-----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, I+9GF0fiPWkOBJy0ddhHD9h+zLxLmn0TLZYp/mqfbirxy5ZFIkV23KyzNaTRfowr IBCvTyLRAtaelMd/pD7j5A== 0001157523-07-010477.txt : 20071031 0001157523-07-010477.hdr.sgml : 20071030 20071031142148 ACCESSION NUMBER: 0001157523-07-010477 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20071031 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20071031 DATE AS OF CHANGE: 20071031 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: 071202284 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 a5533061.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) October 31, 2007 ---------------- 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 October 31, 2007 the registrant issued a press release relating to its earnings for the quarter and nine months ended September 30, 2007. 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 October 31, 2007 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: October 31, 2007 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 a5533061ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 Pope Resources Reports Third Quarter Net Income of $3.6 Million POULSBO, Wash.--(BUSINESS WIRE)--Oct. 31, 2007--Pope Resources (NasdaqGSM:POPEZ) reported net income of $3.6 million, or 74 cents per diluted ownership unit, on revenues of $12.2 million for the third quarter ended September 30, 2007. This compares to net income of $8.3 million, or $1.74 per diluted ownership unit, on revenues of $18.0 million for the comparable period in 2006. Net income for the nine months ended September 30, 2007, totaled $9.2 million, or $1.91 per diluted ownership unit, on revenues of $34.3 million. Net income for the corresponding period in 2006 totaled $17.1 million, or $3.60 per diluted ownership unit, on revenues of $49.7 million. Earnings before interest, taxes, depreciation, depletion, and amortization (EBITDDA) for the quarter ended September 30, 2007, were $5.1 million, compared to $9.9 million for the third quarter of 2006. For the nine months ended September 30, 2007, EBITDDA was $13.9 million, compared to $24.7 million for year-to-date 2006 results. "Results for the third quarter and the first nine months of this year were down significantly compared to last year's comparable periods because of the third quarter 2006 sale of a 17-acre commercial parcel in Gig Harbor to Costco Wholesale Corporation that contributed $5.7 million to our Real Estate segment operating income in the prior year's results," said David L. Nunes, President and CEO. Notwithstanding the much chronicled decline in domestic housing starts, our Fee Timber segment results have held up reasonably well. While our third quarter realized log prices slipped 2%, from $623 per thousand board feet (MBF) in 2006 to $611 per MBF in 2007, we managed to keep log prices flat on a year-to-date basis by locking in prices earlier in the year when markets were not as weak and by shifting our harvest mix toward those markets with the healthiest relative pricing. For the first nine months of 2007, Fee Timber operating income declined 2% to $13.6 million from $13.8 million in 2006. Even though we experienced a 6% drop in harvest volumes, from 51 MMBF in 2006 to 48 MMBF in 2007, the drop in operating income was mitigated by a lower average depletion rate. Last year's harvest included volume from a separate depletion pool that carried a higher depletion rate than volume harvested in the current year. Our Timberland Management & Consulting segment posted a year-to-date operating loss of $0.5 million compared to operating income of $1.4 million in 2006. The decline in operating income from this segment is the result of fewer assets under management in 2007 and a timberland disposition fee earned in 2006 that was not repeated in 2007. Operating income for our Real Estate segment declined from $5.9 million for the first nine months of 2006 to a $0.5 million loss for the comparable period in 2007. As mentioned above, this anticipated decline is due primarily to the sale of a 17-acre commercial parcel in Gig Harbor to Costco in 2006 for which there was no counterpart in 2007's year-to-date results. We expect to generate revenue from our Gig Harbor and Bremerton projects during the balance of 2007, but this revenue will not approach the record level attained in 2006. The financial schedules attached to this earnings release provide detail on individual segment results and operating statistics. About Pope Resources Pope Resources, a publicly traded limited partnership, and its subsidiaries Olympic Resource Management and Olympic Property Group, own or manage nearly 430,000 acres of timberland and development property in Washington and Oregon. In addition, we provide forestry consulting and timberland investment 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.poperesources.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; our ability to discover and to accurately estimate liabilities associated with our properties; 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 "Risk Factors." 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 an important measure of operating profitability, particularly when comparing results between different timber-owning companies because of variability in capital structures, legal structures, methods of calculating depletion expense, and cost basis resulting from historical costs recorded under GAAP. Since this variability impacts the GAAP results of industry issuers in different ways, disclosure of EBITDDA can make it easier for the reader to make meaningful comparisons between operating results and cash-generating capabilities from one timber company to another. Pope Resources, A Delaware Limited Partnership Unaudited CONSOLIDATED STATEMENT OF OPERATIONS DATA (all amounts in $000's, except per unit amounts) Three months ended Nine months ended September 30, September 30, 2007 2006 2007 2006 Revenues $12,171 $18,024 $ 34,284 $ 49,717 Costs and expenses: Cost of sales (5,171) (6,198) (14,302) (21,037) Operating expenses (3,772) (3,423) (11,114) (10,357) ------------ -------- --------- --------- Operating income 3,228 8,403 8,868 18,323 Interest, net 110 (115) 137 (641) ------------ -------- --------- --------- Income before income taxes and minority interest 3,338 8,288 9,005 17,682 Income tax provision (5) (16) (22) (453) ------------ -------- --------- --------- Income before minority interest 3,333 8,272 8,983 17,229 Minority interest 218 7 237 (112) ------------ -------- --------- --------- Net income $ 3,551 $ 8,279 $ 9,220 $ 17,117 ============ ======== ========= ========= Average units outstanding - Basic 4,687 4,645 4,679 4,641 ============ ======== ========= ========= Average units outstanding - Diluted 4,831 4,769 4,823 4,760 ============ ======== ========= ========= Basic net income per unit $ 0.76 $ 1.78 $ 1.97 $ 3.69 ============ ======== ========= ========= Diluted net income per unit $ 0.74 $ 1.74 $ 1.91 $ 3.60 ============ ======== ========= ========= CONSOLIDATED BALANCE SHEET DATA (all amounts in $000's) September 30, 2007 2006 -------- -------- Assets: Cash $3,940 $7,194 Short term investments 27,000 25,000 Other current assets 11,814 8,933 Roads and timber 94,483 98,110 Properties and equipment 42,662 39,026 Other assets 1,519 2,019 -------- -------- Total $181,418 $180,282 ======== ======== Liabilities and partners' capital: Current liabilities $12,264 $14,775 Long-term debt, excluding current portion 29,490 30,866 Other long-term liabilities 282 351 -------- -------- Total liabilities 42,036 45,992 Minority interest 45,969 46,685 Partners' capital 93,413 87,605 -------- -------- Total $181,418 $180,282 ======== ======== RECONCILIATION BETWEEN NET INCOME AND EBITDDA (all amounts in $000's) Three months ended Nine months ended September 30, September 30, 2007 2006 2007 2006 Net income $3,551 $8,279 $ 9,220 $17,117 Added back: Interest, net (110) 115 (137) 641 Depletion 1,430 1,278 4,179 5,970 Depreciation and amortization 205 175 604 534 Income tax provision 5 16 22 453 -------------------- ------ --------- ------- EBITDDA $5,081 $9,863 $13,888 $24,715 ==================== ====== ========= ======= RECONCILIATION BETWEEN CASH FROM OPERATIONS AND EBITDDA (all amounts in $000's) Three months ended Nine months ended September 30, September 30, 2007 2006 2007 2006 Cash from operations $5,087 $15,868 $11,993 $28,423 Adjustments: Change in working capital (579) (4,005) 1,751 1,435 Interest (110) 115 (137) 641 Deferred revenue 1,168 (90) 1,091 (1,031) Minority interest 219 7 237 (112) Deferred taxes (92) (7) (45) 11 Income tax provision 5 16 22 453 Cost of land sold (486) (1,968) (532) (4,837) Equity based compensation (131) (73) (492) (267) Other - - - (1) --------- -------- -------- -------- EBITDDA $5,081 $ 9,863 $13,888 $24,715 ========= ======== ======== ======== SEGMENT INFORMATION (all amounts in $000's) Three months ended Nine months ended September 30, September 30, 2007 2006 2007 2006 Revenues: Fee Timber $ 9,836 $ 8,114 $30,642 $32,287 Timberland Management & Consulting (TM&C) 366 578 1,074 3,146 Real Estate 1,969 9,332 2,568 14,284 --------- -------- -------- -------- Total 12,171 18,024 34,284 49,717 EBITDDA: Fee Timber 5,624 4,686 18,253 19,757 TM&C (223) 58 (482) 1,308 Real Estate 589 5,913 (347) 6,237 General & administrative (909) (794) (3,536) (2,587) --------- -------- -------- -------- Total 5,081 9,863 13,888 24,715 Depreciation, depletion and amortization: Fee Timber 1,517 1,123 4,433 5,948 TM&C 21 18 62 54 Real Estate 49 245 136 322 General & administrative 48 67 152 180 --------- -------- -------- -------- Total 1,635 1,453 4,783 6,504 Operating income/(loss): Fee Timber 3,889 3,563 13,583 13,809 TM&C (244) 33 (544) 1,366 Real Estate 540 5,668 (483) 5,915 General & administrative (957) (861) (3,688) (2,767) --------- -------- -------- -------- Total $ 3,228 $ 8,403 $ 8,868 $18,323 ========= ======== ======== ======== SELECTED STATISTICS Three months ended Nine months ended September 30, September 30, 2007 2006 2007 2006 Log sale volumes (thousand board feet): Sawlogs Douglas-fir 7,602 8,626 30,708 36,908 Whitewood 2,272 483 5,985 3,628 Cedar 931 188 1,566 774 Hardwood 1,297 1,464 2,304 3,170 Pulp All species 3,127 1,386 7,312 6,350 --------- --------- --------- --------- Total 15,229 12,147 47,875 50,830 ========= ========= ========= ========= Average price realizations (per thousand board feet): Sawlogs Douglas-fir 622 662 628 672 Whitewood 446 462 467 446 Cedar 1,347 1,260 1,335 1,058 Hardwood 960 683 938 663 Pulp All species 353 281 397 261 Overall 611 623 611 610 Owned timber acres (A) 140,294 114,196 140,294 114,196 Acres under management 292,647 291,925 292,647 291,925 Capital expenditures ($000's) $ 3,003 $ 4,851 $ 7,413 $ 8,999 Depletion ($000's) 1,430 1,278 4,179 5,970 Depreciation ($000's) 205 175 604 534 Debt to total capitalization 25% 29% 25% 29% (A) 2007 acres include 23,858 acres owned by ORM Timberfund I, LP. QUARTER TO QUARTER COMPARISONS (Amounts in $000's except per unit data) Q3 2007 vs. Q3 2006 Q3 2007 vs. Q2 2007 Total Total Net income: 3rd Quarter 2007 $ 3,551 $ 3,551 2nd Quarter 2007 4,815 3rd Quarter 2006 8,279 -------- -------- Variance $(4,728) $(1,264) Detail of earnings variance: Fee Timber Log price realizations (B) $ (183) $ (228) Log volumes (C) 1,920 (4,618) Depletion (152) 608 Production costs (1,059) 1,040 Other Fee Timber (201) (220) Timberland Management & Consulting Management fee changes 69 147 Disposition fee changes - - Other Timberland Mgmnt & Consulting (346) (222) Real Estate Environmental remediation liability 114 - Land sales (5,050) 1,218 Other Real Estate (192) (216) General & administrative costs (96) 749 Interest net 225 110 Minority interest 211 363 Income taxes 12 5 -------- -------- Total change in earnings $(4,728) $(1,264) ======== ======== (B) Price variance calculated by extending the change in average realized price by current period volume. (C) Volume variance calculated by extending change in sales volume by the average log sales price for the comparison period. CONTACT: Pope Resources Tom Ringo, VP & CFO, 360-697-6626 Fax: 360-697-1156 -----END PRIVACY-ENHANCED MESSAGE-----