PotlatchDeltic (PCH) 1 Aug 232023 Q2 Earnings call transcript

Good morning. My name is Henry, and I will be your conference operator today. At this time, I would like to welcome everyone to the PotlatchDeltic Second Quarter 2023 Conference Call. [Operator Instructions] Thank you.

I would now like to turn the call over to Mr. President Financial Vice remarks. for Interim Wasechek, and Officer Chief opening Wayne you proceed. Sir, may

and second Good conference to welcome morning, PotlatchDeltic's call. quarter earnings XXXX

and Joining Cremers, call the Chief President me Executive is Officer. on PotlatchDeltic's Eric

our found with that contain forward-looking will be statements. with measures our slides review statements the statements. This a regarding at non-GAAP www.potlatchdeltic.com. press our the can call on filings forward-looking release, in these note reconciliation SEC website the of Also, Please on warning please in the and associated presentation risks

I comments, will outlook. review quarter turn for the call over and and our to Eric results some will then I second

Thank you, Wayne

Looking at closed of market yesterday. EBITDDA our adjusted second we total million the reported $XX after quarter,

compared prices to Higher results first segment quarter. the improved the were breakeven Wood million was Our Products quarter adjusted in lumber driver EBITDDA results. second of primary the $XX in the

in seen and closures data, driven particularly including Columbia. several a factors, steady have in and falling We lumber composite Canada, uptick mid-June, since from British lumber mill by capacity constraints in European housing price favorable curtailments, the wildfires additional imports

that more expect in and of second lumber shipped we lumber last XX which feet of the year. will million long-term averages. remain to shipped We board shipped in continue We quarter, XX more than was feet than above we XXX feet million prices million QX in QX

in costs. operate existing reduce new XX The a announced the project activity equipment. end of modernize annual track to approximately and during project XXXX. project the XXXX, be on three expected to mill million will and will Waldo, million mill's and board feet capacity of to focused currently by is Project tie mill's to $XXX on Arkansas remains XXXX the and in our June sawmill. by increase downtime we site weeks of the In with the project completed continue significantly engineering expand prep The cash the

second at volumes the the for the X.X tons million point adjusted harvest of to low million Spring which generated seasonal Our Timberlands quarter. EBITDDA in being We the their $XX pause in breakup. Idaho segment includes of typical due quarter, harvested impact

Our the the significant our in Southern a second Both operating year. the Northern harvest across the Timberlands to exceeding of rainfall conditions in adverse great achieved team due region. teams our Southern and quarter of planned first job harvest plan volume half did despite

Our solid Estate quarter of adjusted million. a segment had with EBITDDA $XX Real

On XXX the acre. rural of nearly acres $X,XXX we sold side the an business, at

that now interest to for timberlands. Estate estate values the real of XX,XXX approximately team acres the rate despite strong our our identified and environment. the Additionally, higher completed have be stratification potential of development side has than Real CatchMark remains sold The core the timberlands business higher significantly

continue up levels we lot Residential at master plan to Chenal our on in inventory low offerings. community lot have and good our take remains Valley

acre. During sales, at nearly of average $XXX,XXX price over $XXX,XXX the per per averaged land sold commercial which completed we second quarter, and million an in XX $X residential lot lots

progress opportunities, As it this we natural to continue make relates area. great to solution climate in

credit of project, to early first carbon the which as next on fruition team Our half could a is working come year. as

also are to producers. residuals and manufacturers We biofuel supply pulpwood opportunities mill exploring pellet and to

deals to in complete farm strong to from continue developers see we interest addition, In South. solar solar the

values basis. Our these grow. on And million and for the climate pipeline to solutions land rural net timberland will increase All expect nearly sales a of driving higher. potential $XXX pipeline solar demand at likely is natural this leases land opportunities we value present

for level U.S., purchasing signs seeing There versus of Sales new are we in a at and large for net housing, existing the to prospective home record month of look to improvement. second higher sale homes three times single-family homebuyers a is into homebuilders improved. have was approximately a the forcing orders above the home. where uses low starts XXX,XXX unit Shifting translated units. unit. the single-family existing This as as is row an single-family This starts June important in lumber has a housing were multifamily as recently

has homebuilder row and level since sentiment a the increased months at seven June of is highest in Also XXXX.

there positive housing believe to tailwinds continue are We the strong to market.

largely is based in millennials favorable view of financial housing stock on homebuying fundamental shortage who Our a form under-building ages. great crisis prime the and of reached after combination of have due demographics to the the

is Acknowledging, ease view, to expect making will our needed million affordable. of construction units it year average homes more time, for lower to U.S. the In levels rebound rates. take above that housing once housing we to final long-term continue the will X.X per return element fully interest rates starts mortgage

lumber need older to which favorable years of because are homes demand, means segment, remain housing people the repairs. reasons. stock important Existing the represents XX of history average. statistic Remodel oldest is for on Turning more more on the underlying in in fundamentals need Repair several typically remains XX% older the and about U.S. than work space homes This homes more significantly average. Remote smaller and new

given market in existing that home very of sheets and are balance consumer more across the for move the home in generally and prospective remodel rates, their versus homebuyers are equity likely strong with a to shape. mortgage U.S., up. fact homeowners is option Remodeling higher good attractive levels stay Also robust job

Repair the big volumes As to of segment, center sold home year. strength up indicator box of and our over year-to-date XX% continued retailers last Remodel one is

remain net over at indiscriminately X,XXX trade many shareholder our we repurchasing quarter they We under during at allocation destroying peg committed allocation. to to companies to average per one towards continually Moving only act time but of buyback will our when $XX of to hastily any for evaluate Far shareholder per shares, too capital a discount options. asset $XX share value. on shares significant our Analysts around these at $XXX,XXX NAV share. and value. We estimated capital plan. the We all our not XXbX-X grow shares value repurchased opportunities

authorization. have our remaining As a million on reminder, we million $XXX $XXX repurchase

in quarter, and million sheet $XXX the At cash had the balance the of on end liquidity million. $XXX of we

shareholder Our platform solid to low provides flexibility liquidity continue and sheet leverage with a strong and value. growing us balance the significant with

our Regarding environmental, we and May. fourth social ESG report governance, in published

formally strategy long-term People, Our PotlatchDeltic initiatives practices governance links we we have proud areas. Performance, advances ESG and and and ESG progress are our in Forests, our through and the short and ESG pillars committed strategic underway in to Planet, these strong to is our goals. responsibility report initiatives four environmental social and of

remains positioned up sheet wrap PotlatchDeltic an comments, investment-grade of a To portfolio very with and my high-quality assets. balance well

attributes commitment value to allocation industry and over long opportunities, fundamentals term. Our increasing our emerging strategy remain and approach. a demonstrate the with strong shareholder These well we disciplined and is opportunistic aligned capital

Wayne now discuss quarter I'll turn our results second it to over outlook. our to and

Thank you, Eric.

more adjusted and of was effect $XX lumber seasonal million in slides, $XX and compared second harvest operating quarter offset as provide of EBITDDA by million Starting more prices with color X Page quarter-over-quarter I fewer segments second to quarter in second now our in of the review on the than lower the first higher each sale quarter decreased acres. our volumes will rural of the results. was the quarter. the EBITDDA

$XX segment X. million The in quarter. is Information through displayed from adjusted X Slides decreased the million EBITDDA segment's for $XX quarter on second to in our the first Timberlands

second conditions XXX,XXX harvested first lower volume to tons than in team good quarter. the tons is breakup. This typical leveraged quarter, in the of logging harvest sawlogs that we XXX,XXX spring Our to seasonally the due in Idaho

positive second sawlog of result prices sawlog the Idaho sawlogs. a a X% Our a the the were per of increased effect basis ton prices quarter. the of to on first in seasonal compared quarter in normal decrease The higher density

million harvested quarter the the we South, In X.X million tons second tons compared to the X.X first in in quarter.

wet harvest demand. and softer to by impacted quarter operating was second conditions volume log due Our challenging weather unusually

prices quarter quarter. the to the were sawlog in Southern second Our compared flat first

lower Moving in first in the average, to is the the Furthermore, realizations random EBITDDA Wood is sales the composite $XXX in X, quarter Slides average board in the quarter per per lumber second X% regional the the On feet between composite. price that comparison, to quarter. product as million framing was a Note not first lumber second composite. to our compared the X% from our $XX $XXX there on mix thousand in second our and in thousand to Products first difference the quarter. board the timing breakeven mix increased quarter. from same By feet quarter price adjusted increased lengths X,

X% a between real-time the we reminder, booking quarter. the not to million price. As the shipments second feet XXX closer by captured board to Lumber experienced lag and is orders composite, increased indication of is shipping in a which

impacted production cut and due at the result sawmill, as the quarter shipments quarter. to maintenance first second in Ola at higher Our weather production mill rates of our our Warren that increased were planned higher Northern mills our in warmer in a

was the first The Shifting of EBITDDA Slides the EBITDDA in million $XX XX the due in compared timing transactions. mix to quarter segment's in Real second on to million sales Estate to rural and XX. $XX adjusted declined by sequentially generated quarter.

However, with per along an total quarter EBITDDA in acre. six for acres, second sales compared due to prices community higher quarter $XXX,XXX the generated averaged Chenal increase the our real sales over master commercial by in lot estate a plan of was that Valley to first with residential two

lot due the second mix on price the to price average XX lower quarter than sale residential in first During a different quarter, at points. closed of of lots we the a

Slide XX. Turning capital which to on is summarized structure,

liquidity our as total This on of amount cash, end $XXX availability includes revolver. well at million. June undrawn the of $XXX Our was as million

We in that mature $XX have to scheduled debt December. is million of

to still sheet market refinance of million We $XXX rate can We options to are pay our this have rates. utilize currently on refinance we of below our forward-starting well that whether off at evaluating debt debt. interest or balance swaps

for a at of shares $XX in X,XXX per repurchased quarter. We $XXX,XXX second share the total

we at place a million long This over $XXX our authorization. value share repurchase our as part on a prices repurchase capital of with focused our strategy broader have and remaining repurchase to reflects increasing attractive term. the reminder, million commitment $XXX XXbX-X plan our allocation shareholder shares in on As ability

expenditures, statement cash million from included and the amount second cash That expenditures excludes timberland acquisitions. real development operations quarter. in were which includes are flow Capital our in $XX estate in

year, excluding the million to $XXX to For we planning spend million, are potential any full $XXX acquisitions.

for estimate the Waldo, and includes $XX sawmill project. expansion expenditure capital million modernization Arkansas Our

sawmill filed and before to $XX received We finalize million fire. Ola received the $XX insurance to second interruption quarter XXXX, our business Since of damage and claim insurance claim related the have our in recoveries we of the for end of was year. expect million the in property recoveries

third planned into a portion harvest forward a high quarter, pull I able for to in typical now volumes third The our the the as a year. higher be are the some than North seasonally provide volumes will of level quarter Harvest first XX. presented of half but in to details on quarter team was Slide lower comments. the are our outlook third planned

We compared prices expect about Northern rise quarter sawlog to the to quarter. third in the X% second

to the the In million we quarter. in tons third plan harvest South, X.X

in expect to our lumber second third plan the in Southern to board quarter. to prices We the quarter. be to sawlog quarter XXX feet third of the million ship XXX million We flat

Our million board feet quarter based average in is than lumber our average price This higher of thus second on of third price. lumber. X% approximately XXX is far shipments lumber the quarter approximately

have prices higher price. our been price X% is and lumber second currently quarter increasing our average than Our spot lumber about recently

foot million EBITDDA on As per board equals a us in reminder, approximately change $XX basis. a for price lumber annual thousand an consolidated of $XX

in XX to Estate, Chenal of approximately and third land, Real quarter. the sell to we lots Shifting X,XXX expect Valley residential acres rural

sell We of acres also in to XX,XXX XXXX. expected land rural are still approximately

the Estate Real provided are slide. details Additional on

higher Overall, is we and This quarter. on a prices the adjusted volumes. seasonal lumber to in total the based will be EBITDDA quarter higher the harvest third compared anticipate for second our expectations increase in

the to in well-positioned We we over are on long-term home continue shareholder term. believe encouraged housing steady We by the resiliency fundamentals demand remain value growing and homebuilder sentiment. the new long and of bullish improvement are

over That concludes the our now to prepared to like remarks. Q&A. I'd turn Henry, call

Instructions] [Operator America. George from go Our first Please ahead. of Staphos from Bank question comes

morning, Thanks Eric. the of details. questions. Couple morning. Thanks, everyone. Good for Good

would particularly effect to might of have a So either all, what volume weather there the EBITDDA always that in with. quantify cost what be? a was is the in XQ the from that or contend weather Timberlands, need Recognizing you the first is to you South terms in of something normal way what of

year-to-date. - the relates we the it as impacts we were the about that really the going knew weather, for and great a Yes, going kind up with our conditions adverse of weather into of we second talked we the first in volume QX, George. the exceeding did Thanks, job in to and team end plan quarter, quarter to planned Yes. we knew from

in while the what we really year. done was our the quarter So we given plan had there QX, adverse first weather, of met

we is, we'll the So expect. the I year there, for full volume key our planned think takeaway be what would is harvest

-- So

pricing side, that volume pressure. so the mills On say that George, there on low was got I never price would

pricing. get to QX. when Sometimes low in the mills really challenging a We was had team work quarter It logs, around on just in run didn't see see and weather. a that that really you

was thank my you question Actually one to so of going be that Yes. for next that. there,

it. In recognizing But the didn't, and you that profile the for volume to you and do terms - on volume for I that? from on what - That of plan is forward XQ perhaps into missed pull estimate? harvest If your year. again quantify XQ, rough your anyway I your

at two year-to-date, QX and that and for in volume, of South, on QX, then to look - QX QX half track. I probably ahead, our look our probably and Well, impact Yes. we're Northern and XXX,XXX you things. so One, the for if And so QX. will mean each at we're

So back in range million half quarter. the the each South we're of the in the for the of kind kind year X.X of volumes for normal

to last demand timber view over. seeing there's terms that it and you right market paper One, the buying? coming of the the you the you there to you that of in extent and any Are you this, markets back What reduction are half first the extent now? a to little can fiber ones turn what I'll for have commentary? are seeing any through bit in - Okay. customers Two me the seeing mills. offer Obviously, been in from on

construction. has existing existing what people home this rate are way new for because to and the fact telling significantly starting what rates home by part and of mean locked that you construction? With mean a so in driven year a rates down, who might lower And sales high, at are then the not that's propelling of terms more turn, the of in for of story Thanks seeing in the contacts new Wood much housing as your come on and Products you're might in home home that been pace have sales, what guys. are then that

Yes.

So, the one George, pricing. on I'll take first

standpoint. Southern saw economic from think QX, to I So QX be think downtime, some for I and flat Certainly, think the we're this we from mills some you looking quotas for relatively - going to I prices is take a dependent. demand know, all market

where legacy into more probably we But our more see downtime we're tension seeing and to coastal So think the loosen we're here seen start QX. - by we've that quotas side, up going encouraged CatchMark taken. on I

we're said bit So QX little and I think demand flat demand QX. - of pickup a I like we're in there, pricing, relatively expecting seeing from to

will I back half won't home rollover, their to sales will start And is in I'll reason what if is existing because existing. of up I think home. back rates up and existing the do like again George, rates take existing to down second the are regarding pick going again come trapped people feel happen to they question, think your pick

Hopefully, new they're that different in a to means, location, home looking buy a perhaps.

just that's I sales think necessarily think that - the million one. flat don't down, see X somewhere U.S. between rolling I rates and is Number the under-built So And don't by over. driven million fact if home X new really I units. come out

in two, low-XXs that's cohort. this you've a anxious age number buy home. to And got It's the

but sales So I home will don't new impacting existing pick that home rates rolling over, envision up, sales. yet,

Eric. Thanks, it over. I'll good. turn Sounds

Thanks.

from comes go from BMO. Please ahead. Ketan Our Mamtora next question

my you, taking and question. thanks Thank for

First question back U.S. coming to

there as reported curious prices? TimberMart-South. pulpwood impact pretty any terms basket, and half you pulpwood prices, on the by Southern regions about is just sort QX move you drop I'm a about into in kind big your curious more pressure as your I'm in wood think South, do you of of back see of

Yes, compare. Wayne. a our much as TimberMart-South. prices aren't Ketan, challenging it's Yes, bit is as as difficult this down or Certainly, to

and TimberMart-South the simple think data, I weighted average. understanding of look use one, a I is when they pretty think average on data; you it's at versus factors: two, thin a couple a my

pricing. really information cause can in that So some volatility

to So, you ours. it when compare especially

think to from slightly to it still to we're I QX. Still, a bit expect, down So as relates QX we and little probably flat and pulpwood, the we I said, quotas going maybe some like business. downtime on see paper pulp

latter and see QX half the the that's kind yes, pricing of reflective we of year. maybe into where So, of

the jet from across I it's Ketan work new now, renewable I $XX there's taking read think fuel look work sustainable biofuel States of right this lot think energy work other I going long-term a the right that's day, and that's it the on worth interesting perspective, step going and off of like solar, United and you if investment bioplastics capital into now. billion something there's wind, And back at that's a U.S.

South the announced and residuals those use pulpwood feedstock raw large, are that, mills. to to provide material mill and/or going projects by for

could look quarter-over-quarter, and would South, are prices be Mississippi, you think term, long Arkansas say, that markets the and and So I down going include, well, region. at the to weaker I especially pulpwood but across Louisiana, in it

I that's work given underway. all quite think the outlook actually long-term is bright the

or sense lumber. Got that's some I in kind we most sitting along that stands Coast, that's out the where of through port? on of it do out of still the have inventory Have East you curious worked I'm a Eric. in it. that's know there sitting is Other qualitatively? has amount just of inventory that that's color, helpful had I just of around down. No, that question was terms European come coming lumber the the

I But Ketan. down come quite sales team, - seems which have a I think feels In some those specifically, my European into is volumes it into information. European our We're only all like mean, And I be like coming we're from it would it U.S. think down. running know we get into wood. places makes for example, can that bit. imports all this not - ran anecdotal don't wood. I I like, I European not information the think sense Houston, I mean,

gotten of past find have year-end. dollar attractive. The months or over not so would whole weaker so. prices quite the a since Europe collapsed bunch U.S. has here It's really reasons the why just Lumber XX

we going are are move think to trend And year. - we And continue as to so you're is through start imports the right, we seeing those roll that I seeing over.

Got from it. And one final side. question my

of think thought I deals, terms million In $XXX not how of the for Can Eric, solar - in we should pin timeline a kind at how terms of about about a this of talk you about least heard of we year, but and I trying say should think to down us, with about, you opportunity, that? number sort cadence, opportunity. you specific of

Well, and it's and What option is good you under what acres, a question, five transactions a lease roughly different have that transaction. tell one-third that's are now that's of of Ketan. roughly XX,XXX roughly we five I'd those those different sale deals, is two-thirds of right a is deals, type

that the deal has proceed anywhere trigger anywhere five the pull the and to for two from years, are they developer so Now option the deals, options years. run with to these for five from place to in two the

very up needs that they're pull their the sell scurrying the for equipment, be until the going option trying they line last exercising power engineering think line trying to won't work they're and to land to on to they done, won't I the to, who up these the minute. about all guys, trigger - all

think And today. by that about now right Potlatch going folks talking But close solar four negotiating we've ground closed that We've five with option. having CatchMark and under are then to done ground. more couple year. not seen we're I'm end of another here conversations bunch deals deals One the tell are closed even on one we're that of a We've would got got be we you, really of that deals the on I now. a

think there's So about think the roughly a it's roughly solar talking opportunity. of and for $XXX And million this that for what land remarkable NPV, we're what's momentum when under only solar acres we're option outcome. of XX,XXX negotiating, you about building our it's is transacting I

call momentum acres, passed it X% good of And our all feels me this a XX,XXX of really trade. to enterprise lot IRA our up roughly this of the had enterprise value renewable our knows, of we provided in only who picking like momentum. pretty land, business out $XXX a land X% So our X% that that's it, $X it, incentives that's of, behind for value, of for, billion, million and energy, was again, and is that what's call legislation

the half. helpful. that's I'll in the in back it. very Got queue. Good jump No, luck back

Thanks, Ketan.

Thanks.

Our ahead. Pettinari go next question Citi. comes from from Anthony Please

Greg Good morning, on Wasechek. Anthony. Mr. for Cremers, Mr. is This

Hi, Greg.

Greg. Hi,

Right.

real a quick from estate. Just question me on

acres seems I on think on the acquired higher I'm opportunities leases? and large color expect pretty can could those in of can capture of what values XX,XXX sold just included identified mentioned the And $XXX sales the a just land at like be as you in acres and It provide point how a some for XX,XXX portfolio So many the you've solar you are than million lands? you HBU clarification, types me. CatchMark you hoping of Timberlands. to amount premium

we when stratification acquired we that so it completed, CatchMark Greg, comes - the to we just XXX,XXX Yes. about acres. yes,

of some timber off identified But - about of about of think we of the almost XX% landowners near premiums XX,XXX areas. that's acres conservation, is even acres driven percentages recreation, solar acres I values XX% XX,XXX reason higher large were those - population potentials. and so, acres for of to adjacent, potential And those that and higher

- So premiums those that just potential the the increased on for values. increases has

providing done. the is when higher is than our but selling - timber did historically and historically approach a at a we're they CatchMark market for premium look thing were - for HBU next product we're the at what to timberland think different has had done, we CatchMark selling I what and premium - So little a values, bit

acre. more but per a tracks, higher at looking value we're So,

recreation, that's these So around and landowners and driven conservation, adjacent forth. of so opportunities off again

some some so pleased that it - that these activity lifting to. and stratification we've started the Eric none referred of your as we're already So in those then $XXX the of none properties and included question we're this really solar. on And is to - with far. of million seeing relates the we've No, seen

Thank that's box low possible, just then first the helpful. the speak one inventory excuse you that year-over-year. they're to the And up lumber me, have you may been if reached XX% mentioned, very sales a quick you. very Okay, rebuild? - an on speak retailers, you big levels by - could lumber are Inventories volumes, Can in half. driven how much of

box So in preparing how inventories think are guess you was rebuild? much what that they of fall level where I at big for? by a of and are, now these demand August, driven And retailers do

don't an know All this driven I Yes, don't from seen centers. the day pretty I lumber question. XX% rebuild. say Greg, end your think year-to-date. is, think I don't would necessarily steady was home I we've also are that by answer can inventory the the up of their at I takeaway volumes

applications. selling with specific that wide think may I to have which are in tend to a variety product something be which do it we're used the studs, them of

good, steady. here. very, channels I some wouldn't going through through into hanging that So, their this into in It's that steady, is those which me just and very indicates there pretty XX%. lumber to also It's that's it. business remodel repair what the not would read decline read sales very would I I catastrophic have been is reiterate up business our that

Okay. very Thank Great. you much.

go from comes question next ahead, Our Roxland from Truist Michael. Securities. Michael Please

Eric you, Thank Wayne for taking questions. and my

lumber mills jump any capitalize seeing try trial higher better - you the housing, into are back fray Just in improvement one, with prices? to respect – to seen demand Have the curtailments? to you what regarding mills housing the and on

on permanent are of No. of billion announced a really been seen roughly data board mills roughly - feet half closure and temporary individual we've get good doing. to curtailments hard has now, curtailment. is that roughly half X as the what It's Michael,

I've people So, just center that I demand. any point. come But home could their just restart R&R know of Prices up don't mills. mills have back that compel any are at heard I of - have That starting to again for this up. or not heard to

Eric. it. one Got as And quick Thanks, one well. just

with baskets for - it's of markets, from terms what's happened any increased early? an improvement wood seen in wood housing, timber obviously, Have demand and products you housing or tension In for too in improved certain and market. resulting

would it's I slightly, year. But - expected. down compared think what to say, quite last up I - than Yes, early. we've too well mean, held but they've are we've prices I

I But, that. tension of will steady. encouraged by I we increase. think expect - the those that's continue, Southern those - expect those think So, would on and kind we're prices think long-term, to hold we And I to we markets the to continue

versus if and in that it lag of type see Thanks, tension improving, do months to - six side? to between the Wayne. what And improving housing nine wood start is just have you lag the where typically have one months you you last products when one. I there baskets wood mean, see you is products wood

factors don't go only and other around that there's of the prices there not volatility lot - but into I if we've know I can demand, the some a factors. think weather-related Yes, be

So, there's yes, I think timetable don't lag a I what if know looks like. specific on that

say, system. to think, and to be buy got in dealers, do enough The drivers, compelled now they feel to look the or I've biggest have demand. of at that's they Mike, their was I existing they meet just lumber one inventories, the the inventory, lumber going like

point, So, to think, that Wayne's weigh that of whole just takes. I factors a host there's into process how long

half. luck the Good in Got second Thanks you. guys.

Thanks.

comes Our Kurt. from Yinger ahead, from Please go question Kurt next Davidson. D.A.

Eric morning, and and thanks, good Great, Wayne.

Hi, Kurt.

mean, update RV an looks plywood in curious start give just manufacturing on just of about the market I all? talk you on in it to at business. you're industrial the and See, also unit like decent heading a I QX? us out into drag Could that weakness and And was costs about just wood log tied the that's to kind how QX, wanted thinking products. if

Kurt. Yes,

first get QX. is that be log of going thing Ola the going We'll processing QX, our do QX costs, costs continue in to to So, are think and mill. lower out I versus into benefits

decline. Our is going Ola and for QX. some power cost to to us our example, Warren, outage a per at cost QX of Similarly lost to that in in some the some volume shifts in continue thousand South, mills like

get QX. absorption costs of coming overhead at we'll versus costs Maries have down. better QX So, St. been in Fiber

So, first we QX per see your versus to I question. going QX think in lower answer cost to are thousand

plywood a comparing industrial Your And second before, like they and drag, for by - about grade truck course, QX we've question on producing really plywood boats million are regarding, we're $X demand rates these interest and panels, financed nearly as that seen has for yes, to business increase, consumers. items our and talked this things were residuals, of high-quality use we've but dropped. And QX. and typically things plywood RVs

so dropped, as has demand And has dropped. pricing

under And so, business the been has pressure. plywood

do think going We into demand that's we is around to do back. as come Now, to think starting QX. turn we get

to me, in dealers think levels their in bottom QX - to going they're start start brought and we to levels QX, they're QX. rock Some in inventory inventories going really of rebuilding excuse our and rebuilding

outages quarter, that Corp's demand is to quarter don't going of perhaps. three a from business. know, the weeks I think Wallula second think don't customers Mill in in has particular, back Out in And up so, took on come side, that think back fourth some downtime. starting Containerboard got, mill Packaging had paper residual yes, Michigan, we we And some downtime. the until, I taking they're they're I to start to Billerud State, in Washington

weeks of kind in may You fungus mill. recall outbreak. took had some of through downtime fungus running due three some QX They a that to their was they

is low point. I the look I frankly, think a So QX see to that I characterize was at when would that it you see flip the results that way back positive you'll our And QX, - again. variance think for variance you'll

about project, located to this outbreak. guess the color at carbon willing you're that's you one. a I Fungus provide talk guess, that turning Got it. stage around to any could new more forest I that? That's where and maybe

Kurt. Yes,

the in is it So U.S.

in acres XX,XXX hardwood bottomlands. some in size. roughly is It South. It's

I next our are to it across going get that is the that year. the We possible. think, sometime to half carbon goal the quality done project involve first in of highest think going we're credits line

we credits expect our for carbon consequently, quite be high. So to pricing

I'm our So, piece really about optimistic of quite business. this

the pledges made all around get to there the that the it's and something net pledged I world, like about net being think to companies zero read companies you have international are day, by zero. X,XXX When out other

to credits, as Airlines buying there up got Delta too written even long And flaky was You ago. somehow. not just get

the So want we're going credits, type to net to going pledges, that them. made that increasingly that's that have offer companies they zero - and we're high-quality

forestry, that thing the in about a And the space highlight, capital of I would Oak other now carbon credit that's is think into flowing Manulife, there's lot that private JPMorgan. Hill,

know, think something Weyerhaeuser or So we I heard like say something about, I that. -- $XX our I think ton don't a

XXX,XXX it say, tons I they $XX think that year be our $X or to range EBITDA of less. carbon it's of more year prices could million roughly in or early $XX ton, - be somewhere roughly we and a a could credits that but to a

here there, it go work. get team working We very from quality get lot got high ways good get to long to issued. credits a hard to is of done. a the to It's But to

this So, up wrap this, optimistic you we'll quite progress we'll it. about but - give really give am quarter, every updates you on on it to I

super are activity set Yes, and terms in it, seeing I guess, at color, it. I that's lastly, you timberland the transaction appreciate opportunity stage? Eric. helpful this then broadly for talking out just okay. there PotlatchDeltic And what of Got

right stream. or well, Yes, so off more lumber or prices for it's they waiting to properties. rates are quiet in to M&A for waiting I carbon market, interest if come the are and people for their know holding people don't that relatively get improve we waiting if with have faith think now to accomplished, down, they're deals timberland some they're value

very So, high is market brought quiet the kind to kind price. of that the of stuff for a now and market is is right going getting

we've to different on over and or bottom bidders those metrics. half past single We're transactions. virtually one year in of we've the half of - our in bottom competed sticking valuation been seven traditional the think, transactions in M&A every every I so,

timberland value only up it has though has capital of the gone as yet, up. seems cost gone Our of

proceeding we've auction at off - and done that and deals we're with always what So think it, is to to actually do particularly us I that's market. forcing the are this, good we're

So, can were there one imagine particularly if there there's the bidders, XX good that at think got It's that. you've did hard deal - day. can we the we - deal we where you where are particular one-off value deals a get end of to well, create when

to So, bidders. an you're value, not shareholder XX you're against auction other competing winning where create going

where intensity So, auction one-off quite can find high, we're think to the deals go we try so going we off-market a good not is property. deal an and on get to those

you. Well, in second sense. half, Thank the luck makes good Okay, here guys.

Great. Thanks, Kurt.

Kurt. Thanks,

from from Please ahead. Mark Our Seaport go Partners. Weintraub Research comes next question

you. Thank follow-ups. few A

bit selling I trend the XX,XXX CatchMark First that stratification, rate? XX,XXX think you much rural just the does what most of sort up a of sort And you've keep to line, Or if folded of correct stratification, CatchMark I next similar wrong a bump of that's last how on perhaps, going indeed me just case? order you and But there. that's likely by view in might the acres the think in the couple as it been couple years, of I'm magnitude with at get years? if

about been and probably target - Mark. about Yes, sell what history, portfolio. - looking things sales there's X% to really One, on program, to our think of a rural couple and we our - we we look we've when of there, able when our at based accomplish, about

a be XX,XXX year. rate run would acres our So around

still stratification, with level. maintains And I think the that that

Well, tied if Minnesota. example, one you back acres. even, we think reminder, into were those XX,XXX look sold for of XXXX half for around acres I

about portfolio And in of the So our we've we had liquidated acres now to now Minnesota. XX,XXX shifted that and South. Minnesota

you're in by where we the liquidation see we've - that's because program our being in in what really seen where So up Minnesota, South. made of think - I

of hear threw number is Eric, the I or to create you having a on in - tons the kind as opposed working kind tons that XXX,XXX the number carbon credits, out that on you of And acres Okay. a per is specific perhaps where year. more something you're based XX,XXX that recurring did number that out go you projects per to to would XX,XXX? to year that the new range? be right and expect And that to keep XXX,XXX Is beyond

at, of we looking project. generate think Yes, life or excuse the we're that tons XXX,XXX property it for XXX,XXX credits the me, the per year will roughly

a not the kind a project midpoint year to $XX, every we at of sales. be sell we're the ton million could credits it year if pick would done finalizing where these $XX but XX-year a $X carbon roughly that a project, be we - So pick $XX of the we roughly midpoint credit range,

you let's be willing to That good. out Okay. feels markets, again. still about could kind are share? things tell does last how pretty talked on? this what going a pretty about if What's lumber to being And year, it play be of your you we little repair wobbly One and remodel What through ball rest bit question, might I but And explanation, guess, the you're as would thoughts? see. strong, the crystal stable. your is of of like being just talked part seasonality housing pricing

they kind Mark. like necessarily. I feel they're wouldn't wobbly Yes, plateauing I they're say, would here. say of

had weeks fires was for You're bunch data. higher European that a things, whole several just higher And about factors, now was example. random and driven lengths, imports I up by week, over rolling those of think better every it We've Canada, and and higher, in and right. housing higher of

of impact But are ground, starting way, in they've two heard We've by roll U.S. to like example. up. for seen out we've to our impact fires start Well, up activity a mills it's restarted I Alberta to pick here the fire the the seen up little pop West. Weyerhaeuser activity about, that talk over the feel were but their in West, no going impacted, bit. to some in kind fire Canada, I

not also strong as print We've And the over. the latest also - roll seen was European we've housing as imports prior quite ones.

the bit seasonal also you're the when get out you as a weakness of year getting get of So those do time little where into into months. into winter we

the low first had as collapse prices. anticipate prices these at, lower Clearly, point move a a here. they're So quarter QX. into maybe I in a to or the was nice slightly where in year. of kind don't we expect We've And drift stay mind my I for run

Okay. Appreciate the color. Thanks, Eric.

Thanks, Mark.

from Quinn from Capital question RBC go Our comes Please Markets. next ahead. Paul

guys. much. very thanks Yes, Good morning,

morning. Good

projects help you are like like marginal timberlands in that Northern of planning some the if are you've the and of the Just understand what following got, timberlands up any that acre could for, XX,XXX projects on this us carbon capture, just wondering got that Idaho? Is say, area? you kind you've stuff areas in

tracks didn't it but bottomlands can round. to property a we This yet, is the to deal at so good credits, harvested, credits, forestry our process. to program. Yes, high-quality is high put painstaking but not this It's getting we're difficult be look a - it that done, South. we in first would where looking harvested be not the that harvest plantation very It's carbon that into it's may harvest be grade may which it's again Paul. quality industrial if is hardwood It still money year still issue is. is This -

the But where yet supply to are being is, point with being they just see it outpacing for forestry. we'll impact not what is supply. carbon and carbon is So values plantation it demand demand where far credits

there's credits. So there pressure their stick net - to assuming commitments, zero carbon price on companies upward

And as a that deal apply going yes, we'll and to this get - lot all deal Idaho, from once we're our it learn to to we're this relates knowledge we think going of done, first acreage. I to

each we and to out look we're in at do, value always the Idaho. see of maximize we Idaho own we'll every carbon that to in like sure sense and I'm acre Just makes acreage if

that. for thanks Okay,

impact setting in suspect hardwood, by it's carbon material. I be not that going this project a that harvesting bottomland to up given a impact So harvesting --long-term the is

the wouldn't to day. at expect material I Yes, be the end it of

there storage for And then carbon you any the guys? front, Okay. opportunities on

that get and your where to pipe We're the the it looking formations store cost to close still you great emitters of carbon. can a formation to it. so key the formation. and Arkansas at capital there's geological are where way Southern in is We've don't have to got to not have lot geologic being carbon we The

that and biofuel and to one in and capture also immediately form want the We're time. So the plants comes build another we're carbon conversations that folks then exploring, with process. going carbon store to this is off take of having or Arkansas,

an definitely for it's opportunity So just us. years several - it's out. It's

All all luck, Best of had. that's I right, guys.

right. Paul. All Thanks,

Thanks, Paul.

Horne Buck James. Raymond next go comes from Our ahead. from Please question

one you Most have got sales been of for one the in I've quick on Valley. just answered. land guys. Thanks, Chenal my questions commercial

have? were at just little particular price such high acreage a give Chenal do the you you crown portfolio? into how a we that achieve factor to color And what you that other point? jewels Valley else can Any to on - able and Just similar that could

a this Buck, things. Yes, Wayne. is couple Yes, of

at I for, think a prime one those was were the was and one believe, two quarter, this the we but locations. other office. sold were bank - a - properties they that And medical

price the depending that on So drives the location really acre. per

and under have it's as bit to of we be can predict a XXX that sales And close. know, challenging commercial develop pipeline, acres the we those commercial think just as will available little land I at you I when think to continue Chenal. lumpy

grow, think rooftop that as increase we continue density think I being to think to continuing as with go to continues residential and and increases that's then benefit to will I only commercial. continues I increase, positive, But - that strong,

-- So

helpful. you, That's guys. got. I That's all Thank Okay.

Thanks, Buck.

Buck. Thanks,

are there to over now more At this Wasechek. that back will showing turn call time, I'm no Wayne questions. I the

Yes. Thank our PotlatchDeltic. call. you your in concludes questions and your That for interest

Ladies and joining. you gentlemen, all thank for

may disconnect. You now