CatchMark Timber Trust, Inc. Class A

Good morning and welcome to the Catchmark Timber Trust's results for the first quarter 2021. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Ursula Godoy, Chief Financial Officer of Catchmark. Please go ahead.

Good morning, and thank you for joining us for our review of Catchmark Timber Trust results for first quarter 2021. I am Ursula Godoy, Chief Financial Officer of Catchmark. Joining me today on the call are Chief Executive Officer Brian David, Chief Resources Officer Todd Wright, and John Racer, President 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's actual results will be affected by certain risks and uncertainties that are beyond its control or ability to predict and could cause our actual results to differ materially from expectations. For more information about the factors that could cause such differences, we refer you to our 2020 Annual Report on Form 10-K and subsequent reports that we filed with the SEC. Today's presentation includes certain non-GAAP financial measures. Reconciliations of these measurements are included in our first quarter 2021 earnings release and financial supplement, which are posted on our website and in our Form 10-Q filed with the SEC yesterday, May 6, 2021. After our presentation, Brian, Todd, John, and I will be pleased to answer any of your questions. Now, I turn over the call to Chief Executive Officer Brian Davis.

Thanks, Ursula, and thank you all for being on the call with us today. All of us at Catchmark hope you, your colleagues, families, and friends continue to stay healthy and safe. 2021 got off to an exceptionally strong start for Catchmark, driven by higher timber prices, both in the U.S. South and Pacific Northwest, and we continue to achieve significant pricing premiums over Southwide market averages for our harvests in the U.S. South while capturing prices significantly higher year-over-year in the Pacific Northwest. Low interest rates, strong housing market demand, and increased home repair and remodeling activity together with continued strong mill activity resulted in higher timber prices during the quarter. As discussed in our last call, the market has been building to a point of price inflection for some time. This began with British Columbia mill closures a couple of years ago the relocation of capital and corresponding mill capacity expansion in the U.S. South, and now the potential for a more sustained and durable housing recovery. These factors are all now driving improved product pricing in select southern micro-markets, and a resilient housing market is encouraging consumption of wood products, reducing the log oversupply in the U.S. South. Various demographic trends, including millennials forming households and aging-in-place baby boomers, are helping generate demand for housing that is outstripping supply and igniting new construction. In fact, privately owned housing units authorized by building permits were at a seasonally adjusted annual rate of nearly 1.8 million in March, more than 30% above the level a year ago and the highest since 2006. Add in the ongoing significant economic stimulus, and the result is a buoyant timber product market, which Catchmark is benefiting from. In addition, we should continue to gain from pricing premiums we consistently achieve from our prime timberlands located in premier mill markets, as well as our standing as a preferred and reliable supplier to our customer base as we utilize a differentiated operating model. employing delivered sales supplemented by our opportunistic stumpage sales. We believe our business model is particularly well-suited to excel in the current market. For the first quarter, tracking long-standing company performance, Catchmark realized increases in U.S. South Pulpwood and Salt Timber stumpage prices of 8% and 9%, respectively, compared to prior year quarter, outpacing 3% and 4% increases in U.S. Southwide average prices. Our Pacific Northwest salt timber price increased 15% year-over-year due to continued strong demand fundamentals. As planned, total harvest volumes during the quarter were lower year-over-year. Importantly, harvest volumes remain on track to meet full-year guidance as we maintain consistent annual productivity on a per-acre basis with the potential to sustain current strong timber pricing. Timberland sales are also on course to meet full-year guidance. Although first quarter timberland sales were lower year over year due to selling 40% fewer acres, per acre timberland sales pricing increased significantly, and we expect to complete a substantial number of sales in the second quarter. Investment management results improved during the quarter due to contributions from the Dawsonville Bluffs Joint Venture and last year's amended Triple T Asset Management Agreement. Dawsonville capitalized on the strong market demand for mitigation credits, while higher asset management fees earned from Triple T resulted from last year's successful renegotiation of the wood supply agreement with Georgia Pacific. We continue to make progress in pursuing recapitalization opportunities for Triple T in the wake of the renegotiated Georgia Pacific wood supply agreement, which allows Triple T to capture market-based pricing for harvests and expands Triple T's ability to sell harvests and timberlands to third parties. Since our investment with a consortium of institutional joint venture partners nearly three years ago, we believe we have significantly increased Triple T's per acre value and delivered improved financial performance through our superior operational management and as a result of the renegotiated Georgia Pacific Wood Supply Agreement increased opportunities to market products to third parties within Triple T's deep regional woodbasket, and enhanced forest management and silvicultural practices, which have improved forest attributes and standing forest inventory. Looking at our capital structure, there are no major changes during the quarter. We maintain healthy liquidity, stable leverage, and advantageous management of debt capital. Yesterday, we also declared a cash dividend of 13.5 cents per share for common stockholders of record as of May 28th, payable on June 15th. In sum, it was a very strong quarter. Timber sales, harvest EBITDA, investment management EBITDA, net loss, and adjusted EBITDA improved year over year. Again, most telling. Timber sales revenue increased on the strength of higher pricing, resulting from improving timber market dynamics. With a positive outlook for pricing, our business model can continue to leverage the benefits from the current operating environment, and we remain well positioned to generate predictable, stable cash flow and deliver fully covered dividends, our primary objectives. Now, Ursula will cover first quarter results in greater detail and review our capital position.