SEATTLE, WASHINGTON -- April 20, 1999 -- Plum Creek Timber Company, L.P. (NYSE:PCL) today announced its financial results for the first quarter of 1999. Earnings for the quarter were $17.9 million, or $0.20 per Unit on revenues of $178.2 million, compared to $21.3 million, or $0.28 per Unit on revenues of $164.3 million for the same period a year ago.
The Company stated that the quarterly cash distribution to Unitholders would be $0.57 per Unit, payable on May 27, 1999 to Unitholders of record as of May 14, 1999.
"Compared to the first quarter of 1998, our earnings were down approximately $3.4 million for the quarter," said Rick R. Holley, President and Chief Executive Officer. This was due primarily to an expense of $2.7 million, or $0.06 per Unit, in REIT conversion costs for the first quarter of 1999 as well as lower land sales. Income from sales of higher and better use lands totaled $0.7 million for the quarter, compared to $1.2 million for the same period a year ago. In addition, interest expense for the quarter was $3.6 million higher than the prior year quarter as a result of the addition of our Northeast Region. Overall, we are very pleased with the performance of our operations during the quarter. Operating income for the quarter was $38.7 million, up $2.6 million from the first quarter of 1998."
"First quarter earnings were positively impacted by the strength in the U.S. housing sector, and repair and remodeling markets. Lumber and plywood prices for the quarter strengthened from fourth quarter 1998 levels, and domestic log prices in the Northwest improved along with product prices. Also, the Japanese export log market has stabilized and prices were favorable as a result of low log inventory levels in Japan.
"Prices for our Northwest lumber were 5% higher in the first quarter of 1999 compared to the same period a year ago. While Southern lumber prices were 11% below last year's first quarter, prices increased 17% from the fourth quarter of 1998. Plywood prices increased 7% year-over-year, and prices for medium density fiberboard were up 4%.
"Compared to the first quarter last year, volume increased by more than 20% in our Northwest lumber product line as a result of greater operating efficiencies and the addition of our Meridian, Idaho remanufacturing facility," continued Holley. "In addition, our Southern lumber volume increased by 13% primarily as a result of the start-up of our new Joyce, Louisiana sawmill. However, the benefits of this additional volume were offset by the year-over-year price decline in Southern lumber.
"Export log prices were down 2% in the first quarter of 1999 compared to the same period a year ago, while Cascades domestic log prices increased 1%. Prices for logs in the Rocky Mountain Region declined 4% compared to last year's first quarter. Log volumes in the Cascades and Rockies increased from the first quarter last year as a result of strong demand and good harvesting conditions. In our Southern Region, an excess supply of logs in the market caused sawlog prices and volumes to decline from levels a year ago. Southern sawlog prices were down 18% from the first quarter of 1998, which negatively impacted our overall earnings for the quarter. In our newly established Northeast Region, which contributed positively to earnings and cash flow in its first full quarter of operations, sawlog prices were 3% above fourth quarter levels.
"We continue to remain focused on maximizing efficiency and productivity throughout our operations and on finding new ways to provide more value-added, high-quality products to the marketplace," said Holley. "In addition, we believe that our ongoing commitment to our key strategic objectives of actively pursuing strategic timberland acquisition opportunities and selling our higher and better use lands, enhances our ability to grow the value of the business over the long-term. We believe that our new REIT structure, once effective, will significantly enhance all of these abilities."
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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