SEATTLE, WASHINGTON -- July 13, 2000 -- Plum Creek Timber Company, Inc. (NYSE: PCL) today announced second quarter earnings of $21.0 million, or $0.30 per share. Second quarter 1999 earnings were $24.0 million, or $0.33 per Unit. Earnings for the first six months of 2000 were $101.6 million, or $1.47 per share, while earnings during the same period a year ago were $53.8 million, or $0.79 per Unit.
EBITDA, a measure of cash flow defined as operating income plus depreciation, depletion and amortization, was $47.9 million for the quarter and $110.0 million for the first six months. The figures are inclusive of the Company's unconsolidated subsidiaries and compare to $63.2 million and $120.7 million for the year-earlier periods. The Company ended the quarter with $126.2 million in cash and cash equivalents.
On July 1, 1999, the Company converted from a Master Limited Partnership to a Real Estate Investment Trust (REIT), and results are now reported under REIT accounting principles. Revenues of $53.1 million for the second quarter, and $112.1 million for the first six months 2000, are not comparable to the 1999 periods because REIT accounting excludes revenues from unconsolidated subsidiaries. On a comparable basis, including the Company's unconsolidated subsidiaries, revenues would have been $166.4 million and $356.1 million for the second quarter and six months of 2000, compared to $184.3 million for the second quarter, and $362.6 million for the first six months 1999.
Plum Creek's quarterly dividend will be announced on July 18, following the Company's Board of Directors meeting.
"The advantages of our strategy, including our geographic diversity and multiple earnings sources were evident during the quarter," said Rick R. Holley, President and Chief Executive Officer. "Our Northern resource business, Medium Density Fiberboard (MDF) operation and higher and better use lands program produced strong returns, offsetting some weakness in our Northwest lumber and plywood and Southern log and lumber markets," Holley added.
The Company's Cascade Region timber business experienced favorable harvest conditions and stable demand in the quarter. The Rockies Region saw strong demand coupled with limited regional log supplies, resulting in good seasonal pricing, and the Northeast Region benefited from stronger than expected demand and pricing for both sawlogs and pulpwood. Ample log supplies from prolonged drought-related harvesting in the Southern U.S. resulted in flat sawlog and declining pulpwood prices versus a year ago in the Southern Region.
The Company's Northwest lumber businesses saw continued growth in program sales to key retail home centers, but other product markets were pressured by overproduction. Southern lumber prices declined, also due to excess industry production. The Company's plywood prices remained flat with the first quarter of 2000, notwithstanding declining commodity structural panel prices. Plum Creek's high quality MDF business experienced solid pricing in the quarter.
With the global economy continuing to grow, the Company anticipates stable wood demand, particularly in the domestic log markets and repair and remodel sector. "Despite some regional oversupply conditions, Plum Creek's businesses are in excellent shape," Holley commented. "Our strategic focus, including our geographic and product diversity should continue to produce good financial returns during the balance of the year," Holley concluded.
Plum Creek is one of the largest timberland owners in the nation with timberlands and mills located in the Northwest, Southern and Northeast regions of the United States.
Conference Call and Supplemental Information
Plum Creek will hold a conference call today, July 13, at 10:00 a.m. PT to discuss these second quarter results. To access the call, dial 877-679-9051 prior to the scheduled start time. A recorded replay of the call will be available starting at 1:00 p.m. PT and can be accessed through July 20. To access the replay, dial (800) 615-3210 and enter the code: 4371150.
A supplemental financial package is also available on our web site at www.plumcreek.com.
This press release contains forward-looking statements within the meaning of the Private Litigation Reform Act of 1995. The accuracy of such statements is subject to a number of risks, uncertainties and assumptions including, but not limited to, the cyclical nature of the forest products industry, our ability to harvest our timber, our ability to execute our acquisition strategy, and regulatory constraints. These risks are detailed from time to time in our filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date made, and neither the Company nor its management undertakes any obligation to update or revise any forward-looking statements. It is likely that if one or more of the risks and uncertainties materializes, the current expectations of the Company and its management will not be realized.
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