CatchMark Second Quarter Revenues Increase 19% Year-Over-Year; Adjusted EBITDA Up 10%; Third Quarter Dividend Declared; Acquisition Pipeline Builds into Second Half of the Year

ATLANTA, Aug. 3, 2015 /PRNewswire/ -- CatchMark Timber Trust, Inc. (NYSE: CTT) today reported solid operating results and year-over-year growth for the quarter ending June 30, 2015, driven by the successful integration of properties acquired during last year and the continued execution of management strategies to sustain durable gains.

Company highlights for the second quarter 2015 include:

  • Generated total revenues of $14.2 million compared to $11.9 million for the second quarter 2014, an increase of 19%.
  • Registered Adjusted EBITDA of $5.5 million compared to $5.0 million for the second quarter 2014, an increase of 10%.
  • Increased gross timber sales revenue by approximately 25%, primarily from an increase in total timber sales volume of 24% to 448,570 tons up from 360,778 tons in second quarter 2014.
  • Realized an increase in average net prices for sawtimber of 8%, compared to second quarter 2014 benefiting from regional pricing dynamics from the 2014 acquisitions.
  • Acquired 9,700 acres of prime timberlands in two separate transactions for $12.8 million.
  • Paid a dividend of $0.125 per share on June 15, 2015.

CatchMark today also declared a dividend of $0.125 per share to stockholders of record on August 28, 2015 payable on September 14, 2015.

Jerry Barag, CatchMark's President and Chief Executive Officer, said: "Second quarter results represent sound implementation of our operating plan on expanding timberland holdings. At the same time, we have maintained significant liquidity—nearly $300 million in various facilities—to take advantage of acquisition opportunities to enhance our platform, with a continued focus on the Southeast U.S where we see the best relative value.

"CatchMark's current acquisitions pipeline is steadily building with a deeper pool of opportunities for the second half of the year, after falling off earlier this year with fewer opportunities meeting our criteria for size, quality and stocking," Barag said.

For the six months ending June 30, 2015, CatchMark acquired approximately 17,400 acres of property in Georgia and Texas for $27.9 million in five separate transactions. The acquisitions have added 0.6 million tons to the company's merchantable timber inventory, comprising 72% pine plantations by acreage and 56% sawtimber by tons.

Willis J. Potts, Jr., CatchMark's Chairman of the Board, said: "In exercising discipline and prudence in reviewing potential purchases, we remain committed to securing high quality timberlands, which will ensure long-term revenue and dividend growth."

CatchMark also registered $0.6 million in sales of 258 acres of timberlands during the second quarter.

Results for Three and Six Months Ended June 30, 2015

CatchMark's revenues increased to $14.2 million for the three months ended June 30, 2015 up from $11.9 million for the three months ended June 30, 2014, driven primarily by an increase in timber sales revenue of $2.5 million. Gross timber sales revenue increased by 25% mainly due to a 24% increase in harvest volume as a result of incremental harvest on properties acquired in the past 12 months. The company's net loss increased to $2.3 million for the three months ended June 30, 2015 from $0.3 million for the three months ended June 30, 2014 primarily due to a higher depletion expense as a result of the change in depletion methodology.


Three
Months Ended
June 30, 2014


Changes attributable to:


Three
Months Ended
June 30, 2015

(amounts in thousands)


Price


Volume


Timber sales (1)








Pulpwood

$

6,111



$

(65)



$

887



$

6,933


Sawtimber (2)

4,062



150



1,527



5,739



$

10,173



$

85



$

2,414



$

12,672




(1)

Timber sales are presented on a gross basis.

(2) 

Includes sales of chip-n-saw and sawtimber.

 

Revenues increased to $34.4 million for the six months ended June 30, 2015 up from $20.8 million for the six months ended June 30, 2014 driven by an increase in timber sales revenue of $7.5 million, an increase in timberland sales revenue of $5.7 million, and an increase in other revenues of $0.5 million. Gross timber sales revenue increased by approximately 41%, mainly due to a 42% increase in harvest volume as a result of incremental harvest on properties acquired in the past 12 months. Net loss increased to $3.1 million for the six months ended June 30, 2015 from $0.7 million for the six months ended June 30, 2014 primarily due to a higher depletion expense as a result of the change in depletion methodology.


Six
Months Ended
June 30, 2014


Changes attributable to:


Six

Months Ended
June 30, 2015

(amounts in thousands)


Price


Volume


Timber sales (1)








Pulpwood

$

10,922



$

(173)



$

2,995



$

13,744


Sawtimber (2)

7,348



298



4,376



12,022



$

18,270



$

125



$

7,371



$

25,766




(1) 

Timber sales are presented on a gross basis.

(2) 

Includes sales of chip-n-saw and sawtimber.

 

Adjusted EBITDA

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 significant amount of timber assets subject to depletion and 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 agreements 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 three months ended June 30, 2015, Adjusted EBITDA was $5.5 million, a $0.5 million increase from the three months ended June 30, 2014, primarily due to a $1.9 million increase in net timber sales, offset by a $0.4 million decrease in net revenue from timberland sales, a $0.7 million increase in cash general and administrative expenses, and a $0.3 million increase in other operating expenses.

For the six months ended June 30, 2015, Adjusted EBITDA was $16.5 million, a $9.5 million increase from the six months ended June 30, 2014, primarily due to a $5.5 million increase in net timber sales and a $5.3 million increase in net revenue from timberland sales, offset by a $0.6 million increase in cash general and administrative expenses, and a $0.5 million increase in other operating expenses.

Our reconciliation of net loss to Adjusted EBITDA for the three and six months ended June 30, 2015 and 2014 follows (in thousands):


Three Months Ended
June 30,


Six Months Ended
June 30,

(amounts in thousands)

2015


2014


2015


2014

Net loss

$

(2,330)



$

(349)



$

(3,147)



$

(737)


Add:








Depletion

6,396



3,729



12,598



5,533


Basis of timberland sold

327



706



4,894



744


Amortization (1)

210



131



390



226


Stock-based compensation expense

233



96



411



179


Interest expense (1)

671



677



1,323



987


Adjusted EBITDA

$

5,507



$

4,990



$

16,469



$

6,932




(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.

 

Conference Call/Webcast

The company will host a conference call and live webcast at 10 a.m. EDT on Tuesday, August 4, 2015 to discuss these results. Investors may listen to the conference call by dialing 888-510-1786 for U.S/Canada and 719-457-2727 for international callers.  Participants will be asked to provide conference I.D. number 8335597. 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 406,700 acres* of timberland located in Alabama, Florida, Georgia, Louisiana 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 June 30, 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, our acquisition pipeline building with a deeper pool of opportunities in the second half of the year, the execution of management strategies sustaining durable gains, and our ability to secure high quality timberlands that will ensure long-term revenue and dividend growth. 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 and (ix) the factors described in Item 1A. of our Annual Report on Form 10-K for the fiscal year ended December 31, 2014, 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

(amounts in thousands, except for per-share data)






(Unaudited)
Three Months Ended
June 30


(Unaudited)
Six Months Ended 
June 30,


2015


2014


2015


2014

Revenues:








Timber sales

$

12,672



$

10,173



$

25,766



$

18,270


Timberland sales

591



1,025



6,765



1,090


Other revenues

911



703



1,887



1,411



14,174



11,901



34,418



20,771


Expenses:








Contract logging and hauling costs

4,824



4,207



9,944



7,954


Depletion

6,396



3,729



12,598



5,533


Cost of timberland sales

401



791



5,407



841


Forestry management expenses

1,061



810



2,182



1,506


General and administrative expenses

1,864



1,060



3,532



2,776


Land rent expense

172



190



375



405


Other operating expenses

935



681



1,873



1,326



15,653



11,468



35,911



20,341


Operating (loss) income

(1,479)



433



(1,493)



430










Other income (expense):








Interest income

2



2



2



2


Interest expense

(853)



(784)



(1,656)



(1,169)



(851)



(782)



(1,654)



(1,167)


Net loss available to common stockholders

$

(2,330)



$

(349)



$

(3,147)



$

(737)










Weighted-average common shares outstanding - basic and diluted

39,551



24,985



39,490



24,910










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

$

(0.06)



$

(0.01)



$

(0.08)



$

(0.03)


 

 


CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except for per-share data)






(Unaudited)




June 30, 2015


December 31,
2014

Assets:




Cash and cash equivalents

$

14,198



$

17,365


Accounts receivable

2,161



798


Prepaid expenses and other assets

2,529



2,781


Deferred financing costs, less accumulated amortization of $571 and $267 as of

    June 30, 2015 and December 31, 2014, respectively

4,017



4,245


Timber assets (Note 3):




Timber and timberlands, net

554,396



543,101


Intangible lease assets, less accumulated amortization of $933 and $931 as of
   June 30, 2015 and December 31, 2014, respectively

24



26


Total assets

$

577,325



$

568,316






Liabilities:




Accounts payable and accrued expenses

$

2,780



$

2,359


Other liabilities

4,120



3,265


Note payable and line of credit (Note 4)

138,002



118,000


Total liabilities

144,902



123,624






Commitments and Contingencies (Note 6)








Stockholders' Equity:




Class A common stock, $0.01 par value; 889,500 shares authorized; 39,552 and 36,193

  shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively

396



362


Class B-3 common stock, $0.01 par value; 3,500 shares authorized; 0 and 3,164 shares

  issued and outstanding as of June 30, 2015 and December 31, 2014, respectively



32


Additional paid-in capital

612,926



612,518


Accumulated deficit and distributions

(180,350)



(167,364)


Accumulated other comprehensive loss

(549)



(856)


Total stockholders' equity

432,423



444,692


Total liabilities and stockholders' equity

$

577,325



$

568,316


 

 


CATCHMARK TIMBER TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(amounts in thousands)






(Unaudited)
Three Months Ended 
June 30,


(Unaudited)
Six Months Ended 
June 30,


2015


2014


2015


2014

Cash Flows from Operating Activities:








Net loss

$

(2,330)



$

(349)



$

(3,147)



$

(737)


Adjustments to reconcile net loss to net cash provided by operating activities:








Depletion

6,396



3,729



12,598



5,533


Other amortization

29



24



58



44


Stock-based compensation expense

233



96



411



179


Noncash interest expense

181



107



332



182


Basis of timberland sold

327



706



4,894



744


Changes in assets and liabilities:








Accounts receivable

(740)



(552)



(1,363)



(1,102)


Prepaid expenses and other assets

68



46



117



575


Accounts payable and accrued expenses

(168)



825



595



378


Other liabilities

1,958



1,721



1,131



1,089


Net cash provided by operating activities

5,954



6,353



15,626



6,885










Cash Flows from Investing Activities:








Timberland acquisitions

(13,134)



(81,742)



(27,651)



(86,089)


Capital expenditures (excluding timberland acquisitions)

(210)



(198)



(1,056)



(536)


Net cash used in investing activities

(13,344)



(81,940)



(28,707)



(86,625)










Cash Flows from Financing Activities:








Proceeds from note payable

6,000



86,500



20,500



86,500


Repayments of note payable



(2,009)



(498)



(20,169)


Financing costs paid

(40)



(928)



(249)



(943)


Issuance of common stock







21,316


Dividends paid to common stockholders

(4,920)



(2,748)



(9,839)



(5,495)


Stock issuance costs



(7)





(1,674)


Net cash provided by financing activities

1,040



80,808



9,914



79,535


Net (decrease) increase in cash and cash equivalents

(6,350)



5,221



(3,167)



(205)


Cash and cash equivalents, beginning of period

20,548



3,188



17,365



8,614


Cash and cash equivalents, end of period

$

14,198



$

8,409



$

14,198



$

8,409


 

 

SELECTED DATA






2015


2014


Q1


Q2


YTD


Q1


Q2


YTD

Timber Sales Volume ('000 tons)












Pulpwood

262



292



554



177



236



413


Sawtimber

175



157



332



86



125



211


Total

437



449



886



263



361



624














Delivered % as of total volume

65

%


59

%


62

%


79

%


63

%


70

%

Stumpage % as of total volume

35

%


41

%


38

%


21

%


37

%


30

%













Net timber sales price ($ per ton)












Pulpwood

$

13



$

13



$

13



$

14



$

13



$

13


Sawtimber

$

26



$

26



$

26



$

22



$

24



$

23














Timberland Sales












Gross Sales (1) ('000)

$

6,174



$

591



$

6,765



$

65



$

1,025



$

1,090


Acres Sold

3,400



258



3,658



29



547



576


Price per acre

$

1,816



$

2,291



$

1,849



$

2,250



$

1,873



$

1,892














Timberland Acquisitions












Gross Acquisitions (1) ('000)

$

14,533



$

12,771



$

27,304



$

243



$

85,376



$

85,619


Acres Acquired

7,668



9,686



17,354



203



44,321



44,524


Price per acre ($/acre)

$

1,895



$

1,318



$

1,573



$

1,200



$

1,926



$

1,923














Period End Acres ('000)












Fee

369



379



379



247



291



291


Lease

29



28



28



30



30



30


Total

398



407



407



277



321



321




(1)

Exclusive of closing costs.

 

SOURCE CatchMark Timber Trust, Inc.

For further information: Investors: Brian Davis, (855) 858-9794, info@catchmark.com; Media: Mary Beth Ryan, Miller Ryan LLC, (203) 268-0158, marybeth@millerryanllc.com
Contact Investor Relations

Email: info@catchmark.com
Toll-free: 855-858-9794

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