Acadian Timber Corp. Reports Second Quarter Results

EDMUNDSTON, New Brunswick, Aug. 06, 2025 (GLOBE NEWSWIRE) — Acadian Timber Corp. (“Acadian” or the “Company”) (TSX:ADN) today reported financial and operating results1 for the three months ended June 28, 2025 (the “second quarter”).

“During the second quarter, Acadian delivered mixed results,” said Adam Sheparski, President and Chief Executive Officer. “Steady operations in New Brunswick were offset by lower production in Maine, where we continue developing our new internal logging operations. We remain confident that these new operations will benefit Acadian over the long term.”

Acadian generated sales of $17.1 million, compared to $41.2 million in the prior year period. The second quarter of 2024 included $19.7 million in carbon credit sales, while no carbon credit sales occurred in the second quarter of 2025. Acadian generated $0.8 million of Free Cash Flow during the second quarter and declared dividends of $5.2 million or $0.29 per share to our shareholders. Acadian’s balance sheet remains solid with $15.1 million of net liquidity as at June 28, 2025, which includes funds available under our credit facilities.

1 This news release makes reference to “Adjusted EBITDA”, which Acadian’s management defines as net income before interest, income taxes, fair value adjustments, non-cash cost of sales related to carbon credits, recovery of or impairment of land and roads and depreciation and amortization, and to “Adjusted EBITDA margin”, which is Adjusted EBITDA as a percentage of sales. Reference is also made to “Free Cash Flow”, which Acadian’s management defines as Adjusted EBITDA less interest paid, current income tax expense, capital expenditures excluding acquisitions of timberlands and non-cash expenditures, and mandatory debt repayments, plus net proceeds from the sale of timberlands and other fixed assets (proceeds less gains or losses). Reference made to “Payout Ratio” is defined as dividends declared divided by Free Cash Flow and “Payout Ratio with DRIP” is defined as dividends paid in cash divided by Free Cash Flow. Management believes that Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow, and Payout Ratios are key performance measures in evaluating Acadian’s operations and are important in enhancing investors’ understanding of the Company’s operating performance. Adjusted EBITDA and Adjusted EBITDA margin are indicative of the underlying profitability of Acadian’s operating segments and are used to evaluate operational performance. Free Cash Flow is used to evaluate Acadian’s ability to generate sustainable cash flows from our operations that are available for dividends, repurchases of common shares, debt reduction, acquisitions, and other capital allocation activities. Payout Ratios are used to evaluate Acadian’s ability to fund its distribution using Free Cash Flow. Reference is also made to “net liquidity” which includes cash and cash equivalents and funds available under credit facilities less amounts reserved to support the minimum cash balance related to long‐term debt. Please refer to the section entitled “Non-IFRS Measures” in Management’s Discussion and Analysis for further details.

Review of Operations

Financial and Operating Highlights

1. Seasonal fluctuations in timber volume and variability in carbon credit revenue render quarterly Payout Ratios not meaningful.

While the second quarter of the year is traditionally our weakest due to seasonal operating conditions, operating activity in Maine was impacted by prolonged wet conditions which significantly delayed the commencement of deliveries in the spring.

Acadian generated revenue from timber sales and services revenue of $17.1 million during the second quarter, compared to $21.5 million in the prior year period. The second quarter of the prior year also included $19.7 million in carbon credit sales, while no carbon credit sales occurred in the second quarter of 2025.

Revenue from timber sales and services decreased primarily due to lower timber sales volumes in Maine, reduced timber services activity, and a decrease in the weighted average selling price of timber. Timber sales volume, excluding biomass, decreased 13% compared to the second quarter of 2024. Timber sales volumes increased in New Brunswick driven by strong demand for softwood sawlogs and increased harvesting capacity. However, this increase was offset by lower sales volumes in Maine, as a result of unfavourable weather conditions combined with lower production during the ramp-up of internal logging operations. Timber services revenue decreased 41% reflecting a favourable change in customer mix which redirected harvesting from Crown licensed timberlands to our freehold operations. The shift decreased our timber services revenue and increased sales from our freehold timberlands.

Weighted average selling price, excluding biomass, decreased 4% year-over-year. Softwood sawlog and pulpwood prices remained relatively stable, as compared to the second quarter of 2024. Hardwood sawlog prices decreased as compared to the prior year period due to continued weakness in lumber markets, while hardwood pulpwood pricing decreased due to shorter hauling distances and lower demand compared to the prior year period. Lower fuel adjustment surcharges, resulting from lower fuel prices, particularly in New Brunswick, also impacted pricing.

Operating costs and expenses were $15.4 million during the second quarter, compared to $32.2 million during the prior year period. Included in operating costs and expenses for the second quarter of 2024 was $15.2 million related to sales of carbon credits. Operating costs and expenses related to timber sales and services decreased $1.5 million from the prior year period as a result of decreased timber sales volumes and timber services activity, partially offset by higher average operating costs and expenses per m3 produced in Maine as a result of the transition to internal logging operations and a more fixed cost structure.

Adjusted EBITDA was $2.4 million during the second quarter compared to $20.6 million in the prior year period. Included in Adjusted EBITDA in the prior year period was $15.7 million related to carbon credit sales. Adjusted EBITDA margin for the quarter was 14% compared to 50% in the prior year period. Free Cash Flow was $0.8 million compared to $16.4 million in the prior year period.

Net income for the second quarter totaled $2.7 million, or $0.15 per share, compared to net income of $7.9 million, or $0.46 per share, in the same period of 2024, due to lower operating income and higher interest expense, partially offset by lower income tax expense.

During the first half of 2025, Acadian generated revenue from timber sales and services of $42.0 million compared to $45.4 million in the prior year period. Carbon credit sales contributed an additional $24.6 million to sales in the first half of 2024 while no carbon credit sales occurred in the first half of 2025.

Timber sales volumes, excluding biomass, and the weighted average selling price both decreased by 4%, as compared to the first half of 2024. Operating costs and expenses of $35.8 million were $17.6 million lower year-over-year. Included in operating costs and expenses for the first half of 2024 were $18.9 million related to carbon credit sales. Operating costs and expenses related to timber sales and services increased 4% compared to the prior year period with the impact of reduced sales volumes offset by higher average operating costs and expenses per m3 produced in Maine.

Adjusted EBITDA of $7.1 million was $24.1 million lower compared to the prior year period with $19.8 million attributable to the sale of carbon credits in 2024.

For the six months ended June 28, 2025, net income was $6.3 million, or $0.35 per share, a decrease of $7.6 million compared to the prior year period, primarily the result of lower operating income partially offset by lower income tax expense.

Segment Performance

New Brunswick Timberlands

The table below summarizes operating and financial results for New Brunswick Timberlands:

Sales for New Brunswick Timberlands were $14.4 million compared to $16.2 million during the prior year period, with increased sales volumes offset by a lower weighted average selling price and lower timber services activity. Timber sales volume, excluding biomass, increased 4% due primarily to a favourable change in customer mix which redirected harvesting from Crown licensed timberlands to our freehold operations. The shift decreased our timber services revenue and increased sales from our freehold timberlands. Biomass sales volume increased significantly due to increased demand.

The weighted average selling price, excluding biomass, for the second quarter was $77.44 per m3, or 4% lower than the prior year period. Softwood sawlog and softwood pulpwood pricing increased 5% and 2% primarily due to stable demand. These increases were offset by a 4% decrease in hardwood sawlog pricing due to weakness in hardwood lumber markets and a 7% decrease in hardwood pulpwood pricing resulting from shorter hauling distances. Lower fuel adjustment surcharges resulting from lower fuel prices also impacted pricing.

Operating costs and expenses were $10.7 million during the second quarter, compared to $11.8 million in the prior year period. Increased harvesting activity was offset by decreased weighted average variable costs and lower timber services activity. Weighted average variable costs, excluding biomass, decreased 5% as a result of a higher proportion of softwood products which carry lower variable costs, and lower fuel adjustment costs, partially offset by increased contractor rates.

Adjusted EBITDA for the quarter was $4.0 million compared to $4.5 million during the prior year period and Adjusted EBITDA margin was 27% compared to 28%.

During the first half of 2025, New Brunswick Timberlands’ sales of $36.5 million were 3% higher than the prior year period. Timber sales volume, excluding biomass, increased by 10% due to greater contractor availability. However, this was offset by a 4% decrease in the weighted average selling price and reduced timber services activity. Operating costs and expenses totaled $26.9 million, an increase of $2 million from the prior year, primarily reflecting higher sales volumes and increased contractor rates, partially offset by a greater proportion of softwood products which carry lower variable costs, and lower fuel adjustment costs. Adjusted EBITDA was $9.9 million compared to $10.5 million in the first half of 2024, and Adjusted EBITDA margin was 27% compared to 30%.

Maine Timberlands

Internal Logging Operations

Prior to January 1, 2025, all harvesting operations in Maine were performed by third-party contractors. During the first quarter of 2025, Acadian established its own internal logging operations. This occurred through two initiatives.

In January 2025, Acadian purchased several pieces of harvesting equipment for $2.4 million and hired equipment operators to conduct harvesting operations on Acadian’s Maine Timberlands.

On February 28, 2025, Acadian acquired certain logging and related assets of A & A Brochu, LLC (“A & A Brochu”) and its affiliates for total cash consideration of $6.9 million. The assets include harvesting, trucking and road working equipment and related real estate which, combined with an established workforce, constitute a portion of A & A Brochu’s logging operation in Maine.

Although some operations will continue to be performed by external contractors in Maine in the near term, these initiatives represent a significant transition away from contracted logging operations in Maine. As expected during ramp-up, during the first half of 2025, production volumes were well below anticipated long-term levels, and operating costs per m3 of timber produced were elevated relative to long-term targets. Additionally, the transition to a more fixed cost structure has resulted in changes from historical cost patterns, with costs less directly tied to revenue generated. This impact is amplified in the second quarter because of the lower sales volumes.

Acadian is actively investing in operator training programs, optimizing equipment utilization, and expanding its operational workforce to support this strategic shift and complete the ramp-up. These efforts are designed to enhance efficiency, build long-term capabilities, and ensure sustained cost improvements. As internal operations continue to scale, Acadian expects to increase production capacity and drive greater cost efficiency in Maine.

The table below summarizes operating and financial results for Maine Timberlands:

Sales for Maine Timberlands during the second quarter totaled $2.7 million compared to $5.5 million in the prior year period. Timber sales volume, excluding biomass, decreased 59% reflecting unfavourable weather conditions and the short-term productivity constraints discussed above.

The weighted average selling price, excluding biomass, in Canadian dollar terms was $98.73 per m3, compared to $89.97 per m3 during the same period of 2024. In U.S. dollar terms, the weighted average selling price, excluding biomass, was $71.58 per m3, compared to $65.76 per m3 in 2024. Increased softwood sawlog pricing of 4% resulting from strong demand and a favourable product mix was offset by a decrease in hardwood pulpwood pricing of 6% resulting from a decrease in demand. Hardwood sawlog and softwood pulpwood volumes were minimal during the quarter.

Operating costs and expenses for the second quarter were $4.1 million, compared to $4.6 million during the same period in 2024. Decreased costs resulting from lower timber sales volumes were partially offset by higher average operating costs and expenses per m3 produced. This increase is attributable to the lower production during the ramp-up of internal logging operations, as well as the transition to a more fixed cost structure.

Adjusted EBITDA for the quarter was $(0.9) million compared to $0.9 million during the prior year period and Adjusted EBITDA margin was (35)% compared to 17%.

During the first half of 2025, Maine Timberlands’ sales were $5.5 million compared to $10.1 million in the first half of 2024. Timber sales volumes, excluding biomass, were 52% lower than the first half of 2024 for the same reasons cited above. The weighted average selling price, excluding biomass, decreased 2% in U.S. dollar terms but increased 2% in Canadian dollar terms. Operating costs and expenses of $7.6 million during the first half of 2025 were $0.7 million lower than the prior year period as a result of lower harvesting activity partially offset by higher operating costs and expenses per m3 produced for the same reasons cited above.

Environmental Solutions

During the first half of 2024, 752,100 carbon credits were sold. No sales occurred during the first half of 2025.

The table below summarizes operating and financial results for Environmental Solutions:

The ACR has developed Version 2.1 of the Improved Forest Management protocol, which is fundamentally the same approach as the previous protocol but introduces dynamic baselines. Carbon credits assessed using the new protocol are expected to be more appealing to customers, thereby commanding higher pricing. Acadian’s project is currently being transitioned to the new protocol, which has resulted in a delay in the registration process for the second and third tranches of carbon credits for the project. Registration is expected in the second half of 2025.

The transition to the new protocol may result in slightly fewer total carbon credits being issued than was expected under the initial protocol. However, all credits generated will be higher-valued carbon removal credits, and no conservation credits will be generated. Actual credit issuances will be adjusted each reporting period based on actual harvesting, natural disturbances, and other factors, as well as periodic updating for inventory and verification activities.

This project has provided valuable experience to the Acadian management team and has formed the foundation for potential carbon credit developments in the future.

Outlook        

Near-term pressures on end use markets persist, and the potential for tariffs is concerning for forest products companies in both the U.S. and Canada. However, North American interest rates and inflation are showing signs of easing, and the consensus forecast for U.S. housing starts is steady at approximately 1.37 million starts in 2025, as compared to 1.35 million in 2024. We remain confident that the stability of the northeastern forestry sector, combined with long-term demand for new homes and repair and remodel activity, will support the long-term demand for our products.

We maintained sufficient contractor availability in New Brunswick through the second quarter, which is expected to continue for the remainder of the year. Although production in Maine was challenged during the second quarter, with continued focus on the internal logging operations, we expect to increase production levels while advancing toward our targeted cost structure.

Demand for Acadian’s sawlogs is mainly driven by regional supply and demand. Near-term sawlog demand is expected to remain stable while pricing may remain challenged until end-use markets improve. Demand and pricing for softwood pulpwood and hardwood pulpwood is expected to remain at reduced levels in the near term.

With respect to voluntary carbon credits, demand and pricing are expected to remain stable. Issuance of the next tranches of carbon credits from Acadian’s current project has been delayed due to the transition to ACR’s updated Improved Forest Management protocol. However, registration of additional carbon credits is anticipated for 2025, and the updated protocol is expected to improve the marketability of the resulting carbon credits. The protocol for developing compliance market carbon credits from managed forests in Canada was finalized during 2024; Acadian is evaluating the opportunities to develop eligible carbon credits that the compliance protocol may present, in conjunction with the opportunities that exist under voluntary protocols.

Quarterly Dividend

Based on a strong balance sheet and positive outlook for the remainder of the year, Acadian is pleased to announce a dividend of $0.29 per share, payable on October 15, 2025 to shareholders of record September 30, 2025.

Acadian Timber Corp. (“Acadian”) is one of the largest timberland owners in Eastern Canada and the Northeastern U.S. and has a total of approximately 2.4 million acres of land under management. Acadian owns and manages approximately 775,000 acres of freehold timberlands in New Brunswick, approximately 300,000 acres of freehold timberlands in Maine and provides timber services relating to approximately 1.3 million acres of Crown licensed timberlands in New Brunswick. Acadian’s primary business is forest management and the production of timber products, including softwood and hardwood sawlogs, pulpwood, and biomass by-products, sold to approximately 90 regional customers. Acadian also focusses on generating income through other opportunities including real estate and environmental solutions.

Acadian’s business strategy is to maximize cash flows from its existing timberland assets through sustainable forest management and other land use activities while growing its business by acquiring assets and actively managing these assets to drive improved performance.

Acadian’s shares are listed for trading on the Toronto Stock Exchange under the symbol ADN.

For further information, please visit our website at www.acadiantimber.com or contact:

Susan Wood
Chief Financial Officer
Tel:  506-737-2345
Email:  [email protected]

Cautionary Statement Regarding Forward-Looking Information and Statements

This News Release contains forward-looking information and statements within the meaning of applicable Canadian securities laws that involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Acadian Timber Corp. and its subsidiaries (collectively, “Acadian”), or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Forward-looking information is included in this News Release and includes statements made in the sections entitled “Internal Logging Operations”, “Segmented Performance – Environmental Solutions” and “Outlook” and without limitation other statements regarding management’s beliefs, intentions, results, performance, goals, achievements, future events, plans and objectives, business strategy, growth strategy and prospects, access to capital, liquidity and trading volumes, dividends, taxes, capital expenditures, projected costs, market trends and similar statements concerning anticipated future events, results, achievements, circumstances, performance or expectations that are not historical facts. All forward-looking statements in this News Release are qualified by these cautionary statements. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, should not be unduly relied upon, and will not necessarily be accurate indications of whether or not such results will be achieved. Actual results may vary. These forward-looking statements include, but are not limited to:

• Expectations regarding the number and timing of carbon credits that will be successfully registered and available for sale. Actual credit issuances will be adjusted each reporting period based on actual harvesting, natural disturbances and other factors, as well as periodic updating for inventory and verification activities.
• Expectations regarding product demand, pricing and end use markets, including expectations for U.S. housing starts, which may be impacted by changes in interest rates, U.S. population demographics and the inventory of homes for sale. Expectations regarding product demand and pricing are based on anticipated market conditions, anticipated regional inventory levels of key customers, and the economic situation of key customers. Estimates for U.S. housing starts are based on forecasts published by major financial institutions.
• Expectations regarding future production volumes and costs associated with internal logging operations which may be impacted by operational efficiency, the regional supply of skilled operators, product demand, pricing and end use markets.
• Expectations regarding the impacts of potential tariffs levied on all U.S. imports from Canada, which may include direct impacts related to changes to the price of and demand for Acadian’s products originating in Canada as well as the U.S., and indirect impacts associated with changes in the price of and demand for the products of Acadian’s key customers and the greater economy.
• Expectations regarding future contractor availability, which may be impacted by regional supply of trained contractors and changes in the demographics of the available workforce.

Other risks and factors are discussed under the heading “Risk Factors” in Annual Report dated February 12, 2025 and in the Annual Information Form dated March 28, 2025 and other filings of Acadian made with securities regulatory authorities, which are available on SEDAR+ at www.sedarplus.ca. Forward-looking information is based on various material factors or assumptions, which are based on information currently available to Acadian. Readers are cautioned that the preceding list of material factors or assumptions is not exhaustive. Although the forward-looking statements contained in this News Release are based upon what management believes are reasonable assumptions, Acadian cannot assure readers that actual results will be consistent with these forward-looking statements. The forward-looking statements in this News Release are made as of the date of this News Release based on information currently available to management and should not be relied upon as representing Acadian’s views as of any date subsequent to the date of this News Release. Acadian assumes no obligation to update or revise these forward-looking statements to reflect new information, events, circumstances or otherwise, except as may be required by applicable law.

Acadian Timber Corp.
Consolidated Balance Sheets

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Consolidated Statements of Net Income

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Consolidated Statements of Comprehensive Income

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Consolidated Statements of Cash Flows

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Reconciliations to Adjusted EBITDA and Free Cash Flow

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1. Seasonal fluctuations in timber volume and variability in carbon credit revenue render quarterly Payout Ratios not meaningful.

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