Deltic Timber Corp. (NYSE:DEL) filed Quarterly Report for the period ended 2010-09-30.
Deltic Timber Corp. has a market cap of $636.3 million; its shares were traded at around $51.96 with a P/E ratio of 53.5 and P/S ratio of 5.7. The dividend yield of Deltic Timber Corp. stocks is 0.6%.DEL is in the portfolios of John Keeley of Keeley Fund Management, Jean-Marie Eveillard of First Eagle Investment Management, LLC, Chuck Royce of Royce& Associates.
Highlight of Business Operations:Deltic recorded net income of $3.3 million for the third quarter of 2010, compared to income of $.2 million for the same period of 2009. The increase is primarily due to the sale of 19 acres of commercial real estate in Chenal Valley in the third quarter of 2010. This sale benefited the Real Estate segment which reported income of $4 million during the current period, an improvement of $4.8 million when compared to the $.8 million loss the segment reported in 2009s third quarter. The Woodlands segment reported income of $5 million during the third quarter of 2010, an increase from $4.6 million in the third quarter of 2009 primarily due to increased harvest volumes and oil and gas royalties. Deltics Mills segment reported an operating loss of $.3 million compared to operating income of $.1 million in the third quarter of 2009, due mainly to higher raw material log costs. The Corporate segments operating expenses were $.3 million higher during the current-year quarter than the same period a year ago due to increased general and administrative expenses. Deltic owns a 50 percent interest in Del-Tin Fiber, LLC (Del-Tin) and recorded equity in earnings of $1 million for the third quarter of 2010, an increase from $.6 million for the same period of 2009 due primarily to increased sales volume.
For the third quarter of 2010, the pine sawtimber harvest increased 22,218 tons, to 159,487 tons, when compared to the 2009 third quarter harvest level of 137,269 tons. This increase was due to dryer weather conditions in the current-year period, allowing the Company to accelerate the harvest of fee timber. The average per-ton sales price increased four percent, to $28 per ton, from the 2009 third quarter per-ton price of $27. The pine pulpwood harvest of 74,573 tons was a decrease of 5,341 tons from the harvest in the third quarter of 2009, while the average sales price received for the pine pulpwood sold decreased $2 per ton when compared to a year ago, to $8 per ton. The decreased harvest volume and per-ton sales price was due to reduced demand from area papermills for raw materials. The Company sold approximately 370 acres of recreational-use hardwood bottomland at an average sales price of $1,499 per acre during the third quarter of 2010 compared to sales of 649 acres at an average price of $1,682 per acre for the same period of 2009. In addition, the segment reported hunting lease income of $.5 million for the third quarters of both 2010 and 2009.
Total mineral revenues, consisting of mineral lease rentals and net oil and gas royalties for the third quarter of 2010 were $1.5 million, compared to $.9 million in the third quarter of 2009. The majority of this revenue currently comes from an area known as the Fayetteville Shale Play, an unconventional natural gas reservoir now being developed in the state of Arkansas. The Company has under lease or held by production approximately 31,200 net mineral acres in the Fayetteville Shale Play. During the third quarter of 2010, the Company received net royalty payments of $.8 million from the defined Fayetteville Shale Play, compared to $.4 million received in the third quarter of 2009. The increase was due to a larger number of wells in production when compared to a year ago. The total of all net oil and gas royalty income, inclusive of the Fayetteville Shale Play, was $1 million and $.4 million for the third quarter of 2010 and 2009, respectively. Total income from mineral lease rentals was $.5 million in the third quarter of
The Mills segment reported a $.3 million operating loss during the third quarter of 2010 versus operating income of $.1 million for the same period of 2009. The variance is due to increased raw material log cost along with a slightly lower average per-unit sales price, which were partially offset by an increased sales volume during the current year. The average sales price received for lumber sold of $259 per MBF in the third quarter of 2010 was a $2 decrease from the same period a year ago. Lumber sales were 69.2 million board feet in the current period of 2010, an increase of 5.1 million board feet from the third quarter of 2009, as the Company increased operating hours to match demand for lumber. Because of the historically volatile nature of the wood products market and current market conditions, Deltic will continue to evaluate market conditions and adjust operating hours as needed in order to match production with market demand. In addition, Deltic expects approximately one-half of the required logs for its sawmills to come from Company fee timberlands.
Operating income increased $4.7 million. The Woodlands segment operating income increased $.4 million, primarily due to higher harvest volumes and increased per-ton sales prices for pine sawtimber and hardwood sawtimber, and increased net revenues from oil and gas royalties, partially offset by a decreased margin from timberland sold. The Mills segments operating income decreased $.4 million due mainly to increased log cost and a lower average sales price per MBF of lumber sold. The Real Estate segment results improved $4.8 million due to the sale of 19 acres of commercial real estate at an average price of $334,000 per acre. Corporate expense increased by $.3 million due to higher general and administrative expenses.
For the third quarter of 2010, Deltics equity in Del-Tin was $1 million compared to $.6 million for the same period of 2009. The $.4 million increase was due to increased sales volume. Additional selected financial and statistical data for Del-Tin is shown in the following table.
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