Pope Resources Partnership (POPE) has reported a 220.33 percent jump in profit for the quarter ended Sep. 30, 2016. The company has earned $1.97 million, or $0.45 a share in the quarter, compared with $0.62 million, or $0.13 a share for the same period last year.
Revenue during the quarter dropped 13.35 percent to $13.18 million from $15.21 million in the previous year period. Gross margin for the quarter expanded 1695 basis points over the previous year period to 52.87 percent. Operating margin for the quarter period stood at positive 15.06 percent as compared to a negative 5.74 percent for the previous year period.
Operating income for the quarter was $1.98 million, compared with an operating loss of $0.87 million in the previous year period.
"Our overall average log price realizations remained relatively flat compared to the previous several quarters," said Tom Ringo, President and CEO, "though we started to ramp up harvest volume at the tail end of the quarter in anticipation of modest price appreciation over the next several months. Meanwhile, our Real Estate segment closed on two sales of undeveloped land in Q3 and invested $4.8 million in our Harbor Hill project to prepare for the anticipated sale of up to 127 residential lots in the fourth quarter. The most noteworthy event of the quarter was the 7,324-acre Carbon River tree farm acquisition that closed in July. Pairing Carbon River with a series of other small-tract timberland acquisitions completed of late underscores the significant progress we are making toward our objective to grow the Partnership's land base as an engine for future earnings and distributions."
Working capital turns negative
Working capital of Pope Resources Partnership has turned negative to $2.30 million on Sep. 30, 2016 from positive $5.25 million on Sep. 30, 2015. Current ratio was at 0.90 as on Sep. 30, 2016, down from 1.25 on Sep. 30, 2015.
Days sales outstanding went down to 4 days for the quarter compared with 12 days for the same period last year.
Debt increases substantially
Pope Resources Partnership has witnessed an increase in total debt over the last one year. It stood at $133.76 million as on Sep. 30, 2016, up 57.55 percent or $48.86 million from $84.90 million on Sep. 30, 2015. Total debt was 33.25 percent of total assets as on Sep. 30, 2016, compared with 25.58 percent on Sep. 30, 2015. Debt to equity ratio was at 0.69 as on Sep. 30, 2016, up from 0.55 as on Sep. 30, 2015.
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