SEATTLE, WASHINGTON -- July 20, 1999 -- Plum Creek Timber Company, Inc. (NYSE:PCL) today announced its financial results for the second quarter and first six months of 1999. Earnings for the quarter were $22.5 million, or $0.30 per Unit on revenues of $184.3 million, compared to $16.1 million, or $0.17 per Unit on revenues of $171.8 million for the same period a year ago. Included in the second quarter 1999 results were expenses related to the REIT conversion of $2.4 million, or $0.05 per Unit. Second quarter 1998 results had charges of $8.8 million, or $0.19 per Unit related to the Company's long-term incentive program.
Earnings for the first six months of 1999 were $40.4 million, or $0.50 per Unit on revenues of $362.6 million, compared with $37.4 million, or $0.45 per Unit on revenues of $336.1 million in 1998.
The Company stated that the quarterly cash dividend to shareholders would be $0.57 per share, payable on August 26, 1999 to shareholders of record as of August 13, 1999.
"We are very pleased with our second quarter performance. The Company's focus on productivity and efficiency improvements throughout our operations has positioned us to fully capitalize on improvements in product pricing," said Rick R. Holley, President and Chief Executive Officer. Holley also noted, "During the quarter, strong U.S. housing, repair and remodel markets pushed lumber and plywood prices significantly higher."
Northwest lumber markets improved steadily throughout the quarter, a result of robust U.S. housing starts, driving lumber prices near record highs. Commodity plywood prices rose to record levels during the quarter, also buoyed by the strong U.S. economy and resulting building activity, while medium density fiberboard (MDF) prices climbed seasonally.
Domestic log prices in the Northwest improved from first quarter levels and the export log market strengthened further as the Japanese economy demonstrated modest improvement. Excess supplies of sawlogs and pulpwood in the South, and weak pulp markets in the Northeast resulted in lower prices in those areas, partially offsetting pricing gains elsewhere.
Prices for Northwest lumber were 12% higher in the second quarter of 1999 compared to the same period a year ago. Southern lumber prices were 2% lower than second quarter 1998 levels, although prices improved slightly from the first quarter of 1999.
"Our plywood and MDF businesses remain strong as demand continues to improve," Holley continued. Prices for plywood increased 16% in the second quarter of 1999 compared to the same period a year ago. MDF prices showed modest improvement with prices up 3% compared to the second quarter of 1998.
Prices for domestic logs in our Cascade Region improved 14% over second quarter 1998 levels and were 9% higher compared to the first quarter of 1999. Export log prices were up 10% in the second quarter of 1999 compared to the same period a year ago and 8% higher than the first quarter of 1999. Prices for logs in the Rocky Mountain Region remained firm year-to-year and were up 2% compared to the first quarter of 1999. Log prices in our new Northeast Region were unchanged compared to the first quarter of the year. Prices for sawlogs in our Southern Region were down 21% from last year's second quarter, driven by a market oversupply due to dry weather that created favorable harvesting conditions, but were up 8% over first quarter 1999 prices.
"Income from sales of higher and better use lands totaled $5.4 million for the quarter compared to $6.0 million for the same period a year ago, and $0.7 million in the first quarter of 1999," Holley said.
"As we look forward to the second half of the year, we expect pricing for our products to be stable as log and lumber supplies remain sufficient and overall demand for wood products remains strong. We anticipate export markets to improve modestly in the second half of the year as the Japanese recession subsides," Holley concluded.
Plum Creek is one of the largest private timberland owners in the nation with timberlands and mills located in the Northwest, Southern and Northeastern United States.
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