CTT - Earnings call transcript Q1 2022 | CatchMark Timber Trust Inc

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Operator

Good morning, and welcome to the CatchMark Timber Trust First Quarter 2022 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I'd now like to turn the conference over to Ursula Godoy, Chief Financial Officer. ahead. go Please

Ursula Godoy-Arbelaez

thank of and XXXX. joining for of us am Good Timber you Trust review CatchMark. Officer Financial CatchMark Godoy, quarter results our Ursula morning, Chief for for I first

call, the Resources Chief Reitz. on today Todd me our Executive Davis; Officer, Officer, Chief and Brian Joining

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

in more our that XX-Q to yesterday, with our posted measurements Brian, earnings of the For website are XXXX such to XXXX cause annual certain our pleased After could I SEC. our Today's and Todd, report questions. we filed presentation and your with any XX-K factors financial these about which supplement, reports of presentation, information includes and filed measures. on will Reconciliations that release financial first subsequent are X, you differences, we XXXX. quarter non-GAAP be refer Form included on the answer the Form and on May SEC

the over Executive call turn I Officer, Now, Chief to Brian Davis.

Brian Davis

and quarter, first business results. results. had the operating an We demonstrated appreciate Ursula, you to review XXXX quarter year. delivers joining again, good In model We you, morning, everyone. strong how our exceptional Thank first us today consistently of for CatchMark the our start

timberlands focused leading now in are owning prime entirely We on U.S.

and significant sales again wood sales above year-over-year delivered increases. by generated market markets, stumpage well where opportunistic mill our South superior pricing registering averages supplemented

year-over-year, record, by increased sales XX% pricing Our year-over-year. X% for increased also net a prices company sawtimber a solid pulpwood timber

premiums pricing XX% We for for pulpwood. XX% market sales averages, to achieve significant higher sawtimber timber and above higher continue

generated result, sales XX% revenue higher in the a U.S. timber we As year-over-year

increase. Bluffs steady the as our XX operating on credits associated guidance wetlands transition $XX per during related T we and timberland credits. from year. Retail But total which Dawsonville, held contribution first our for get with basis stocking our well the a strong compared venture, investment lower industry-leading than in total XXXX, asset when at mitigation services capitalizing on made we Demand proceeds, sales five-year great sales. major volumes. the quarter, the of also to have quarter From way as acre sales to meeting XX% harvest and despite our productivity and a results. per planned land And of land harvest received our been $X.X for for retail able results are been timberland sales three are full-year million we an to lower has to and risen we more targets our Since South, $XX a portfolio to quarter. annualized These demand end its first joint the income strong XXX% expired agreement pricing characteristics of with on mitigation year-over-year quarter, credit management the productivity acquired the management the exit to as price acreage recognize for Triple fees were is strong below averages. market approximately continue results Lower of to Dawsonville due for from has its we a averages.

quarters, the EBITDA terms carry record net common pricing. distribution momentum for share cash especially as and for into available first to our For of of increase payable in in June May or produced of share dividend stockholders XX, XX% on coming $X.XXX XXXX in performance XX. from We quarter we the XX% income of $X.XX of Yesterday, we a per million anticipate operations $X.X year quarter per sawtimber the adjusted prior realized declared above quarter, year-over-year. achieved a cash

of pricing environment. sawtimber achieve on to expect the now interest demand above in new approximately we XXXX even rising levels strong rate housing based XX% full-year, for the For

picture unemployment all record highs has economy high unwavered are mortgage mixed new time housing resilient. have U.S. has rates. of and fuel activity despite and up. permits the low increased starts growth interest Repair housing let presents near and demand particularly Builder also in wage or and rates, our a building countered remained activity helps This rising remodeling backlogs demand, not new sawlog Although by at for in inflation

the South markets more where to expanding housing. requires regional population new and as continue come increases and mills online

XX%. supply first meet results from supply of CatchMark we account to full-year mix mills by challenging previous XX% the wood chain through for Taking register have weighted track are increase environment to quarter expectations harvest from the favored increasing This our to model. supply sales supply on and blended now able customer since sawtimber issues, demand, pricing market constraints. XX% has we trucking XX% side, of reliably our and needs On our to a various into resulted market labor up been to tighter average including delivered has availability meet

initiatives pricing pulpwood, upgraded pulpwood to to customers we some quarters, utilize sheet as on acquisitions, our primed flow to balance but back are facilities value Our At help better liquidity also potential highs our improved continue both pulpwood on progress from category. In to chip-n-saw coming timberlands. and to cash we register benefiting of averages expect may to we strong the maximize present, expect above recent levels mill instead position. have well our long-term for and price make execute from the significant near-term pull market of acquisition merchandising accretive

the local where also our around presence XXX% the in and acreage that seven. three More of prime better secure good business in can quality in with customers further our top acquisitions advantage now our our to bolt-on strategy to and market It our ownership of find timberlands are enables leading focused a mill with than efficiencies where us to value our operations footprint while top we enhancing markets have and We serve expand smaller gain existing markets our markets and market position. on we take can and contractors. in fits XX% are

X,XXX pine agreements transactions, The our Carolina. and totaling two footprints are buy These properties we operating acres in South sale target fit have states, properties million. than with separate existing more feature So entered to and metrics. Alabama objectives located value will $X above acquisition within two that purchase long-term with into expected cash in on and far, accretive compared high attributes. They in close are early have to allocation These be and our timberlands third hand good by quarter. funded characteristics to of underwriting plantations a the

program under acquisition prudent strategy. deliberate We or larger be will acquisitions, to continue small-tract and whether in identifying our

our as wetlands to existing involving properties regard issuance carbon mitigation and existing identifying offset timberlands banking, build new and of part as to to create continue of banking, on to of pipeline carbon the year. for acquisition sequestration are to also mitigation initiatives X% environmental banking in half Bluffs. we opportunities program properties looking our well are of We wetlands the we mitigation With similar identified be our solar. pointing to have XX% Meanwhile, credit second we Dawsonville carbon a our to

developers. on developer initiatives our continues lease Overall, signed to a acres detailed, XXXX performance. other growth and and be Taking CatchMark very we solar our X,XXX option a solar positioned we with almost are performance objectives. acre operating for have together, meeting previously well have agreements with outlook X,XXX successful As

U.S. leading and timberlands prime Our

markets pricing. South to superior are mill continuing generate

and acquisition further moving initiatives. on flow grow activities our enhance designed additional stockholder We and disciplined are together to durable to forward executing streams revenue are strategy These from create are value. we to work cash environmental

a to off is year good the said, I for very As CatchMark. start

capital our Ursula, and Now, provide will on the detail more discuss position. quarter first results

Ursula Godoy-Arbelaez

you, above Brian. first market become premiums Thank hallmark, CatchMark averages. quarter, the driven over solid timber CatchMark sales achieving year, what has significantly from operating performance In carried last pricing by a

year-over-year. down an third Adjusted quarter We characteristics mainly lower resulted Slightly sale our Pacific strong capturing timberlands also sales, lower volumes, excellent in of XXXX. the quarter related had for increased with assets EBITDA lower year-over-year revenues Northwest primarily from to pricing average. our timberland X%, than harvest portfolio for quality XX%

now in U.S. are operations entirely Our concentrated the

revenue South timber XX% year-over-year. where sales our increased

have the prices impact in timber increases of revenue significant planned lessened harvest lower Our net volumes. sales

$XX.X million million revenue the Timber quarter CatchMark XX, ended compared of $XX.X generated quarter XXXX. March in in the first $XX.X quarter sales $XX.X to million million XXXX. For totaled versus XXXX, revenues first

tons. U.S. total by year-over-year to decreased As volume the net XX% significant XXX,XXX captured timber in harvest We approximately planned, increases year-over-year price sales

X% and sawtimber for to TimberMart-South, pulpwood. XX% When U.S. for South, compared

sawtimber first EBITDA quarter segments. pulpwood first net respectively. South $XX.X a wide premiums EBITDA in and realized million averages, compared totaled adjusted out $X.X and $XXX,XXX in to million to stumpage registered Adjusted of XXXX. XX% pricing XX% quarter Breaking by loss XXXX. income million net $XX.X compared We

first under during to recognized were mitigation exit to of year-over-year to Triple $XXX,XXX increased to Investment range management We from represented quarter its which but quarter million strong of wetlands $X.X the planned joint services joint The first compared recognized For Dawsonville the management $X.X EBITDA $X.X was of full-year venture distributions X% a a relative venture, the from from quarter, demand per related venture. our significantly joint timberland closing year-over-year T percentage the up The lower increase. XXXX EBITDA $X.X fees investment to year-over-year, T which Bluffs from our reflects in lower million sales the Triple in resulting fees $XXX,XXX on this of in pine sold estate first agreement, asset March XX% in EBITDA compared million expired a sold sales Real EBITDA operating million the acres, XX% $X.X lower to targets. in management levels harvest capitalize and XXXX, on an transition XX. due XXXX acre in the Pricing quarter on from for stocking primarily strong greater of million credits. XXXX. received value. to paid from the year's increase $X.X was continues million

share dividend on per a of paid also $X.XXX March XXXX. We XX, stockholders to

significantly position. the program to the of Pacific After turning Northwest, balance and recycling sheet capital property review sale liquidity. its with the had capital year's Bandon in the concluding CatchMark last Now improved company's

remained and the rising hedged available is debt we interest priced first outstanding which have company rate quarter, the leverage attractively of During More capital our remained low than again. debt despite environment, XX% and protected.

positioned is gain momentum further course over are to should forward underway year. which with strategy, acquisition the and the of We growth well move our

under net of The remaining the as of balance activities of remaining as capacity company sheet we had distribution. $XX the million in momentum. covered hand. we credit a its that with to XXXX. had during total quarter. had cash be of were As the million Stockholders cash over occurred comfortably XX, credit operating and by XXXX, and dividend for facilities sum acquisitions changes provided very cash which program received by March share $XX.X of during company will to fund million no million fully No There facilities were solid $XXX and quarter. March $X.X gains quarter available over the share borrowing on the liquidity up, remains under repurchases strong program, further XX, able excellent which a repurchase first To our distributions,

will review operations and harvest Todd? sales. timberland Now, Todd

Todd Reitz

good Ursula, continues and prime from timberlands premier Thank CatchMark morning, U.S. at you, everyone. benefit located to our

Strong achieving added negotiations stumpage material in control needs sales quarter, delivered pricing sales help helped costs, macro offset achieved demand and production fourth aided operating from and logging remain catch cut helps sales to increases capitalized and for and smooth market South on and substantial quarter. pricing offset levels delivered tension during chain tension continue for mill We on we margins. model The Strong fundamentals many which pine quarter maintained risk, and maintain pricing staying opportunity, playing allowing registering in production robust with weather quarters from we our stumpage the using raw to stumpage Strong stumpage products stumpage mitigate coming will customers conditions Successful markets, demands. per the low during our inventories high volume board were the us as drive previous should all led wood of quarter. rising delivered Mills significant demand mill meet pricing our haul are of we negotiate guidance. XXXX, increases. capitalize and flexibility X,XXX contractor on supported price and to most to full-year delivered premiums. chip-n-saw pricing our continue to with should first market sawtimber supply pricing and increases. favorable lumber and to opportunistic production products track the quarters out by pricing still quarter attrition second and foot sales $X,XXX above the up of and

capture thinning product due and meeting be and continue. and do going in the to sawtimber market continue to not of pricing above summer XXXX will key cut full-year, dynamics premiums. and pulpwood success but with For pulpwood the pricing increases we spring haul to supply forward, expect reduce mix we prices pulpwood continue above gauging approximately Staying to to we to recent averages, trajectory Increased expect and to market expect XX% achieve our higher will nimble, pricing maintaining the margins. costs our changing market

let's Now timberland review sales.

completing we our approximately quarter to sales annual as timberland XX% XX% XX% significantly sales selling from in target timberland executed acres on As of planned, and revenue quarter. compared to increased year-over-year more prior year the

$X.X to on company had sales, XXXX timberland sold lower than X% we per was average. a substantially acre to for the compared The acres first million. land of merchantable productivity sold price X,XXX sold taking the the portfolio continued sales strong characteristics. CatchMark X,XXX The robust lower pricing $X.X million acres generate buyer due stocking year-over-year relative We acres Reviewing timber quarter average lower details, for when advantage to demand.

These sold pine sold plantation example, pine quarter had had acre quarter acres the compared the per tons to first XX% XXXX. in XX%. first of acres in For stocking portfolio during first tons to the only per our quarter only eight acre also average compared of three

Given the transactions, second target pipeline are expect on XX% to we XX% and complete market the the and full-year end our strong sales by current of of quarter. sales track land to of

turn year. to back you. As start to off highlighted, excellent Brian, are has I to Brian we over an the it

Brian Davis

Thanks, Todd.

for and more strong simplified off how and based U.S. business prime evidence quarter owning CatchMark focused on provides paying more first strategies The performance

product stewardship South timberlands, stumpage to environmental-related are operations. mill markets, managing initiatives and with that investments. the sustainable opportunistic more the criteria through using acquisitions and helping effectively progress selected Due will operating disciplined to cycle, come throughout we and growth, leading in markets, business our liquidity, delivered on superior generate per and our supplemented making are acquisitions traction. carefully we our and model nation's environmental are good efforts to we and our attractive hand demonstrate higher by expect appreciation, not due able to cash With value on completing to capital fit all Together, of seeking yields. flow highest the gaining sheet, our capture maximize than to acre these where executing to through sales but pricing average to our also price balance continue to capture be only

pleased Now, take to questions. and your Ursula, Todd will be I

Operator

We comes Baird. the first will [Operator now question-and-answer session. ahead. begin Our go Instructions] Please question with from Dave Rodgers

David Rodgers

and go closings visibility together rest like? with good coming Yes. Can start current on wholly-owned Good game you wanted better morning, maybe you us look of side. talk that in beyond Brian that the is the as you on you about and a of set give everyone. look this that how see kind toward acquisition any the that year to back might of what pipeline acquisition to It's basis. guys

Brian Davis

Dave. morning, Good Absolutely.

parts about two of One opportunities and the is into marketplace. small-tract we end year, program, acquisition talked really bid year, market is the other which really of off or strategy. as this come our that going we there's So last kind the to think about

been off So pipeline land owners. that to this These in we're really starting point market, ones to today we've release where the earnings to are get is our the adjacent have we're building reflecting closings.

everything have actually bank three, able each as those it's from but plantation our is solar, our opportunities; mitigation range by and two, strategy high great we of accretion on been near-term exceeding of think standpoint, market. bolt-on really being specific one, that's carbon we've remarks, be our categories. portfolio broad metrics prepared you operations. really which our focused actually in really alternative threefold, at very in as to credits, – well has in existing noted focusing the accretive operability income, meaning one very it seamless cash really relative And we and kind and look to we As the from opportunities; XX% a And very acquisition array, because of

market, And we works when a be we're spending in really in lot the making U.S. especially our going for time said so and what us by of solely of virtue sure focused to

seen what acres lot bite X,XXX can activity provide These exiting on we've really is program. at owners size. for looking obviously We a are for of good a time, opportunities. South, small-tract that really the liquidity are

And from so that we we the that's standpoint, pipeline there think like be being that and can built accretive. very

of it's marketplace. in $X we're seen quality some in of very other We've that those kind Now, to obviously target – high value, space and are we for opportunities, scale the not this off. relative be lot now this good size very range. to million $XX some but that going A million They're of deals value go today. competitive in finding transactions relative

at. hardest and remain is what we're overall, is this looking we And very about so the our coming and going excited really have now the we're Dave, are the [first have, we're that part managing problem that of want we a in what disciplined world] to seeing really opportunities to pipeline and But way. the we're opportunities all

David Rodgers

than for and a of the about on little the quarter, release about of update that, maybe the talked Brian. and sounded then savings talked on bit margin first pulpwood in you Thanks question Todd, press Maybe which Great. secular. pressure a you in kind cost more for seasonal

talked quarters on So with of all perspective pressure today, you've versus easing and about secular where kind last a of seasonal? on said whether you margin feel like on maybe of any update is an the secular couple update from that that's kind as

Todd Reitz

Absolutely.

good they the us, sawtimber for impact great a thinking to the these is so about just or now, a is into and comments noted QX efficiently still product, and products. going gets this turned that we're a little actually seeing Some merchandising you opportunity And having we've the But of a wood. pulp in our previously stem really had? utilization that of really had into effectively come – capital it recognized at kind purchase move is, which was that product, are which up the with smaller sawmills, a when will any all will, pulpwood really customers more gone we utilized, category, We've before, smaller wood. product this side, that been their about talked there, and of show pulpwood major merchandising utilizing they're the strong than issue is the it some larger you which across of stem not stem. the up have would stringer At really in that from the change of so that thing lumber log more it's category, into other in therefore, ends I we So that's facility, producers. if had What board think and our type more of pulp sawtimber we've times, chip-n-saw chip-n-saw mentioned of utilization what that was we've around small marketplace. as pulpwood retooled say super

the of just added just that into when has of more seasonality into what we're getting as and rolling some cost what year to handling time far to As it been have now, we're doing this you there. time during right due the thinning start that’s

very bit south. on impact So the will – see margin. operation a change still little from in the what the little you cost comparatively strong across a with of overall the more have the no would an associated be across we market, have Margin

what with So just and the there, more no merchandising working today. real of marketability it's we're of issue

David Rodgers

Ursula maybe Appreciate you. a Brian. last And dovetail that then question to Todd. Thank for with

One, or or from X% about contribution think carbon do that about streams those I a the about goal revenue offset aside we you And XXXX thinking today are offset? standpoint? the to revenue acreage, program. where should XX% near-term talked from XXXX carbon thought for You have of set a for be

Ursula Godoy-Arbelaez

morning, Dave. Hey. Good

there on program. we haven't said, that can that about program talking we XXXX. that program hey, the opportunity into before some nine come yet. we're portfolio we're in this carbon thinking yet the that six monetized At an and haven't of really entire that time, guidance, to we But looking So at time seen as to months and be how The we're would we're another be of out we at X% and for track would still is our could our the put the to that. through XX% expectation see

a And second of so of in first really it's of the than the half more half year XXXX.

Brian Davis

as more is executing of From point important It's is with on really along executing present this and incident of bank really important more credit the at will a a magnitude than in standpoint, Dave, a credit actually credit solar projects. time. the incident mitigation again, as itself the action on be magnitude it the real activity But magnitude. carbon by carbon of the

David Rodgers

Yes.

right. I All Thanks think everyone. right. that's

Brian Davis

Dave. Thanks,

Ursula Godoy-Arbelaez

Thank you.

Operator

from comes Quinn Please question next with RBC. ahead. go Our Paul

Paul Quinn

very Thanks Yes. guys. morning, Good much.

trying the to clarify Just chip-n-saw aren't of as this to able retool use up to be moving a why result pulpwood prices log, [indiscernible] increased chip-n-saw demand? that chip-n-saw

Todd Reitz

substantially part spoke Hey, were you Paul. very we price we quarter, where actually kind we going if for – the Good and we the go our did sawtimber mix overall that year the up XX% XX% see our will. were morning. of for of of chip-n-saw showing Actually

a we're if been price up fall will, better improved the us why utilizing that competing this showing these is into in that really I pulpwood point. good is much And was saying arena, going is market at are a in it that to that thing, for had you So now there. stems chip-n-saw

fundamentals there, pointing duration opportunity seeing of there, maintain there. like feel so then all go is seeing what we're market coming just the being and things to one-off of improvements forward. rates that here. and of it experiencing at the online. more price tension everything So a durability those The together be And drive is coming type placed can utilization point this are Capital we We're we're up. moving is will

So all of these things key us. coming been together for have

Paul Quinn

site you something acquisitions the more tons acquired end details of per or Brian if could give Todd, the then And index, that those post around metrics? us quarter, Great. around some just acre Okay. the you

Brian Davis

Brian. Paul. This morning, about these excited Good transactions. Yes. is We're

So at you're going programs, you kind a it's interesting not when of the look these DCF. run small-tract take to

looking at quantitative and really some qualitative. You're

so we that but we side, to ones announced really the that what going younger be find these of is on fitting are the has high would did a be just And we lot a plantation. is going into that to

so really age fitting these as from And an we distribution view of inside long-term our standpoint. class portfolio

So they're what they're going pine portfolio below we to equivalent better per to currently they average. our be again, XX indices not haul of than be to acre, or inside tons represent XX have. going is our to close really But convertible very high likely miles, zones type age of or acres what are class be our distribution, going site

And portfolio. the so but you a overall needle doesn't does from know type to it provide as our your that's model, really standpoint, then that it not relates lot the can accretive specifics into tons, to put move nature but really of I it harvest

Paul Quinn

basically you've share maybe Okay. in investing no just old better And timberland year opportunities that that Ursula, and saying for the then got buybacks Is quarter. stock? acquiring

Ursula Godoy-Arbelaez

in quarter. That's We Yes. didn't any have buybacks correct. the

our just So to really goes it allocation back capital priorities.

as heard you've have be our to and team, to really, along. to year, the we at to acquisitions program of as in cover traction make we and rest look dividend some the starting as able continue our go we to want sure opportunities good order we liquidity so And on the those execute gain acquisitions

Paul Quinn

thanks All of luck. much. very Hey, right. Best

Ursula Godoy-Arbelaez

Thank you.

Brian Davis

Thanks, Paul.

Operator

Pettinari Citi. ahead. Please go comes Anthony with question Our next from

Anthony Pettinari

Good morning.

Brian Davis

morning. Good

Anthony Pettinari

kind quarterly I and unchanged. strong volumes extremely the just were in sort the XQ, move a of wondering your maybe forward some adjusted and higher why year normalizing range results comments the think even I as to XQ maybe about the about could is able kind think and EBITDA of of range? XQ the rest you guidance or cadence the pull we’re maybe but to if above bit, full-year that understood about shouldn't talk Hey. of of end guidance we

Ursula Godoy-Arbelaez

Good Anthony. Hey. morning,

pleased the guess So you to QX. surprised with saw pricing quarter, been we're well not a of the we've able extremely what seen all we I ahead as were yes, volumes perspective team you're anticipated you mean, for what heard what and I from had our actually and although achieve we've right.

I And opportunities, guidance QX able think at said, largest QX through really, we from the for a the of to as yet going we be likely perspective. our think find cadence probably will we time take those were is hey, advantage the lowest. be the to volume some year, had volumes of which good

so as of year, the That it volumes, really moving you rest fairly And of remainder said, we be mentioned, think year. through should the our spread the not we're on guidance. throughout evenly the

though increases anticipated what And sawtimber even XX% prices in to lot pricing on so on pulpwood, initially us a to compared give we perspective. up it anticipate, XX% last price And do to year. by seen that a our those we've from that with that's XX% in sawtimber, weighted confidence had we does X% of increase say as average it to call

I come think to we XX% out XX%. with initially

anticipate pricing year, X.X for know, from as those same and perspective all X.X QX. a million still you things but So are the still to is million volume we it's And about tons. of it positive, the volume both and

time, not the this any So making full-year at to target. we're changes

Brian Davis

Brian. see Come is this us August. in Anthony,

Anthony Pettinari

inventories this, an is is makes where just call one really maybe kind an up really I that if kind last inflection will. had drawn kind I digits down or think different catalyzing you low-single if guess decade kind tension maybe few But up inflection. a or perspective and mill where back In Brian market lucky mean, I annum. were know or prices of guys you'd this year-to-date. per I one maybe Todd, follow-up, stepping new XXXX price. there sawtimber that just it just I'm is customers. just that quarters, related. there of prices XXXX of triple is this as I sort wondering normal a think in are we've of maybe plus. of the Lumber two we just been don't it's things wondering there's of any or sort prices I'm of have anything in finally is what year-to-date, seen are there's which whether just feel XX% there.

Brian Davis

This is Brian.

think I opportunity preparation is this. meets luck the the part of

this of goes with an a we've takes the to about the and so along really been And that overnight decade, better a be success. talking for part while that saying it

decade. this guess mountain macro from And to thing, a the aspects of U.S. everything it capital beetle, sometimes pine really redeployment I the It's the been the that of is

South and of all I needing at I X.X%. mean, we of housing. events. been these mean, unemployment have strengthen we've confluence

rates you are when sheets You're in getting balance hovering around those XXXX, XX-year XXXX growth, wage look historically consumer shape. back have rates at even great was X.X%. low were XXXX, We around, still

the there. so demand is really And side

that's you're capacity the seeing still side, So XXXX, XXXX, they they have We've in constraints. capacity nowhere seen the XXXX. had there's why which in near lumber

seeing but are from have going in continue that that they're the demand. side, You to to lumber consolidation space,

you growth The that past in. in the in improvement of component second The operating is been drain the ratios the on for markets touched been we've market the and been functional decade. a markets is that really have we've

our look about day, and published for us, Todd were I And when in you the at heat the other maps IP. a we this talking so take that

constrained really and a improve, You've markets, our continue our a here sitting really marketplace. to to it's – seen for we're markets balance

that's small ownership operate And so production of controlled in is with rest which the old really structure XX% the the given XX% the and ownership, we that by the rule. the really the really, land XX-XX TIMOs it base. producing is is and markets, It's and the the ownership combine you corporates, of who's in majority.

see to wood And so we're wall expecting this coming not in. of

feel And like years make. trend so two a does

like sure sure to future not at but XX% the so, can back. knowable, do wins I the Now, I you our XX% I year? but promise hope is next

Anthony Pettinari

Got over. I'll it. Thanks. perspective. great turn That's it

Brian Davis

Thanks.

Operator

Please Raymond question Our comes Buck next James Horne with ahead. Instructions] from [Operator & Associates. go

Buck Horne

Hey, and on thanks. Fantastic those morning. Good quarter congrats pricing premiums.

So of capital premium of mean, I sustainability my in think longer terms you're is guess U.S. as the the wide magnitude with I to achieving question first versus what into the you of those continues averages. do term of market come kind premiums

process? premiums those acquisitions well. those looking would to acquisitions market premiums as are pricing your your be Are South? those guess, you're anticipating in are the at And into bidding as that of sustainable in underwrite I sellers potential you having areas,

Brian Davis

Good morning, Buck.

there. you price premium. price pricing the to we premium, relative couple a that's maintaining is on U.S. measure So in and got questions When One

South Well, able having a where in maintain the where what seen looking there's we Mississippi be are looked infrastructure look that's is and or be standpoint time be and the from a it. we've at Mississippi, an it of very at price lot to conservation are price But a really they to believe historically. today. they'd that owner where would we'll extended we've premiums. these of to long you a so take premiums a viewpoint want I opportunities in XX-year exceptional today relative how an if of there. market of it wood mill, build outside extent and a product mill to and pretty to mean, period really a takes from to appreciation And difficult say, on there's I at

markets markets. premium, as U.S. so our three a markets talk is price XX% out a is XXX% top Now, the I that's in of really the base that, and our how seven of in result about ownership markets and top like in XX We of from

depth and measured really demand of South. supply And by and and market factors. breadth that's

remain reason magnitude but like anytime for premium The may we and see And to change. soon. we we narrow, where it so expect it are, evaporating don't there's we the to really there, no

a As it relates it. capital to to really cost M&A, element of it's

well this question it so timberland interest as rates? we to an expectations hedge. what's inflation our really is, Well, as relates And one get is increasing to related

so what our had And is you still year appreciation product product we years, price Even outstripped past inflation this exceptionally saw was two price seen high, though really appreciation. inflation. in the we've last what

it really basis. So is on our really marketplace, in a real

So the the what's happening We've in expectation what's off in seen transactions of some go U.S. real?

with not it. forest, forest attributes looked and transaction always at unique different one factors, along a its a South, own that transactions forest those there’s and as we've go each there's as has

mitigation that levels near-term consideration standpoint, alternative from a is a cash that flows as go most important location from transaction. recent sales, bank with in so the consideration, development because development, credits, standpoint very have that's we then Stocking very the pricing recreational a important such but it. really along land income, saw also carbon, And

it rate. really much discount see from standpoint, pricing more you the So a in

of for But about is really And make know XX% type so each you've detail like to in years how we year we the is, expectations? to a are off. that that Buck, factor. conservatism following to we put think that much in of that price but increases just but its pricing. going sure – can to be price pricing to well as we but to still next think it, it for answer, I assets valuations contributing trend, I as be attributed much XX% on our there's been your we communicated. fair remain watch the three the to the That I want space built two the important exponential are of going expectations, points some believe how I relates

Buck Horne

my very of And – color. this if the that. the I I wood bigger is, you appreciate have wondering the through guys European picture. follow-up guess, more you later impact imports the comparisons, maybe on if It's kind helpful. U.S. Thank I'm year thought into for is

tightening continue sustain wood terms potentially do – at the European your in effect or Europe thought or to to layer of of comparisons, of impact how another reduced on the that due days. What's dwindle think the going least add in just could of you to these imports? market improve South what's of the

Todd Reitz

see to going thinking sit, you Todd. our in fill were about add – we have capacity where It's of it's in running, help take place, we Should in place. markets to they how it’s Is continue to does supply think you're currently Buck, shifts model do they're tension going have basis maxed they tension those else we're to are wood it's there the Hey, with. And have. consistent as that that it that if we our out, what to as structured that, value customers on all you able a as far how feels pricing to things we're continue our continue then they're bring additional of the see if mills and to void? if Or to very can going one operating shift? to table the to that to continue to another we that being something with they this near with some up Yes. some and everybody to about how the delivered operate, add we

a very in the at but now see level, tightening rate are if that high out, see plays as down the road. know capacity, will. all a markets how So we of high we're running potential it We'll you

be would lumber that it overall So of kind more pricing improvement.

within then and we might a see a think at to running we're where now. right feel like markets due efficient that, that a flow I from rate are and we very curve but the we just they're in, supply

Buck Horne

guys. Thanks Okay.

Brian Davis

Thanks Buck.

Operator

conference would our session. Brian question-and-answer concludes This I Davis over to to back remarks. like turn for any the closing

Brian Davis

vacations, college have ceremonies, Sarah. Day and quarter Thanks, to with outlook this and weddings, really in lives but upcoming in We while school our results our celebrate summer We a and first including importantly, themselves. weekend. events are lot there noteworthy graduation bigger are Mother's our out recognize most high

August. to look results be present So we our forward QX moments. these and take celebrate the Thank in time you, reporting to and

Operator

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

may disconnect. You now

CatchMark Timber Trust (CTT) 6 May 222022 Q1 Earnings call transcript