Investors, analysts and other interested parties can access Acadian
Timber Corp.’s 2018 Second Quarter Results via conference call or
webcast on Thursday August 2, 2018 at 1:00PM ET, please dial
1-866-521-4909 toll free in North America (Canada and the USA), or
for overseas calls, please dial 1-647-427-2311 at approximately
12:50PM ET. For those unable to participate, a taped rebroadcast
will be available until midnight September 4, 2018. To access this
rebroadcast, please dial 1-800-585-8367 or 1-416-621-4642
Conference ID #9495046. |
|
All figures in Canadian dollars unless otherwise
noted
Acadian Timber Corp. (“Acadian” or the “Company”) (TSX:ADN) today
reported financial and operating results1 for the three months
ended June 30, 2018 (the “second quarter”).
“Acadian’s second quarter benefited from
favourable operating conditions and strong seasonal demand”, said
Mark Bishop, Chief Executive Officer of Acadian. “As the
outlook for softwood sawtimber demand and pricing continues to be
supported by steady growth in U.S. housing starts and residential
home improvement, Acadian is well positioned to continue its
favourable momentum for the remainder of the year.”
Acadian continued to perform well during the
three-month period ended June 30, 2018, posting Adjusted EBITDA1 of
$2.6 million, in-line with the prior year period. Acadian benefited
from a 4% increase in log sales volumes during the period,
resulting from favourable operating conditions and strong seasonal
demand, the benefits of which were offset by a decline in higher
and better use (“HBU”) land sales in Maine. Log selling prices for
most of our products benefited from improved demand while our
weighted average log selling price per cubic metre remained in-line
with the prior year period due to a change in the sales mix. During
the quarter we generated $2.0 million of Free Cash Flow1 consistent
with the same period of 2017.
During the first half of 2018, we have declared
dividends of $0.5575 per share to our shareholders or $9.3 million
compared to $9.2 million during the same period of 2017, reflecting
a 3% increase in our quarterly dividend as approved by our Board of
Directors in April 2018. This represents a payout ratio of 101%,
which is slightly above our long-term annual target of 95% but
in-line with expectations given the seasonality of our operations.
We anticipate that over the long-term we will maintain the 95%
target payout ratio.
1 This news release makes reference to
Adjusted EBITDA margin and Free Cash Flow which are key performance
measures in evaluating Acadian’s operations and are important in
enhancing investors’ understanding of Acadian’s operating
performance. Adjusted EBITDA is used to evaluate operational
performance while Free Cash Flow is used to evaluate Acadian’s
ability to generate sustainable cash flows from our operations.
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). 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 |
Six Months Ended |
(CAD thousands, except per share information) |
|
|
June 30, 2018 |
June 24, 2017 |
June 30, 2018 |
June 24, 2017 |
Sales volume (000s m3) |
|
|
|
231.6 |
|
|
217.4 |
|
|
651.3 |
|
|
573.4 |
|
Net sales1 |
|
|
$ |
16,099 |
|
$ |
14,329 |
|
$ |
49,047 |
|
$ |
42,341 |
|
Net income |
|
|
|
1,888 |
|
|
4,011 |
|
|
3,874 |
|
|
8,769 |
|
Adjusted EBITDA |
|
|
|
2,582 |
|
|
2,622 |
|
|
11,452 |
|
|
10,652 |
|
Free Cash Flow |
|
|
|
1,997 |
|
|
2,034 |
|
|
9,255 |
|
|
9,422 |
|
Dividends declared |
|
|
|
4,727 |
|
|
4,601 |
|
|
9,328 |
|
|
9,202 |
|
Payout ratio |
|
|
|
237 |
% |
|
226 |
% |
|
101 |
% |
|
98 |
% |
Per share – basic and diluted |
|
|
|
|
|
|
Net income |
|
|
$ |
0.11 |
|
$ |
0.24 |
|
$ |
0.23 |
|
$ |
0.52 |
|
Free Cash Flow |
|
|
|
0.12 |
|
|
0.12 |
|
|
0.55 |
|
|
0.56 |
|
Dividends declared |
|
|
|
0.2825 |
|
|
0.275 |
|
|
0.5575 |
|
|
0.55 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Certain prior year amounts have been
reclassified to conform to the current year presentation as a
result of adoption of IFRS 15, Revenue From Contracts with
Customers, on January 1, 2018
During the second quarter, Acadian’s net sales
rose to $16.1 million from $14.3 million in the comparable period
of 2017, driven by favourable operating conditions and strong
seasonal demand which resulted in a 4% increase in total log sales
volumes. Acadian’s weighted average log selling price remained
in-line with the prior year period as the benefit from increases in
softwood sawlog and hardwood pulpwood prices of 6% and 3%,
respectively, was offset by changes in the sales mix.
The impact of the increase in log sales volumes
was offset by lower sales of higher and better use (“HBU”) land in
Maine, resulting in Adjusted EBITDA of $2.6 million, consistent
with the prior year period. The Adjusted EBITDA margin for the
quarter was 16%, down from 18% in the prior year
period.
Acadian typically experiences low levels of
operating, marketing and selling activity during the second quarter
of each year owing to the spring thaw period that causes much of
the infrastructure to be temporarily inoperable. As a result, year
to year variations in sales volumes and operating costs are less
meaningful.
Net income was $1.9 million, or $0.11 per share,
for the second quarter, compared to $4.0 million, or $0.24 per
share, for the same period in 2017 due to the impact of foreign
exchange revaluation of U.S. dollar denominated long-term debt.
During the first half of 2018 Acadian’s net
sales improved to $49.0 million from $42.3 million during the prior
year period, primarily attributable to a 12% increase in log sales
volumes driven by favourable harvest conditions, particularly for
spruce and fir stands. The weighted average log selling price
remained in-line with the prior year period as improvements in the
selling prices for most products were offset by changes in the
sales mix. As a result, Adjusted EBITDA improved to $11.5 million
from $10.7 million during the first half of 2017, despite HBU sales
decreasing $1.0 million from the prior year period. The Adjusted
EBITDA margin of 23% is down from 25% in the prior year period as
the increase in log sales volumes was more than offset by
lower HBU land sales in Maine. For the six months ended June 30,
2018, net income was $3.9 million, or $0.23 per share, which
represents a decrease of $4.9 million over the same period of 2017
primarily due to the impact of foreign exchange revaluation of U.S.
dollar denominated long-term debt.
Segment Performance
New Brunswick Timberlands
The table below summarizes operating and
financial results for New Brunswick Timberlands.
|
Three Months Ended June 30,
2018 |
Three Months Ended June 24, 2017 |
|
Harvest(000s m3) |
Sales(000s m3) |
SalesMix |
Results($000s) |
Harvest(000s m3) |
Sales(000s m3) |
SalesMix |
Results($000s) |
Softwood |
47.2 |
53.3 |
29 |
% |
$ |
2,930 |
|
27.8 |
39.4 |
23 |
% |
$ |
2,038 |
|
Hardwood |
68.2 |
81.9 |
44 |
% |
|
6,467 |
|
62.0 |
92.1 |
54 |
% |
|
7,186 |
|
Biomass |
51.1 |
51.1 |
27 |
% |
|
1,503 |
|
39.3 |
39.3 |
23 |
% |
|
783 |
|
|
166.5 |
186.3 |
100 |
% |
|
10,900 |
|
129.1 |
170.8 |
100 |
% |
|
10,007 |
|
Timber services and other sales1 |
|
|
|
|
2,017 |
|
|
|
|
|
1,476 |
|
Net sales1 |
|
|
|
$ |
12,917 |
|
|
|
|
$ |
11,483 |
|
Adjusted
EBITDA |
|
|
|
$ |
2,160 |
|
|
|
|
$ |
2,028 |
|
Adjusted EBITDA margin |
|
|
|
|
17 |
% |
|
|
|
|
18 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
2018 |
Six Months Ended June 24, 2017 |
|
Harvest(000s m3) |
Sales(000s m3) |
SalesMix |
Results($000s) |
Harvest(000s m3) |
Sales(000s m3) |
SalesMix |
Results($000s) |
Softwood |
205.8 |
210.7 |
44 |
% |
$ |
11,815 |
|
163.1 |
165.9 |
38 |
% |
$ |
9,296 |
|
Hardwood |
161.2 |
164.9 |
34 |
% |
|
13,033 |
|
177.3 |
186.8 |
43 |
% |
|
14,788 |
|
Biomass |
104.0 |
104.0 |
22 |
% |
|
2,954 |
|
84.6 |
84.6 |
19 |
% |
|
1,748 |
|
|
471.0 |
479.6 |
100 |
% |
|
27,802 |
|
425.0 |
437.3 |
100 |
% |
|
25,832 |
|
Timber services and other sales1 |
|
|
|
|
8,235 |
|
|
|
|
|
6,904 |
|
Net sales1 |
|
|
|
$ |
36,037 |
|
|
|
|
$ |
32,736 |
|
Adjusted EBITDA |
|
|
|
$ |
8,017 |
|
|
|
|
$ |
8,156 |
|
Adjusted EBITDA margin |
|
|
|
|
22 |
% |
|
|
|
|
25 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Certain prior year amounts have been
reclassified to conform to the current year presentation as a
result of adoption of IFRS 15, Revenue From Contracts with
Customers, on January 1, 2018
Net sales for our New Brunswick Timberlands
increased to $12.9 million from $11.5 million during the prior year
period. Log sales volumes, excluding biomass, increased 3% to 135
thousand m3 from 132 thousand m3 in the second quarter of 2017
reflecting favourable operating conditions and strong seasonal
demand for softwood sawlogs and improved demand for softwood
pulpwood. In addition, timber services and other sales increased
37% compared to the prior year period primarily due to the timing
of harvest activities.
The weighted average log selling price during
the quarter was $69.47 per m3, down from $70.13 per m3 in the prior
year period. Demand for softwood sawlogs and hardwood pulpwood in
New Brunswick remained strong with prices increasing 4%, however,
the benefit of this was more than offset by lower volumes of
higher-valued hardwood sawlogs and higher volumes of lower-valued
softwood pulpwood, relative to the prior year period. Prices for
these products were favourable compared to the prior year
period.
Biomass product sales volumes increased by 30%
year-over-year as shipments to export markets resumed in early
2018. The return of the export markets also resulted in a
meaningful 135% increase in gross margin earned compared to the
second quarter of 2017.
Operating costs for the quarter were $10.8
million, compared to $9.5 million in the second quarter of 2017
primarily due to higher harvest volumes and timing of operating
activities. Variable log harvest costs per m3 decreased 5%
primarily due to a change in the harvest mix.
Adjusted EBITDA was $2.2 million during the
second quarter of 2018, compared to $2.0 million in the prior year
period, due to the impact of the increase in log sales volumes and
higher margins for biomass products. The Adjusted EBITDA margin of
17% for the quarter was slightly lower than the prior year period
reflecting timing of operating activities.
During the six-month period ended June 30, 2018,
net sales totaled $36.0 million which represents a $3.3 million
increase compared to the same period last year. New Brunswick
benefited from a 6% increase in log sales volumes and a 23%
increase in biomass sales volumes, which were partially offset by
the impact of lower weighted average log selling prices due to
changes in the sales mix. Costs were $28.0 million, or $3.5 million
higher than the prior year due to the increase in sales volumes and
higher transportation costs. As a result, Adjusted EBITDA was $8.0
million, a decrease of $0.2 million compared to the same period
last year, while Adjusted EBITDA margin decreased to 22% from
25%.
There were no recordable safety incidents among
employees and two minor lost time incidents among contractors
during the second quarter of 2018.
Maine Timberlands
The table below summarizes operating and
financial results for Maine Timberlands.
|
Three Months Ended June 30,
2018 |
Three Months Ended June 24, 2017 |
|
Harvest(000s m3) |
Sales(000s m3) |
SalesMix |
Results($000s) |
Harvest(000s m3) |
Sales(000s m3) |
SalesMix |
Results($000s) |
Softwood |
25.4 |
25.3 |
56 |
% |
$ |
1,914 |
|
16.6 |
16.5 |
35 |
% |
$ |
1,155 |
|
Hardwood |
9.5 |
13.2 |
29 |
% |
|
1,156 |
|
13.8 |
19.5 |
42 |
% |
|
1,544 |
|
Biomass |
6.8 |
6.8 |
15 |
% |
|
11 |
|
10.6 |
10.6 |
23 |
% |
|
16 |
|
|
41.7 |
45.3 |
100 |
% |
|
3,081 |
|
41.0 |
46.6 |
100 |
% |
|
2,715 |
|
Timber services and other sales |
|
|
|
|
101 |
|
|
|
|
|
131 |
|
Net sales |
|
|
|
$ |
3,182 |
|
|
|
|
$ |
2,846 |
|
Adjusted
EBITDA |
|
|
|
$ |
569 |
|
|
|
|
$ |
909 |
|
Adjusted EBITDA margin |
|
|
|
|
18 |
% |
|
|
|
|
32 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30,
2018 |
Six Months Ended June 24, 2017 |
|
Harvest(000s m3) |
Sales(000s m3) |
SalesMix |
Results($000s) |
Harvest(000s m3) |
Sales(000s m3) |
SalesMix |
Results($000s) |
Softwood |
117.0 |
116.5 |
67 |
% |
$ |
9,235 |
|
79.4 |
79.1 |
58 |
% |
$ |
5,906 |
|
Hardwood |
43.4 |
43.9 |
26 |
% |
|
3,410 |
|
43.2 |
45.2 |
33 |
% |
|
3,436 |
|
Biomass |
11.3 |
11.3 |
7 |
% |
|
18 |
|
11.8 |
11.8 |
9 |
% |
|
18 |
|
|
171.7 |
171.7 |
100 |
% |
|
12,663 |
|
134.4 |
136.1 |
100 |
% |
|
9,360 |
|
Timber services and other sales |
|
|
|
|
347 |
|
|
|
|
|
245 |
|
Net sales |
|
|
|
$ |
13,010 |
|
|
|
|
$ |
9,605 |
|
Adjusted EBITDA |
|
|
|
$ |
4,033 |
|
|
|
|
$ |
3,065 |
|
Adjusted EBITDA margin |
|
|
|
|
31 |
% |
|
|
|
|
32 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales totaled $3.2 million compared to $2.8
million for the same period last year as log sales volumes
increased 7% to 38 thousand m3 from 36 thousand m3 in the prior
year period. This increase was primarily driven by strong seasonal
demand for softwood sawlogs which had been impacted in the prior
year period by high customer inventories and limited markets for
sawmill residuals.
The weighted average log selling price in
Canadian dollar terms was $79.82 per m3, up from $74.84 per m3 in
the same period of 2017. The weighted average log selling price in
U.S. dollar terms was $61.85 per m3, up 11% year-over-year,
reflecting meaningfully improved demand and prices for softwood
sawlogs and hardwood pulpwood.
Costs for the second quarter of $2.9 million
were in-line with the same period in 2017 as longer hauling
distances resulted in higher transportation costs which were offset
by the impact of foreign exchange.
Adjusted EBITDA for the quarter was $0.6 million
compared to $0.9 million in the prior year period as lower HBU land
sales more than offset the increase in log sales volumes and
prices. As a result, the Adjusted EBITDA margin decreased to 18%,
relative to 32% in 2017.
During the six month period ended June 30, 2018,
net sales totaled $13.0 million, or $3.4 million higher than the
first half of 2017, primarily due to a 29% increase in log sales
volumes due to favourable winter harvest conditions and a 5%
increase in the weighted average log selling price which was lower
in the prior year due to high customer inventories. Costs were $9.3
million, or $1.3 million higher than the same period of 2017
largely due to higher sales volumes, partially offset by the
benefit of shorter hauling distances. Adjusted EBITDA was $4.0
million, an increase of $1.0 million compared to the prior year
period due to the aforementioned factors, partially offset by lower
HBU land sales. As a result, the Adjusted EBITDA margin
decreased slightly to 31% from 32% in the prior year period.
There were no recordable safety incidents among
employees or contractors during the second quarter of 2018 at our
Maine Timberlands.
Adoption of IFRS 15, Revenue from contracts
with customers
IFRS 15 supersedes previous revenue standards
(IAS 18, Revenue) and related interpretations and it applies to all
revenue arising from contracts with customers. On January 1, 2018,
the Company adopted IFRS 15 using the full retrospective approach.
The adoption of this standard on January 1, 2018 resulted in a
change in presentation from net to gross for timber services, which
does not impact the Company’s operating earnings or net income. As
a result of this change in presentation, net sales for the
three-month and six-month period ended June 24, 2017 increased by
$1.7 million and $6.6 million, respectively, with a corresponding
increase in operating costs and expenses. Net sales are net of
discounts and rebates to customers. Revenue is recognized when
control passes to the customer, which is generally when timber is
delivered to the customer and actual quantities delivered are
determined. Sales are governed primarily by contract and in some
cases by standard industry terms. Pursuant to the Crown Lands
Services Agreement, Acadian provides harvesting, transportation and
other services to Crown licensees and sub-licensees. Acadian
receives payment for these services which are recognized upon
delivery of the timber and when actual quantities delivered are
determined.
Market Outlook
The following contains forward-looking
statements about Acadian Timber Corp.’s market outlook for the
remainder of fiscal 2018. Reference should be made to the
“Forward-looking 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 key markets include softwood
sawtimber, hardwood sawtimber and hardwood pulpwood. Northeast
North American softwood dimension sawmills represent over one third
of Acadian’s end-use market and are the primary market for our
softwood sawtimber. Economic forecasters continue to call for
steady growth in housing starts, with year-over-year increases
averaging over 10% in 2018 and 4% in 2019. The underlying
fundamental driver of pent-up household formation remains highly
compelling and forecasters continue to expect attractive growth in
housing starts in future years despite weakening affordability and
ongoing supply-side constraints of tight construction labour
markets and more restrictive building regulations. North American
sawtimber demand is expected to grow at over 3% per year over the
next few years to support expanding domestic construction
needs.
Benchmark Western Spruce-Pine-Fir and Southern
Yellow Pine lumber prices were up over the sequential quarter by
17% and 6%, respectively, allowing producers to continue to pass on
the full application of average export duties on U.S.-bound
shipments to consumers. Reduced inventories in the supply chain at
the beginning of the spring construction season due to severe
winter conditions and tight rail and truck transport availability
during the first quarter were replenished through the quarter as
these constraints were largely alleviated. While lumber pricing
volatility should be expected due to uncertainty of ongoing
application and pass through of duties or a potential future
softwood lumber dispute settlement including quotas, forecasters
continue to expect the underlying supply demand drivers will
support strength in lumber pricing through 2019. By extension,
Acadian anticipates continued strong support in end use markets for
softwood sawtimber pricing through this
period.
Since the final determination of combined export
duties averaging 20.2% was announced by the U.S. Department of
Commerce and finalized by the International Trade Commission in
late Q4 2017, industry officials indicate there have been no
material softwood negotiations between the U.S. and Canada. As
there is little expectation that a softwood settlement will factor
into the current broader North American Free Trade Agreement
(“NAFTA “) trade negotiations, there remains little visibility on
relief from duties in the near to medium
term.
Hardwood sawtimber markets, typically oriented
to millwork and higher value specialty markets, are expected to
remain at healthy current levels throughout the remainder of the
year. Hardwood pulpwood demand in the region remains stable with
tight supply conditions continuing to support historically strong
pricing. In New Brunswick, biomass markets have benefited from the
expected recovery in export volumes, while Maine’s biomass market
remains under pressure from low cost natural gas as a more
competitive feed stock for electricity generation. While
investments in wood-based liquid biofuels and new wood pellet
capacity in the state are encouraging, the projects are in
early-stage development. We expect that the Maine recreational real
estate market will remain active and therefore anticipate
conditions will support the sale of additional properties
throughout the remainder of 2018.
Quarterly Dividend
Acadian is pleased to announce a dividend of
$0.2825 per share, payable on October 15, 2018 to shareholders of
record on September 30, 2018.
Acadian Timber Corp. is a
leading supplier of primary forest products in Eastern Canada and
the Northeastern U.S. With a total of 2.4 million acres of land
under management, Acadian is the third largest timberland operator
in New Brunswick and Maine.
Acadian owns and manages approximately 1.1
million acres of freehold timberlands in New Brunswick and Maine,
and provides timber services relating to approximately 1.3 million
acres of Crown licensed timberlands in New Brunswick. Acadian also
owns and operates a forest nursery in Second Falls, 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:Jon
SyrnykInvestor RelationsTel: 604-661-9622Email:
jsyrnyk@acadiantimber.com
Forward-Looking Statements
This News Release contains forward-looking
information 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. When used
in this News Release, such statements may contain such words as
“may,” “will,” “intend,” “should,” “expect,” “believe,” “outlook,”
“predict,” “remain,” “anticipate,” “estimate,” “potential,”
“continue,” “plan,” “could,” “might,” “project,” “targeting” or the
negative of these terms or other similar terminology.
Forward-looking information in this News Release includes, without
limitation, statements made in the section entitled “Market
Outlook” and 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 News Release.
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. 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; 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 income tax law; economic situation of key
customers; Brookfield’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 each of
the Annual Information Form dated March 28, 2018 and the Management
Information Circular dated March 28, 2018, 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: 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 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, 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.Interim Condensed Consolidated Statements of
Net Income(unaudited)
|
Three Months Ended |
Six Months Ended |
(CAD thousands, except per share data) |
June 30, 2018 |
June 24, 20171 |
June 30, 2018 |
June 24, 20171 |
|
|
|
|
|
Net sales |
$ |
16,099 |
|
$ |
14,329 |
|
$ |
49,047 |
|
$ |
42,341 |
|
Operating costs and expenses |
|
|
|
|
Cost of sales |
|
11,174 |
|
|
9,868 |
|
|
32,668 |
|
|
28,108 |
|
Selling, administration and other |
|
2,214 |
|
|
2,399 |
|
|
4,720 |
|
|
4,638 |
|
Reforestation |
|
415 |
|
|
398 |
|
|
422 |
|
|
398 |
|
Depreciation and amortization |
|
77 |
|
|
77 |
|
|
161 |
|
|
155 |
|
|
|
13,880 |
|
|
12,742 |
|
|
37,971 |
|
|
33,299 |
|
Operating earnings |
|
2,219 |
|
|
1,587 |
|
|
11,076 |
|
|
9,042 |
|
Interest expense, net |
|
(1,003 |
) |
|
(744 |
) |
|
(1,961 |
) |
|
(1,491 |
) |
Other items |
|
|
|
|
Fair value adjustments |
|
3,391 |
|
|
2,764 |
|
|
1,266 |
|
|
1,289 |
|
Unrealized exchange (loss) / gain on long-term
debt |
|
(1,651 |
) |
|
790 |
|
|
(3,939 |
) |
|
1,255 |
|
Gain on sale of timberlands |
|
286 |
|
|
958 |
|
|
463 |
|
|
1,455 |
|
Loss on disposal of land, roads and other fixed
assets |
|
— |
|
|
— |
|
|
(248 |
) |
|
— |
|
Earnings before income taxes |
|
3,242 |
|
|
5,355 |
|
|
6,657 |
|
|
11,550 |
|
Current income tax recovery / (expense) |
|
96 |
|
|
(120 |
) |
|
(1,269 |
) |
|
(267 |
) |
Deferred income tax expense |
|
(1,450 |
) |
|
(1,224 |
) |
|
(1,514 |
) |
|
(2,514 |
) |
Net income |
$ |
1,888 |
|
$ |
4,011 |
|
$ |
3,874 |
|
$ |
8,769 |
|
Net income per share – basic and diluted |
$ |
0.11 |
|
$ |
0.24 |
|
$ |
0.23 |
|
$ |
0.52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1. Certain prior year amounts have been
reclassified to conform to the current year presentation as a
result of adoption of IFRS 15, Revenue From Contracts with
Customers, on January 1, 2018
Acadian Timber Corp.Interim Condensed
Consolidated Statements of Comprehensive
Income(unaudited)
|
Three Months Ended |
Six Months Ended |
(CAD thousands) |
June 30, 2018 |
June 24, 2017 |
June 30, 2018 |
June 24, 2017 |
|
|
|
|
|
Net income |
$ |
1,888 |
$ |
4,011 |
|
$ |
3,874 |
$ |
8,769 |
|
Other comprehensive income / (loss) |
|
|
|
|
Items that may be reclassified subsequently to net
income: |
|
|
|
|
Unrealized foreign currency translation gain /
(loss) |
|
2,088 |
|
(1,118 |
) |
|
5,454 |
|
(1,740 |
) |
Deferred income tax recovery |
|
246 |
|
271 |
|
|
— |
|
364 |
|
|
|
2,334 |
|
(847 |
) |
|
5,454 |
|
(1,376 |
) |
Comprehensive income |
$ |
4,222 |
$ |
3,164 |
|
$ |
9,328 |
$ |
7,393 |
|
|
|
|
|
|
|
|
|
|
|
|
Acadian Timber Corp.Interim Condensed
Consolidated Balance
Sheets(unaudited)
As at(CAD thousands) |
June 30, 2018 |
December 31, 2017 |
Assets |
|
|
Current Assets |
|
|
Cash and cash equivalents |
$ |
22,866 |
$ |
23,951 |
Accounts receivable and other assets |
|
6,115 |
|
11,007 |
Inventory |
|
801 |
|
1,226 |
|
|
29,782 |
|
36,184 |
Timber |
|
336,577 |
|
330,879 |
Land, roads and other fixed assets |
|
90,046 |
|
89,013 |
Intangible assets |
|
6,140 |
|
6,140 |
|
$ |
462,545 |
$ |
462,216 |
Liabilities and shareholders’ equity |
|
|
Current liabilities |
|
|
Accounts payable and accrued liabilities |
$ |
5,557 |
$ |
12,476 |
Dividends payable to shareholders |
|
4,727 |
|
4,601 |
|
|
10,284 |
|
17,077 |
Long-term debt |
|
92,456 |
|
90,866 |
Deferred income tax liability |
|
83,654 |
|
80,188 |
Shareholders’ equity |
|
276,151 |
|
274,085 |
|
$ |
462,545 |
$ |
462,216 |
|
|
|
|
|
Acadian Timber Corp.Interim Condensed
Consolidated Statements of Cash
Flows(unaudited)
|
Three Months Ended |
Six Months Ended |
(CAD thousands) |
June 30, 2018 |
June 24, 2017 |
June 30, 2018 |
June 24, 2017 |
Cash and cash equivalents provided by / (used
for): |
|
|
|
|
Operating activities |
|
|
|
|
Net income |
$ |
1,888 |
|
$ |
4,011 |
|
$ |
3,874 |
|
$ |
8,769 |
|
Adjustments to net income: |
|
|
|
|
Deferred income tax expense |
|
1,450 |
|
|
1,224 |
|
|
1,514 |
|
|
2,514 |
|
Depreciation and amortization |
|
77 |
|
|
77 |
|
|
161 |
|
|
155 |
|
Fair value adjustments and other |
|
(3,391 |
) |
|
(2,764 |
) |
|
(1,266 |
) |
|
(1,289 |
) |
Unrealized exchange loss / (gain) on long term debt |
|
1,651 |
|
|
(790 |
) |
|
3,939 |
|
|
(1,255 |
) |
Gain on sale of timberlands |
|
(286 |
) |
|
(958 |
) |
|
(463 |
) |
|
(1,455 |
) |
Loss on disposal of land, roads and other fixed assets |
|
— |
|
|
— |
|
|
248 |
|
|
— |
|
Net change in non-cash working capital balances and
other |
|
3,527 |
|
|
1,256 |
|
|
(543 |
) |
|
2,134 |
|
|
|
4,916 |
|
|
2,056 |
|
|
7,464 |
|
|
9,573 |
|
Financing activities |
|
|
|
|
Dividends paid to shareholders |
|
(4,601 |
) |
|
(4,601 |
) |
|
(9,202 |
) |
|
(8,784 |
) |
|
|
(4,601 |
) |
|
(4,601 |
) |
|
(9,202 |
) |
|
(8,784 |
) |
Investing activities |
|
|
|
|
Additions to timber, land, roads and other fixed
assets |
|
(26 |
) |
|
(504 |
) |
|
(31 |
) |
|
(618 |
) |
Acquisition of Katahdin Timberlands LLC |
|
— |
|
|
— |
|
|
— |
|
|
(1,276 |
) |
Proceeds from sale of timberlands |
|
305 |
|
|
1,257 |
|
|
497 |
|
|
2,094 |
|
Proceeds from sale of land, roads and other fixed
assets |
|
8 |
|
|
— |
|
|
187 |
|
|
— |
|
|
|
287 |
|
|
753 |
|
|
653 |
|
|
200 |
|
Increase / (decrease) in cash and cash equivalents during the
period |
|
602 |
|
|
(1,792 |
) |
|
(1,085 |
) |
|
989 |
|
Cash and cash equivalents, beginning of period |
|
22,264 |
|
|
22,435 |
|
|
23,951 |
|
|
19,654 |
|
Cash and cash equivalents, end of
period |
$ |
22,866 |
|
$ |
20,643 |
|
$ |
22,866 |
|
$ |
20,643 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliations to Adjusted EBITDA and Free Cash
Flow
|
Three Months Ended |
Six Months Ended |
(CAD thousands) |
June 30, 2018 |
June 24, 2017 |
June 30, 2018 |
June 24, 2017 |
|
|
|
|
|
Net income |
$ |
1,888 |
|
$ |
4,011 |
|
$ |
3,874 |
|
$ |
8,769 |
|
Add / (deduct): |
|
|
|
|
Interest expense, net |
|
1,003 |
|
|
744 |
|
|
1,961 |
|
|
1,491 |
|
Current income tax (recovery) / expense |
|
(96 |
) |
|
120 |
|
|
1,269 |
|
|
267 |
|
Deferred income tax expense |
|
1,450 |
|
|
1,224 |
|
|
1,514 |
|
|
2,514 |
|
Depreciation and amortization |
|
77 |
|
|
77 |
|
|
161 |
|
|
155 |
|
Fair value adjustments and other |
|
(3,391 |
) |
|
(2,764 |
) |
|
(1,266 |
) |
|
(1,289 |
) |
Unrealized exchange loss / (gain) on long-term debt |
|
1,651 |
|
|
(790 |
) |
|
3,939 |
|
|
(1,255 |
) |
Adjusted EBITDA |
$ |
2,582 |
|
$ |
2,622 |
|
$ |
11,452 |
|
$ |
10,652 |
|
Add / (deduct): |
|
|
|
|
Interest paid on debt, net |
|
(682 |
) |
|
(717 |
) |
|
(1,366 |
) |
|
(1,438 |
) |
Additions to timber, land, roads and other fixed assets |
|
(26 |
) |
|
(50 |
) |
|
(31 |
) |
|
(164 |
) |
Gain on sale of timberlands |
|
(286 |
) |
|
(958 |
) |
|
(463 |
) |
|
(1,455 |
) |
Loss on disposal of land, roads and other fixed assets |
|
— |
|
|
— |
|
|
248 |
|
|
— |
|
Proceeds on sale of timberlands |
|
305 |
|
|
1,257 |
|
|
497 |
|
|
2,094 |
|
Proceeds on sale of roads and other fixed assets |
|
8 |
|
|
— |
|
|
187 |
|
|
— |
|
Current income tax recovery / (expense) |
|
96 |
|
|
(120 |
) |
|
(1,269 |
) |
|
(267 |
) |
Free Cash Flow |
$ |
1,997 |
|
$ |
2,034 |
|
$ |
9,255 |
|
$ |
9,422 |
|
Dividends declared |
|
4,727 |
|
|
4,601 |
|
|
9,328 |
|
|
9,202 |
|
Payout ratio |
|
237 |
% |
|
226 |
% |
|
101 |
% |
|
98 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Acadian Timber (TSX:ADN)
Historical Stock Chart
From Jun 2024 to Jul 2024
Acadian Timber (TSX:ADN)
Historical Stock Chart
From Jul 2023 to Jul 2024