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Deltic Timber 2Q Earnings Down 36 Percent

2 min read

Deltic Timber Corp. of El Dorado on Wednesday reported second-quarter net income of $2.7 million, down 36 percent from same quarter last year, as capital improvements and maintenance affected operations in its manufacturing division.

The lumber manufacturer and real estate company (NYSE: DEL) reported earnings per share of 22 cents, down from 35 cents in the same quarter last year. Net sales totaled $55.4 million, down from $56.8 million in the same quarter last year.

“Deltic continues to make progress to sharpen our focus on relentless execution and increase shareholder value,” John D. Enlow, Deltic’s president and CEO, said in a news release.

Enlow, who joined Deltic earlier this year after longtime CEO Ray Dillon retired last year, said the company’s woodlands segment “continued to see favorable sawlog demand” and increased harvests, and that pricing across pulpwood and chip-n-saw grades remained stable.

Enlow added that the manufacturing segment saw the average sales price for lumber sold increase 5 percent on “continued favorable demand.” But maintenance and capital improvements also affected operating income. The company cited five weeks of reduced run rates at a large log line at its Ola sawmill, and the company’s medium density fiberboard plant continued to be dogged by worn press chains, which are scheduled to be replaced this month.

Enlow also said the company made “significant progress” evaluating assets, competitive position, market risks and opportunities. He said the company is “now assessing a comprehensive range of strategic alternatives.”

Shares of the company spiked in February after a regulatory filing revealed that Deltic had been “approached by multiple parties interested in merging with or acquiring” the company. Southeastern Asset Management Inc. of Memphis said potential suitors had approached it and Deltic about a deal, and that it believed that Deltic has hired a financial adviser.

In response, Deltic said it “maintains an open dialogue with all shareholders and values their input” and has “met and spoken with Southeastern on a number of occasions to discuss their ideas.”

On Thursday, Enlow said the company is honing a strategic plan.

“We remain committed to developing and communicating in a timely fashion a strategic direction that is laser focused on achieving strong operational performance, driving shareholder value and delivering best-in-class returns,” he said.

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