CTT - Earnings call transcript Q2 2019 | CatchMark Timber Trust Inc

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Operator

Good morning. Welcome to the CatchMark Timber Trust Second Quarter 2019 Earnings Call and Webcast. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Brian Davis, President and Chief Financial Officer. Please go ahead.

Brian Davis

Debby. you, Thank thank of and XXXX. joining for us Good Timber you Trust review CatchMark quarter results a morning, for for second I and am President Officer Brian CatchMark. of Chief Financial Davis,

Chief today Executive President the Forest Reitz; Triple President Todd John Resources, me T. Joining call of Officer, Barag; Senior on Jerry Vice Rasor, of and are

certain During statements currently management's by on and results information and are available. expectation. be from CatchMark actual risks current ability will will and materially could forward-looking make are control management call, cause that based this statements. our forward-looking results CatchMark's beyond actual These uncertainties or differ predict beliefs to affected its to

on file could more such our refer differences, Form about with subsequent we Report to XX-K that reports the factors For and information SEC. we that cause you Annual the XXXX

certain are measurements Todd, X, posted Form I includes of be Thursday, SEC of presentation which included will John our yesterday, in non-GAAP your XX-Q website any financial to Reconciliations is presentation, earnings pleased Jerry, and After our our release, with on measures. these questions. answer and Today's filed XXXX. our August

Now I'll to results. CatchMark's Barag to turn call XXXX quarter the Jerry second cover over

Jerrold Barag

markets from CatchMark’s strategy, benefiting agreements on in focus mill blue-chip supply of joining morning, by second Thanks, thank Brian. The leading assembling pleased point revenues model year-over-year. customers. operating strength underlying results in us timberlands everybody, the today. delivered and very you total quarter and Good were with wood and to for increases We select highlighted our and with performance sales adjusted EBITDA prime

HBU fees primarily timberland asset contributors Significant sales. Triple from management where T results to and quarterly

generate sales to to again enabled realize also for average than continued significant results, we In our relation year-over-year Our timber to increases. TimberMart-South. pricing to pricing better high-demand mill compared market previous CatchMark markets timber

six months for for quarter. second from sawtimber for period to timber were resilient to pleased our prices the X% were first We X% pulpwood sawtimber and higher and higher year-over-year. quarter for X% quarter higher also and year-over-year for higher see pulpwood in Our sawtimber X% prices ending second

last remain In quarter, during meet full-year Northwest on X.X we in producing meeting And very acquisition of up harvest operations addition, volume stepped to timber much tons. to year, sales $X.X plan. our million track X.X target the Pacific revenue million Bandon million

CatchMark’s asset As are with excellent were wood with Triple customers. a operations well. noted, primary for in management quarter producing venture results, venture The we doing also meeting exceeded joint Operationally, to joint second operating joint $X.X budget T to major fully supply the the our Triple these contributor quarter Triple fees ventures revenues. T year-to-date. million is obligations T and Contributing two our results

weather-related price our pricing to T activities. T meet targets as gas harvests. We and generated and XXXX we for disproportionately oil sales Triple land local benefited pine conditions increases demand local benefiting inventories mill surface from related use increased by on from and strong leading revenues depressed are Triple to are track

less $X than multiple top of the guidance. the exceptional invested at XXXX The produced has asset been That formation. date X.Xx an years its as venture in X.X million of venture guidance joint EBITDA. and investment adjusted to capital end results delivering anticipated to of million $X story reaches another Bluffs success Dawsonville registered its has culmination since with venture joint The management joint returns

hurdles. joint in exceeding recognition CatchMark completed on of with we have venture all with million keeping management and substantially sold joint cash transaction of management was $X.X Dawsonville. investment the down X,XXX XX the remaining quarter. plan venture, third the distribution provided a for That a performance million based strategic recently In our of $X.X acres during The includes the July distribution promote

execution HBU year-over-year $X.X million contributed timberland CatchMark's X,XXX for compared Moving quarter performance. acres sold to acres X,XXX quarter of during and We our second million, for the results, to to timberland also improved $X.X plan the back second XXXX. sales approximately net

share The dividend Company's Year-to-date stockholders September cash per cash August common XXXX had available record of dividends for with flow remains on on XX, solid fully and for declared payable a yesterday, $X.XXX cash covered XX, we of XXXX. been distribution. quarterly

basis, look to second loss from June closer Triple $XX.X $XX.X a XX, the T. Taking a million a net We increased a allocated quarter at compared operating quarter of X% we million results, on by ending XXXX. to million incurred to primarily CatchMark's GAAP due revenues loss $XX.X second

million resulting discussed. We increased timber $XX.X timber was adjusted $XX.X from sales volumes, higher decrease and sales by XX% EBITDA X% revenue year-over-year the previously gross in which a mitigated year-over-year primarily million. of pricing generated X% by We to reduction

X,XXX approximately sold quarters timberlands We $X.X $X.X about will completed disposition million paid capital, million after moment. for talk acres recycle to $X.X efforts in million. debt of end. a recycling Brian more We which down timberland And our in

per management $X.XXX expectations of to to on and million. very paid XX, million we a asset and meet quarter Overall, fees had in to a are continued adjusted $XX the EBITDA million within June $XX We finally of in share we XXXX. good for stockholders $X.X dividend range

I turn the capital recycling. will to to now sheet it So discuss over balance Brian and

Brian Davis

you, Thank Jerry.

close, debt program, and quarters During land us sales. towards recycling subsequent returning and targeted are levels. second our by repayments the have quarter larger on spearheaded since debt made we capital progress selective sales These the significant

The completed for two into and ventures. entering proceeds repurchases, are joint of also There timberlands, we potentially share that new capital provide transactions recently. additional prime acquisitions

June, sold $XXX,XXX in on multi-draw which debt sale. the facility. on GAAP X,XXX We realized $X.X existing CatchMark's to productive, July gain of In receiving of down net pay timberlands term used proceeds, a acres late in early we wholly-owned less Georgia were million

a multi-draw $XX.X sale and debt proceeds million balance of Georgia on million Last our wholly-owned XX,XXX and also facility. $XX the we executed in repay to month, acres of term use Alabama outstanding

achieved procurement This pricing timberlands, use the of desire repurchases. to to sale just expect proceeds in including sale We attractive remaining purposes, corporate range. outside general share the from fund CatchMark's

results. fully be quarter third will transactions in reflected These

include the If which disposition, facilitated $XXX capital have we Southwest now last nearly you completed Bandon acquisition, recycling million in year's transactions.

after share remains patronage. of repayments, end wake We which and available for $XXX the sheet capital appropriate large mix have consideration million to balance of maintain acquisitions, our at our our under of rate the favorable and working of pricing debt we repurchases. sales the timberland and floating that the credit the our debt second since occurred facilities net XX% quarter, the X.X% to low fixed and of cost XX% of highly Turning

quarter. repurchased repurchases and the stock of worth With share under regard $X.X CatchMark's open million to million share transactions common during we second repurchase program, $XX market

June exposure demonstrated the to indicators, additional program. low an debt capital of debt worth opportunistic floating we million repurchases, may our rate attractive cash of covered up maturities our of share CatchMark successful a shares under our expenditures low from As from repurchase wealth been staggered dividend, $XX.X management capital our XX, the cost fully as are operations. by very have funding XXXX in The long-dated allocation and of of By all debt.

And now review over a we'll turn it to for of Todd operations.

Todd Reitz

Brian. Thanks

though planning in harvest to as year XXXX compared Our we and anticipated our volume second played out volume prior harvest decrease Even results. pricing guidance. largely quarter

mill seasonal outages We for prepared the the and weather have U.S. in wet

region. across during the harvest quarter which decreased volumes the South

capitalize Jerry From sales well products were opportunistic markets. the earlier. increased able our pointed wet as to our in conditions stumpage weather as strategy We through in favorable Southeast contribute out also sales select pricing standpoint, delivered as outperforming through across our

$X.XX $XX our As quarter, versus result, pine substantially CatchMark's a remained versus for average TimberMart-South. second all In the TimberMart-South pulpwood averaged has $XX sawtimber above and pricing products almost South-wide for Averages. $XX.XX our

revenue sales in timber decline gross harvest us ton to on helped per full-year higher guidance. track mitigate and resulting kept volumes Our the meet

with we Southeast, third supply to and to sales U.S. quarter. have a the ongoing Columbia of capacity be our partners from delivered customers well our the In continue The shift fiber British to lumber positioned productive

outlook. our Overall U.S. South further improves

region position we has as American timber to take enhanced dominant and South well situated been advantage extremely long-term. are North

economy and as new purchasing rates own home should and improve mortgage The short-term holding is lower help then it potentially the well. construction its

compared markets. the the increases half For secure positioned the we in we volumes well we anticipate first and approved as to pricing premiums to year half our are second in of

in the mixed of XX% the timber approximately sales and to enhancing which quarter increase up revenue. the gross the In in property, will Bandon harvest second over million Northwest remainder Bandon operations generating $X.X Pacific year, harvested tons recently XX,XXX stepped harvest sawtimber, continue with sawtimber we acquired of overall as the volumes our well.

our we our good for confidence expect forward plans. results So meet harvest to Jerry? going reason about and operating have

Jerrold Barag

Thanks Todd.

investment down in discussed on to recycling, capital year Brian quarter, targeted last after paying debt activity. to focus was the As main levels our return substantial second

markets. as liquid high our evaluate on offerings to We the opportunities office few have that focusing continue most our in trickle. pipeline are present augment to and premier acquisition opportunities monitor quality portfolio, a however, there properties investment will dwindled new At

out have demand prices. that wet harvest and track our and as planned So with our despite see we're lumber target weather in lumber summary, volumes. we year's the across and are results and on abating been greater conditions in maintenance will The volatility markets the outages mill to on improved playing lead markets to

company meeting results. full-year we As competent a remain for guidance result, about

management inventory us Locations reliable which available mill which seek operations of acquisitions which pricing. flow provides highest provide to strong in cash the produce growth. And the demand a strategic Our favorable durable high at business for for timberlands, throughout superior focus disciplined revenue based cycle. foundation on merchantable quality will maximize markets future the outlets

pricing underlies the attain. been delivered, we able positive the have premiums results including to This have strategy we

asset but space also produced management promised; asset as not business Dawsonville Our is in attractive fees, investment Bluffs a management only promote. superior very returns delivering performance

fees investment sales T We expectations. for shorter helped expectations. the sold venture is the assets the diversify track are and revenue with streams a year. remainder and comfortably asset expected above significantly operationally in not of than generated performing down Timberland better our plan the profitably period and returns on managed have joint management Triple than are volatile which

available program recycling investments. has further outstanding supplemented helped and repurchases leverage Our for new of achieve as well reducing for our resources share our capital to as goal

has Our and staggered and us our our rate manage share debt to capital undertake repurchases, exposure. our capital position of cover and maturities is interest cost, allocation in positioned sound dividend, terms favorably floating

market. And opportunities expand their investments this portfolio, opportunity dividend. acquisitions continue high in we quarterly deliver continue We in and covered that a purchases constrained to regarding can venture reliable, timberlands disciplined but to remain prime fully extremely joint quality monitor

sustainable supporting us our total strategy a of focus and CatchMark, at excellence. performance on flow executing maintained based by on a All growing dividends cash

you, Thank joining us today. for again

his us take time of the the Director extend on Henry the Your Henry conclude Audit Zigtema dedication opportunity the thank One Committee. Earlier I questions. wanted to an week, of over and and been and for we you, just attention Chair last And thing as to appreciated. past retired our before service in seven to has years. take appreciation. Independent all team Thank sincere management and our Henry. the CatchMark

take Brian, Now, Todd and I, will your and John questions.

Operator

comes begin Collin [Operator Raymond go the The will ahead. from Instructions] question-and-answer now We first James. session. Mings Please question with

Collin Mings

Thank you. guys. Good morning,

Jerrold Barag

Collin. morning, Good

Collin Mings

question in for on any could and more First just negotiations agreement the supply some when timing latest me of what's that get on the we Triple update front. visibility T, on sawlogs on update terms

Jerrold Barag

is Jerry. this Collin,

So are through working we still it.

a and conclude to As the down still of we're GP. previously still taking issues with we're we've it's but get to through we've we working up said, said are and and track going it's time on attention, a there, complex as issue or whether lot

Collin Mings

and still from to to to think but end that towards should Okay. million contribution just full-year, for it make understand just the of call I Shifting given sure $XX EBITDA million range $XX we that the now? potentially range Dawsonville guidance, upper the prepared the the about adjusted gears remarks,

Brian Davis

million what it’s defer $XX Collin to hit. million be we're still in not going part guidance range, of range of you we're EBITDA. changing to regarding adjusted that our to We'll $XX going to

Collin Mings

the the way, keeping below Okay. Well that numbers the year? is same, what contribution the harvest you a is above you're thinking at expecting different that to coming maybe this Dawsonville, recognizing start or from were you're

Brian Davis

to range a end of the the for At Dawsonville $X of high the million million EBITDA. Bluffs beginning Dawsonville. for $X year, at we perform adjusted of the anticipate range will

Collin Mings

it. Got

on you to done sale of quarter just quarter it, have recognizing asset and here and the second guys lot And third work into call end front. then of Okay. a the

of other Just you think as have curious, disposition kind to it? under bucket large do you and sell any contract about that timberlands

Jerrold Barag

do initially kind now. We've the of pending and completed had opportunities planned what to beginning continuously we year there's of No. nothing the we but at evaluate that, right

Collin Mings

one just last then And it I'll over. and one Okay. turn

that on has winding kind or Just slowed normal particularly deal more or maybe curious, thoughts with Jerry, year, other increase joint some maybe opportunities for so flow partnership why emerging? acquisition flow given really traditional slowed given additional venture so your significantly this on the has does aren't appetite, that front? down opportunities Just deal meaningfully that course now and Dawsonville maybe that an of opportunity

Jerrold Barag

Yes.

observation or not, primarily pervades which around of just aspects of a my themselves. all kind on fair very then the people whether the decide sector has most in part this as what's the in gotten volatility, So for of very, it's the timberland the Sentiment is market lumber the all downside result and going for markets. to negative and can

helpful. Canadian personal only off that markets about is, and in of, goes and particularly Pacific the to to lumber is footing, the west, very the be are And have find belief but Northwest, into they will unsettled. the build My been which it West, not the foundation some

owners It prices potential be timber hard that at volatility in timberlands around prices the think owners timberland. given of unnoticed not think who lumber this the been optimism to that I point. by of has the produce might

have frankly quite they backdrop about on So markets. for timberland chosen hands, lumber a just volatility and that's the presumably out optimism in wait and better their markets the sit the to

U.S. the again, Now

seen been shining has transactions, that in And at size to buoyant market. and have part transactions very have that the sized smaller medium very, of light away, been couple South prices. the smaller of we far a

been U.S. in In one at eye-popping seen case, one we've prices that's the

South.

years more some have timberland so which primarily last through the kind in And really the rotation it's of Northwest. been on today of U.S. transactions a been a couple focused And have Pacific America really North of for there's the where support,

to is us, gratifying the which composition portfolio of South, given and have. the the that makeup we

Dawsonville that a is on we're would potentially think basis. as there opportunity we down, is as going love going joint are is on opportunities But pricing opportunities forward and those also winding Collin, the go opportunity evaluate standpoint. venture some dynamics from there to new to find and front. you the And We be in a based market the what disciplined it's to on what said,

Collin Mings

it Okay. I'll extra over. Jerry. turn color Thank for you the there,

Jerrold Barag

Collin. Thanks.

Brian Davis

you. Thank

Operator

The Citibank. next question with Anthony Pettinari from is

Randy Toth

Good is in actually morning, Randy sitting Anthony. This guys. Toth

Jerrold Barag

morning, Randy. Good

Randy Toth

Good morning.

you using announced the you've and quick the Xx of midpoint the said guys EBITDA something on leverage, doing think guidance. Just of down I math divestitures getting just and under winding I'm for Dawsonville, and recycling year the that how take previously, handle, or with the I you about were will second something I in you. ease a that? in think should half seven looking had should as capital Thank

Brian Davis

begins math, You've contract. as review an anything come something under of That recycling ultimately our Randy. for we always opportunities that mindsets the do come base. But with But portfolio up does that asset alluded have with our with capital currently in it. the our of to, don't right seven front upgrade up Jerry

Randy Toth

operating Okay, in year the expected Pacific then about the And had fair a Northwest switching wasn't has business your of you've surprised enough. Thank you versus nearly you. for gears, U.S. Bandon now. kind there anything that property Is or the model

South?

Todd Reitz

surprising, Nothing timing one some access is on like there. had getting with, that in there's government That was This control over we The place road you've to BLM Randy. process, no that been there. say Todd. where had thing work of the the and some agreements up really slowed things shutdown. Hey, issues

places with so it's I major I been overall, in familiar no that surprises regards. with. had had previous we a familiar But in market were worked,

things manager to they place folks or ground. AFM the get having Just in on working in with there, got out our place,

to plan and well. forward those market season of with So forward out to as no and of move continues then the fire things timing course and as kinds looking that harvest trying the

Jerrold Barag

bought we meant it integration there. and XXXX, I mean contractors fortuitously, a was operations its be towards property the for to during plans made year, heavily when loaded and the running out and just more up of to a management the Yes. half get Randy, second

the we on half to And expected there than been readjusting a back second the so we'll has are normal course gone out bought a get of lot But more pricing from markets environment property. and operating XXXX. obviously standpoint, it the of the seems that during when more volatility that there's

Randy Toth

can about on That's Okay. any we helpful. a have Thank just in U.S. sales thoughts one one, I just about talk tightness know your there? ramping anecdotes last you just past you. up or of couple price the had Maybe your saw very improvements? micro-markets six so months, mills curious

Jerrold Barag

of were It’s that Sure. we in have the what out some maintenance �� had a QX, lot place. you coming outages seen of

saw their some and little out the QX outlook we're that running of that a consistent rate But we're slow and to continuing is of getting at their positive. and had work additionally seeing up was QX. placement You a capital through mills very mills what coming continuous some

Maintenance and pulp to good solid are of extra outages to is mills our as to hearing that. beginning part are what various We're and from over, everybody out strong plan. saw some secure production, that's planned we're around of been volume, mill able that QX have really customers going run coming see customers, production

we And more QX consistent upticks couple a pricing in, seeing so from seen being a feel quarter-over-quarter good And we're drops our a market few relatively very QX, about flat, pricing perspective, quarter-over-quarter. in coming places, that. had really but we're we of any very we major haven't

Brian Davis

Yes.

first quarter we recall, significant you of sizable price during had if So pretty XXXX. some increases the

really related. really second weather Some increases the of the that abated of some related that that And through price was I portion related, demand has was we're those quarter. think pleased weather of not

over are pricing significantly slightly pretty or up last months. much quarter So we've more six held second up first the to

seen think I markets Triple that's T. results Georgia a strong the be market-by-market from standout terms an markets reflective in pleased operational two standpoint, Southern that's of with really pricing really we're well. been aspect And would Those standpoint pricing from from USL. of of as operating you've has and of what kind And in Texas on out going the the

seen that market as there's improved haven't year back through North though come were as are as well. but so into been of of some the outages in so up three significant maintenance rolling and maybe there mass through feeling and outside gone numbers has Carolina the that translate we've picked this portions much. those quarter Carolina. earlier online, this South over necessarily People you better, But and actual markets it operations

Randy Toth

turn I’ll it Thank helpful. very That's you. over. Gotcha.

Jerrold Barag

Thanks Randy.

Operator

Paul Quinn go The from Markets. next comes RBC question with ahead. Please Capital

Unidentified Analyst

Hi, for question. Thank It's you taking [indiscernible] Paul. guys. my for

just ask about and pulpwood of between little to seeing that you wanted the that second I the bit First, and XXXX? mix saw a towards year the changing logs how your South you're see in and over half

Jerrold Barag

Coming and an of product the some operations production going our mix saw of to online. higher we of timber increase come more see started out forward, see chip balance of the in and year we But little the pulp QX had of as thinning being moved. a we'll salt

had a in meeting we'll account the mix that look So southern there XX/XX as we moving of out, guidance the more in of region. be there towards line we

Pacific that years. when the saw for program overlook all timber rolls XX% to overall compared probably us, can't which we a be Additionally, Northwest the to previous up addition to the in, closer say as we'll

there's the I box less which some has So of seasonality there's is little mean weather wet wet bit. as kind a demand rebated out there, flattened abated, weather

the call we side pulpwood own paper continue the, the standpoint year. from not at we regions balance in But on So side, and demand operating the much it least pulp properties. this pressure where for nearly as or a of there's for

procurement the more outlook for XXXX. our continue at putting that to, a second lumber see a standpoint deliver into markets timber mills positive from definitely demand timber, to those during investments that's of capital are and half We volume sell on ability increasing and to

Unidentified Analyst

you. That's Okay. very Thank helpful.

the seen years. very seeing On for seeing if side, in timber little valuation been wondering you if changes transactions the I'm the over a stable just past the you're any upon few we've you're if the could being them late or changes touch few marketplace timber has in years? bit past guys

Jerrold Barag

by premier been stable the fact sought after properties us, properties. most that and we they is very the been which part have underlined valuation of high have type quality has So for for pretty

concept standpoint And I so get difference the and more between from of and we agreements appropriate. kind entirely that an for think it appraisers valuation properties. have monitor our markets with stands to that is price covenants lending the us standpoint respect have and about of appraised as started values to We quality believe that appraisal. of it's And a discerning a important

been year for last quality have valuations this is for us going And flat or underway that years. expectation would the that'll into of reevaluation in property couple they our the be those pretty And properties. process flat later better for fact, much remain more less the

declines become and become and but think that'll this a in will by industry some quality headline, – across further see you poor end more I the may worse it evident of markets year. become properties the should

Unidentified Analyst

last We one as you some Can it Thank different Perfect. not as your market? see repair reports, one strong you for talk is you. the suggesting over And probably next year? what what you're you're and from me. remodeling the just about seeing bit in are market how from seeing getting that a that little do going just the was customers, market some

Jerrold Barag

similar in There's growth. or the containerboard just grow – But out as of don't see going that important have going they're has away anytime mean of soon. looks I it track little out. new parody, the to again, I market one like not that repair it's that seems a of, and to where use much sagging taken repair the is remodel out and categorize on clearly leveling in the the and leveled we but terms that in probably far to dynamic, keep remodel fact now housing. backwards market box has really rate for not usage eclipsed clearly is It the not And usage. fashion lumber lumber from lead it a really lumber continuing and at nearly mean, the what's I'd potential to same bit. which is

Unidentified Analyst

next was turn it Thank helpful. a for Have quarter. guys. you, over. the luck I'll That good Okay. very

Jerrold Barag

it. Appreciate you. Thank

Operator

The next David question ahead. comes Please Rodgers with from Baird. go

David Rodgers

morning. Jerry, rising those pretty quality lower in kind of some stable, But seems assets to over assets. the maybe of just Yes. decline it's had have good or it prices pricing the of next guys a like of declining tie the Good you and set being couple pricing at maybe years. view comments that,

I that. So of volumes two, hopeful expect you're that do the guess little what market maybe in one, market And you in on now regarding be you'll or of half higher in kind second then more the more for kind long-term hitting the specifically and is pricing a obviously pricing. seeing something maybe

us of timber kind regarding you So update lumber thoughts on or your long-term pricing pricing?

Jerrold Barag

Sure.

to going comments I'm by region. to the have Okay. separate

differently the because are operating the fairly So regions between U.S.

and Northwest. South Pacific

in U.S. the So

where you markets out do is those beginning made we increases especially year, we going of business, second combination the played demand, projected capacity to market were the we for South the sawtimber the tell side in wet do good or in the first where first price not on way where it's doing the quarter pretty the leading primarily the – beginning business of weather this the at business I'm is to that we the of but during and more more us. quarter

expected much we cases And increases was price and as more full-year. in have would by or either the that that large than for some

And that pushing balance by the those price because the pricing the point wet we It have it the is of goal pricing conditions for to abate the you maintain large, year. us rest So the dry be portion necessarily in expectation should to or now. were the we're not quarter second pushing as is for at weather can of should see have because where the to by on got really doing numbers, of the year. out markets the for and on in that increases pricing this successful we it for

lived we the at horizon. said But we're in south. to drive on in operate come We're you seeing night we not one the should trying able to that that anything We're us not maintain. prices having and that, customers down the Atlanta If last feeling at confident in pretty be having dry. markets very

about we're now. that so pretty And right feeling good

that of upfront terms shouldn't building But expectation We quarter-over-quarter, price for increases. in setting kind the happy experience a this be we're of expectations, getting U.S. during necessarily it had XXXX in of there

South.

really Pacific a opposite lot the that Northwest is It's are coming is coming of as out of Western particularly fee the of and kill how of in interior had shuttered. that's where you've kind dislocations board it's minus Canada, you've the Columbia of result it dramatic story. or been permanently now and of the that turned. billion beetle plus capacity British somewhere And X quickly the different had is how

a The manufacturers has the dynamic Northwest. come bit Pacific They around high. prices lumber prices. downs. with that's lot in sympathy the were high been got lumber came were dislocation lumber exceptionally a They created that in prices of those there Timber little slower to down. And

you've itself and it's conducting think in seen rationally, going it's the sizing on across capacity right itself. and that the way market, into right that And the the manufacturing I all the themselves in is Pacific pullback So Canada. and the are now. in recalibrating participants And Northwest

me that would And to in experience. Pacific I experience my probably markets. a you're that it's would needs recalibrate, even that's now and market And when seeing happy today tell right the usually exactly tell Northwest not you what

I the of to get where will right should a is where for Northwest. what reality new they are they think is where the good believe the end lumber below Pacific is back The be and the timber news Northwest themselves I Pacific lumber specifically in prices prices production and today that in will basis up

whole I there? that get Pacific Okay. it's is have us how it's to experience, long the situation tomorrow. that not that property in not in tells that, And and to our small involved is it that's tomorrow, tell the Northwest variable the on Now take we you going can

in is timber of And And later to – that you're see prices inventories get see supply as prices as the long-term lumber feels footing fundamentals like excess better timber. no because, better those for XXXX drawdown. the regain to demand but its There are it lumber in of you'll market get still better, it going positive. really prices where get also timber Pacific Northwest is supply lumber

that those do And resolved we the way don't same inventory shouldn't prices issues so lumber have the react see that out west once in the themselves.

David Rodgers

on added the detail for Thanks that.

Jerrold Barag

Sure.

David Rodgers

and And just in Brian. just able some around then the thoughts the you iterative flip maybe you Brian, weak? two were the stock like you I then things appreciate you've stock capacity kind to on the is, buying side and can that, that maybe maybe of buyback capacity pretty if stock remained senses. some for of acquisition to back about follow-up you your done talk do, that to iterative have One find given and capacity that.

Brian Davis

Yep.

a there's couple So there. of in things

as first, year. this messaged So think acquisitions, about we began we

have active XXXX capacity capital have million monitoring plenty and including we're out the and today We've very of of alluded in opportunities billability Jerry We to, repurchases. for marketplace all and acquisitions as we share liquidity. $XXX

right standpoint XXXX. we're actually our had our now, that during monitoring from given that So we is bias activity again to delever

So becoming application through our about capital think program? we how the really is proceeds it the of question recycling

which with take second right advantage to to practices. opportunistic allows which in We'll bias a is active against supply to with our we remain now opportunities of our for position future the program, were growth repurchase us and really share inconsistent And be debt, their quarter. past in outstanding

basis. As you to it want a leverage do we're we on neutral really, noted,

repurchases. basis to subsequent quarter on well of brings about and which in XX% share XX% quarter towards last us million quarter, proceeds $XX activity, allocation a an as For as capital we target of about debt about this example, target net which adjusted applied remaining levels had within our $XX with EBITDA recycling we with reduction, the debt million a

And given second a our versus quarter debt capital amount believe that we that's allocation share neo, over given as cost noted, repurchases in you color as in in during of Hopefully price the looking X.XX% a gives share prudent of you're for. X.X%, strategy. the a you around Dave, our certain

David Rodgers

Great. Yes. guys. Thanks

Jerrold Barag

Thanks Dave.

Operator

question Please a we from follow-up Mings ahead. Next James. Instructions] [Operator Raymond go Collin have with

Collin Mings

the about Two you. latest thinking - one as out Just thoughts Thank U.S. latest regarding from follow-up far log activity on as your of export me?

Asian place, a in currently to of obviously context in presence desire, but markets. tariffs maintain on part the CatchMark's then just the in and long-term an also South the effort

bit more talk So initiatives just and effort you maybe a about that that little can?

Todd Reitz

seen we've bit. way is main portion when we of that That and really do. it's primarily operated Again, that's what effect, tariff really a saw small little into of pullback the a just to Sure slowdown we've that a been this went of in and Savannah we continued back been area then South the Todd. out has pull Collin, and

impact overall market been far presence So – with minimal. those the our as as to has

volume area within those one that's those there, there. that has a In tension to country. was And strong nice enough areas of while any that the of be it that really that market's it's the things is as absorbed strong the

haven't overall of seen So pricing and we the scheme push things. a major market on overall back

discussions long-term of door We've a if they maintained But impact a little tariff back there. bit major can us and squared speak. at very, for the in it a strong. to very away to it, been have trade stayed hasn't but know, come to just the love and, presence and get foot whole customers level, you ultimately keep so in, light We'd where your a see again, that

Collin Mings

it. Got

some your I'm hasn't there in a I correctly, export you're been in interpreting of that to terms at comments pretty shift the, the markets. big in point really play selling diminimous So this pricing of those in impact. market, still guess in it's but dynamics customers But if

Todd Reitz

has There That's not. correct.

Collin Mings

last to completed discussion the to but guidance the as guideposts Pacific year know can with us or are just from mean well And that a regarding accretion some the and but versus dilution a additional ops Northwest you impact then any XQ of transaction, just the was in back the into you financials. Brian, sales. I all the much larger going great XQ. I think two that bit provide how as the entry of associated asset I to provide about sales curious kind the the around and little there asset detail that to

recognizing are to sale up discussion other Because the just dilution curious, asset capital So I sales. guideposts? assets know but smaller the when these has before that goal come transactions, from minimize much recycling any was

guideposts be additional helpful. on that any So would front

Todd Reitz

us. are You're listening Collin, to correct you

mindset. second two had during really transaction a These the impact on a a Our it characteristics that stocking a about kind we're per closed basis. share about XX cap low assets goal of better mix, anything neutral, not quarter is with basis, was per changing $X.X stocking that And million the acre really poor distinct acre. with them, per tons

stocking with was our portfolio. other at consistent transaction were The that levels

in associated and haul day than to realized asset application proximity I given back But product with resulting per us impact from really, distance just those. share sale. the associate urban to slightly the This pricing. is which was given we areas lower realized the ultimately to brings full in operational a our of of everything longer better that average circle end selected cap with on challenges price typography really that minimal do to

Collin Mings

sales or Okay. swing maybe the not there's one In cash savings, the if interest fair. much these your don't maybe that next around but given couple of least other the words, anything over at really, really flow way expense that but slightly years, asset very beneficial, other,

Todd Reitz

That's fair.

Collin Mings

right. appreciate you. it. All Okay. Thank I

Todd Reitz

you. Great. Thank

Operator

This concludes would for over conference I CEO Jerry like Please to ahead. our turn closing go any question-and-answer with session. the back to BaragBarod remarks. the

Jerrold Barag

– today. with that the will you wish Thanks quarter. I rest enjoy for be third we hope and us joining back for I your you again summer of you

Operator

now The concluded. conference today's has presentation. for Thank attending you

may now You disconnect.

CatchMark Timber Trust (CTT) 2 Aug 192019 Q2 Earnings call transcript