|DELTIC TIMBER CORPORATION|
|CONSOLIDATED FINANCIAL DATA SUMMARY|
|Earnings per common share|
|Average shares outstanding||12,628,282||12,533,013|
Commenting on results, Mr. Dillon stated, “I am pleased to report that Deltic’s solid assets generated profitable results despite the continued negative impact on our businesses caused by the weak housing market. Having our Mills segment produce increased operating income in this lumber market was quite an accomplishment, and reinforces our vertical-integration strategy. In addition, dry weather conditions in our operating area resulted in excellent logging conditions in our timberlands, on which we capitalized by increasing our harvest levels when compared to the first quarter of 2011. We are also beginning to see a slight increase in residential lot sales activity in our Chenal Valley development, as a result of low interest rates combined with improved credit availability from area banks. At Del-Tin Fiber, we are focused on further improvement in productivity and efficiency during this period of a moderately soft MDF market, in addition to evolving the product mix of the plant to utilize different resin glue to reduce manufacturing cost there.”Operating income for Deltic’s Woodlands segment was $4.8 million in the first quarter of 2012, an increase of $.1 million when compared to $4.7 million reported a year ago. The Company harvested 173,007 tons of pine sawtimber during the current period of 2012, an 18 percent increase from the 146,089 tons harvested in the first quarter of 2011. The average per-ton price for pine sawtimber was $22 for the first quarter of 2012, a 15 percent decrease from $26 per ton for 2011’s first quarter. The decrease in the sales price for pine sawtimber was due to lower demand from the sawmills in Deltic’s operating area, which was caused by a reduced operating level. Pine pulpwood harvested in 2012’s first quarter period totaled 134,934 tons at an average sales price of $9 per ton, which compares to 125,467 tons harvested at $8 per ton for the same period of 2011. Deltic was able to increase the harvest volume of both pine sawtimber and pulpwood because of the favorable logging conditions during the current-year period. Oil and gas lease rentals and net royalty income totaled $1.4 million during the current period of 2012 compared to $1.6 million during 2011’s same quarter. The reduction was due to the impact of decade-low prices for natural gas, which was partially offset by an increase in the number of producing wells. During the current quarter, the Company sold 270 acres of timberland, primarily non-strategic recreational-use hardwood bottomland, at an average sales price of $1,400 per acre versus 2011’s first quarter sales of 307 acres at an average sales price of $1,400 per acre.
Deltic’s Mills segment reported operating income of $1.6 million in the first quarter of 2012, which compares to $.7 million for the same period of 2011. The improvement was due to a higher per-unit sales price; improved hourly productivity rates; increased sales volume; and a lower cost of logs used in manufacturing lumber, as evidenced by the current-period’s decreased average sales price for pine sawtimber. The current-quarter’s average lumber sales price of $271 per thousand board feet was an increase of $5 per thousand board feet from the first quarter of 2011. In the first quarter of 2012, Deltic sold 65 million board feet of lumber, an increase of 2.5 million board feet when compared to 2011’s first quarter sales of 62.5 million board feet, as the Company increased lumber production to match market demand.The Company’s Real Estate segment reported an operating loss of $.8 million for the first quarters of both 2012 and 2011. Residential lot sales totaled seven lots in 2012’s first quarter compared to three lots sold in the same period of 2011. The current quarter’s average per-lot sales price was $67,100, an $18,200 per lot decrease when compared to the first quarter of 2011’s average per-lot sales price of $85,300, due to the mix of lots sold. There were no sales of commercial real estate acreage in the first quarter of either year. Corporate operating expense was $4.3 million in the first quarter of 2012, which compares to $4 million for the corresponding period of 2011. The slight increase was due to higher general and administrative expenses, primarily resulting from increased pension and post-retirement benefit obligations caused by lower interest rates. Deltic’s equity in the earnings of Del-Tin Fiber was $.1 million for the current year quarter versus $.5 million for the same period in 2011, as the joint venture experienced increased manufacturing cost, including high resin expense. Capital expenditures were $4 million for the first quarters of both 2012 and 2011.
Regarding the outlook for the second quarter and year of 2012, Mr. Dillon stated, “At this time we anticipate the pine sawtimber harvest to be 150,000 to 170,000 tons and 575,000 to 600,000 tons, respectively. Finished lumber production sales volume are anticipated to be at 50 to 70 million board feet for the second quarter and 250 to 275 million board feet for the year, depending upon market conditions. Residential lot sales are estimated at five to ten lots and 25 to 35 lots for the second quarter and year of 2012, respectively. Even though commercial acreage in Chenal Valley receives interest, due to the volatile nature of commercial real estate transactions and the significant number of factors related to any sale, it is difficult to anticipate future closings.”Statements included herein that are not historical in nature are intended to be, and are hereby identified as, “forward-looking statements” within the meaning of the Federal Securities Laws. Such statements reflect the Company’s current expectations and involve certain risks and uncertainties. Actual results could differ materially from those included in such forward-looking statements. Factors that could cause such differences include, but are not limited to, the cyclical nature of the industry, changes in interest rates, credit availability, general economic conditions, adverse weather, cost and availability of materials used to manufacture the Company’s products, and the other risk factors described from time to time in the reports and disclosure documents filed by the Company with the Securities and Exchange Commission. Deltic will hold a conference call on Tuesday, April 24, 2012, at 10:00 a.m. Central Time to discuss the first quarter of 2012 earnings. Interested parties may participate in the call by dialing 1-888-396-2369 and referencing participant passcode identification number 14030564. The call will also be broadcast live over the Internet and can be accessed through the Investor Relations section of the Deltic website, at www.deltic.com . Online replays of the call will be available through the Deltic website, and a recording of the call will be available until Tuesday, May 1, 2012, by dialing 1-888-286-8010 and referencing replay passcode identification number 39241642.