PotlatchDeltic (PCH) 27 Jul 212021 Q2 Earnings call transcript

Good morning. My name is May and I will be your conference operator today. At this time, I would like to welcome everyone to the PotlatchDeltic Second Quarter 2021 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Instructions]. [Operator you. Thank like now the over call I to Mr. to would turn Financial President opening Vice Richards, Officer and Jerry Chief for remarks. Sir, you may proceed.

All morning and XXXX May, and PotlatchDeltic's you, quarter call. earnings right. second conference welcome Thank to good

filings me the on Executive This review the and Chief the presentation the President statements. in risks statements our contain Officer. is Cremers, slides, call Eric Joining PotlatchDeltic's with on our concerning and warning forward-looking associated will the SEC Please call a press in that www.potlatchdeltic.com. note of please the Also, will statements. forward-looking second results on some at these can cover measures website call for quarter found I and I'll reconciliation be and Eric with non-GAAP turn then, our comments, our over outlook. our to now release,

historic their run record continued prices in quarter second driving Lumber Jerry. performance you, financial quarter, of the another for company. the Thank

consolidated is was which Our financial our fourth million QX, performance. $XXX quarter record EBITDA in consecutive

$XXX quarter. EBITDA this EBITDA Products of in segment Wood full-year XXXX, second for exceeded generated amount annual which was the record Our an context, itself. million Wood provide To Products

Arkansas announced, Ola, fire we a June on at had our previously XXth. As sawmill

Insurance mill, Fortunately, cover restoring the injured a was center. limited nobody deductible. the just large along the log breakdown machine operations above was cost the at with lost of million damage $X primary to and will profits

team Our replacement equipment is actively working and on options. demolition

purchase in replacement as premature potentially plans, yet that working is the of restarting on to as possible, log QX year. are as finalized line. we have Although, schedule we not soon our a not commit yet have the large of finalized to line we It late next

the prior XXX reminder, Ola a had As of annual capacity fire. million feet board to an

profitability business exceptionally continues expect we year. from business to well, and plywood Our this this perform record

strong. ticket discussed have very trailers, RVs, truck these big furniture. boats, is As industrial in items calls, Demand plywood remains for on and our used grade we prior

low Idaho their volumes Our EBITDA the being second Timberland despite in seasonal of point spring breakup. record million due quarter, harvest segment earned to at $XX

Our our highlights ton $XXX price industry. are in created being by sawlog average indexed contracts, the of which Idaho sawlog in per sales the value unique

Our in the the harvest half the meeting of sawlog our high Idaho harvest attractive prices, year, team exceeding of the risk of reducing fire plan and a annual job did plan not great first because realizing danger.

team Southern extreme wet with winter managing good did during second a first Our quarter, the quarter. job in weather dealing through weather the after extraordinarily

We Ola to our annual will due Southern expect that primarily approximately our harvest sawmill XXX,XXX the below be plan, tons fire. harvest

Estate the we over as Real lots the by XXX quarters. as digested and acreage. thus purchased interest the third continue evidenced draws in Our see Chenal to quarter Demand remains commercial and Valley segments expected quarter, declined EBITDA strong good rural as second lot Chenal in homebuilders in in prior far two in

two lumber $X,XXX of the believe on for prices decline past reached by not bottom. Peak was X,XXX Random to the per uncommon as Turning SPF sustainable. that certainly Lengths lumber upside well prices the last months feet price two-by-fours is not prices. over Western and Psychology occurred in as lumber in steep that over overshoot board to better downside. May for weeks the has has the the a We it role played and couple most nine reported

futures lower settled July triggered led that appears $XXX performance the per price board feet. contract prices key demand the For center, factor and home a be at down to lumber X,XXX cash Lumber decline.

nearly reported first in better $XX the feet Lengths price limited during weeks. week, correction. risk wanted market the two-by-fours current is pressure increase Nobody Yellow species downside Lengths nine lumber was late and falling two to their lumber which sawmill that to While that comfort shifted Western the Pine week, Random eased week. second board knife that and last reports We X,XXX buyers tone at price of in of catch Random lumber price the provided also per that increased curtailments lumber believe half of Southern reported the last in the downward of other a levels.

construction business lumber market of multi-year the cusp drive that robust our a at liquidity result, that board inventories. new of a we lumber and slides, range, replenish FEA As last $XXX the set that recent are remain suggests the Housing-related in could a fundamentals various agree. boom which moved futures to bounce prices residential contracts up The per the buyers stated is nicely sharply and of end frankly, in X,XXX lean week. foot lumber as returns on

On the demand adjusted average units June side, million than on higher well basis; permits million of as year, XX% XX-year X.XX are X.X units. of starts new of prior seasonally with residential construction the units remains million the as strong X.X a

be the the common high-levels segment just robust", work Long-term low home prime remain to years XX mortgage lumber units. to and into grow now National a demand entering remote of We home U.S. due seen. work this U.S. X age lumber Mac has millennials continue to that on of demand rates, to by week anything the likely Realtors not declined last which strong that front Association and fact remodel their record estimates equity million the first that expect of million that after the destroyed. great in as construction new crisis, their of been shifting news. is we've residential page hide including underbuilding And segment demand that Day, had fundamentals On role. Stock, to people million to buying that Return D.R. Housing remain units. leisure continues also ever point, prices likely positive, earnings activities to massive expect Freddie of repair X.X and discretionary model X call homes reacted spending, has low Industry inventories single-family a very remodel will turned practice. estimates economists since repair historically and shortage underbuilt financial home-for-sale, average, years. demand the and the Lumber remains and deferred, in to market Horton stated unlike the U.S. is "extremely Memorial played in on

On and market, the govern the attractive and near-term. the the we higher continue prices that lumber the shortage will lumber may across relatively bottlenecks new business settle fundamentals expect a our west labor at equipment favorable capacity. levels. constraints supplier Wildfires pace remained to the side, that in of supply tight costs, create of and truck also drivers Overall, drive

financial lumber and XXXX remainder the is Our perfectly to performance strategy beyond. to continue for drive of strong to leverage situated

remained Turning to priority. capital a allocation. Returning cash shareholders top to

will quarter. fourth special dividend in meaningful the that expect to pay continue we a We

In currently addition, per annual share a typically in dividend, evaluates our regular Board our which December. is $X.XX

committed operating my To climate of is platform, or to and governance. up a sustainable on management, we in of turn provide to our our two current I Our responsibility wrap responsible environmental PotlatchDeltic social favorable strong comments, prudent forest related over storage now well-positioned PotlatchDeltic very liquidity continue leader capital and our are is a and and to analysis. and increasing Jerry and outlook. us strong strategy advantage positions shareholder value. quarter of May expanded published our $XXX Environmental and Timberlands areas. a investments include existing sheet greenhouse the accretive acquisitions. ScopeX information our website. or Report acquiring Governance Highlights near in We as about Social in report is of additional consider disclosures and million combination our second sequestration, our second will gases, and in we available discuss balance mills and to We're mills allocation it the results carbon liquidity solid fundamentals industry and to take interested

the fourth offset prices seasonally increased Information slides, effect second generated $XX on The in from quarter in segment harvest EBITDA in the Thank Slides in X. row our increased lower you, $XXX adjusted through a the EBITDA first record of Eric. to in million of $XXX quarter second our for The our is and million X higher to the quarter. second This adjusted million we Page in segment's quarterly XX the last months. have displayed Starting over from of quarter. volumes first lumber is the than the million EBITDA $XX Timberland X quarter. $XXX with EBITDA more million

have the was first in and weather. in quarter XXX,XXX quarter price in the the first constrained of per to increases. in healthy is tons Spring quarter. north tons XXX,XXX to the that lower activity due we wet increased quarter tons ton experienced and to volume or to we quarter. seasonally XXX,XXX sawlog in the first harvested in second typical good markets breakup. This in Our XXX,XXX strong prices team the both Lumber logging harvested a the than ton second In leveraged Logging quarter compared South, per XX%. conditions sawlogs harvest the Northern $XXX sawlogs the Cedar from tons second by record indexed $XXX

were Southern flat Our prices sawlog sequentially.

first Slides on to $XXX and segment. Turning another Products increased quarterly to in from X, the is in EBITDA $XXX the for X quarter adjusted This the quarter. record Wood second EBITDA million million

price $X,XXX To board lumber to quarter. Our helpful to per the our provide first by realizations in prices X,XXX per lumber X,XXX it's month. in increased from the quarter board XX% feet average look second $XXX feet context, at

price of $X,XXX to second finally We realizations shipped in lumber per lumber to million the $X,XXX board in $X,XXX board in feet from increased feet X,XXX and in Our XXX May, average June. quarter. April

Memorial managing Ola occurred our below earlier, reducing the in our a a fire was Arkansas challenges job center expectations, home our discussed after has operating not XXth, and Eric limit approximately X% production. been Day as and did shortfall. Also, truck June this the While team transportation rail our on sawmill to since demand drop good

a Valley digesting sequential Estate quarter, commercial which two lot quarter. as But completed quarter XX. million Real $XX expected was were in the on fewer XX, first in second sale prior in builders to adjusted the reflects Slides The was the Chenal Shifting in in completed Moving estate to are to were items, million that the first million decline the the summarized the financial second purchases EBITDA and XX real $XX lot quarters. compared $X segments sales and latter Slide quarter. on robust

million amount $XXX availability $XXX Our total well our any not in million. liquidity during includes shares second repurchase revolver. to as undrawn increased as did cash, quarter. of We the This

quarter. place, from Note and commitment to in attractive the expenditures, development Timberland repurchase As XXbX-X a that included estate in our I flow the which million in cash ability and real cash operations acquisitions. just reflects $XX second were our are shares plan our mentioned excludes reminder, expenditures Capital statement amount prices. includes in a which it have at we

presented are in excluding We expect covered also some replace expect million Slide equipment sawmill The largely exclude by to XXXX, Planned provide on acquisitions. capital costs we expenditures Ola be be that damage high-level our will XXXX will now in comments. insurance. total fire details approximately outlook capital the XX. expenditures $XX will that I'll

harvest to expect million third to We X.X Timberland X.X and in segments tons for our the the million in quarter tons X.X million approximately full-year.

planned mentioned, quarter. higher Ola, will quarter. redirect to Eric the would consumed to be be it As North may by in harvest constrain Fire Harvest sawmill. seasonally Southern volumes the uneconomic danger than is planned this is because Idaho, which have in year, lower our very been logging logs our the are that third Arkansas in high in

sawlog South higher the be in be are prices sawlog Northern quarter prices. seasonally Harvest the of third XXXX quarter expect first that We will third and to volumes in they lower in quarter. sawlog expected approximate in to prices

mill. file depending on lumber weeks two the currently order is prompt to Our

booked, is average orders Our the including shipped, XX% our price yet lumber than quarter, not price. quarter far average lumber but thus approximately second in lower third

million $XX As approximately plan million in $XX on board XXX change annual a to the per in equals us to for third basis. X,XXX board EBITDA an lumber million We price at feet XXX foot consulted of of lumber ship reminder, quarter.

lots from XXX treat expect sell with and for Arkansas adjusted the we we approximately approximately Chenal segment lots expect to EBITDA. approximately to in special insurance amounts exclude consolidated the the a will Real associated proceeds demand Estate, we to acres remains sawmill third as and Shifting and land Ola, will and year. We the item X,XXX the Lot rural XX of sell strong Valley quarter.

Additional on real are the estate slide. details provided

sequentially will continue concludes will now expect tax prices That on above averages. the up with seasonally XX% industry we third third decline model our consolidated effect lumber lower remarks. fundamentals to anticipate would open the approximately rate long-term integrated the and well-positioned value to prepared bullish over the lumber like We're XX% to and harvest We're our the total higher in lines. we be the to shareholder of remain our call will prices May, as very quarter operating growing Q&A. adjusted I long-term. for full-year. exceed quarter, expect Overall, We in EBITDA

Instructions]. [Operator

BMO of Your with Markets. first question comes from the Mamtora Capital line Ketan

Your open. line is

a very congrats And quarter, Jerry. Eric and you. strong second on Thank

start the level capital about the special sense with maybe we way on to don't in what special I it you recognizing right to about allocation, in that question cash want the board us the of there in of some First on is Can year? the and color of give front of sort to of jump you think about around will flow Any leverage? dividends? it framework you thinking be terms Do Should for be of think helpful. terms dividends.

Ketan, lot probably sure really lot of shareholders. that's including this a a That's of I'm start. is topical Yes. Jerry. place a good to folks, for

the so we've this we of will lot fortunately, been lumber to year shared has we we what that strong business. site within we our I dividend, this a drives that quarter paid and again, really coming leverage it through but have REIT, can it much which special off, the And lot to that out fair And described in generated currently jeopardize form also retain that set prices as multiples value significant of distribute we the First maintain which amount, arrangement have status, retain a Idaho, we're be a our going well in earnings REIT have our is our really And goes to the back as amount will where as to lumber value have do last high benefit share. And will with a a certainly to a log through to that the we in value have the a dividend. $X.XX shareholders never lumber be that of the usually the to the as is our are only and stage be expect class presentations year. control of this so problem regular that prices creating a mean, destinies cash. indexed here.

So nobody breaching danger of should in be worried we're that requirements. those

a of of with Board. moving requirement the lot are for process And the complexities amount, through a a -- of lot being are there's the is parts. of what variables, looking lumber and the terms lot REIT of discussing given There’s the driven. key year? complexities, of in prices In of there’s one With a what lot rest our we that's

give much guidance quarter. it at unfortunately or will be other So or than this be point, color I will can't the It more significant. sideboards in fourth

There's And Ketan, two you Wood lumber I'll lot our in we $XXX the right had up Products change in million higher just earnings just the for particularly add And we for one as in stream, comment imagine, to to the forecast what of Jerry going Products, or earnings roughly given we're year prices. just where a month than Wood a that a said. now volatility might think was year ago, now. end

the enormous. that earnings more and of dividend that across amount is therefore that spread shares volatility think XX stream less, or about $XXX million So million in

until going dividend the the is. we of decide what to appropriate get to the wait special So year end we're to

context that's the I No, and fair color absolutely the appreciate there. and

Timberland the and pipeline of the to both capital if you sawmills, allocation do sort both the at side M&A, is curious how pipeline switching looking most Timberland kind the it's talk side around looks -- like just moment. what can Now, look of now? you at see the about on and I of your of sort you know where I'm opportunities right other

to hit And recent they in their just case, would that been And transact, of deals and changed for on the tell reasons. working that looking is the you think changed we for. looking at deals though bid. these deal. ones; But were do decided that we three high deals their Yes. one and what the minds down number to were high they we've specifics we're of not bid, from what don't number There -- away minds currently on. I we're and the I interesting I actually the we like and these is is into and yet competitive we walked get competing a even currently for seller were the

is timber interesting. $X,XXX seeing People So I M&A lumber, are They're getting mark and think picking they're seeing Timberland South excited. It's $X,XXX, getting data. up.

IRR. and bid wide X,XXX may was And buyers the XX% quarter acres. But we an ask did kick so this the spread Mississippi between And sellers. last be a in continue still was to fact, It on deals. we tires won

So shareholder chase it one closed of just overpay. in us. that shareholder value, that created going only We're going to not that value deals lot like QX. But deals for a do create and we we're to

it. queue. of the back it over and Good turn I'll year. half luck the the That's helpful. in really jump Got back in

Thanks.

Your John question Bank of next Babcock America. of of line from comes the

line Your open. is

and you my you lumber. know bit mentioned, questions. guess you what Hey talk terms now, of the just taking thank I can in a in market for about I right seeing starting you're little out, about,

around what sense say any data Just at the right picked you're change of for any weeks where demand trend builders, that kind been it kind to last, particularly just in like least then get centers, there, commentary there's would curious been was ago, in how useful? demand that's broadly has seen home relative sounds that And two that is just up. some a be if or the weakness of to want you now, also from can a at provide probably of

Yes.

ground might've time the or could people got it have pickup was centers. would buyer essentially COVID that been of a looks strike in month a the up. that two to a started mirror. demand spending happened dried due now and question, two probably a and demand virtually been home activities buyer leisure out a year a movies But and and center It like rear And just from It home halt, was travel up bucks was DIY to restaurants no the in view it so on that to whatnot. some demand prices month just just see demand where the or People or us we summertime. And ago, have It's yes, go there to to strike. not increasing. was and when on go there So ago. to so, takeaway. real is But ago, $X,XXX

nobody wanted lot is our with the that So get on sheet. balance $X,XXX view lumber to of a caught

they now of prices let drifted They And stopped back the buying. now demand because seeing have off so risk centers. lower. And for home come we're is the

we to is So return going is we're people up feel again, activity the like into back. demand start And R&R getting you coming that summer to know, see What on we're fall, I as the I now for housing. don't from pick vacation just that It as and is, this housing you been the optimistic incredible. start side tell I've regarding know whatnot. ever outlook

have what look public If out the Pulte saying on favorable releases, Lennar, the there. you they're at whether of this terms with could homebuilders, about Horton, and morning, D.R. things recent on go just the company earnings very I about demand been in homebuilders exceptional talking

next just at to demand. of those what of to lot X.X struggling five amount marching of to years. shortages pundits new year chain units four example, the look But there higher is over and or produce supply because housing starts, going going an that they're Now are issues. you FEA, we're they're up if million keep And saying, to a like units, thinks unbelievable the housing for per

side. on favorable housing demand really outlook just start So the

some you were home that you you're color directly on side might some lower on know much that, priced Can really they them it I work to not up left it be following I that the inventory. might in Okay. any pertains for home on And actually talk then that at centers? trying particularly that front. how just we this Also of on the how to should extent mean, prices to about business. when the virtual think have essentially that to about higher through centers, like sounds as come

get it ultimately that predict, come that so might no into but be to terms demand. a play difficult because sense overall to of that just for And in trying may longer

market and on home home is but like Yes, inventories hard And it's at really got still bucks us inventory to Their what went there because now. they're center inventories. they said, coming to these to to with is, buyer's strike have down for be exactly know or $XXX starting I'd the that replenish back where and step right demand and is tell lean prices the you really centers. so I into takeaway

don't what into we --we have anecdotal. don't just have of home I So don't direct the -- that's centers know, doing insight kind

just pricing last on rolls get we about question, volatility and and that's quarter that over fair. it over, results want next how I just I before the And sense a through Yes, or turn how just then to given the pricing. two should sawlog think quick particularly lumber lumber in

you color if some would useful. provided just about the past the could kind lag of be the of So also in and talk that you

is This John. one, that take I'll Jerry. Yes.

So it's in group, a lag lag for resets. lumber of terms reminder is price in the four-week the a terms about of

talked average. So in second script far prices when us the the lumber were in compared XX% I so to quarter down quarter for third the about

sawlog again four-week lag. pricing, lag that you about about indexed You think a have that's when do to

that's thing of the other sawlog. mix X and sells typically in the four Cedar, The three sometimes times mix is value which

last we have same Northern I'll in the to guided quarter that think continue I sawlog relatively strong prepared Hey, of is be And probably going actually give certainly and kind QX you third to thing So of XXXX. level. certainly the pricing then same at not the is approximately Cedar comments, had off as we the come

dial-in what are. our expectations you help at were should all So that that really least

of the RBC question Quinn of next from Capital. comes Paul Your line

is open. line Your

Ola. Maybe at I'll start with the fire

could $X give deductible, a the the it? some -- like, that is for was know Maybe you how that is you a context I million us fire bad Just, $XX claim. million got insurance

Yes.

machine fire, thankfully the the nobody Thankfully mean that to in It was mill got said center our So didn't really just as whole was remarks, damaged. the opening one ground. hurt. burn I we

center. large log line your right a unfortunately integral equipment Now, machine now centers very high -- primary And those demand breakdown from it component those obviously the sawmill. are machine vendors. to is important running an very The in that's

good extent the be our from So but one. guess be be it's discussions used been because really out, going trying prices. -- protected. optimistic the new a is play getting to all used and wind to a that a will $XX buying so know We've we've dependent one, we we're had And to line. used in I gently to we vendors hard with that what it's interruption probably; I'm costs, is one. really But of lumber business it's find how will purchase. covered full we been insurance what a claim kind the the new discussions standpoint, speak. happens going now will see the And identified range which to about a insurance. It's be to up premium. paying in the which It’s will again will if wind upon up to is install by And million there cover of demolition We'll

will sawmill a business and up interruption was P&L as that from Ola be protected if standpoint. Our running

it for interruption. it probably now, to say million right million another it's machinery. business install plus and So a that $XX then I'd relocate it’s $X and It's

lead long just And they've understanding equipment then that order some two-years-plus. yes, providers files Okay. themselves, got my is

source suspect now working And is wasn’t a working able used -- How And are it or sawmill a it is you to one? I option. right a is the that in idle? so it

One one year. middle Well, as next so different equipment there. is the on as side, early two can things get of new we

that for lead particular two-year not it's of So equipment. that times piece

one is who one, old. new It's -- not being leading second third vendor, sawmill sitting late two That the don't a The well at a next idle quarter to get run. a years. by roughly to knows so used the sold today year. of idle know, could eight machinery of vendor three is in years It’s been nine piece today, it’s the maintained. I It's or about which still very we So industry. by it's for,

a equipment that's fact, out of we to would one go we In if new buy. exact and today, had piece buy the

there've but that all since to Now whatnot, software been to equipment. make those and will changes originally piece it prior we of modifications sold and implementing installing that was thing that

So as our from new. as good view, it's

Okay.

doesn't huge QX difference I'm one the of there’s -- like of So and a bring this between XXXX up it used in new still XXXX. a it end probably and like you maybe QX sound one

and issue. covering the insurance used new? go versus So is would you Why

is Well, is been basically diligence do piece going this by as as to We're them and because equipment. inspect go the think going new. we have it. that new. that vendor of a used in original good We're we've that good on to as the as assured And

as want have get people we've startup, And scatter. it that down, talked for So be and tend no to challenging in on to our want harder you When right them us mind a scatter. how running your mill. get prior to industry this soon is we mill work. for back longer soon can. just as don't now retain calls those that up people. we there the really is difference. We to The And would delayed going the about that we We them want our We skilled at people to stay to to it's labor. mill

good very point. That's Okay. a

Okay.

lumber, to like on, turning is pricing, your the just what breakdown maybe just in I'd price July average to-date? So monthly

is bucks. average July forecast $XXX

Okay.

we're future. file into order remember the out files, so always selling -- stuff order remember I'll if Now

that were captures high that back So in -- prices $XXX still some we of seeing those were June.

Yes. I understand the lag.

meaningful Or meaningful is pickup? the year? that annual Is a that Okay. And is then rate run strong this a just plywood like that? highlighted than you market how it X% more

with say, multiples it's earnings I the of in our would business, the I would lumber, competitive don't what like reasons. plywood But don't like normal business. that just to be results we like would We of it -- breakout for in a year.

Okay. That's Best helpful. of much, Thanks luck. guys. very

Paul. Thanks,

line Your comes D.A. from of Kurt question Yinger Davidson. next of the

open. is line Your

of terms million the this guess originally starting point? harvest I Hey, a XXXX reasonable Idaho we in about and that think should level permitting, what expecting for as is going normalized roughly weather outlined forward? six year just on starting harvest secondly, And demand that first, off outlook, harvest levels we be ton

so Yes, Kurt and is I'll take Jerry. this that

level, parts think In about question, harvest, terms answer of our it year. year tees half, that's think sawlogs or on because key our lot are part when runway, Ola, moving back we I the which of sustainable roughly the that normal is is Unfortunately, There's his produced for first touched is the district, each of the start our tons same Eric that well, I'll Southern Idaho amount -- give in in a the with our purchaser the six that sawmill, and a take Ola harvest. you this region. million our the up comments million outlet of six in were still was some your Timberlands growing about harvesting had

think we XXX,XXX for short of that from why be So, think part the fire because guidance year down six going the tons for tons the this -- has harvest Ola we district reason in is the we're million come of the to year.

in delivered to be volume be continue years. future would and So that grow it'll harvest fortunately, deferred,

we The have is other certainly thing in sawlogs. here, prioritized that's happening Idaho, delivering

make logging availability, we becomes the to strong contractor So of just pulpwood into can we to sure push going less the it a we're And sawlogs to that have when markets. priority. deliver

side shifted And I margin kind recall, with. business Idaho, in on volumes at said, this but as year, of pretty look the the start like you the to so pulpwood low that's far logging capacity. anemic when pretty really So we've you

probably X So, at we're day, X.X pulpwood of just tons there the a a explanation the short, as why tons to the end Idaho, at stuff million margin there's million it's on the being little so. in other to XXX,XXX is versus

all are Well, have over sawmill the about like especially here where's producing pulpwood think produced really or there's downward pressure been last stuff. on prices when it's you no or to Jerry quarters, in that low put margin that residuals produced said, being few the

get about think you was Idaho? that And guess how of that us Got something absorb side; it, you pressure the modest lag expect makes That But quarter. okay. in costs in just last pricing? sense. QX the of a looked log to you'd it QX on fiber from like could those Is lot as a more headwind to remind versus I sticking

in just your products wood logs, purchase you question, terms clarify Yes, of thinking to Kurt? are of

Correct.

Okay.

it's in about earlier, reset. a of lag four terms that week that price I lag So a talked about

again, as fast probably saw XX%, price looks you're Northern expect we down, of going or is sawlogs, you complex will seeing you get the realization. tell -- to come which the pricing if forward the in very QX realizations seeing to sawlog probably some So, terms just indexed Mary's of come relief, price take call you're as not in St. marker, lumber in terms as repairs the the QX I but Mill down. it similar

got Okay, it. All right.

[ph] sense. the through pricing going it's is the guess So same, Timberland segment. the That I makes

think market and and any Okay, with approach the going if your you could seeing buying inventory you're in that then I'm impact ultimately you talk about whether the distributor how this just change customers curious all may volatility, from forward. to or

psychology lending swings going more forward? to spoke to another of itself just something the be there. Is You you big think that factor that will kind impact

Yes, there can balance lot nervous. high to get don't They from stuck start with on get inventory prices a you huge levels, is get really want sheet. a really purchasers. to psychology of people imagine lumber as When impact their to

want customer end meet they'll stop buying they but to demand. so And

buy they it a So or something. directly from to lumber, rail takes like and mills via truck where tend ship month not

really buyers high prices, is wasn't to So and buy those then especially at the home centers inventories inventory. the psychology up as DIY to collapsed huge. got lean showing prices We want

the really situation we the third centers get fall, back fourth return and going have the lean centers for quarters. the from demand into and now and be the people come home come home is is We vacations going inventories. support as So have in R&R a we and in to that's the And and think really some are whatnot, pricing pickup do replenish to DIY and going have inventories, down provide, think and there's the here we segments. got prices to going think to to

a is what large happens psychology of So here. part

great. Right,

Okay, color the great. luck and here good guys. back Well, half in appreciate all the

Kurt. Thanks

line Seaport Partners. comes Weintraub of next Your Research question Mark from of the

is Your line open.

you. Thank

increase maybe sort forefront been from brings it I of that that been same in the were as certainly there's for fact that et to at of because So profitability reasons is time-to-time. the prices your low referencing about the guess noted some costs, really very go reading weather, differences regional pulpwood we've interesting, the cetera. pulpwood time, South themselves. the it's of kind there you how and are on you And then in

point. you're wood you more, I you sense, trying buying South? the and and the buy logs know where in that Or South you're a buying and in more wood of get lot to some lot selling as same a exposures sell you you others in starting a have a Are baskets, do So selling within basically in the also logs, baskets? of

pretty on kind reference basis Timber-Mart prices wood average guess like prices big specific in was my which out of to is Report We're got maybe I prices And -- with sawlog our pulpwood came sawlog stable recovery Mark, that the a excited start Southern to the pricing pulpwood the face weaker picture. indicate sawlog and here. reference seeing of baskets, that people Idaho South in simple flies price XX%. that some at recently,

of think based of it's I it's not. out probably A that Timber-Mart is South one on Our it's well will thin a share data have we to view couple good is transactions. it that set things there,

included are state that's owner database. the For Arkansas. in Timberland information we that submit example, don't of second largest we in And

and or bit expansion, mill fashion data time-to-time, up a of there's new like in there. that's I we there's there's a as So a see in every this it a time sawlog. norm, to delivered on usually down $XX like is be it us premiums, or seems $XX, weather $X.XX a going this this for which probably into might ton then $X.XX, it's large, from of is basis lift a the point, around an typically per what not see part long-term we said, the either settle little back brought Greenfield big to And up

our one the is, So view I data. be cautious got to with think,

I lot short-lived, kind We settled been our data to of at the have said, have point long-term premium pretty stable in baskets, look into like has of and been things and any, wood this average we a in norm. it's that

helpful. that's Okay,

sort of and not so would in for to putting just clarify, feel just really but a a presence? the regions, the that's U.S. to And show spot those you different you on so Or the -- think that fair specific you think where do would description that be have comments

South overall?

that's our speak fairly data. where have I basket. to to Mark. wood only baskets, And exposure we just, we the wood Southern can I have deep mean, don't Yes, we direct other

are my So PotlatchDeltic comments experience specific.

color sort dividend and capital Okay. framing. to And for special in that's the thanks shifting gears the on being multiples regular for allocation of just the back the helpful

to think you I a mentioned, dividend in bump appropriate or bit like but to conclusions be cash what's the now? you'll would year lead Jerry, what you'll -- it relatively -- kind the you a of paid be also that sheet, You in the sort of more I the regular on be maybe the of what if on it's as maybe you your time first well. special. Eric a a the of the the out that drivers bunch for mean, sort also going relooking be given seems would also quite Last have balance would had determinants while, small at

that is process should just for -- more of expect what this the make up sense one increases time sort it like So make of was from sort this it to that small inflationary thought of time? type of that pushing year, would or the

Yes.

So we to sustainable need is Mark, our That be convinced. make it to -- -- first any foremost. have to we that any We changes need we increases make, dividend, conviction. is we it, and

you industry cash tremendous at prices, contracts they're at or though cash Idaho amount trading are amount they still of sawlog and for unique indexed creating sawlog enormous as they down in come think of current are our know, down, us. coming I these the even an

our break-even. remain are roughly over view several next that $XXX going that high years, to is that prices BC to especially given needs relatively this to get lumber lumber backdrop Given the

relatively to that our Our flows Idaho. cash are going strong is it relates remain Timberland sense business, as especially to in

our that say just dividend current would per each consider I beyond well-positioned decided our for Board that's December of we're $X.XX that in So But increasing year. to share. base

Canfor also what that there being That still BC is makes help in that sense. -- or the you -- -- The guess that mentioned to that -- high BC curtailment anywhere yet in related is higher of a like so reinforce are Okay. cost on the we some I those there kind were floor sort think I cash point else cost are that on -- lot this have or -- a of create to mean that costs higher that seeing cash wood of to be conviction going anything seen? a I

announcement Well, state we Canfor and that about a and that customers are scenes. we hours. are know But of the rumors. behind not only we happening lots come cutting They making publicly back be that public have And out is may the one curtailing they're it, hearing curtailing. it's but

decks been would prior quarter relates log mills have logs those to purchased I that BC, those are say too. the As from that right that what have it now is in

into facing log QX But and headwinds get low there's cost those as reset. QX they're real prices So still logs. we relatively when

-- I the ticking clock So I how think kind is is the would it. of word

there more showing -- turn Jerry call I'm questions. the I'll time, over are back to this no At back Richards.

for Thank you interest and not sooner. and May, next everybody's to modeling right. the detailed we'll I PotlatchDeltic. talk you, if appreciate of All available certainly the the am questions quarter follow-up rest in day

Thank you.

call. you today's conference participating. for concludes This Thank

disconnect. now may You