PotlatchDeltic(US:PCH)2022-10-27 16:00Timberland and Harvesting - The company owns approximately 2.2 million acres of timberland and operates six sawmills and an industrial-grade plywood mill[97]. - In Q3 2022, the Southern harvest volume was 1.4 million tons, higher than Q3 2021, with an expected harvest of 1.8 to 1.9 million tons in Q4 2022[108]. - The company anticipates harvesting approximately 6.5 million tons of timber for the full year 2022, with about 75% from the Southern region[108]. - The merger with CatchMark Timber Trust, completed on September 14, 2022, enhances the company's timberland portfolio in the U.S. South[112]. - Total harvest volume for the Timberlands segment increased by 407,435 tons to 1,911,413 tons in Q3 2022 compared to Q3 2021[134]. - Harvest volume in the Southern region increased by 38.9% to 1.4 million tons in Q3 2022, attributed to favorable conditions and increased stumpage sales[134]. Financial Performance - Revenues for Q3 2022 were $306.7 million, an increase of $19.4 million compared to Q3 2021, driven by higher lumber prices and increased harvest volumes in the Southern region[114]. - Year-to-date revenues for 2022 were $1.1 billion, $11.4 million lower than the same period in 2021, mainly due to lower lumber prices and shipments[120]. - Net income for Q3 2022 was $45.96 million, a decrease of $19.71 million from $65.67 million in Q3 2021[113]. - Total Adjusted EBITDDA for Q3 2022 decreased by $6.1 million compared to Q3 2021, primarily due to higher manufacturing and log and haul costs[119]. - Total Adjusted EBITDDA for the first nine months of 2022 decreased by $55.3 million compared to the same period in 2021, primarily due to lower lumber prices and higher costs[128]. - Adjusted EBITDDA for the three months ended September 30, 2022, was $101,090, compared to $107,183 for the same period in 2021[170]. Costs and Expenses - Cost of goods sold increased by $30.3 million in Q3 2022, primarily due to inflationary price increases in manufacturing and log and haul costs[115]. - Year-to-date cost of goods sold increased by $54.4 million compared to the first nine months of 2021, driven by inflationary price increases and higher Southern harvest volumes[121]. - CatchMark merger-related expenses for Q3 2022 totaled $26.0 million, including $7.5 million for severance benefits and $9.3 million for accelerated vesting of equity awards[116]. - The company incurred CatchMark merger-related expenses of $26,007 during the three months ended September 30, 2022[170]. Real Estate Segment - The Real Estate segment expects to sell approximately 20,600 acres of rural land and 180 residential lots for the full year 2022[111]. - Revenues for the Real Estate segment increased by $5.511 million to $19.008 million in Q3 2022 compared to Q3 2021[140]. - Real Estate Adjusted EBITDDA for Q3 2022 was $14.1 million, an increase of $5.1 million compared to Q3 2021, driven by higher development sales[143]. - For the first nine months of 2022, Real Estate Adjusted EBITDDA reached $66.1 million, up $28.6 million from the same period in 2021[144]. - The company sold 157 residential lots at an average price of $108,418 in the first nine months of 2022, compared to 122 lots at $90,301 in the same period of 2021[145]. Market Conditions and Trends - Inflation has impacted costs, with the Consumer Price Index increasing by 8.2% and the Producer Price Index by 8.5% over the last twelve months[107]. - Long-term housing fundamentals remain favorable despite recent declines in housing starts, driven by a shortage of homes and demographic trends[106]. - The company is well-positioned to support climate commitments through natural climate solutions, including forest carbon sequestration[101]. Capital Expenditures and Debt - The company plans to spend approximately $85 to $90 million on capital expenditures during 2022, including $131 million for the Waldo sawmill expansion[150][151]. - Total outstanding net long-term debt was $1.0 billion as of September 30, 2022, with plans to refinance a $40 million term loan expiring in December 2022[156]. - Long-term debt increased to $1,032,503 as of September 30, 2022, compared to $758,256 at December 31, 2021[164]. - The company maintains a strong interest coverage ratio of 22.39, significantly above the covenant requirement of 3.00 to 1.00, and a leverage ratio of 19%, well below the 40% limit[162]. Cash Flow and Dividends - Net cash from operating activities for the first nine months of 2022 was $458.4 million, a slight increase of $5.2 million compared to $453.2 million in 2021[144]. - A special dividend is expected to be paid to stockholders in December 2022, reflecting strong performance and cash generation[149]. - Cash Available for Distribution (CAD) for the nine months ended September 30, 2022, was $306,136, down from $412,265 in 2021[171]. Market Capitalization and Credit Rating - Market capitalization decreased to $3,315,072 as of September 30, 2022, from $4,159,034 at December 31, 2021[164]. - The company is rated as investment grade by both Moody's and S&P, indicating a stable credit profile[163]. - The weighted-average cost of debt after tax decreased to 2.4% as of September 30, 2022, from 3.1% in the previous year[164]. - The dividend yield increased to 4.3% as of September 30, 2022, compared to 2.9% at December 31, 2021[164].