PotlatchDeltic(US:PCH)2025-11-07 19:40Timberland and Wood Products Operations - The company owns 2.1 million acres of timberland and operates six sawmills, an industrial-grade plywood mill, and a real estate development business[101]. - In Q3 2025, total harvest volume for the Timberlands segment was 1.9 million tons, slightly lower than Q3 2024, with expectations to harvest 1.7 to 1.8 million tons in Q4 2025[115]. - The Wood Products segment expects to ship between 290 and 300 million board feet of lumber during Q4 2025, driven by increased shipments from the Waldo sawmill[116]. - Total harvest volume decreased by 72,750 tons to 1,880,710 tons in Q3 2025 compared to Q3 2024[136]. - Timberlands Adjusted EBITDDA for Q3 2025 was $41.0 million, an increase of $5.2 million compared to $35.8 million in Q3 2024[137]. - Timberlands Adjusted EBITDDA for Q3 2025 increased by $5.2 million compared to Q3 2024, driven by a 16.4% rise in sawlog prices in the Northern region to $128 per ton[138]. - Wood Products segment revenues for Q3 2025 were $165.9 million, up $26.5 million from $139.4 million in Q3 2024, with a nine-month total of $502.3 million, an increase of $60.8 million from $441.6 million[139]. - Average lumber sales price decreased slightly to $396 per MBF in Q3 2025 from $402 per MBF in Q3 2024, while for the first nine months, it increased to $432 per MBF from $419 per MBF[141][146]. - Wood Products Adjusted EBITDDA for Q3 2025 improved by $7.1 million to $(2.5) million compared to $(9.6) million in Q3 2024, and for the first nine months, it increased by $27.4 million to $10.9 million from $(16.5) million[143][144]. - Total Northern harvest volume increased by 1.6% in the first nine months of 2025, while Southern region harvest volume declined by 2.8% due to land sales[138]. Real Estate Segment - The Real Estate segment anticipates selling approximately 5,000 rural acres and 46 residential lots in Chenal Valley during Q4 2025[117]. - Real Estate Adjusted EBITDDA for Q3 2025 rose by $31.2 million to $63.0 million compared to $31.9 million in Q3 2024, but decreased by $19.1 million for the first nine months to $108.5 million from $127.7 million[148][147]. - Total rural real estate acres sold in Q3 2025 increased significantly, including a 6,500-acre conservation sale and a 6,300-acre recreation tract, with average price per acre at $3,280 compared to $3,727 in Q3 2024[145][148]. Financial Performance - Revenues for Q3 2025 increased by $59.0 million to $314.2 million compared to Q3 2024, driven by higher lumber shipments and significant real estate sales[121]. - Cost of goods sold rose by $29.6 million to $257.1 million in Q3 2025, primarily due to increased fiber and manufacturing costs[122]. - Net income for Q3 2025 was $25.9 million, a significant increase of $22.6 million compared to $3.3 million in Q3 2024[120]. - Total Adjusted EBITDDA for Q3 2025 increased by $43.4 million to $89.3 million, attributed to higher lumber shipments and real estate sales[126]. - Year-to-date revenues for the first nine months of 2025 increased by $53.5 million to $857.4 million, supported by higher average lumber prices[127]. - Cost of goods sold decreased by $5.3 million to $716.9 million for the first nine months of 2025, mainly due to fewer rural real estate acres sold[128]. - Net cash from operating activities for the nine months ended September 30, 2025, was $155.7 million, an increase of $12.6 million from $143.1 million in 2024[149]. - Cash received from customers rose by $49.8 million, driven by higher lumber prices and shipments, partially offset by lower Southern harvest volume[151]. - Net income for Q3 2025 was $25,893,000, a significant increase from $3,309,000 in Q3 2024[169]. - Total Adjusted EBITDDA for Q3 2025 reached $89,263,000, compared to $45,902,000 in Q3 2024, reflecting a growth of 94%[169]. - Cash Available for Distribution (CAD) for the nine months ended September 30, 2025, was $90,328,000, up from $39,291,000 in the same period of 2024[170]. Capital Expenditures and Debt - The company expects to spend approximately $60.0 million to $65.0 million on capital expenditures during 2025, excluding the final closeout payment for the Waldo sawmill Modernization Project[153]. - Total outstanding long-term debt was $1.0 billion as of September 30, 2025, with $27.5 million classified as current[155]. - The company repurchased 1,511,923 shares of common stock for a total of $60.0 million in the first nine months of 2025[151]. - Cash expenditures for property, plant, and equipment were $39.9 million in the first nine months of 2025, down from $71.5 million in the same period of 2024[151]. - The interest coverage ratio was 7.9, significantly above the required minimum of 3.00 to 1.00 as of September 30, 2025[162]. - Market capitalization increased to $3.15 billion as of September 30, 2025, based on outstanding shares of 77.3 million[164]. - The company has a remaining authorization of $30.0 million for future stock repurchases under the 2022 Repurchase Program[154]. Market Conditions and Economic Outlook - The U.S. housing market saw total privately-owned housing starts exceed 1.3 million units in August 2025, with single-family starts averaging approximately 0.9 million units[112]. - Builder sentiment improved in October 2025, with the NAHB/Wells Fargo Housing Market Index rising to 37, the highest level since April[113]. - The repair and remodel sector, the largest driver of lumber demand, is forecasted to grow through 2026 despite a slowdown in discretionary remodel activity[114]. - The average 30-year fixed mortgage rate improved to approximately 6.3% by the end of September 2025, down 55 basis points from year-end 2024[111]. Merger and Strategic Initiatives - The company entered into a merger agreement with Rayonier, where each PotlatchDeltic stockholder will receive 1.7339 shares of Rayonier common stock for each share of PotlatchDeltic common stock[118]. - Merger-related expenses for Q3 2025 were $1.9 million, associated with the pending merger with Rayonier[123]. Cash Flow and Investments - Net cash from investing activities improved by $37.1 million, with a cash outflow of $45.0 million in 2025 compared to $82.1 million in 2024[149]. - The company reported a net cash outflow from financing activities of $168,740,000 for the nine months ended September 30, 2025, compared to $137,534,000 in 2024[170]. Risk Management - The company is exposed to interest rate risk on its variable rate debt instruments and uses interest rate swaps to hedge this exposure[172]. - Market risk exposures have not changed materially since December 31, 2024[173].