CatchMark Increases Revenues by 4% in Third Quarter; Declares Dividend

Zeitungsständer (Symbolbild). © AdrianHancu / iStock Editorial / Getty Images Plus / Getty Images

PR Newswire

ATLANTA, Nov. 3, 2016

ATLANTA, Nov. 3, 2016 /PRNewswire/ -- Capably integrating recent timberland acquisitions in South Carolina and Georgia, CatchMark Timber Trust, Inc. (NYSE: CTT) today announced increased revenues and timber sales volume for the quarter ended September 30, 2016. The company anticipates meeting its revenue and Adjusted EBITDA targets for the full year and declared a fourth quarter dividend.

CatchMark Timber Trust, Inc. (PRNewsFoto/CatchMark Timber Trust, Inc.)

Company highlights for the third quarter 2016 include:

Generated total revenues of $18.3 million for the three months ended September 30, 2016 compared to $17.6 million for the third quarter 2015, a 4% increase year over year.
Incurred a net loss of $2.9 million, or $0.07 per share.
Realized $7.2 million in Adjusted EBITDA for the quarter.
Generated gross timber sales revenue of $16.0 million, a 27% increase over third quarter 2015, on harvest volume of 553,832 tons, a 24% increase year over year.
Paid a dividend of $0.135 per share on September 16, 2016.

CatchMark today also declared a dividend of $0.135 per share to stockholders of record on November 20, 2016 payable on December 16, 2016.

Jerry Barag, CatchMark's President and CEO, said: "Over the course of the past year we have been carefully and successfully managing our harvest mix to take advantage of weather conditions and deal with market variables, while expeditiously integrating recent acquisitions. We have benefited from recent expansion into new mill markets with some of the highest pulpwood pricing in the South, but intermittent wet weather over the course of the year has presented temporary challenges which we successfully navigated throughout the quarter. We remain extremely well positioned to meet the objectives of our growth strategy, including providing recurring dividends and sustainable productivity over the long term."

CatchMark did not make any major timberland acquisitions or sales during the third quarter, focusing on successfully taking over operations from recent purchases in South Carolina and Georgia (the Carolinas Midlands III transaction). For the entire nine months ended September 30, 2016, the company acquired approximately 60,400 acres, adding 2.3 million tons of merchantable inventory, comprised of 68% pine plantations by acreage and 46% sawtimber by tons. During this period, CatchMark sold approximately 6,300 acres.

As of September 30, 2016, the company had $200.9 million available under its credit facilities to help fund future acquisitions. CatchMark had made no share repurchases during the third quarter under its $30 million share repurchase program, approved by its board of directors on August 7, 2015. As of the end of the quarter, the company had up to $21.2 million remaining for share repurchases under the program.

Willis J. Potts, Jr., CatchMark's Chairman of the Board, said: "Our advantageous capital position provides considerable flexibility to make ongoing capital decisions, buttressing our objectives for growth, augmenting our dividend, and increasing shareholder value."

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CatchMark Timber Trust

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Results for Three and Nine Months Ended September 30, 2016
CatchMark's revenues increased to $18.3 million for the three months ended September 30, 2016 from $17.6 million for the three months ended September 30, 2015. Gross timber sales revenue increased by approximately 27% as a result of a 24% increase in harvest volume and increases in pulpwood pricing. Net loss was $2.9 million for the three months ended September 30, 2016, as compared to $1.9 million for the three months ended September 30, 2015.

	Three Months Ended September 30, 2015		Changes attributable to:				Three Months Ended September 30, 2016
(in thousands)	Three Months Ended September 30, 2015		Price		Volume		Three Months Ended September 30, 2016
Timber sales ⁽¹⁾
Pulpwood	$	7,129	$	209	$	1,990	$	9,328
Sawtimber ⁽²⁾	5,504		(153)		1,309		6,660
	$	12,633	$	56	$	3,299	$	15,988

⁽¹⁾Timber sales are presented on a gross basis.
⁽²⁾Includes chip-n-saw and sawtimber.

Revenues increased to $61.5 million for the nine months ended September 30, 2016 from $52.0 million for the nine months ended September 30, 2015. Gross timber sales revenue increased 24% as a result of a 22% increase in harvest volume and increases in pulpwood pricing. Net loss was $6.1 million for the nine months ended September 30, 2016 as compared to $5.1 million for the nine months ended September 30, 2015.

	Nine Months Ended September 30, 2015		Changes attributable to:				Nine Months Ended September 30, 2016
(in thousands)	Nine Months Ended September 30, 2015		Price		Volume		Nine Months Ended September 30, 2016
Timber sales ⁽¹⁾
Pulpwood	$	20,873	$	943	$	3,893	$	25,709
Sawtimber ⁽²⁾	17,526		(864)		5,302		21,964
	$	38,399	$	79	$	9,195	$	47,673

⁽¹⁾Timber sales are presented on a gross basis.
⁽²⁾Includes chip-n-saw and sawtimber.

Adjusted EBITDA
The discussion below is intended to enhance the reader's understanding of our operating performance and our ability to satisfy lender requirements. Earnings from Continuing Operations before Interest, Taxes, Depletion, and Amortization ("EBITDA") is a non-GAAP measure of operating performance. EBITDA is defined by the SEC; however, we have excluded certain other expenses due to their non-cash nature, and we refer to this measure as "Adjusted EBITDA." As such, our Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies and should not be viewed as an alternative to net income as a measurement of our operating performance. Due to the significant amount of timber assets subject to depletion and the significant amount of financing subject to interest and amortization expense, management considers Adjusted EBITDA to be an important measure of our financial condition and performance. Our credit agreement contains a minimum debt service coverage ratio based, in part, on Adjusted EBITDA since this measure is representative of adjusted income available for interest payments.

For the three months ended September 30, 2016, Adjusted EBITDA was $7.2 million, a $1.6 million decrease from the three months ended September 30, 2015, primarily due to a $2.2 million decrease in net timberland sales.

For the nine months ended September 30, 2016, Adjusted EBITDA was $29.3 million, a $4.1 million increase from the nine months ended September 30, 2015, primarily due to a $5.5 million increase in net timber sales.

Our reconciliation of net loss to Adjusted EBITDA for the three months and nine months ended September 30, 2016 and 2015 follows:

Three Months Ended
September 30,

Nine Months Ended
September 30,

(in thousands)

2016

2015

2016

2015

Net loss

(2,897)

(1,944)

(6,129)

(5,091)

Add:

Depletion

7,072

6,710

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