Q4 2019 Earnings Call
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Looking to the Catchmark timber trust fourth quarter 2019 earnings call and webcast all participants will be in listen only mode. So do you need assistance. Please signal conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded I would now like to turn the conference over to Ursula good toy.
Chief Financial Officer. Please go ahead ma'am.
Good morning. Thank you for joining that's what I read you have Catchmark timber Trust me, so for fourth quarter and full year 2019, as well its 2020 company guidance.
I'm Ursula go <unk>, Chief Financial Officer, Catchmark, joining me today on the call our Chief Executive Officer, Brian Davis, Chief Resources Officer, Cod, right and John Rasor precedent of Triple T. Timberland.
During this call Catchmark management will make forward looking statements. These forward looking statements are based on management's current beliefs and the information currently available Catchmark actual result will be affected by certain risk and uncertainty that are beyond its control or ability to predict and could cause our actual results could differ materially.
Lead from expectation.
For more information about the factors that could cause such differences. We refer you to our 2018 annual report on form 10-K in subsequent reports that we filed with the FCC.
Today's presentation includes certain non-GAAP financial measures reconciliations of these measurements are included in our earnings release, which is posted on our website.
After a presentation, Brian taught John and I will be pleased to answer any of your question.
Now I turn over the call to Chief Executive Officer, Brian Davis.
Thank you Ursula and good morning, everyone.
On our call today, our team looks forward to reviewing Catchmarks excellent fourth quarter and full year 2019 results.
Providing company guidance for the year ahead, and sitting out the guiding principles for continued to deliver on Catchmarks objectives, and those objectives steadfastly center on increasing shareholder value through stable and predictable cash flow generation and supporting a strong reliable dividend.
Before we began almost to recognize the outstanding contributions of Jerry Barag food together with the team help lead catchmark since its listing on the New York stock exchange more than six years ago.
Over that time without exception, we delivered on our plan and strategy meeting our operating targets and guidance. We also assembled what we believe is the highest quality timberlands portfolio in our industry position to deliver durable cash flow growth for our shareholders over the long term all of US think Jerry for his leadership creativity and French.
Yep.
Going forward, we intend to maintain Catchmarks course, built on three strategic pillars for delivering predictable cash flow growth.
Those three pillars are investing in prime timberlands operating near high demand middle markets with credit worthy Counterparties and managing our timberlands to optimize harvest through sustainable best practices.
We will continue to rely on a delivered what sales model and fiber supply agreements to sustain pre deductible revenues and volumes there will be no change in this operating approach, which is underpinned delivering consistent and predictable cash flow.
We intend to be extremely disciplined and focused on strengthening and expanding our timberlands, particularly in and around our current markets with proven customers and partners.
And this approach takes advantage of our positions in some of the country's best middle markets principally in the U.S. south timber basket.
We will seek transactions for prime properties in the $5 million to $50 million range with our preference for direct fee ownership and using less leverage.
Our coastal Georgia acquisition in 2017 as an example.
Aren't ventures also can contribute to provide us with the investment opportunities to grow our holdings by leveraging our platform for scale and operating efficiencies.
In terms of size and partnership structure, we will look to use the model of our very successful dawsonville gloss joint venture, which effectively round trip last year.
Importantly, we also will be focused on further reducing overall company leverage.
Selectively we intend to continue to redeploy capital by selling assets that are less productive and no longer meet our operating targets and buy more productive assets that are accretive to cash flow and were optimize portfolio construction.
We also may use proceeds for a combination of debt reduction and share repurchases.
So growth will occur through a disciplined approach focused on direct field ownership smaller to mid sized deals potentially additional joint venture co investments and less leverage.
All of our attention is on providing our shareholders with predictable and stable cash flow. It's a simple strategy, we intend to keep our strategy simple.
Turning to 2019 results those are very good year for Catchmark, we met our company guidance and produced anticipated cash flow growth benefiting from our superior Timberland holdings delivered with sales model fiber supply agreements and rigorous management practices.
And meeting Catchmarks guidance for the year, we realized increased timber sales superior pricing, the U.S., south timber basket and a significant increase in net timber revenue driven by higher timber volumes in the Pacific northwest higher pricing, the USL and improve sawtimber mix.
We completed integration of the 2018 band in acquisition in the Pacific Northwest, improving overall sell them or mix.
Great asset management fees from a full year of Triple tea joint venture, which is meeting all of its operating targets.
Taken together all of these initiatives continued support a consistent dividend from operating cash flows for our shareholders and position catchmark for future growth.
First of all will now review the financial results and then Todd will provide an overview of operations and Ursula I'll take this opportunity to welcome you as Chief Financial Officer, you've been an integral part of our team since the start of Catchmark, but we all look forward to working with you and your new role.
Thank you very much Brian and good to be with all of you on today's call.
As Brian highlighted catchmark generated excellent year over year results for both fourth quarter and full year 2019, fueled by increased timber revenues and asset management fee.
Our results reinforce the efficacy of our strategy based on investing in Prime Timberland holdings near leading no market and maximizing our operations through I can lever with sales model in fiber supply agreements.
For fourth quarter, 2019, Catchmark increased revenues by 27% to $29.1 million compared to fourth quarter 2018.
No a net loss by 69% to $11.8 million, primarily due to lower losses allocated from the triple key joint venture.
Creased, adjusted EBITDA by 61% to $15.1 million.
Increase total harvest volumes by 23% to 628000 time.
Increased gross timber sales revenue by 23% to $20 million.
Increased net timber revenues by 30% to $11.7 million, an increase harvest EBIT up by 42% to $9.7 million.
Net timber revenues increase as a result of higher harvest volumes and increase our tempered.
The increase our member mix derived from a 7% increase in the U.S., South and a fully integrated Pacific northwest operation.
During the fourth quarter Catchmark also acquired 900 acres of Prime Pine Timberlands located near existing holdings in South Carolina for $1.9 million of cash on hand generated from capital recycling disposition.
We saw 3200 acres of timberland for $5 million, increasing real estate EBITDA by $2.3 million over the same period in 2018.
We enter into a 21.3 million dollar contract for a large disposition of 14400 acres of Georgia, Timberlands, which closed in January 2020, as part of the company's capital recycling strategy.
And we paid a dividend of 13 and a half centsper share to stockholders of record on December 13 2019.
For full year 2019, the company reported the following year over year result.
Increased total revenues by 9% to $106.7 million compared to full year 2018.
Lower net loss by 24% to $93.3 million, primarily due to lower allocator losses in higher earn asset management fees from Triple Pete.
Increased adjusted EBITDA by 14% to $56.9 million due to higher net timber revenues in asset management fee.
Increase total harvest volumes by 3% to 2.24 million time, driven by integration of our Pacific Northwest property.
Increased timber sales by 4% to $72.6 million increased net timber revenue by 9% to $41.4 million, an increase hard to Steve it up by 8% to $33.7 million.
These gains were generated in part by a higher saw timber mix increased pricing in the U.S., south and the integration of Pacific Northwest operations.
Gross timber sales revenue increase year over year by $3.1 million Assa result of a 5.2 million dollar increase in the Pacific Northwest region.
Offset by a 2 million dollar decrease in the U.S. South region, resulting from a 9% decrease and deliver sales as a percentage of total volume.
Total harvest volume into U.S., south remain comparable year over year, with pulpwood pricing, increasing 2% and sawtimber pricing increasing 1%.
Net timber revenues increased by 9% as a result of higher harvest volumes and increased saw timber mix and higher U.S. south pricing.
For full year 2019, we also increased asset management fee revenue by 113% to $11.9 million, primarily due to a full year of triple T. operations.
We recognized $600000 of incentive based promote.
$1 million of income $4.8 million of adjusted EBITDA and received $4.8 million of distributions from the highly successful document Blas joint venture.
We increased investment management, EBITDA by 35% to $16.7 million due to triple Tcs and adult students plus Russell.
We realized timberland sales of $17.6 million from the disposition of 9200 acres.
The proceeds were in line with 2018 result in company targets.
We completed large dispositions of 14400 acres for $25.4 million, capturing a gain of $8 million and paying down outstanding debt and lastly, we paid fully covered dividends of $26.3 million were 54 cents per share.
In 2019, we also made significant progress on our mission to reduce company debt relative to adjusted EBITDA and met our yearend target of eight times net debt to adjusted EBITDA ratio down from nine and a half times at year end 2018.
This accomplishment reflects the full year impact of asset management fee revenues earned from Triple tea.
And the execution of our ongoing capital recycling program through large dispositions of timberlands that no longer meet our productivity criteria.
By year end 2019 liquidity had increased to $196.6 million from $170.6 million at year end 2018.
This was comprised of $185.1 million of debt capacity and $11.5 million of cash on hand.
In addition, we also took advantage of the favorable interest rate environment to blend and extend existing interest rate swaps.
After fourth quarter hedging transactions to fix rate on $275 million of debt. The average term on our fixed rate debt stood at nine years at a weighted average interest rate of 2.17% before the applicable spreads and expect that patronage dividends.
That compared to an average time of four years at 2.44% at the end of the third quarter.
The 2019 results do not include the recent approximately $21 million, Georgia, Timberlands largest position, which we close last month on January 31.
Proceeds of this transaction were used to repay approximately $21 million of outstanding debt on February start.
As a result, our fixed to floating rate debt is now 63% and liquidity has now increased to $206 million.
These results all underscore our commitment and focus on appropriately deleveraging and strengthening our balance sheet.
During the fourth quarter 2019, Catchmark did not repurchase any shares under the company's $30 million stock repurchase program.
For full year 2019, the company repurchased approximately 329000 shares for $3 million with $15.7 million remaining available under the program at year end.
Now I'll turn it over to Todd for the operations radio.
Thank you Ursula at the outset I want to recognize our team of field managers for the excellent job. They continue to do working with our customers and contractors to ensure we execute on our commitments their efforts paid off again during a very strong fourth quarter, where we met plan on production and pricing, including achieving a favorable sawtimber mix.
Our strong middle markets fiber supply agreement partners delivered would model and opportunistic stumpage sales continued as our primary performance drivers, helping maintain pricing levels for all time products substantially above timber Mart, south south wide averages specifically in 2019 Catchmark achieved pricing.
Premiums that were 47% higher for pulpwood, and 31% higher for sawtimber and timber Mart south averages.
We are encouraged about the healthy pace of us housing starts with increasing levels of permits and homebuilder order files pointing to a 1.3 million start projection for full year 2020.
This should lead to stronger lumber demand and higher pricing for finished products, which should produce better supply demand dynamics in the tumor market.
Flow existing home inventories favorable mortgage rates and the strong jobs market, including rising real wages all support this favorable outlook.
In addition, applying specifically to Catchmark sawmill capital improvement in Greenfield projects in the us cells or come into fruition are beginning to start operations. Although we do not expect fully realized demand materialize in our markets until 2021 and into following years, we have begun to experience early demand upticks in local and regional Michael Moore.
Markets pricing is expected to trend up slightly during the year with seasonal ebbs and flows. We also expect our harvest volume for the year to increased to 2.3 to 2.5 million ton range with 95% of our production coming from US South operations are sawtimber mix projects at approximately 40% from the U.S South and 80%.
In the Pacific Northwest, we forecast first quarter 2020 harvest volumes to be higher year over year in first quarter pricing to be relatively stable quarter over quarter.
For further 2020 guidance I turn it back over to Brian.
Thanks, Todd consistent with our past practices guidance does not include potential contributions from acquisitions possible, new joint venture investments or additional capital recycling.
We forecast adjusted EBITDA of between 48 in $56 million, reflecting decreased contributions from dawsonville blocks, which effectively wrapped up last year.
Expected sharply reduced GAAP net loss for the year between 10 and $15 million reflects a substantial reduction on losses allocated from triple tea.
As Todd noted, we anticipate harvest volumes between 2.3 and 2.5 million tons.
Asset management fee revenue is projected at $11 million to $12 million, primarily from triple team.
Higher anticipated harvest EBITDA will be driven primarily by increased harvest volumes and steady pricing, while investment management EBITDA will decrease due to the absence of significant contributions from Dawsonville Blas.
Timberland sales targets of $15 million to $17 million remain in our traditional annual range of 1% to 2% of the acreage.
And making new investments, we will continue to focus on buying prime timberland assets, our analysis and due diligence will concentrate on achieving sustainable yield and durable cash flow based on strong stocking and productivity characteristics as well as locations and superior middle markets.
We intend to remain highly disciplined and prudent using our ownership presence to find appropriate off market deals concentrating in and around our existing mill markets.
In particular, we're confident that we can continue to come across opportunities to expand our market presence through delivered wouldn't model relationships.
To sum up Catchmark delivered an excellent 2019 operating results and we improved our capital position to enable future growth.
We realized a significant increase in adjusted EBITDA higher harvest volumes increased timber sales superior pricing in the us out timber basket and increased sawtimber mix a significant increase in net timber revenue and harvest EBITDA. The successful integration of the band and property in the Pacific Northwest.
Significant asset management fees earned from Triple TV this excess of Dawsonville blogs and meeting timberland sales targets.
In addition, the capital recycling strategy employing targeted large disposition continues to improve the overall quality of our timber assets reduce leverage strengthen our balance sheet and enable future investments in prime timberlands furthering our growth strategy.
And most importantly, we have a strong cohesive group of executives and staff dedicated focus to meeting our ongoing targets.
Our team remains steadfast in implementing a simple and proven strategy based on investing and owning premier Timberlands and superior mill markets employing the best sustainable management practices to help deliver durable harvest yields.
Taken together these initiatives executed by our outstanding team will enable us to continue to provide a consistent dividend supported by predictable and stable operating cash flows for shareholders.
All of us at Catchmark remain discipline dedicated and confident while meeting our objectives going forward. Thank you again for joining US today now Ursula Todd John and I will be pleased to take your questions.
Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone, if you're using a speakerphone. Please pick up your handset before pressing the keys to withdraw your question. Please press Star then to at this time, we'll pause momentarily to assemble our roster.
And our first question will come from Collin Mings with Raymond James. Please go ahead.
Thank you good morning, Brian and team and congrats congratulations again to everyone.
Great. Good morning, John Good morning.
To start I did want to follow up on the leadership change in your opening remarks, Brian.
First is there any additional color you can provide on the timing of the transition and then also Brian I was curious just as it relates to your prepared remarks as you and the board look toward the company goes from here. It sounds like lower leverage is a key priority do you in earnest will have any specific targets in mind.
Sure call I'll take that so from a your first question regarding timing hi.
The process for leadership development began with my promotion to President in April of last year, we've been developing our team from the time, which we had our IPO, which we had nine employees today, we have 25 and so the border myself have been very focused on developing expert.
Jason bench strength and it's now was demonstrated by this most recent leadership change over a number of people taking a great step forward filling those opportunities internally, we brought in to external general counsel from Awesome bird almost two years ago, Todd rise comes to us from Weyerhaeuser by way of concrete. So we have great bench strength and so from the standpoint.
Timing.
As a young.
The board feel very comfortable on our move forward as it relates to the leadership team, which we have in place today.
Now your ultimate question comes back to have an approach and our approach really is to continue to deliver our value proposition to disappoint acquisitions of prime timberlands and high demand no markets superior management to provide predictable and stable cash flows, which we announced in our.
Pre pre rate, but ultimately my bias is towards are relatively simple corporate structure for a company of our size with a lower leverage profile as it relates to a target it's more of a direction.
Versus a target and that direction as a lower leverage profile than what we currently have and will be disappointed in our approach as we are well within our financial covenants or no near term maturities and we have plenty of liquidity. So this would be more of a bias over a period of time as it relates to the direction for leverage.
Okay fair enough.
Working with the simplicity theme if you will.
I do want to touch on joint ventures, as well, Brian. It does sound like why you are look maybe looking forward to maybe in the future less complexity. If you will there is still.
A willingness to conduct smaller joint venture opportunities.
So just curious on the JV front is there any near term opportunities that you've identified on that front I just again, given the wind down here of Dawsonville.
Yeah, so as it relates to Jvs in the future I think Dawsonville Blas represents a great model I believe my opening remarks captured some of that sentiment we have a positive lean in recruiting that type of success with a joint venture by virtue of scaling structure of Dawsonville.
2019 was a busy year as it relates to the integration associated with the band and the full year operations of Triple T. I can tell you would be about the fourth quarter of 2019, Weve reinvigorated our efforts as it relates to those types of joint ventures, as well as direct acquisitions.
Okay.
Sticking with the asset management business last quarter. The company discussed how volatility in the lumber markets was a headwind maybe getting a deal with the GP Don as it relates to the Triple T.
Joint venture just recognizing you aren't going to negotiate on an earnings call. It maybe can you just remind us more broadly your latest thoughts to the best path to create value on as it relates to triple team, especially recognizing there is some extra incentive for catchmark to get something done here within called the first two years of that JV forming.
Correct and also as we've noted in prior calls we've established a good working relationship with GPS since we began managing the property in 2018 and under John Rasor. His guidance. We're meeting all the targets under our existing would supply agreements. We remain engaged in a constructive dialogue with GP and were both evaluating whether there is it.
Transaction associated potential agreement modifications that mutually beneficial to both of us.
And we should note and you're correct column, we're not going to negotiate on a earnings call, but if we're able to reach an agreement GP then it may accelerate our ability to realize value with respect to the triple tea joint venture, but consistent with other calls if we're not able to reach an agreement GP than we believe treat triple tea is still very good investment is a great property when the fastest.
Growing regions in the country and we've been managing a very well meeting our targets on the supply agreements and take advantage of other revenue generating opportunities.
Okay I appreciate the the color there Brian.
Switching gears real quick to the just the real estate activity during the quarter I don't know Theres. Some additional details you can provide obviously the per acre.
Transaction price their per acre of the different transactions that were cleared in the fourth quarter I should say.
Just optically looked a little low obviously theres a lot that goes into a per acre pricing on timberland deals, but just curious if you can provide a little bit more color on that I am just given where those realizations work.
Hey, Colin this is Todd you bet there in the fourth quarter. We ended up closing now whether that $4 million deal, there's really a pure hardwood timberland sale.
Had you know.
Difficulty of access Operability.
Type items with it so therefore being pure hardwood doesn't have the stocking level on the pricing associated with an upland Stan you would see a little bit lower rate there.
Okay, and one last one for me and I'll turn it over.
Again, Todd just as it relates to the timberland.
Markets and specifically the demand for logs in the Pacific Northwest recognizing you guys don't have a huge presence there, but just if you can weigh in obviously lot of discussion on some of the other earnings cause as it relates to the impact of the export markets on tension in the Pacific Northwest.
Lot of uncertainty created by both the European salvage would situation and the Corona virus.
Not to mention obviously to be the trade situation. So just your thoughts on the Pacific Northwest as you start ramping up our harvest volumes in that region.
Sure you know and just to reiterate you're right. We don't have a huge huge exposure or play within the whole export arena there, but it does provide some tension and as of late.
We actually have.
An opportunity here for some pricing improvement and it's really driven from the standpoint of.
The Canadian log flow really going into the Japanese market has been a little bit diminished and so we've seen some of that pick up in the Pacific Northwest region.
As of late.
Really just couple of weeks ago, we we received a a modest improvement in pricing that are not normally improved our export options, but it also drove some improvement in the local domestic market, which was very well received and then and who knows how long that will last it could be amounts could be the whole quarter again, we'll just have to wait and see but it is a data point.
Things are improving there we'd like to see that additionally, in the south we've seen a little bit of uptick there is no you mentioned the tariff.
Using potentially we don't really know exactly what that's going to look like at this point in time window, something is coming but in the south most recently had a market reopened that had been closed and while it's an early indicator.
Maybe things to come it was encouraging in spite of the fact, we don't know exactly what it's going to look like going forward as far as the timing of the tariffs being removed a reduced we did see that happen. So we welcome that again back to the tension in the overall marketplace.
Outlook is still very positive in the overall scheme of things with all of our domestic customers not really hearing a whole lot around concern over.
As you mentioned the European issue of lumber coming in summer speculated that maybe that hit its peak last year, and we could see that going down so not a whole lot of concern around that at this point in time coming from our customers anyway.
Okay. Thank you I'll turn it over.
Thanks gone the.
And our next question will come from Anthony Pettinari of Citi. Please go ahead.
Good morning, this is actually Randy tole sitting in for Anthony.
Good morning, Randy lighting to harvest falls up over 5% at the midpoint can you talk about what's driving that year over year expectation.
Yeah.
From our standpoint, our management of our assets has really been focused on maximizing the returns of our overall portfolio. We have everything from our direct harvest activity to investment management business to land sale business as well as our other revenues our management approach over the last couple of years is included some harvests deferrals.
For harvesting at the lower end of a range for the past three years is actually led to southern stocking of our forest growing from 38 tons Gray grew to 43 tons per acre at end of 2019, and so as we look at maximizing the value associated there for us.
We have the merchantable inventory thats available to be delivered into the marketplace and I think it's important consideration Todd if you wouldn't mind talking a little bit more about the specifics of our harvest planned for 2020 sure Brian Eno. So looking at 2020, we we actually have an opportunity to fully implement seven northwest.
And then really is just.
Utilizing that prime southern Timberland ownership, we have through normal course business. The main drivers for 2020.
You think about the overall mix of what we're going to be producing when you were still going to be in 75% target.
Ran as far as a delivered program is concerned we already have half a million or so tons dedicated and locked up with our fiber surprise during the partners. There is additional upside potential was that.
As we look to Q1 production.
Over 19, if you look at the first quarter 20 compared to the first quarter of 19 be very similar from a percentage basis as we said on the opening remarks, we would.
We anticipate pricing to be modestly improving throughout the year, so quarter over quarter that may be fairly flat and growing as we move forward.
In addition to just the first quarter as we look out throughout the year, we would anticipate a little more consistent flow throughout the year as compared to 19 were not going to see that building.
When you think about Q1 Q4 tend to be a little bit wider production in quarters compared to Q2, and three which tend to have more available production days.
Okay. That's helpful. Thank you and then.
Including the proceeds from the recent disposition.
In Georgia, it looks like you're right around eight times leverage is there a target range you would like to get to by the end of 2020. Thank you.
Hey, Randy it's a very similar question that I think on I'd ask as well as a regarding a target. We don't really have a target was much more of a direction. We're very comfortable were operating today at an eight times leverage our bias is to move that leverage number down over a period of time, but again, we're not in any rush we have a welcome.
Then we have good visibility and predictability associated with our cash flow, we've got no near term maturities in well within our financial covenants and so from a standpoint of having a target. We don't at this time, it's much more of a direction.
Okay. That's helpful I'll turn it over thank you.
Thanks Randy.
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And our next question will come from Dave Rodgers with Baird. Please go ahead.
Yeah. Good morning, everybody I guess wanted to talk about the portfolio. Obviously you guys have constructed at since the IPO, but mill markets have changed since then distribution patterns. So how much of the portfolio now that you've undertaken a couple of bigger sales over the last six months how much of the portfolio today sits in a highest quality middle market that you want.
To be in and what do you consider really available for sale as you continue to want to make the portfolio higher and higher quality.
Right, Dave is Brian good morning, So from our standpoint, we have this in our investor presentation, 95% over acres under current management sits in the top four markets in the U.S South and so we feel very confident that we've done a great job since IPO assembling a superior asset base relative to anybody else and so.
The opportunity is really sit inside of.
Our marketplace like the Acone transaction, where we call the Georgia Timberlands transaction really fit that criteria for us for large dispositions is one kind of an asset profile to operational considerations and three impact on accretive nature associated with the proceeds. So for example, the Georgia.
Freelance.
Good marketplace kind of outside of our operational expectations regarding its much more of a stumpage market for us versus our deliver wouldn't model creates some sort of variability associated with cash flow versus what we normally would want to do stocking levels were lower at 28 tons per acre versus or average around 43 tons per acre and then from.
Our productivity standpoint, because we've been active on these tracks. It was more of about 1.8 tons per acre from a productivity standpoint over the next 10 years versus 4.5 to five and have tons and so what we've seen Dave is really an opportunity exists inside of our existing marketplace. Because we bought so well since our IPO along with the legacy property in of itself.
There's a lot more liquidity for our existing assets. It provides us the opportunity actually redeploy in our existing marketplace to create much more scale and opportunity for us to execute under deliver wouldn't model. So we like the markets we operate in today.
And to taking those three criteria how much of the portfolio than falls below that where you are making that decision to recycle still.
Yes, that's on a continuous process. So if you think about the capital recycling activity. We've done over the last couple of years, we've our southwest properties, which considers consisted of Texas and Louisiana.
We recycle those properties and the acquisition of band in last year, we did about $25 million of dispositions in our existing marketplace in the U.S south of which we used $20 million that debt to pay down.
And we've done.
$21 million first quarter this year.
From our standpoint that seems to be the right about at tempo as it relates to capital recycling opportunities. We'll continue to review our portfolio ultimately becomes too. It was the use of that capital and it's going be focus on an accretive use of that capital whether through paying down our relatively inexpensive debt for really building up our pipeline, which we've been doing.
Since the fourth quarter of last year of these kind of middle market lower middle market acquisition opportunities in that $5 million to $10 million range.
Thanks, Glenn maybe on the harvest deferrals that you mentioned, taking the total stocking from 30 to 43 tons per acre.
The plan that you have now kind of that you've set out for 2020 and going forward, how does that impact your expectation of stocking level given growth parameters over the next year to Threed is that to keep you at 43 on with growth rates or do you kind of work that back down into the into the Thirtyth. How do you think about that.
So first off it starts with the acquisitions, we've made since our IPO, we've had an opportunity really by high quality very productive sites. So from a growth rate standpoint, we have a much above average as it relates to growth criteria that being said, we would anticipate while we have grown that from 38.
Owns a 43 times, we would expect to bring that level slightly down.
Is really not much of concern it's on a normalized basis. So.
From our standpoint, we've been we've been operating asset to maximize the value and we feel very comfortable with that we'd be operating above that 38 tons per acre range, but below 43.
Great. Thank you.
Great. Thanks, Dave.
And our next question will come from Albert Sebastian with Prospect Advisors. Please go ahead.
Good morning.
Good morning now.
Just a few questions firstly could you give us the the EBITDA associated with the this sale that you entered into the.
14400 acres and Georgia that you.
I guess.
You closed in January.
Right. So we have weakened to discuss more our regarding the productivity and so thats about 1.8 tons per acre per year over the next 10 years are you can use a weighted average of what we realize on a per ton basis that can give you an expectation around.
EBITDA.
Okay. Okay.
And just.
Taking a look at.
Your.
Your guidance your net cash provided by operating activities.
For the year was about 33 million for 2018, it was around $30 million.
Could you give us some sort of guidance based on your your EBITDA.
Guidance this year, what that that might be or give us a bracket.
One way to think about it.
Now is that we considered around payout ratio regarding our dividends. So we target a 75% to 85% payout ratio. So if you know what our dividends are going to be for 2020, you can kind of back into the expectations regarding cash generation.
Okay, Okay and.
Distributions from unconsolidated joint ventures, I assume a lot of that.
It was.
About 4 million and.
2019, It was just under 5 million in 2018, I assume a lot of that is Dawson dawsonville could you give us a handle on what that number that line item might be for.
For 2020.
Good morning, now this is our sola I'll take that question.
You're right as we've discussed doesn't last contribution for 19 with me to top in a wide range around $4.8 million.
Currently we have approximately $2 million Sun Valley on book and this is mainly coming from our mitigation bank credit. So from the contribution standpoint attachment for the next couple of years. It. We anticipate is gonna be putting that negligible at no more than call. It half a million dollars annually beginning in 22.
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Okay. So this line item probably will be about half a million dollars for this year.
That's right.
Okay. Thank you very much.
Thanks Al.
Again, if you have a question. Please press Star then one our next question as a follow up from calling means with Raymond James. Please go ahead.
Thank you I just first the fall for me is just I want to go back to Dave's question on the portfolio can you, maybe just expand a little bit more on the 900 acres you acquired during the fourth quarter and then just kind of more specifically do you have any other acquisitions currently under contract as we sit here today.
So.
Gone 900 acres it was an error existing marketplace.
What we've noticed in this this is a very small transaction, but what weve notice in the lower end of the middle market, we actually have some opportunities in that space given our operating area.
We have lot of connectivity into these marketplaces in there seems to be we're building a very strong pipeline in this kind of $5 million to $10 million range. We don't have anything currently under contract. We're looking at a number of transactions.
John Capriati has been spearheading our efforts since our IPO in 2013 is done a really good job really building that those opportunities for us being able to recalibrate refocused our efforts doubling our efforts in cyber existing market area and we're we're finding some pretty good liquidity for opportunities that.
Really hit the kind of light up our board for US. So we're excited about albeit this is 900 acres that we did in the fourth quarter by really speak to more about the opportunities that we see in our existing marketplace.
Got it and along these lines how does the Pacific northwest fit into the potential for some of these smaller deals that you're targeting.
Right Pacific Northwest has had a little bit different availability in the marketplace from a liquidity standpoint, we're not seeing as many opportunities in the Pacific northwest as we are in the southeast.
Some of that speaks to our existing size of our operations out there Todd and his team has done a fantastic job in 2019 of getting that up and operational in 2020 is going to be expanding those operations during the year.
But we always keep our eyes and ears open associated with for creative opportunities.
Okay.
And then one other housekeeping one from me here just as it relates to the anticipated gain from large dispositions.
Recognizing that you provided a range around that is that just be Oh 114400 acre deal that's already close to their just kind of uncertainty.
Some of the accounting of that or is there. Some additional large dispositions that you're thinking about as you kind of put out that guidance range.
No thats related to the transaction in the way closed in January call.
Okay. Thank you.
Great. Thanks gone.
No.
This concludes our question and answer session I would like to turn the conference back over to Brian Davis, CEO and President for any closing remarks. Please go ahead Sir.
Thank you for joining us today, and we look forward to talking with you next quarter.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.