CatchMark Announces Strong Full-Year 2015 Results: Revenues Up 27%, Adjusted EBITDA Increases 36%

Mar 07, 2016, 16:13 ET from CatchMark Timber Trust, Inc.

ATLANTA, March 7, 2016 /PRNewswire/ -- Exceeding company guidance, CatchMark Timber Trust, Inc. (NYSE: CTT) announced today that continued gains from operations and timberland acquisitions produced solid year-over-year increases in company revenues and Adjusted EBITDA for the 12-month period ended December 31, 2015. Full-year 2015 operating highlights included:

  • Increased revenues to $69.1 million, a 27% gain over full-year 2014.
  • Increased Adjusted EBITDA to $32.2 million, a 36% increase over full-year 2014.
  • Increased total harvest volumes to 1.84 million tons from 1.37 million tons in 2014.  

CatchMark's acquisitions of prime timberlands during 2015, totaling $73.7 million, excluding transaction costs, and comprising 42,900 acres, expanded its holdings into North Carolina and South Carolina and increased its total owned interests in timberlands across the U.S. South to 425,000 acres. For the year, CatchMark completed 19 timberland sales, totaling approximately 6,400 acres, for $11.8 million.

At year end, the company's low-leveraged balance sheet provided ample liquidity for future opportunistic acquisitions and timely share repurchases with a multi-draw term loan capacity of $280 million and a line of credit of $35 million. Under CatchMark's $30 million share repurchase program announced in August 2015, nearly 600,000 shares have been repurchased by year-end at an average price of $10.25.

Jerry Barag, CatchMark's President and CEO, said: "We are very pleased with the execution of our strategic business plan during 2015 and we are well-positioned for another year of growth in 2016.  We remain focused on allocating capital into markets with favorable current and long-term fundamentals that fit our profile for producing durable earnings over long-term holding periods and improving our product mix. Our operational focus remains on maximizing current harvest volumes to match demand in our mills markets as well as practicing intensive forest management and applying silvicultural techniques."

Chairman of the Board Willis J. Potts, Jr., said: "Our efforts remain concentrated on long-term growth and the 2015 results set the stage for meeting our objectives of increasing adjusted EBITDA per share, raising our dividend, and creating greater value for our stockholders over time."

CatchMark's year-over-year results for fourth quarter 2015 were impacted by a large land sale, which had an outsized positive impact on revenues and Adjusted EBITDA in fourth quarter 2014. Gross timber sales revenues and harvest volumes increased significantly year over year. Highlights of the company's 2015 fourth quarter include:

  • Generated total revenues of $17.1 million compared to $20.9 million for fourth quarter 2014.
  • Produced Adjusted EBITDA of $6.9 million compared to $11.6 million for fourth quarter 2014.
  • Registered a net loss of $3.3 million compared to net income of $2.2 million in the fourth quarter 2014.
  • Increased gross timber sales revenues by 32% to $14.4 million from $11.0 million in fourth quarter 2014.
  • Increased total harvest volume by 47% to 509,000 tons from 346,000 tons in fourth quarter 2014.
  • Acquired 25,300 acres of new timberlands in Georgia, North Carolina, South Carolina, Tennessee, and Texas for a total of $45.5 million, exclusive of transaction costs.
  • Completed timberland sales of $1.5 million, comprising 800 acres.        
  • Paid a dividend of $0.125 per share to stockholders of record on December 14, 2015.

Results for Fourth Quarter and Full Year 2015 Revenues decreased to $17.1 million for the quarter ended December 31, 2015 from $20.9 million for the quarter ended December 31, 2014 primarily because of a decrease in timberland sales revenue of $7.5 million, offset by an increase in timber sales revenue of $3.5 million and an increase of $0.3 million in other revenues. Timber sales revenue increased by 32%, mainly as a result of an increase in harvest volume from properties acquired in the past 12 months.

Timberland sales revenue decreased due to selling fewer acres during the quarter ended December 31, 2015. The average sales price per acre on timberland sales was down during the fourth quarter of 2015 as a result of receiving above-average pricing on a large land sale during the fourth quarter of 2014. Other revenues increased due to having more acreage under recreational leases due to the growth of our timberland portfolio.

 

Three  Months Ended December 31, 2014

Changes attributable to:

Three Months Ended December 31, 2015

(in thousands)

Price

Volume

Timber sales(1)

Pulpwood

$

6,048

$

116

$

823

$

6,987

Sawtimber (2)

4,925

(108)

2,634

7,451

$

10,973

$

8

$

3,457

$

14,438

 

(1)        Timber sales are presented on a gross basis. (2)        Includes sales of chip-n-saw and sawtimber.

CatchMark incurred a net loss of $3.3 million for the quarter ended December 31, 2015 compared to net income of $2.2 million for the quarter ended December 31, 2014, as a result of a $5.2 million decrease in operating income from lower net timberland sales, higher depletion expense, and an increase in interest expense.

Revenues increased to $69.1 million for the year ended December 31, 2015 from $54.3 million for the year ended December 31, 2014 primarily due to an increase in timber sales revenue of $12.2 million, an increase in timberland sales revenue of $1.2 million and an increase of $1.4 million in other revenues. Timber sales revenue increased by 30%, mainly due to an increase in harvest volume as a result of incremental harvest on properties acquired in the past 12 months. We incurred an $8.4 million net loss for the year ended December 31, 2015 as compared to generating net income of $0.7 million for the year ended December 31, 2014 due to a $7.9 million decrease in our operating income, a $0.9 million increase in our interest expense, and a $0.2 million decrease in interest income.

 

For the Year Ended

December 31, 2014

Changes attributable to:

For the Year Ended December 31,

2015

(in thousands)

Price

Volume

Timber sales(1)

Pulpwood

$

23,800

$

(203)

$

4,263

$

27,860

Sawtimber (2)

16,835

336

7,806

24,977

$

40,635

$

133

$

12,069

$

52,837

 

(1)        Timber sales are presented on a gross basis. (2)        Includes sales of chip-n-saw and sawtimber.

Adjusted EBITDA for Fourth Quarter and Full Year 2015 The discussion below is intended to enhance the reader's understanding of our operating performance and our ability to satisfy lender requirements. Earnings from Continuing Operations before Interest, Taxes, Depletion, and Amortization ("EBITDA") is a non-GAAP measure of operating performance. EBITDA is defined by the SEC; however, we have excluded certain other expenses due to their non-cash nature, and we refer to this measure as "Adjusted EBITDA." As such, our Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies and should not be viewed as an alternative to net income as a measurement of our operating performance. Due to the significant amount of timber assets subject to depletion and the significant amount of financing subject to interest and amortization expense, management considers Adjusted EBITDA to be an important measure of our financial condition and performance. Our credit agreement contains a minimum debt service coverage ratio based, in part, on Adjusted EBITDA since this measure is representative of adjusted income available for interest payments.

For the quarter ended December 31, 2015, Adjusted EBITDA was $6.9 million, a $4.6 million decrease from the quarter ended December 31, 2014, primarily due to a $7.3 million decrease in revenue from net timberland sales and increases in cash paid for general and administrative expenses, other operating expenses, and forestry management fees, offset by a $3.7 million increase in net timber sales.

For the year ended December 31, 2015, Adjusted EBITDA was $32.2 million, a $8.5 million increase from the year ended December 31, 2014, primarily due to a $9.6 million increase in net timber sales, a $0.8 million increase in revenue from net timberland sales, and a $1.4 million increase in other revenues, offset by increases in cash paid for general and administrative expenses, other operating expenses, and forestry management fees.

Our reconciliation of net loss to Adjusted EBITDA for the three months and 12 months ended December 31, 2015 and 2014 follows:

 

(in thousands)

Three Months Ended December 31,

Years Ended December 31,

2015

2014

2015

2014

Net (loss) income

$

(3,296)

$

2,161

$

(8,387)

$

660

Add:

Depletion

7,783

4,398

27,091

14,788

Basis of timberland sold

1,133

4,029

8,886

5,072

Amortization (1)

187

182

765

836

Stock-based compensation expense

247

133

889

418

Interest expense

882

653

2,924

1,897

Adjusted EBITDA

$

6,936

$

11,556

$

32,168

$

23,671

 

(1)       For the purpose of the above reconciliation, amortization includes amortization of deferred financing costs, amortization of intangible lease assets, and amortization of mainline road costs, which are included in either interest expense, land rent expense, or other operating expenses in the accompanying consolidated statements of operations.

2016 Outlook CatchMark also announced earnings guidance for full-year 2016, expecting Adjusted EBITDA of between $31 million and $35 million, excluding the impact of new acquisitions, and increased harvest volumes targeted in a range of 1.9 million to 2.1 million tons, also excluding new acquisitions. Planned land sales are expected to total between $11 million and $13 million, comprising 1% to 2% of fee timberlands in line with the ongoing land sales program. 

The company projects a net loss between $10 million and $11.5 million, primarily resulting from non-cash charges related to depletion expense driven by the higher harvest volume and change in product mix as well as higher interest expense reflecting higher average debt outstanding after consideration of the fourth quarter acquisitions totaling nearly $50 million

Barag said, "In assessing our outlook for 2016, we have confidence in continued strong performance driven by our core asset base and growth derived from our acquisitions pipeline. Through an extremely disciplined approach in allocating capital, we remain committed to assembling the industry's highest quality portfolio, targeting local market dynamics, sustainable productivity, merchantable inventory, and targeted cash yield."

Conference Call/Webcast The company will host a conference call and live webcast at 10 a.m. EST on Tuesday, March 8, 2016 to discuss these results. Investors may listen to the conference call by dialing 1-877-870-4263 for U.S/Canada and 1-412-317-0790 for international callers.  Participants should ask to be joined into the CatchMark call. Access to the live webcast will be available at www.catchmark.com.  A replay of this webcast will be archived on the company's website shortly after the call.  

About CatchMark Headquartered in Atlanta, CatchMark Timber Trust, Inc. is a self-administered and self-managed publicly traded REIT that began operations in 2007 and owns interests in approximately 425,000 acres* of timberland located in Alabama, Florida, Georgia, Louisiana, North Carolina, South Carolina, Tennessee and Texas. Listed on the NYSE (CTT), CatchMark provides institutions and individuals an opportunity to invest in a public company focused exclusively on timberland ownership with an objective of producing stockholder returns from sustainably recurring harvests.  For more information, visit www.catchmark.com.   From time to time, CatchMark releases important information via postings on its corporate website. Accordingly, investors and other interested parties are encouraged to enroll to receive automatic email alerts regarding new postings. Enrollment information is found in the "Investors Relations" section of www.catchmark.com.

* As of December 31, 2015.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "continue," or other similar words. However, the absence of these or similar words or expressions does not mean that a statement is not forward-looking. Forward looking statements are not guarantees of performance and are based on certain assumptions, discuss future expectations, describe plans and strategies, contain projections of results of operations or of financial condition or state other forward looking information. Such statements include, but are not limited to, that we have ample liquidity for future opportunistic acquisitions and timely share repurchases, that we are well-positioned for another year of growth, and that our 2015 results set the stage for meeting our objectives to increase adjusted EBITDA per share, raise our dividend and create greater value for stockholders over time. Readers of this press release should be aware that there are various factors that could cause actual results to differ materially from any forward-looking statements made in this press release. Factors that could cause or contribute to such differences include, but are not limited to: (i) we may not generate the harvest volumes from our timberlands that we currently anticipate; (ii) the demand for our timber may not increase at the rate we currently anticipate or at all due to changes in general economic and business conditions in the geographic regions where our timberlands are located; (iii) the cyclical nature of the real estate market generally, including fluctuations in demand and valuations, may adversely impact our ability to generate income and cash flow from sales of higher-and-better use properties; (iv) timber prices may not increase at the rate we currently anticipate or could decline, which would negatively impact our revenues; (v) the supply of timberlands available for acquisition that meet our investment criteria may be less than we currently anticipate; (vi) we may be unsuccessful in winning bids for timberland that are sold through an auction process; (vii) we may not be able to access external sources of capital at attractive rates or at all; (viii) potential increases in interest rates could have a negative impact on our business; (ix) our share repurchase program may not be successful in improving stockholder value over the long-term; and (ix) the factors described in Item 1A. of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, under the heading "Risk Factors" and our other filings with Securities and Exchange Commission. Accordingly, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. We undertake no obligation to update our forward-looking statements, except as required by law.

 

CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

Three Months Ended

December 31,

Year Ended

December 31,

2015

2014

2015

2014

Revenues:

Timber sales

$

14,438

$

10,973

$

52,837

$

40,635

Timberland sales

1,525

9,075

11,845

10,650

Other revenues

1,112

839

4,440

3,026

17,075

20,887

69,122

54,311

Expenses:

Contract logging and hauling costs

5,093

4,896

19,911

17,322

Depletion

7,783

4,398

27,091

14,788

Cost of timberland sales

1,251

4,372

9,747

5,558

Forestry management expenses

1,242

1,204

4,495

3,567

General and administrative expenses

2,451

1,971

7,667

6,185

Land rent expense

203

215

736

831

Other operating expenses

1,310

866

4,295

2,942

19,333

17,922

73,942

51,193

Operating (loss) income

(2,258)

2,965

(4,820)

3,118

Other income (expense):

Interest income

3

6

177

Interest expense

(1,041)

(804)

(3,573)

(2,635)

(1,038)

(804)

(3,567)

(2,458)

Net (loss) income available to common stockholders

$

(3,296)

$

2,161

$

(8,387)

$

660

Weighted-average common shares outstanding - basic and diluted

38,888

39,361

39,348

31,568

Net (loss) income per-share available to common stockholders - basic and diluted

$

(0.08)

$

0.05

$

(0.21)

$

0.02

 

CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except per-share amounts)

December 31, 2015

December 31, 2014

Assets:

Cash and cash equivalents

$

8,025

$

17,365

Accounts receivable

2,562

798

Prepaid expenses and other assets

3,277

2,781

Deferred financing costs, less accumulated amortization of $123 and $39 as of December 31, 2015 and 2014, respectively

354

418

Timber assets (Note 3):

Timber and timberlands, net

584,854

543,101

Intangible lease assets, less accumulated amortization of $934 and $931 as of December 31, 2015 and 2014, respectively

23

26

Total assets

$

599,095

$

564,489

Liabilities:

Accounts payable and accrued expenses

$

3,307

$

2,359

Other liabilities

3,703

3,265

Note payable and line of credit, less net deferred financing costs (Note 4)

181,047

114,173

Total liabilities

188,057

119,797

Commitments and Contingencies (Note 6)

Stockholders' Equity:

Class A common stock, $0.01 par value; 900,000 and 896,500 shares authorized; 38,975 and 36,193 shares issued and outstanding as of December 31, 2015 and 2014, respectively

390

362

Class B-3 common stock, $0.01 par value; 0 and 3,500 shares authorized; 0 and 3,164 shares issued and outstanding as of December 31, 2015 and 2014, respectively

32

Additional paid-in capital

607,409

612,518

Accumulated deficit and distributions

(195,341)

(167,364)

Accumulated other comprehensive loss

(1,420)

(856)

Total stockholders' equity

411,038

444,692

Total liabilities and stockholders' equity

$

599,095

$

564,489

 

CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

Three Months Ended December 31,

Year Ended December 31,

2015

2014

2015

2014

Cash Flows from Operating Activities:

Net (loss) income

$

(3,296)

$

2,161

$

(8,387)

$

660

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

Depletion

7,783

4,398

27,091

14,788

Basis of timberland sold

1,133

4,029

8,886

5,072

Other amortization

29

31

117

98

Stock-based compensation expense

247

453

889

738

Noncash interest expense

158

(169)

648

418

Changes in assets and liabilities:

Accounts receivable

(357)

(30)

(1,764)

(204)

Prepaid expenses and other assets

(210)

(211)

187

619

Accounts payable and accrued expenses

(30)

(1,176)

985

(998)

Other liabilities

(718)

(2,365)

(158)

(1,346)

Net cash provided by operating activities

4,739

7,121

28,494

19,845

Cash Flows from Investing Activities:

Timberland acquisitions

(47,252)

(146,201)

(75,793)

(237,527)

Capital expenditures (excluding timberland acquisitions)

(1,042)

(215)

(2,668)

(906)

Net cash used in investing activities

(48,294)

(146,416)

(78,461)

(238,433)

Cash Flows from Financing Activities:

Proceeds from note payable

47,000

234,250

67,500

320,750

Repayments of note payable

(116,250)

(498)

(254,910)

Financing costs paid

(529)

(2,338)

(781)

(3,302)

Issuance of common stock

190,222

Dividends paid to common stockholders

(4,847)

(4,921)

(19,590)

(15,336)

Repurchase of common shares

(1,416)

(43)

(6,004)

(43)

Stock issuance costs

(1)

(10,042)

Net cash provided by financing activities

40,208

110,697

40,627

227,339

Net (decrease) increase in cash and cash equivalents

(3,347)

(28,598)

(9,340)

8,751

Cash and cash equivalents, beginning of period

11,372

45,963

17,365

8,614

Cash and cash equivalents, end of period

$

8,025

$

17,365

$

8,025

$

17,365

 

SELECTED DATA

2015

2014

Q1

Q2

Q3

Q4

YTD

Q1

Q2

Q3

Q4

YTD

Timber Sales Volume ('000 tons)

Pulpwood

262

292

289

288

1,131

177

236

258

215

886

Sawtimber

175

157

156

221

709

86

125

138

131

480

Total

437

449

445

509

1,840

263

361

396

346

1,366

Delivered % as of total volume

65

%

59

%

61

%

57

%

60

%

79

%

63

%

62

%

80

%

70

%

Stumpage % as of total volume

35

%

41

%

39

%

43

%

40

%

21

%

37

%

38

%

20

%

30

%

Net timber sales price ($ per ton)

Pulpwood

$

13

$

13

$

13

$

13

$

13

$

14

$

13

$

13

$

13

$

13

Sawtimber

$

26

$

26

$

25

$

25

$

26

$

22

$

24

$

25

$

25

$

24

Timberland Sales

Gross Sales (1) ('000)

$

6,174

$

591

$

3,554

$

1,526

$

11,845

$

65

$

1,025

$

486

$

9,074

$

10,650

Acres Sold

3,400

258

1,953

796

6,407

29

547

206

2,979

3,761

Price per acre

$

1,816

$

2,291

$

1,820

$

1,914

$

1,849

$

2,250

$

1,873

$

2,357

$

3,046

$

2,832

Timberland Acquisitions

Gross Acquisitions (1) ('000)

$

14,533

$

12,771

$

550

$

45,451

$

73,305

$

243

$

85,376

$

$

149,539

$

235,158

Acres Acquired

7,668

9,686

290

25,261

42,905

203

44,321

77,088

121,612

Price per acre ($/acre)

$

1,895

$

1,318

$

1,898

$

1,799

$

1,709

$

1,200

$

1,926

$

$

1,940

$

1,934

Period End Acres ('000)

Fee

369

379

377

401

401

247

291

291

365

365

Lease

29

28

28

24

24

30

30

30

28

28

Total

398

407

405

425

425

277

321

321

393

393

(1) Exclusive of closing costs.

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SOURCE CatchMark Timber Trust, Inc.



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