Keweenaw Land Association, Ltd. · OTC:KEWL
Keweenaw Land Association — Shareholder Meeting (May 2013)
22 slides from Keweenaw Land Association's shareholder meeting presentation, May 20, 2013
Slide 1: Annual Meeting Presentation
Keweenaw Land Association, Limited Annual Meeting Presentation May 20, 2013
Slide 2: Safe Harbor
Keweenaw Land Association, Limited 2013 Annual Meeting Presentation May 20, 2013 Safe Harbor This presentation contains forward-looking statements. These forward-looking statements are subject to a number of risks and should not be relied upon as predictions of future events or promises of a given c
Slide 3: Corporate Overview
Keweenaw Land Association, Limited Corporate Overview • Owns and manages 161,930 surface acres and 401,643 acres severed and attached mineral rights • Located in the western Upper Peninsula of Michigan and Northern Wisconsin • Reorganized as a Michigan corporation in 1999 • Staff of 17 full-time emp
Slide 4: Land Ownership 2012
Keweenaw Land Association, Limited Land Ownership 2012 tyne Lake Superior
Slide 5: 2012 Results - Net Income doubled over last year
2012 Results - Net Income doubled over last year As of: December 31 2012 2011 Net Income $1,041,096 $520,820 Log Sales $9,668,988 $9,736,841 Gross Margin % 32.1% 30.4% Timber Operations Income $1,438,157 $1,175,159 Pre-tax Profit per cd-eq $17.43 $13.38 5
Slide 6: Ten Year Financial History
Ten Year Financial History • Improving Net Income post recession • Average Return on Capital 5.2% since 2003 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 Receipts $10,509 $10,390 $9,170 $9,097 $11,238 $9,063 $9,845 $10,718 $9,079 $8,647 (in thousands) Net Income after Tax 1,041 521 164 291 1,36
Slide 7: Strategic Plan
Keweenaw Land Association, Limited Strategic Plan • Core Business ‒ Commercial forestry company with real estate and mineral assets • Manage assets for long-term growth and capital appreciation – Optimize our timber and land portfolio • Management Initiatives ‒ Upgrade and consolidate core timberlan
Slide 8: Business Segments
Business Segments • Fee Timber – Total standing inventory of 2.65 million cord equivalents – Standing sawtimber inventory of 234.4 MMBF – 62.1% of volume is northern hardwoods – Average annual harvest volume of 72,600 cd eq over past 10 years • Real Estate – 7,900 acres on commercial, recreational,
Slide 9: Keweenaw stock has outperformed S&P 500 over past 10 years
Keweenaw stock has outperformed S&P 500 over past 10 years • Stock compound annual growth of 9.9% vs. 5.7% for S&P 500 Keweenaw Stock Price vs. S&P 500 Index Since 2003 Index Base Year 2003 = 100 0% 2% 4% 6% 8% 10% KEWL S&P 500 9
Slide 10: Strong Balance Sheet
Strong Balance Sheet • Tangible land & timber assets, mostly land grant properties, recorded at historical cost according to Generally Accepted Accounting Principles (GAAP) • Long term debt less than $750,000 • Current Ratio – 4.7 to 1 (Current Assets/Current Liabilities) • A $2.5 million Operating
Slide 11: Active management has resulted in increased value of land and timber assets
Active management has resulted in increased value of land and timber assets • Per acre value up over 8% since 2009 appraisal, 115% since 1998 • Conducted independent third-party appraisals since 1998 • Executive Summary of recent appraisal provide to shareholders on website Acres under Management Ov
Slide 12: Appraisal of land and timber increased by $11.25 million since 2009
Appraisal of land and timber increased by $11.25 million since 2009 • Increased inventory affirms our sustained yield management objective • Improved sawtimber mix due to appropriate silvicultural practices • Land acquisitions add higher quality timber and timberlands Appraised Value – 2009 $128.85
Slide 13: Keweenaw timberlands are well-stocked with high valued hardwood tree species
Keweenaw timberlands are well-stocked with high valued hardwood tree species • 88% of sawtimber inventory is hardwood • Hard Maple comprises nearly half of sawtimber inventory • Sales realization of hard maple significantly higher than softwood Keweenaw sawtimber mix percentage As of 12/31/2012 2012
Slide 14: Log sort yard enables value-added sales
Log sort yard enables value-added sales • Secure site permits all-weather access to log customers • Sorting and remanufacturing of logs enables maximum return on log value 14
Slide 15: Real Estate Program - Focused on adding productive timberland
Real Estate Program - Focused on adding productive timberland in a cost effective and tax efficient manner • Since 2003, acquired 11,000 of productive timberland • Sold/exchanged 5,700 acres of HBU, non-strategic and low productive lands • Generated over $8 million in land sales • Reduced total non-
Slide 16: Successfully monetizing value of HBU properties through development and sale
Successfully monetizing value of HBU properties through development and sale • Developed and sold 31 residential lots since initiation of program in 2003 • Generated $390,000 in value-added and $494,000 in pre-market development “as-is” value • Currently marketing 6 developments 16
Slide 17: Over 7,900 acres of land identified as available for future strategic land sales
Over 7,900 acres of land identified as available for future strategic land sales Development Properties – 1,600 acres • Located near urban or high use recreation areas • Targeting rural residential market for 1 to 5 acre lots Lake and River Frontage – 4,600 acres • Lake Superior, Lake Gogebic, Presq
Slide 18: Mineral and other land assets actively promoted and managed
Mineral and other land assets actively promoted and managed • Contacted over 85 mining/exploration companies since 2006 • Recent Mineral Lease Activity • 2008 - Orvana lease • 2011 - Trans-Superior Gogebic-Taconite • 2012 - Keweenaw Copper Co. • 48 other surface, commercial and recreational property
Slide 19: Orvana Mining Lease in final stages of permitting
Orvana Mining Lease in final stages of permitting • Lease agreement signed in 2008 • Primary lease encompasses 681 acres • Option agreement added 2,382 acres near original lease • Income from lease includes annual rental fees plus sliding scale net smelter royalties upon initiation of mining • All k
Slide 20: Continuously exploring other revenue opportunities
Continuously exploring other revenue opportunities • Timber Investment Fund • Provide acquisition, management, and disposition services for third-party investors • Opportunity to partner and co-invest in attractive hardwood timberlands • Leverage Keweenaw’s market position and management experience
Slide 21: Keweenaw as an Investment
Keweenaw as an Investment • Keweenaw is a unique northern hardwood timberland investment • Management team committed to enhancing the long- term value of the company • Remain focused on creating shareholder value – Practice sustainable forest management – Improving the quality and volume of standing
Slide 22: Contact Information
Contact Information If you have questions or wish to contact us regarding this presentation material, please call or email us at: Toll Free – 877-539-3362 Email – [email protected] David Ayer – Chairman Brian D. Glodowski – President Keweenaw Land Association, Limited 22
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