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Deltic Posts Likely Last Profit as Separate Company

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Deltic Timber Corp. of El Dorado closed out its final fiscal year as a separate entity on Wednesday, reporting a small fourth-quarter profit and a a $6.5 million profit for all of 2017. The company’s acquisition by Potlatch Corp. of Spokane, Washington, is expected to be completed this month.

Deltic’s fourth-quarter earnings of $200,000, or 2 cents per share, were meager compared to the same period last year, when the natural resources company posted a $3.1 million profit, or 26 cents per share. The yearlong profit of 53 cents per share was down 29 percent from 2016 numbers.

Sales were strong heading into the merger with Potlatch, up more than 10 percent to $242 million. The combined company, PotlatchDeltic Corp., to be based in Spokane, will trade on the Nasdaq stock market under the ticker PCH. Deltic’s corporate offices in El Dorado will be the new company’s Southern operational headquarters, and the combined board will include eight directors from Potlatch and four from Deltic, under the terms of the acquisition.

Deltic’s adjusted fourth-quarter net income, which excludes merger-related costs, was $11.3 million, or 92 cents per share. The fourth-quarter results were buoyed by greater operating income from the woodlands and manufacturing segments as demand stayed strong for Deltic’s timber and wood products. But the company said increased corporate and administrative expenses related to the merger agreement offset many of those gains. The merger deal was reached in October.

The company’s real estate segment sold 78 residential lots in the fourth quarter, just eclipsing the 77 lots sold at the end of 2016. However, the average lot sale price of $98,000 was up, yielding a 19 percent increase year over year.

In announcing fourth-quarter earnings of $11.6 million two weeks ago, Potlatch Chairman and CEO Mike Covey predicted that the Deltic deal would close by the end of February. He was quoted by Wesley Brown of Talk Business & Politics as saying that votes by the shareholders of each company are scheduled Feb. 20. “We remain confident that the merger presents significant strategic and financial opportunities,” Covey said.

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