Rayonier Reports First Quarter 2024 Results

Rayonier Inc. reported first quarter net income attributable to Rayonier of $1.4 million, or $0.01 per share, on revenues of $168.1 million. This compares to net income attributable to Rayonier of $8.3 million, or $0.06 per share, on revenues of $179.1 million in the prior year quarter.

• First quarter net income attributable to Rayonier of $1.4 million ($0.01 per share) on revenues of $168.1 million
• First quarter pro forma net income of $7.0 million ($0.05 per share)
• First quarter operating income of $16.2 million and Adjusted EBITDA of $56.2 million
• First quarter cash provided by operations of $52.3 million and cash available for distribution (CAD) of $36.8 million

The first quarter results included $1.3 million of net costs associated with legal settlements and a $4.5 million pension settlement charge, net of tax. Excluding these items and adjusting for pro forma net income adjustments attributable to noncontrolling interests, first quarter pro forma net income
was $7.0 million, or $0.05 per share. This compares to pro forma net income of $1.1 million, or $0.01 per share, in the prior year period.

First quarter operating income was $16.2 million versus $10.6 million in the prior year period, which included $2.3 million of timber write-offs resulting from a casualty event. Excluding this item, prior year first quarter pro forma operating income was $12.9 million. First quarter Adjusted EBITDA was $56.2 million versus $54.7 million in the prior year period.

Cash provided by operating activities was $52.3 million versus $64.0 million in the prior year period. Cash available for distribution (CAD) was $36.8 million, which increased $6.4 million versus the prior year period
due to lower cash interest paid (net) ($4.7 million), higher Adjusted EBITDA ($1.5 million), and lower cash
taxes paid ($0.4 million), partially offset by higher capital expenditures ($0.1 million).

“Overall, we delivered modestly improved first quarter results relative to the prior year quarter, which were inline with our expectations at the start of the year,” said Mark McHugh, President and CEO. “We achieved total Adjusted EBITDA of $56.2 million, representing a 3% increase versus the prior year period, as stronger results from our Southern Timber and New Zealand Timber segments more than offset lower results in our Pacific Northwest Timber and Real Estate segments.”

“In our Southern Timber segment, Adjusted EBITDA increased 5% versus the prior year quarter, as a 6% increase in harvest volumes was partially offset by a 4% decrease in weighted-average net stumpage realizations. In our Pacific Northwest Timber segment, Adjusted EBITDA declined 34% versus the prior year quarter, driven by a 17% decrease in harvest volumes and an 11% decrease in weighted-average delivered log prices. In our New Zealand Timber segment, Adjusted EBITDA improved 88% versus the prior year quarter, as higher carbon credit sales and favorable foreign exchange impacts were partially offset by 4% lower export sawtimber prices.”

“In our Real Estate segment, Adjusted EBITDA was $2.0 million below the prior year quarter, as transaction activity was relatively limited to start the year, consistent with our prior guidance.”

Southern Timber

First quarter sales of $70.0 million decreased $1.9 million, or 3%, versus the prior year period. Harvest volumes increased 6% to 2.01 million tons versus 1.89 million tons in the prior year period, as we benefited from weather-related constraints on competing supply. Average pine sawtimber stumpage realizations decreased 3% to $30.62 per ton versus $31.57 per ton in the prior year period, primarily due to a less favorable geographic mix. Average pine pulpwood stumpage realizations decreased 2% to $16.89 per ton versus $17.32 per ton in the prior year period, which was also primarily driven by an unfavorable geographic mix. Overall, weighted-average net stumpage realizations (including hardwood) decreased 4% to $23.07 per ton versus $24.03 per ton in the prior year period. Non-timber sales of $9.1 million decreased 3% versus the prior year period, as lower pipeline easement revenues were partially offset by growth in our land-based solutions business. Operating income of $23.0 million increased $0.8 million versus the prior year period due to favorable costs ($1.7 million) and higher volumes ($1.5 million), partially offset by lower net stumpage realizations ($1.9 million) and lower non-timber income ($0.5 million).

First quarter Adjusted EBITDA of $44.8 million was 5%, or $2.0 million, above the prior year period.

Pacific Northwest Timber

First quarter sales of $25.2 million decreased $9.2 million, or 27%, versus the prior year period. Harvest volumes decreased 17% to 317,000 tons versus 384,000 tons in the prior year period, primarily due to the Large Disposition we completed in Oregon in late 2023. Average delivered prices for domestic sawtimber decreased 9% to $84.31 per ton versus $93.12 per ton in the prior year period due to a combination of weaker demand from domestic lumber mills, reduced export market tension, and an unfavorable species mix, as a lower proportion of Douglas-Fir sawtimber was harvested in the current year period. Average delivered pulpwood prices decreased 39% to $29.31 per ton versus $48.23 per ton in the prior year period, as supply constraints and strong end-market demand significantly benefited the prior year period. An operating loss of $4.4 million versus an operating loss of $3.5 million in the prior year period was driven by lower net stumpage realizations ($0.4 million), higher depletion expense ($0.3 million), and lower volumes ($0.2 million).

First quarter Adjusted EBITDA of $4.7 million was 34%, or $2.4 million, below the prior year period.

New Zealand Timber

First quarter sales of $45.7 million increased $1.6 million, or 4%, versus the prior year period. Sales volumes of 480,000 tons were relatively flat versus the prior year period. Average delivered prices for export sawtimber decreased 4% to $108.72 per ton versus $112.97 per ton in the prior year period, driven by weaker construction demand in China. Average delivered prices for domestic sawtimber declined 5% to $68.13 per ton versus $71.58 per ton in the prior year period. The decrease in domestic sawtimber prices was primarily driven by weaker domestic demand and decreased competition from export markets, coupled with the decline in the NZ$/US$ exchange rate (US$0.62 per NZ$1.00 versus US$0.63 per NZ$1.00). Excluding the impact of foreign exchange rates, domestic sawtimber prices decreased 3% versus the prior year period. First quarter nontimber / carbon credit sales totaled $3.5 million versus $0.3 million in the prior year period. Operating income of $7.4 million increased $8.1 million versus the prior year period due to favorable foreign exchange impacts ($3.4 million), higher carbon credit income ($3.3 million), the prior year write-off of timber basis due to a tropical cyclone casualty event ($2.3 million), lower costs ($0.5 million), and lower depletion rates ($0.3 million), partially offset by lower net stumpage realizations ($1.7 million).

First quarter Adjusted EBITDA of $11.4 million was 88%, or $5.4 million, above the prior year period.

Real Estate

First quarter sales of $15.6 million decreased $0.7 million versus the prior year period, while operating loss of $0.1 million decreased $1.0 million versus the prior year period. Sales and operating income decreased versus the prior year period due to fewer acres sold (1,933 acres sold versus 2,087 acres sold in the prior year period) and lower weighted-average prices ($5,774 per acre versus $6,200 per acre in the prior year period), partially offset by favorable deferred revenue adjustments. Improved Development sales of $1.8 million consisted of two transactions in the Heartwood development project south of Savannah, Georgia, including a 3.1-acre multi-tenant retail parcel for $1.0 million ($321,000 per acre) and 18 finished residential lots for $0.8 million (a base price before true-up of $46,000 per lot or $284,000 per acre). This compares to Improved Development sales of $4.8 million in the prior year period. Rural sales of $8.7 million consisted of 1,498 acres at an average price of $5,828 per acre. This compares to prior year period sales of $6.5 million, which consisted of 1,531 acres at an average price of $4,245 per acre. Timberland & Non-Strategic sales of $0.6 million consisted of a 430-acre transaction for $1,421 per acre. This compares to prior year period sales of $1.6 million, which consisted of a 528-acre transaction for $3,100 per acre.

First quarter Adjusted EBITDA of $4.6 million decreased $2.0 million versus the prior year period.

Trading

First quarter sales of $11.8 million decreased $0.8 million versus the prior year period, primarily due to lower prices. Sales volumes of 105,000 tons remained flat versus the prior year period. The Trading segment generated breakeven results versus operating income of $0.3 million in the prior year period.

Other Items

First quarter corporate and other operating expenses of $9.8 million increased $1.2 million versus the prior year period, primarily due to higher compensation and benefits expenses and professional services fees. Compensation and benefits expenses were elevated versus the prior year quarter primarily due to the acceleration of equity compensation expense for retirement-eligible employees.

First quarter interest expense of $9.7 million decreased $2.0 million versus the prior year period, primarily due to lower average outstanding debt.

First quarter net income tax benefit of $0.8 million versus income tax expense of $1.1 million in the prior year period was primarily due to a $1.2 million tax benefit associated with the pension termination and settlement.

For full results click here.

About Rayonier

Rayonier is a leading timberland real estate investment trust with assets located in some of the most productive softwood timber growing regions in the United States and New Zealand. As of December 31, 2023, Rayonier owned or leased under long-term agreements approximately 2.7 million acres of timberlands located in the U.S. South (1.85 million acres), U.S. Pacific Northwest (418,000 acres) and New Zealand (421,000 acres). More information is available at www.rayonier.com.

Contact:

Collin Mings – Vice President, Capital Markets & Strategic Planning – investorrelations@rayonier.com – (904) 357-9100

Source: Rayonier, Inc.