PotlatchDeltic(US:PCH)2022-05-06 18:51Financial Data and Key Metrics Changes - CatchMark Timber Trust reported a net income of $3.2 million or $0.07 per share for Q1 2022, compared to a net loss of $600,000 in Q1 2021 [29] - Adjusted EBITDA increased by 15% year-over-year, totaling $14.8 million compared to $12.9 million in Q1 2021 [29] - Cash available for distribution increased by 34% year-over-year [12] Business Line Data and Key Metrics Changes - Timber sales revenue increased by 17% year-over-year in the U.S. South, despite lower planned harvest volumes [9][26] - Retail land sales contributed $6.1 million in proceeds from 11 sales, representing over 35% of the total timberland sales target for the year [10] - Investment management EBITDA decreased to $2.7 million from $3.8 million in 2021, primarily due to lower asset management fees [30] Market Data and Key Metrics Changes - Net timber sales prices increased by 30% for sawtimber and 8% for pulpwood year-over-year, with premiums of 47% and 37% above market averages, respectively [9][28] - The company expects sawtimber pricing to be approximately 20% above 2021 levels for the full year [13] Company Strategy and Development Direction - The company is focused on acquiring prime timberlands in leading U.S. South mill markets to enhance its market position and operational efficiencies [17][18] - CatchMark is pursuing a disciplined acquisition strategy, targeting smaller bolt-on acquisitions to maximize cash flow potential [17][19] - Environmental initiatives, including wetlands mitigation banking and carbon sequestration, are part of the company's growth strategy [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued demand for new housing, despite rising interest rates, which supports sawtimber pricing [13][14] - The company anticipates a full-year weighted average pricing increase of 15% to 20% for blended harvest, up from previous expectations of 10% to 15% [16] - Management noted that supply chain issues have created a favorable market environment for CatchMark, allowing it to meet customer supply needs effectively [15] Other Important Information - The company declared a cash dividend of $0.075 per share for common stockholders, payable on June 15, 2022 [12] - As of March 31, 2022, CatchMark had over $250 million of borrowing capacity remaining under its credit facilities and over $27 million in cash [33] Q&A Session Summary Question: Update on acquisition pipeline - Management discussed the two parts of the acquisition strategy: small-tract program and off-market opportunities, expressing excitement about the pipeline being built [49][50] Question: Update on pulpwood margins - Management clarified that margin pressure on pulpwood is more seasonal than secular, with strong overall margins expected [54][56] Question: Carbon offset program revenue streams - Management indicated that the carbon offset program has not yet been monetized, with expectations for revenue contributions in the second half of 2022 [58][59] Question: Sustainability of pricing premiums - Management expressed confidence in maintaining pricing premiums due to the company's strategic market positioning and supply-demand dynamics [90][91] Question: Impact of European wood imports - Management noted that reduced European wood imports could tighten the market further, enhancing pricing tension [94][96]