-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JgGyLbXpBpo1olpx3Kbn2+sYEn6a/aWPZfJFqEGvCHh5gPGLw+im7uoQkh4V6Cv9 CkXgvX6YdJ8cfsNqDWG9rw== 0001157523-05-003879.txt : 20050427 0001157523-05-003879.hdr.sgml : 20050427 20050427120652 ACCESSION NUMBER: 0001157523-05-003879 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050426 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050427 DATE AS OF CHANGE: 20050427 FILER: COMPANY DATA: COMPANY CONFORMED NAME: POPE RESOURCES LTD PARTNERSHIP CENTRAL INDEX KEY: 0000784011 STANDARD INDUSTRIAL CLASSIFICATION: FORESTRY [0800] IRS NUMBER: 911313292 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09035 FILM NUMBER: 05775368 BUSINESS ADDRESS: STREET 1: 19245 10TH AVE NE CITY: POULSBO STATE: WA ZIP: 98370 BUSINESS PHONE: 2066976626 MAIL ADDRESS: STREET 1: 19245 10TH AVE NE CITY: POULSBO STATE: WA ZIP: 98370 8-K 1 a4873890.txt POPE RESOURCES 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K Current Report Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported) April 26, 2005 -------------- Pope Resources, A Delaware Limited Partnership (Exact name of registrant as specified in its charter) Delaware 91-1313292 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 19245 Tenth Avenue NE, Poulsbo, Washington 98370 ------------------------------------------------ (Address of principal executive offices) (ZIP Code) Registrant's telephone number, including area code (360) 697-6626 -------------- NOT APPLICABLE -------------- (Former name or former address, if changed since last report.) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (SEE General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) INFORMATION TO BE INCLUDED IN THE REPORT ---------------------------------------- Item 2.02: RESULTS OF OPERATIONS AND FINANCIAL CONDITION On April 26, 2005 the registrant issued a press release relating to its earnings for the quarter ended March 31, 2005. A copy of that press release is furnished herewith as Exhibit 99.1. Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS Exhibit No. Description - ---------- ----------- 99.1 Press release of the registrant dated April 26, 2005 SIGNATURES - ---------- Pursuant to the requirements of Section 13 of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. POPE RESOURCES, A DELAWARE LIMITED PARTNERSHIP DATE: April 26, 2005 BY: /s/ Thomas M. Ringo ------------------- Thomas M. Ringo Vice President and Chief Financial Officer, Pope Resources, A Delaware Limited Partnership, and Pope MGP, Inc., General Partner EX-99.1 2 a4873890ex991.txt EXHIBIT 99.1 Exhibit 99.1 Press Release of the Registrant dated April 26, 2005 Pope Resources Reports First Quarter Net Income of $4.6 Million POULSBO, Wash.--(BUSINESS WIRE)--April 26, 2005--Pope Resources (Nasdaq:POPEZ) reported net income of $4.6 million, or 97 cents per diluted ownership unit, on revenues of $16.7 million for the first quarter ended March 31, 2005. This compares to net income of $4.0 million, or 87 cents per diluted ownership unit, on revenues of $11.7 million for the comparable period in 2004. Earnings before interest, taxes, depreciation, depletion, and amortization (EBITDDA) were $9.6 million for the current quarter versus $6.4 million for the comparable period in 2004. "We enjoyed one of the strongest quarters in the Partnership's history, with solid performances across all three of our business segments," said David L. Nunes, President and CEO. "Following two timberland acquisitions which closed in 2004, first quarter log harvest volume for our Fee Timber segment increased 13%, from 20 million board feet (MMBF) in 2004 to 23 MMBF in 2005. Average log prices were also up $40 per thousand board feet (MBF), representing a 7% increase over 2004's first quarter log prices. However, due to the addition of log harvest volume coming from a fourth quarter acquisition, which carries a significantly higher non-cash depletion expense, operating income for our Fee Timber segment declined by $1.1 million, from $6.1 million in 2004 to $5.0 million in 2005. Our Timberland Management & Consulting segment generated an operating profit for the first time in five quarters on the strength of our new management agreement with Cascade Timberlands LLC, which spans 522,000 acres of timberland in Washington and Oregon. This new contract, initiated in January 2005, propelled first quarter operating income to $0.8 million, compared to an operating loss of $0.4 million in 2004. Lastly, our Real Estate segment got off to a strong start with higher rural residential land sales leading to operating income of $0.6 million in the first quarter of 2005, compared to an operating loss of $0.2 million for the comparable period in 2004." The decrease in Fee Timber operating income in the first quarter of 2005 compared to the prior year is attributable to an increase in current quarter depletion expense that more than offset the current quarter's comparatively higher harvest volumes and realized log prices. The increase in depletion expense stemmed from harvest activity on timberland purchased in the fourth quarter of 2004 for which a separate depletion pool was created. The separate depletion pool was created because the timber inventory from this acquisition was almost completely merchantable. We expect to harvest a total of approximately 79 MMBF in 2005, of which 21 MMBF is expected to come from this separate depletion pool. The depletion cost resulting from log harvests on this acquired timberland will approximate the net stumpage value (delivered log price less harvesting and transportation cost) realized on the sale of this particular timber. As such, the incremental harvest from this acquired property will result in a negligible net income impact while nonetheless generating operating cash flow or EBITDDA. Fee Timber EBITDDA increased from $7.6 million in the first quarter of 2004 to $8.9 million in the first quarter of 2005 in contrast with the aforementioned decline in operating income when comparing the two periods. The Partnership's debt to total capitalization ratio was 36% as of March 31, 2005, down from 42% at the end of the first quarter of 2004. The Partnership does not expect first quarter 2005 financial results to be indicative of results for each of the ensuing quarters in 2005. With no internal sawmills to supply, the Partnership is able to capitalize on short-term market conditions by altering the timing of planned annual harvest volumes. For example, timber volume harvested in the first quarter represented 29% of the planned 2005 harvest of 79 MMBF. Similarly, as a result of strong market conditions, the Real Estate segment has completed about 50% of their planned development property sales in 2005 as of the end of the first quarter. About Pope Resources Pope Resources, a publicly traded limited partnership, and its subsidiaries Olympic Resource Management and Olympic Property Group, own or manage over 640,000 acres of timberland and development property in Washington and Oregon. In addition, we provide forestry consulting and timberland management services to third-party owners and managers of timberland in Washington, Oregon, and California. The company and its predecessor companies have owned and managed timberlands and development properties for more than 150 years. Additional information on the company can be found at www.orm.com. The contents of our website are not incorporated into this release or into our filings with the Securities and Exchange Commission. This press release contains a number of projections and statements about our expected financial condition, operating results, business plans and objectives. These statements reflect management's estimates based on current goals and its expectations about future developments. Because these statements describe our goals, objectives, and anticipated performance, they are inherently uncertain, and some or all of these statements may not come to pass. Accordingly, they should not be interpreted as promises of future management actions or financial performance. Our future actions and actual performance will vary from current expectations and under various circumstances the results of these variations may be material and adverse. Some of the factors that may cause actual operating results and financial condition to fall short of expectations include factors that affect our ability to anticipate and respond adequately to fluctuations in the market prices for our products; environmental and land use regulations that limit our ability to harvest timber and develop property; labor, equipment and transportation costs that affect our net income; and economic conditions that affect consumer demand for our products and the prices we receive for them. Other factors are set forth in that part of our Annual Report on Form 10-K entitled "Management's Discussion & Analysis of Financial Condition and Results of Operation - Risks and Uncertainties." Other issues that may have an adverse and material impact on our business, operating results, and financial condition include those risks and uncertainties discussed in our other filings with the Securities and Exchange Commission. Forward-looking statements in this release are made only as of the date shown above, and we cannot undertake to update these statements. Management considers earnings (net income or loss) before interest expense, income taxes, depreciation, depletion and amortization (EBITDDA) to be a relevant and meaningful indicator of liquidity and earnings performance commonly used by investors, financial analysts and others in evaluating companies in its industry and, as such, has provided this information in addition to the generally accepted accounting principle-based presentation of net income or loss and cash from operations. In that context, "depletion" refers to a measure of the reduction in value of timberland upon the harvest of growing timber from that land. Pope Resources, A Delaware Limited Partnership Unaudited CONSOLIDATED STATEMENTS OF OPERATIONS (all amounts in $000's, except per unit amounts) Three months ended March 31, 2005 2004 -------- ------- Revenues $ 16,656 $11,732 Costs and expenses: Cost of sales (7,804) (4,488) Operating expenses (3,181) (2,496) Interest, net (717) (750) -------- ------- Total expenses (11,702) (7,734) -------- ------- Income before income taxes 4,954 3,998 Income tax (expense) (247) - -------- ------- Income before minority interest 4,707 3,998 Minority interest (101) - -------- ------- Net income $ 4,606 $ 3,998 ======== ======= Weighted average units outstanding - Basic (000's) 4,561 4,518 Weighted average units outstanding - Diluted (000's) 4,730 4,575 Basic net income per unit $ 1.01 $ 0.88 Diluted net income per unit $ 0.97 $ 0.87 CONSOLIDATED BALANCE SHEETS (all amounts in $000's) March 31, 2005 2004 ------- ------- Assets: Cash and short-term investments $ 4,472 $ 3,358 Other current assets 3,802 3,575 Roads and timber 61,023 54,903 Properties and equipment 26,604 24,918 Other assets 1,112 1,375 ------- ------- Total $97,013 $88,129 ======= ======= Liabilities and partners' capital: Current liabilities $ 4,946 $ 3,486 Long-term debt, excluding current portion 32,504 34,574 Other long-term liabilities 211 333 ------- ------- Total liabilities 37,661 38,393 Partners' capital 59,352 49,736 ------- ------- Total $97,013 $88,129 ======= ======= RECONCILIATION BETWEEN NET INCOME AND EBITDDA (all amounts in $000's) Three months ended 31-Mar-05 31-Mar-04 31-Dec-04 --------- --------- --------- Net income $ 4,606 $ 3,998 $ 820 Added back: Interest, net 717 750 728 Depletion 3,843 1,471 1,353 Depreciation and amortization 152 168 152 Income tax expense 247 - Less: Income tax benefit - - - ------- ------- ------- EBITDDA $ 9,565 $ 6,387 $ 3,053 ======= ======= ======= RECONCILIATION BETWEEN CASH FROM OPERATIONS AND EBITDDA (all amounts in $000's) Three months ended 31-Mar-05 31-Mar-04 31-Dec-04 --------- --------- --------- Cash from operations $6,893 $4,225 $3,595 Added back: Change in working capital 1,993 1,519 - Interest 717 750 728 Deferred profit - - Income tax expense 247 - - Other 1 1 - Less: Change in working capital - - (824) Deferred profit (152) (108) (275) Income tax benefit - - - Cost of land sold (134) - (169) Other - - (2) --------- --------- --------- EBITDDA $9,565 $6,387 $3,053 ========= ========= ========= SEGMENT INFORMATION (all amounts in $000's) Three months ended 31-Mar-05 31-Mar-04 31-Dec-04 --------- --------- --------- Revenues: Fee Timber $13,663 $11,411 $ 5,576 Timberland Management & Consulting (TM&C) 1,614 126 602 Real Estate 1,379 195 1,799 ------- ------- ------- Total 16,656 11,732 7,977 EBITDDA: Fee Timber 8,911 7,633 2,960 TM&C 863 (382) (10) Real Estate 671 (218) 904 General & administrative (880) (646) (801) ------- ------- ------- Total 9,565 6,387 3,053 Depreciation, depletion and amortization: Fee Timber 3,869 1,502 1,395 TM&C 21 22 22 Real Estate 36 23 19 General & administrative 69 92 69 ------- ------- ------- Total 3,995 1,639 1,505 Operating income (loss): Fee Timber 5,042 6,131 1,565 TM&C 842 (404) (32) Real Estate 635 (241) 885 General & administrative (848) (738) (870) ------- ------- ------- Total $ 5,671 $ 4,748 $ 1,548 ======= ======= ======= SELECTED STATISTICS Three months ended 31-Mar-05 31-Mar-04 31-Dec-04 --------- --------- --------- Log sale volumes (thousand board feet): Export conifer 3,510 5,624 1,153 Domestic conifer 15,065 11,690 5,414 Pulp conifer 2,937 2,633 1,422 Hardwoods 1,488 405 1,111 --------- --------- --------- Total 23,000 20,352 9,100 ========= ========= ========= Three months ended 31-Mar-05 31-Mar-04 31-Dec-04 --------- --------- --------- Average price realizations (per thousand board feet): Export conifer $ 661 $ 659 $ 676 Domestic conifer 616 554 590 Pulp conifer 273 221 209 Hardwoods 627 558 617 Overall 580 540 544 Owned timber acres 115,103 115,125 118,488 Acres under management 527,316 5,316 527,316 Capital expenditures ($000's) 948 9,331(b) 13,267(a) Depletion ($000's) 3,843 1,471 1,353 Depreciation and amortization ($000's) 152 168 152 Debt to total capitalization 36% 42% 40% (a) Includes $12.3 million timberland acquisition closed in October 2004. (b) Includes $8.5 million timberland acquisition closed in January 2004. QUARTER TO QUARTER COMPARISONS (Amounts in $000's except per unit data) Q1 2005 vs. Q1 2004 Q1 2005 vs. Q4 2004 Total Per Unit Total Per Unit -------- --------- -------- --------- Net income: 1st Quarter 2005 $ 4,606 $ 1.01 $ 4,606 $ 1.01 4th Quarter 2004 820 0.18 1st Quarter 2004 3,998 0.88 ------- -------- ------- -------- Variance $ 608 $ 0.13 $ 3,786 $ 0.83 ======= ======== ======= ======== Detail of earnings variance: Fee Timber: Log price realizations (A) $ 920 $ 0.21 $ 828 $ 0.18 Log volumes (B) 741 0.17 5,413 1.21 Timberland sale income (6) - - - Depletion (2,372) (0.53) (2,490) (0.55) Other Fee Timber (372) (0.09) (274) (0.06) Timberland Management & Consulting: Management fee changes 1,187 0.26 832 0.19 Other Timberland Mgmnt & Consulting 59 0.01 42 0.01 Real Estate: Land sales 903 0.20 (314) (0.07) Other (27) (0.01) 64 0.01 General & administrative costs (110) (0.02) 22 - Interest expense 38 0.01 2 - Other (taxes, minority int., interest inc.) (353) (0.08) (339) (0.09) ------- -------- ------- -------- Total change in net income $ 608 $ 0.13 $ 3,786 $ 0.83 ======= ======== ======= ======== (A) Price variance allocated based on changes in price using the lower period volume. (B) Volume variance allocated based on change in sales volume and the average log sales price for the current period less variance in log production costs. CONTACT: Pope Resources Tom Ringo, 360-697-6626 Fax 360-697-1156 -----END PRIVACY-ENHANCED MESSAGE-----