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Deltic Timber Names New CEO, Fires CFO

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Deltic Timber Corp. of El Dorado on Monday named John D. Enlow, formerly of Weyerhaeuser, as its new chief executive and revealed that it had fired its chief financial officer for misappropriating “certain company assets for personal use.”

The publicly traded timber and real estate company (NYSE: DEL) also reported fourth-quarter and fiscal year results, which showed profit and revenue gains.

In a news release, the company said Enlow, 49, would take over as president and CEO on March 8. Enlow last worked as vice president of real estate and southern timberlands at Weyerhaeuser from 2014 to 2016. Before that, he worked for Rayonier Inc. of Jacksonville, Florida, for 16 years.

“We are pleased to welcome a proven leader of John’s caliber and experience to the Deltic team,” said Robert C. Nolan, chairman of Deltic’s board. “John’s broad industry expertise in forestry, real estate development, finance and operations will be invaluable as the company continues to capitalize on momentum in the housing and wood products markets.”

The company said Enlow will receive an annual base salary of $500,000 and a target annual incentive opportunity equal to 85 percent of his base salary. He will receive a sign-on bonus of $75,000 and a sign-on equity award with an aggregate value of $650,000.

Ray Dillon, Deltic’s CEO for 13 years, retired from the company in October, and its board of directors had named D. Mark Leland as an interim replacement.

CFO Fired

Separately, the company said it had fired CFO Kenneth D. Mann and appointed Byrom L. Walker as his temporary replacement. Walker, 55, has been controller since May 2007; he’s been with Deltic for 11 years.

“The termination of Mr. Mann was completed after the board became aware that he misappropriated certain company assets for personal use,” the company said in its earnings release. “This action is not related to the company’s operating or financial performance and is not expected to have a material impact on Deltic’s previously issued financial statements.”

Deltic provided few other details about Mann’s dismissal. In a filing with the U.S. Securities and Exchange Commission, Deltic said Mann told the company’s general counsel on Feb. 20 that Mann had “misappropriated certain company assets for personal use.” Mann was placed on administrative leave and was fired on Friday, according to the filing.

The board revoked Mann’s unvested equity awards, his 2017 cash incentive bonus and equity awards that vested on Feb. 20. The board’s audit committee has retained Davis Polk & Wardwell LLP of New York to help review “matters involving Mr. Mann.” The company said that, after the review, it “intends to seek full reimbursement from Mr. Mann for all misappropriated amounts.”

Last week, shares of Deltic hit a new 52-week high after a filing said the company had been “approached by multiple parties interested in merging with or acquiring” the company.

In a Schedule 13D filing with the SEC, Southeastern Asset Management Inc. of Memphis, which owns a 15 percent stake in Deltic, said potential suitors had approached it and Deltic about a deal, and that it believes Deltic has hired a financial adviser.

In the filing, Southeastern listed the benefits it thinks a combination of Deltic and the publicly traded timber real estate investment trust (REIT) would yield for shareholders. Among them: opportunities for “superior, experienced corporate leadership that would obviate the need to hire a new” chief executive officer.

4Q, Full-Year Results

Also on Monday, Deltic released fourth-quarter and full-year results.

For the quarter, the company reported net income of $3.1 million or 26 cents per share, up from a loss of $128,000 or 1 cent per share in the same quarter last year. Revenue was $58.5 million, up 18 percent from $49.6 million in the same quarter last year.

The company attributed the improved quarterly results to increased operating income in its manufacturing and real estate segments. Those improvements included higher average sales prices for both lumber and medium density fiberboard; increased sales volume of MDF; improved operating performance at its MDF plant; the sale of two commercial real estate sites; and the sale of 77 residential lots.

“With Deltic’s well positioned asset base and exceptional team, we achieved another quarter of solid operating and financial performance,” Leland said in a news release.

For the year, Deltic reported net income of $9.2 million or 76 cents per share, up from $2.6 million or 21 cents per share in the previous year. Revenue was $219.4 million, up 13 percent from $193.8 million in the previous year.

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