Catchmark Timber Trust (CTT) Misses Q1 EPS by 2c, Revenues Beat

Catchmark Timber Trust (NYSE: CTT) reported Q1 EPS of ($0.09), $0.02 worse than the analyst estimate of ($0.07). Revenue for the quarter came in at $27 million versus the consensus estimate of $25.93 million.

First Quarter 2020 Results Highlights

CatchMark's first quarter 2020 operating results included:

• Increased revenues by 19% to $27.0 million, compared to $22.6 million in first quarter 2019.
• Decreased net loss to $4.2 million, compared to $30.4 million in first quarter 2019, primarily due to a $27.5 million decrease in losses allocated from the Triple T joint venture.
• Increased Adjusted EBITDA by 27% to $12.9 million, compared to $10.2 million in first quarter 2019.
• Increased timber sales revenue by 10% to $18.2 million, net timber revenues by 18% to $10.9 million and Harvest EBITDA by 19% to $8.6 million compared to first quarter 2019. These gains were driven by higher harvest volumes.
• Increased harvest volume in the U.S. South by 18% to 569,940 tons, driven by opportunistic stumpage sales.
• Increased Pacific Northwest harvest volume to 25,000 tons from 4,800 tons in first quarter 2019.
• Generated $3.0 million in asset management fee revenues from the Triple T and Dawsonville Bluffs joint ventures, including an incentive-based promote for Dawsonville Bluffs for exceeding investment return hurdles.
• Sold 3,000 acres of timberlands for $4.8 million, compared to 900 acres for $2.1 million in first quarter 2019. The lower year-over-year, per-acre sales price resulted from lower average merchantable inventory stocking levels — 15 tons per acre compared to CatchMark's portfolio average of 42 tons per acre — as well as from CatchMark retaining through timber reservations 0.1 million tons of merchantable inventory with a 49% sawtimber mix.
• Completed a $21.3 million large disposition of 14,400 acres, recognizing a gain of $1.3 million and paying down debt by $20.9 million with the net proceeds.
• Paid a dividend of $0.135 per share to stockholders of record on March 16, 2020.

Brian M. Davis, CatchMark's Chief Executive Officer, said: "We remain focused on owning prime timberlands in high-demand mill markets and managing our operations to generate predictable and stable cash flow throughout the business cycle. To date, our operations in the field have not been materially impacted by the pandemic and we are working to ensure necessary social distancing for the safety of all our employees, customers, vendors and business associates. We also continue to maintain frequent communications and connectivity with our customers to work through their supply chain needs and stay flexible to meet changes in demand."

Operations

CatchMark's first quarter 2020 realized stumpage prices for pulpwood and sawtimber were 11% and 6%, respectively, lower than first quarter 2019, trending with 15% and 8% decreases in regional average pulpwood and sawtimber stumpage prices. Compared to TimberMart-South Southwide averages, CatchMark realized a 50% premium in pulpwood pricing, and 21% premium in sawtimber pricing.

CatchMark Chief Resources Officer Todd Reitz said: "We benefited from relative pricing premiums achieved in our high-demand mill markets and had anticipated overall lower year-over-year pricing due to a weather-related spike last year as well as ample first quarter inventories that mills had to work down. We were nimble in increasing stumpage sales to take advantage of demand opportunities and we have the flexibility to fall back on our delivered wood sales and fiber supply agreements, which provide a reliable source of demand from creditworthy counterparties."

For earnings history and earnings-related data on Catchmark Timber Trust (CTT) click here.

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