Northern the job the harvest the reduced year. for harvest quarter, the Our shortfall which in and securing increasing

compared Northern for in quarter. sawlog The sawlogs. lower per the reflects lower index quarter primarily were prices to prices a fourth in XX% ton the third on decline basis sawlog prices

of was In The first quarter the in closed the fourth operations full in on timberlands tons million quarter. quarter CatchMark's merger South, we we the September. since the harvested fourth X.X

flexibility team achieving Southern to and Timberlands execution that result. Solid were key by our

volume the was quarter. compared -- sawlog more X% stronger than in the in wood CatchMark's mix in the X% more than increase High hardwood which fourth southern baskets sawlog sawlogs. which fourth prices Southern prices of quarter were our higher driven seasonally in lower a was Our third higher legacy offset of quarter were by in quarter quarter. to full the third markets, The a

million from Wood quarter. Adjusted to the Moving and million declined third quarter $X fourth XX. in X Products on in $XX to the Slides EBITDDA

XX% the Our or the average XX% quarter Lumber Composite Random in board in X,XXX feet By realization nearly Lengths decreased third Price the the price quarter. lower comparison, $XXX was quarter. lumber than Framing fourth per

experienced by the orders lag to and shipping a As a captured the price. of between not indication booking which we composite, closer real-time is is reminder,

shipments $XXX in realizations board XXX million to December. feet feet price average million the October, XXX feet Our and from board X in the in board third quarter. per million X,XXX feet November lumber board in $XXX quarter fourth $XXX were in Lumber decreased

lower to slower a planned. ramp-up in Our primarily were fourth due expected, Ola at quarter planned than the than shipments

to track our we on progress rate the As Eric making by end run Ola, team mentioned, and production the the full first reach quarter. good is are of at

The was $X Shifting third declined of due generated quarter. to quarter $XX fourth to to weighted heavily by in as the average price fourth and XXXX. fewer acres year sale the our half This sales a first the was both the were land to expected XX CatchMark's in Slides EBITDDA at quarter. Estate adjusted the in sales the compared million in and sequentially on Real rural XX. million segment's EBITDDA lower rural of

master-planned sale EBITDDA generated Valley of We residential third sequentially. compared quarter. to lots XX lots the in by our closed Chenal quarter the also community in XX fourth declined the

real acres quarter we We at commercial that, an also of fewer quarter. per sale Having for year said in acre. commercial the least fourth sold $XXX,XXX every price have one average estate closed this

Slide are which items, financial to summarized Turning on XX.

Our points that matured had in includes refinanced total and million. We as approximately rate $XXX on debt our refinance our reduced well liquidity revolver. million the this interest cash as annual XXX the December. amount undrawn by on $XXX,XXX. We basis of logged $XXX debt million was $XX previously approximately our rate, This lowered which interest availability cost of

refinance X.X% borrowing third this used to million. rate declined we outstanding our weighted run interest CatchMark's the year. reduce debt of average our in to interest the annual quarter, swaps cost has cost $X nearly Overall, debt the rate Including on

in repurchased of We $XX price average per an shares of quarter fourth the $XX million share. our at

dividend We also in paid December. million special a $XX

in fourth and estate Capital expenditures in timberland million quarter. included acquisitions. from excludes in real which expenditures, cash the our it amount flow were development cash $XX includes are operations That statement

three the $XX last in transactions on the were the timberland three Arkansas bolt-on million in for acquisitions fourth aggregate. we the mentioned, three transactions, close to cash We used and year Mississippi Eric earlier As to including in successful early quarter. this the $XXX million of all bidders close

that we and of remain We track basis. when synergies well, we million of run go announced million communicated now rate of achieved $XX the to cash on $XX versus at a continues May. we end the achieve cash have the CatchMark of target Integration $XX million transaction synergies to on

volumes high-level outlook details the harvest We Timberlands are tons North million on are our XX. seasonally level in in at in plan to quarter be to now provide segment X.X XXXX. some lower in Harvest approximately XXXX. the Slide of comparable presented the quarter to first first I'll the comments, a planned

to the decline harvest quarter. the tons first in to quarter in prices we quarter. In sawlog compared to X.X fourth South, first about Northern plan expect the We XX% approximately million the

to remain prices sawlog full. Southern assuming inventories customer log our decrease modestly expect We

X.X We XXX first quarter, seasonally feet lower lumber of billion cut sawmills rates Warren, lumber. are plan production Northern quarter. expected to a our XXX the of ship In and million to effect Ola, ship our sawmill we at to Arkansas planned Arkansas in to feet board the in maintenance XXXX. sawmill our The board in outage offset plan of in increased million first

Our price based the average first feet on than lumber. quarter board XX% lumber price. This lumber million in far our approximately quarter of thus fourth is approximately is lower XXX average

our prices and our have lower been lumber Our lumber currently X% quarter spot recently is about than increasing price. price fourth average

for consolidated $XX board basis. on change a foot price X,XXX annual per EBITDDA As of approximately lumber in an a equals million $XX us reminder,

Estate. Real to Shifting

acres and to Chenal Valley sell lots in XX,XXX land XXX rural residential expect XXXX. approximately We of

the real provided Additional estate are on slide. details

that and quarter expense approximately due the payments on our third receive than short-term first is million $X quarter increased $XX our in to Farm annual is patronage -- cash fourth Also, lower Interest quarter higher income when quarters $X rates. other will first interest and Credit from of second, balance in the estimate because banks. XXXX. balance the interest expense for million interest the million be the We that we per has to quarters

Turning to capital expenditures.

last spend for that in any June. $XXX acquisitions. Arkansas $XXX to announced excluding XXXX, modernization That planning Waldo, to are We expansion million includes million $XX we sawmill estimate million the potential

the and we to expect adjusted shareholder total Overall, that, quarter improvement be are positioned optimistic EBITDDA sawlog lower will term. growing Having the we said in lower and the the continue reached lumber continue. lumber first over January, due in We're to that recent index our prices. we value believe well will prices long bottom

open Devon, the prepared Q&A. our to I'd concludes call remarks. to now That like

Operator

comes [Operator Instructions] Our first question Weintraub with Seaport Mark from Global.

Mark Weintraub

Thank you.

recognizing left repurchase, at that you on authorization. about got to still at How when of but execute, do In going the it cash part discount, at lower. of it million the to $XXX been? you'd the said has so you terms think going generation least same obviously, year your should million pace of the be clearly, only the $XXX time, is we share type stock in a But, the the likely the bunch is first you're

we -- quite obviously, a do how the have you cash should of do think So, You kind the still of about sheet on bit it? have balance revolver. and, the untapped

Eric Cremers

Mark. shares uncertainty there stock a NAV, question, opportunistically in Good to discount a right Buying our like strategy. today, at back lot markets our But of of to does allocation is part important large capital trades remains needless say, very now. it Yes. when the that a

price options. balance there moving share for repurchases. use that believe we're share are option of a capital We the an continue other and our with isn't attractive the -- to to going constantly repurchases capital, day, of really But against that end at aggressively

very we wrong. has cautious get in capital us our approach Most the served well share repurchases think companies past. And allocation to

time. I than come So, is we be answer going give you to And at other they allocation NAV these a and over capital I those definitive where can on our we're other and go don't stock that to alternatives alternatives, valuation the constantly have. other against metrics evaluating think pace relative

to predict to hard is very it's pace So, play how going out. the

Mark Weintraub

guide quick on help follow-up. your thought there want on balance Is that process of -- that of might maybe you you just be? kind And sheet a as can what level to certain the a cash retain us

Jerry Richards

Yes.

follow-on good Mark. a that's question, So

mean, base top we of project level hold. on going we're on to is million then, in reminder, spend So, that, a kind of about And I a million thought Waldo historically, to I as have like of $XXX we year. this level of cash, terms $XX the that

So, approaching be $XXX something of million kind baseline. the would

Mark Weintraub

I'll over. helpful. That's Okay. it turn

Operator

Our Quinn next with Paul question comes RBC Capital Markets. from

Paul Quinn

much. Hey, thanks very

under mentioned in that -- Eric on a question in Just the North you harvest XXXX.

material in that 'XX? you're whether going how and to is wondering make Just up volume that

Jerry Richards

This Yes. Actually, is one, I'll take that Paul. Jerry.

wood. So, pulpwood the harvest, of under ton in primarily and that's terms

things a seen pretty years on. for One, for last weak couple been pulpwood And So, us, region. historically, going low-margin part of there's of few in we've have that's business. our the the a for pricing

doesn't it out, pay wood the don't. to hold when So, we

in other was had, And issue is contractor thing then, the we've an QX it availability. certainly,

ton So, job our team contract did wood. a good really securing availability prioritized but of: pulpwood over more in and QX; one, certainly sawlogs shipping they

million for So, to that they hit feet at report happy XXX was the plan end the day, year. that of for the year the the board and

up. and going wood forward, if made think I I ton don't know pulpwood that gets So,

I the (ph). it's that's in mirror] -- So, think I think [rear-view

Paul Quinn

Okay. got the Ola? were sure but I'm and Products Wood your side, the at the quarter, not operations were lumber affected slower-than-expected the but well plywood how it they on you've just that in And just then, breakeven knowing by rained ramp-up asset,

Eric Cremers

they at not simply Well, Ola standpoint. the in made standpoint, want slower definitely shipment earnings were a money an the couple fourth Ola. we We a affected in missed and million we're from dollars. our where cut at From be targets to Products we quarter, because Wood ramp-up quarter, rate the in of production by

that's commodity under to competes OSB definitely of in was with good mix But our Plywood housing-type be and plywood a applications. chunk expected. pressure some QX,

part under And of But side some the was well. some it's QX. of surprisingly the is the in up of more pressure business plywood non-repair side, That high-end other industrial our applications. holding reasonably is business

Paul Quinn

as Idaho we by week up down a wondering announcement. by detail material last thanks how just then, that month. wondering, jumped result much the prices of big for at Was announcement prices a all? Canfor in on that and Canada lumber Okay. in And I'm had just

Eric Cremers

Southern really And good saw from impacted material. was prices, $XX $XX, Canfor immediately announcement. prices our X,XXX a kind definitely Yes, It really in weren't made. when almost we raised the all by a was of lumber which in point, then, was you that about Idaho the yes, is that [indiscernible] particular. announcement a Oh, $XX, jump range,

Paul Quinn

capacity anticipating in suspect I in B.C. And closures you're 'XX here? further

Eric Cremers

Yes.

don't we've know, I XX of seen, or so roughly So, board over months. far, last curtailments billion X shutdowns the feet permanent either

as relatively we we up operate in We that is hear -- continue but to B.C. B.C., continue know, hear high cost. don't to you

that think And to or up producers really a curtailments I yes, I hear lower curtailing that's about closures, closing. of expectation those prices, these or chatter that so, And could with but lot in be an there's mills more there region.

Paul Quinn

just that then has or the And lower opportunities, in there of Okay. pricing 'XX? lastly, the timberland environment, is with deals do that you lumber up freed in the i.e., some anticipate more marketplace,

Eric Cremers

Yes. are there as front. sellers to holding and quiet now, guess pulling have are like sellers we pretty properties surprise off the year lumber going it's to so housing pulling little XXXX, market with some The market and bring back Paul, the a to I be so active be timberland might to pause with suspect is back that a signs a starts becoming starts to We're carbon it's until it's lumber guessing market. deal. choosing of looks far, But really is potential pretty But a demand bit it recovery coming M&A housing right quiet. a no of M&A back, and I'm here. wait a on timberland prices in going Also, bigger bigger

Paul Quinn

all all That's That's guys. had. All I right. had. I Thanks,

Eric Cremers

Thanks.

Jerry Richards

Thanks, Paul.

Operator

Markets. next Our Mamtora Ketan BMO Capital question with from comes

Unidentified Analyst

on [Roshni] Ketan (ph) at This BMO. of morning. good behalf Hi, is

you're last can to you change and demand announcements? inventory about question curtailment what weeks the a Have off little in bit the channel seen Just trends? about terms recent lumber here, talk -- back of start with of in Paul's a seeing you

Eric Cremers

so in haven't spring Well, quite the we we're uptick yet firm not yet, demand. building really seen season to

have far along I -- with been all going drop. running think prices relatively people are how dealers to are and low what inventories wondering

So, they've been holding off from buying.

to a lower. any bottom. reached okay, in They're are little I the going a prices have think, pickup here People have go lately. probably think seen to we demand not starting of bit

to me So, say really don't it's to that into buying. users. hard we for to demand, time direct translates is it's How step user up sell really end

the home of segment sell will our the now. happy And side, that we We're I a of really R&R number say with strong. remarkably on that R&R side stayed centers. business to has right

good so, And segment. that feeling we're about

coming no to as will demand. this doubt Fed the look XXXX, But down relative back be starts into we get we year. think we to That's XXXX. and as are There's to going out added last later this is out year starts hurt again lumber to year, going we cutting housing rates be think overall

confidence see buying or I've points moved I've few The signs off up about seen in have come XXX positive started down mortgage to and housing. We articles rates. homebuilders has the homebuilder mortgage basis read so, lows. a rates down

builders buyers. somewhere X% is Some -- read of entice a offering to to I think I one that mortgage try the rate

crisis. So, was it's the complete there like the like out it's disaster to after we're -- season. not it it's But financial spring a building great not yet

Unidentified Analyst

Thanks in then, us about you can you do the Idaho decline in for that? about prices in what's log that How think to right is? tell And QX color. think way

Jerry Richards

great logs, Yes, has talk going when That's number the around lumber manufacture quarter, plays lumber which we those buying certainly, the mean, certainly probably for in early. we're year index then, additional and you of so costs, relief, as the plywood. actually, be to and it's question. down significant, see some logs that that's million come log price as and the to could first No or Idaho and pricing ourselves question $X the a we're I out.

Unidentified Analyst

side sawlogs log also in could your Thank well? on (ph) And you [falling] in Idaho as benefit stuff, you primarily you. just see Idaho, Wood the Okay. when you are seeing Southern Like, Products? cost and then, anything talk about

Eric Cremers

No.

little first not quarter, quarter. the they're a bit the down in Our They Southern much. be fourth may little actually but a up bit prices, in

to the of a log prices timber One benefits stable. relatively having in tend is of business the south be

South. So, we're not the in seeing decline real any

Unidentified Analyst

Chenal and real just Valley, then one me. last the much for Deltic's in commercial? left residential both And of development is estate How in Okay.

Jerry Richards

frame question. context. and I'll That's with just the mean the a -- to start stats great high-level Yes. I

So started sale that's real that And remain. X,XXX the as that's estate master-planned total lots, also been a when community. residential about is about project. XXX available acres X,XXX-acre XXXXs Deltic have over little since And late well. commercial It's of then, we a X,XXX for

Unidentified Analyst

Thanks. Okay. Thank queue. I'll the you. jump back in

Eric Cremers

Thanks.

Operator

comes America. Staphos Our Bank question with George of from next

George Staphos

guys. for Good morning. Thanks details. the Hi,

Eric Cremers

morning. Good

George Staphos

With Ola, slowly the demand issues you mentioned not curve bit with to that or that, the of market? owing more up wanted be? it Was perhaps Eric, was why it the coming the where a to was it Or Ola? you'd curve was wanted. than little cut as sort running you're And to up Jerry curve rate true learning you coming

Eric Cremers

up question. rate in up Yes, the not was XX,XXX, back good September, XX,XXX October, related just switch. When cut an an a started to late mill it Starting feet Ola was No, around on-off George, early demand. we not it's our clearly hour.

here sit we feet ran per board we XX,XXX night hour. today, shift, the As last on night

the volumes production turned since we mill doubled over when on. we've So, first now

the step by software like one the start. think two forward, had said, very bird-dogging end control issues. had But going Right steps want had to still those end We issues And We're you We step we the back at a be That's we're with that steps the to vibration optimization an to like to This where back, be I we handling mill and curve issues. now, think deal our two of And our That's hour. at residuals to grappling quarter. we'll get start XX,XXX not there target. we where with. we're forward, the we want and ramp-up alignment the one goal. of We up is we're be. when up moving to quarter. had issues we're lumber we That's this. issues.

George Staphos

It's harder a the in spreadsheet. lot than numbers putting probably

you give credit we'll So, and it. appreciate

Eric Cremers

you. Thank

George Staphos

course there CapEx obviously, is that at in at But a you the we I the tracking year there think little would than have and you and the point we about over that Street, is or least be guided anything on asking Waldo. bit progress should were out? of higher else

Jerry Richards

it, $XXX Products of from The start level, would Eric part million bit of That acres add of I'll and mean normal mean, it's is may million a a it. nailed $XX Waldo. business. want now a say, with standpoint. be up planting It's Yes, you to Timberlands because biz. something have in high trees Wood higher I $XXX we harvest. to I spend includes it. But our little overall, of a rest I and would kind million little more

Real Estate, it's a that's a stay timing, of little We bit ahead always step and conscious. demand. of

back -- So, a end of And we potentially to of we're slowed XXXX. development kind planning little bit back pick now, right at down the that up a bit. pace up little

those discretionary, And discretionary return think there then, the try maintenance, well. of XX% discretionary think as certain we Products, level there's about a to also for And you Wood projects. but there's projects always about a greater than

George Staphos

watching probably more to the British folks. any capacity be we going at potential you least for or Last are this curtailments for shutdowns? that other where we markets should But for be aside and such me, curve Thanks, from -- is us potential cost and than is Columbia, is for question think there see strained could Jerry. you

Eric Cremers

down if Yes, for West the competing logs been is Northwest, have I Those export that taken. the past timber several West a to harvesting coming mills has been Standing conservation down. available bunch side years. over coming in with the And side profit is to to large side think of George, they're that's Pacific mills a West have -- price vulnerable they think I part are market measures inventories been had volume But stay fires. the We on have here. because vulnerable make of going There's the -- been open. logs logs. mills the

next further the It So, up on I will for West vulnerable think reductions probably in but North like America. B.C., over that's be the nothing most there's in what's happened region the potential side.

George Staphos

That's you, Thanks. I it turn guys. Thank all got. over. Okay. I'll

Operator

Our final Roxland with question comes from Mike Truist Securities.

Mike Roxland

Eric Thanks, my questions. taking Appreciate Jerry. and

did rate Just the from a affected quarter? the Wood You that cost perspective in obviously, slow at mention, anything Products first one, Ola.

else, there's outside anything Ola there's be, relatively price on if and because just affected just And margins wondering the I'm EBITDDA pretty I'm an wondering of weak. if that margin. anything basis, seem to So, that

Eric Cremers

a inflationary in we're Well, environment, relatively Mike.

I that's part it. having the can't leverage in think run in jumped quarter of else I us rate really XX particular. that Certainly, the cost structure, thing think an would hour of one -- the fourth run hurt anything at any Ola I of its out us of in help So, but particular at quarter. in that can't fourth

Mike Roxland

Eric. Okay. Got it, it. Appreciate

on question repair last one Just remodel. and

which You which remain typically, lag between great. in and there's remodel. made starts the few if been is historically, a is in a But well, comment [indiscernible] fairly that a decline decline look home quarter -- center and single-family strong, customer it's housing you takeaways repair back

any see sense you you're that but takeaway see seeing understand you of Do out takeaway, home declining? if -- I right weeks, strong look centers still do from deals couple and that at going you you're especially that now So, all? abating

reason itself asking see does not consumer has lag not is, the I'm all but weakened. you And only typically only do starts, it -- the

couple of has also elevated unemployment, type work fact last rising look look the at particularly from You home. growth. you been you years, relatively of at wage look at And in given that the R&R

is whether just I'm -- something of and signs seeing sense persist cracks. expect trying any are So, if you're now of a takeaway to you center with right home what there that get to

Eric Cremers

it were in really sit prices those over during slow. I them down, a do is, home market years. side of quarter. environment But side the to And now to it fourth signs Yes. But think of slowing, couple think by have was right. got yes, project, because -- house deferring to prices. out point for home you're the will and repair cracks. is past I of trigger of low even growth I we high-priced There's I do that time the I here, you're other COVID, which lumber you've don't anybody as lumber the projects. is, any coin come on the other would around people see do pull still right, the the the repair a think any

are are that There's that a out bunch there of whole other issues favorable.

levels high home equity. of really these still You got

inventory people stuck You've not there's that's their in got -- There's for so are sale -- out homes. much there.

yes, you're still home stuck a out if floating lot still cash unemployment so, of a in up, there. has There's it's but ticked X.X%. your And --

So, at see slowing the rate put that so don't don't there end here it the down. I'll growth of many way. will the other that I factors Maybe I of are turning it negative, favorable play year, it see but at more slow,

Mike Roxland

much. you the Thank luck very Good quarter. in

Eric Cremers

Thanks.

Jerry Richards

Thanks.

Operator

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

Jerry Richards

in interest for right. And call. concludes Devon. Thank PotlatchDeltic. you, your and you, questions All That thank our everybody, your

PotlatchDeltic (PCH) 31 Jan 232022 Q4 Earnings call transcript