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Wednesday July 28, 8:54 am Eastern Time
Company Press Release
SOURCE: U.S. Timberlands Company, L.P.
U.S. Timberlands Reports Second Quarter Cash Flow and Earnings - Announces Quarterly Distribution to Unitholders -
NEW YORK, July 28 /PRNewswire/ -- U.S. Timberlands Company, L.P. (Nasdaq: TIMBZ - news) today announced cash flow and operating results for the quarter ended June 30, 1999. The Company also announced the declaration of its sixth consecutive quarterly distribution to Unitholders of $0.50 per unit.
Cash flow for the second quarter of 1999, as measured by EBITDDA, increased 19% to $15.0 million, or $1.15 per unit, compared to cash flow of $12.6 million, or $0.96 per unit, for the second quarter of 1998. EBITDDA is defined as operating income plus depletion, depreciation, road amortization and cost of timber and property sales. The Company reported net income for the second quarter of $4.5 million, or $0.34 per unit, as compared with a loss of $2.9 million, or ($0.22) per unit, for the same period in 1998. Revenues for the second quarter of 1999 increased 9% to $20.3 million compared with $18.6 million for the same period in 1998. The increase in EBITDDA and revenues during the second quarter of 1999 is due principally to an $11.6 million increase in stumpage and deed sales partially offset by a $3.3 million decrease in log sales and a $6.3 million decrease in timber and property sales. The increase in net income during the second quarter of 1999 over the same period in 1998 is due principally to a timberland sale in 1998 with nominal gross margin as compared to making only log and timber sales in 1999 with higher gross margins. In addition, the 1999 depletion rate per thousand board feet declined.
Cash flow in the first six months of 1999, as measured by EBITDDA, increased 55% to $21.8 million, or $1.66 per unit, compared to cash flow of $14.1 million, or $1.07 per unit, for the same period in 1998. The Company reported net income for the first six months of $2.7 million, or $0.21 per unit, as compared with a loss of $9.6 million, or ($0.73) per unit for the same period in 1998. Revenues for the first six months of 1999 were $31.4 million compared with $26.4 million for the same period in 1998.
John M. Rudey, Chairman, stated ''These good results reflect the strength of the timber markets and the Company's strong management team. In light of the positive pricing environment, we are anticipating an opportunity to reduce our 1999 log harvest and timber sales volume by 5% versus our original plan while increasing our value per unit as measured by EBITDDA and net income per unit.''
The sixth quarterly distribution to Unitholders of $0.50 per unit will be paid on August 13, 1999 to Unitholders of record as of August 5, 1999.
U.S. Timberlands Company, L.P. owns 615,000 fee acres of timberland and cutting rights on 3,000 acres of timberland containing total merchantable timber volume estimated to be approximately 2.1 billion board feet in Oregon east of the Cascade Range. U.S. Timberlands specializes in the growing of trees and the sale of logs and standing timber. Logs harvested from the timberlands are sold to unaffiliated domestic conversion facilities. These logs are processed for sale as lumber, molding products, doors, millwork, commodity, specialty and overlaid plywood products, laminated veneer lumber, engineered wood I-beams, particleboard, hardboard, paper and other wood products. These products are used in residential, commercial and industrial construction, home remodeling and repair and general industrial applications as well as a variety of paper products. U.S. Timberlands also owns and operates its own seed orchard and produces approximately five million conifer seedlings annually from its nursery, approximately half of which are used for its own internal reforestation programs, with the balance sold to other forest products companies. Additional information on U.S. Timberlands is available on the Company's corporate web site at ustimberlands.com.
Certain information discussed in this press release may constitute forward-looking statements within the meaning of the Federal securities laws. Although U.S. Timberlands believes that expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Forward-looking information is subject to certain risks, trends, and uncertainties that could cause actual results to differ materially from those projected. Such risks, trends and uncertainties include the highly cyclical nature of the forest products industry, economic conditions in export markets, the possibility that timber supply could increase if governmental, environmental or endangered species policies change, and limitations on U.S. Timberlands' ability to harvest its timber due to adverse natural conditions or increased governmental restrictions. For a more complete description of factors, which could impact U.S. Timberlands and the statements contained herein, reference should be made to U.S. Timberlands' filings with the United States Securities and Exchange Commission.
U.S. TIMBERLANDS COMPANY, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Unit)
(Unaudited)
Quarter Ended June 30,
1999 1998
Revenues $20,296 $18,621
Costs and expenses
Cost of goods sold 2,774 4,248
Cost of timberland sales -- 5,917
Depletion, depreciation
and road amortization 5,268 3,957
Selling, general and
administrative 2,489 1,760
Total costs and expenses 10,531 15,882
Operating income 9,765 2,739
Interest expense 5,495 5,635
Interest income (99) (94)
Financing fees 169 169
Other income (257) (85)
Net income (loss) $4,457 $(2,886)
Net income (loss)
per Unit (A) $0.34 $(0.22)
Units outstanding (A) 12,859,607 12,859,607
EBITDDA (B) $15,033 $12,613
EBITDDA per Unit (A) $1.15 $0.96
(A) Calculations of per unit amounts are made after giving effect to the
General Partner's allocation of net income (loss) or EBITDDA.
(B) EBITDDA is defined as operating income plus depletion, depreciation,
road amortization and cost of timber and property sales.
U.S. TIMBERLANDS COMPANY, L.P.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Unit)
(Unaudited)
Six Months Ended June 30,
1999 1998
Revenues $31,425 26,378
Costs and expenses
Cost of goods sold 4,796 6,899
Cost of timberland sales -- 5,917
Depletion, depreciation
and road amortization 9,252 6,716
Selling, general and
administrative 4,839 5,390
Total costs and expenses 18,887 24,922
Operating income 12,538 1,456
Interest expense 10,965 11,098
Interest income (351) (270)
Financing fees 338 338
Other income (1,139) (110)
Net income (loss) $2,725 $(9,600)
Net income (loss)
per Unit (A) $0.21 $(0.73)
Units outstanding (A) 12,859,607 12,859,607
EBITDDA (B) $21,790 $14,089
EBITDDA per Unit (A) $1.66 $1.07
(A) Calculations of per unit amounts are made after giving effect to the
General Partner's allocation of net income (loss) or EBITDDA.
(B) EBITDDA is defined as operating income plus depletion, depreciation,
road amortization and cost of timber and property sales.
U.S. TIMBERLANDS COMPANY, L.P.
CONSOLIDATED BALANCE SHEETS
(In Thousands)
June 30, December 31,
1999 1998
(Unaudited) (*)
Assets
Current assets
Cash and cash equivalents $1,005 $4,824
Accounts and current portion
of notes receivable -- net 4,490 2,706
Prepaid expenses and other 144 1,539
Total current assets 5,639 9,069
Timber, timberlands and
roads -- net 325,109 332,593
Seed and nursery stock 929 1,883
Property, plant and
equipment -- net 1,118 1,154
Notes receivable
-- long term 829 --
Deferred financing fees 5,661 5,998
Other assets 1,000 --
Total assets $340,285 $350,697
Liabilities
Current liabilities
Accounts payable and
accrued liabilities $4,886 $6,052
Deferred revenue 1,764 1,614
Short-term debt 1,000 --
Total current liabilities 7,650 7,666
Long-term debt 225,000 225,000
Minority interest 1,076 1,180
Partners' Capital
Partners' capital 106,559 116,851
Total liabilities
and partners' capital $340,285 $350,697
(*) Derived from audited Consolidated Balance Sheet as of
December 31, 1998.
U.S. TIMBERLANDS COMPANY, L.P.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Six Months Ended June 30,
1999 1998
Cash Flows From
Operating Activities:
Net income (loss) $2,725 $(9,600)
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depletion, depreciation and
road amortization 9,252 12,633
Financing fees 338 338
Other non-cash items 150
Working capital changes
-- net (1,756) (950)
Net cash provided by
operating activities 10,709 2,421
Cash Flows From Investing
Activities:
Timber, timberlands and
road additions (1,516) (218)
Purchase of property,
plant and equipment -- net (36) (28)
Capitalized seed and
nursery costs -- net 975 (63)
(Increase) decrease in notes
receivable -- net (829) 177
Increase in other assets (1,000)
Net cash used in investing
activities (2,406) (132)
Cash Flows From Financing
Activities:
Short-term borrowings 1,000
Distributions to Unitholders(13,122) (9,580)
Net cash used in financing
activities (12,122) (9,580)
Decrease in cash and cash
equivalents (3,819) (7,291)
Cash and cash equivalents
-- beginning of period 4,824 10,625
Cash and cash equivalents
-- end of period $1,005 $3,334
SOURCE: U.S. Timberlands Company, L.P.
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