Lee Nutter, Chairman, President and CEO said: "Earnings improved from the fourth quarter due to lower costs in our Performance Fibers business, increased demand for high value cellulose specialty products, higher lumber prices and lower interest costs."
EBITDA (earnings before interest, taxes, depreciation, depletion, amortization and the non-cash cost of land sales) was $75 million, or $2.68 per share, compared to $65 million, or $2.33 per share, in the fourth quarter and $78 million, or $2.84 per share, in first quarter 2001. Free cash flow was $27 million compared to $3 million in the fourth quarter and $32 million in first quarter 2001. Net debt at quarter-end was $794 million, $48 million lower than year-end 2001 and $150 million below first quarter 2001. The net debt-to-capital ratio of 52.5 percent reflects a decline of 1.8 and 5.5 percentage points from year-end and first quarter 2001, respectively.
Performance Fibers
Sales of $129 million and operating income of $7 million were both $4 million above fourth quarter. Sales rose primarily due to increased cellulose specialties volume while operating income improved due to the higher volume and lower manufacturing costs. After declining throughout 2001, first quarter fluff pulp prices held at fourth quarter levels. Compared to first quarter 2001, sales and operating income declined by $10 million and $8 million, respectively, primarily due to lower fluff pulp prices.
Timber and Land
Sales of $63 million were $6 million higher than fourth quarter while operating income of $29 million was $2 million lower. Sales were comparable to first quarter 2001 while operating income declined $7 million due to lower timber volume and prices, partially offset by higher land sales.
Wood Products and Trading
Sales of $89 million were comparable to fourth quarter. However, the operating loss of $2 million reflected improvement of $2 million and $5 million compared to fourth quarter and first quarter 2001, respectively. Improved operating results were due to higher prices and lower manufacturing costs in lumber operations.
Other Items
Corporate and other expense of $6 million was $1 million above fourth quarter primarily due to higher stock price-based incentive compensation, partially offset by reorganization costs in the fourth quarter.
Interest expense of $15 million was $1 million and $4 million below fourth quarter and first quarter 2001, respectively, primarily due to lower debt levels.
The effective tax rate was above the unusually low fourth quarter rate which included foreign exchange tax-related benefits.
Outlook
"Although global economic conditions remain soft," Nutter said, "we expect second quarter earnings, excluding the impact of the recently announced New Zealand transaction, to be somewhat higher than the first quarter due to increased land sales margins and improved costs in our Performance Fibers business."
Rayonier is the world's premier supplier of high performance specialty cellulose fibers and has 2.3 million acres of timberland in the U.S. and New Zealand. Approximately half of Rayonier's sales are outside the U.S. to customers in nearly 60 countries.
Comments about market trends and anticipated earnings are forward-looking and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The following important factors, among others, could cause actual results to differ materially from those expressed in the forward-looking statements: changes in global market trends and world events that could impact customer demand; interest rate and currency movements; fluctuations in demand for cellulose specialties, absorbent materials, timber, and wood products; the impact of such market factors on the company's timber sales in the U.S. and New Zealand; adverse weather conditions; changes in production costs for wood products and performance fibers, particularly for raw materials such as wood, energy and chemicals; unexpected delays in the closing of land sale transactions; and implementation or revision of governmental policies and regulations affecting the environment, import and export controls and taxes. For additional factors that could impact future results, please see the company's most recent Form 10-K on file with the Securities and Exchange Commission.
A conference call will be held on Tuesday, April 23 at 4:15 p.m. EDT to discuss these results. Interested parties are invited to listen to the live webcast by logging onto http://www.rayonier.com and following the link. Supplemental materials will be available at the website. A replay will also be available on the site shortly after the call. Also, investors may access the "listen only" conference call by dialing 913-981-5584.
For further information, visit the company's web site at http://www.rayonier.com. Complimentary copies of Rayonier press releases and other financial documents are also available by mail or fax by calling 1-800-RYN-7611.
RAYONIER
FINANCIAL HIGHLIGHTS
MARCH 31, 2002 (unaudited)
(millions of dollars, except per share information)
Three Months Ended
--------------------------------------
March 31, December 31, March 31,
2002 2001 2001
--------- ------------ ---------
Profitability
Sales $ 276.3 $ 267.1 $ 276.5
Operating income $ 28.2 $ 25.3 $ 37.9
Net income $ 9.4 $ 7.9 $ 12.3
Net income per diluted
Common Share $ 0.33 $ 0.28 $ 0.45
Operating income
as a percent of sales 10.2% 9.5% 13.7%
ROE (annualized) (a) 3.5% 2.2% 7.0%
Capital Resources and Liquidity
EBITDA (b) $ 75.2 $ 64.8 $ 78.1
Free cash flow (c) $ 26.5 $ 3.4 $ 32.3
Decrease in borrowings $ 35.1 $ 5.0 $ 29.0
Debt $ 814.7 $ 849.8 $ 944.0
Net debt (d) $ 794.2 $ 842.5 $ 944.0
Net debt / capital 52.5% 54.3% 58.0%
(a) Major land sales are not annualized.
(b) EBITDA is defined as earnings from continuing operations
before significant non-recurring items, provision for dispositions,
interest expense, income taxes, depreciation, depletion, amortization
and the non-cash cost of land sales.
(c) Free cash flow is defined as EBITDA plus or minus significant
non-recurring items, changes in working capital and long-term assets
and liabilities, less income taxes, interest expense, custodial
capital spending, prior-year dividend levels and the non-cash cost of
land sales.
(d) Net debt is defined as debt less cash invested of $20.5, $7.3
and $0, at 3/31/02, 12/31/01 and 3/31/01, respectively.
RAYONIER
STATEMENTS OF CONSOLIDATED INCOME
MARCH 31, 2002 (unaudited)
(millions of dollars, except per share information)
Three Months Ended
--------------------------------------
March 31, December 31, March 31,
2002 2001 2001
--------- ------------ ---------
Sales $ 276.3 $ 267.1 $ 276.5
--------- ------------ ---------
Costs and expenses
Cost of sales 236.0 233.2 231.5
Selling and general
expenses 11.5 11.7 7.6
Other operating expense
(income) 0.6 (3.1) (0.5)
--------- ----------- ---------
Operating income 28.2 25.3 37.9
Interest expense (15.2) (16.2) (18.9)
Interest and miscellaneous
income (expense), net 0.3 0.7 (0.5)
--------- ----------- ---------
Income before income taxes 13.3 9.8 18.5
Income tax expense (3.9) (1.9) (6.2)
-------- ----------- ---------
Net income $ 9.4 $ 7.9 $ 12.3
======== =========== =========
Net income per Common Share
Basic EPS $ 0.34 $ 0.29 $ 0.45
======== =========== =========
Diluted EPS $ 0.33 $ 0.28 $ 0.45
======== =========== =========
Weighted average Common Shares
used for determining
Basic EPS 27,526,125 27,282,588 27,125,148
========== ========== ==========
Diluted EPS 28,085,833 27,669,616 27,493,637
========== ========== ==========
RAYONIER
BUSINESS SEGMENT SALES AND OPERATING INCOME
MARCH 31, 2002 (unaudited)
(millions of dollars)
Three Months Ended
----------------------------------------
March 31, December 31, March 31,
2002 2001 2001
--------- ------------ ---------
Sales
Performance Fibers
Cellulose
specialties $ 90.6 $ 86.6 $ 90.0
Absorbent
materials 38.7 38.9 49.0
--------- ------------ ---------
Total Performance
Fibers 129.3 125.5 139.0
--------- ------------ ---------
Timber and Land
Timber 44.4 44.1 61.9
Land 19.1 13.0 1.2
--------- ------------ ---------
Total Timber
and Land 63.5 57.1 63.1
--------- ------------ ---------
Wood Products and
Trading 89.2 87.9 83.8
Intersegment
eliminations (5.7) (3.4) (9.4)
--------- ------------ ---------
Total sales $ 276.3 $ 267.1 $ 276.5
========= ============ =========
Operating income (loss)
Performance Fibers $ 6.6 $ 2.6 $ 14.7
Timber and Land
Timber 20.8 20.7 35.3
Land 8.6 10.8 0.8
--------- ------------ ---------
Total Timber
and Land 29.4 31.5 36.1
Wood Products
and Trading (1.6) (3.6) (6.2)
Corporate and other (6.2) (5.2) (6.7)
--------- ------------ ---------
Total operating
income $ 28.2 $ 25.3 $ 37.9
========= ============ =========
RAYONIER
FUNDS FLOW SUMMARY
MARCH 31, 2002 (unaudited)
(millions of dollars)
Three Months Ended
-----------------------------------------
March 31, December 31, March 31,
2002 2001 2001
--------- ------------ ---------
Net income $ 9.4 $ 7.9 $ 12.3
Depreciation,
depletion and
amortization 43.9 37.6 40.5
Non-cash cost of
land sales 2.7 1.3 0.3
--------- ------------ ---------
Subtotal 56.0 46.8 53.1
Capital expenditures (17.1) (18.7) (21.0)
Working capital
changes (8.8) (6.1) 4.7
Dividends (9.9) (9.8) (9.8)
Share repurchases - - -
All other 14.9 (7.2) 2.0
--------- ------------ ---------
Decrease in
borrowings $ 35.1 $ 5.0 $ 29.0
========= ============ =========
RAYONIER
SELECTED SUPPLEMENTAL FINANCIAL DATA
MARCH 31, 2002 (unaudited)
(millions of dollars, except per share information)
Three Months Ended
-----------------------------------------
March 31, December 31, March 31,
2002 2001 2001
--------- ------------ ---------
Geographical Data (Non-U.S.)
Sales
New Zealand $ 27.3 $ 34.3 $ 24.0
Other 13.3 9.7 12.0
--------- ------------ ---------
Total $ 40.6 $ 44.0 $ 36.0
========= ============ =========
Operating income (loss)
New Zealand $ 0.2 $ 2.9 $ 0.6
Other (1.4) 1.2 0.1
--------- ------------ ---------
Total $ (1.2) $ 4.1 $ 0.7
========= ============ =========
Timber and Land
Sales
Northwest U.S. $ 17.3 $ 18.4 $ 25.1
Southeast U.S. 35.6 28.2 31.7
New Zealand 10.6 10.5 6.3
--------- ------------ ---------
Total $ 63.5 $ 57.1 $ 63.1
========= ============ =========
Operating income (loss)
Northwest U.S. $ 12.8 $ 13.0 $ 20.1
Southeast U.S. 17.1 17.0 14.1
New Zealand (0.5) 1.5 1.9
--------- ------------ ---------
Total $ 29.4 $ 31.5 $ 36.1
========= ============ =========
EBITDA per Share
Performance
Fibers $ 0.86 $ 0.81 $ 1.22
Timber and Land 1.96 1.69 2.02
Wood Products
and Trading 0.07 0.01 (0.11)
Corporate and
other (0.21) (0.18) (0.29)
--------- ------------ ---------
Total $ 2.68 $ 2.33 $ 2.84
========= ============ =========
RAYONIER
SELECTED OPERATING INFORMATION
MARCH 31, 2002 (unaudited)
Three Months Ended
-----------------------------------------
March 31, December 31, March 31,
2002 2001 2001
--------- ------------ ---------
Performance Fibers
Sales Volume
Cellulose specialties,
in thousands of
metric tons 104 99 103
Absorbent materials,
in thousands of
metric tons 70 68 72
Production as a percent
of capacity 96.3% 95.9% 98.6%
Timber and Land
Sales volume - Timber
Northwest U.S., in
millions of board feet 70 66 88
Southeast U.S., in
thousands of short
green tons 1,241 1,025 1,575
New Zealand, in
thousands of metric
tons(1) 287 449 292
Timber sales volume - Intercompany
Northwest U.S., in
millions of board feet 15 3 29
Southeast U.S., in
thousands of short
green tons 5 11 14
New Zealand, in thousands
of metric tons(1) 179 219 144
Acres sold 18,900 6,466 415
Wood Products and Trading
Lumber sales volume, in
millions of board feet 79 80 57
Medium-density fiberboard
sales volume, in thousands
of cubic meters 36 48 37
Log trading sales volume
North America, in millions
of board feet 27 23 49
New Zealand, in thousands
of cubic meters 211 286 214
Other, in thousands of
cubic meters 118 68 123
(1) 2001 volume restated from cubic meters to metric tons
| CONTACT: | Rayonier Inc., Jacksonville |
|---|---|
| Media Contact: | |
| Jay A. Fredericksen, 904/357-9106 | |
| or | |
| Investor Contact: | |
| Parag Bhansali, 904/357-9155 | |
