Acadian Timber Corp. (“Acadian” or the “Company”) (TSX:ADN) today
reported financial and operating results1 for the three months and
full year ended December 31, 2022.
“While 2022 presented a challenging operating
year for Acadian due to limited contractor availability, demand for
our products remained strong and pricing continued to increase
throughout the year. Costs were elevated across the business,
however, we are proud of the continued efforts and success of our
management team in controlling or recovering these costs from our
customers,” commented Adam Sheparski, President and Chief Executive
Officer. “As we enter our busiest season, we have already begun to
increase contractor capacity with expectations of improvement in
2023, which we believe will make us well-positioned to take
advantage of the opportunities presented by current regional market
conditions."
Adjusted EBITDA for the year was $18.2 million,
compared to $22.5 million in 2021. Acadian generated $12.2 million
of Free Cash Flow during the year, compared to $16.9 million in
2021, and declared dividends of $19.5 million or $1.16 per share to
our shareholders. Acadian’s balance sheet remains solid with $19.5
million of net liquidity as at December 31, 2022, which includes
funds available under our credit facilities.
On February 8, 2023, the Company renewed its
Normal Course Issuer Bid by filing a notice of intention with the
Toronto Stock Exchange (“TSX”) to purchase for cancellation up to
847,944 common shares representing 5% of the 16,958,881 common
shares outstanding as of January 31, 2023, subject to regulatory
approval. The purchases will be made through the facilities of the
TSX and/or any alternative Canadian trading systems to the extent
they are eligible. The price that the Company will pay for any such
shares will be the market price at the time of acquisition. The
Company believes that repurchasing shares at the prevailing market
prices from time to time is a worthwhile use of funds and in the
best interests of the Company and its shareholders. Purchases may
commence on February 14, 2023 and shall terminate not later than
February 13, 2024. Based on average daily trading
volume (“ADTV”) of 7,860 over the last six months, daily purchases
will be limited to 1,965 common shares (25% of the ADTV of the
common shares), other than block purchase exemptions.
Under the Company’s current NCIB, which
commenced on February 14, 2022 and expires on February 13, 2023,
the Company received approval from the TSX to purchase up to
834,345 common shares representing 5.0% of those outstanding as of
February 3, 2022. The Company has not purchased any of its common
shares over the past 12 months.
___________________________________1 This
news release makes reference to Adjusted EBITDA, Adjusted EBITDA
margin, Free Cash Flow and Payout Ratios which are key performance
measures in evaluating Acadian’s operations and are important in
enhancing investors’ understanding of the Company’s operating
performance. Adjusted EBITDA and Adjusted EBITDA margin are
indicative of the underlying profitability of Acadian’s operating
segments and 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 Payout Ratios are
used to evaluate Acadian’s ability to fund its distribution using
Free Cash Flow. Acadian’s management defines Adjusted EBITDA as net
income before interest, income taxes, fair value adjustments,
recovery of or impairment of land and roads and depreciation and
amortization, and “Adjusted EBITDA margin” as Adjusted EBITDA as a
percentage of Acadian’s sales. 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 timberlands
and fixed assets (proceeds less gains or losses). Reference made to
“Payout Ratio” is defined as dividends declared divided by Free
Cash Flow, and Payout Ratio with DRIP is defined as dividends paid
in cash divided by Free Cash Flow. We have provided in this news
release reconciliations of net income, as determined in accordance
with International Financial Reporting Standards (“IFRS”), to
Adjusted EBITDA and Free Cash Flow. Reference is also made to net
liquidity which includes cash and funds available under credit
facilities less amounts reserved to support the minimum cash
balance related to long-term debt. As these measures do not have
standardized meanings prescribed by IFRS, they may not be
comparable to similar measures presented by other companies. Please
refer to Management’s Discussion and Analysis for further
details.
Review of Operations
Financial and Operating
Highlights
|
Three Months Ended |
Year Ended |
(CAD thousands, except per share information) |
December 31,2022 |
|
December 31,2021 |
|
December
31,2022 |
|
December
31,2021 |
|
Sales volume (000s m3) |
|
230.5 |
|
|
290.1 |
|
|
917.8 |
|
|
1,062.3 |
|
Sales |
$ |
23,755 |
|
$ |
25,946 |
|
$ |
90,473 |
|
$ |
95,729 |
|
Operating income |
|
3,937 |
|
|
6,166 |
|
|
17,865 |
|
|
21,757 |
|
Net income |
|
22,002 |
|
|
6,541 |
|
|
35,507 |
|
|
18,684 |
|
Adjusted EBITDA |
$ |
4,058 |
|
$ |
6,315 |
|
$ |
18,194 |
|
$ |
22,487 |
|
Adjusted EBITDA margin |
|
17 |
% |
|
24 |
% |
|
20 |
% |
|
23 |
% |
Free Cash Flow |
$ |
2,000 |
|
$ |
5,149 |
|
$ |
12,151 |
|
$ |
16,933 |
|
Dividends declared |
|
4,897 |
|
|
4,839 |
|
|
19,468 |
|
|
19,357 |
|
Dividends paid in cash |
|
3,721 |
|
|
4,839 |
|
|
16,002 |
|
|
19,357 |
|
Payout Ratio |
|
245 |
% |
|
94 |
% |
|
160 |
% |
|
114 |
% |
Payout Ratio with DRIP |
|
186 |
% |
|
n/a |
|
|
132 |
% |
|
n/a |
|
Per share – basic and diluted |
|
|
|
|
Net income |
$ |
1.30 |
|
$ |
0.39 |
|
$ |
2.11 |
|
$ |
1.12 |
|
Free Cash Flow |
|
0.12 |
|
|
0.31 |
|
|
0.72 |
|
|
1.01 |
|
Dividends declared |
|
0.29 |
|
|
0.29 |
|
|
1.16 |
|
|
1.16 |
|
Three Months Ended December 31, 2022
Acadian generated sales of $23.8 million,
compared to $25.9 million in the prior year period. Sales volume,
excluding biomass, decreased 26% primarily due to contractor
availability which resulted in lower harvesting activity, combined
with unfavourable weather conditions. Biomass sales volume
increased 25% due to favourable market conditions. The weighted
average selling price, excluding biomass, increased 17%
year-over-year, benefiting from strong demand for all products.
Operating costs and expenses were $19.8 million
during the fourth quarter, consistent with the fourth quarter of
2021. Weighted average variable costs, excluding biomass, increased
27% reflecting higher contractor rates and fuel cost adjustments
paid to contractors.
Adjusted EBITDA was $4.1 million during the
fourth quarter, compared to $6.3 million in the prior year period
and Adjusted EBITDA margin for the quarter was 17% compared to 24%
in the prior year period. The year-over-year decrease is primarily
driven by reduced sales volumes, particularly in Maine, and
increased variable costs. Free Cash Flow was $2.0 million compared
to $5.1 million in the same period of 2021.
Net income for the fourth quarter totaled $22.0
million, or $1.30 per share, compared to $6.5 million, or $0.39 per
share in the same period of 2021. The increase in net income was
largely due to the impact of higher gains on non-cash fair value
adjustments in 2022 compared to 2021, resulting from the increased
fair value of our timberlands, offset by lower operating income due
to lower harvesting activity.
Year Ended December 31, 2022
Acadian generated sales of $90.5 million,
compared to $95.7 million in the prior year as a result of
decreased sales volumes, partially offset by increased pricing.
Although demand for softwood sawlogs remained stable and demand for
hardwood sawlogs, hardwood pulpwood and softwood pulpwood
strengthened throughout the year, sales volume, excluding biomass,
decreased 13% primarily as a result of limited contractor
availability. Acadian’s weighted average selling price, excluding
biomass, increased 12% due to strong demand across all products as
well as the partial recovery of elevated fuel costs from our
customers.
Operating costs and expenses were $72.6 million
during 2022, compared to $74.0 million in the prior year,
reflecting lower harvesting and timber services activity partially
offset by higher contractor costs. Weighted average variable costs,
excluding biomass, increased 16% due to higher contractor rates and
fuel prices.
Adjusted EBITDA for the year ended December 31,
2022 was $18.2 million, compared to $22.5 million in the prior
year, while Adjusted EBITDA margin was 20% compared to 23% in the
prior year. Key factors impacting the year-over-year decrease in
Adjusted EBITDA were lower harvesting volumes due to contractor
availability, higher contractor rates and fuel costs, and lower
gains on sales of land, partially offset by strong pricing for
products. Free Cash Flow was $12.2 million compared to $16.9
million in 2021.
Net income for the year ended December 31, 2022
totaled $35.5 million, or $2.11 per share, compared to net income
of $18.7 million, or $1.12 per share, in 2021. Net income was
primarily impacted by higher gains on non-cash fair value
adjustments in 2022 compared to 2021 resulting from the increased
fair value of our timberlands.
Segment Performance
New Brunswick Timberlands
The table below summarizes operating and
financial results for New Brunswick Timberlands for the fourth
quarter.
Three Months Ended December 31, 2022 |
(CAD thousands) |
Harvest (000s m3) |
Sales (000s m3) |
Sales Mix |
|
Results |
|
Softwood |
93.8 |
94.5 |
53 |
% |
$ |
6,523 |
|
Hardwood |
60.8 |
51.8 |
29 |
% |
|
5,334 |
|
Biomass |
32.6 |
32.6 |
18 |
% |
|
1,313 |
|
|
187.2 |
178.9 |
100 |
% |
|
13,170 |
|
Timber services and other sales |
|
|
|
|
5,389 |
|
Sales |
|
|
|
$ |
18,559 |
|
Adjusted EBITDA |
|
|
|
$ |
3,738 |
|
Adjusted EBITDA margin |
|
|
|
|
20 |
% |
Three Months Ended December 31, 2021 |
(CAD thousands) |
Harvest (000s m3) |
Sales (000s m3) |
Sales Mix |
|
Results |
|
Softwood |
102.5 |
98.0 |
51 |
% |
$ |
6,029 |
|
Hardwood |
70.0 |
64.2 |
34 |
% |
|
5,550 |
|
Biomass |
28.2 |
28.2 |
15 |
% |
|
980 |
|
|
200.7 |
190.4 |
100 |
% |
|
12,559 |
|
Timber services and other sales |
|
|
|
|
5,420 |
|
Sales |
|
|
|
$ |
17,979 |
|
Adjusted EBITDA |
|
|
|
$ |
4,458 |
|
Adjusted EBITDA margin |
|
|
|
|
25 |
% |
Sales for New Brunswick Timberlands were $18.6
million compared to $18.0 million during the prior year period.
Sales volume, excluding biomass, decreased 10% primarily due to the
impacts of contractor availability on hauling activity. Reduced
sawlog and hardwood pulpwood sales, and lower timber services
activity, was partially offset by an increase in softwood pulpwood
sales. Biomass sales volume increased 15% during the quarter due to
favourable market conditions. The weighted average selling price,
excluding biomass, for the fourth quarter was $81.05 per m3, or 14%
higher than the prior year period, as a result of strong pricing
across all products.
Operating costs and expenses were $14.9 million
during the fourth quarter, compared to $13.6 million in the prior
year period due to higher contractor costs and higher land
management costs. Weighted average variable costs, excluding
biomass, increased 29% reflecting higher contractor rates and fuel
adjustment costs paid to contractors compared to the prior year
period.
Adjusted EBITDA for the quarter was $3.8 million
compared to $4.6 million during the prior year period and Adjusted
EBITDA margin was 20% compared to 25% in the prior year period.
Adjusted EBITDA and Adjusted EBITDA margin were impacted by lower
sales volume and higher operating costs in the fourth quarter as
compared to the prior year period.
The table below summarizes operating and
financial results for New Brunswick Timberlands for the year.
Year Ended December 31, 2022 (CAD thousands) |
Harvest (000s m3) |
Sales (000s m3) |
Sales Mix |
|
Results |
|
Softwood |
373.9 |
381.7 |
55 |
% |
$ |
25,951 |
|
Hardwood |
236.4 |
230.5 |
33 |
% |
|
21,060 |
|
Biomass |
85.1 |
85.1 |
12 |
% |
|
3,685 |
|
|
695.4 |
697.3 |
100 |
% |
|
50,696 |
|
Timber services and other sales |
|
|
|
|
|
19,333 |
|
Sales |
|
|
|
|
$ |
70,029 |
|
Adjusted EBITDA |
|
|
|
|
$ |
15,693 |
|
Adjusted EBITDA margin |
|
|
|
|
|
22 |
% |
|
|
|
|
|
|
|
|
Year Ended December 31, 2021 (CAD thousands) |
Harvest (000s m3) |
Sales (000s m3) |
Sales Mix |
|
Results |
|
Softwood |
340.3 |
338.7 |
45 |
% |
$ |
21,480 |
|
Hardwood |
310.1 |
305.4 |
40 |
% |
|
23,555 |
|
Biomass |
110.9 |
110.9 |
15 |
% |
|
4,229 |
|
|
761.3 |
755.0 |
100 |
% |
|
49,264 |
|
Timber services and other sales |
|
|
|
|
|
22,236 |
|
Sales |
|
|
|
|
$ |
71,500 |
|
Adjusted EBITDA |
|
|
|
|
$ |
17,876 |
|
Adjusted EBITDA margin |
|
|
|
|
|
25 |
% |
Sales for New Brunswick Timberlands totaled
$70.0 million, compared to $71.5 million in 2021. Sales volume,
excluding biomass, decreased 5% primarily due to contractor
availability which limited hauling activity. Biomass sales volume
decreased 23% due to less favourable market conditions.
The weighted average selling price, excluding
biomass, for the year was $76.79 per m3, 10% higher year-over-year,
as a result of strong prices across all products driven by demand,
as well as fuel cost recovery from customers.
Operating costs and expenses were $54.5 million
during 2022, compared to $53.8 million in the prior year due to
higher contractor costs and higher land management costs. Weighted
average variable costs, excluding biomass, increased 18% compared
to the prior year due to higher contractor rates and fuel cost
adjustments paid to contractors.
Adjusted EBITDA for the year ended December 31,
2022 was $15.7 million, compared to $17.9 million in the prior
year, while Adjusted EBITDA margin was 22% compared to 25% during
the prior year.
Maine Timberlands
The table below summarizes operating and
financial results for Maine Timberlands for the fourth quarter.
Three Months Ended December 31, 2022 |
(CAD thousands) |
Harvest (000s m3) |
Sales (000s m3) |
Sales Mix |
|
Results |
|
Softwood |
29.8 |
29.6 |
57 |
% |
$ |
3,144 |
|
Hardwood |
20.3 |
18.4 |
36 |
% |
|
1,859 |
|
Biomass |
3.6 |
3.6 |
7 |
% |
|
9 |
|
|
53.7 |
51.6 |
100 |
% |
|
5,012 |
|
Other sales |
|
|
|
|
|
184 |
|
Sales |
|
|
|
|
$ |
5,196 |
|
Adjusted EBITDA |
|
|
|
|
$ |
804 |
|
Adjusted EBITDA margin |
|
|
|
|
|
15 |
% |
|
Three Months Ended December 31, 2021 |
(CAD thousands) |
Harvest (000s m3) |
Sales (000s m3) |
Sales Mix |
|
Results |
|
Softwood |
73.5 |
73.5 |
74 |
% |
$ |
5,653 |
|
Hardwood |
27.4 |
25.4 |
25 |
% |
|
2,150 |
|
Biomass |
0.8 |
0.8 |
1 |
% |
|
5 |
|
|
101.7 |
99.7 |
100 |
% |
|
7,808 |
|
Other sales |
|
|
|
|
|
159 |
|
Sales |
|
|
|
|
$ |
7,967 |
|
Adjusted EBITDA |
|
|
|
|
$ |
2,098 |
|
Adjusted EBITDA margin |
|
|
|
|
|
26 |
% |
Sales for Maine Timberlands during the fourth
quarter totaled $5.2 million compared to $8.0 million in the prior
year period. Sales volume, excluding biomass, decreased by 52%
compared to the same period of 2021, primarily due to contractor
availability which limited harvesting and hauling activity but was
also impacted by unfavourable weather conditions.
The weighted average selling price, excluding
biomass, in Canadian dollar terms was $104.38 per m3, or 32% higher
than the same period of 2021. In U.S dollar terms, the weighted
average selling price, excluding biomass, was $76.83 per m3,
compared to $62.56 per m3 in 2021 with higher prices across all
products benefiting from favourable market dynamics.
Operating costs and expenses for the fourth
quarter were $4.5 million, compared to $6.0 million during the same
period in 2021 as a result of lower harvesting activity offset by
higher land management costs. Weighted average variable costs,
excluding biomass, increased 32% primarily as a result of higher
contractor rates and fuel adjustment costs paid to contractors.
Adjusted EBITDA for the quarter was $0.8 million
compared to $2.1 million during the prior year period and Adjusted
EBITDA margin was 15% compared to 26% in the prior year period. The
decrease year-over-year was primarily the result of lower
harvesting activity combined with higher land management costs.
The table below summarizes operating and
financial results for Maine Timberlands for the year.
Year Ended December 31, 2022 (CAD thousands) |
Harvest (000s m3) |
Sales (000s m3) |
Sales Mix |
|
Results |
|
Softwood |
151.0 |
150.8 |
68 |
% |
$ |
13,921 |
|
Hardwood |
59.9 |
60.9 |
28 |
% |
|
5,802 |
|
Biomass |
8.8 |
8.8 |
4 |
% |
|
22 |
|
|
219.7 |
220.5 |
100 |
% |
|
19,745 |
|
Other sales |
|
|
|
|
|
699 |
|
Sales |
|
|
|
|
$ |
20,444 |
|
Adjusted EBITDA |
|
|
|
|
$ |
4,154 |
|
Adjusted EBITDA margin |
|
|
|
|
|
20 |
% |
|
|
|
|
|
|
|
|
Year Ended December 31, 2021 (CAD thousands) |
Harvest (000s m3) |
Sales (000s m3) |
Sales Mix |
|
Results |
|
Softwood |
221.7 |
221.7 |
72 |
% |
$ |
16,744 |
|
Hardwood |
83.2 |
84.2 |
27 |
% |
|
6,915 |
|
Biomass |
1.4 |
1.4 |
1 |
% |
|
15 |
|
|
306.3 |
307.3 |
100 |
% |
|
23,674 |
|
Other sales |
|
|
|
|
|
555 |
|
Sales |
|
|
|
|
$ |
24,229 |
|
Adjusted EBITDA |
|
|
|
|
$ |
5,887 |
|
Adjusted EBITDA margin |
|
|
|
|
|
24 |
% |
Sales for Maine Timberlands were $20.4 million
compared to $24.2 million in 2021. Sales volume, excluding biomass,
decreased by 31% due to contractor availability which limited
harvesting and hauling activity as well as unfavourable weather
conditions in the fourth quarter.
The weighted average selling price, excluding
biomass, in Canadian dollar terms was $93.18 per m3, compared to
$77.35 per m3 in 2021. In U.S dollar terms, the weighted average
selling price, excluding biomass, was $71.82 per m3, compared to
$61.52 per m3 in 2021 with higher prices across all products
benefiting from favourable market dynamics as well as fuel cost
recovery from customers.
Operating costs and expenses for 2022 were $16.4
million, compared to $18.9 million in 2021 due to lower harvesting
activity. Weighted average variable costs, excluding biomass,
increased 17% primarily as a result of higher contractor rates and
fuel cost adjustments paid to contractors.
Adjusted EBITDA for the year ended December 31,
2022 was $4.2 million compared to $5.9 million in the prior year
and Adjusted EBITDA margin was 20% compared to 24% during the prior
year.
Outlook
Following a series of interest rate increases
during 2022 in an effort to curb inflation, housing sales and price
growth have slowed, and consensus forecast has been lowered to
approximately 1.24 million U.S. housing starts in 2023 as compared
to 1.55 million in 2022. These estimates are consistent with
pre-pandemic historical levels.
Accordingly, we remain confident that the
stability of the northeastern forestry sector, combined with the
long-term demand for new homes and repair and remodel activity,
will support the demand for, and pricing of, our products. However,
given the short-term pressures from end use markets, we may
experience pricing pressure.
Though decelerating, inflation is expected to
remain a challenge in the near term and to continue to exert
pressure on our financial results through elevated contractor rates
and fuel surcharges that we pay our contractors. Labour shortages
resulting in limited contractor availability throughout the region
and beyond is expected to continue as the industry works to resolve
the issue. We will continue our efforts to recover these
incremental costs from our customers, and to support as well as
recruit existing and new contractors.
Because demand for Acadian’s sawlogs is mainly
driven by regional supply and demand of logs, the stable sawlog
demand and prices experienced in 2022 are largely expected to
continue into 2023. Despite normalized softwood lumber prices we
continue to see stability in our softwood log prices. The impact of
market uncertainty on hardwood lumber prices may result in a
softening of the hardwood log markets, however, prices are expected
to remain above historical norms.
Hardwood pulpwood markets are expected to remain
strong into 2023 in light of limited regional supply. Softwood
pulpwood markets into 2023 are expected to remain at the improved
levels experienced in 2022.
On December 2, 2022, Twin Rivers Paper Company
(“Twin Rivers”) announced that a definitive agreement had been
reached to sell its softwood lumber mill in Plaster Rock, New
Brunswick to Groupe Lebel. Pending regulatory and provincial
review, the transaction is expected to close in the first quarter
of 2023. Acadian has significant contracts with Twin Rivers and a
positive relationship with Groupe Lebel. We look forward to
continuing to build this relationship in this new capacity.
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 April 15, 2023 to
shareholders of record on March 31, 2023.
Acadian Timber Corp. is one of
the largest timberland owners in Eastern Canada and the
Northeastern U.S. and has a total of approximately 2.4 million
acres of land under management. Acadian owns and manages
approximately 761,000 acres of freehold timberlands in New
Brunswick, approximately 300,000 acres of freehold timberlands in
Maine 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 90 regional
customers.
Acadian’s business strategy is to maximize cash
flows from its existing timberland assets through sustainable
forest management and other land use activities while growing its
business by acquiring assets and actively managing these assets 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:
Susan WoodChief Financial OfficerTel:
506-737-2345 Email: ir@acadiantimber.com
Cautionary Statement Regarding
Forward-Looking Information and Statements
This News Release 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 Timber Corp. and its
subsidiaries (collectively, “Acadian”), or industry results, to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Forward-looking information is included in this News
Release and includes statements made in the section entitled
“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. All forward-looking statements in this News Release 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. Actual
results may vary. These forward-looking statements include, but are
not limited to:
- Expectations regarding product
demand, pricing and end use markets, including expectations for
U.S. housing starts, which may be impacted by changes in interest
rates, U.S. population demographics and the inventory of homes for
sale. Expectations regarding product demand are based on
anticipated market conditions, anticipated regional inventory
levels of key customers, and the economic situation of key
customers. Estimates for U.S. housing starts are based on forecasts
published by major financial institutions.
- Expectations regarding future
contractor availability, which may be impacted by regional supply
of trained contractors and changes in the demographics of the
available workforce.
Other risks and factors are discussed under the
heading “Risk Factors” in the Annual Report dated February 8, 2023,
and in the Annual Information Form dated March 25, 2022 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.
Readers are cautioned that the preceding list of material factors
or assumptions is not exhaustive. Although the forward-looking
statements contained in this News Release 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
News Release are made as of the date of this News Release based on
information currently available to management and should not be
relied upon as representing Acadian’s views as of any date
subsequent to the date of this News Release. 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.Consolidated Balance Sheets |
|
(unaudited) |
|
As at(CAD thousands) |
|
December
31, 2022 |
December 31,
2021 |
Assets |
|
|
|
Current assets |
|
|
|
Cash |
|
$ |
6,230 |
$ |
7,316 |
Accounts receivable and other assets |
|
|
8,265 |
|
8,386 |
Current income taxes receivable |
|
|
— |
|
104 |
Inventory |
|
|
1,850 |
|
1,450 |
|
|
|
16,345 |
|
17,256 |
Timber |
|
|
437,365 |
|
394,063 |
Land, roads, and other fixed assets |
|
|
87,986 |
|
99,183 |
Intangible asset |
|
|
6,140 |
|
6,140 |
Total assets |
|
$ |
547,836 |
$ |
516,642 |
Liabilities and shareholders’ equity |
|
|
|
Current liabilities |
|
|
|
Accounts payable and accrued liabilities |
|
$ |
11,206 |
$ |
8,800 |
Current income taxes payable |
|
|
20 |
|
— |
Dividends payable to shareholders |
|
|
4,897 |
|
4,839 |
|
|
|
16,123 |
|
13,639 |
Long-term debt |
|
|
107,937 |
|
100,888 |
Deferred income tax liabilities, net |
|
|
120,053 |
|
110,630 |
Total liabilities |
|
|
244,113 |
|
225,157 |
Shareholders’ equity |
|
|
303,723 |
|
291,485 |
Total liabilities and shareholders’ equity |
|
$ |
547,836 |
$ |
516,642 |
|
|
|
|
|
|
Acadian
Timber Corp.Consolidated Statements of Net
Income |
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
Year Ended |
(CAD thousands, except per share data) |
|
December31, 2022 |
|
December31, 2021 |
|
December31, 2022 |
|
December 31,2021 |
|
Sales |
|
$ |
23,755 |
|
$ |
25,946 |
|
$ |
90,473 |
|
$ |
95,729 |
|
Operating costs and expenses |
|
|
|
|
|
Cost of sales |
|
|
17,526 |
|
|
17,527 |
|
|
62,894 |
|
|
64,933 |
|
Selling, administration and other |
|
|
2,145 |
|
|
2,057 |
|
|
8,066 |
|
|
7,622 |
|
Silviculture |
|
|
68 |
|
|
127 |
|
|
1,375 |
|
|
1,156 |
|
Depreciation and amortization |
|
|
79 |
|
|
69 |
|
|
273 |
|
|
261 |
|
|
|
|
19,818 |
|
|
19,780 |
|
|
72,608 |
|
|
73,972 |
|
Operating income |
|
|
3,937 |
|
|
6,166 |
|
|
17,865 |
|
|
21,757 |
|
Interest expense, net |
|
|
(803 |
) |
|
(748 |
) |
|
(3,098 |
) |
|
(2,978 |
) |
Other items |
|
|
|
|
|
Fair value adjustments and other |
|
|
27,126 |
|
|
4,182 |
|
|
34,311 |
|
|
6,773 |
|
Unrealized exchange gain on long-term debt |
|
— |
|
|
16 |
|
|
— |
|
|
432 |
|
Gain on sale of timberlands and other fixed assets |
|
42 |
|
|
80 |
|
|
56 |
|
|
469 |
|
Income before income taxes |
|
|
30,302 |
|
|
9,696 |
|
|
49,134 |
|
|
26,453 |
|
Income tax expense |
|
|
(8,300 |
) |
|
(3,155 |
) |
|
(13,627 |
) |
|
(7,765 |
) |
Net income |
|
$ |
22,002 |
|
$ |
6,541 |
|
$ |
35,507 |
|
$ |
18,684 |
|
Net income per share – basic and diluted |
|
$ |
1.30 |
|
$ |
0.39 |
|
$ |
2.11 |
|
$ |
1.12 |
|
|
Acadian Timber Corp.Consolidated
Statements of Comprehensive Income |
|
(unaudited) |
|
|
Three Months Ended |
Year Ended |
(CAD thousands) |
December 31, 2022 |
|
December 31, 2021 |
|
December 31, 2022 |
|
December 31, 2021 |
|
Net income |
$ |
22,002 |
|
$ |
6,541 |
|
$ |
35,507 |
|
$ |
18,684 |
|
Other comprehensive income / (loss) |
|
|
|
|
Items that may be reclassified subsequently to net income: |
|
|
|
|
(Loss) gain on revaluation of land and roads, net of deferred
income tax recovery of $4,088 (2021 – deferred income tax recovery
of $62) |
|
(10,293 |
) |
|
(483 |
) |
|
(10,293 |
) |
|
(483 |
) |
Unrealized foreign currency translation loss |
|
666 |
|
|
(297 |
) |
|
3,121 |
|
|
(600 |
) |
|
|
(9,627 |
) |
|
(780 |
) |
|
(7,172 |
) |
|
(1,083 |
) |
Comprehensive income |
$ |
12,375 |
|
$ |
5,761 |
|
$ |
28,335 |
|
$ |
17,601 |
|
|
Acadian
Timber Corp.Consolidated Statements of Cash
Flows |
|
(unaudited) |
|
|
Three Months Ended |
Year Ended |
(CAD thousands) |
December 31, 2022 |
|
December 31, 2021 |
|
December 31, 2022 |
|
December 31, 2021 |
|
Cash provided by (used for): |
|
|
|
|
Operating activities |
|
|
|
|
Net income |
$ |
22,002 |
|
$ |
6,541 |
|
$ |
35,507 |
|
$ |
18,684 |
|
Adjustments to net income: |
|
|
|
|
Income tax expense |
|
8,300 |
|
|
3,155 |
|
|
13,267 |
|
|
7,769 |
|
Depreciation and amortization |
|
79 |
|
|
69 |
|
|
273 |
|
|
261 |
|
Fair value adjustments and other |
|
(27,126 |
) |
|
(4,182 |
) |
|
(34,311 |
) |
|
(6,773 |
) |
Unrealized exchange gain on long-term debt |
|
— |
|
|
(16 |
) |
|
— |
|
|
(432 |
) |
Gain on sale of timberlands and other fixed assets |
|
(42 |
) |
|
(80 |
) |
|
(56 |
) |
|
(469 |
) |
Income taxes paid |
|
(644 |
) |
|
(475 |
) |
|
(2,502 |
) |
|
(2,117 |
) |
Net change in non-cash working capital balances and other |
|
3,698 |
|
|
(3,388 |
) |
|
2,697 |
|
|
(694 |
) |
|
|
6,267 |
|
|
1,624 |
|
|
15,235 |
|
|
16,229 |
|
Financing activities |
|
|
|
|
Dividends paid to shareholders |
|
(3,721 |
) |
|
(4,839 |
) |
|
(16,002 |
) |
|
(19,357 |
) |
Investing activities |
|
|
|
|
Additions to timber, land, roads, and other fixed assets |
|
(127 |
) |
|
(28 |
) |
|
(378 |
) |
|
(333 |
) |
Proceeds from sale of timberlands and other fixed assets |
|
45 |
|
|
105 |
|
|
59 |
|
|
519 |
|
|
|
(82 |
) |
|
77 |
|
|
(319 |
) |
|
186 |
|
Increase / (decrease) in cash during the period |
|
2,464 |
|
|
(3,138 |
) |
|
(1,086 |
) |
|
(2,942 |
) |
Cash, beginning of period |
|
3,766 |
|
|
10,454 |
|
|
7,316 |
|
|
10,258 |
|
Cash, end of period |
$ |
6,230 |
|
$ |
7,316 |
|
$ |
6,230 |
|
$ |
7,316 |
|
|
|
|
Acadian Timber Corp.Reconciliations to
Adjusted EBITDA and Free Cash Flow |
|
|
|
(unaudited) |
|
|
|
|
Three Months Ended |
Year Ended |
(CAD thousands) |
December
31, 2022 |
|
|
December 31, 2021 |
|
|
December 31, 2022 |
|
|
December 31, 2021 |
|
Net income |
$ |
22,002 |
|
|
$ |
6,541 |
|
|
$ |
35,507 |
|
|
$ |
18,684 |
|
Add / (deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
803 |
|
|
|
748 |
|
|
|
3,098 |
|
|
|
2,978 |
|
Income tax expense |
|
8,300 |
|
|
|
3,155 |
|
|
|
13,627 |
|
|
|
7,769 |
|
Depreciation and amortization |
|
79 |
|
|
|
69 |
|
|
|
273 |
|
|
|
261 |
|
Fair value adjustments and other |
|
(27,126 |
) |
|
|
(4,182 |
) |
|
|
(34,311 |
) |
|
|
(6,773 |
) |
Unrealized exchange gain on long-term debt |
|
— |
|
|
|
(16 |
) |
|
|
— |
|
|
|
(432 |
) |
Adjusted EBITDA |
$ |
4,058 |
|
|
$ |
6,315 |
|
|
$ |
18,194 |
|
|
$ |
22,487 |
|
Add / (deduct): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid on debt, net |
|
(772 |
) |
|
|
(718 |
) |
|
|
(2,976 |
) |
|
|
(2,843 |
) |
Additions to timber, land, roads, and other fixed assets |
|
(127 |
) |
|
|
(28 |
) |
|
|
(378 |
) |
|
|
(333 |
) |
Gain on sale of timberlands and other fixed assets |
|
(42 |
) |
|
|
(80 |
) |
|
|
(56 |
) |
|
|
(469 |
) |
Proceeds from sale of timberlands and other fixed assets |
|
45 |
|
|
|
105 |
|
|
|
59 |
|
|
|
519 |
|
Current income tax expense |
|
(1,162 |
) |
|
|
(445 |
) |
|
|
(2,692 |
) |
|
|
(2,428 |
) |
Free Cash Flow |
$ |
2,000 |
|
|
$ |
5,149 |
|
|
$ |
12,151 |
|
|
$ |
16,933 |
|
Dividends declared |
|
4,897 |
|
|
|
4,839 |
|
|
|
19,468 |
|
|
|
19,357 |
|
Dividends paid in cash |
|
3,721 |
|
|
|
4,839 |
|
|
|
16,002 |
|
|
|
19,357 |
|
Payout Ratio |
|
245 |
% |
|
|
94 |
% |
|
|
160 |
% |
|
|
114 |
% |
Payout Ratio with DRIP |
|
186 |
% |
|
|
n/a |
|
|
|
132 |
% |
|
|
n/a |
|
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