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$PCL 1Q15 10-Q: Board of Directors has authorized a common stock repurchase program that may be increased from time to time at its discretion. PCL repurchased 0.4MM shares of common stock at a total cost of $19MM or an average cost per share of $41.97. At March 31, 2015, $106MM is available for share repurchases under the current authorization.
On Dec. 28, 2015, $PCL amended its $700MM revolving line of credit agreement that matures on Jan. 15, 2019, increasing the borrowing capacity to $800MM. Subject to customary covenants, the line of credit allows for borrowings from time to time up to $800MM, including up to $60MM of standby letters of credit.
$PCL's 2015 CapEx, excluding timberland acquisitions, was $84MM and includes approx. $68MM for timberlands, $8MM for manufacturing facilities, $2MM for real estate development projects, and $6MM for investments in IT. The timberland expenses are mainly for reforestation and other expenditures associated with the planting and growing of trees.
$WY said as per terms of merger, each outstanding share of $PCL is converted into 1.60 shares of $WY. Totally, about 278.9MM shares of $WY will be issued to $PCL stockholders, representing 35% shares outstanding. $WY paid off outstanding amounts under $PCL's term loan agreement and outstanding amounts due under $PCL's revolving credit agreement.
$WY reported that post the merger with $PCL, the combined company will own 13MM plus acres of productive timberlands and will operate 38 wood products manufacturing facilities across US. Combined company will have a 13-member board, including 8 directors from the pre-closing $WY board and 5 directors from the pre-closing $PCL board.
$WY, which competes with $PCL and $LPX, said that Timberlands segment posted 4Q15 earnings of $134MM, up $8MM vs. 3Q15. In the West, fee harvest volumes rose seasonally and average log realizations rose due to the greater percentage of export sales. Wood Products segment earnings were $48MM before special items vs. $85MM in 3Q15.
Timberland owner and manager $PCL reported lower 4Q15 results as revenue fell due in part to weak harvest and lower prices. The company reported quarterly earnings of $34MM, or $0.19 cents per share, compared to $68MM, or $0.39 cents per share a year ago. Revenue fell 25% to $323MM.
For Southern Resources segment, $PCL expects sawlog harvest volumes to fall about 5% from 6.5MM tons it harvested in 2014. $PCL sees pulpwood harvest volumes in 2015 to fall modestly from 9.3MM in 2014. The expected fall are due to high mill inventories, and recent production downtime and quota restrictions on log deliveries at many of customers.
For Northern Resources segment, $PCL expects 2015 sawlog harvest volumes to decrease about 15% compared to the 2.3MM tons it harvested in 2014 due primarily to recent land sales and recent harvest schedule updates. $PCL expects pulpwood harvest volumes in 2015 to approx. 1.6MM tons it harvested in 2014.
On Sept. 15, $PCL agreed to contribute about 260,000 acres of southern timberlands in exchange for cash of about $420MM and 25% common ownership interest in Twin Creeks Timber, initially valued at about $140MM. The institutional investors agreed to initially contribute cash of about $420MM in exchange for 75% common ownership of Twin Creeks Timber.
For 4Q15, $PCL expects tax expenses to be $2MM and third-party interest expense is expected to be $24MM which is about $3MM lower than the third quarter. $PCL ended the quarter $738MM in liquidity and $PCL expect to draw on the revolver to pay off $439MM of higher rate senior notes that mature in mid-November.
$PCL's Real Estate segment sales for 3Q15 were $129MM & operating income was $84MM. This results included $PCL's previously disclosed sale of approx. 98,000 acres of timberlands in Florida to Hancock at an avg. price of $1,230 per acre. The results also included the sale of 3,700 acres of recreation lands & 1,060 acres of non-strategic timberlands.
$PCL said that North American lumber demand increased about 4% so far this year and $PCL's lumber supply in North America grew about 5%, primarily due to increased lumber production in Canada. The improvement in Canadian dollar allows them to produce more lumber & the production increase came principally from east of the Rockies and Alberta.
For 4Q15, $PCL expects earnings in the range of $0.13 and $0.18 per share resulting in FY earnings between $1.06 and $1.11 per share. Real Estate segment revenues expected to be between $35-45MM. Overall harvest levels for the year are expected to be between 18.5-19MM tons, which is lower than the initial harvest plans for the year.
During 3Q15, $PCL repurchased $50MM of common stock, approx. 1.3MM shares at an average price of $39.20 per share. and during the first nine months of the year, $PCL repurchased $100MM of common stock, nearly 2.5MM shares at an average price of $40.30 per share. As of Sept. 30, 2015, $PCL had $200MM remaining on its share repurchase authorization.
During 3Q15, $PCL's Northern Resources segment reported operating income of $6MM versus $13MM in 3Q14. Overall harvest volumes were affected mainly due to fire restrictions in the western states, impacting the segment's sawlog harvest by approx. 50,000 tons. Operating income in the Southern Resources segment was $33MM, down $2MM from a year ago.