Investors, analysts and other interested parties
can access Acadian Timber Corp.’s 2017 Third Quarter Results
conference call via webcast on Thursday, October 26, 2017 at 1:00
p.m. ET at www.acadiantimber.com or via teleconference at
1-800-319-4610, toll free in North America. For
overseas calls please dial +1-604-638-5340, at approximately 12:50
p.m. ET. The recorded teleconference rebroadcast can be accessed at
1-800-319-6413 or +1-604-638-9010 and enter passcode 2826.
Acadian Timber Corp. (“Acadian” or the “Company”) (TSX:ADN) today
reported financial and operating results1 for the three months
ended September 30, 2017 (the “third quarter”).
“Demand across Acadian’s sawtimber and hardwood
pulpwood markets remained strong during the third quarter,” said
Mark Bishop, Chief Executive Officer of Acadian. “While seasonally
drier than normal summer weather supported strong third quarter log
production, annual harvest levels will continue to reflect our long
term sustainable targets.”
Acadian reported another strong quarter of
results for the third quarter, benefiting from strong seasonal
demand, favourable operating conditions, and higher and better use
land sales in Maine. In the quarter, we generated Adjusted EBITDA1
of $6.7 million compared to $5.2 million in the prior year period
driven by the impact of stronger log sales volumes, partially
offset by higher operating costs from increased average haul
distances.
Total shareholder dividends during the first
nine months of 2017 were $0.825 per share or $13.8 million,
representing a 10% increase over the same period of 2016. Acadian’s
payout ratio for the nine-month period was 94%, which is in line
with our long term target of 95%.
|
Review of Operations |
|
Financial
and Operating Highlights |
|
|
Three Months Ended |
Nine Months Ended |
(CAD
thousands, except per share information) |
|
|
|
Sept 302017 |
|
|
Sept 242016 |
|
|
Sept 302017 |
|
|
Sept 242016 |
|
Sales volume (000s
m3) |
|
|
|
381.0 |
|
|
351.7 |
|
|
954.4 |
|
|
862.2 |
|
Net sales |
|
|
$ |
22,161 |
|
$ |
19,342 |
|
$ |
57,863 |
|
$ |
54,445 |
|
Net income |
|
|
|
9,702 |
|
|
2,779 |
|
|
18,471 |
|
|
12,951 |
|
Adjusted EBITDA |
|
|
|
6,687 |
|
|
5,153 |
|
|
17,339 |
|
|
15,498 |
|
Free Cash Flow |
|
|
|
5,302 |
|
|
4,195 |
|
|
14,724 |
|
|
13,108 |
|
Dividends declared |
|
|
|
4,601 |
|
|
4,182 |
|
|
13,803 |
|
|
12,548 |
|
Payout ratio |
|
|
|
87% |
|
|
100% |
|
|
94% |
|
|
96% |
|
Per share – basic and
diluted |
|
|
|
|
|
|
Net
income |
|
|
$ |
0.58 |
|
$ |
0.17 |
|
$ |
1.10 |
|
$ |
0.77 |
|
Free Cash
Flow |
|
|
|
0.32 |
|
|
0.25 |
|
|
0.88 |
|
|
0.78 |
|
Dividends declared |
|
|
|
0.27 |
|
|
0.25 |
|
|
0.83 |
|
|
0.75 |
|
|
In the third quarter, Acadian generated net
sales of $22.2 million compared to $19.3 million in the prior year
period primarily due to a 20% increase in log sales volumes. Total
log sales volumes benefited from a 14% increase in softwood sawlog
sales volumes and a 29% increase in hardwood pulpwood sales volumes
resulting from favourable summer harvest conditions and strong
seasonal demand. The weighted average log selling price remained
relatively consistent with the prior year period due to a
favourable change in mix, offset by the impact of foreign
exchange.
Adjusted EBITDA margin increased to 30% from 27%
in the prior year period as the benefits of higher log sales
volumes and stronger sales of higher and better use (HBU) land in
Maine were partially offset by higher operating costs due to longer
average haul distances.
Net income for the third quarter totaled $9.7
million, or $0.58 per share, compared to $2.8 million, or $0.17 per
share, respectively, for the same period in 2016. The increase is
primarily due to higher Adjusted EBITDA as described above and
favourable foreign exchange revaluation of long-term debt.
During the first nine months of 2017, Acadian’s
net sales were $57.9 million, reflecting an improvement over the
prior year period of $54.4 million primarily attributed to a 15%
increase in log sales volumes from favourable harvest conditions
throughout the year, particularly for spruce and fir stands. This
positive impact was partially offset by a 3% decrease in the
weighted average log selling price driven by weaker sawlog and
pulpwood pricing. Adjusted EBITDA improved to $17.3 million from
$15.5 million during this period while the Adjusted EBITDA margin
improved to 30% from 28% benefiting from the aforementioned sales
volume increase as well as higher HBU land sales in Maine. For the
nine months ended September 30, 2017, net income improved to $18.5
million, or $1.10 per share, representing an increase of $5.5
million over the prior year period primarily due to higher Adjusted
EBITDA as described above and favourable foreign exchange
revaluation of U.S. dollar denominated long-term debt.
Acadian’s financial position continues to be
solid with $93.1 million of net liquidity as at September 30, 2017,
including funds available under the Company’s Revolving Facility
and a stand-by equity commitment from Brookfield.
Total shareholder dividends during the first
nine months of 2017 were $0.825 per share or $13.8 million,
representing a 10% increase over the same period of 2016 ($0.75 per
share or $12.5 million).
New Brunswick Timberlands
The table below summarizes operating and
financial results for New Brunswick Timberlands.
|
|
|
|
Three Months Ended Sept 30, 2017 |
|
Three Months Ended Sept 24, 2016 |
|
Harvest |
Sales |
Results |
|
Harvest |
Sales |
Results |
|
(000s m3) |
(000s m3) |
($000s) |
|
(000s m3) |
(000s m3) |
($000s) |
Softwood |
113.0 |
115.2 |
$ |
6,265 |
|
97.4 |
99.2 |
$ |
5,258 |
Hardwood |
99.5 |
103.2 |
|
7,396 |
|
98.5 |
91.2 |
|
6,663 |
Biomass |
70.2 |
70.2 |
|
863 |
|
92.3 |
92.3 |
|
1,660 |
|
282.7 |
288.6 |
|
14,524 |
|
288.2 |
282.7 |
|
13,581 |
Other
sales |
|
|
|
1,023 |
|
|
|
|
747 |
Net
sales |
|
|
$ |
15,547 |
|
|
|
$ |
14,328 |
Adjusted EBITDA |
|
|
$ |
5,454 |
|
|
|
$ |
4,608 |
Adjusted EBITDA margin |
|
|
35% |
|
|
|
|
32% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended Sept 30, 2017 |
|
Nine Months Ended Sept 24, 2016 |
|
Harvest |
Sales |
Results |
|
Harvest |
Sales |
Results |
|
(000s m3) |
(000s m3) |
($000s) |
|
(000s m3) |
(000s m3) |
($000s) |
Softwood |
276.1 |
281.1 |
$ |
15,561 |
|
243.8 |
245.2 |
$ |
13,205 |
Hardwood |
276.8 |
290.0 |
|
22,184 |
|
257.6 |
257.8 |
|
20,697 |
Biomass |
154.8 |
154.8 |
|
2,611 |
|
166.4 |
166.4 |
|
4,559 |
|
707.7 |
725.9 |
|
40,356 |
|
667.8 |
669.4 |
|
38,461 |
Other sales |
|
|
|
1,288 |
|
|
|
|
1,538 |
Net sales |
|
|
$ |
41,644 |
|
|
|
$ |
39,999 |
Adjusted EBITDA |
|
|
$ |
13,610 |
|
|
|
$ |
13,453 |
Adjusted EBITDA margin |
|
|
33% |
|
|
|
|
34% |
|
|
|
|
|
|
|
|
|
Three months ended September 30, 2017:
Net sales totaled $15.5 million compared to
$14.3 million for the same period last year. Excluding biomass, log
sales volumes increased 15% to 218 thousand m3 from 190 thousand m3
in the prior year period, largely driven by continued strength of
softwood sawlog and hardwood pulpwood sales reflecting favourable
harvest conditions.
The weighted average log selling price for the
quarter of $62.55 per m3 was in-line with prior year of $62.65 per
m3 as a 3% increase in softwood sawlog prices from continued strong
demand, was offset by a 5% decrease in hardwood pulpwood prices
reflecting seasonally higher consumer inventories.
Strong local demand for biomass products has
recently tapered, with sales volumes decreasing 24% year-over-year.
Overall, the gross margin earned on our biomass products decreased
32% compared to the third quarter of 2016 reflecting limited export
markets for products.
Adjusted EBITDA and costs for the quarter were
$5.5 million and $10.1 million, respectively, compared to $4.6
million and $9.7 million, respectively, in the third quarter of
2016 primarily due to the aforementioned increase in log sales
volumes which was partially offset by a marginal increase in
variable costs per m3 due to longer average haul distances. As a
result, Adjusted EBITDA margin for the quarter increased to 35%
from 32% in the prior year.
Nine months ended September 30, 2017:
Net sales of $41.6 million, which increased $1.6
million compared to the same period last year, benefited from a 14%
increase in log sales volumes which was partially offset by the
impact of marginally lower selling prices. Costs of $28.0 million
were $1.5 million higher than the prior year due to the
aforementioned increase in sales volumes, as variable costs per m3
remained flat while operating costs were impacted by timing of
maintenance activities. As a result, Adjusted EBITDA was $13.6
million, an increase of $0.2 million compared to the prior year
period, while Adjusted EBITDA margin decreased to 33% from 34%. As
New Brunswick Timberlands remains disciplined in managing harvest
levels consistent with its forest management plan, full year 2017
sales volumes are expected to be consistent with the prior
year.
SafetyThere were two minor recordable safety
incidents among employees and contractors during the third quarter
of 2017.
Maine Timberlands
The table below summarizes operating and
financial results for Maine Timberlands.
|
|
|
|
Three Months Ended Sept 30, 2017 |
Three Months Ended Sept 24, 2016 |
|
Harvest |
Sales |
Results |
Harvest |
Sales |
Results |
|
(000s m3) |
(000s m3) |
($000s) |
(000s m3) |
(000s m3) |
($000s) |
Softwood |
35.0 |
34.9 |
$ |
2,592 |
36.3 |
36.2 |
$ |
2,878 |
Hardwood |
56.8 |
50.2 |
|
3,799 |
29.7 |
25.6 |
|
1,977 |
Biomass |
7.3 |
7.3 |
|
11 |
7.2 |
7.2 |
|
23 |
|
99.1 |
92.4 |
|
6,402 |
73.2 |
69.0 |
|
4,878 |
Other
sales |
|
|
|
212 |
|
|
|
136 |
Net
sales |
|
|
$ |
6,614 |
|
|
$ |
5,014 |
Adjusted EBITDA |
|
|
$ |
1,551 |
|
|
$ |
749 |
Adjusted EBITDA margin |
|
|
23% |
|
|
|
15% |
|
|
|
|
|
Nine Months Ended Sept 30, 2017 |
Nine Months Ended Sept 24, 2016 |
|
Harvest |
Sales |
Results |
Harvest |
Sales |
Results |
|
(000s m3) |
(000s m3) |
($000s) |
(000s m3) |
(000s m3) |
($000s) |
Softwood |
114.4 |
114.0 |
$ |
8,498 |
113.3 |
112.7 |
$ |
8,796 |
Hardwood |
100.0 |
95.4 |
|
7,235 |
68.1 |
64.8 |
|
5,259 |
Biomass |
19.1 |
19.1 |
|
29 |
15.3 |
15.3 |
|
76 |
|
233.5 |
228.5 |
|
15,762 |
196.7 |
192.8 |
|
14,131 |
Other sales |
|
|
|
457 |
|
|
|
315 |
Net sales |
|
|
$ |
16,219 |
|
|
$ |
14,446 |
Adjusted EBITDA |
|
|
$ |
4,616 |
|
|
$ |
2,863 |
Adjusted EBITDA margin |
|
|
28% |
|
|
|
20% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended September 30, 2017:
Net sales totaled $6.6 million compared to $5.0
million during the prior year period, benefiting from a meaningful
year over year increase in hardwood log sales volumes which
increased from 26 thousand m3 to 50 thousand m3. This increase was
driven primarily by favourable harvest conditions relative to the
same quarter of 2016 and an increase in regional market share. We
believe that Acadian has been able to capture additional market
share, in part, because it has built up a strong track record of
reliability over time, and also due to its Sustainable Forestry
Initiative® certification, which is a requirement of certain
customers.
The weighted average log selling price in
Canadian dollar terms was $75.07 per m3, compared to $78.56 per m3
in the same period of 2016. The weighted average log selling price
in U.S. dollar terms was relatively consistent with the prior year
period as the impact of higher relative hardwood sawlog sales was
offset by a 3% decline in softwood sawlog prices resulting from a
change in product mix.
Costs for the third quarter were $5.4 million,
compared to $4.3 million during the same period in 2016, due to the
aforementioned increase in sales volumes, while variable costs per
m3 remained flat compared to the prior year period. Adjusted EBITDA
for the quarter was $1.6 million, compared to $0.7 million in the
prior year period while Adjusted EBITDA margin increased to 23%
from 15% due primarily to the aforementioned sales increase as well
as the benefit of HBU land sales.
Nine months ended September 30, 2017:
Net sales were $16.2 million, or $1.8 million
higher than the first nine months of 2016, primarily due to a 18%
increase in log sales volumes reflecting favourable harvest
conditions, while weighted average log selling prices decreased 5%
due to foreign exchange and impact of high customer inventories
earlier in the year.
Costs were $13.4 million or $1.7 million higher
than the same period of 2016 largely due to higher sales volumes
and longer average haul distances. Adjusted EBITDA was $4.6
million, an increase of $1.7 million compared to the same period
last year, while Adjusted EBITDA margin increased to 28% from 20%
primarily driven by the benefit of HBU land sales.
Safety
There were no recordable safety incidents among
employees or contractors during the third quarter of 2017.
Freehold Timberlands
Maine Timberlands invested $0.5 million during the first nine
months of 2017 on approximately 1,200 acres of freehold timberlands
to eliminate third party common and undivided ownership interests
which will strengthen our regional operating position.
Market Outlook
The following contains forward-looking
statements about Acadian Timber Corp.’s market outlook for the
remainder of fiscal 2017. 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. Sluggish wage growth, tight construction labour
markets and Fed rate hikes remain as headwinds, however, the
underlying fundamental driver of pent-up household formation
continues to strengthen. While economic forecasters have continued
to revise their outlook for U.S. housing starts mainly reflecting
near term supply side headwinds, they continue to call for steady
growth, with year-over-year forecast growth averaging approximately
7% for 2018 and 6% for 2019, up from about 3% in 2017. Residential
home improvements are also expected to remain strong. Over the
longer term, pent up demand continues to build suggesting a
continued and extended ramp up in housing construction. Demand
growth expectations for North American sawtimber remain in the 3-4%
per year range for the next several years to support expanding
domestic construction needs.
Aside from improving U.S. housing markets, a
number of additional factors including a strengthening Canadian
dollar, wildfires in the BC Interior, and severe hurricane activity
in the Caribbean and US South, have helped push lumber prices to
multi-year highs, with average year to date third quarter 2017
benchmark prices sitting 25% above year-ago levels. We anticipate
robust lumber pricing will continue to support continued stable
sawtimber pricing across our markets well into next year.
The U.S. Department of Commerce announced during
the third quarter of 2017 that it had postponed the final
determinations in the ongoing antidumping (ADD) and countervailing
duty (CVD) investigations of Canadian lumber imports from September
6 to no later than November 14. With this delay, the so-called 'gap
period' (which started on August 25) is expected to extend for four
months until final duties come back in early January 2018 following
the final injury determination. For most of the 'gap period,'
Canadian lumber imports to the U.S. will only face 7% preliminary
ADDs. For a short window around year-end, Canadian producers will
face zero duties on lumber shipments to the U.S. as the preliminary
ADDs will also expire by then. Strength in lumber markets, combined
with supply side factors is broadly expected to continue to support
a pass through of duties to the market through to the end of
year.
Canada and the U.S. could not agree on a
softwood lumber deal before the North American Free Trade (NAFTA)
negotiations began in mid-August. As widely anticipated, NAFTA
discussions appear to have now positioned a new softwood lumber
agreement as a second priority for negotiators. A quota-based
softwood lumber deal may still be actionable, but the two sides
remain at odds on the actual quota level in addition to a “hot
market clause” which would provide Canada additional market access
in the event American suppliers can’t meet domestic needs.
Additionally, the traditional treatment of Atlantic lumber
producers and Quebec border mills in any settlement remains an
objective for Canadian negotiators.
Hardwood sawtimber markets remain strong and
stable and are unaffected by U.S. trade initiatives. We remain
encouraged that hardwood pulpwood markets remain historically
strong, and that Acadian continues to be a preferred partner for
hardwood fibre supply to this important market segment. Acadian’s
domestic biomass markets remain oversupplied reflecting both weak
paper sector demand and challenging wood biomass generation markets
due to the combination of low natural gas prices and declining
subsidies. The anticipated recovery in export biomass shipments
from our New Brunswick operations has been delayed until at least
the second half of 2018.
As always, Acadian management remains vigilant
in pursuing cost efficiencies across the business, in addition to
remaining highly focused on the sustainable management of our
timberland estate. With a strong balance sheet, and highly capable
operating team, we remain well positioned to meet our quarterly
distributable cash commitments for the foreseeable future. On
behalf of the board and management of Acadian, I would like to
thank all our shareholders for their ongoing support.
Quarterly
Dividend
Acadian is pleased to announce a dividend of
$0.275 per share, payable on January 15, 2018 to shareholders of
record on December 31, 2017.
* * * * * * * * *
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 management 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
100 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 Relations
Tel:
604-661-9622Email: jsyrnyk@acadiantimber.com
* * * * * * * * *
Forward-Looking StatementsThis 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 29, 2017 and the Management Information Circular
dated March 29, 2017, 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 Consolidated Statements of Net Income |
(unaudited) |
|
|
Three Months Ended |
Nine Months Ended |
(CAD
thousands) |
Sept 302017 |
|
Sept 242016 |
|
Sept 302017 |
|
Sept 242016 |
|
|
|
|
|
|
Net
sales |
$ |
22,161 |
|
$ |
19,342 |
|
$ |
57,863 |
|
$ |
54,445 |
|
Operating costs and
expenses |
|
|
|
|
Cost of
sales |
|
13,949 |
|
|
12,380 |
|
|
36,764 |
|
|
34,027 |
|
Selling,
administration and other |
|
1,791 |
|
|
1,460 |
|
|
5,083 |
|
|
4,530 |
|
Reforestation |
|
96 |
|
|
430 |
|
|
494 |
|
|
564 |
|
Depreciation and amortization |
|
78 |
|
|
124 |
|
|
233 |
|
|
371 |
|
|
|
15,914 |
|
|
14,394 |
|
|
42,574 |
|
|
39,492 |
|
Operating earnings |
|
6,247 |
|
|
4,948 |
|
|
15,289 |
|
|
14,953 |
|
Interest expense,
net |
|
(698 |
) |
|
(733 |
) |
|
(2,189 |
) |
|
(2,186 |
) |
Other items |
|
|
|
|
Fair
value adjustments |
|
(269 |
) |
|
333 |
|
|
1,020 |
|
|
2,236 |
|
Unrealized exchange gain / (loss) on long-term debt |
|
5,799 |
|
|
(921 |
) |
|
7,054 |
|
|
5,133 |
|
Gain on
sale of timberlands |
|
362 |
|
|
81 |
|
|
1,817 |
|
|
174 |
|
Earnings before income taxes |
|
11,441 |
|
|
3,708 |
|
|
22,991 |
|
|
20,310 |
|
Current income tax
expense |
|
(549 |
) |
|
(7 |
) |
|
(816 |
) |
|
(8 |
) |
Deferred
income tax expense |
|
(1,190 |
) |
|
(922 |
) |
|
(3,704 |
) |
|
(7,351 |
) |
Net
income |
$ |
9,702 |
|
$ |
2,779 |
|
$ |
18,471 |
|
$ |
12,951 |
|
Net
income per share – basic and diluted |
$ |
0.58 |
|
$ |
0.17 |
|
$ |
1.10 |
|
$ |
0.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acadian Timber Corp. |
Interim Consolidated Statements of Comprehensive
Income |
(unaudited) |
|
|
Three Months Ended |
Nine Months Ended |
(CAD thousands) |
Sept 302017 |
|
Sept 242016 |
Sept 302017 |
|
Sept 242016 |
|
|
|
|
|
|
Net income |
$ |
9,702 |
|
$ |
2,779 |
$ |
18,471 |
|
$ |
12,951 |
|
Other
comprehensive (loss) / income |
|
|
|
|
Items that
may be subsequently reclassified to net income: |
|
|
|
|
Unrealized foreign currency translation (loss) / gain |
|
(7,775 |
) |
|
1,176 |
|
(9,151 |
) |
|
(7,146 |
) |
Comprehensive income |
$ |
1,927 |
|
$ |
3,955 |
$ |
9,320 |
|
$ |
5,805 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acadian Timber Corp. |
Interim Consolidated Balance Sheets |
(unaudited) |
|
As at(CAD thousands) |
September 30, 2017 |
|
December 31, 2016 |
|
|
|
|
|
ASSETS |
|
|
|
|
Current Assets |
|
|
|
|
Cash and
cash equivalents |
$ |
20,277 |
|
$ |
19,654 |
Accounts
receivable and other assets |
|
13,176 |
|
|
6,952 |
Inventory |
|
1,363 |
|
|
2,149 |
|
|
34,816 |
|
|
28,755 |
Timber |
|
321,273 |
|
|
328,477 |
Land, roads and other
fixed assets |
|
89,424 |
|
|
91,206 |
Intangible assets |
|
6,140 |
|
|
6,140 |
|
$ |
451,653 |
|
$ |
454,578 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
Current
liabilities |
|
|
Accounts
payable and accrued liabilities |
$ |
11,169 |
|
$ |
3,529 |
Dividends
payable to shareholders |
|
4,601 |
|
|
4,183 |
|
|
15,770 |
|
|
7,712 |
Long-term debt |
|
90,095 |
|
|
97,066 |
Deferred income tax
liability |
|
82,420 |
|
|
81,949 |
Shareholders’ equity |
|
263,368 |
|
|
267,851 |
|
$ |
451,653 |
|
$ |
454,578 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Acadian Timber Corp. |
Interim Consolidated Statements of Cash Flows |
(unaudited) |
|
|
Three Months Ended |
Nine Months Ended |
(CAD
thousands) |
Sept 302017 |
|
Sept 242016 |
|
Sept 302017 |
|
Sept 242016 |
|
Cash
provided by / (used for): |
|
|
|
|
Operating
activities |
|
|
|
|
Net income |
$ |
9,702 |
|
$ |
2,779 |
|
$ |
18,471 |
|
$ |
12,951 |
|
Adjustments to net
income: |
|
|
|
|
Deferred
income tax expense |
|
1,190 |
|
|
922 |
|
|
3,704 |
|
|
7,351 |
|
Depreciation and amortization |
|
78 |
|
|
124 |
|
|
233 |
|
|
371 |
|
Fair
value adjustments |
|
269 |
|
|
(333 |
) |
|
(1,020 |
) |
|
(2,236 |
) |
Unrealized exchange (gain) / loss on long term debt |
|
(5,799 |
) |
|
921 |
|
|
(7,054 |
) |
|
(5,133 |
) |
Interest
expense, net |
|
698 |
|
|
733 |
|
|
2,189 |
|
|
2,186 |
|
Interest
paid, net |
|
(671 |
) |
|
(708 |
) |
|
(2,109 |
) |
|
(2,107 |
) |
Gain on
sale of timberlands |
|
(362 |
) |
|
(81 |
) |
|
(1,817 |
) |
|
(174 |
) |
Net
change in non-cash working capital and other |
|
(1,027 |
) |
|
1,001 |
|
|
1,054 |
|
|
1,521 |
|
|
|
4,078 |
|
|
5,358 |
|
|
13,651 |
|
|
14,730 |
|
Financing
activities |
|
|
|
|
Dividends
paid to shareholders |
|
(4,601 |
) |
|
(4,182 |
) |
|
(13,385 |
) |
|
(12,548 |
) |
|
|
(4,601 |
) |
|
(4,182 |
) |
|
(13,385 |
) |
|
(12,548 |
) |
Investing
activities |
|
|
|
|
Additions to timber,
land, roads and other fixed assets |
|
(225 |
) |
|
(245 |
) |
|
(843 |
) |
|
(279 |
) |
Acquisition of Katahdin
Timberlands LLC |
|
— |
|
|
— |
|
|
(1,276 |
) |
|
— |
|
Proceeds from sale of
timberlands |
|
382 |
|
|
83 |
|
|
2,476 |
|
|
178 |
|
|
|
157 |
|
|
(162 |
) |
|
357 |
|
|
(101 |
) |
(Decrease) / increase
in cash and cash equivalents during the period |
|
(366 |
) |
|
1,014 |
|
|
623 |
|
|
2,081 |
|
Cash and
cash equivalents, beginning of period |
|
20,643 |
|
|
18,783 |
|
|
19,654 |
|
|
17,716 |
|
Cash and cash equivalents, end of period |
$ |
20,277 |
|
$ |
19,797 |
|
$ |
20,277 |
|
$ |
19,797 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliations to Adjusted EBITDA and Free Cash
Flow |
|
|
Three Months Ended |
Nine Months Ended |
(CAD
thousands) |
Sept 302017 |
|
Sept 242016 |
|
Sept 302017 |
|
Sept 242016 |
|
|
|
|
|
|
Net income |
$ |
9,702 |
|
$ |
2,779 |
|
$ |
18,471 |
|
$ |
12,951 |
|
Add / (deduct): |
|
|
|
|
Interest
expense, net |
|
698 |
|
|
733 |
|
|
2,189 |
|
|
2,186 |
|
Current
income tax expense |
|
549 |
|
|
7 |
|
|
816 |
|
|
8 |
|
Deferred
income tax expense |
|
1,190 |
|
|
922 |
|
|
3,704 |
|
|
7,351 |
|
Depreciation and amortization |
|
78 |
|
|
124 |
|
|
233 |
|
|
371 |
|
Fair
value adjustments |
|
269 |
|
|
(333 |
) |
|
(1,020 |
) |
|
(2,236 |
) |
Unrealized exchange (gain) / loss on long-term debt |
|
(5,799 |
) |
|
921 |
|
|
(7,054 |
) |
|
(5,133 |
) |
Adjusted EBITDA |
|
6,687 |
|
|
5,153 |
|
|
17,339 |
|
|
15,498 |
|
Add / (deduct): |
|
|
|
|
Interest
paid on debt, net |
|
(671 |
) |
|
(708 |
) |
|
(2,109 |
) |
|
(2,107 |
) |
Additions
to timber, land, roads and other fixed assets |
|
(185 |
) |
|
(245 |
) |
|
(349 |
) |
|
(279 |
) |
Gain on
sale of timberlands |
|
(362 |
) |
|
(81 |
) |
|
(1,817 |
) |
|
(174 |
) |
Proceeds
from sale of timberlands |
|
382 |
|
|
83 |
|
|
2,476 |
|
|
178 |
|
Current
income tax expense |
|
(549 |
) |
|
(7 |
) |
|
(816 |
) |
|
(8 |
) |
Free Cash Flow |
$ |
5,302 |
|
$ |
4,195 |
|
$ |
14,724 |
|
$ |
13,108 |
|
Dividends declared |
$ |
4,601 |
|
$ |
4,182 |
|
$ |
13,803 |
|
$ |
12,548 |
|
Payout ratio |
|
87% |
|
|
100% |
|
|
94% |
|
|
96% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 This news release makes reference to Adjusted EBITDA, 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.
Acadian’s management defines Adjusted EBITDA as earnings before
interest, taxes, fair value adjustments, recovery of or impairment
of land and roads, 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.
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