PotlatchDeltic Corporation (NASDAQ:PCH) Q3 2023 Results Conference Call October 31, 2023 12:00 PM ET

Company Participants

Eric Cremers - President, CEO

Wayne Wasechek - VP, CFO

Conference Call Participants

Anthony Pettinari - Citi

George Staphos - Bank of America

Ketan Mamtora - BMO Capital Markets

Kurt Yinger - D.A. Davidson

Mark Weintraub - Seaport Research Partners

Mike Roxland - Truist Securities

Paul Quinn - RBC Capital Markets

Operator

Good morning. My name is Sarah, and I will be your conference operator today. At this time, I would like to welcome everyone to the PotlatchDeltic Third Quarter 2023 Conference Call. [Operator Instructions].

I would now like to turn the call over to Mr. Wayne Wasechek, Vice President and Chief Financial Officer, for opening remarks. Sir, you may proceed.

Wayne Wasechek

Good morning, and welcome to PotlatchDeltic's Third Quarter 2023 Earnings Conference Call. Joining me on the call is Eric Cremers. PotlatchDeltic's President and Chief Executive Officer.

This call will contain forward-looking statements. Please review the warning statements in our press release on our presentation slides and in our filings with the SEC regarding the risks associated with these forward-looking statements. Also, please note that a reconciliation of non-GAAP measures can be found on our website at www.potlatchdeltic.com.

I'll turn the call over to Eric for some comments, and then I will review our third quarter results and outlook.

Eric Cremers

Thank you, Wayne. Looking at our third quarter results, we reported total adjusted EBITDDA of $56 million after the market closed yesterday. These solid results reflect improved financial performance across all of our business segments compared to the second quarter. Our Wood Products segment's adjusted EBITDDA was $15 million in the third quarter compared to $12 million in the second quarter. Slightly higher average lumber prices were the primary driver of the improved results. We have seen a steady decline in the composite lumber price since peaking in late July, driven by several ongoing headwinds, including higher interest rates, housing affordability challenges and declining consumer confidence.

We believe lumber prices are starting to bottom out as the lumber composite price hovers in the upper $300 per 1,000 board foot range. We continue to remain optimistic about long-term housing fundamentals that drive demand for our business, but overall macroeconomic concerns remain. For the third quarter, we shipped 276 million board feet of lumber which was slightly below the volume we shipped in Q2, but 11 million feet more than we shipped in Q3 of last year. We remain focused on executing our capital project plan, including our $131 million project to modernize and expand our Waldo, Arkansas sawmill. We continue to hit our major milestones on the Waldo project, which is on track to be completed by the end of 2024.