KLAMATH FALLS, Ore., Feb. 9 /PRNewswire/ -- U.S. Timberlands Company, L.P.
(Nasdaq: TIMBZ) announced earnings for the fourth quarter and year ended
December 31, 1997.
Net income for fourth quarter 1997 before extraordinary item was $5.5
million on revenues of $36.3 million, compared to a loss of $3.0 million in
the prior year's fourth quarter on revenues of $12.1 million. Fourth quarter
1997 earnings included a $5.8 million non-cash charge for the write-off of
deferred financing costs in connection with the retirement of certain debt
upon completion of U.S. Timberlands initial public offering. Adjusted for
this extraordinary item U.S. Timberlands reported a net loss of $0.3 million
for fourth quarter 1997. Included in income before extraordinary item is a
$0.6 million non-cash charge taken in the fourth quarter 1997 in connection
with the mark to market adjustment related to a financial instrument in
accordance with FAS 80.
Fourth quarter 1997 EBITDDA was $28.7 million compared to $6.1 million for
fourth quarter 1996. EBITDDA is defined as operating income plus
depreciation, depletion, amortization, and cost of timber and property sales.
For the year 1997 U.S. Timberlands incurred a loss before extraordinary
items of $1.4 million on revenues of $77.3 million, compared to a pro forma
net loss of $26.3 million in the prior year on pro forma revenues of $29.6
million. Earnings for 1997 included $9.3 million in non-cash charges for the
write-off of deferred financing costs related to extinguishment of debt.
Adjusted for these extraordinary items, U.S. Timberlands reported a net loss
of $10.7 million for 1997. EBITDDA was $53.3 million for 1997 compared to pro
forma EBITDDA of $7.1 million for 1996.
The increase in revenues for the fourth quarter and the year 1997 compared
to the comparable periods in 1996 resulted primarily from the sale of non-
strategic timber and timberland holdings near Klamath Falls, Oregon and the
commencement of stumpage sales from the Ochoco timberlands, which were
purchased in July 1997. Additionally, during 1997 U.S. Timberlands increased
the volume of timber harvested from the Klamath Falls timberlands compared to
the prior year. The sales of non-strategic timber and timberlands generated
gains of $4.2 million in the fourth quarter 1997 and $6.5 million for the year
1997.
"We are pleased with our strong operating and cash flow performance in the
fourth quarter as measured by EBITDDA totaling $28.7 million," said Allen E.
Symington, President and Chief Financial Officer.
Log and stumpage sales were in line with Company expectations in a
regional environment of relatively strong domestic demand but weak export
demand. Since all U.S. Timberlands sales were to unaffiliated conversion
facilities in the domestic market, they were only indirectly affected by the
added supply to the domestic market from traditional exporters. Inland
producers, such as U.S. Timberlands, were not impacted as greatly as coastal
producers by the slowdown in export log markets.
"Our timberland base of 630,000 acres in Oregon remains well positioned to
supply logs and timber to the domestic conversion businesses in our region,"
said John M. Rudey, Chairman. "We are pleased that our initial financial
results were favorable and allowed us to end the year with more than $10.0
million in cash and no borrowings against our $100.0 million revolving credit
facility."
As described in the prospectus issued in connection with U.S. Timberlands
initial public offering in November 1997, U.S. Timberlands expects to make the
first distribution on its units on May 15, 1998. Such distribution to
Unitholders is expected to be $0.73, representing the sum of $0.50, the
Minimum Quarterly Distribution for the first quarter of 1998, plus $0.23, the
pro rata portion of the Minimum Quarterly Distribution for the period from
November 19, 1997 through December 31, 1997.
U.S. Timberlands owns approximately 630,000 fee acres of timberland and
cutting rights on approximately 3,000 acres of timberland containing total
merchantable timber volume estimated to be approximately 2.2 billion board
feet in Oregon east of the Cascade Range. U.S. Timberlands specializes in the
growing of trees and the sale of logs and standing timber. Logs harvested
from the timberlands are sold to unaffiliated domestic conversion facilities.
These logs are processed for sale as lumber, plywood and other wood products,
primarily for the use in new residential home construction, home remodeling
and repair and general industrial applications. U.S. Timberlands also owns
and operates its own seed orchard and produces approximately five million
conifer seedlings annually from its nursery, approximately half of which are
used for its own internal reforestation programs, with the balance sold to
other forest products companies.
Certain information discussed in this press release may constitute
forward-looking statements within the meaning of the federal securities law.
Although U.S. Timberlands believes that expectations reflected in such
forward-looking statements are based upon reasonable assumptions, it can give
no assurance that its expectations will be achieved. Forward-looking
information is subject to certain risks, trends and uncertainties that could
cause actual results to differ materially from those projected. Such risks,
trends and uncertainties include the highly cyclical nature of the forest
products industry, the possibility that timber supply could increase if
governmental environmental or endangered species policy changes and
limitations on U.S. Timberlands' ability to harvest its timber due to adverse
natural conditions or increased governmental restrictions. For a more
complete description of factors which could impact U.S. Timberlands and the
statements contained herein, reference should be made to U.S. Timberlands'
filings with the Securities and Exchange Commission.(financial tables to
follow)
U.S. TIMBERLANDS COMPANY, L.P.
COMBINED STATEMENT OF INCOME
(In thousands, except unit data)
(Unaudited)
Fourth Quarter
1997 1996
Revenues $36,288 $12,103
Operating expenses:
Cost of goods sold 19,777 7,858
Selling, general and
administrative 1,950 1,243
Total operating expenses 21,727 9,101
Operating income 14,561 3,002
Interest expense 7,503 5,389
Guarantee fees and
amortization of
deferred financing fees 1,239 996
Interest income 260 409
Other expense 622 48
Income (loss) before
extraordinary item 5,457 -3,022
Extraordinary item-loss on
extinguishment of debt 5,766 --
Net loss -$309 -$3,022
Net income (loss) per Unit
before extraordinary
item (A) $0.42 -$0.23
Net loss per Unit (A) -$0.02 -$0.23
Units outstanding (A) 12,859,607 12,859,607
EBITDDA (B) $28,661 $6,084
(A) Units outstanding used to compute per Unit earnings are based on the
pro forma number of units outstanding as of December 31, 1997, after deducting
the General Partners' allocation of net income.
(B) EBITDDA is defined as operating income plus depreciation, depletion,
amortization, and cost of timber and property sales.
U.S. TIMBERLANDS COMPANY, L.P.
COMBINED STATEMENT OF INCOME
(In thousands, except unit data)
(Unaudited)
Year Ended December 31,
Pro Forma
1997 1996
Revenues $77,345 $29,597
Operating expenses:
Cost of goods sold 43,827 23,780
Selling, general and
administrative 6,250 7,079
Total operating expenses 50,077 30,859
Operating income (loss) 27,268 -1,262
Interest expense 25,321 24,943
Guarantee fees and
amortization of
deferred financing fees 4,193 755
Interest income 1,452 409
Other expense (income) 574 -229
Loss before extraordinary items-1,368 -26,322
Extraordinary items-loss on
extinguishment of debt 9,337 --
Net loss -$10,705 -$26,322
Net loss per Unit before
extraordinary items (A) -$0.11 -$2.03
Net loss per Unit (A) -$0.82 -$2.03
Units outstanding (A) 12,859,607 12,859,607
EBITDDA (B) $53,317 $7,114
(A) Units outstanding used to compute per Unit earnings are based on the
pro forma number of units outstanding as of December 31, 1997, after deducting
the General Partners' allocation of net income.
(B) EBITDDA is defined as operating income plus depreciation, depletion,
amortization, and cost of timber and property sales.
SOURCE U.S. Timberland Company, L.P.
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CONTACT:
Allen E. Symington or John C. McDowell of
U.S. Timberlands Company, 541-884-2240; or Stefanie King of
Edelman Financial, 212-704-8291, for U.S. Timberlands
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