Investors

Press Release

« Back

Rayonier Reports First Quarter 2002 Earnings

April 22, 2002

JACKSONVILLE, Fla., Apr 22, 2002 (BUSINESS WIRE) -- Rayonier (NYSE:RYN) today reported first quarter net income of $9.4 million, or 33 cents per share, compared to $7.9 million, or 28 cents per share, in fourth quarter 2001 and $12.3 million, or 45 cents per share, in last year's first quarter. Sales of $276 million were up $9 million from fourth quarter and comparable to first quarter 2001.

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


Contact

Mark McHugh

Senior Vice President and Chief Financial Officer

Phone: (904) 357-9100

investorrelations@rayonier.com

Transfer Agent

For essential services such as change of address, lost certificates or dividend checks, or change in registered ownership, please write or call:

  • Regular Mail
  • Computershare
  • P.O. Box 43006
  • Providence, RI 02940-3006
  • United States
  • Overnight Delivery
  • Computershare
  • 250 Royall Street
  • Canton, MA 02021
  • United States

Inside the U.S.: (800) 659-0158

Outside the U.S.: (201) 680-6587

For online inquiries, please visit https://www-us.computershare.com.

Please include your name, address, account number and telephone number with all correspondence.

Get investor email alerts delivered to your inbox