The average sales price received for lumber sold was 48% higher than a year ago, and the sales volume of lumber increased 9% when compared to the same period of 2012. In addition, equity in the earnings of Del-Tin Fiber LLC was $1 million higher than in 2012’s 1Q. Net cash provided by operating activities was $9 million in the 1Q 2013, which compares to $2.1 million a year ago.
Commenting on the results, Ray C. Dillon, President and CEO, stated, “Deltic’s portfolio of diverse assets continued to perform well in the 1Q 2013, as indicated by the financial results reported. The improved housing market resulted in increased sales prices for both lumber and medium density fiberboard. As a result, both the financial performance of the Company’s Manufacturing segment and our equity in Del-Tin Fiber’s earnings improved significantly.
“On April 1, Deltic successfully completed the acquisition of the other half of the ownership of Del-Tin Fiber from its joint venture partner as previously announced on February 13, 2013. As a result, we will now operate and report it as a consolidated subsidiary, as part of the Manufacturing segment, in succeeding quarters.”
The Woodlands segment had operating income of $4.6 million in the 1Q 2013, compared to $4.8 million for the same period of 2012. The Company harvested 181,069 tons of pine sawtimber during the current period of 2013, a 5% increase from the 173,007 tons harvested in the 1Q 2012. The average per-ton sales price for pine sawtimber was $23 in the 1Q 2013, a 5% increase from 2012’s 1Q sales price of $22 per ton. Pine pulpwood harvested in the 1Q 2013 totaled 97,010 tons, which compares to 134,934 tons harvested for the same period of 2012. The average per-ton sales price for pine pulpwood was $9 for the 1Q of both 2013 and 2012. Oil and gas lease rentals and net royalty income totaled $1.2 million for the current period of 2013 compared to $1.4 million during 2012’s same quarter. The decrease was due to a combination of lower lease rental revenues attributed to leased properties as the original lease periods end and are now being held by producing wells, and reduced net royalty income, primarily due to a lower gas production volume. During the current quarter, the Company sold 288 acres of non-strategic recreational-use hardwood bottomland at an average sales price of $1,800 per acre versus 1Q sales in 2012 of 270 acres at an average price of $1,400 per acre.
Deltic’s Manufacturing segment reported operating income of $11.3 million, an increase of $9.7 million when compared to 2012’s 1Q operating income of $1.6 million as the lumber market continued to show steady improvement. The average lumber sales price was $402 per thousand board feet in the 1Q 2013, and this was a $131 per thousand board feet, or 48%, increase over the $271 per thousand board feet reported in the 1Q 2012. In the 1Q 2013, the Company sold 71.1 million board feet, an increase of 6.1 million board feet when compared to 2012’s 1Q sales of 65 million board feet, as the Company increased lumber production to match market demand.
Regarding the outlook for the 2Q and year of 2013, Mr. Dillon stated, “At this time we anticipate the pine sawtimber harvest to be 160,000 to 170,000 tons and 585,000 to 605,000 tons, respectively. Finished lumber sales volumes are anticipated to be at 65 to 75 million board feet for the 2Q and 275 to 290 million board feet for the year. MDF sales volumes for the 2Q and year of 2013 are estimated to be 30 to 32 million square feet and 120 to 130 million square feet, respectively. Actual sales volumes for both lumber and MDF are dependent upon market conditions. Residential lot sales are estimated at 10 to 15 lots and 50 to 60 lots for the 2Q and year of 2013, respectively. Even though commercial acreage in Chenal Valley has received interest from potential buyers, it is difficult to anticipate future closings due to the volatile nature of commercial real estate transactions and the significant number of factors related to any sale.”
Deltic Timber Corporation is a vertically integrated natural resources company focused on the efficient and environmentally responsible management of its land holdings. The Company owns over 450,000 acres of timberland, operates two sawmills, and is engaged in real estate development.