Acadian Timber Corp. (“Acadian” or the “Company”) (TSX:ADN) today
reported financial and operating results1 for the three months
ended September 28, 2019 (the “third quarter”).
As previously reported, on August 20, 2019,
Brookfield Asset Management (“BAM”) sold all of its interest in
Acadian to Macer Forest Holdings Inc. and, on September 9, 2019,
Acadian entered into an agreement with its external manager,
Brookfield Timberlands Management LP (“Brookfield LP”), a
subsidiary of BAM, to terminate the management agreement between
Acadian and Brookfield LP and internalize Acadian’s asset
management and administrative services functions. The aggregate
consideration payable to Brookfield LP in connection with the
termination of the management agreement was $18 million (the
“Termination Fee”), which was satisfied in cash. The termination of
the management agreement resulted in the elimination of the
management fee and the annual performance fee which, going forward,
will reduce Acadian’s administration costs and, in turn, increase
Free Cash Flow.
“Acadian’s strategy remains the same,” said
Erika Reilly, Interim Chief Executive Officer of Acadian. “We
will continue to focus on maximizing shareholder value through
active management as we have successfully done since
formation.” Ms. Reilly added: “What is changing is that
Acadian is building out its internal capabilities to be even more
efficiently run and internally managed, delivering savings from the
elimination of the asset management agreement to its
shareholders.”
_______________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,
amortization and the Termination Fee 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 and Free
Cash Flow.
Review of Operations
Financial and Operating
Highlights
|
Three Months Ended |
Nine months Ended |
(CAD thousands, except per share information) |
|
Sept 28, 2019 |
|
|
Sept 29, 2018 |
|
|
Sept 28, 2019 |
|
|
Sept 29, 2018 |
|
Sales volume (000s m3) |
|
313.5 |
|
|
332.0 |
|
|
911.7 |
|
|
983.3 |
|
Sales |
$ |
25,357 |
|
$ |
26,634 |
|
$ |
74,213 |
|
$ |
75,681 |
|
Net (loss) / income |
|
(10,869 |
) |
|
5,949 |
|
|
1,097 |
|
|
9,823 |
|
Adjusted EBITDA |
|
5,123 |
|
|
6,059 |
|
|
17,018 |
|
|
17,511 |
|
Adjusted EBITDA margin |
|
20 |
% |
|
23 |
% |
|
23 |
% |
|
23 |
% |
Free Cash Flow |
|
4,186 |
|
|
5,133 |
|
|
13,426 |
|
|
14,388 |
|
Dividends declared |
|
4,840 |
|
|
4,726 |
|
|
14,519 |
|
|
14,054 |
|
Payout ratio |
|
116 |
% |
|
92 |
% |
|
108 |
% |
|
98 |
% |
Per share – basic and diluted |
|
|
|
|
Net (loss) / income |
$ |
(0.65 |
) |
$ |
0.36 |
|
$ |
0.07 |
|
$ |
0.59 |
|
Free Cash Flow |
|
0.25 |
|
|
0.31 |
|
|
0.80 |
|
|
0.86 |
|
Dividends declared |
|
0.29 |
|
|
0.2825 |
|
|
0.87 |
|
|
0.84 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
During the third quarter, Acadian generated
sales of $25.4 million, compared to $26.6 million in the prior year
period. While improved markets for pulpwood drove a 7% increase in
the sales volume of logs, excluding biomass, compared to the prior
year period, biomass volumes fell and there was less activity in
our timber services business. Additionally, the weighted average
selling price, excluding biomass, fell 2% from the prior year
period with weakness in softwood sawlog pricing in Maine mostly
offset by improved prices for pulpwood.
Operating costs and expenses were $20.6 million
during the third quarter, compared to $21.2 million during the
prior year period, with savings from reduced activity in our timber
services business largely offset by higher land management and
reforestation costs due to the timing of these activities and
higher administrative costs resulting from the early settlement of
annual performance fees due to Brookfield LP as a result of the
termination of the management agreement.
Adjusted EBITDA was $5.1 million during the
third quarter, compared to $6.1 million in the prior year period,
while the Adjusted EBITDA margin for the quarter was 20%, compared
to 23% in the prior year period. This year-over-year decrease
reflects the factors discussed above as well as decreased gains
from the sale of timberlands and other assets. Free Cash Flow
during the quarter totaled $4.2 million compared to $5.1 million in
the same period of 2018.
The third quarter net loss of $10.9 million, or
$0.65 per share, was $16.8 million below the prior year period
income of $5.9 million, or $0.36 per share. The variance from the
prior year period is primarily due to the Termination Fee which,
after income tax, reduced net income by $12.8 million or $0.77 per
share. Other factors included the decrease in operating earnings,
for the reasons discussed above, and an unrealized foreign exchange
revaluation loss on U.S. dollar denominated long-term debt during
the third quarter, compared to an unrealized gain in the prior year
period.
During the first nine months of 2019, Acadian’s
sales of $74.2 million were down 2% compared to the prior year
period with decreased total log sales volumes and lower activity in
our timber services business being mostly offset by improved
pricing. Operating costs and expenses of $58.3 million were $0.9
million lower than the prior year period primarily reflecting the
lower log sales volumes and timber services activity offset by
higher land management and reforestation costs due to the timing of
these activities. As a result, year-to-date Adjusted EBITDA fell
slightly to $17.0 million from $17.5 million during the same period
of 2018 while the year-to-date Adjusted EBITDA margin was unchanged
at 23%. Net income, for the nine months ended September 28, 2019
was $1.1 million, or $0.07 per share, a decrease of $8.7 million
over the same period of 2018 primarily due to the Termination Fee,
offset by a year-to-date unrealized foreign exchange revaluation
gain on U.S. dollar denominated long-term debt of $2.9 million,
compared to an unrealized loss of $2.4 million in the prior year
period.
For the nine-month period ended September 28,
2019, the Board of Directors declared dividends of $0.87 per share
or $14.5 million, compared to $0.84 per share or $14.1 million
during the same period of 2018, reflecting the dividend increases
announced in May 2018 and February 2019 amounting to a combined 5%
increase in our quarterly dividend per share. This represents a
Payout Ratio of 108%, which is above our long term annual target,
but in line with expectations given the seasonality of our
operations and the aforementioned dividend increases. We
anticipate that over the long term we will revert to a Payout Ratio
consistent with our target level and in the near term, Acadian’s
cash position supports a Payout Ratio in excess of our target.
Segment Performance
New Brunswick Timberlands
The table below summarizes operating and
financial results for New Brunswick Timberlands.
|
Three Months Ended Sept 28, 2019 |
|
Three Months Ended Sept 29, 2018 |
|
|
Harvest |
Sales |
Sales |
|
Results |
|
Harvest |
Sales |
Sales |
|
Results |
|
|
(000s m3) |
(000s m3) |
Mix |
|
($000s) |
|
(000s m3) |
(000s m3) |
Mix |
|
($000s) |
|
Softwood |
103.7 |
102.7 |
43 |
% |
$ |
5,864 |
|
99.5 |
98.4 |
39 |
% |
$ |
5,417 |
|
Hardwood |
109.1 |
111.1 |
47 |
% |
|
8,188 |
|
105.0 |
96.8 |
38 |
% |
|
7,063 |
|
Biomass |
24.9 |
24.9 |
10 |
% |
|
818 |
|
58.3 |
58.3 |
23 |
% |
|
1,848 |
|
|
237.7 |
238.7 |
100 |
% |
|
14,870 |
|
262.8 |
253.5 |
100 |
% |
|
14,328 |
|
Timber services
and other sales |
|
|
|
|
4,599 |
|
|
|
|
|
5,792 |
|
Sales |
|
|
|
$ |
19,469 |
|
|
|
|
$ |
20,120 |
|
Adjusted EBITDA |
|
|
|
$ |
4,789 |
|
|
|
|
$ |
4,495 |
|
Adjusted
EBITDA margin |
|
|
|
25 |
% |
|
|
|
|
22 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended Sept 28, 2019 |
|
Nine Months Ended Sept 29, 2018 |
|
|
Harvest |
Sales |
Sales |
|
Results |
|
Harvest |
Sales |
Sales |
|
Results |
|
|
(000s m3) |
(000s m3) |
Mix |
|
($000s) |
|
(000s m3) |
(000s m3) |
Mix |
|
($000s) |
|
Softwood |
291.4 |
303.3 |
45 |
% |
$ |
17,817 |
|
305.3 |
309.1 |
42 |
% |
$ |
17,232 |
|
Hardwood |
264.3 |
274.0 |
41 |
% |
|
20,849 |
|
266.2 |
261.7 |
36 |
% |
|
20,096 |
|
Biomass |
99.0 |
99.0 |
14 |
% |
|
3,554 |
|
162.3 |
162.3 |
22 |
% |
|
4,802 |
|
|
654.7 |
676.3 |
100 |
% |
|
42,220 |
|
733.8 |
733.1 |
100 |
% |
|
42,130 |
|
Timber services
and other sales |
|
|
|
|
13,147 |
|
|
|
|
|
14,027 |
|
Sales |
|
|
|
$ |
55,367 |
|
|
|
|
$ |
56,157 |
|
Adjusted EBITDA |
|
|
|
$ |
13,388 |
|
|
|
|
$ |
12,512 |
|
Adjusted
EBITDA margin |
|
|
|
24 |
% |
|
|
|
|
22 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Sales for our New Brunswick Timberlands during
the third quarter were $19.5 million compared to $20.1 million
during the prior year period. The sales volume, excluding biomass,
increased 10% over the prior year, however sales of biomass were
down due to the recent operating curtailment of the customer who
ships the product to export markets. The weighted average selling
price, excluding biomass, during the quarter was $65.71 per m3, an
increase of 3% over the prior year period with prices for all
products improving.
Adjusted EBITDA, at $4.8 million during the
third quarter of 2019, was almost unchanged from $4.5 million in
the prior year period as decreased sales revenues were mostly
offset by decreased operating costs. Adjusted EBITDA margin for the
quarter increased to 25% from 22% in the prior year period fully
benefitting from the weighted average selling price increase as
variable harvest costs per m3, excluding biomass, were almost
unchanged year-over-year.
During the first nine months of 2019, New
Brunswick’s sales totaled $55.4 million down slightly from $56.2
million in the prior year period. The total volume sold, excluding
biomass, was almost unchanged year-over-year and the weighted
average selling price of these products climbed 2% reflecting
strength in softwood sawlog and pulpwood markets. Biomass sales
volumes fell 39% year-over-year due to the current export market
curtailments and revenues from timber services dropped 7% due to
decreased activity. Operating costs of $42.6 million during the
first nine months of 2019 were $1.4 million lower than the prior
year period largely due to lower total sales volumes and decreased
timber services activity. As a result, year-to-date Adjusted EBITDA
improved to $13.4 million from $12.5 million during the same period
of 2018 while the Adjusted EBITDA margin improved to 24% from
22%.
There were no recordable safety incidents among
employees or contractors during the third quarter of 2019. New
Brunswick Timberlands successfully completed a surveillance audit
under the 2015-2019 standard of the Sustainable Forest Initiative®
during the quarter.
Maine Timberlands
The table below summarizes operating and
financial results for Maine Timberlands.
|
Three Months Ended Sept 28, 2019 |
|
Three Months Ended Sept 29, 2018 |
|
|
Harvest |
Sales |
Sales |
|
Results |
|
Harvest |
Sales |
Sales |
|
Results |
|
|
(000s m3) |
(000s m3) |
Mix |
|
($000s) |
|
(000s m3) |
(000s m3) |
Mix |
|
($000s) |
|
Softwood |
49.0 |
49.0 |
66 |
% |
$ |
3,551 |
|
50.0 |
50.6 |
64 |
% |
$ |
4,468 |
|
Hardwood |
26.1 |
25.5 |
34 |
% |
|
2,164 |
|
24.7 |
23.2 |
30 |
% |
|
1,859 |
|
Biomass |
0.3 |
0.3 |
— |
% |
|
4 |
|
4.7 |
4.7 |
6 |
% |
|
7 |
|
|
75.4 |
74.8 |
100 |
% |
|
5,719 |
|
79.4 |
78.5 |
100 |
% |
|
6,334 |
|
Other sales |
|
|
|
|
169 |
|
|
|
|
|
180 |
|
Sales |
|
|
|
$ |
5,888 |
|
|
|
|
$ |
6,514 |
|
Adjusted EBITDA |
|
|
|
$ |
711 |
|
|
|
|
$ |
1,914 |
|
Adjusted
EBITDA margin |
|
|
|
12 |
% |
|
|
|
|
29 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended Sept 28, 2019 |
|
Nine Months Ended Sept 29, 2018 |
|
|
Harvest |
Sales |
Sales |
|
Results |
|
Harvest |
Sales |
Sales |
|
Results |
|
|
(000s m3) |
(000s m3) |
Mix |
|
($000s) |
|
(000s m3) |
(000s m3) |
Mix |
|
($000s) |
|
Softwood |
163.1 |
163.3 |
69 |
% |
$ |
12,471 |
|
167.0 |
167.1 |
67 |
% |
$ |
13,703 |
|
Hardwood |
68.7 |
68.3 |
29 |
% |
|
5,894 |
|
68.1 |
67.1 |
27 |
% |
|
5,269 |
|
Biomass |
3.8 |
3.8 |
2 |
% |
|
12 |
|
16.0 |
16.0 |
6 |
% |
|
25 |
|
|
235.6 |
235.4 |
100 |
% |
|
18,377 |
|
251.1 |
250.2 |
100 |
% |
|
18,997 |
|
Other sales |
|
|
|
|
469 |
|
|
|
|
|
527 |
|
Sales |
|
|
|
$ |
18,846 |
|
|
|
|
$ |
19,524 |
|
Adjusted EBITDA |
|
|
|
$ |
4,594 |
|
|
|
|
$ |
5,947 |
|
Adjusted
EBITDA margin |
|
|
|
24 |
% |
|
|
|
|
30 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Sales totaled $5.9 million for Maine Timberlands
during the third quarter compared to $6.5 million for the same
period last year. The sales volume, excluding biomass, was in line
with the prior year period, however the weighted average selling
price, excluding biomass, fell by 11% due to a combination of
weaker pricing for softwood sawlogs and a product mix more heavily
weighted to softwood pulpwood. Demand for softwood pulpwood
improved providing the opportunity to focus harvesting activities
on retrieving pulpwood that wasn’t harvested in prior years when
markets were very weak.
Adjusted EBITDA for the quarter was $0.7 million
compared to $1.9 million during the prior year period due to lower
value product mix and lower revenue from land sales along with
operating conditions that created the opportunity to complete the
majority of road maintenance and construction activity earlier than
in 2018. The Adjusted EBITDA margin was 12% during the quarter
compared to 29% in the prior year period.
During the first nine months of 2019, Maine
Timberland’s sales of $18.8 million were down from $19.5 million in
the prior year period. The weighted average selling price,
excluding biomass, fell 2% primarily due to a lower value product
mix as the proportion of volume of softwood pulpwood increased.
Operating costs of $14.7 million during the first nine months of
2019 were 3% above the prior year period due to a 3% increase in
variable harvest costs per m3, excluding biomass, and increased
road maintenance and construction costs. As a result of the above
factors, year-to-date Adjusted EBITDA fell to $4.6 million from
$5.9 million during the same period of 2018 while the Adjusted
EBITDA margin declined to 24% from 30% in the prior year.
There were no recordable safety incidents among
employees or contractors during the third quarter of 2019. Maine
Timberlands successfully completed a surveillance audit under the
2015-2019 standard of the Sustainable Forest Initiative® during the
quarter.
Market Outlook
The following contains forward-looking
information about Acadian Timber Corp.’s market outlook for the
remainder of fiscal 2019 and into 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 & paper
products, engineered wood products and fuels. The outlook for
Acadian’s end-use markets is expected to remain stable in the near
term, suggesting that demand and pricing of our products will
generally follow suit.
U.S. housing starts are up 1% to 1.26 million
year-over-year, as of September 2019. Consensus estimates are
calling for this level to be sustained through 2020 with favourable
demand drivers, including lower interest rates, wage growth and
strong U.S. household balance sheets, offset by supply-side
constraints, including labour shortages, increased construction
costs and new regulation.
Benefits from steady expected U.S. demand for
North American softwood lumber in 2020 and significant sawmill
curtailments in western North America are expected to be offset, in
part, by lower offshore exports, available softwood supply in the
U.S. south, and increased wood supply from Central Europe as spruce
forests impacted by a bark beetle are liquidated. Regionally,
Acadian’s softwood sawmill customers continue to operate on full
shifts, and we expect stable demand for our softwood sawtimber
products going into 2020.
Local markets for hardwood sawlogs are expected
to remain balanced for the remainder of the year despite the impact
the U.S.-China trade dispute and slowing Chinese economy have had
on appearance lumber exports as markets for industrial lumber are
expected to remain strong for most of our customers.
Hardwood and softwood pulpwood demand is
expected to remain steady or gradually improve, supported by the
restart of a pulp mill in Maine. Biomass markets in Maine remain
weak, without any significant changes in sight. The New Brunswick
biomass market continues to be supported by steady demand at
attractive prices; however, the export market in New Brunswick has
been curtailed for the remainder of 2019. We expect this
market to return in 2020.
As a leading producer of primary forest products
in eastern Canada and the northeastern U.S., Acadian’s sales are
most closely tied to the performance of local sawmills, pulp mills,
and other wood processing facilities, and our customers generally
have a positive outlook for the remainder of 2019 and as we head
into 2020, despite the mixed indicators for global supply and
demand of wood products.
Quarterly Dividend
Acadian is pleased to announce a dividend of
$0.29 per share, payable on January 15, 2020 to shareholders of
record on December 31, 2019.
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 one of the largest timberland
operators 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'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:Brian
BanfillInterim Chief Financial OfficerTel: 604-669-3141Email:
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. When used in this News Release, 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 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; changes in U.S.
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 income tax law;
economic situation of key customers; 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 each of the Annual Information Form dated March 28, 2019 and the
Management Information Circular dated March 28, 2019, 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 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 / (Loss)(unaudited)
|
Three Months Ended |
|
Nine Months Ended |
|
(CAD thousands, except per share data) |
Sept 28, 2019 |
|
Sept 29, 2018 |
|
Sept 28, 2019 |
|
Sept 29, 2018 |
|
|
|
|
|
|
Sales |
$ |
25,357 |
|
$ |
26,634 |
|
$ |
74,213 |
|
$ |
75,681 |
|
Operating costs and expenses |
|
|
|
|
Cost of sales |
|
17,404 |
|
|
18,694 |
|
|
49,900 |
|
|
51,362 |
|
Selling, administration and other |
|
2,789 |
|
|
2,392 |
|
|
7,412 |
|
|
7,112 |
|
Reforestation |
|
375 |
|
|
31 |
|
|
749 |
|
|
453 |
|
Depreciation and amortization |
|
71 |
|
|
69 |
|
|
215 |
|
|
230 |
|
|
|
20,639 |
|
|
21,186 |
|
|
58,276 |
|
|
59,157 |
|
Operating earnings |
|
4,718 |
|
|
5,448 |
|
|
15,937 |
|
|
16,524 |
|
Interest expense, net |
|
(1,010 |
) |
|
(936 |
) |
|
(2,989 |
) |
|
(2,897 |
) |
Other items |
|
|
|
|
Fair value adjustments and other |
|
139 |
|
|
822 |
|
|
1,409 |
|
|
2,088 |
|
Unrealized exchange (loss) / gain on long-term debt |
|
(1,030 |
) |
|
1,568 |
|
|
2,907 |
|
|
(2,371 |
) |
Management agreement termination fee |
|
(18,000 |
) |
|
— |
|
|
(18,000 |
) |
|
— |
|
Gain on sale of timberlands |
|
333 |
|
|
387 |
|
|
864 |
|
|
850 |
|
Gain / (loss) on disposal of other fixed assets |
|
1 |
|
|
155 |
|
|
2 |
|
|
(93 |
) |
(Loss) / Earnings before income taxes |
|
(14,849 |
) |
|
7,444 |
|
|
130 |
|
|
14,101 |
|
Current income tax recovery / (expense) |
|
1,667 |
|
|
(575 |
) |
|
335 |
|
|
(1,844 |
) |
Deferred income tax recovery / (expense) |
|
2,313 |
|
|
(920 |
) |
|
632 |
|
|
(2,434 |
) |
Net (loss) / income |
$ |
(10,869 |
) |
$ |
5,949 |
|
$ |
1,097 |
|
$ |
9,823 |
|
Net (loss) / income per share – basic and diluted |
$ |
(0.65 |
) |
$ |
0.36 |
|
$ |
0.07 |
|
$ $0.59 |
|
|
|
|
|
|
|
|
|
|
|
Acadian Timber Corp.Interim Condensed
Consolidated Statements of Comprehensive Income /
(Loss)(unaudited)
|
Three Months Ended |
|
Nine Months Ended |
(CAD thousands) |
Sept 28, 2019 |
|
Sept 29, 2018 |
|
Sept 28, 2019 |
|
Sept 29, 2018 |
|
|
|
|
|
Net (loss) / income |
$ |
(10,869 |
) |
$ |
5,949 |
|
$ |
1,097 |
|
$ |
9,823 |
Other comprehensive (loss) / income |
|
|
|
|
Items that may be reclassified subsequently to net income: |
|
|
|
|
Unrealized foreign currency translation gain / (loss) |
|
1,500 |
|
|
(2,228 |
) |
|
(4,447 |
) |
|
3,226 |
Loss on revaluation of land |
|
(9 |
) |
|
— |
|
|
(23 |
) |
|
— |
Deferred income tax recovery |
|
3 |
|
|
— |
|
|
7 |
|
|
— |
Comprehensive (loss) / income |
$ |
(9,375 |
) |
$ |
3,721 |
|
$ |
(3,366 |
) |
$ |
13,049 |
|
|
|
|
|
|
|
|
|
|
|
|
Acadian Timber Corp.Interim Condensed
Consolidated Balance
Sheets(unaudited)
As at(CAD thousands) |
Sept 28, 2019 |
December 31, 2018 |
Assets |
|
|
Current assets |
|
|
Cash and cash equivalents |
$ |
12,900 |
$ |
22,320 |
Accounts receivable and other assets |
|
10,191 |
|
7,230 |
Current taxes receivable |
|
2,695 |
|
— |
Inventory |
|
1,098 |
|
2,756 |
|
|
26,884 |
|
32,306 |
Timber |
|
366,169 |
|
367,901 |
Land, roads and other fixed assets |
|
84,769 |
|
86,103 |
Intangible asset |
|
6,140 |
|
6,140 |
Total assets |
$ |
483,962 |
$ |
492,450 |
Liabilities and shareholders’ equity |
|
|
Current liabilities |
|
|
Short-term debt |
$ |
9,930 |
$ |
— |
Accounts payable and accrued liabilities |
|
11,462 |
|
7,963 |
Current tax liabilities |
|
— |
|
647 |
Dividends payable to shareholders |
|
4,839 |
|
4,714 |
|
|
26,231 |
|
13,324 |
Long-term debt |
|
94,722 |
|
96,595 |
Deferred income tax liability |
|
90,519 |
|
92,119 |
Shareholders’ equity |
|
272,490 |
|
290,412 |
Total liabilities and shareholders’ equity |
$ |
483,962 |
$ |
492,450 |
|
|
|
|
|
Acadian Timber Corp.Interim Condensed
Consolidated Statements of Cash
Flows(unaudited)
|
Three Months Ended |
|
Nine Months Ended |
|
(CAD thousands) |
Sept 28, 2019 |
|
Sept 29, 2018 |
|
Sept 28, 2019 |
|
Sept 29, 2018 |
|
Cash and cash equivalents provided by / (used for): |
|
|
|
|
Operating activities |
|
|
|
|
Net (loss) / income |
$ |
(10,869 |
) |
$ |
5,949 |
|
$ |
1,097 |
|
$ |
9,823 |
|
Adjustments to net (loss) / income: |
|
|
|
|
Deferred income tax (recovery) / expense |
|
(2,313 |
) |
|
920 |
|
|
(632 |
) |
|
2,434 |
|
Depreciation and amortization |
|
71 |
|
|
69 |
|
|
215 |
|
|
230 |
|
Fair value adjustments and other |
|
(139 |
) |
|
(822 |
) |
|
(1,409 |
) |
|
(2,088 |
) |
Unrealized exchange loss / (gain) on long term debt |
|
1,030 |
|
|
(1,568 |
) |
|
(2,907 |
) |
|
2,371 |
|
Gain on sale of timberlands |
|
(333 |
) |
|
(387 |
) |
|
(864 |
) |
|
(850 |
) |
(Gain) / loss on disposal of other fixed assets |
|
(1 |
) |
|
(155 |
) |
|
(2 |
) |
|
93 |
|
Accretion of long-term debt |
|
276 |
|
|
267 |
|
|
861 |
|
|
774 |
|
Net change in non-cash working capital balances and other |
|
(1,079 |
) |
|
(1,511 |
) |
|
(2,114 |
) |
|
(2,561 |
) |
|
|
(13,357 |
) |
|
2,762 |
|
|
(5,755 |
) |
|
10,226 |
|
Financing activities |
|
|
|
|
Borrowings |
|
9,930 |
|
|
— |
|
|
9,930 |
|
|
— |
|
Dividends paid to shareholders |
|
(4,840 |
) |
|
(4,726 |
) |
|
(14,394 |
) |
|
(13,928 |
) |
Common shares repurchased under NCIB |
|
— |
|
|
— |
|
|
(37 |
) |
|
— |
|
|
|
5,090 |
|
|
(4,726 |
) |
|
(4,501 |
) |
|
(13,928 |
) |
Investing activities |
|
|
|
|
Additions to timber, land, roads and other fixed assets |
|
(68 |
) |
|
(159 |
) |
|
(86 |
) |
|
(190 |
) |
Proceeds from sale of timberlands |
|
353 |
|
|
469 |
|
|
920 |
|
|
966 |
|
Proceeds from sale of other fixed assets |
|
1 |
|
|
387 |
|
|
2 |
|
|
574 |
|
|
|
286 |
|
|
697 |
|
|
836 |
|
|
1,350 |
|
Decrease in cash and cash equivalents during the period |
|
(7,981 |
) |
|
(1,267 |
) |
|
(9,420 |
) |
|
(2,352 |
) |
Cash and cash equivalents, beginning of period |
|
20,881 |
|
|
22,866 |
|
|
22,320 |
|
|
23,951 |
|
Cash and cash equivalents, end of period |
$ |
12,900 |
|
$ |
21,599 |
|
$ |
12,900 |
|
$ |
21,599 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliations to Adjusted EBITDA and Free Cash
Flow
|
Three Months Ended |
|
Nine Months Ended |
|
(CAD thousands) |
Sept 28, 2019 |
|
Sept 29, 2018 |
|
Sept 28, 2019 |
|
Sept 29, 2018 |
|
|
|
|
|
|
Net (loss) / income |
$ |
(10,869 |
) |
$ |
5,949 |
|
$ |
1,097 |
|
$ |
9,823 |
|
Add / (deduct): |
|
|
|
|
Interest expense, net |
|
1,010 |
|
|
936 |
|
|
2,989 |
|
|
2,897 |
|
Current income tax (recovery) / expense |
|
(1,667 |
) |
|
575 |
|
|
(335 |
) |
|
1,844 |
|
Deferred income tax (recovery) / expense |
|
(2,313 |
) |
|
920 |
|
|
(632 |
) |
|
2,434 |
|
Depreciation and amortization |
|
71 |
|
|
69 |
|
|
215 |
|
|
230 |
|
Fair value adjustments and other |
|
(139 |
) |
|
(822 |
) |
|
(1,409 |
) |
|
(2,088 |
) |
Management agreement termination fee |
|
18,000 |
|
|
— |
|
|
18,000 |
|
|
— |
|
Unrealized exchange loss / (gain) on long-term debt |
|
1,030 |
|
|
(1,568 |
) |
|
(2,907 |
) |
|
2,371 |
|
Adjusted EBITDA |
$ |
5,123 |
|
$ |
6,059 |
|
$ |
17,018 |
|
$ |
17,511 |
|
Add / (deduct): |
|
|
|
|
Interest paid on debt, net |
|
(708 |
) |
|
(648 |
) |
|
(2,049 |
) |
|
(2,014 |
) |
Additions to timber, land, roads and other fixed assets |
|
(68 |
) |
|
(17 |
) |
|
(86 |
) |
|
(48 |
) |
Gain on sale of timberlands |
|
(333 |
) |
|
(387 |
) |
|
(864 |
) |
|
(850 |
) |
(Gain) / loss on disposal of other fixed assets |
|
(1 |
) |
|
(155 |
) |
|
(2 |
) |
|
93 |
|
Proceeds on sale of timberlands |
|
353 |
|
|
469 |
|
|
920 |
|
|
966 |
|
Proceeds on sale of other fixed assets |
|
1 |
|
|
387 |
|
|
2 |
|
|
574 |
|
Current income tax recovery / (expense) |
|
1,667 |
|
|
(575 |
) |
|
335 |
|
|
(1,844 |
) |
Current tax effect of termination fee |
|
(1,848 |
) |
|
— |
|
|
(1,848 |
) |
|
— |
|
Free Cash Flow |
$ |
4,186 |
|
$ |
5,133 |
|
$ |
13,426 |
|
$ |
14,388 |
|
Dividends declared |
$ |
4,840 |
|
$ |
4,726 |
|
$ |
14,519 |
|
$ |
14,054 |
|
Payout ratio |
|
116 |
% |
|
92 |
% |
|
108 |
% |
|
98 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
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