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
27, 2006
Pope
Resources, A Delaware Limited Partnership
(Exact
name of registrant as specified in its charter)
|
Delaware
(State
or other jurisdiction of
incorporation
or organization)
|
91-1313292
(I.R.S.
Employer
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
27, 2006 the registrant issued a press release relating to its earnings for
the
quarter ended March 31, 2006. 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 27,
2006
|
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 27, 2006
|
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
|
|
| Contact: |
Tom
Ringo
|
|
VP
& CFO
|
|
|
360.697.6626
|
|
|
Fax
360.697.1156
Nasdaq:POPEZ
|
NEWS
RELEASE
FOR
IMMEDIATE RELEASE
April
27,
2006
POPE
RESOURCES REPORTS FIRST QUARTER NET INCOME OF $5.3
MILLION
Pope
Resources (Nasdaq:POPEZ) reported net income of $5.3 million, or $1.11 per
diluted ownership unit, on revenues of $16.1 million for the first quarter
ended
March 31, 2006. This compares to net income of $4.6 million, or 97 cents per
diluted ownership unit, on revenues of $16.7 million for the comparable period
in 2005.
Earnings
before interest, taxes, depreciation, depletion, and amortization (EBITDDA)
were
$8.8 million for the current quarter versus $9.6 million for the comparable
period in 2005.
“We
enjoyed strong bottom-line results for the first quarter of 2006, reflecting
a
tight market for logs and disposition fees generated from our timberland
management client,” said David L. Nunes, President and CEO.
Operating
income generated by our Fee Timber segment increased to $6.2 million from $5.0
million in 2005, due to a 5% increase in average realized log prices and a
decrease in depletion expense. Harvest volume for the first quarter of 2006
was
22 million board feet (MMBF) compared to 23 MMBF for the comparable quarter
in
2005, consistent with our lower planned 2006 annual harvest of 58 MMBF compared
to 2005’s total of 74 MMBF. The impact from these lower harvest volumes was
offset by the higher log prices, which improved from $580 per thousand board
feet (MBF) in 2005 to $608/MBF in 2006. As with other years in which snow
limited access to many of our competitors’ lands during the winter, we took
advantage of our year-round road system on the Hood Canal tree farm and chose
to
front-load our annual harvest volume to capture favorable log pricing. First
quarter harvest volume represents 38% of our total planned harvest for 2006.
The
decrease in current quarter depletion expense figured prominently in the
improved operating income results for the Fee Timber segment, driven by lower
harvest volume coming from a 2004 timberland acquisition which had a separate
depletion cost pool that results in a high per-unit depletion expense when
this
timber is harvested. Operating results in 2006 contained a lower proportion
of
harvest volume from these high-depletion rate lands than was the case in 2005.
Out of a planned 58 MMBF harvest for 2006, we expect approximately 7 MMBF of
this total to come from the separate depletion pool.
Our
Timberland Management & Consulting segment posted operating income of $1.3
million in the current quarter compared to $842,000 in first quarter 2005,
resulting largely from nonrecurring disposition fees that will also translate
to
reduced management fee revenue for future quarters.
Based
on
$1 million of lower property sales revenues in the current quarter, our Real
Estate segment generated an operating loss of $339,000 compared to operating
income of $635,000 in 2005. We are currently expecting several Real Estate
closings in 2006, including the first sales from both our Gig Harbor and
Bremerton projects, which are anticipated to increase Real Estate’s operating
income for the year above the prior year’s results.
About
Pope Resources
Pope
Resources, a publicly traded limited partnership, and its subsidiaries Olympic
Resource Management and Olympic Property Group, own or manage nearly 410,000
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 there are varying methods of calculating
depletion expense under GAAP. With different issuers employing various
calculation methodologies, disclosure of EBITDDA can make it easier for the
reader to make meaningful comparisons between the operating results and
cash-generating capabilities of different timber companies.
|
Pope
Resources, A Delaware Limited Partnership
|
|||||||
|
Unaudited
|
|||||||
|
CONSOLIDATED
STATEMENTS OF OPERATING DATA
|
|||||||
|
(all
amounts in $000's, except per unit amounts)
|
|||||||
|
Three
months ended March 31,
|
|||||||
|
2006
|
2005
|
||||||
|
Revenues
|
$
|
16,083
|
$
|
16,656
|
|||
|
Costs
and expenses:
|
|||||||
|
Cost
of sales
|
(6,425
|
)
|
(7,804
|
)
|
|||
|
Operating
expenses
|
(3,478
|
)
|
(3,181
|
)
|
|||
|
Interest,
net
|
(309
|
)
|
(717
|
)
|
|||
|
Cascade
investment income
|
5
|
||||||
|
Total
expenses
|
(10,207
|
)
|
(11,702
|
)
|
|||
|
Income
before income taxes and minority interest
|
5,876
|
4,954
|
|||||
|
Income
tax expense
|
(445
|
)
|
(247
|
)
|
|||
|
Income
before minority interest
|
5,431
|
4,707
|
|||||
|
Minority
interest
|
(133
|
)
|
(101
|
)
|
|||
|
Net
income
|
$
|
5,298
|
$
|
4,606
|
|||
|
Weighted
average units outstanding - Basic (000's)
|
4,635
|
4,561
|
|||||
|
Weighted
average units outstanding - Diluted (000's)
|
4,754
|
4,730
|
|||||
|
Basic
net income per unit
|
$
|
1.14
|
$
|
1.01
|
|||
|
Diluted
net income per unit
|
$
|
1.11
|
$
|
0.97
|
|||
|
CONSOLIDATED
BALANCE SHEET DATA
|
|||||||
|
(all
amounts in $000's)
|
|||||||
|
March
31,
|
|||||||
|
2006
|
2005
|
||||||
|
Assets:
|
|||||||
|
Cash
and short-term investments
|
$
|
18,682
|
$
|
4,472
|
|||
|
Other
current assets
|
7,232
|
3,802
|
|||||
|
Roads
and timber
|
50,721
|
61,023
|
|||||
|
Properties
and equipment
|
29,206
|
26,604
|
|||||
|
Other
assets
|
600
|
1,112
|
|||||
|
Total
|
$
|
106,441
|
$
|
97,013
|
|||
|
Liabilities
and partners' capital:
|
|||||||
|
Current
liabilities
|
$
|
4,675
|
$
|
4,946
|
|||
|
Long-term
debt, excluding current portion
|
30,741
|
32,504
|
|||||
|
Other
long-term liabilities
|
193
|
211
|
|||||
|
Total
liabilities
|
35,609
|
37,661
|
|||||
|
Partners'
capital
|
70,832
|
59,352
|
|||||
|
Total
|
$
|
106,441
|
$
|
97,013
|
|||
|
RECONCILIATION
BETWEEN NET INCOME AND EBITDDA
|
||||||||||
|
(all
amounts in $000's)
|
||||||||||
|
Three
months ended
|
||||||||||
|
31-Mar-06
|
31-Mar-05
|
31-Dec-05
|
||||||||
|
Net
income
|
$
|
5,298
|
$
|
4,606
|
$
|
872
|
||||
|
Added
back:
|
||||||||||
|
Interest,
net
|
309
|
717
|
539
|
|||||||
|
Depletion
|
2,573
|
3,843
|
922
|
|||||||
|
Depreciation
and amortization
|
184
|
152
|
159
|
|||||||
|
Income
tax expense
|
445
|
247
|
435
|
|||||||
|
EBITDDA
|
$
|
8,809
|
$
|
9,565
|
$
|
2,927
|
||||
|
RECONCILIATION
BETWEEN CASH FROM OPERATIONS AND EBITDDA
|
||||||||||
|
(all
amounts in $000's)
|
||||||||||
|
Three
months ended
|
||||||||||
|
|
31-Mar-06
|
31-Mar-05
|
31-Dec-05
|
|||||||
|
Cash
from operations
|
$
|
4,697
|
$
|
6,893
|
$
|
6,656
|
||||
|
Added
back:
|
||||||||||
|
Change
in working capital
|
3,768
|
1,994
|
-
|
|||||||
|
Interest
|
309
|
717
|
539
|
|||||||
|
Income
tax expense
|
445
|
247
|
435
|
|||||||
|
Less:
|
||||||||||
|
Change
in working capital
|
-
|
-
|
(4,456
|
)
|
||||||
|
Deferred
profit
|
(275
|
)
|
(152
|
)
|
(81
|
)
|
||||
|
Cost
of land sold
|
(13
|
)
|
(134
|
)
|
(90
|
)
|
||||
|
Unit
compensation
|
(122
|
)
|
-
|
(76
|
)
|
|||||
|
EBITDDA
|
$
|
8,809
|
$
|
9,565
|
$
|
2,927
|
||||
|
|
||||||||||
|
|
SEGMENT
INFORMATION
|
|||||||||
|
(all
amounts in $000's)
|
||||||||||
|
|
Three
months ended
|
|||||||||
|
|
31-Mar-06
|
31-Mar-05
|
31-Dec-05
|
|||||||
|
Revenues:
|
||||||||||
|
Fee
Timber
|
$
|
13,724
|
$
|
13,663
|
$
|
5,194
|
||||
|
Timberland
Management & Consulting (TM&C)
|
2,024
|
1,614
|
2,641
|
|||||||
|
Real
Estate
|
335
|
1,379
|
1,072
|
|||||||
|
Total
|
16,083
|
16,656
|
8,907
|
|||||||
|
EBITDDA:
|
||||||||||
|
Fee
Timber
|
8,876
|
8,911
|
2,544
|
|||||||
|
TM&C
|
1,307
|
863
|
1,508
|
|||||||
|
Real
Estate
|
(305
|
)
|
671
|
(10
|
)
|
|||||
|
General
& administrative
|
(1,069
|
)
|
(880
|
)
|
(1,115
|
)
|
||||
|
Total
|
8,809
|
9,565
|
2,927
|
|||||||
|
Depreciation,
depletion and amortization:
|
||||||||||
|
Fee
Timber
|
2,644
|
3,869
|
950
|
|||||||
|
TM&C
|
16
|
21
|
23
|
|||||||
|
Real
Estate
|
34
|
36
|
43
|
|||||||
|
General
& administrative
|
63
|
69
|
65
|
|||||||
|
Total
|
2,757
|
3,995
|
1,081
|
|||||||
|
Operating
income (loss):
|
||||||||||
|
Fee
Timber
|
6,232
|
5,042
|
1,594
|
|||||||
|
TM&C
|
1,291
|
842
|
1,485
|
|||||||
|
Real
Estate
|
(339
|
)
|
635
|
(53
|
)
|
|||||
|
General
& administrative
|
(1,004
|
)
|
(848
|
)
|
(1,134
|
)
|
||||
|
Total
|
$
|
6,180
|
$
|
5,671
|
$
|
1,892
|
||||
|
SELECTED
STATISTICS
|
||||||||||
|
Three
months ended
|
||||||||||
|
31-Mar-06
|
31-Mar-05
|
31-Dec-05
|
||||||||
|
Log
sale volumes (thousand board feet):
|
||||||||||
|
Export
conifer
|
347
|
2,756
|
952
|
|||||||
|
Domestic
conifer
|
18,449
|
16,103
|
5,373
|
|||||||
|
Pulp
conifer
|
2,675
|
2,653
|
1,338
|
|||||||
|
Hardwoods
|
562
|
1,488
|
677
|
|||||||
|
Total
|
22,033
|
23,000
|
8,340
|
|||||||
|
|
Three
months ended
|
|||||||||
|
|
31-Mar-06
|
31-Mar-05
|
31-Dec-05
|
|||||||
|
Average
price realizations (per thousand board feet):
|
||||||||||
|
Export
conifer
|
$
|
716
|
$
|
661
|
$
|
641
|
||||
|
Domestic
conifer
|
658
|
590
|
620
|
|||||||
|
Pulp
conifer
|
251
|
219
|
223
|
|||||||
|
Hardwoods
|
598
|
627
|
561
|
|||||||
|
Overall
|
608
|
580
|
554
|
|||||||
|
Owned
timber acres
|
114,513
|
115,103
|
117,000
|
|||||||
|
Acres
under management
|
291,925
|
527,316
|
439,000
|
|||||||
|
Capital
expenditures ($000's)
|
948
|
4,132
|
||||||||
|
Depletion
($000's)
|
2,573
|
3,843
|
922
|
|||||||
|
Depreciation
and amortization ($000's)
|
184
|
152
|
159
|
|||||||
|
Debt
to total capitalization
|
31
|
%
|
36
|
%
|
34
|
%
|
||||
|
QUARTER
TO QUARTER COMPARISONS
|
|||||||
|
(Amounts
in $000's)
|
|||||||
|
Q1
2006 vs. Q1 2005
|
Q1
2006 vs. Q4 2005
|
||||||
|
Total
|
Total
|
||||||
|
Net
income:
|
|||||||
|
1st
Quarter 2006
|
$
|
5,298
|
$
|
5,298
|
|||
|
4th
Quarter 2005
|
872
|
||||||
|
1st
Quarter 2005
|
4,606
|
||||||
|
Variance
|
$
|
692
|
$
|
4,426
|
|||
|
Detail
of earnings variance:
|
|||||||
|
Fee
Timber:
|
|||||||
|
Log
price realizations (A)
|
$
|
617
|
$
|
1,190
|
|||
|
Log
volumes (B)
|
(561
|
)
|
7,586
|
||||
|
Production
costs
|
(148
|
)
|
(2,191
|
)
|
|||
|
Depletion
|
1,270
|
(1,651
|
)
|
||||
|
Other
Fee Timber
|
11
|
(296
|
)
|
||||
|
Timberland
Management & Consulting:
|
|||||||
|
Management
fee changes
|
(738
|
)
|
(357
|
)
|
|||
|
Disposition
fees
|
1,343
|
(45
|
)
|
||||
|
Other
Timberland Mgmnt & Consulting
|
(156
|
)
|
208
|
||||
|
Real
Estate:
|
|||||||
|
Land
sales
|
(808
|
)
|
(560
|
)
|
|||
|
Other
|
(166
|
)
|
273
|
||||
|
General
& administrative costs
|
(156
|
)
|
130
|
||||
|
Interest
expense
|
208
|
196
|
|||||
|
Other
(taxes, minority int., interest inc.)
|
(24
|
)
|
(57
|
)
|
|||
|
Total
change in net income
|
$
|
692
|
$
|
4,426
|
|||
| (A) |
Price
variance calculated by applying the change in price to current
period
volume.
|
|||||||
| (B) |
Volume
variance calculated by applying the change in sales volume to the
average
log sales price for the prior period.
|
|||||||