Rayonier Reports First Quarter 2025 Results

Rayonier Inc. reported first quarter net loss attributable to Rayonier of ($3.4) million, or ($0.02) per share, on revenues of $82.9 million. This compares to net income attributable to Rayonier of $1.4 million, or $0.01 per share, on revenues of $113.7 million in the prior year quarter. Due to the Company’s previously announced agreement to sell entities that hold its entire 77% New Zealand joint venture interest, the contribution from the Company’s New Zealand operations are now reflected as discontinued operations on its consolidated financial statements, and all prior periods have been retrospectively adjusted accordingly.

The first quarter results included $2.5 million of income from discontinued operations (net of tax),¹ $1.7 million of net costs associated with legal settlements,² and $1.1 million of restructuring charges.³ Excluding these items and adjusting for pro forma net income (loss) adjustments attributable to noncontrolling interests,⁴ first quarter pro forma net loss⁵ was ($2.7) million, or ($0.02) per share. This compares to pro forma net income⁵ of $1.2 million, or $0.01 per share in the prior year period.

First quarter operating income was $0.1 million versus $8.6 million in the prior year period. First quarter operating income included $1.1 million of restructuring charges.³ Excluding this item, pro forma operating income⁵ was $1.2 million. This compares to pro forma operating income⁵ of $8.6 million in the prior year period. First quarter Adjusted EBITDA⁵ was $27.1 million versus $44.6 million in the prior year period.

Cash provided by operating activities was $27.7 million versus $52.3 million in the prior year period. Cash available for distribution (CAD)⁵ was $20.3 million, which decreased $10.8 million versus the prior year period due to lower Adjusted EBITDA⁵ ($17.6 million), partially offset by lower capital expenditures ($3.2 million) and higher cash interest received (net) ($3.6 million).

“We continued to advance key strategic initiatives during the first quarter, underscored by our announcement of an agreement to sell our New Zealand joint venture interest in March,” said Mark McHugh, President and CEO. “To date, we’ve now completed or announced pending dispositions totaling $1.45 billion, which has allowed us to reduce leverage and return meaningful capital to shareholders. To this end, we’ve completed ~$13 million of share repurchases year-to-date (through April 30), as we’ve looked to create long-term value for our shareholders amid the ongoing disparity between public and private timberland values. Following the anticipated closing of the New Zealand transaction later this year, we expect to have significant additional capital allocation capacity, which we plan to deploy toward value-enhancing uses, including additional share repurchases.”

“Turning to our first quarter financial results, we generated total Adjusted EBITDA of $27.1 million—representing a 39% decline compared to the prior year period—as lower results in our Southern Timber and Real Estate segments were partially offset by stronger results in our Pacific Northwest Timber segment. First quarter results were negatively impacted by several factors, including the timing of real estate closings, challenging timber market conditions in the U.S. South, and reduced harvest volumes due to our 2024 disposition activities.”

“In our Timber segments, Adjusted EBITDA declined 33% versus the prior year quarter, as a lower contribution from our Southern Timber segment was partially offset by stronger results in our Pacific Northwest Timber segment. Weaker volumes and pricing in our Southern Timber segment were driven in part by the continued effects of salvage timber in our Atlantic markets, which we expect will moderate over the next several months. Meanwhile, in our Real Estate segment, Adjusted EBITDA decreased $2.6 million relative to the prior year quarter, as transaction activity was relatively limited to start the year, consistent with our prior guidance.”

“Despite the relatively slow start to the year, we still anticipate consolidated full-year Adjusted EBITDA results generally in line with our prior guidance (after adjusting for the reclassification of New Zealand operations to discontinued operations), as further detailed below.”

Southern Timber

First quarter sales of $50.9 million decreased $19.0 million, or 27%, versus the prior year period. Harvest volumes decreased 21% to 1.58 million tons versus 2.01 million tons in the prior year period, primarily due to softer mill demand coupled with the impact of the Large Disposition we completed in Oklahoma in late 2024. Average pine sawtimber stumpage realizations decreased 16% to $25.86 per ton versus $30.62 per ton in the prior year period, due to a combination of softer demand from Southern sawmills, competing log supply from salvage timber, and an unfavorable shift in geographic mix. Average pine pulpwood stumpage realizations decreased 17% to $14.10 per ton versus $16.89 per ton in the prior year period, driven by the continued impact of salvage volume on the market, softer demand from pulp mills taking extended downtime, and an unfavorable shift in geographic mix. Overall, weighted-average net stumpage realizations (including hardwood) decreased 19% to $18.64 per ton versus $23.07 per ton in the prior year period. Non-timber sales of $9.1 million decreased $0.1 million versus the prior year period, as lower pipeline easement revenues were largely offset by growth in our Land-Based Solutions business. Operating income of $10.1 million decreased $12.9 million versus the prior year period due to lower net stumpage realizations ($7.0 million), lower volumes ($5.3 million), higher costs ($1.0 million), and lower non-timber income ($0.1 million), partially offset by lower depletion expense ($0.5 million).

First quarter Adjusted EBITDA⁵ of $27.0 million was 40%, or $17.8 million, below the prior year period.

Pacific Northwest Timber

First quarter sales of $21.4 million decreased $3.8 million, or 15%, versus the prior year period. Harvest volumes decreased 18% to 261,000 tons versus 317,000 tons in the prior year period, primarily due to the impact of the Large Dispositions completed in the fourth quarter of 2024. Average delivered prices for domestic sawtimber increased 7% to $90.58 per ton versus $84.31 per ton in the prior year period, primarily due to improved demand from domestic lumber mills in response to higher lumber prices and a favorable geographic mix. Average delivered pulpwood prices increased 3% to $30.05 per ton versus $29.31 per ton in the prior year period due to modestly improved supply/demand dynamics. Operating income of $0.7 million versus an operating loss of ($4.4) million in the prior year period was driven by lower costs ($1.8 million), lower depletion expense ($1.8 million), higher net stumpage realizations ($1.3 million), lower variable costs ($0.1 million), and higher non-timber income ($0.1 million).

First quarter Adjusted EBITDA⁵ of $6.4 million was 35%, or $1.6 million, above the prior year period.

Real Estate

First quarter sales of $10.2 million decreased $5.4 million versus the prior year period, while operating loss of ($1.0) million increased $0.8 million versus the prior year period. Sales decreased and operating loss increased versus the prior year period due to fewer acres sold (1,031 acres sold versus 1,933 acres sold in the prior year period) and unfavorable deferred revenue adjustments, which were partially offset by higher weighted-average prices ($8,308 per acre versus $5,774 per acre in the prior year period).

Improved Development sales of $3.3 million included two residential pod sales totaling 78.2 acres ($42,000 per acre) in the Heartwood development project south of Savannah, Georgia. This compares to Improved Development sales of $1.8 million in the prior year period.

Rural sales of $5.3 million consisted of 953 acres at an average price of $5,534 per acre. This compares to prior year period sales of $8.7 million, which consisted of 1,498 acres at an average price of $5,828 per acre.

There were no Timberland & Non-Strategic sales in the first quarter. This compares to prior year period sales of $0.6 million, which consisted of a 430-acre transaction for $1,421 per acre.

First quarter Adjusted EBITDA⁵ of $2.0 million decreased $2.6 million versus the prior year period.

Trading

The Trading segment has been adjusted to exclude results associated with the Company’s New Zealand operations, which have been reclassified to discontinued operations. First quarter sales of $0.4 million decreased $2.6 million versus the prior year period, primarily due to lower volumes. Sales volumes were 1,000 tons in the first quarter, compared to 23,000 tons in the prior year period. The Trading segment generated an operating loss of $0.5 million versus breakeven results in the prior year period.

Other Items

First quarter corporate and other operating expenses of $9.3 million decreased $0.6 million versus the prior year period, as lower compensation and benefits expenses and lower professional services fees were partially offset by $1.1 million of restructuring charges.³ The restructuring charges were related to our previously announced workforce optimization initiative, which was effectuated during the first quarter.

First quarter interest expense of $6.4 million decreased $2.6 million versus the prior year period, primarily due to lower average outstanding debt. First quarter interest income of $2.9 million increased $1.0 million versus the prior year period, primarily due to higher cash on hand following the Large Dispositions completed in late 2024.

First quarter income tax expense of $0.3 million versus income tax benefit of $1.0 million in the prior year period was primarily due to a $1.2 million tax benefit associated with the Company’s pension plan termination and settlement in the prior year period.

Share Repurchases

During the first quarter, the Company repurchased 95,000 shares at an average price of $27.61 per share, or $2.6 million in total. As of March 31, 2025, the Company had approximately 156.0 million common shares and 2.1 million redeemable operating partnership units outstanding.

During April, the Company repurchased another 404,000 shares at an average price of $24.75 per share, or $10.0 million in total. As of April 30, the Company had $287.4 million remaining on its current share repurchase authorization.

Outlook

We are updating our 2025 guidance to reflect the Company’s New Zealand Timber segment moving to discontinued operations in our financial statements, as well as our first quarter results and expectations for the balance of the year. Specifically, we now expect to achieve net income attributable to Rayonier of $424 to $458 million, EPS of $2.71 to $2.93, pro forma EPS of $0.34 to $0.41, and Adjusted EBITDA of $215 to $235 million. Our revised Adjusted EBITDA guidance reflects a slight decrease at the midpoint (i.e.,-1%) versus our prior guidance, after adjusting for the impact of reclassifying the New Zealand operations to discontinued operations. Our revised net income attributable to Rayonier guidance includes the anticipated gain on the sale of our New Zealand joint venture interest.

In our Southern Timber segment, we now expect to achieve full-year harvest volumes of 6.9 to 7.0 million tons—toward the lower end of our prior guidance range—as we continue to opportunistically flex volume in response to market conditions. The impact of salvage volume entering the market following Hurricane Helene in 2024 continues to negatively impact some of our operating areas. However, we expect pine stumpage realizations to trend higher from first quarter levels as salvage efforts moderate and operating conditions normalize in the coming quarters. In addition, we continue to expect lower non-timber income for full-year 2025 as compared to the prior year. Overall, we expect full-year Adjusted EBITDA in our Southern Timber segment of $135 to $140 million, down modestly at the midpoint from our prior guidance.

In our Pacific Northwest Timber segment, we remain on track to achieve full-year harvest volumes of approximately 0.9 million tons. Further, we continue to expect that full-year weighted-average log pricing will trend higher versus the prior year due to higher lumber prices, healthy demand from domestic sawmills, and the anticipated impact of increased duties on Canadian lumber in the second half of the year. Overall, we expect full-year Adjusted EBITDA in our Pacific Northwest Timber segment of $22 to $26 million, up slightly at the midpoint from our prior guidance.

Turning to our Real Estate segment, we are encouraged by our transaction pipeline for the balance of the year, but expect closing activity will be heavily concentrated in the third and fourth quarters. We currently expect an Adjusted EBITDA contribution of $5 to $10 million in the second quarter—a modest improvement from the first quarter. Overall, we now expect full-year Adjusted EBITDA in our Real Estate segment of $90 to $100 million, up modestly at the midpoint from our prior guidance.

Additional details regarding the Company’s revised 2025 financial guidance can be found in Schedule G herein and in the Company’s Q1 2025 Financial Supplement. All guidance figures assume a year-end 2025 transaction closing date for the New Zealand joint venture sale transaction and exclude any contribution from the New Zealand operations in Adjusted EBITDA, capital expenditures, and pro forma EPS. Further, the revised financial guidance assumes no financial contribution from the potential redeployment of sale proceeds. For illustration purposes, we have also provided “Pro Forma 2025 Financial Guidance” in the Financial Supplement, which incorporates the pro forma impact of the New Zealand joint venture sale proceeds on the Company’s 2025 interest income and implied CAD assuming that the transaction had closed on December 31, 2024.

In an effort to provide additional transparency and to better manage expectations around the quarter-to-quarter variability of Real Estate segment results, we are also introducing quarterly guidance. Specifically, as it relates to the second quarter, we currently expect net income attributable to Rayonier of $3 to $8 million, EPS of $0.02 to $0.05, pro forma EPS of $0.01 to $0.04, and Adjusted EBITDA of $30 to $40 million.

For the full first quarter results, click here.

1“Income from discontinued operations, net of tax” includes income generated by the Company’s New Zealand joint venture interest, which is now reflected as discontinued operations due to its pending disposition.

2“Net cost on legal settlements” reflects the net loss from litigation regarding insurance claims.

3“Restructuring charges” include severance costs related to workforce optimization initiatives.

4“Pro forma net income (loss) adjustments attributable to noncontrolling interests” are the proportionate share of pro forma items that are attributable to noncontrolling interests.

5“Pro forma net (loss) income,” “Pro forma revenues (sales),” “Pro forma operating income (loss),” “Adjusted EBITDA” and “CAD” are non-GAAP measures defined and reconciled to GAAP in the attached exhibits.

6“Pension settlement charge, net of tax” reflects the net loss recognized in connection with the termination and settlement of the Company’s defined benefit plan.

About Rayonier

Rayonier is a leading timberland real estate investment trust with assets located in some of the most productive softwood timber growing regions in the United States and New Zealand. As of March 31, 2025, Rayonier owned or leased under long-term agreements approximately 2.5 million acres of timberlands located in the U.S. South (1.75 million acres), U.S. Pacific Northwest (308,000 acres) and New Zealand (412,000 acres). More information is available at www.rayonier.com.

Contact:

Collin Mings – Vice President – (904) 357-9100 – investorrelations@rayonier.com

Source: Rayonier, Inc.