SEATTLE, Apr 18, 2002 (BUSINESS WIRE) -- Plum Creek Timber Company, Inc.(NYSE:PCL) today announced first quarter earnings of $56 million, or $0.30 perdiluted share.
Plum Creek completed its merger with The Timber Company on October 6, 2001. Foraccounting purposes, The Timber Company is considered the surviving entitybecause of the structure of the merger. Therefore, reported financial resultsfor periods prior to the merger reflect the financial results of The TimberCompany. Results for the first quarter 2002 reflect the performance of thecombined companies and are not comparable to the results reported for firstquarter 2001.
Funds from operations, a simplified measure of cash flow from operations definedas net income plus depreciation, depletion, and basis in higher and better uselands sold, was $91 million for the first quarter of 2002. The Company ended thequarter with $285 million in cash and cash equivalents.
Plum Creek's first quarter dividend will be announced April 23, 2002, followingthe Company's Board of Directors' meeting.
"We delivered good results during the first quarter by executing well in eacharea of the business. During the quarter, prices for our timber held steady inmost regions and showed improvements in others. Harvest volumes were higher thananticipated, a reaction to the relatively mild winter and good demand," saidRick Holley, President and CEO.
"The better than expected earnings from our real estate business are the resultof the early completion of a few large transactions originally scheduled for thesecond quarter. We continue to evaluate and position properties within ourdiverse portfolio that will be sold or exchanged to meet the demand for landwith attractive recreational, conservation or development attributes.
"The manufacturing business continued its profitable track record due toimproving demand for our lumber, plywood and MDF products," concluded Holley.
Review of Operations
Compared to the fourth quarter 2001, sawlog prices increased approximately 6% inthe Southern Resources segment and held steady in the Northern Resourcessegment. At the end of the quarter, sawlog prices in five of Plum Creek's sixtimber regions were at levels above first quarter averages. Plum Creekexperienced improving demand from mills as they reacted to unexpectedly highdemand for lumber and structural panels in the first quarter. Pulpwood prices inboth resource segments were unchanged from the fourth quarter due to continuedweak demand and excess capacity in the pulp and paper industry.
First quarter revenue for the Real Estate segment was $23 million, significantlyhigher than expected but lower than the $27 million reported in the fourthquarter 2001, reflecting the transaction driven nature of the real estatebusiness.
The Company's lumber prices were up over 3% from the prior quarter due to strongdemand for lumber. Improving plywood demand fueled a 16% increase in plywoodsales volume over fourth quarter while a sales mix shift resulted in the Companyreporting modestly lower prices for the product. Medium density fiberboard (MDF)demand improved during the quarter and sales volumes increased 13% from fourthquarter as the Company continued the start-up of its second MDF production line.Despite improving demand, MDF prices fell nearly 3% due to increased competitionon the West Coast from imported MDF.
Strong housing starts, good repair and remodel demand, and the potential for arecovery in pulp and paper markets are positive signs for Plum Creek'sbusinesses. Many mills are beginning to experience strengthening demand fortheir products, translating into improved demand for timber. However, theCompany expects the persistent strength of the U.S. dollar and overcapacityaffecting most pulp and paper markets will moderate any improvement in pulpwoodprices. Plum Creek continues to anticipate modest improvements in sawlog pricingas the economy strengthens and mills increase their production in response toimproving demand.
In the second quarter, Plum Creek expects log prices in the South to hold steadyat first quarter levels. March sawlog prices in the North were above firstquarter averages and the Company expects Northern sawlog prices to showimprovement in the second quarter. The Company continues to experience stronginterest in its real estate properties from developers and conservation buyers.However, because several transactions originally scheduled for the secondquarter closed early, the Real Estate segment should report lower revenues andincome than those reported in the first quarter. The Company expects lumberprices to hold at first quarter levels and plywood prices to improve modestlydue to improving industrial demand. MDF sales volume should continue to increaseas the new MDF line adds production. MDF prices should improve as higher value,thin-board production volumes increase from the new line.
"Plum Creek's core timber business is showing signs of improvement in manyregions. Our real estate and manufacturing businesses are performing well, andwe continue to see potential for greater contribution to earnings and cash flowfrom the natural resources on our lands. In addition to our many internal growthopportunities, we continue to evaluate acquisitions that meet our disciplinedinvestment criteria," concluded Holley.
Earnings Conference Call and Supplemental Information
Plum Creek will hold a conference call today, April 18 at 2:00 p.m. PDT, todiscuss these results, current business conditions and the outlook for thesecond quarter of 2002. To access the call, dial 877/679-9051 or 952/556-2804(outside North America) prior to the scheduled start time and reference the PlumCreek earnings call. A recorded replay of the call will be available afterwardsfor 48 hours by dialing 800/615-3210 or 703/326-3020 (outside North America) andentering the conference code 5761547.
Supplemental financial information for Plum Creek operations, includingstatistical data, is available attached to the earnings release in the investorinformation section of Plum Creek's website at www.plumcreek.com.
Plum Creek, a real estate investment trust, is one of the largest land owners inthe nation, with over 7.8 million acres of timberlands in every significanttimber-growing region of the United States and ten wood product manufacturingfacilities in the Northwest.
This press release contains forward-looking statements within the meaning of thePrivate Litigation Reform Act of 1995 as amended. Some of these forward-lookingstatements can be identified by the use of forward-looking words such as"believes," "expects," "may," "will," "should," "seek," "approximately,""intends," "plans," "estimates," or "anticipates," or the negative of thosewords or other comparable terminology. The accuracy of such statements issubject to a number of risks, uncertainties and assumptions including, but notlimited to, the cyclical nature of the forest products industry, our ability toharvest our timber, our ability to execute our acquisition strategy, and variousregulatory constraints. These risks, uncertainties and assumptions are detailedfrom time to time in our filings with the Securities and Exchange Commissionunder the Securities Exchange Act of 1934, as amended, and the Securities Act of1933, as amended. It is likely that if one or more of the risks materializes, orif one or more assumptions proves to be incorrect, the current expectations ofPlum Creek and its management will not be realized. Forward-looking statementsspeak only as of the date made, and neither Plum Creek nor its managementundertakes any obligation to update or revise any forward-looking statements.
PLUM CREEK TIMBER COMPANY, INC. CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) Quarter Ended ------------------ March 31, March 31, 2002 2001 -------- -------- (In Millions, Except Per Share)Revenues: Timber $ 157 $ 110 Real Estate 23 4 Manufacturing 93 -- Other 2 3 ----- ----- Total Revenues 275 117Costs and Expenses: Cost of Goods Sold: Timber 74 37 Real Estate 11 -- Manufacturing 89 -- Other -- -- ----- ----- Total Cost of Goods Sold 174 37 Selling, General and Administrative 17 9 ----- ----- Total Costs and Expenses 191 46 ----- -----Operating Income 84 71Interest Expense, net 26 11 ----- -----Income before Income Taxes 58 60Provision for Income Taxes (2) (23) ----- -----Net Income $ 56 $ 37 ===== =====Net Income per Share - Basic $0.30 $0.33 ===== =====Net Income per Share - Diluted $0.30 $0.32 ===== =====Weighted average number of Shares outstanding - Basic 184.5 112.7 ----- -----Weighted average number of Shares outstanding - Diluted 185.3 113.9 ----- -----Click Here for 1st Quarter 2002 Financial Supplements (In Excel)
More information on Plum Creek Timber Co. may be accessed at:http://www.businesswire.com/cnn/pcl.shtml.
Plum Creek Timber Company
John Hobbs, 800/858-5347
URL: http://www.businesswire.comToday's News On The Net - Business Wire's full file on the Internetwith Hyperlinks to your home page.
Copyright (C) 2002 Business Wire. All rights reserved.