Acadian Timber Corp. (“Acadian” or the “Company”) (TSX:ADN) today
reported financial and operating results1 for the three months
ended September 26, 2020 (the “third quarter”).
“Operating conditions were favorable during the
third quarter, but regional market demand was varied with increased
demand for softwood sawlogs more than offset by a weaker than
expected hardwood pulpwood market,” commented Erika Reilly, Chief
Executive Officer. “With a deep customer base and diversified
product mix, Acadian responded to changing market conditions by
staying close to our customers and shifting production, all while
aiming to protect our margins.”
Health and safety remained a key focus during
the quarter. Acadian experienced no recordable safety incidents
among employees and four incidents among contractors. Acadian
continued to emphasize the importance of strong safety performance
to all members of the organization. Acadian also continued to
monitor COVID-19 related developments in the regions in which we
operate and updated our COVID-19 operational plans accordingly.
During the quarter, both the New Brunswick and
Maine operations completed a surveillance audit under the 2015-2019
standard of the Sustainable Forest Initiative® with no
non-conformances. The Maine operation also renewed its
outcome-based forestry agreement with the Maine Forest Service.
Acadian generated $3.1 million of Free Cash Flow
and declared dividends of $4.8 million to our shareholders during
the third quarter. Our balance sheet continues to be solid with the
refinancing of Acadian’s long-term debt complete and $20.4 million
of net liquidity as at September 26, 2020, which includes funds
available under our credit facilities.
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1 |
This news release makes reference to Adjusted EBITDA, Adjusted
EBITDA margin, Free Cash Flow and Payout Ratio which are key
performance measures in evaluating Acadian’s operations and are
important in enhancing investors’ understanding of Acadian’s
operating performance. Adjusted EBITDA and Adjusted EBITDA margin
are used to evaluate operational performance. Free Cash Flow is
used to evaluate Acadian’s ability to generate sustainable cash
flows from our operations while the Payout Ratio is used to
evaluate Acadian’s ability to fund its distribution using Free Cash
Flow. Acadian’s management defines Adjusted EBITDA as earnings
before interest, taxes, fair value adjustments, recovery of or
impairment of land and roads, realized gain/loss on sale of roads
and other fixed assets, unrealized exchange gain/loss on debt,
depreciation and amortization and Adjusted EBITDA margin as
Adjusted EBITDA as a percentage of its total revenue. Free Cash
Flow is defined as Adjusted EBITDA less interest paid, current
income tax expense, and capital expenditures plus net proceeds from
the sale of fixed assets (selling price less gains or losses
included in Adjusted EBITDA). Payout Ratio is defined as dividends
declared divided by Free Cash Flow. As these performance measures
do not have standardized meanings prescribed by International
Financial Reporting Standards (“IFRS”), they may not be comparable
to similar measures presented by other companies. As a result, we
have provided in this news release reconciliations of net income,
as determined in accordance with IFRS, to Adjusted EBITDA, Adjusted
EBITDA margin and Free Cash Flow. |
Review of Operations
Financial and Operating Highlights
|
Three Months Ended |
|
Nine Months Ended |
|
(CAD thousands) |
|
September 26, 2020 |
|
September 28, 2019 |
|
September 26, 2020 |
|
September 28, 2019 |
|
Sales volume (000s m3) |
|
|
302.3 |
|
|
313.5 |
|
|
816.9 |
|
|
911.7 |
|
Sales |
|
$ |
23,236 |
|
$ |
25,357 |
|
$ |
66,102 |
|
$ |
74,213 |
|
Operating
earnings |
|
|
4,445 |
|
|
4,718 |
|
|
13,991 |
|
|
15,937 |
|
Net income / (loss) |
|
|
5,248 |
|
|
(10,869 |
) |
|
6,766 |
|
|
1,097 |
|
Adjusted EBITDA |
|
|
4,514 |
|
|
5,123 |
|
|
14,197 |
|
|
17,018 |
|
Adjusted EBITDA margin |
|
|
19 |
% |
|
20 |
% |
|
21 |
% |
|
23 |
% |
Free Cash Flow |
|
|
3,149 |
|
|
4,186 |
|
|
9,506 |
|
|
13,426 |
|
Dividends
declared |
|
|
4,840 |
|
|
4,840 |
|
|
14,518 |
|
|
14,519 |
|
Payout ratio1 |
|
|
154 |
% |
|
116 |
% |
|
153 |
% |
|
108 |
% |
Per share – basic and diluted |
|
|
|
|
|
Net income / (loss) |
|
$ |
0.31 |
|
$ |
(0.65 |
) |
$ |
0.41 |
|
$ |
0.07 |
|
Free Cash Flow |
|
|
0.19 |
|
|
0.25 |
|
|
0.57 |
|
|
0.80 |
|
Dividends declared |
|
|
0.29 |
|
|
0.29 |
|
|
0.87 |
|
|
0.87 |
|
1. Seasonal fluctuations in volume render third quarter payout
ratios not meaningful. |
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For the three months ended September 26, 2020,
Acadian generated sales of $23.2 million, compared to $25.4 million
in the prior year period. Sales volume, excluding biomass,
decreased 9% and the weighted average selling price, excluding
biomass, decreased 3% year-over-year. While demand for softwood
sawlogs increased during the quarter driven by a strong North
American softwood lumber market, demand for hardwood pulpwood
declined. The negative effects of COVID-19 impacted select hardwood
pulpwood end use markets. In addition, regional consumption was
further impacted by the substitution of softwood for hardwood
pulpwood and the ongoing market disruption caused by the
Androscoggin Mill explosion in Jay, Maine that occurred earlier
this year.
Operating costs and expenses were $18.8 million
during the third quarter, compared to $20.6 million during the
prior year period. This year-over-year decrease reflects lower
harvesting activity and administrative costs. Weighted average
variable costs, excluding biomass, decreased 2% reflecting a lower
cost product mix in the period.
Adjusted EBITDA was $4.5 million during the
third quarter, compared to $5.1 million in the prior year period
and Adjusted EBITDA margin for the quarter was 19%, compared to 20%
in the prior year period, or 19% excluding a $0.3 million gain in
timberland sales in 2019. Free Cash Flow was $3.1 million compared
to $4.2 million in the same period of 2019.
Net income for the third quarter totaled $5.2
million, or $0.31 per share, compared to a net loss of $10.9
million, or $0.65 per share in the same period of 2019. The
variance from the prior year period is primarily due to the
termination fee paid to Brookfield in 2019 which, after income tax,
reduced net income by $12.8 million or $0.77 per share. Net income
was also impacted by a combination of gains on non-cash items such
as unrealized foreign exchange on long-term debt and fair value
adjustments in 2020 compared to 2019.
During the first nine months of 2020, Acadian
generated sales of $66.1 million compared to $74.2 million in the
prior year period. The 11% decrease reflects an abbreviated
operating period during the second quarter and reduced demand for
hardwood pulpwood during the third quarter compared to 2019. The
weighted average selling price, excluding biomass, remained
relatively stable with a 1% decrease. Operating costs and expenses
of $52.1 million were $6.2 million lower than the prior year period
due to lower harvesting activity and administrative costs. As a
result, year-to-date Adjusted EBITDA was $14.2 million compared to
$17.0 million during the first nine months of 2019. Adjusted EBITDA
margin of 21% compares to 23% in 2019, or 22% on a comparable
basis, excluding 2019 land sales.
For the nine months ended September 26, 2020,
net income was $6.8 million, or $0.41 per share, which represents
an increase of $5.7 million year-over-year. The variance is
primarily related to the one-time termination fee paid to
Brookfield in the third quarter of 2019 and year-to-date unrealized
foreign exchange movements on U.S. denominated long-term debt.
Segment Performance
New Brunswick Timberlands
The table below summarizes operating and
financial results for New Brunswick Timberlands.
|
Three Months
Ended September 26, 2020 |
|
Three Months Ended September 28, 2019 |
|
|
Harvest |
Sales |
Sales |
|
Results |
|
Harvest |
Sales |
Sales |
|
Results |
|
|
(000s m3) |
(000s m3) |
Mix |
|
($000s) |
|
(000s m3) |
(000s m3) |
Mix |
|
($000s) |
|
Softwood |
123.7 |
122.5 |
52 |
% |
$ |
7,050 |
|
103.7 |
102.7 |
43 |
% |
$ |
5,864 |
|
Hardwood |
75.7 |
73.7 |
31 |
% |
|
5,249 |
|
109.1 |
111.1 |
47 |
% |
|
8,188 |
|
Biomass |
40.7 |
40.7 |
17 |
% |
|
1,156 |
|
24.9 |
24.9 |
10 |
% |
|
818 |
|
|
240.1 |
236.9 |
100 |
% |
|
13,455 |
|
237.7 |
238.7 |
100 |
% |
|
14,870 |
|
Timber services and other |
|
|
|
|
4,570 |
|
|
|
|
|
4,599 |
|
Sales |
|
|
|
$ |
18,025 |
|
|
|
|
$ |
19,469 |
|
Adjusted EBITDA |
|
|
|
$ |
4,240 |
|
|
|
|
$ |
4,789 |
|
Adjusted EBITDA margin |
|
|
|
24 |
% |
|
|
|
|
25 |
% |
|
Nine Months
Ended September 26, 2020 |
|
Nine Months Ended September 28, 2019 |
|
|
Harvest |
Sales |
Sales |
|
Results |
|
Harvest |
Sales |
Sales |
|
Results |
|
|
(000s m3) |
(000s m3) |
Mix |
|
($000s) |
|
(000s m3) |
(000s m3) |
Mix |
|
($000s) |
|
Softwood |
282.5 |
284.2 |
47 |
% |
$ |
16,188 |
|
291.4 |
303.3 |
45 |
% |
$ |
17,817 |
|
Hardwood |
211.5 |
223.3 |
37 |
% |
|
17,262 |
|
264.3 |
274.0 |
41 |
% |
|
20,849 |
|
Biomass |
103.2 |
103.2 |
16 |
% |
|
3,280 |
|
99.0 |
99.0 |
14 |
% |
|
3,554 |
|
|
597.2 |
610.7 |
100 |
% |
|
36,730 |
|
654.7 |
676.3 |
100 |
% |
|
42,220 |
|
Timber services and other |
|
|
|
|
12,474 |
|
|
|
|
|
13,147 |
|
Sales |
|
|
|
$ |
49,204 |
|
|
|
|
$ |
55,367 |
|
Adjusted EBITDA |
|
|
|
$ |
11,900 |
|
|
|
|
$ |
13,388 |
|
Adjusted EBITDA margin |
|
|
|
24 |
% |
|
|
|
|
24 |
% |
Sales for our New Brunswick Timberlands were
$18.0 million compared to $19.5 million during the prior year
period. Sales volume, excluding biomass, decreased by 8% primarily
due to lower hardwood pulpwood sales, partially offset by higher
softwood sawlog sales. Biomass sales volume increased 63% during
the quarter due to strong domestic sales. The weighted average
selling price, excluding biomass, for the third quarter was $62.70
per m3, or 5% lower than the prior year period, as a result of
lower hardwood pulpwood volumes and price compared to the prior
year.
Operating costs and expenses were $13.8 million
during the third quarter, compared to $14.9 million in the prior
year period due to lower harvesting activity and administrative
costs. Weighted average variable costs, excluding biomass,
decreased 8% due to lower hardwood deliveries and shorter haul
distances to markets compared to the prior year period.
Adjusted EBITDA was $4.2 million during the
third quarter of 2020 compared to $4.8 million in the prior year
period reflecting lower hardwood pulpwood sales and a $0.2 million
gain on the sale of timberlands in 2019. Adjusted EBITDA margin was
24% compared to 25% in the prior year period, or 23% excluding the
2019 land sale.
During the first nine months of 2020, New
Brunswick Timberlands’ sales of $49.2 million was 11% lower than
the prior year period. Sales volume, excluding biomass, decreased
12% due to an abbreviated operating period during the second
quarter and reduced demand for hardwood pulpwood during the third
quarter relative to the nine months of 2019. The weighted average
selling price, excluding biomass, decreased 2% with relatively
stable prices across all products offset by less higher value
hardwood pulpwood in the mix. Operating costs and expenses of $37.4
million during the first nine months of 2020 were $5.2 million
lower than the prior year period due to lower harvesting activity
and administrative costs. Adjusted EBITDA was $11.9 million
compared to 13.4 million during the first nine months of 2019 for
the reasons discussed, while Adjusted EBITDA margin remained stable
at 24%.
There were four recordable safety incidents
among contractors and no incidents among employees during the third
quarter of 2020.
Maine Timberlands
The table below summarizes operating and
financial results for Maine Timberlands.
|
Three Months
Ended September 26, 2020 |
|
Three Months Ended September 28, 2019 |
|
|
Harvest |
Sales |
Sales |
|
Results |
|
Harvest |
Sales |
Sales |
|
Results |
|
|
(000s m3) |
(000s m3) |
Mix |
|
($000s) |
|
(000s m3) |
(000s m3) |
Mix |
|
($000s) |
|
Softwood |
38.5 |
38.6 |
59 |
% |
$ |
2,741 |
|
49.0 |
49.0 |
66 |
% |
$ |
3,551 |
|
Hardwood |
31.8 |
26.8 |
41 |
% |
|
2,305 |
|
26.1 |
25.5 |
34 |
% |
|
2,164 |
|
Biomass |
— |
— |
0 |
% |
|
2 |
|
0.3 |
0.3 |
0 |
% |
|
4 |
|
|
70.3 |
65.4 |
100 |
% |
|
5,048 |
|
75.4 |
74.8 |
100 |
% |
|
5,719 |
|
Other sales |
|
|
|
|
163 |
|
|
|
|
|
169 |
|
Sales |
|
|
|
$ |
5,211 |
|
|
|
|
$ |
5,888 |
|
Adjusted EBITDA |
|
|
|
$ |
793 |
|
|
|
|
$ |
711 |
|
Adjusted EBITDA margin |
|
|
|
15 |
% |
|
|
|
|
12 |
% |
|
Nine Months
Ended September 26, 2020 |
|
Nine Months Ended September 28, 2019 |
|
|
Harvest |
Sales |
Sales |
|
Results |
|
Harvest |
Sales |
Sales |
|
Results |
|
|
(000s m3) |
(000s m3) |
Mix |
|
($000s) |
|
(000s m3) |
(000s m3) |
Mix |
|
($000s) |
|
Softwood |
140.9 |
141.0 |
68 |
% |
$ |
10,806 |
|
163.1 |
163.3 |
69 |
% |
$ |
12,471 |
|
Hardwood |
69.5 |
65.0 |
32 |
% |
|
5,665 |
|
68.7 |
68.3 |
29 |
% |
|
5,894 |
|
Biomass |
0.2 |
0.2 |
0 |
% |
|
4 |
|
3.8 |
3.8 |
2 |
% |
|
12 |
|
|
210.6 |
206.2 |
100 |
% |
|
16,475 |
|
235.6 |
235.4 |
100 |
% |
|
18,377 |
|
Other sales |
|
|
|
|
423 |
|
|
|
|
|
469 |
|
Sales |
|
|
|
$ |
16,898 |
|
|
|
|
$ |
18,846 |
|
Adjusted EBITDA |
|
|
|
$ |
3,959 |
|
|
|
|
$ |
4,594 |
|
Adjusted EBITDA margin |
|
|
|
23 |
% |
|
|
|
|
24 |
% |
Sales for our Maine Timberlands totaled $5.2
million compared to $5.9 million for the same period last year.
Sales volume, excluding biomass, decreased by 12% as customers were
slow to take softwood pulpwood deliveries due to continued high
inventories in the region.
The weighted average selling price, excluding
biomass, remained stable due to a favourable product mix overall
offset by lower quality softwood and hardwood sawtimber in the mix.
In Canadian dollar terms the weighted average selling price was
$77.27 per m3, up 1% compared to the same period of 2019. In U.S.
dollar terms, the weighted average selling price, excluding
biomass, was $57.95 per m3, flat year-over-year.
Operating costs and expenses for the third
quarter were $4.4 million, compared to $5.3 million during the same
period of 2019 primarily due to lower harvest activity and
administrative costs. Variable harvest costs per m3, excluding
biomass, were higher than in the prior year period due to a higher
cost mix, with less softwood pulpwood harvested, and longer hauling
distances to market.
Adjusted EBITDA for the quarter was $0.8 million
compared to $0.7 million during the prior year period and Adjusted
EBITDA margin was 15% compared to 12% in the prior year period.
Lower sales were more than offset by the lower costs during the
quarter.
During the first nine months of 2020, sales were
$16.9 million compared to $18.8 million in the prior year period.
The weighted average selling price, excluding biomass, increased
1%, while sales volume, excluding biomass, decreased 11%
year-over-year reflecting low demand for pulpwood during the nine
months of 2020. Operating costs and expenses of $13.0 million
during the nine-month period were $1.7 million lower than the prior
year period due to lower harvesting activity and lower
administrative costs in 2020. Adjusted EBITDA of $4.0 million
compares to $4.6 million during the first nine months of 2019, with
2019 including a $0.4 million gain related to timberland sales.
Adjusted EBITDA margin was 23% compared to 24% in 2019, or 22%
excluding 2019 land sales.
There were no recordable safety incidents among
employees or contractors during the third quarter of 2020.
Market
Outlook
The following contains forward-looking
information about Acadian Timber Corp.’s market outlook for the
remainder of fiscal 2020. Reference should be made to the section
entitled “Cautionary Statement Regarding Forward-Looking
Information and Statements” section of this news release. For a
description of material factors that could cause actual results to
differ materially from the forward-looking statements in the
following, please see the Risk Factors section of our Management’s
Discussion and Analysis of Acadian’s most recent Annual Report and
Annual Information Form available on our website at
www.acadiantimber.com or filed with SEDAR at www.sedar.com.
Acadian’s main products include softwood sawlogs
and pulpwood, hardwood sawlogs and pulpwood, and biomass, from
which our customers manufacture solid wood, pulp and paper
products, engineered wood products, and fuels. This product
diversity leads to more stable performance over cycles.
The outlook for softwood sawlogs is positive
with an expected increase in North American softwood lumber
consumption in 2021. Consensus estimates are for 1.30 million
housing starts in 2020 increasing to 1.37 million in 2021 supported
by favourable demographics, lower interest rates and old,
underbuilt housing stock.
Local markets for hardwood sawlogs are expected
to strengthen for the remainder of the year as less product is
produced in light of weak hardwood pulpwood markets, matched with
strengthening demand for hardwood lumber.
Hardwood and softwood pulpwood demand is
expected to remain weak for the remainder of the year, until
hardwood pulp markets improve and regional supply is brought in
balance with demand.
Biomass markets in New Brunswick continue to be
supported by steady demand while biomass markets in Maine remain
limited.
Quarterly Dividend
Based on a strong balance sheet and outlook for
the remainder of the year, Acadian is pleased to announce a
dividend of $0.29 per share, payable on January 15, 2021 to
shareholders of record on December 31, 2020.
Acadian Timber Corp.
(“Acadian”, the “Company” or “we”) is a leading supplier of primary
forest products in Eastern Canada and the Northeastern U.S. With a
total of approximately 2.4 million acres of land under management,
Acadian is the second largest timberland operator in New Brunswick
and Maine.
Acadian owns and manages approximately 761,000
acres of freehold timberlands in New Brunswick (“New Brunswick
Timberlands” or “NB Timberlands”), approximately 300,000 acres of
freehold timberlands in Maine (“Maine Timberlands”) and provides
timber services relating to approximately 1.3 million acres of
Crown licensed timberlands in New Brunswick. Acadian’s products
include softwood and hardwood sawlogs, pulpwood and biomass
by-products, sold to approximately 85 regional customers.
Acadian’s business strategy is to maximize cash
flows from its existing timberland assets while growing our
business by acquiring assets on a value basis and utilizing our
operations-oriented approach to drive improved performance.
Acadian’s shares are listed for trading on the
Toronto Stock Exchange under the symbol ADN.
For further information, please visit our
website at www.acadiantimber.com or
contact:
Adam Sheparski Chief Financial Officer Tel:
506-737-2345 Email: ir@acadiantimber.com
Cautionary Statement Regarding
Forward-Looking Information and Statements
This MD&A contains forward-looking
information and statements within the meaning of applicable
Canadian securities laws that involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements of Acadian, or industry results, to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. When used in this MD&A, such forward-looking
statements may contain such words as “may,” ”will,” “intend,”
“should,” “suggest,” ”expect,” “believe,” “outlook,” “forecast,”
“predict,” “remain,” “anticipate,” “estimate,” “potential,”
“continue,” “plan,” “could,” “might,” “project,” “targeting” or the
negative of these terms or other similar terminology.
Forward-looking information is included in the Letter to
Shareholders which precedes this MD&A and includes statements
made in this MD&A in sections entitled “Dividend Policy of the
Company” and “Market Outlook” and without limitation other
statements regarding management’s beliefs, intentions, results,
performance, goals, achievements, future events, plans and
objectives, business strategy, growth strategy and prospects,
access to capital, liquidity and trading volumes, dividends, taxes,
capital expenditures, projected costs, market trends and similar
statements concerning anticipated future events, results,
achievements, circumstances, performance or expectations that are
not historical facts. These statements, which reflect management’s
current expectations regarding future events and operating
performance, are based on information currently available to
management and speak only as of the date of this MD&A. All
forward-looking statements in this MD&A are qualified by these
cautionary statements. Forward-looking statements involve
significant risks and uncertainties, should not be read as
guarantees of future performance or results, should not be unduly
relied upon, and will not necessarily be accurate indications of
whether or not such results will be achieved. Factors that could
cause actual results to differ materially from the results
discussed in the forward-looking statements include, but are not
limited to: general economic and market conditions; changes in US
housing starts; product demand; concentration of customers;
commodity pricing; interest rate and foreign currency fluctuations;
seasonality; weather and natural conditions; regulatory, trade or
environmental policy changes; changes in Canadian or U.S. income
tax law; economic situation of key customers; disease outbreak;
Acadian’s ability to source and secure potential investment
opportunities; the availability of potential acquisitions that suit
Acadian’s growth profile; and other risks and factors discussed
under the heading “Risk Factors” in the Annual Report dated
February 12, 2020 and in each of the Annual Information Form dated
March 27, 2020 and the Management Information Circular dated March
27, 2020, and other filings of Acadian made with securities
regulatory authorities, which are available on SEDAR at
www.sedar.com. Forward-looking information is based on various
material factors or assumptions, which are based on information
currently available to Acadian. Material factors or assumptions
that were applied in drawing a conclusion or making an estimate set
out in the forward-looking information may include, but are not
limited to: forecasts in the housing market; anticipated financial
performance; anticipated market conditions; business prospects; the
economic situation of key customers; strategies; regulatory
developments; exchange rates; the sufficiency of budgeted capital
expenditures in carrying out planned activities; the availability
and cost of labour and services; and the ability to obtain
financing on acceptable terms. Readers are cautioned that the
preceding list of material factors or assumptions is not
exhaustive. Although the forward-looking statements contained in
this MD&A are based upon what management believes are
reasonable assumptions, Acadian cannot assure readers that actual
results will be consistent with these forward-looking statements.
The forward-looking statements in this MD&A are made as of the
date of this MD&A, and should not be relied upon as
representing Acadian’s views as of any date subsequent to the date
of this MD&A. Acadian assumes no obligation to update or revise
these forward-looking statements to reflect new information,
events, circumstances or otherwise, except as may be required by
applicable law.
Acadian Timber Corp.
Interim Condensed Consolidated Balance Sheets
(unaudited)
As at (CAD thousands) |
September 26, 2020 |
|
December 31, 2019 |
|
Assets |
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
Cash |
$ |
7,406 |
|
$ |
7,601 |
|
Accounts receivable and other assets |
|
11,433 |
|
|
11,602 |
|
Current income taxes receivable |
|
1,299 |
|
|
2,245 |
|
Inventory |
|
1,178 |
|
|
1,545 |
|
|
|
21,316 |
|
|
22,993 |
|
|
|
|
|
|
|
|
Timber |
|
385,927 |
|
|
377,992 |
|
Land, roads
and other fixed assets |
|
93,017 |
|
|
91,584 |
|
Intangible assets |
|
6,140 |
|
|
6,140 |
|
Total assets |
$ |
506,400 |
|
$ |
498,709 |
|
|
|
|
|
|
|
|
Liabilities and shareholders’ equity |
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
Short-term debt |
$ |
— |
|
$ |
7,793 |
|
Accounts payable and accrued liabilities |
|
10,979 |
|
|
9,190 |
|
Dividends payable to shareholders |
|
4,839 |
|
|
4,839 |
|
Current portion of long-term debt |
|
— |
|
|
93,084 |
|
|
|
15,818 |
|
|
114,906 |
|
|
|
|
|
|
|
|
Long-term
debt |
|
106,468 |
|
|
— |
|
Deferred
income tax liability |
|
100,783 |
|
|
97,102 |
|
Shareholders’ equity |
|
283,331 |
|
|
286,701 |
|
Total liabilities and shareholders’ equity |
$ |
506,400 |
|
$ |
498,709 |
|
Acadian Timber Corp.
Interim Condensed Consolidated Statements of Net Income /
(Loss)
(unaudited)
|
|
Three Months Ended |
|
Nine Months Ended |
(CAD thousands, except per share data) |
September 26, 2020 |
|
September 28, 2019 |
|
September 26, 2020 |
|
September 28, 2019 |
|
Sales |
$ |
23,236 |
|
$ |
25,357 |
|
$ |
66,102 |
|
$ |
74,213 |
|
Operating costs and expenses |
|
|
|
|
|
|
|
|
Cost of sales |
|
16,075 |
|
|
17,404 |
|
|
44,704 |
|
|
49,900 |
|
Selling, administration and other |
|
1,971 |
|
|
2,789 |
|
|
6,274 |
|
|
7,412 |
|
Reforestation |
|
676 |
|
|
375 |
|
|
927 |
|
|
749 |
|
Depreciation and amortization |
|
69 |
|
|
71 |
|
|
206 |
|
|
215 |
|
|
|
18,791 |
|
|
20,639 |
|
|
52,111 |
|
|
58,276 |
|
Operating earnings |
|
4,445 |
|
|
4,718 |
|
|
13,991 |
|
|
15,937 |
|
Interest
expense, net |
|
(1,142 |
) |
|
(1,010 |
) |
|
(3,605 |
) |
|
(2,989 |
) |
Other
items |
|
|
|
|
|
|
|
|
Fair value adjustments and other |
|
643 |
|
|
139 |
|
|
3,861 |
|
|
1,409 |
|
Unrealized exchange gain / (loss) on long-term debt |
|
2,240 |
|
|
(1,030 |
) |
|
(2,940 |
) |
|
2,907 |
|
Management agreement termination fee |
|
— |
|
|
(18,000 |
) |
|
— |
|
|
(18,000 |
) |
Gain on sale of timberlands |
|
— |
|
|
333 |
|
|
— |
|
|
864 |
|
Gain on disposal of other fixed assets |
|
— |
|
|
1 |
|
|
— |
|
|
2 |
|
Earnings (Loss) before income tax |
|
6,186 |
|
|
(14,849 |
) |
|
11,307 |
|
|
130 |
|
Current
income tax recovery / (expense) |
|
(312 |
) |
|
1,667 |
|
|
(1,870 |
) |
|
335 |
|
Deferred income tax recovery / (expense) |
|
(626 |
) |
|
2,313 |
|
|
(2,671 |
) |
|
632 |
|
Net income / (Loss) |
$ |
5,248 |
|
$ |
(10,869 |
) |
$ |
6,766 |
|
$ |
1,097 |
|
Net income / (Loss) per share – basic and diluted |
$ |
0.31 |
|
$ |
(0.65 |
) |
$ |
0.41 |
|
$ |
0.07 |
|
Acadian Timber Corp.
Interim Condensed Consolidated Statements of Comprehensive
Income
(unaudited)
|
|
Three Months Ended |
|
Nine Months Ended |
(CAD thousands) |
September 26, 2020 |
|
September 28, 2019 |
|
September 26, 2020 |
|
September 28, 2019 |
|
Net income / (Loss) |
$ |
5,248 |
|
$ |
(10,869 |
) |
$ |
6,766 |
|
$ |
1,097 |
|
Other comprehensive income (loss) |
|
|
|
|
|
|
|
|
|
Items that
may be reclassified subsequently to net income: |
|
|
|
|
|
|
|
|
|
Unrealized foreign currency translation gain / (loss) |
|
(3,073 |
) |
|
1,500 |
|
|
4,382 |
|
|
(4,447 |
) |
Gain on revaluation of roads and land |
|
— |
|
|
(9 |
) |
|
— |
|
|
(23 |
) |
Deferred income tax recovery |
|
— |
|
|
3 |
|
|
— |
|
|
7 |
|
Comprehensive income / (Loss) |
$ |
2,175 |
|
$ |
(9,375 |
) |
$ |
11,148 |
|
$ |
(3,366 |
) |
Acadian Timber Corp.
Interim Condensed Consolidated Statements of Cash
Flows
(unaudited)
|
Three Months Ended |
Nine Months Ended |
(CAD thousands) |
September 26, 2020 |
|
September 28, 2019 |
|
|
September 26, 2020 |
|
September 28, 2019 |
|
Cash provided by (used for): |
|
|
|
|
|
|
|
|
Operating activities |
|
|
|
|
|
|
|
|
Net income / (Loss) |
$ |
5,248 |
|
$ |
(10,869 |
) |
$ |
6,766 |
|
$ |
1,097 |
|
Adjustment
to net income: |
|
|
|
|
|
|
|
|
Deferred income tax expense / (recovery) |
|
626 |
|
|
(2,313 |
) |
|
2,671 |
|
|
(632 |
) |
Depreciation and amortization |
|
69 |
|
|
71 |
|
|
206 |
|
|
215 |
|
Fair value adjustments and other |
|
(643 |
) |
|
(139 |
) |
|
(3,861 |
) |
|
(1,409 |
) |
Unrealized exchange (gain) / loss on long-term debt |
|
(2,240 |
) |
|
1,030 |
|
|
2,940 |
|
|
(2,907 |
) |
Gain on sale of timberlands |
|
— |
|
|
(333 |
) |
|
— |
|
|
(864 |
) |
Gain on disposal of other fixed assets |
|
— |
|
|
(1 |
) |
|
— |
|
|
(2 |
) |
Accretion of long-term debt |
|
315 |
|
|
276 |
|
|
1,038 |
|
|
861 |
|
Net change in non-cash working capital balances and other |
|
(648 |
) |
|
(1,079 |
) |
|
3,545 |
|
|
(2,114 |
) |
|
|
2,727 |
|
|
(13,357 |
) |
|
13,305 |
|
|
(5,755 |
) |
Financing activities |
|
|
|
|
|
|
|
|
Repayment of
operating loans |
|
— |
|
|
— |
|
|
(8,169 |
) |
|
— |
|
Issuance of
long-term debt |
|
— |
|
|
9,930 |
|
|
19,795 |
|
|
9,930 |
|
Repayment of
long-term debt |
|
— |
|
|
— |
|
|
(9,729 |
) |
|
— |
|
Deferred
financing costs |
|
— |
|
|
— |
|
|
(527 |
) |
|
— |
|
Dividends
paid to shareholders |
|
(4,840 |
) |
|
(4,840 |
) |
|
(14,518 |
) |
|
(14,394 |
) |
Purchase of common shares under NCIB |
|
— |
|
|
— |
|
|
— |
|
|
(37 |
) |
|
|
(4,840 |
) |
|
5,090 |
|
|
(13,148 |
) |
|
(4,501 |
) |
Investing activities |
|
|
|
|
|
|
|
|
Additions to
timber, land, roads and other fixed assets |
|
(257 |
) |
|
(68 |
) |
|
(352 |
) |
|
(86 |
) |
Proceeds
from sale of timberlands |
|
— |
|
|
353 |
|
|
— |
|
|
920 |
|
Proceeds from sale of other fixed assets |
|
— |
|
|
1 |
|
|
— |
|
|
2 |
|
|
|
(257 |
) |
|
286 |
|
|
(352 |
) |
|
836 |
|
Increase / (decrease) in cash during the period |
|
(2,370 |
) |
|
(7,981 |
) |
|
(195 |
) |
|
(9,420 |
) |
Cash beginning of period |
|
9,776 |
|
|
20,881 |
|
|
7,601 |
|
|
22,320 |
|
Cash end of period |
$ |
7,406 |
|
$ |
12,900 |
|
$ |
7,406 |
|
$ |
12,900 |
|
Reconciliations to Adjusted EBITDA and
Free Cash Flow
|
Three Months Ended |
Nine Months Ended |
|
September 26, 2020 |
|
September 28, 2019 |
|
September 26, 2020 |
|
September 28, 2019 |
|
Net income / (loss) |
$ |
5,248 |
|
$ |
(10,869 |
) |
$ |
6,766 |
|
$ |
1,097 |
|
Add /
(deduct) |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
1,142 |
|
|
1,010 |
|
|
3,605 |
|
|
2,989 |
|
Current income tax (recovery) / expense |
|
312 |
|
|
(1,667 |
) |
|
1,870 |
|
|
(335 |
) |
Deferred income tax (recovery) / expense |
|
626 |
|
|
(2,313 |
) |
|
2,671 |
|
|
(632 |
) |
Depreciation and amortization |
|
69 |
|
|
71 |
|
|
206 |
|
|
215 |
|
Fair value adjustments and other |
|
(643 |
) |
|
(139 |
) |
|
(3,861 |
) |
|
(1,409 |
) |
Management agreement termination fee |
|
— |
|
|
18,000 |
|
|
— |
|
|
18,000 |
|
Unrealized exchange (gain) / loss on long-term debt |
|
(2,240 |
) |
|
1,030 |
|
|
2,940 |
|
|
(2,907 |
) |
Adjusted EBITDA |
$ |
4,514 |
|
$ |
5,123 |
|
$ |
14,197 |
|
$ |
17,018 |
|
Add /
(deduct) |
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid on debt, net |
|
(796 |
) |
|
(708 |
) |
|
(2,470 |
) |
|
(2,049 |
) |
Additions to timber, land, roads and other fixed assets |
|
(257 |
) |
|
(68 |
) |
|
(352 |
) |
|
(86 |
) |
Gain on sale of timberlands |
|
— |
|
|
(333 |
) |
|
— |
|
|
(864 |
) |
Gain on disposal of other fixed assets |
|
— |
|
|
(1 |
) |
|
— |
|
|
(2 |
) |
Proceeds on sale of timberlands |
|
— |
|
|
353 |
|
|
— |
|
|
920 |
|
Proceeds on sale of other fixed assets |
|
— |
|
|
1 |
|
|
— |
|
|
2 |
|
Current tax effect of termination fee |
|
— |
|
|
(1,848 |
) |
|
— |
|
|
(1,848 |
) |
Current income tax (expense) / recovery |
|
(312 |
) |
|
1,667 |
|
|
(1,870 |
) |
|
335 |
|
Free Cash Flow |
$ |
3,149 |
|
$ |
4,186 |
|
$ |
9,506 |
|
$ |
13,426 |
|
Dividends declared |
$ |
4,840 |
|
$ |
4,840 |
|
$ |
14,518 |
|
$ |
14,519 |
|
Payout Ratio |
|
154 |
% |
|
116 |
% |
|
153 |
% |
|
108 |
% |
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