The increase was due to improved financial results for Deltic’s Woodlands and Real Estate segments combined with the benefit of a lower effective income tax rate, partially offset by reduced operating income from the Company’s Manufacturing segment as a result of maintenance-related expenses and downtime at its medium density fiberboard plant.
Net cash provided by operating activities was $10.3 million for the 3Q 2014, compared to $13.7 million for 2013’s 3Q.
For the first nine months of 2014, net income was $16.2 million. This compares to results for the first nine months of 2013 of $18.2 million before consideration of non-recurring gains that resulted from the acquisition of the remaining 50% ownership interest in the Del-Tin Fiber medium density fiberboard plant in April 2013 and an involuntary conversion of assets in the Company’s Manufacturing segment.
Inclusive of these gains that totaled $5.7 million, net of income taxes, reported net income for the first nine months of 2013 was $23.9 million. Net cash provided by operating activities was $25.1 million for the nine-month period ended September 30, 2014 compared to $34 million for the first nine months of 2013.
Commenting on the results, President and CEO, Ray C. Dillon, stated, “Deltic’s assets continued to produce solid financial results during the 3Q, as the Company reported favorable net income to the 3Q of last year as well as the 2Q 2014. Pine sawtimber stumpage prices are higher than a year ago, and we also capitalized on the opportunity to sell some non-strategically located timberland with higher and better use potential for an attractive per-acre price, benefitting Deltic’s Woodlands segment results for the period. While the increased stumpage prices resulted in increased cost for the logs used as raw material in our sawmills, they continued to generate strong mill margins. At Del-Tin Fiber, we performed a scheduled maintenance outage during the quarter, as we continue to focus on improving productivity and plant uptime there. In our Real Estate segment, we had a successful lot offering in a new small-lot neighborhood that is very near to our Chenal Valley development, and we also continue to see increased interest in our commercial acreage there. With the excess cash flows generated by our businesses during the third quarter, we repurchased 68,581 shares of the Company’s common stock and repaid $5 million of the debt we incurred to acquire timberland acreage earlier in 2014.”
Deltic Timber Corporation is a natural resources company focused on the efficient and environmentally responsible management of its land holdings. The Company owns approximately 530,000 acres of timberland, operates two sawmills and a medium density fiberboard plant, and is engaged in real estate development.
