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) May 3,
2010
Pope
Resources, A Delaware Limited Partnership
(Exact
name of registrant as specified in its charter)
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Delaware
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91-1313292
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(State
or other jurisdiction of
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(I.R.S.
Employer
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incorporation
or organization)
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Identification
No.)
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19245 Tenth Avenue NE, Poulsbo, Washington
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98370
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(Address of principal executive offices)
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(ZIP Code)
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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
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Item
2.02:
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RESULTS
OF OPERATIONS AND FINANCIAL
CONDITION
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On May 3,
2010 the registrant issued a press release relating to its earnings for the
quarter ended March 31, 2010. A copy of that press release is furnished herewith
as Exhibit 99.1.
Item
9.01. FINANCIAL
STATEMENTS AND EXHIBITS
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Exhibit No.
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Description
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99.1
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Press
release of the registrant dated May 3,
2010
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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.
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POPE
RESOURCES, A DELAWARE LIMITED PARTNERSHIP
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||
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DATE:
May 3, 2010
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BY:
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/s/
Thomas M. Ringo
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Thomas
M. Ringo
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||
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Vice
President and Chief Financial Officer, Pope
Resources,
A Delaware Limited Partnership, and
Pope
MGP, Inc., General
Partner
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||
Exhibit
99.1
Press
Release of the Registrant dated May 3, 2010
POPE
RESOURCES REPORTS FIRST QUARTER 2010 EARNINGS
May 3,
2010
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Contact: Tom
Ringo
VP
& CFO
360.697.6626
Fax
360.697.1156
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NEWS
RELEASE
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FOR IMMEDIATE RELEASE
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NASDAQ:POPE
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May 3,
2010
POPE RESOURCES REPORTS FIRST
QUARTER INCOME OF $451,000
Pope
Resources (NASDAQ:POPE) reported net income attributable to unitholders of
$451,000, or $0.10 per diluted ownership unit, on revenue of $6.0 million for
the quarter ended March 31, 2010. This compares to a net loss
attributable to unitholders of $123,000, or $0.03 per diluted ownership unit, on
revenue of $5.0 million for the comparable period in 2009.
Cash
provided by operations for the quarter ended March 31, 2010 was $846,000,
compared to $435,000 for the first quarter of 2009.
“Despite
continued weak domestic housing starts, we were encouraged by improving market
dynamics in both domestic and export log markets,” said David L. Nunes,
President and CEO. “Domestic sawlog prices improved by 3% to $459 per thousand
board feet (MBF), or $13 per MBF, relative to the first quarter of 2009 and by
14%, or $58 per MBF, relative to the fourth quarter of 2009. This
improvement is a function of inventory restocking throughout the lumber
distribution channel as well as increasing demand from Chinese and Korean log
buyers. We responded to these improved market conditions by moving
more of our planned harvest volume into the first quarter. Given the
improvement in log markets, we intend to continue harvesting more than planned,
as we did in the first quarter to take advantage of higher prices, and will do
so the rest of the year if market conditions stay constant or
improve.”
Fee
Timber operating income in the first quarter increased 67%, from $1.4 million in
2009 to $2.3 million in 2010, driven by an increase in harvest volume from 9
million board feet (MMBF) in 2009 to 12 MMBF in 2010, offset in part by an 8%
decline in average realized log price, which fell from $477 per MBF in 2009 to
$441 per MBF in 2010. The decline in average log price realization
from the first quarter of 2009 reflects a shift in the export mix, with more
volume flowing to the lower valued Chinese and Korean markets, as well as an
increase in harvest of lower valued whitewood logs.
Page 1 of
5
POPE
RESOURCES REPORTS FIRST QUARTER 2010 EARNINGS
May 3,
2010
Our
Timberland Management & Consulting segment posted an operating loss of
$241,000 for the first quarter of 2010, a decline from the operating loss of
$104,000 for the corresponding quarter in 2009 primarily due to the termination
of the Cascade Timberlands contract in mid-2009. This segment
includes revenue from the management of timberland owned by the two private
equity timber funds managed by Olympic Resource Management. However,
fees earned from these management activities during the first quarter of 2010
and 2009 of $253,000 and $204,000, respectively, were eliminated with a
corresponding reduction to Fee Timber operating expenses as a result of the
consolidation of these funds into the Partnerships’ financial
statements.
The
operating loss of $526,000 posted by our Real Estate segment for the first
quarter of 2010 reflects a slight decline from the operating loss of $459,000
for 2009’s first quarter due primarily to a decline in commercial lease revenue
for the millsite at Port Gamble. The millsite had been leased to the
Washington State Department of Transportation in support of a long-term project
to replace a portion of the Hood Canal Bridge. The final payment on
this lease was received in the third quarter of 2009.
First
quarter 2010 General & Administrative expenses increased 11% to $941,000,
compared to $844,000 in the prior year, driven by higher professional service
fees in the first quarter of 2010 versus 2009.
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 152,000 acres of
timberland and development property in Washington and Oregon. We also
manage, co-invest in, and consolidate two timberland investment funds that we
manage for a fee. In addition, we offer our 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 conditions
in the housing construction and wood-products markets that affect demand for our
products; 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,
including changes in those regulations; conditions affecting credit markets as
they affect the availability of capital and costs of borrowing; labor, equipment
and transportation costs that affect our net income; the impacts of natural
disasters on our timberlands and on surrounding areas; and our ability to
discover and to accurately estimate liabilities associated with our properties.
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.
Page 2 of
5
Pope
Resources, A Delaware Limited Partnership
Unaudited
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(all
amounts in $000's, except per unit amounts)
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Three
months ended March 31,
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||||||||
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2010
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2009
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|||||||
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Revenues
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$ | 5,966 | $ | 4,979 | ||||
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Costs
and expenses:
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||||||||
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Cost
of sales
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(2,606 | ) | (2,198 | ) | ||||
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Operating
expenses
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(2,788 | ) | (2,822 | ) | ||||
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Operating
income (loss)
|
572 | (41 | ) | |||||
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Interest
income
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34 | 69 | ||||||
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Interest
expense
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(541 | ) | (617 | ) | ||||
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Capitalized
interest
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240 | 305 | ||||||
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SLARS
gain and (impairment) on dispositions
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11 | (60 | ) | |||||
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Income
(loss) before income taxes
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316 | (344 | ) | |||||
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Income
tax expense
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(12 | ) | - | |||||
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Net
income (loss)
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304 | (344 | ) | |||||
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Net
loss attributable to noncontrolling interests
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147 | 221 | ||||||
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Net
income (loss) attributable to Pope Resources' unitholders
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$ | 451 | $ | (123 | ) | |||
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Average
units outstanding - Basic
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4,530 | 4,591 | ||||||
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Average
units outstanding - Diluted
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4,586 | 4,591 | ||||||
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Basic
net income (loss) per unit
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$ | 0.10 | $ | (0.03 | ) | |||
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Diluted
net income (loss) per unit
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$ | 0.10 | $ | (0.03 | ) | |||
CONDENSED
CONSOLIDATED BALANCE SHEETS
(all
amounts in $000's)
(unaudited)
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31-Mar-10
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31-Dec-09
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|||||||
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Assets:
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||||||||
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Pope
Resources cash and cash equivalents
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$ | 6,917 | $ | 6,035 | ||||
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ORM
Timber Funds cash and cash equivalents
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1,317 | 1,145 | ||||||
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Cash
and cash equivalents
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8,234 | 7,180 | ||||||
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Auction
rate securities, current
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- | 690 | ||||||
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Other
current assets
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1,621 | 1,392 | ||||||
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Total
current assets
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9,855 | 9,262 | ||||||
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Roads
and timber, net
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119,778 | 120,457 | ||||||
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Properties
and equipment, net
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55,246 | 54,911 | ||||||
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Auction
rate securities, non-current
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- | 796 | ||||||
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Other
assets
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1,605 | 1,630 | ||||||
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Total
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$ | 186,484 | $ | 187,056 | ||||
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Liabilities
and equity:
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||||||||
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Current
liabilities
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$ | 2,242 | $ | 2,235 | ||||
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Current
portion of long-term debt
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18,636 | 831 | ||||||
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Long-term
debt, excluding current portion
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10,098 | 28,659 | ||||||
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Other
long-term liabilities
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1,249 | 1,274 | ||||||
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Total
liabilities
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32,225 | 32,999 | ||||||
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Partners'
capital
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83,350 | 83,126 | ||||||
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Noncontrolling
interests
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70,909 | 70,931 | ||||||
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Total
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$ | 186,484 | $ | 187,056 | ||||
Page 3 of
5
RECONCILIATION
BETWEEN NET INCOME (LOSS) AND CASH FLOWS FROM OPERATIONS
(all
amounts in $000's)
|
Three
months ended March 31,
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||||||||
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2010
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2009
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|||||||
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Net
income (loss)
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$ | 304 | $ | (344 | ) | |||
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Added
back:
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||||||||
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Depletion
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724 | 569 | ||||||
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SLARS
activity
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(11 | ) | 60 | |||||
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Depreciation
and amortization
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154 | 203 | ||||||
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Unit
compensation
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161 | 159 | ||||||
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Development
expenditures
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(320 | ) | (329 | ) | ||||
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Cost
of land sold
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67 | - | ||||||
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Change
in operating accounts
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(233 | ) | 117 | |||||
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Cash
provided by operations
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$ | 846 | $ | 435 | ||||
SEGMENT
INFORMATION
(all
amounts in $000's)
|
Three
months ended March 31,
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||||||||
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2010
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2009
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|||||||
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Revenues:
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||||||||
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Pope
Resources Fee Timber
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$ | 5,484 | $ | 4,520 | ||||
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ORM
Timber Funds
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278 | 1 | ||||||
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Total
Fee Timber
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5,762 | 4,521 | ||||||
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Timberland
Management & Consulting (TM&C)
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- | 208 | ||||||
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Real
Estate
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204 | 250 | ||||||
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Total
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$ | 5,966 | $ | 4,979 | ||||
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Operating
income (loss):
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||||||||
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Fee
Timber
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2,280 | 1,366 | ||||||
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TM&C
|
(241 | ) | (104 | ) | ||||
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Real
Estate
|
(526 | ) | (459 | ) | ||||
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General
& administrative
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(941 | ) | (844 | ) | ||||
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Total
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$ | 572 | $ | (41 | ) | |||
SELECTED
STATISTICS
|
Three
months ended March 31,
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||||||||
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2010
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2009
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|||||||
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Log
sale volumes (thousand board feet):
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||||||||
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Sawlogs
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||||||||
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Douglas-fir
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9,023 | 7,530 | ||||||
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Whitewood
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487 | 65 | ||||||
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Cedar
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146 | 64 | ||||||
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Hardwood
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89 | 119 | ||||||
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Pulp
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||||||||
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All
species
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1,847 | 967 | ||||||
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Total
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11,592 | 8,745 | ||||||
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Average
price realizations (per thousand board feet):
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||||||||
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Sawlogs
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||||||||
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Douglas-fir
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467 | 508 | ||||||
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Whitewood
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371 | 306 | ||||||
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Cedar
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794 | 798 | ||||||
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Hardwood
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499 | 475 | ||||||
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Pulp
|
||||||||
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All
species
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300 | 227 | ||||||
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Overall
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441 | 477 | ||||||
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Owned
timber acres
|
114,000 | 114,000 | ||||||
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Acres
owned by Funds
|
36,000 | 24,000 | ||||||
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Third-party
managed acres
|
- | 267,000 | ||||||
|
Capital
expenditures ($000's)
|
589 | 780 | ||||||
|
Depletion
($000's)
|
724 | 569 | ||||||
|
Depreciation
and amortization ($000's)
|
154 | 203 | ||||||
|
Debt
to total capitalization (excludes noncontrolling interest)
|
26 | % | 25 | % | ||||
Page 4 of
5
QUARTER
TO QUARTER COMPARISONS
(Amounts
in $000's except per unit data)
|
Q1 2010 vs. Q1 2009
|
Q1 2010 vs. Q4 2009
|
|||||||
|
Total
|
Total
|
|||||||
|
Net
income (loss) attributable to Pope Resources' unitholders:
|
||||||||
|
1st
Quarter 2010
|
$ | 451 | $ | 451 | ||||
|
4th
Quarter 2009
|
$ | (376 | ) | |||||
|
1st
Quarter 2009
|
(123 | ) | ||||||
|
Variance
|
$ | 574 | $ | 827 | ||||
|
Detail
of earnings variance:
|
||||||||
|
Fee
Timber
|
||||||||
|
Log
price realizations (A)
|
$ | (417 | ) | $ | 301 | |||
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Log
volumes (B)
|
1,358 | 578 | ||||||
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Depletion
|
(155 | ) | (172 | ) | ||||
|
Production
costs
|
(254 | ) | (126 | ) | ||||
|
Other
Fee Timber
|
382 | 5 | ||||||
|
Timberland
Management & Consulting
|
||||||||
|
Management
fee changes
|
(208 | ) | - | |||||
|
Other
Timberland Mgmnt & Consulting
|
71 | (69 | ) | |||||
|
Real
Estate
|
||||||||
|
Environmental
remediation liability
|
- | 30 | ||||||
|
Land
and conservation easement sales
|
(1 | ) | (214 | ) | ||||
|
Timber
depletion on HBU sale
|
- | 6 | ||||||
|
Other
Real Estate
|
(66 | ) | 50 | |||||
|
General
& administrative costs
|
(97 | ) | 257 | |||||
|
Net
interest expense
|
(24 | ) | (5 | ) | ||||
|
Other
(taxes, noncontrolling int., impairment)
|
(15 | ) | 186 | |||||
|
Total
variance
|
$ | 574 | $ | 827 | ||||
|
(A)
|
Price
variance calculated by extending the change in average realized price by
current period volume.
|
|
(B)
|
Volume
variance calculated by extending change in sales volume by the average log
sales price for the comparison
period.
|
Page 5 of
5