FOR RELEASE April 23, 2012 CONTACT: Kenneth D.
Mann Investor Relations (870) 881-6432
Deltic Announces Preliminary First Quarter 2012 Results
EL DORADO, AR - President and Chief Executive Officer, Ray C.
Dillon, of Deltic Timber
Corporation (NYSE-DEL) announced today that preliminary net
income for the first quarter of 2012 was
$.1 million, $.01 a share, the same as reported for the first
quarter a year ago. The Company's Mills segment reported
improved operating income due to an increase in sales volume,
a higher average unit sales price, and a lower average cost
per unit sold, when compared to the first quarter of 2011.
The improvement in results for the Mills segment was
essentially offset by increased Corporate general and
administrative expenses and a lower equity in the earnings of
Del-Tin Fiber, Deltic's joint venture to manufacture medium
density fiberboard ("MDF"). Net cash provided by operating
activities was $2.1 million in the first quarter of 2012,
which compares to net cash required of $1.2 million a year
ago.
Commenting on results, Mr. Dillon stated, "I am pleased to
report that Deltic's solid assets generated profitable
results despite the continued negative impact on our
businesses caused by the weak housing market. Having our
Mills segment produce increased operating income in this
lumber market
was quite an accomplishment, and reinforces our
vertical-integration strategy. In addition, dry weather
conditions in our operating area resulted in excellent
logging conditions in our timberlands, on which we
capitalized by increasing our harvest levels when compared to
the first quarter of 2011. We are also beginning to see a
slight increase in residential lot sales activity in our
Chenal Valley development, as a result of low interest rates
combined with improved credit availability from area banks.
At Del-Tin Fiber, we are focused on further improvement in
productivity and efficiency during this period of a
moderately soft MDF market, in addition to evolving the
product mix of the plant to utilize different resin glue to
reduce manufacturing cost there."
Operating income for Deltic's Woodlands segment was $4.8
million in the first quarter of 2012, an increase of $.1
million when compared to $4.7 million reported a year ago.
The Company harvested
173,007 tons of pine sawtimber during the current period of
2012, an 18 percent increase from the
146,089 tons harvested in the first quarter of 2011. The
average per-ton price for pine sawtimber was
$22 for the first quarter of 2012, a 15 percent decrease from
$26 per ton for 2011's first quarter. The decrease in the
sales price for pine sawtimber was due to lower demand from
the sawmills in Deltic's operating area, which was caused by
a reduced operating level. Pine pulpwood harvested in 2012's
first quarter period totaled 134,934 tons at an average sales
price of $9 per ton, which compares to 125,467 tons harvested
at $8 per ton for the same period of 2011. Deltic was able to
increase the harvest volume of both pine sawtimber and
pulpwood because of the favorable logging conditions during
the current-year period. Oil and gas lease rentals and net
royalty income totaled $1.4 million during the current period
of
2012 compared to $1.6 million during 2011's same quarter. The
reduction was due to the impact of decade-low prices for
natural gas, which was partially offset by an increase in the
number of producing wells. During the current quarter, the
Company sold 270 acres of timberland, primarily non-strategic
recreational-use hardwood bottomland, at an average sales
price of $1,400 per acre versus 2011's first quarter sales of
307 acres at an average sales price of $1,400 per acre.
Deltic's Mills segment reported operating income of $1.6
million in the first quarter of 2012, which compares to $.7
million for the same period of 2011. The improvement was due
to a higher per-unit sales price; improved hourly
productivity rates; increased sales volume; and a lower cost
of logs used in manufacturing lumber, as evidenced by the
current-period's decreased average sales price for pine
sawtimber. The current-quarter's average lumber sales price
of $271 per thousand board feet was an increase of $5 per
thousand board feet from the first quarter of 2011. In the
first quarter of 2012, Deltic sold 65 million board feet of
lumber, an increase of 2.5 million board feet when compared
to 2011's first quarter sales of 62.5 million board feet, as
the Company increased lumber production to match market
demand.
The Company's Real Estate segment reported an operating loss
of $.8 million for the first quarters of both 2012 and 2011.
Residential lot sales totaled seven lots in 2012's first
quarter compared to three lots sold in the same period of
2011. The current quarter's average per-lot sales price
was
$67,100, an $18,200 per lot decrease when compared to the
first quarter of 2011's average per-lot sales price of
$85,300, due to the mix of lots sold. There were no sales of
commercial real estate acreage in the first quarter of either
year.
Corporate operating expense was $4.3 million in the first
quarter of 2012, which compares to $4 million for the
corresponding period of 2011. The slight increase was due to
higher general and administrative expenses, primarily
resulting from increased pension and post-retirement benefit
obligations caused by lower interest rates. Deltic's equity
in the earnings of Del-Tin Fiber was $.1 million for the
current year quarter versus $.5 million for the same period
in 2011, as the joint venture experienced increased
manufacturing cost, including high resin expense. Capital
expenditures were $4 million for the first quarters of both
2012 and 2011.
Regarding the outlook for the second quarter and year of
2012, Mr. Dillon stated, "At this time we anticipate the pine
sawtimber harvest to be 150,000 to 170,000 tons and 575,000
to 600,000 tons, respectively. Finished lumber production
sales volume are anticipated to be at 50 to 70 million board
feet for the second quarter and 250 to 275 million board feet
for the year, depending upon market conditions. Residential
lot sales are estimated at five to ten lots and 25 to 35 lots
for the second quarter and year of
2012, respectively. Even though commercial acreage in Chenal
Valley receives interest, due to the volatile nature of
commercial real estate transactions and the significant
number of factors related to any sale, it is difficult to
anticipate future closings."
Statements included herein that are not historical in nature
are intended to be, and are hereby identified as,
"forward-looking statements" within the meaning of the
Federal Securities Laws. Such statements reflect the
Company's current expectations and involve certain risks and
uncertainties. Actual results could differ materially from
those included in such forward-looking statements. Factors
that could cause such differences include, but are not
limited to, the cyclical nature of the industry, changes in
interest rates, credit availability, general economic
conditions, adverse weather, cost and availability of
materials used to manufacture the Company's products, and the
other risk factors described from time to time in the reports
and disclosure documents filed by the Company with the
Securities and Exchange Commission.
Deltic will hold a conference call on Tuesday, April 24,
2012, at 10:00 a.m. Central Time to discuss the first quarter
of 2012 earnings. Interested parties may participate in the
call by dialing
Total net sales/operating income $ 30.6 1.1 29.4 0.6
Deltic Timber Corporation CONSOLIDATED STATEMENTS OF INCOME
(Preliminary and Unaudited)
(Thousands of dollars, except per share amounts)
Three Months Ended
March 31,
2012 2011
Net sales $ 30,639 29,395
Costs and expenses
Cost of sales 22,001 21,337
Depreciation, amortization, and
cost of fee timber harvested 2,908 3,162
General and administrative expenses 4,596 4,346
Total costs and expenses 29,505 28,845
Operating income 1,134 550
Equity in earnings of Del-Tin Fiber 71 537
Interest income 2 7
Interest and other debt expense, net of capitalized interest
(1,035) (942) Other income/(expense) (25) 3
Income before income taxes 147 155
Income taxes (50) (63) Net income $ 97 92
Earnings per common share
Basic $ 0.01 0.01
Assuming dilution $ 0.01 0.01
Dividends per common share paid $ 0.075 0.075
Average common shares outstanding (thousands)
Basic 12,501 12,409
Assuming dilution 12,567 12,509
Deltic Timber Corporation CONSOLIDATED BALANCE SHEETS
(Preliminary and Unaudited) (Thousands of dollars)
Mar. 31,
Dec. 31,
2012
2011
Assets
Current assets
Cash and cash equivalents
$ 3,074
3,291
Trade accounts receivable - net
6,582
4,821
Other receivables
-
1
Inventories
4,792
4,353
Prepaid expenses and other current assets
4,766
3,862
Total current assets
19,214
16,328
Investment in real estate held for development and sale
57,063
57,408
Investment in Del-Tin Fiber
7,284
7,113
Other investments and noncurrent receivables
316
885
Timber and timberlands - net
229,866
228,274
Property, plant, and equipment - net
29,365
30,187
Deferred charges and other assets
1,589
1,675
Total assets
$ 344,697
341,870
Liabilities and Stockholders' Equity
Current liabilities
Trade accounts payable
$ 2,928
1,867
Current maturities of long-term debt
1,111
1,111
Accrued taxes other than income taxes
2,413
1,971
Deferred revenues and other accrued liabilities
7,651
7,761
Total current liabilities
14,103
12,710
Long-term debt
65,000
64,000
Deferred tax liabilities - net
1,351
1,211
Other noncurrent liabilities
Commitments and contingencies
Stockholders' equity
Common stock, 12,813,879 shares issued
36,284
-
128
36,826
-
128
Capital in excess of par value
80,648
80,842
Retained earnings
162,318
163,170
Treasury stock, 159,043 and 208,296 shares held,
respectively
(5,595)
(7,288)
Accumulated other comprehensive loss
(9,540)
(9,729)
Total stockholders' equity
227,959
227,123
Total liabilities and stockholders' equity
$ 344,697
341,870
Deltic Timber Corporation CONSOLIDATED STATEMENTS OF CASH
FLOWS (Preliminary and Unaudited)
(Thousands of dollars)
Three Months Ended
March 31,
2012
2011
Operating activities
Net income
$ 97
92
Adjustments to reconcile net income to
net cash provided/(required) by operating activities:
Depreciation, amortization, and cost of fee timber
harvested
2,908
3,162
Deferred income taxes
17
39
Real estate development capital expenditures
(105)
(298)
Real estate costs recovered upon sale
232
130
Timberland costs recovered upon sale
127
142
Equity in earnings of Del-Tin Fiber
(71)
(537)
Stock-based compensation expense
558
507
Net increase in liabilities for pension and other
postretirement benefits
450
147
Net decrease in deferred compensation for stock-based
liabilities
(890)
(694)
Increase in operating working capital other
than cash and cash equivalents
(1,375)
(3,805)
Other changes in assets and liabilities
169
(120)
Net cash provided/(required) by operating activities
2,117
(1,235)
Investing activities
Capital expenditures, excluding real estate development
(3,478)
(2,822)
Net change in purchased stumpage inventory
(346)
(770)
Advances to Del-Tin Fiber
(800)
(597)
Repayments from Del-Tin Fiber
700
875
Net change in funds held by trustee
568
-
Other - net
220
170
Net cash required by investing activities
(3,136)
(3,144)
Financing activities
Proceeds from borrowings
2,000
5,500
Repayments of notes payable and long-term debt
(1,000)
(1,000)
Treasury stock purchases
(19)
(55)
Common stock dividends paid
(949)
(941)
Proceeds from stock option exercises
409
646
Excess tax benefits from stock-based compensation
534
498
Deferred financing costs
-
(1,094)
Other - net
(173)
(130)
Net cash provided by financing activities
802
3,424
Net decrease in cash and cash equivalents
(217)
(955)
Cash and cash equivalents at January 1
3,291
3,831
Cash and cash equivalents at March 31
$ 3,074
2,876
Deltic Timber Corporation
OTHER DATA
(Preliminary and Unaudited)
Three Months Ended
March 31,
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