SEATTLE--(BUSINESS WIRE)--Oct. 23, 2001--Plum Creek TimberCompany, Inc. (NYSE:PCL) today announced third quarter earnings of$16.9 million, or $0.24 per share, which includes $2.7 million, or$0.04 per share, of expenses related to the merger of Plum Creek andThe Timber Company, formerly a separate operating group ofGeorgia-Pacific Corporation.
Third quarter 2000 earnings were $9.5 million, or $0.14 per share,including $2.2 million, or $0.03 per share, of expenses related to themerger.
Earnings for the first nine months of 2001 were $84.9 million, or$1.23 per share, including a one-time gain of $24.7 million, or $0.36per share, from the March sale of Plum Creek's southwest Washingtontimberlands to Pope Resources and $7.7 million, or $0.11 per share, ofmerger related expenses. Earnings for the same period in 2000 were$111.1 million, or $1.61 per share, including a one-time gain of$49.9 million, or $0.72 per share, from the sale of Plum Creek's St.Maries, Idaho timberlands to Crown Pacific Partners and $2.2 million,or $0.03 per share, of merger related expenses. Excluding one-timeitems, results for the first nine months were $0.98 per share and$0.92 per share for 2001 and 2000, respectively.
EBITDA, a measure of cash flow defined as operating income plusdepreciation, depletion and amortization, was $46.0 million for thequarter and $145.0 million for the first nine months of 2001, comparedto $36.9 million and $147.1 million for the prior-year periods. PlumCreek ended the quarter with $159.2 million in cash and cashequivalents.
Plum Creek's quarterly dividend will be announced later today,following the company's Board of Directors' meeting.
"We're pleased with the results of the third quarter. On Oct. 6 weclosed the merger with The Timber Company and are now focused oncapitalizing on the strong growth potential this combination provides.With our management team in place, we are executing a quick andseamless transition. We are in the process of formulating a detailedbusiness plan for 2002 that will quantify the new opportunitiespresented by the size, breadth and diversity of our combined landportfolio. Our harvest profile gives us a growing core cash flow, andwe're aggressively moving forward on new opportunities in our realestate and natural resource businesses," said Rick Holley, presidentand CEO.
Review of Operations
Third quarter 2001 performance showed significant improvement overthe same period last year. Year-over-year improvements in lumber andplywood prices combined with a higher level of real estate sales toincrease net income over 75%. Lumber and plywood prices were up 8% and7%, respectively, over the third quarter of 2000. In addition,stronger than expected real estate sales activity offset weaker sawlogand pulpwood prices for the same period in 2000.
"As we move into the fourth quarter, we expect our geographic andproduct diversity to lessen the impact of a slowing macroeconomicenvironment," said Holley. "Timber markets are inherently local innature and our outlook for the coming quarter reflects varied demandand pricing conditions across our newly expanded landscape."
Plum Creek expects demand in the fourth quarter to be fairlyconsistent with third quarter levels. This is due in part to our fibersupply agreements in many regions. These agreements are expected toprovide Plum Creek with a level of stability in both harvest volumesand prices. Customers are almost universally uncertain about demandfor their products which is translating into cautious buying on theirpart.
Timber prices are expected to be sequentially flat to slightlydown in most regions in the fourth quarter. Nevertheless, Plum Creekexpects pockets of relative pricing strength in western regions of theSouth, especially for hardwood sawtimber and pulpwood where a returnto more normal rainfall has restricted logging in low-lying hardwoodlands.
The real estate business is expected to remain reasonably strongduring the fourth quarter while results from the company'smanufacturing businesses are expected to be affected by lower levelsof demand and weaker pricing.
The fourth quarter of 2001 will be the first reporting period forPlum Creek following the merger with The Timber Company.
Earnings Conference Call and Supplemental Information
Plum Creek will hold a conference call today, Oct. 23, at 2:00p.m. PDT to discuss these results, the progress of its mergerintegration and the outlook for the fourth quarter. To access thecall, dial 877/679-9045 prior to the scheduled start time andreference access code 5555175. A recorded replay of the call will beavailable afterward for 48 hours by dialing 800/615-3210 and enteringthe same code.
Supplemental financial information, for both Plum Creek and TheTimber Company operations, including statistical data, is available inthe investor information section of Plum Creek's website atwww.plumcreek.com.
Plum Creek, a real estate investment trust, is one of the largestland owners in the nation, with over 7.8 million acres of timberlandsin every significant timber-growing region of the United States andnine wood product mills in the Northwest.
This press release contains forward-looking statements within themeaning of the Private Litigation Reform Act of 1995. Some of theseforward-looking statements can be identified by the use offorward-looking words such as "believes," "expects," "may," "will,""should," "seek," "approximately," "intends," "plans," "estimates," or"anticipates," or the negative of those words or other comparableterminology. The accuracy of such statements is subject to a number ofrisks, uncertainties and assumptions including, but not limited to,the cyclical nature of the forest products industry, our ability toharvest our timber, our ability to execute our acquisition strategy,and regulatory constraints. These risks, uncertainties and assumptionsare detailed from time to time in our filings with the Securities andExchange Commission under the Securities Exchange Act of 1934, asamended, and the Securities Act of 1933, as amended. It is likely thatif one or more of the risks materializes, or if one or moreassumptions proves to be incorrect, the current expectations of PlumCreek and its management will not be realized. Forward-lookingstatements speak only as of the date made, and neither Plum Creek norits management undertakes any obligation to update or revise anyforward-looking statements.
PLUM CREEK TIMBER COMPANY, INC. CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) Quarter Ended September 30, --------------------- 2001 2000 ---- ---- (In Thousands, Except Per Share)Revenues $ 163,558 $ 41,539 --------- ---------Costs and Expenses: Cost of Goods Sold 120,097 16,367 Selling, General and Administrative 10,121 2,283 Merger Expenses 2,706 2,178 --------- --------- Total Costs and Expenses 132,924 20,828 --------- ---------Operating Income 30,634 20,711Interest Expense (14,672) (11,548)Interest Income 1,543 893Gain (Loss) on Disposition of Assets - Net 2,052 (182) --------- ---------Income before Income Taxes, Equity in Earnings of Unconsolidated Subsidiaries and Preferred Stock Dividends 19,557 9,874Provision for Income Taxes (2,690) - Equity in Earnings (Loss) of Unconsolidated Subsidiaries and Preferred Stock Dividends - (366) --------- ---------Net Income $ 16,867 $ 9,508 ========= =========Net Income per Share - Basic & Diluted $ 0.24 $ 0.14 ========= =========Weighted average number of Shares outstanding - Basic 69,187 69,181 --------- ---------Weighted average number of Shares outstanding - Diluted 69,351 69,228 --------- ---------
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Plum Creek Timber Company, Inc.
John Hobbs, 800/858-5347
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