Aug 5, 2015
Executives
Dante Parrini - Chairman and Chief Executive Officer John Jacunski - Chief Financial Officer
Analysts
Anuja Shah - BMO Capital Markets Bryan Lynch - Vertical Research Steve Chercover - D.A. Davidson Dan Jacome - Sidoti & Company Alec Cummings - Deutsche Bank
Operator
Good morning. My name is Khalia and I will be your conference operator today.
At this time, I would like to welcome everyone to the Glatfelter's Second Quarter Earnings Call. All lines have been placed on mute to prevent any background noise.
After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions].
Thank you. I would now like to turn the call over to our host, John Jacunski, please go ahead.
John Jacunski
Thank you, Khalia. Good morning and again welcome to Glatfelter’s 2015 second quarter earnings conference call.
This is John Jacunski. I am the company's CFO.
Before we begin our presentation, I have a few standard reminders. During our call this morning, we will use the term adjusted earnings as well as other non-GAAP financial measures.
A reconciliation of these financial measures to our GAAP based results is included in today’s earnings release and in the investor slides. We will also make forward-looking statements today that are subject to risks and uncertainties.
Our 2014 Form 10-K filed with the SEC and today’s release, both of which are available on our website, disclose factors that could cause our actual results to differ materially from these forward-looking statements. These forward-looking statements speak only as of today and we undertake no obligation to update them.
And finally, we have made available a slide presentation to accompany our comments on this morning's call. You may access the slides on our website or through this morning's webcast provider.
I will now turn the call over to Dante Parrini, Glatfelter's Chairman and Chief Executive Officer.
Dante Parrini
Thanks, John. Good morning and thank you for joining us to discuss our second quarter 2015 results.
In the quarter Glatfelter people continued to navigate the headwinds of the macro level challenges we have been facing in certain markets and regions of the world. I am pleased with the progress we've made in areas of our business within our direct control.
We are successfully serving the needs of our customers, controlling costs, operating well and improving overall safety performance. As shown on Slide 3 we generated adjusted earnings per share of $0.04 in the second quarter down compared to $0.09 in 2014.
Our second quarter results were reduced by a net $0.07 per share due to the impact of foreign currency translation and higher costs for this year's expanded annual maintenance outages in specialty papers, somewhat offset by a favorable tax rate. Excluding these items earnings per share would be $0.11.
Revenue for the quarter was $411 million down 1% on a constant currency basis compared to last year. Revenue for composite fibers was up 4% on a constant currency basis reflecting strong demand in most product segments this quarter.
Food and beverage shipments were strong up 9% and a quarterly record. However orders for non-woven wall cover were down 19% compared to the second quarter of 2014 and down 3% when compared to the first quarter due to significant weakness in Russia and Ukraine.
The operations team in CFBU performed very well delivering a 6% increase in output on its inclined wire paper machines to support the strong demand. Excluding a $1.9 million negative impact from foreign currency translation, operating profit for this business increased nearly 8% compared to the second quarter last year.
Advanced Airlaid Materials had a disappointing quarter with shipments down 8% and operating profit down 50% due to weak shipments of hygiene products and the related costs from market down time. The combination of lower demand and weak economies and some one-time factors that impacted order patterns were partially offset by a significant growth in specialty wipes.
While we are facing some near-term market challenges we still expect longer term growth opportunities for our absorbent core hygiene materials and our specialty wipes. Revenue for specialty papers decreased 2% driven by lower selling prices.
Shipping volumes were up slightly compared to last year again outperforming the broader uncoated freesheet market. While many of the markets we serve are very competitive and pricing is a challenge, we continue to focus on excellent customer service, new product development and new business development to differentiate Glatfelter.
As a result the engineered products segment was up 8% during the quarter. We successfully completed the extensive annual maintenance outages on time and on budget.
We are pleased with the results of the work and with the improved operating performance during the quarter. We will continue to focus on cost control and operating excellence in the second half of the year to deliver solid results.
During the quarter we made substantial progress on our workforce efficiency and cost reduction initiatives. We have a total cost savings target of $25 million to $30 million in 2015 that includes a workforce reduction of 3% to 5%.
During the first half of the year we have reduced our total headcount by 2.6% and generated cost savings of $13 million. So we are on plan to achieve our targets.
John will now provide a more in-depth review of our second quarter results and then I will offer some additional perspectives of the business. John?
John Jacunski
Thank you Dante. For the second quarter we reported net income of $2.8 million or $0.06 share.
After excluding non-core business items we reported net income of $1.8 million or $0.04 per share compared to $0.09 in 2014. Slide 4 shows a bridge of adjusted earnings per share from the second quarter of last year to this year.
Composite fibers results reduced earnings per share by $0.01 with a negative impact of $0.03 coming from foreign currency translation. Advanced Airlaid Materials results reduced earnings per share by $0.05.
Specialty papers results reduced earnings per share by $0.05 reflecting an $0.08 negative impact from the expanded annual maintenance outages. And taxes on adjusted earnings increased earnings per share by $0.04 due primarily to the release of reserves related to the completion of tax audits during the quarter.
Slide 5 shows the summary of second quarter results for the composite fibers business. With the exception of non-woven wall cover composite fibers performed very well during the quarter.
Revenue was $140 million an increase of 4% on a constant currency basis compared to last year. Shipping volume was flat when including the Oberschmitten acquisition.
Selling prices were down compared to the second quarter of last year but have generally remained stable for the first six months of 2015. Shipments of tea and single-serve coffee products set a new quarterly record and were up 9% compared to year ago, with shipments of single-serve coffee products were 22% and tea products up 6%.
We expect continued strong demand for these products for the remainder of the year. Shipments of non-woven wall cover parts were down 19% compared to the second quarter of 2014 and down 3% versus the first quarter.
Our wall cover products continue to be impacted by macroeconomic challenges in Russia and Ukraine. We have introduced a lower basis weight product to reduce the cost and make our products more competitive in the current environment, but consumer demand is being impacted by the protracted recessionary environment in these key markets for the segment.
We also saw strong growth in technical specialties with shipments up 11% year-over-year, excluding the Oberschmitten acquisition driven by demand for electrical products. Composite laminate shipments were up 16% and the market for metalized products remains sluggish and competitive resulting in shipments declining 8%.
We had a solid quarter from an operations perspective despite the low demand for wall cover products. We took downtime in Dresden during the quarter to manage inventory levels which reduced operating profit by $1.1 million.
However we were able to generate substantial cost benefits through our continuous improvement and cost-reduction initiatives that more than offset this impact. Our production volumes are up 6% on our inclined wire machines year over year and material usage and waste rates improved.
We also completed the installation of equipment for the new dispersible wipes product. We have started start up the equipment and are working through the product testing and qualification process with customers.
We expect to begin commercial shipments towards the end of the year. So overall operating profit for the quarter was $16.7 million down $600,000 from last year including a negative currency translation impact of $1.9 million.
For the third quarter of 2015 when compared to the second quarter we expect shipping volumes to be slightly higher. Selling prices and raw material on energy prices are expected to be in line with the second quarter.
Advanced Airlaid Materials results are summarized on Slide 6. Revenue during the quarter was $57.5 million down 8.6% on a constant currency basis compared to last year with shipments down 8% in comparison.
Substantial growth in wipes products was more than offset by lower shipments of feminine hygiene products. The lower shipments reflect several factors including consumers moving to lower cost and functionality products in certain weaker economies, particularly in Eastern Europe, inventory reductions at certain customers and the impact of down-gauging to lighter basis weight products.
In addition in the year ago quarter we gained about 500 tons of volume due to a fire at a competitor's facility. Operating income for this business declined $3.1 million compared to $6.2 million last year.
Lower shipping volume negatively impacted the results by $1.3 million and the related market downtime to manage inventory levels at our facility in Germany reduced results by $2.1 million. We also concluded an upgrade to a winder in our Gatineau facility to improve production efficiency and create incremental capacity.
This installation and startup negatively impacted second quarter results by $1 million. For the third quarter we expect shipping volumes to be approximately 5% higher than the second quarter.
Average selling prices are expected to decline slightly and raw material prices are expected to be in line with the second quarter. Slide 7 provides a summary of the results for specialty papers.
Net sales for the quarter were down 2% due primarily to lower selling prices. Shipments were up slightly when compared to the second quarter of last year and we again outperformed the broader uncoated freesheet market that was down slightly.
Specialty papers continues to add new customers and grow key product lines to offset the impact of the broader uncoated freesheet market decline. During the quarter shipments of engineered products increased 8% driven by growth in high-speed digital inkjet and other technical products and shipments of envelope products were up 4%.
Shipments of book publishing products were flat and carbonless and non-carbonless form products were down 10% and 4% respectively. During the quarter we completed our annual maintenance outages at both facilities which adversely impacted results by $33 million this year compared to $28 million in the second quarter of last year.
As we previously communicated the outages this year reflect a broader scope of work to address the superheaters in Spring Grove. Excluding the costs of the outages, operating results increased $2.5 million due to a lower raw material and energy costs, lower depreciation expense, and improved operating performance including record monthly pulp production in June at our Ohio facility.
With this business in the third quarter we expect shipping volumes to increase approximately 5% compared with second quarter. We expect selling prices in our more commodity like products to decline slightly as the industry operating rates, inventory levels and continued demand decline create a competitive market environment.
We expect input costs to remain in line with the second quarter. Finally we expect maintenance spending to decrease approximately $31 million reflecting the return to more normal maintenance routines.
Slide 8 shows corporate costs and other financial items for the quarter. Corporate costs for the second quarter were down compared to last year reflecting cost control initiatives, workforce efficiency activity and lower spending.
This was somewhat offset by higher spending for Fox River matter. During the quarter we also incurred $600,000 of costs associated with our workforce efficiency reductions.
These costs were excluded from adjusted earnings. The status of our pension plan is shown on Slide 9.
Our second quarter 2015 pension expense was $1.6 million compared to $1.8 million in the same quarter last year. Based on updated actuarial estimates we now expect total pension expense of $9.1 million for 2015.
From a funding perspective our qualified plan remains overfunded. We have had not to make cash contributions to our qualified plan for quite some time and we do not expect to for the foreseeable future.
Slide 10 shows our free cash flow. During the second quarter we generated cash from operations of $23.4 million compared to a use of $11.2 million in the year ago quarter.
In the second quarter of this year we used $3.7 million of cash for working capital compared to $33.5 million in the second quarter of last year reflecting improvements in inventory and accounts payable. Capital expenditures for the second quarter increased by $7.1 million compared to the same quarter last year, primarily due to investments related to boiler environmental compliance work at both specialty paper's facilities.
Capital expenditures for all of 2015 are estimated to be $105 million to $115 million including approximately $35 million for the boiler environmental compliance projects. As is typical for our business we expect strong cash flows over the second half of the year.
Turning now to the ongoing and complex litigation related to PCB contamination in the Fox River. There have been a number of court decisions that have supported our position that Glatfelter should have little responsibility for remediation costs in the river.
Recently the District Court in Wisconsin issued an opinion that the liability proportion of river may not be joint several which could potentially be less favorable for Glatfelter. However no judgment has been entered and the issues surrounding this opinion and the ultimate responsibility for remediation costs continues to be subject to extensive litigation, including a trial currently scheduled for June of 2016.
Also as we have previously disclosed the EPA issued a work plan for remediation to be completed during 2015 that assigned approximately $33 million of work to Glatfelter. We believe we have defenses to the assignment of the work but we expect we will complete work estimated cost approximately $10 million in the second half of the year.
As is more completely discussed in our Form 10-Q that will be filed later today we believe our appropriate -- we believe after appropriate consideration and retrial of Whiting litigation in June 2016, the courts will assign none or perhaps some small amount of the downstream work to Glatfelter as they did previously. Although we are unable to determine with any degree of certainty the amount we may be required to fund for remediation work in the interim, the amounts could be significant.
Any amount to be paid or any other party pays in the interim may be subject to reallocation when the Whiting litigation is resolved. Slide 11 shows some balance sheet liquidity metrics.
Our net debt on June 30, totaled $325 million up $20 million from the end of 2014. We finished the quarter with $66 million of cash and $206 million available under our revolving credit facility.
So our balance sheet remains in good shape with leverage on a net debt basis of 1.9x at June 30. We believe this provides sufficient liquidity to meet our near term investment needs and to continue to execute our growth strategies.
This concludes my comments. I will turn the call back to Dante.
Dante Parrini
Thanks, John. Glatfelter has taken aggressive steps in the first half of the year to address the challenges we are facing related to weak economic conditions in some key markets as well as a weak euro.
In composite fibers we continue to grow in key markets where we have leadership positions. We have doubled the growth rates in food and beverage and we expect this strong demand to continue.
Composite laminate products were up 16% and we continue to improve the mix of products we are selling. And we have integrated the Oberschmitten electrical products business well and we're gaining synergies with our facility in France driving growth in technical specialties.
Our new disposable wipes product is on track to be introduced later this year and we're working hard to create market wins in wall cover by changing our products to be more competitive. In the Airlaid business while market demand is a near-term challenge we continue to see growth opportunities in our core product categories.
We are closely working with our customers to develop the next generation of products in feminine hygiene, adult incontinence, and specialty wipes to maintain our leadership positions in these markets. We are also focusing on manufacturing excellence and continuous improvement techniques to improve our overall cost position.
And we are evaluating the North American market capacity and demand situation by partnering with our customers to find solutions to support our mutual growth. In specialty papers we operated much better in the second quarter than in the first setting new pulp production record rates in Ohio.
On the commercial side of this business we expect to outperform the broader uncoated freesheet market for the 11th consecutive year by leveraging our new business and new product development capabilities and customer service expertise. We will look to build on this momentum in the second half.
Finally we will continue implementing our enterprise-wide cost reduction initiatives to complement our ongoing continuous improvement activities. This includes completing the broad-based workforce reduction of 3% to 5% of our employee population.
Based on our progress in the first half of the year we expect these cost reduction measures and our continuous improvement initiatives to generate savings of $25 million to $30 million in 2015. Going forward we remain committed to our strategy of focused global growth.
I believe our leading share positions in segments with effective long-term growth potential, new business and new product development capabilities, long-standing relationships with blue chip customers and drive to maintain a competitive cost structure when combined with the strong balance sheet positions Glatfelter well to continue generating earnings growth and solid cash flows in the coming years. At this point I'd like to open the call for your questions.
Operator
Your first question comes from the line of Anuja Shah of BMO Capital Markets.
Anuja Shah
Thanks for taking my questions. First question is the weakness in Airlaid volumes this quarter, did you lose business with any existing customers?
Dante Parrini
So I would say that our assessment of our market shares in the Airlaid business has remained largely unchanged and that we are experiencing, like some of our customers are experiencing which is lower consumer demand in weak economies and for us its predominantly Eastern Europe. And so that's our biggest factor and then we did have some one-time factors that I believe John alluded to such as some inventory reductions and the fact that last year Q2 we had about 500 metric tons of additional volume.
They came our way due to a fire at a competitor's facility in Asia.
Anuja Shah
Okay. And then switching over to the uncoated paper trade situation, can we just get an update on the latest there and maybe what you are seeing in terms of imports right now?
Dante Parrini
Yes. So I think the June results reflect some improvement and we have seen a reduction in some of the imports of cut sheet papers, so I think the preliminary judgments and how the proceedings are unfolding lending themselves more favorable to domestic producers.
We still have more time before all the respective government agencies form their final opinion and all the counterparties have had an opportunity to provide a comment. So I will say that generally speaking from cut sheets side of things at least in June we saw some improvement.
Anuja Shah
Okay. And then just one modeling issue.
So you guys were assigned, for Fox River, an additional $33 million, and you're doing $10 million of it in the second half. Does that mean we can assume $23 million hits 2016, or is that dependent on litigation?
John Jacunski
Yes. That's going to be dependent upon a number of factors.
So I don’t know the answer to that question. We don’t think that the $33 million is an appropriate level of work for us to be assigned and as we have disclosed in our 10-Q and I think we talked in the last quarter we have some defenses to that.
However at this point we figure it is prudent that we move forward with the $10 million of work that I mentioned that would be in the second half. But the level of remediation we may be required to do in 2016 is unknown and no work plan has been established by the EPA as far as where we are.
Anuja Shah
Okay, that's helpful. Thank you very much.
That's it from me.
Operator
The next question comes from the line of James Armstrong at Vertical Research.
Bryan Lynch
This is actually Bryan Lynch filling in for James Armstrong. My first question is, where do you see specialty papers' margins falling the most?
John Jacunski
I am not sure I completely understand, I think that if you look at our second quarter typically we are -- we have the $33 million of annual outage costs. If we sort of adjust for that and compare to the second quarter of last year our operating profit would have been up $2.5 million.
So it's not a margin retraction. I mean I think we have talked for the last couple of quarters about the need for some expanded annual outage to address some equipment that you typically only are repairing or replacing every 20 to 25 years.
We were at about the 23 year mark. So that expanded the scope.
So that's what drove the profitability down compared to a year ago, but again if you exclude that our profitability was up in the second quarter.
Bryan Lynch
Okay, that's helpful. And just a quick modeling question.
SG&A costs were down year over year. Is this a new run rate, or should we expect them to rebound as the year progresses?
John Jacunski
No. I think that for this year as we have talked about our $25 million to $30 million cost reduction initiatives we are clearly being very careful about what we spend and so we expect to keep the spending at a relatively low level for the second half of the year and so I think that that's going to be the run rate for the balance of the year.
Operator
Your next question coming from the line of Steve Chercover of DA Davidson.
Steve Chercover
Yes. A couple other questions on specialty papers, to start with.
So the decline in raw materials, I assume that's expected to persist, given what you said in terms of the cost structure?
Dante Parrini
Yes. Our guidance for Q3 is generally flat, raw material pricing.
Steve Chercover
So with record pulp production, hopefully that's sustainable. And $31 million less maintenance, we should see presumably a better Q3 than you delivered last year, despite some pressure on pricing.
John Jacunski
Well we haven't given more specific guidance than what we outlined, so we expect -- as we said we expect volume to increase about 5%. You see commodity pricing drifting down here for a number of quarters and we expect that to continue given the situation in the market and then we again expect about -- we had annual maintenance outage costs of about $33 million.
We expect our costs to reduce by $31 million, so we get back to more normal maintenance routines in Q3. So that's the extent of the guidance we provided.
We haven't given a specific number when compared to last year.
Steve Chercover
Okay, thanks for that, John. And then, it's ironic that you took market-related downtime in Europe and were sold out in North American Airlaid.
Does the winder at Gatineau address the incremental demand here in North America, or is there more to do?
Dante Parrini
The winder project is a debottlenecking effort that will increase some production capacity but not to the amount that we believe we will need over time to meet the growing needs in North America, may be annualized it's about 500 metric tons. So you are correct when you say that we have excess capacity in Europe and we are capacity constrained in North America and one of the challenges of Airlaid products is that it doesn’t travel all that well.
So logistics is a huge consideration when thinking about shipping product around the world. So as we have said before we continue to leverage our continuous improvement tools to debottleneck and squeeze that incremental capacity similar to how we have done it in composite fibers over the years and work with our customers to have a clear picture of what their forecasted demand is over time and how we might be able to meet our individual and collective growth objectives together.
Steve Chercover
Okay. And then two more quick ones.
I understand we won't have any clarity on litigation until June of next year. But if it evolves as you expect, given precedent opinions, the $10 million that you spend this year could conceivably be recovered.
Is that correct?
John Jacunski
That is correct.
Steve Chercover
Good, let's hope. And then finally, could you discuss the acquisition landscape?
Is Europe still the focus? Obviously, currency has been a headwind, but I guess that also provides an opportunity.
Dante Parrini
Yes, sure. I am happy to address that.
I wouldn't say that any one region of the world is a focal point. For us we continue to stick with the same standards and criteria that we have applied which is a strategic fit.
Do we see a line of sight toward a leadership position in these segments, does it help expand and improve the businesses that we are in? If I think about our growth platforms composite fibers and the Airlaid businesses lend themselves more favorably to acquisitions, if they are adjacent are the adjacencies close enough where we can convince ourselves we are rightful owners to these types of businesses?
Clearly currencies are a consideration but we have a number of strategic criteria that have to be met before we would allow a geography to overweight our decision so to speak. So I think we are staying very open minded and we are still very committed to the focused global growth strategy that we have been embarked upon for a number of years.
Steve Chercover
Are there any adjacent businesses that you are not currently involved in that are attractive?
Dante Parrini
Well I can't get into specific targets as you can appreciate but in the past we've spoken about the broader categories of filtration. There are a variety of non-woven technologies that are out there.
There are a variety of fiber-based engineered material businesses that are out there. And we also have a track record of taking a variety of commodity type inputs whether they are fiber-based or resin based and converting them into specialty materials.
So I think it creates a wide variety of potential opportunities for us to diligence and we are going to be very thoughtful and dutiful in terms of how we choose to execute future acquisitions. But I do envision acquisitions being part of our future.
Steve Chercover
Great. Thank you Dante.
Operator
Your next question coming from the line of Dan Jacome of Sidoti & Company.
Dan Jacome
Thanks for taking the question. Nice job on the coffee shipments.
Just wondering, can you give us a little bit more flavor there on what you're seeing? Are you guys taking market share?
Did a competitor leave the market? Anything there would be helpful.
Dante Parrini
Glatfelter has about 75% or so market share in single-serve coffee. And so as the market grows we are very well-positioned to continue to capture market growth.
We also have the largest and most diverse portfolio of inclined wire paper machines in the industry to produce these types of products and we have a distinctive competency when it comes to a critical raw material, which is called abaca. And so we are the largest procurer of raw abaca fibers in the world.
We have a popping facility in the Philippines, so we have a more integrated supply chain. And the combined effects of all these things as well as our sticky relationships with the market making customers have allowed us to continue to grow this part of our business and we are very bullish on the future of our coffee business.
Dan Jacome
Great. So longer term run rate you still see this category kind of growing in the mid-single-digits, is that safe?
Dante Parrini
Yes. That's it in the mid to high single digits.
Dan Jacome
Okay, great. And then just turning back to Fox River, maybe I missed it; what were your reserve levels coming out of the quarter?
John Jacunski
They are the same $16 million, they haven't changed and we will obviously use $10 million of that in the second half is the expectation.
Dan Jacome
Got it, appreciate that. And then any incremental thoughts on the SPO acquisition from a while back?
Any color on how do you feel about the electrical papers category today? And then what sort of metrics are you using internally to sort of judge the success of this longer term?
Thanks.
Dante Parrini
Sure. So we are very pleased with the ongoing integration of Oberschmitten.
I think the results that you are seeing in our technical specialty sales and some of the synergies that we are beginning to build with our facility in France, are encouraging. I think if you look at it from a bigger picture trend point of view, alternative energy storage and transmission is something that's going to become more and more prominent and we think there are applications for our fiber-based solutions in things like capacitors and batteries and the like.
So we are again bullish on this particular category of this trend and we look to continue to grow it over time.
Dan Jacome
Okay, terrific. And then one last housekeeping question.
Maybe I missed it. What was uncoated freesheet down in the quarter, the industry at large?
John Jacunski
About three-tenths of a percent, we were up three-tenths of a percent.
Dan Jacome
Got it. Appreciate it.
Good luck with the rest of the quarter. Thank you.
Dante Parrini
Thank you.
Operator
Your next question coming from the line of Alec Cummings of Deutsche Bank.
Alec Cummings
I wanted to ask, in white paper, it's my understanding that you are more exposed to the offset grid. So I would think any incremental impact in half two from the June adjustment in the cut size price would be relatively marginal.
Is that reasonable?
Dante Parrini
We had a hard time hearing your question, Alec.
Alec Cummings
So I think -- it was my understanding that in June, the cut size price for uncoated freesheet declined, but I would think that that impact for you guys would be relatively marginal since you are more exposed to the offset grid.
John Jacunski
Yes. So Alec that's true that we have very little exposure -- some exposure to cut sheet but it's pretty small.
But we do -- some of our other products kind of track the broader offset type pricing. So things like envelope, some of the publishing grades, there might be premiums through those prices but they generally track them.
So as we see commodity type paper grades declining we also see an impact to our pricing for those. Engineering products and the carbonless segment tend to be -- are the exception where those do not really track.
Uncoated freesheet there is sort of the -- technical aspects of those products are a little bit different. The market dynamics are a little bit different.
So where we are impacted is in some of our more commodity-like rates, so envelope, forms products, non-carbonless forms products and some of the book rates.
Alec Cummings
Okay. That's helpful.
And then I just wanted to get an update. How much progress or how far along are the timberland sales?
I think I saw a couple of million in the quarter, but I think it was -- the remainder of the 20,000 acres were expected to be sold, right?
Dante Parrini
We only sold about 28 acres in the quarter. The rest of that you saw was really a tax adjustment on prior timberland sales.
So we sold very little actually in the action second quarter. We are -- as we talked we are -- our plan has been to sell all of our timberlands.
We have been in the market looking at something bigger blocks of the land and we will report on that as it progresses but I have nothing to update at the moment.
Alec Cummings
Okay, thank you very much. I will turn it over.
Dante Parrini
Sure.
Operator
And there are no further questions in the queue. Dante closing remarks?
Dante Parrini
Yes. Well I just want to thank those who joined us today for being on the call and we look forward to speaking with you next quarter.
Enjoy the rest of your day.
Operator
Thank you ladies and gentlemen. That does conclude today's conference call.
You may now disconnect.