Deltic Announces Third Quarter 2006 Results.EL DORADO El Dorado, legendary country of South America El Dorado (ĕl`dərä`dō, –rā`–) [Span.,=the gilded man], legendary country of the Golden Man sought by adventurers in South America. , Ark. -- Deltic Timber Corporation (NYSE NYSE See: New York Stock Exchange :DEL):
DELTIC TIMBER CORPORATION
CONSOLIDATED FINANCIAL DATA SUMMARY
THIRD QUARTER 2006 2005
Net sales $ 43,698,000 36,827,000
Net income 6,290,000 3,238,000
Earnings per common share
Basic .51 .26
Assuming dilution .50 .26
Average shares outstanding 12,406,265 12,256,730
YEAR-TO-DATE 2006 2005
Net sales $ 126,354,000 122,242,000
Net income 12,585,000 12,158,000
Earnings per common share
Basic 1.02 .99
Assuming dilution 1.01 .99
Average shares outstanding 12,391,695 12,244,406
Deltic Timber Corporation (NYSE:DEL) announced today that net income for the third quarter of 2006 totaled $6.3 million, $.51 a share, a 94 percent increase when compared to $3.3 million, $.26 a share, a year ago. The improvement was due primarily to commercial acreage sales in the Company's Real Estate segment and improved results at Del-Tin Fiber. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for the current period was $9.2 million, a $4.6 million increase from the third quarter of 2005. Net cash provided by operating activities was $23.2 million for the current quarter, which compares to $8.9 million a year ago. Commenting on the results, President and Chief Executive Officer, Ray C. Dillon, stated, "Our Chenal Valley real estate development made a significant contribution to income once again, with sales of two commercial sites totaling around 53 acres. One of these sites was approximately 38 acres to an affiliate of RED Development LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control for the development of an upscale lifestyle shopping center shopping center, a concentration of retail, service, and entertainment enterprises designed to serve the surrounding region. The modern shopping center differs from its antecedents—bazaars and marketplaces—in that the shops are usually amalgamated into which should generate additional interest in Deltic's adjoining acreage. Our Woodlands segment benefited from our decision to increase the harvest of pine sawtimber in the first half of 2006, as the weakened weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak  en·er n. lumber lumber, term for timber that has been cut into boards for use as a building material. The major steps in producing lumber involve logging (the felling and preparation of timber for shipment to sawmills), sawing the logs into boards, grading the boards according to market
has resulted in a decrease in stumpage stump·age n. 1. Standing timber regarded as a commodity. 2. The value of standing timber. 3. The right to cut standing timber. stumpage 1. prices during the third quarter. Difficult market conditions continue for our lumber manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. . As such, a significant amount of management's time and attention is being dedicated to this segment of the Company. We are pleased with the improvement in both operating performance and financial results for Del-Tin Fiber, with the facility headed for a record year." The Woodlands segment earned $4.6 million in the third quarter of 2006, a decrease of $1.4 million when compared to $6 million for the same period of 2005. The Company's pine sawtimber harvest decreased from 159,512 tons in the prior-year third quarter to 121,636 tons in 2006's third quarter. Deltic had accelerated the timing of a portion of its annual timber harvest plan during the first six months of 2006 in anticipation of downward pressure on stumpage prices in the second half of 2006 resulting from a weakening weak·en tr. & intr.v. weak·ened, weak·en·ing, weak·ens To make or become weak or weaker. weak en·er n. lumber market. Average
pine sawtimber price was $44 per ton for the third quarter of 2006
versus $47 per ton a year ago.Deltic's Mills segment reported a loss of $3.6 million in the third quarter of 2006 compared to income of $1.7 million in the corresponding quarter of 2005. Finished lumber sales price decreased 21 percent, or $80 per thousand board feet, to $294. Lumber sales volume of 63.2 million board feet decreased three percent when compared to 2005's third quarter, primarily as a result of a reduction in operating hours due to market conditions and downtime The time during which a computer is not functioning due to hardware, operating system or application program failure. for capital equipment installation. The Company's Real Estate segment earned $11 million in the third quarter of 2006, which compares to $.4 million for the same quarter of 2005. Included in the current-year quarter were sales of approximately 53 acres of commercial real estate, at a pretax pre·tax adj. Existing before tax deductions: pretax income. pretax adj [profit] → vor (Abzug der) Steuern gain of $10.7 million. Residential lot sales decreased from 31 lots to 23 when compared to a year ago. Due to sales mix sales mix See product mix. , the average lot price increased by $21,700 to $104,300 per lot. Corporate operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. was $3 million for 2006's third quarter, which compares to $3.1 million for the corresponding quarter of 2005. Deltic's equity in Del-Tin Fiber was income of $1.5 million for the third quarter of 2006, an increase of $1.4 million when compared to income of $.1 million a year ago. Income tax expense for the current-year quarter was $3.3 million higher than the third quarter of 2005 due to the increase in pretax income pretax income Reported income before the deduction of income taxes. Pretax income is sometimes considered a better measure of a firm's performance than aftertax income because taxes in one period may be influenced by activities in earlier periods. combined with the Company having virtually no income tax expense for 2005's third quarter due to an income tax benefit created primarily by the impact of a reversal of estimated valuation allowance related to accumulated state net operating loss carryforwards Net operating loss carryforwards Application of losses to offset earnings in future years. . Capital expenditures were $11.1 million for 2006's third quarter and $22.7 million for the nine months ended September 30, 2006. For the corresponding periods of 2005, capital expenditures totaled $10.8 million and $25.2 million, respectively. For the first nine months of 2006, net income totaled $12.6 million, $1.02 a share. Financial results for the nine months ended September 30, 2005, were net income of $12.2 million, $.99 a share. Net cash provided by operating activities was $42.4 million for the 2006 period compared to $29.6 million a year ago. Pine sawtimber harvest level for the nine months ended September 30, 2006, was 489,358 tons compared to 494,554 tons during the same period of 2005. Average pine sawtimber price of $46 per ton increased $1 per ton from the prior-year period. Finished lumber average sales price decreased $44, or 12 percent, from $377 per thousand board feet to $333. Lumber sales increased 10.2 million board feet to 213 million. Residential lot sales for the first nine months of 2006 totaled 82 lots at an average price of $111,200, which compares to 158 lots at $83,500 per lot for the corresponding period of 2005. Commercial acreage sales totaled approximately 53 acres during the nine-month period ended September 30, 2006, while a .99-acre commercial outparcel was sold for a price equivalent to $632,600 per acre in the first nine months of 2005. In regard to the outlook for the fourth quarter and year of 2006, Mr. Dillon stated, "We currently anticipate the pine sawtimber harvest to be 80,000 to 90,000 tons and 565,000 to 575,000 tons, respectively. Finished lumber production and sales volumes are estimated at 60 to 70 million board feet for the fourth quarter and 275 to 285 million feet for the year, depending on market conditions. Residential lot sales are projected at 110 to 120 lots for the year of 2006." Statements included herein that are not historical in nature are intended to be, and are hereby identified as, "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " 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 cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. nature of the industry, changes in interest rates and 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 Thursday, October 26, 2006 at 10:00 a.m. Central Time to discuss third quarter 2006 earnings. Interested parties may participate in the call by dialing 1-800-291-5365 and referencing participant passcode identification number 75822482. The call will also be broadcast live over the Internet and can be accessed through the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the Deltic website at www.deltic.com. Online replays of the call will be available through the Deltic website, and a recording of the call will be available until Thursday, November 9, by dialing 1-888-286-8010 and referencing replay passcode identification number 19109989. |
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