Adjusted EBITDA, a non-GAAP measure of operating performance, for the 1Q 2014 was $93 million and was $128 million for the same period of 2013. A reconciliation of adjusted EBITDA to net income and cash flow from operations is provided as an attachment to this release.
“We’re pleased with the results of the first quarter of 2014,” said Rick Holley, CEO. “Results from our timber resources segment continue to grow with higher log prices and additional harvest volumes from our recently acquired timberlands. Earnings were in line with our initial expectations despite difficult weather conditions that hampered both log deliveries in the South and production and shipments from our Manufacturing facilities. As expected, first quarter’s income was lower than last year. This was solely the result of a large non-strategic timberland sale that contributed 21 cents to earnings per share in the 1Q 2013.”
The Northern Resources segment reported operating profit of $16 million during the 1Q, a $5 million improvement over the 1Q 2013. Sawlog prices increased $9 per ton, more than 11%, compared to the 1Q 2013 driven by strong demand from both export markets and domestic lumber mills. Pulpwood markets in the Northeast and the Lake States remained attractive with stable pricing over the past year. Total Northern segment harvest volume was similar to the 1Q 2013’s harvest level.
Operating profit in the Southern Resources segment was $31 million, up $7 million from the $24 million reported for the 1Q 2013 due to increased harvest volumes and higher log prices. The recently acquired lands in the South drove a 16% increase in harvest volumes for both sawlogs and pulpwood. Average sawlog prices have increased more than $1 per ton, or approximately 6% over the past year. Pulpwood prices have also increased and are up approximately 7% compared to the 1Q 2013.
The Manufacturing segment reported operating income of $9 million, slightly lower than the $10 million reported in the 1Q 2013. Plywood sales volumes were 17% lower compared to the 1Q 2013. Severe weather limited log deliveries, reduced production levels at its mills, and hampered shipments to our customers. Lumber sales volumes increased 24% versus the prior year due to the re-start of production at the company’s Evergreen sawmill in April 2013. Lumber and plywood prices were similar to the 1Q 2013, while MDF prices increased 6% over the past year.
Plum Creek is among the largest and most geographically diverse private landowners in the nation with approximately 6.7 million acres of timberlands in forest ecosystems across the northern and southeastern United States.