Deltic names Enlow as CEO

4Q profit $3.1M; finance chief out

Deltic Timber Corp. said Monday it has hired a new president and chief executive officer and fired its chief financial officer, while also announcing a $3.1 million profit for the fourth quarter of 2016.

The company declined to elaborate on the firing or on a report last week by its largest shareholder, Southeastern Asset Management Inc. of Memphis, that it has been approached by several investors about buying the El Dorado-based timber firm.

John Enlow, most recently a vice president at Weyerhaeuser, will become Deltic's president and CEO on March 8, the company announced in a conference call to discuss its fiscal 2016 and fourth-quarter report. Enlow succeeds Mark Leland, who has served as interim president since Ray Dillon unexpectedly announced his retirement in October after 13 years as president. Leland will continue to serve on Deltic's board.

Enlow is a 25-year veteran of the forest industry. Before serving as vice president of real estate and Southern timberlands at Weyerhaeuser, from 2014 to 2016, he spent 16 years in various roles at Rayonier Inc., of Jacksonville, Fla.

Leland also said in a statement that Deltic's board had fired Kenneth Mann as its chief financial officer "after the Board became aware that he misappropriated certain Company assets for personal use." The board said it had appointed Byrom Walker to serve as an interim chief financial officer while the company searches for a permanent hire.

The company had announced it would release its earnings report Friday after markets closed but, late that afternoon, it moved the release to Monday morning, to coincide with the conference call, before markets opened.

Leland said in the conference call with analysts that the company wouldn't take questions on the firing of its chief financial officer or on the report by Southeastern, which owns 15 percent, or about $140 million, in Deltic stock.

Leland said only that "the amount of the assets" involved in Mann's firing didn't materially affect the company's financial report or financial condition. Of Southeastern's Schedule 13G filing with the Securities and Exchange Commission reporting the acquisition efforts, Leland said the company has always had open communications with its stockholders. "We made a statement on that filing, and I think we're just not going to comment further," Leland said, in asking that questions be limited to the financial report.

With Deltic's report pending, the New York Stock Exchange delayed early-morning trading on the company. The shares fell $2.81, or 3.6 percent, to close Monday at $74.29.

For the fourth quarter of 2016, Deltic reported a profit of $3.1 million, or 26 cents per share, compared to a net loss of $100,000, or 1 cent per share, for the same quarter in 2015. Revenue rose 17.8 percent, to $58.5 million, compared with $49.6 million a year ago.

For fiscal 2016, the company reported net sales of $219.4 million, up 13.2 percent from $193.9 million in fiscal 2015. Profits for 2016 amounted to $9.2 million, up 42 percent from $6.5 million.

The company attributed its fourth-quarter improvements to several factors, including higher average prices for lumber and medium density fiberboard, increased sales of the fiberboard, the sale of two commercial real estate sites totaling 21 acres, and the sale of 77 residential lots. Deltic said its Woodlands segment reported operating income of $4.2 million for the fourth quarter of 2016, matching the fourth quarter of 2015. The pine saw-timber harvest for the fourth quarter of 2016 was 179,158 tons, a 16 percent increase over 2015.

Its manufacturing segment reported operating income of $3.2 million, compared with a loss of $600,000 for the fourth quarter of 2015.

Deltic's real estate operations reported operating income of $6.4 million for the fourth quarter, compared with $1.7 million for the same quarter of 2015. The average per-lot sales price in the fourth quarter of 2016 was $82,600, compared with $101,700 per lot for fourth-quarter 2015. The number of lots sold, however, increased from 52 to 77. The two real estate sites sold for $5.4 million.

Deltic repurchased 32,309 common shares for $1.9 million during the fourth quarter. Total repurchases for the year are at 309,739 shares for $17 million.

Corporate expenses increased from $17.3 million in 2015 to $22.9 million, primarily because of costs related to the retirement in October of its president, Deltic said.

Business on 02/28/2017

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