Pope Resources (NASDAQ:POPE) reported a net loss attributable to unitholders of $1.1 million, or $0.25 per diluted ownership unit, on revenue of $8.1 million for the second quarter ended June 30, 2010. Results for the quarter include a $1.2 million loss on early debt extinguishment. This compares to a net loss attributable to unitholders of $693,000, or $0.16 per diluted ownership unit, on revenue of $3.7 million for the comparable period in 2009.
Net loss for the six months ended June 30, 2010 totaled $675,000, or $0.15 per diluted ownership unit, on revenue of $14.1 million. As was the case with the second quarter, results for the first half of 2010 include a $1.2 million loss on early debt extinguishment. Net loss for the corresponding period in 2009 totaled $816,000, or $0.18 per diluted ownership unit, on revenue of $8.6 million.
Cash provided by operations for the quarter ended June 30, 2010 was $277,000, compared to cash used by operations of $1.5 million for the second quarter of 2009. For the six months ended June 30, 2010, cash provided by operations was $1.1 million, compared to cash used by operations of $1.1 million for year-to-date 2009 results. Cash provided by operations in 2010 for both the second quarter and first half of the year included the $1.2 million payment for the aforementioned early debt retirement that was part of a new financing.
“We were very encouraged by the improvement in our operating results for both the second quarter and year-to-date, notwithstanding that the decision to refinance one of our timber mortgages resulted in a net loss for the current quarter and year to date,” said David L. Nunes, President and CEO. “We enjoyed better-than-expected log markets during the first half of the year and capitalized on this by moving harvest volume forward in the year. While the housing market remains very weak, we are fortunate to have been able to restructure our debt and enjoy considerable operational flexibility as evidenced by our significant harvest deferrals over the past few years. This flexibility puts us in a position to be able to take advantage of future short-term log price swings by opportunistically moving log harvest volume into or out of the market, as circumstances dictate. Having said that, three factors combined to overwhelm what was otherwise a positive operating story into disappointing year-to-date results: a $1.2 million payment for the aforementioned early debt retirement, a $713,000 accrual related to a new long-term incentive compensation plan, and a $563,000 accrual for additional environmental remediation costs at Port Gamble, Washington.”