Form 8-K POTLATCH CORP For: Jan 28

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January 28, 2015 6:32 AM EST


�
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_____________________________________________________________�
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: January�28, 2015
(Date of earliest event reported)
_____________________________________________________________�
POTLATCH CORPORATION
(Exact name of registrant as specified in its charter)

Delaware
�
001-32729
�
82-0156045
(State or Other Jurisdiction
of Incorporation)
�
(Commission
File Number)
�
(I.R.S. Employer
Identification Number)
�
�
�
�
�
601 W. First Avenue, Suite 1600,
Spokane WA
�
�
�
99201
(Address of principal executive offices)
�
�
�
(Zip Code)
509-835-1500
(Registrants telephone number, Including area code)
_____________________________________________________________�
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




�





Item 2.02. ����

Results of Operations and Financial Condition.

On January�28, 2015, Potlatch Corporation announced its results of operations and financial condition for the quarter ended December�31, 2014. The press release containing this announcement is furnished as Exhibit 99.1 hereto.

The information in this Form 8-K and the Exhibit attached hereto shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such filing.



Item 9.01. ����

Financial Statements and Exhibits

(d)
Exhibits.

99.1
Press release issued by Potlatch Corporation, dated January�28, 2015.
����
POTLATCH REPORTS FOURTH QUARTER AND YEAR END RESULTS
----------------------------------------------------------------------------------------------





SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: January�28, 2015

POTLATCH CORPORATION
By: /s/ Lorrie D. Scott ������������
Lorrie D. Scott
Vice President, General Counsel and
Corporate Secretary





EXHIBIT INDEX

Exhibit�
Description
99.1
Press release issued by Potlatch Corporation, dated January�28, 2015.





Exhibit 99.1
�
�
�
�
Potlatch Corporation
601 W. First Ave., Suite 1600
Spokane, WA 99201
509.835.1500
www.potlatchcorp.com
News Release
For immediate release:
Contact:
(Investors)
(Media)
�
�
Jerry Richards
Mark Benson
�
�
509.835.1521
509.835.1513
�

Potlatch Corporation Reports Fourth Quarter and Full Year 2014 Results
SPOKANE, Wash - January 28, 2015 - Potlatch Corporation (Nasdaq: PCH) today reported net income of $20.1 million, or $0.49 per diluted share, on revenues of $146.2 million for the quarter ended December 31, 2014. Excluding transaction-related expenses of $0.4 million and nonrecurring tax benefits of $1.9 million, fourth quarter 2014 earnings were $18.6 million, or $0.45 per diluted share. Net income was $13.7 million, or $0.34 per diluted share, on revenues of $140.0 million in the fourth quarter of 2013.
Net income for the full year of 2014 was $89.9 million, or $2.20 per diluted share, on revenues of $607.0 million. This compares to net income of $70.6 million, or $1.73 per diluted share, on revenues of $570.3 million in 2013.
"We are pleased with our performance this year, including the fact that we grew both the company and the dividend," said Michael Covey, chairman and chief executive officer. "The addition of approximately 201,000 acres of high-quality timberlands in Alabama and Mississippi increases our geographic and market diversity in the South. We delivered solid financial results in 2014 and we expect 2015 to be another good year," concluded Mr. Covey.





Financial Highlights
(millions, except per-share data)������������
�
�
Q4 2014
�
Q3 2014
�
Q4 2013
Revenues
�
$
146.2

�
$
177.2

�
$
140.0

Net income
�
$
20.1

�
$
33.2

�
$
13.7

Net income per diluted share
�
$
0.49

�
$
0.81

�
$
0.34

Distribution per share
�
$
0.375

�
$
0.35

�
$
0.35

Net cash from operations
�
$
23.7

�
$
39.2

�
$
15.2

Cash and short-term investments at end of period
�
$
31.0

�
$
73.3

�
$
57.8

Business Performance: Q4 2014 vs. Q3 2014
Resource
Resources operating income was $23.9 million on revenues of $69.2 million in the fourth quarter, compared to operating income of $34.1 million on revenues of $91.9 million in the third quarter of 2014. Harvest volumes were seasonally lower in the Northern and Southern regions. Northern sawlog price realizations decreased 4% per ton in the quarter due primarily to seasonally higher moisture content, but were flat on a dimensional, or board foot, basis. Southern sawlog prices were 7% lower largely due to a lower mix of hardwood logs. Southern pine sawlog prices were flat compared to the third quarter.
Wood Products
Wood Products operating income was $9.1 million on revenues of $88.7 million in the fourth quarter, compared to operating income of $15.8 million on revenues of $99.2 million in the third quarter of 2014. Lumber shipments declined 9% due to fewer operating days in the quarter and the average lumber price realized was 4% lower in the fourth quarter. Log costs were also under pressure in the Lake States due to pulp mill demand in the region.
Real Estate
Real Estates operating income was $1.6 million on revenues of $4.1 million in the fourth quarter, compared to operating income of $4.6 million on revenues of $6.2 million in the third quarter of 2014. The decline in earnings was due to the sale of fewer acres and mix.




Outlook
We expect the recovery in the U.S. housing market to continue in 2015, which will translate into higher earnings in Resource and another strong year in Wood Products. We plan to increase our harvest to 4.5 million tons in 2015. We are not planning any large sales in our Real Estate segment and expect to sell approximately 20,000 acres this year. Our balance sheet is in good shape and a core part of our strategy remains growing the company over time, concluded Mr. Covey.
Conference Call Information
A live conference call and webcast will be held today, January 28, 2015, at 9 a.m. Pacific Time (noon Eastern Time). Investors may access the webcast at www.potlatchcorp.com by clicking on the Investor Resources link or by conference call at 1-866-393-8403 for U.S./Canada and 1-706-679-7929 for international callers. Participants will be asked to provide conference I.D. number 61675140. Supplemental materials that will be discussed during the call are available on the website.
A replay of the conference call will be available two hours following the call until February 4, 2015 by calling 1-800-585-8367 for U.S./Canada or 1-404-537-3406 for international callers. Callers must enter conference I.D. number 61675140 to access the replay.
About Potlatch
Potlatch is a Real Estate Investment Trust (REIT) with approximately 1.6 million acres of timberland in Alabama, Arkansas, Idaho, Minnesota and Mississippi. Potlatch, a verified forest practices leader, is committed to providing superior returns to stockholders through long-term stewardship of its forest resources. The company also conducts a land sales and development business and operates wood products manufacturing facilities through its taxable REIT subsidiary. More information about Potlatch can be found on the companys website at www.potlatch.com.





Forward-Looking Statements
This press release contains certain forward-looking statements within the meaning of the Private Litigation Reform Act of 1995 as amended, including without limitation, statements about our expectations regarding future company performance; the direction of our business markets; the state of the domestic housing market; housing starts; business conditions in our Resource and Wood Products segments; lumber pricing; sawlog pricing; 2015 harvest levels; performance of our Wood Products, Resource and Real Estate segments in 2015; earnings growth; and similar matters. These forward-looking statements are based on current expectations, estimates, assumptions and projections that are subject to change, and actual results may differ materially from the forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, changes in timberland values; changes in timber harvest levels on the company's lands; changes in timber prices; changes in policy regarding governmental timber sales; changes in the United States and international economies; changes in the level of construction activity; changes in Chinese demand; changes in tariffs, quotas and trade agreements involving wood products; changes in demand for our products; changes in production and production capacity in the forest products industry; competitive pricing pressures for our products; unanticipated manufacturing disruptions; changes in general and industry-specific environmental laws and regulations; unforeseen environmental liabilities or expenditures; weather conditions; changes in raw material, fuel and other costs; the ability to satisfy complex rules in order to remain qualified as a REIT; changes in tax laws that could reduce the benefits associated with REIT status; and other risks and uncertainties described from time to time in the company's public filings with the Securities and Exchange Commission. The forward-looking statements are made as of the date of this press release and the company does not undertake to update any forward-looking statements.






�
Potlatch Corporation
Consolidated Statements of Income
Unaudited (Dollars in thousands, except per-share amounts)
�

�
Quarter Ended
�
Twelve Months Ended
��
December 31,
�
December 31,
�
2014
�
2013
�
2014
�
2013
Revenues
$
146,237

�
$
139,955

�
$
606,950

�
$
570,289

Costs and expenses:
�
�
�
�
�
�
�
Cost of goods sold
107,773

�
106,070

�
429,789

�
408,772

Selling, general and administrative expenses
11,861

�
13,240

�
44,655

�
50,397

Environmental remediation charge


�


�


�
3,522

�
119,634

�
119,310

�
474,444

�
462,691

Operating income
26,603

�
20,645

�
132,506

�
107,598

Interest expense, net
(6,434
)
�
(5,573
)
�
(22,909
)
�
(23,132
)
Income before income taxes
20,169

�
15,072

�
109,597

�
84,466

Income tax provision
(33
)
�
(1,351
)
�
(19,687
)
�
(13,885
)
Net income
$
20,136

�
$
13,721

�
$
89,910

�
$
70,581

�
�
�
�
�
�
�
�
Net income per share:
�
�
�
�
�
�
�
Basic
$
0.49

�
$
0.34

�
$
2.21

�
$
1.74

Diluted
0.49

�
0.34

�
2.20

�
1.73

Cash distributions per share
$
0.375

�
$
0.35

�
$
1.425

�
$
1.28

Weighted-average shares outstanding (in thousands):
�
�
�
�
�
�
�
Basic
40,764

�
40,533

�
40,749

�
40,503

Diluted
40,927

�
40,739

�
40,894

�
40,709







�
Potlatch Corporation
Consolidated Condensed Balance Sheets
Unaudited (Dollars in thousands, except per-share amounts)
�

�
December�31,
2014
�
December�31,
2013
ASSETS
�
�
�
Current assets:
�
�
�
Cash
$
4,644

�
$
5,586

Short-term investments
26,368

�
52,251

Receivables, net
9,928

�
16,572

Inventories
31,490

�
36,275

Deferred tax assets
6,168

�
7,724

Other assets
15,065

�
11,961

Total current assets
93,663

�
130,369

Property, plant and equipment, net
65,749

�
59,976

Timber and timberlands, net
828,420

�
455,871

Deferred tax assets
37,228

�
21,576

Other assets
10,361

�
12,738

Total assets
$
1,035,421

�
$
680,530

LIABILITIES AND STOCKHOLDERS EQUITY
�
�
�
Current liabilities:
�
�
�
Current installments on long-term debt
$
22,870

�
$


Current liability for pensions and other postretirement employee benefits
6,260

�
6,701

Accounts payable and accrued liabilities
43,064

�
43,617

Total current liabilities
72,194

�
50,318

Long-term debt
606,473

�
320,092

Liability for pensions and other postretirement employee benefits
115,936

�
83,619

Other long-term obligations
15,752

�
22,353

Total liabilities
810,355

�
476,382

Stockholders equity
225,066

�
204,148

Total liabilities and stockholders' equity
$
1,035,421

�
$
680,530

�
�
�
�
Shares outstanding (in thousands)
40,605

�
40,537

Stockholders equity per common share
$
5.54

�
$
5.04

Working capital
$
21,469

�
$
80,051

Current ratio
1.3
:1
�
2.6
:1






�
Potlatch Corporation
Consolidated Condensed Statements of Cash Flows
Unaudited (Dollars in thousands)
�

�
Twelve Months Ended
�
December 31,
�
2014
�
2013
CASH FLOWS FROM OPERATING ACTIVITIES
�
�
�
Net income
$
89,910

�
$
70,581

Adjustments to reconcile net income to net cash provided by operating activities:
�
�
�
Depreciation, depletion and amortization
26,749

�
26,962

Basis of real estate sold
8,646

�
2,904

Change in deferred taxes
(1,616
)
�
(2,467
)
Employee benefit plans
2,122

�
7,561

Equity-based compensation expense
4,137

�
4,377

Other, net
(2,191
)
�
(1,972
)
Funding of qualified pension plans
(3,550
)
�


Working capital changes
7,165

�
(17,694
)
Net cash from operating activities
131,372

�
90,252

CASH FLOWS FROM INVESTING ACTIVITIES
�
�
�
Change in short-term investments
25,884

�
10,826

Transfer from company owned life insurance (COLI)
28,870

�


Transfer to COLI
(25,515
)
�


Property, plant and equipment
(13,261
)
�
(10,280
)
Timberlands reforestation and timberland roads
(10,971
)
�
(12,313
)
Acquisition of timber and timberlands
(388,952
)
�
(1,060
)
Other, net
1,262

�
823

Net cash from investing activities
(382,683
)
�
(12,004
)
CASH FLOWS FROM FINANCING ACTIVITIES
�
�
�
Distributions to common stockholders
(57,848
)
�
(51,868
)
Repayment of long-term debt


�
(36,663
)
Proceeds from issuance of long-term debt
310,000

�


Issuance of common stock
398

�
1,904

Change in book overdrafts
1,465

�
(955
)
Deferred financing costs
(2,388
)
�
(25
)
Employee tax withholdings on vested performance share awards
(1,104
)
�
(1,738
)
Other, net
(154
)
�
(302
)
Net cash from financing activities
250,369

�
(89,647
)
Increase (decrease) in cash
(942
)
�
(11,399
)
Cash at beginning of period
5,586

�
16,985

Cash at end of period
$
4,644

�
$
5,586







�
Potlatch Corporation
Segment Information
Unaudited (Dollars in thousands)
�
�
Quarter Ended
�
Twelve Months Ended
�
December 31,
�
December 31,
(Dollars in thousands)
2014
�
2013
�
2014
�
2013
Revenues:
�
�
�
�
�
�
�
Resource
$
69,245

�
$
60,974

�
$
252,581

�
$
238,228

Wood Products
88,650

�
87,373

�
376,239

�
366,015

Real Estate
4,108

�
6,848

�
40,460

�
26,160

�
162,003

�
155,195

�
669,280

�
630,403

Intersegment revenues - Resource
(15,766
)
�
(15,240
)
�
(62,330
)
�
(60,114
)
Total consolidated revenues
$
146,237

�
$
139,955

�
$
606,950

�
$
570,289

�
�
�
�
�
�
�
�
Operating income:
�
�
�
�
�
�
�
Resource
$
23,854

�
$
18,064

�
$
84,976

�
$
73,425

Wood Products
9,122

�
8,938

�
52,442

�
58,892

Real Estate
1,650

�
4,574

�
26,945

�
18,266

Eliminations and adjustments
174

�
(840
)
�
(190
)
�
(907
)
�
34,800

�
30,736

�
164,173

�
149,676

Corporate
(14,631
)
�
(15,665
)
�
(54,576
)
�
(65,210
)
Income before income taxes
$
20,169

�
$
15,071

�
$
109,597

�
$
84,466

�
�
�
�
�
�
�
�
Depreciation, depletion and amortization:
�
�
�
�
�
�
�
Resource
$
5,102

�
$
4,583

�
$
17,847

�
$
18,103

Wood Products
1,589

�
1,584

�
6,176

�
6,194

Real Estate
15

�
14

�
59

�
56

�
6,706

�
6,181

�
24,082

�
24,353

Corporate
717

�
710

�
2,667

�
2,609

Total depreciation, depletion and amortization
$
7,423

�
$
6,891

�
$
26,749

�
$
26,962

�
�
�
�
�
�
�
�
Basis of real estate sold - Real Estate
$
1,427

�
$
1,166

�
$
9,355

�
$
3,536

Eliminations and adjustments
(70
)
�
(207
)
�
(709
)
�
(632
)
Total basis of real estate sold - Real Estate
$
1,357

�
$
959

�
$
8,646

�
$
2,904






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