Deltic Timber Gets Boost From Rising Prices, New Acquisition

Improving sales prices for lumber and a gain from the acquisition of a joint venture helped Deltic Timber to a big second quarter net income boost.

The El Dorado-based timber and real estate firm posted second quarter profits of $11.2 million compared to $3.5 million in the previous year’s quarter.

Deltic realized $5.2 million of non-operating, after-tax gains from its previously announced acquisition of the other half of ownership of Del-Tin Fiber in February.  The deal closed in April.

The company’s manufacturing segment saw pretax operating income increase $4.5 million due to “a higher average sales price for lumber sold” and from the addition of the Del-Tin operations.

“All three of Deltic’s operating segments reported improved financial results when compared to the same quarter of 2012, led by the improvement in our manufacturing segment,” said President and CEO Ray Dillon. “For the quarter, this segment’s financial results improved $3 million before consideration of the additional $1.5 million positive impact that the inclusion of the results of Del-Tin Fiber had on the segment. The timing of our Del-Tin Fiber acquisition has proved to be very beneficial. The medium density fiberboard market strengthened during the second quarter, resulting in improved sales prices. As result of these factors, our commitment to a strategy of vertical integration continued to be beneficial to the financial performance of the Company for the quarter.”

Deltic’s real estate segment, which includes its Chenal Valley properties, posted a small profit during the quarter of roughly $200,000 compared to an approximately $300,000 loss one year ago.

The Woodlands segment reported operating income of $4.9 million in the second quarter of 2013 compared to $4.7 million in 2012’s second quarter.

Deltic Timber (NYSE: DEL) shares closed trading on Wednesday at $64.40. The company’s stock has traded between $57.29-$73.97 per share during the past year.