Q4 2019 Earnings Call
[music].
Good morning, My name is Lindsay and I will be your conference operator today.
At this time I would like to welcome everyone to the Potlatch Deltic fourth quarter 2019 conference call.
All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad. If you would like to withdraw your question press the pound key.
Thank you I would now like to turn the call over to Mr., Jerry Richards, Vice President and Chief Financial Officer for opening remarks.
Sir you May proceed.
Thank you Lenzi and good morning welcome.
Welcome to Potlatch Deltics fourth quarter 2019 earnings conference call.
With me in the room, or Mike heavy Chairman and Chief Executive Officer, and Eric Cromer's, President and Chief operating Officer.
This call will contain forward looking statements. Please review the warnings statements in our press release on the presentation slides and in our filings with the SEC.
Turning 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 Dot potlatch Deltic dotcom.
Ill now turn the call over to Mike for some comments and then I will cover our fourth quarter results in our outlook.
Thanks, Jerry and good morning, everyone.
We generated adjusted EBITDA of $179 million in 2019, which was our third highest level of annual EBITDA since electing REIT status in 2006.
We accomplished this despite a relatively weak lumber pricing environment, which reflects the stronger company that has been created through the 2018 Deltic merger.
We're pleased with the performance of our real estate business. This year, our real estate team did an excellent job identifying and executing on rural land sales opportunities from the legacy Deltic timberlands.
Sale of Timberlands near Little rock, Arkansas for $11000 per acre and revenue of $9 million for commercial land sales were two key factors that drove more EBITDA at better margins than we had planned.
Turning to timberlands focus this year was catching up harvest volumes against our plan in both of our main operating regions.
This situation existed in Idaho, because customers in the region into the spring breakup period with higher than normal log inventories are.
Our timberlands team successfully shifted sawlog volume to the second half of the year.
Idaho log deliveries ended the year slightly ahead of plan.
Our southern harvest volumes fell short this year.
Rainfall was double normal levels in Arkansas operating areas in the first half of the year, which restricted the supply of Sawlogs.
We discussed on last quarter's call that we would not be able to make up the shortfall in southern volume because the resulting price and supplier response in the second half of the year led to oversupplied log inventories at mills in the region.
Southern Pine Sawlog prices of normalize we expect to harvest volumes to return to normal levels in 2020.
Wood products successfully completed its elevated capital project plan in 2019.
Notable projects included new kills at two of our saw mills.
Andrew stack and a lower grades.
The primary benefits of these projects are extended expanded capacity and improved grade realization.
We have scaled back to 2020 capital project plan to let our mills focus on operating well, what we expect will be improved market conditions.
Other 2019 highlights included the sale of adult legacy Deltic MDF facility.
And the refinance of $100 million of debt, which lowered our interest cost by roughly 80 basis points.
Our balance sheet remains strong and provides the flexibility to continue to grow shareholder value.
We returned $133 million of cash to shareholders in 2019, including 25 million of share repurchases at an average price at $37 per share.
Our stock currently trades, approximately 16% above the average repurchase price and we did not by any shares in the fourth quarter.
Looking forward to 2020, improving us housing market fundamentals bode well for lumber demand.
Homebuilders continue to report healthy additions to their order files and housing starts have increased meaningfully which are two key leading indicators.
US housing starts remained on upward trend through December and are at their highest level since 2006 on a seasonally adjusted basis.
Customer confidence low unemployment affordable mortgages.
Inventory of existing homes for sale and the fact that Lenny.
Just demographic cohort in the us are entering the prime homebuying years or additional factors that underpin our optimism in 2020.
Turning to lumber supply several capacity curtailment or closures were announced in 2019.
It is estimated that these decisions removed over 2 billion board feet of North American lumber capacity in aggregate.
And offsets a portion of the sawmill capacity that's been added in the U.S south in the last few years.
The news yesterday that Canadian lumber duties are likely to decrease as a result of US Commerce's first annual administrative review was not unexpected.
Any change would not go into effect until August of this year and we do not believe that or reduction in the duty will result in Canadian lumber producers restarting notes.
Polish deltics, well positioned to benefit from favorable over supply and demand fundamentals due to our leverage to lumber prices.
Now I'll turn it over to generate discuss the quarter and our outlook for the year.
Thank you Mike starting with page four of the slides total adjusted EBIT dollars $47 million in the fourth quarter compared to $55 million in the third quarter.
The sequential decrease in EBITDA is due primarily to lower harvest and lumber shipment volumes.
I'll now review each of our operating segments and provide more color on the fourth quarter results.
Information for Timberland segment as displayed on slide five through seven.
The segment's adjusted EBITDA was $38 million in the fourth quarter compared to $43 million in the third quarter.
We harvested 473000 tons of Sawlogs in the north in the fourth quarter.
This is down seasonally from the 529000 tons that we harvest in the third quarter.
Northern Sawlog prices were 4% lower on a per ton basis in the fourth quarter compared to the third quarter.
The effective a normal seasonal increase in the density of logs was partially offset by a slightly higher percent of cedar sawlogs in the mix and slightly higher index prices.
In the South our harvest volume was flat quarter over quarter at about 1 million tons.
Our southern Sawlog prices were 7% lower in the fourth quarter compared to the third quarter.
The decline was due to a seasonally lower proportion of hardwood sawlogs in the mix and the absence of a wet weather related premium on southern pine Sawlog prices that we experienced into the third quarter.
Turning to wood products on slides eight and nine adjusted EBITDA of $1.8 million in the fourth quarter was $4.1 million lower third quarter.
Production was scaled back in the fourth quarter for a variety of our operational and market reasons, which negatively affected fixed cost absorption.
For example, startup in the new continuous dry kilns at our Warren, Arkansas sawmill took longer than anticipated.
The new kilns were all operating well by the end of the year.
In a second example, we ran less overtime than we had planned given market conditions.
Log costs were higher in the segment, primarily in Idaho due to an increase in index log prices.
Moving to real estate on slides 10 and 11.
The segment's adjusted EBITDA $14 million in the fourth quarter was down slightly from $14.7 million in the third quarter.
An increase in commercial land sales and should all valley, mostly offset the sale of fewer rural acres quarter over quarter.
Shifting to financial items, which are summarized on slide 12, we ended the year with $83 million of cash.
We refinanced the 40 million dollar term loan that was scheduled to mature in December.
But the new loan matures in November 2029, and the interest rate net of patronage is about 2.5%.
Interest savings will be modest relative to the variable rate on the old term loan.
We have another $46 million in term loans that are scheduled to mature in December 2020.
Interest rates remain attractive, which plays a key role as we evaluate refinancing or repaying this debt.
Capital expenditures were $21.4 million in the fourth quarter and $66 million for the full year.
Note that these amounts include real estate development expenditures, which are included in cash from operations in our cash flow statement.
Details of our 2020 outlook are presented on slide 13.
We expect to harvest about 6 million tons in our timberland segment in 2020 with approximately 70% of the volume in the south.
Harvest volumes in the north are planned to be seasonally lower in the first quarter compared to the fourth quarter.
We expect northern Sawlog prices to decrease modestly in the first quarter due primarily to seasonally heavier logs and fewer cedar sawlogs in the mix.
Our risk volumes in the south or plan to be seasonally lower.
We expect southern Sawlog prices declined modestly in the first quarter due primarily to a seasonally lower mix of hardwood sawlogs.
We plan to ship just over 1.1 billion board feet of lumber in 2020.
We expect averaged first quarter lumber prices to be modestly higher than the fourth quarter and the ship 270 to 280 million board feet of lumber in the first quarter.
Our average lumber price in January as approximately $18 higher than our fourth quarter average lumber price.
Our average spot lumber prices currently $30 higher than our fourth quarter average lumber price.
As a reminder, attend dollar per thousand board foot change in lumber price equals approximately $12 million of consolidated EBITDA for us on an annual basis.
Shifting to real estate, we expect to sell 20000 to 25000 acres of rural land and 147, all valley lots in 2020.
Additional real estate details are provided on the slide.
Our noncash non operating pension and post retirement expense will increase approximately $10 million this year.
The change is largely because an $8 million per year credit related to restructuring that post retirement plans in 2010 was fully amortized as at the end of 2019.
We estimate that cash contributions to the pension and post retirement plans will be $11 million in 2020.
Our interest expense will be lower than normal in the first quarter because that is when we receive our annual patronage payment from the farm credit banks.
We estimate that interest expense will be $3 million in the first quarter and $8 million to $9 million per quarter for the second third and fourth quarters of 2020.
Our total capital expenditures are planned to be in the range of $42 million to $48 million excluding acquisitions in 2020.
We completed a series of large high return projects in our mills last year, and we plan to spend $20 million to $25 million less than our wood products segment and 21.
This will allow our mills to focus on operating well and what we expect will be improved market conditions.
Overall, we estimate that first quarter total adjusted EBITDA will be lower than fourth quarter, primarily due to a seasonal decrease in harvest volumes.
We are encouraged by improving industry fundamentals and we expect 2020 to be a solid year.
That concludes our prepared remarks, Lynsey I'd now like to open the call to QNX.
At this time, if you'd like to ask the question. Please press star followed by the number one on your telephone keypad, well pause for a moment compared to Q and a roster.
Our first question comes from John Babcock with Bank of America. Your line is now open.
Hey, good morning, and brother good afternoon as all yes.
Well I guess, starting out you mentioned and confirmed I guess reports that the duties on Canadian lumber will be falling into a single digits later this year.
What did the level on that and then also if you could kind of share your view on how you expect that Tim pipe fundamentals upgrade.
Well.
This is Mike.
The duties are proposed to be cut in half.
Roughly in about August so on a per dollar per thousand board foot basis. They fall from approximately $60 a thousand board for you today to about $30 per thousand board feet as we understand it.
Remember duties are they move inversely with the price of lumber they are going down because we had a really strong price year in 2018, which is the the year. That's under analysis and we would expect one of the duties reviewed another year. Following this they would go up because 2019 was a week lumber price here.
As we stated in the call. We do not expected. This is going to reverse the decisions that Canadians made to shutter saw mills permanently. So although the margin certainly will improve for some Canadian producers. We don't think it will fundamentally fix supply of lumber in North America today.
Thanks.
And then you talked a little bit about the capital projects.
Basically pushing off some in 2020 odd you expect those projects to be completed in 2021 also could just generally provide some color on what those capital projects, where our and also what projects you have planned for this year.
Well, Eric can expand on this we didnt, we didnt really pushing the off I think it was a matter of we completed the highest priority projects we had.
All of those are going to have positive impacts on our ability to produce more lumber as well as higher grade realizations in our mills and we expected this year to be a better year for lumber pricing, we want to be able to operate at full capacity and.
Runs of run full blast inovios distracted by capital projects. So thats really what we've done I would really say, we postponed anything we probably will just shifts under 2021.
Thank you and analyzed by some of our turnover it looks like commercial like or sales were pretty strong in a quarter.
How much commercial acres you have remained the portfolio at this juncture.
So John this is this is Eric rationale as a 4800 acre Master plan community.
When first developed it had over 800 acres of commercial property available and I think we're now down about 370 acres remaining so we still got a pretty good pretty good inventory of commercial acres left to sell.
Okay.
Our next question comes from the line of Collin Mings with Raymond James.
Your line is now open.
Thanks, and good morning, guys.
Morning.
First question for me just sticking with the capital expenditure guidance for the year as we think about the 42% to 48 million dollar number is that pretty much all kind of recurring maintenance capex or is there still some component of that is some of these high return projects again I appreciate the comments about scaling back some of that activity relative to last.
Just trying to get a better sense of what that kind of run rate maintenance capex number looks like.
Yeah. So that we're still this call and this is Eric we're not add up at a strictly maintenance level of capital spending for our mills.
We had five large projects going in 2019.
Including the two kilns that are at our worn facility that were 15 million dollar install for 2020, we've got three meaningful projects planned.
A stack or in St. Mary's a stacker at our Glenn melanoma Barker going into our Ola mill.
Collectively that's about another who knows five or $6 million. So we're still at a at a level of investment spending in our mills and we're still above maintenance spending so don't don't get the wrong impression there.
Okay, that's actually very helpful color there.
Maybe just sticking with capital allocation I know, it's been discussed on a number of calls recently, but just maybe just current thoughts as we entered the new year here on potential for bolt on acquisition opportunities I know that has been the focus of the company. It again going back my prepared comments of where the stock price is wasnt active during the fourth quarter.
On the repurchase front, so maybe just talk a little bit about the timberland acquisition marketing and the opportunities you are not seeing right now.
Well the market in 2019 was.
I would consider average in terms of what traded I think we continue to see a pattern that high quality timberlands continue to trade at a very full price.
Whether that's in the Pacific northwest or in the U.S, south as well stocked productive good quality ground.
Roughly speaking is selling for $2000 an acre in the south and $4000 acres an acre in the northwest.
We've seen some lower quality kind of class B and C properties.
That have sold for much less than that but that wasn't unexpected. So theres no steels to be head in the timberland M&A market and that puts more emphasis for us on bolt on acquisitions, where we do have some advantage or synergy or someone else might not have it with adjacent property.
Yes that would be in Mississippi, Alabama, Arkansas, perhaps Louisiana and parts of Texas.
But theres a variable very little property on the market currently.
Okay, and then just switching over to.
The timberland business real quick just can you provide a quick update on the cedar log pricing and demand you're seeing on that front.
Yes, the call and it's Eric again.
We we mentioned on our last call that we thought cedar prices and bottomed in.
In 2019.
We have since seen a real nice rebound in cedar prices, they're up about 10% to 15%.
Fair to where they were from most of last year and a couple different things have changed to improve market fundamentals number one SEDAR.
Bill log inventory levels are now down they were running pretty high most of last year. So demand was relatively low because they're decks were full as the first thing. The second thing is we have taken steps to.
To diversify our markets first cedar logs. So we are intentionally getting cedar logs out of the inland region.
Thats improving the supply demand dynamic here in the area and then lastly, theres a strike going on at Western Forest products up in Canada, which produces a lot of SEDAR.
And thats, probably favorably impacting cedar prices here in the U.S., but we've seen a real nice rebound in cedar log prices.
Thank you helpful I'll turn it over.
Our next question comes from Steve Chercover with da Davidson. Your line is now open.
Thanks, Good morning, everyone.
So you.
You did.
Explained part of the reason that the lumber volumes were down in Q4.
Just wondering with any of that the reduction due.
In an effort.
To get inventories to their desired levels and how would you characterize your order files now and finally, what's the last three projects are completed in 2020 do you believe that you couldn't be cash flow positive in most any normal lumber operating environment.
Yes, Steve. This is a this is Eric no I'd I'd tell you what happened to our wood products business in the in the fourth quarters. We candidly just did not run well for a variety of reasons.
At our worn saw mill, we had killed startup issues like where like Jerry spoke about.
Our Waldo mill down in Arkansas had uptime challenges during the quarter, our Ola mill, which AFE of its volume is timbers prices were so low for timbers last year.
That we were below variable cost in the in the fourth much of the fourth quarter. So we had to hold back production volumes, there and that negatively impacted fixed cost absorption. So a whole bunch of different reasons really hit us in the fourth quarter.
What I would tell you now that were one month into 2020 is that our mills are operating very well to start the year. We're optimistic that we continue on this trajectory that we have seen a nice a nice turn in that business. How your other question about do we think will operate in a black we do think will operate in the black we regularly benchmark our mills and our mills we bid.
Leave our generally speaking first or second quarter mile Mills.
And if I look at our margin performance compared to our leading peers.
While there is occasionally.
An issue, which can impact a quarter.
For two.
Over the long term, we tend to track very well with our large peers in the industry. So we do think we're going to be blackett debt at the bottom so to speak.
Okay. Thank you for that and then switching to real estate, which is by definition lumpy and I suppose opportunistic is there a base load cash cost that we should assume because even prior to the deltic combination in 2018, I think you guys ran at about $20 million.
There's an EBIT give or take a few and by not mistaken 2020 might be below that so I'm just wondering.
Are we missing something or is that accurate this year, you're really holding back.
Now, you're talking about which which part of our real estate business the development side or the rural side well really the.
Well, both I mean, you we know Chanel Valley is going to do given the lots and the average.
So I guess, it's more on the.
Each of you non core timber side.
No I think you know Jerry's comments, where that will sell 20 to 25000 rural acres for the year and I think thats, that's very consistent and we had we had a great here last year with.
The large transaction just outside of a little rock, but the 20 to 25000 acres is very consistent with what we've done in the past.
Okay and final question I guess, you kind of touched it in the context of timberlands, but there was a fairly large transaction announced last month and I'm. Just wondering if you guys took a look under the hood.
We can't comment on that Steve.
So this has been announced I guess, our observations are sold under that a full price.
As encouraging to see the timberlands still trades at a premium value, particularly in the Pacific Northwest.
Okay. Thanks, Mike.
Our next question comes from Mark Weintraub with people on your line is now open.
Thank you first I, just hoping to get our your thoughts on that up lumber market dynamics.
In terms of channel inventories and.
The release any recent sense you have in demand trends.
Yeah. So markets there yeah. We're we're pleased to see lumber prices finally turn around here.
No. There are a number of curtailments closures last year that really didnt happen until the fourth quarter is mills had to wind down log and lumber inventories and so we haven't seen a lot of supply come off the market and that's against the backdrop of improving demand.
We saw really strong home sales in the month of December and we're seeing really strong order files.
Out of the homebuilders, if you take a look at the publicly traded homebuilders, whether pulte D.R. Horton when our.
MDC, they're all they're all showing like plus 30% kind of.
Order growth numbers. So we think there's there's better times ahead for our lumber and our wood products our business.
But getting back your point about inventories in the channel. We think they continue to be low they've they've been low for a couple of years now.
As distributors dealers can can kind of live with the short order files.
Are you seeing a pickup in.
Lumber orders I mean, you talked about obviously that the homesales, having been improving are you seeing that begin to translate into.
More more demand for your lumber.
In the last given.
Well, we we sell what we produced and I'd say given that prices had been had been rising we were feeling like we have a little bit more pricing power than we have in the recent past.
There's been talk of.
The repair and remodel markets rolling over candidly, we don't we don't see that arc home Center business is doing great right now.
Okay. So when you are describing lumber pricing you talked about it being up 18 bucks versus.
The fourth quarter in January 30 Bucks spot.
The only if I heard you write suggested that Q1 would it be modestly higher than Q4, I'm just trying to understand it sounded like it was.
Even if we just sustain this where the prices today it sounds like that's more than modest improvement. So just wanted to make sure I understood. If there was some other dynamic at work.
No. So so we had a slow start to the here. The first part of January prices were not responding as well as we would've liked or hoped.
But here of late we Havent seen a nice run up.
If you look at where EFI and receipt have their prices for the for the quarter on average they've got him up 6%. That's about what we think they're going to be for the quarter as well if current trends stay in place.
So I guess I'm just trying to understand that if I heard you right. You said January was up 18 Bucks versus the Q4 average and then you said the current was up 30 Bucks.
And so if we stayed at the up 30, presumably we'd be up somewhere between 20 and 30 closer to the 30.
And that would by my math the.
Somewhat more than that 6%.
Yeah, I mean, it could be 7% Mark I mean, we're we're slice and pretty fine hairs here.
Okay, but the okay, but and obviously prices could go higher from where they are today as well would be set so that certainly not built into to that if I on your friend correct. That's correct fair enough fair enough and then anymore.
Mark just to clarify maybe maybe were hung up around the term modest.
I think to put it on.
On a finer point the number that we mentioned here.
Prices are up 6% or so is a more accurate statement than the word modest that's correct.
Okay Super and then on that the the lumber duties and that the perspective change just to make sure I fully understand so there is no adjustment in the framework as you understand that it's just the lower lumber duties that would come into effect potentially starting August.
Entirely a function of where lumber prices averaged as opposed to any change in framework.
Our understanding and this is fresh news.
Theres no change in the framework whatsoever.
Nor will there be any refund of deposits that are currently on file and in fact.
Tariffs will continue to be collected input in the U.S treasury going forward.
So I don't think Theres any framework that's changed it was not unexpected.
The duties went down because we had a very high lumber price year in 28 team leading to the less injury. If you will.
That was we look at the year of 29 team when that comes time for review.
I don't have a negotiated settlement by then and we would expect duties to go back up because lumber prices were much lower in 1980.
Got it thank you and just two quick ones at the on that one is.
There's been a lot more talk about European spruce going into China and that has knock on impacts.
Two global lumbar and even timber flows potentially how do you see that affecting your business if at all.
Well, a little little to nothing at the end of the day Mark as you know, we don't export really logs or lumber.
Inland business here, while we produce.
Our western species.
We're really index to the price of lumber here in the in one region. So what happens with West coast log prices really doesn't have an effect on us here.
So bottom line is we don't we don't see it impacting us Oh and by the way the amount of lumber coming in from Central Europe.
What I've been reading what I've been hearing is that those volumes look like they peaked.
So if you think that incremental export volume lumber volume coming at a central Europe.
Could push prices lumber prices here lower that doesn't seem to be the case.
Okay, Great and one last one.
Was on the deep perspective that.
Lower lumber duties wouldn't affect the supply side.
Makes sense to me I guess, the one caveat being if there were saw mills that.
War prospectively going to be going down and they were still running.
Perhaps.
You would've thought they'd already known that the duties were going to be going down that could change the decision making to your knowledge, though is there much in the way of.
Got capacity, that's been announced to go down but hasn't gone down yet or is it are we at that point, where the capacity that was announced to go down has already gone down.
We think it's the latter but honestly, we don't know I haven't heard of.
Andy.
This is mostly a b C issue, we haven't heard of energy any BC announcements that are pending for closure will several more allow allow announced last year. They wound down there log decks.
The calendar years older inventory another shot.
Okay Super Thanks much.
And ladies and gentlemen, if you would like to ask a question. Please press star one on your telephone keypad.
Our next question comes from Paul Quinn with RBC capital markets.
Your line is now open.
Yes, thanks, very much good morning, guys.
Good morning.
Just a question on so I understand your lumber business, a little bit better I would've thought you had been a lot more levered to the to the style within you're talking about a price recovery and I've seen southern.
Yellow pine two way for go down over the last three weeks so.
It's a better for us to look at random length comp is it.
Or maybe you could give us feel for what you're what your size mix is between two by four two by six to eight to buy 10, just so we can track it better.
Well, there really is no perfect index to compare to Paul.
We are product mix really is a lot different than random lengths.
Frankly is look at random lengths I think is nearly 50% to buy for.
Were 11% to buy for.
Random lengths is zero percent timbers were 6% timbers.
Random lengths is zero percent economy were 20% economy.
Random lengths is 33% southern yellow pine were 50% southern yellow pine. So theres just so many puts and takes.
That there really isn't random links is not a perfect comparator, but it's it's about as good as you're going to get.
And there are they going to be periods of time like here recently, where we have underperformed the index.
Really due to incredibly weak timbers pricing timbers pricing was down 30% from March to October and in contrast to the random links composite was up 3% from Q1 to Q4, so that 30% price decline had had an outsized impact on our overall reported prices, but I would I would also tell you.
Theres periods of time, when we're going to do a lot better than the index and I think about 18 to 19, when random lengths was down $103.
We were actually only down $86. So we didnt $17 better than the index. So they're going to be periods of time, where we do better than the index in periods of time, when we do worse than the index.
But it's really about is as good of competitors you can come up with.
Okay. So it sounds like randomly lumber composition is in the one.
But given your 50% waiting is setting alpine maybe that setting alpine compas it might might be better fit of you have you tried that first versus your realizations.
Well and then there is also within southern yellow pine, there's there's there's wise and there is theres narrows.
And those two can move in different directions as well.
So again I guess I would just encourage you to think about the random lengths is the best thing to use for pricing guidance.
Okay.
Yeah, I'll try that I would add yes. Thanks for that and then maybe Mike you are mentioning reduction in duties just went at that debt reduction will be in place for a year just wondering if thats going to.
Change that thinking on on the U.S. side in terms of potential negotiations between Canada, and the U.S. to try to get a deal eventually.
Well I don't know Paul it's an election year, there's no negotiations ongoing that I'm aware of between the US in Canada I think the coalition, which were members of we all continue to believe that long term.
Negotiated market based settlement makes the most sense on market share.
It's early days.
Well, maybe you could give us it just said.
A summary of what are the individual napster W. Tivo cases that are coming up that that might actually move. This case move this issue Ford.
Sure.
My level of expertise just fell off dramatically with that question. So.
[laughter].
This is such a complicated matter I can't really side those off the top of my head. We can certainly follow up just follow up on a call with you to help with.
Okay. That's helpful. Thanks, that's all I had good luck.
Our next question comes from Mike Mark Weintraub with Stifel. Your line is now open.
Hi, Thanks, It's just one quick follow up.
Paul's question, what I'm, sorry, you said economies like 20% and timbers, what was that again that percentage.
Timbers is 6% of our production just 6%, okay, and what 50, but it's 50% of one of our mills production.
Okay and.
If we're looking at random lengths and I apologize I should know there but.
Where can I, where can we find something that would track the economy or timber since is there a particular item to to look for.
I think those numbers are buried in random lengths, Paul but I'll have to adult have to get back to you on that Mark there. If you if you dive deeper into the random links weekly pricing report their line items for both tumors that economy lumber.
I want to be lumber is really a to buy for stood product, where we generate the economy.
Okay, I'll circle back to to get to kind of thanks, so much.
[music].
At this time Im showing there are no more questions.
I'll turn the call back over to Jerry Richards.
Alright, Thank you Wednesday, and thank you everybody for your interest in Potlatch Deltic certainly as we as you heard on the call a couple of follow ups, but to be happy to take your detailed modeling questions and be available the rest of the day and hope everybody has a good day.
This concludes today's conference call you may now disconnect.
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