Acadian Timber Corp. Reports Year-End Results

Investors, analysts and other interested parties can access Acadian Timber Corp.’s 2019 Fourth Quarter Results conference call via webcast on Thursday, February 13, 2020 at 1:00PM ET at  or via teleconference at toll free in North America (Canada and the USA), or for overseas calls, please dial (Conference ID 3079535) at approximately 12:50PM ET. For those unable to participate, a taped rebroadcast will be available until midnight ET, March 14, 2020. To access this rebroadcast, please dial or (Conference ID 3079535).

All figures in Canadian dollars unless otherwise noted

VANCOUVER, British Columbia, Feb. 12, 2020 (GLOBE NEWSWIRE) — Acadian Timber Corp. (“Acadian” or the “Company”) (TSX:) today reported financial and operating results1 for the year ended December 31, 2019.

“Acadian delivered another year of solid operating and financial performance. Weighted average prices and harvesting costs remained stable year-over-year and operating results benefited from lower year-end harvested log inventories and decreased administrative costs,” commented Erika Reilly, Interim Chief Executive Officer of Acadian.

The Company’s Adjusted EBITDA1 totaled $23.6 million in 2019, compared to $22.1 million during 2018, and the Adjusted EBITDA1 margin climbed to 24% from 22% in 2018. Key factors contributing to the year-over-year improvement in Adjusted EBITDA1 include lower management and performance fees due to the termination of the management agreement with Brookfield Timberlands Management LP announced in the third quarter of this year and the benefit of reduced year-end inventory levels compared to the prior year as the inventory management program with one of Acadian’s customers that was in place during the fourth quarter of 2018 was not in place this year.

Acadian declared dividends to its shareholders of $1.16 per share during the year, representing a Payout Ratio1 of 103% which is above our long-term target, but in line with expectations given the 3% increase in our quarterly dividend per share announced in February 2019. We anticipate that over the long term we will revert to a Payout Ratio consistent with our target level.

During the fourth quarter, Acadian signed a term sheet with MetLife Investment Management, LLC to refinance its credit facilities under essentially the same terms as the existing facilities, but with slightly more favourable interest rates and with maturity dates ranging from 5 to 10 years from the date of closing. Acadian expects to complete this refinancing during the first quarter of 2020.

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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 its 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 other fixed assets, unrealized exchange gain/loss on debt, depreciation, amortization and the management agreement 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 EndedYear Ended(CAD thousands, except per share information)    Dec 31,
2019

 Dec 31,
2018   Dec 31,
2019

 Dec 31,
2018 Sales volume (000s m3)   339.4   323.7  1,251.1  1,307.0 Sales  $  25,835 $24,167 $  100,048 $99,848 Net income   16,228  16,441  17,325  26,264 Adjusted EBITDA   6,586  4,631  23,604  22,142 Adjusted EBITDA margin   25% 19% 24% 22%Free Cash Flow   5,296  3,525  18,722  17,771 Dividends declared   4,839  4,715  19,358  18,769 Payout Ratio   91% 134% 103% 106%Per share – basic and diluted      Net income  $  0.97 $0.98 $  1.04 $1.57 Free Cash Flow   0.32  0.20  1.12  1.06 Dividends declared   0.29  0.2825  1.16  1.1225 

Acadian generated sales of $100.0 million in 2019, almost unchanged from $99.8 million in the prior year. The Company benefited from a 3% increase in sales volume, excluding biomass, due to improved demand for softwood pulpwood, but this was partially offset by lower biomass sales and a modest decrease in timber services activity. Acadian’s weighted average selling price, excluding biomass, was almost unchanged year-over-year with softwood sawlog and pulpwood price improvements of 2% and 13%, respectively, offset by a greater proportion of relatively lower valued softwood pulpwood in the mix of products sold.

Operating costs of $77.8 million in 2019 were down 1% from $78.8 million in the prior year due to lower harvest volumes and administrative costs.

Acadian generated Adjusted EBITDA of $23.6 million during 2019, compared to $22.1 million in the prior year, while the Adjusted EBITDA margin for 2019 increased to 24% from 22% in 2018.

The net income for the year ended December 31, 2019 totaled $17.3 million, or $1.04 per share, compared to net income of $26.3 million, or $1.57 per share, in 2018. The variance from the prior year is primarily due to fees related to the termination of the management agreement with Brookfield Timberlands Management LP that was announced in the third quarter of this year which, after income tax, reduced net income by $12.8 million or $0.77 per share. This was partially offset by an operating earnings improvement of $1.2 million for the reasons discussed above and lower income tax expense of $2.8 million, after adjusting for the effect of the termination fee. The effect of an unrealized foreign exchange gain on the revaluation of U.S. dollar-denominated long-term debt of $4.7 million, compared to an unrealized loss in the prior year of $7.5 million, was almost entirely offset by a smaller fair value revaluation of timber assets compared to the prior year.

Segment Performance

New Brunswick Timberlands

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

 Three Months Ended December 31, 2019
 Three Months Ended December 31, 2018  HarvestSalesSales Results
 HarvestSalesSales Results  (000s m3)(000s m3)Mix ($000s) (000s m3)(000s m3)Mix ($000s) Softwood104.3108.543%$  6,207 110.794.237%$5,242 Hardwood109.397.139% 7,325 103.1102.441% 7,881 Biomass44.644.618% 1,352 56.456.422% 1,743  258.2250.2100% 14,884 270.2253.0100% 14,866 Timber services and other sales    3,921     3,741 Sales   $ 18,805    $18,607 Adjusted EBITDA   $  5,211    $4,057 Adjusted EBITDA margin   28%    22%

 Year Ended December 31, 2019
 Year Ended December 31, 2018  HarvestSalesSales Results
 HarvestSalesSales Results  (000s m3)(000s m3)Mix ($000s) (000s m3)(000s m3)Mix ($000s) Softwood395.7411.844%$ 24,024 416.0403.341%$22,474 Hardwood373.6371.140% 28,174 369.3364.137% 27,977 Biomass143.6143.616% 4,906 218.7218.722% 6,545  912.9926.5100% 57,104 1,004.0986.1100% 56,996 Timber services and other sales    17,068     17,768 Sales   $ 74,172    $74,764 Adjusted EBITDA   $ 18,599    $16,569 Adjusted EBITDA margin   25%    22%

Year ended December 31, 2019:

Sales for New Brunswick Timberlands totaled $74.2 million compared to $74.8 million in 2018. The sales volume, excluding biomass, increased 2% over the prior year primarily due to lower inventory levels at the end of 2019 and improved demand for softwood pulpwood. The biomass sales volume fell 34% as a customer who utilized biomass to generate electricity ceased operations during the year and a portion of the harvesting during the year was changed to a system that is more cost-effective but generates less biomass material. The weighted average selling price, excluding biomass, was 1% higher than in the prior year as prices improved for softwood sawlogs and pulpwood, but the product mix was more heavily weighted to softwood pulpwood. Revenues from timber services and other sales fell 4% due to lower operating activity than in the prior year.

Operating costs for the year were $56.2 million, compared to $58.5 million during 2018, due to lower harvest volumes. Variable harvest costs per m3, excluding biomass, were unchanged year-over-year.

Adjusted EBITDA for the year ended December 31, 2019 was $18.6 million, compared to $16.6 million during 2018, and the Adjusted EBITDA margin for the year increased to 25% from 22% in the prior year, reflecting the benefit of lower management and performance fees due to the termination of the management agreement and reduced year-end inventory levels compared to the prior year as the inventory management program with one of the operation’s customers that was in place during the fourth quarter of 2018 was not in place this year.

For the year ended December 31, 2019, New Brunswick Timberlands experienced no recordable safety incidents among employees and three among contractors.

Maine Timberlands

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

 Three Months Ended December 31, 2019
 Three Months Ended December 31, 2018  HarvestSalesSales Results
 HarvestSalesSales Results  (000s m3)(000s m3)Mix ($000s) (000s m3)(000s m3)Mix ($000s) Softwood71.171.080%$  5,325  46.446.065%$3,571 Hardwood17.918.220% 1,532 19.922.332% 1,831 Biomass% — 2.42.43% 4  89.089.2100% 6,857 68.770.7100% 5,406 Other sales    173     154 Sales   $  7,030     $5,560 Adjusted EBITDA   $  2,119     $892 Adjusted EBITDA margin   30%    16%

 Year Ended December 31, 2019
 Year Ended December 31, 2018  HarvestSalesSales Results
 HarvestSalesSales Results  (000s m3)(000s m3)Mix ($000s) (000s m3)(000s m3)Mix ($000s) Softwood234.2234.372%$ 17,796  213.4213.166%$17,274 Hardwood86.686.527% 7,426 88.089.428% 7,100 Biomass3.83.81% 12 18.418.46% 29  324.6324.6100% 25,234 319.8320.9100% 24,403 Other sales    642     681 Sales   $ 25,876     $25,084 Adjusted EBITDA   $6,713     $6,839 Adjusted EBITDA margin   26%    27%

Year ended December 31, 2019:

Sales for the year ended December 31, 2019 totaled $25.9 million for Maine Timberlands, compared to $25.1 million during the prior year. The sales volume, excluding biomass, increased 6% year-over-year reflecting improved demand for softwood pulpwood, however this heavier weighting to pulpwood contributed to the weighted average selling price, excluding biomass, falling 2%.

The weighted average selling price, excluding biomass, in U.S. dollar terms, decreased 5% year-over-year as the benefit of improved prices for softwood and hardwood pulpwood was more than offset by a decrease in softwood sawlog prices due to pricing pressure resulting from weakness in lumber prices in North America and a greater percentage of softwood pulpwood in the mix of products sold.

Operating costs for the year were $19.9 million compared to $19.0 million during 2018 reflecting the increase in softwood harvest volumes. As well, variable harvest costs per m3, excluding biomass, increased 2% compared with the prior year due to modest increases in harvesting and hauling contractor rates.

Adjusted EBITDA for the year ended December 31, 2019 was $6.7 million, almost unchanged from $6.8 million during the prior year, with the benefit of increased sales volumes offset by lower per m3 margins. Adjusted EBITDA margin slipped to 26% from 27% in the prior year period.

For the year ended December 31, 2019, Maine Timberlands experienced no recordable safety incidents among employees and contractors.

Market Outlook

The following contains forward-looking information about Acadian Timber Corp.’s market outlook for the remainder of 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  or filed with SEDAR at .

The outlook for Acadian’s key products, softwood sawlogs and hardwood pulpwood, is for demand and pricing to remain stable in the near term.

The softwood lumber market, the end use market for our softwood sawlogs, is expected to benefit from slightly stronger U.S. housing starts in 2020, while the U.S. repair and remodeling sector is expected to hold flat at its 2019 level, according to Fastmarkets RISI. The consensus forecast is for 1.31 million U.S. housing starts in 2020 compared to 1.29 million total starts in 2019, with growth driven by the single-family sector. A low supply of existing homes, low mortgage rates and a strong labour market support the improved outlook for U.S. home building. However, supply side factors, including increased wood supply from Central Europe and reduced North American exports to China, as well as builders’ focus on smaller, more affordable homes (which contain less wood), may mute some of the benefits of this more positive U.S. housing outlook.

Demand and pricing for our hardwood pulpwood is expected to remain stable, with our largest hardwood pulpwood customers operating at full capacity. We expect hardwood pulpwood supply coming from other major landowners in the region to decrease as they reduce their harvest levels, which should tighten the regional market for this product over time.

The outlook for Acadian’s other products is mixed.

Acadian’s hardwood sawlog sales in the U.S. are coming under pressure as an indirect result of Chinese duties on U.S. exports. However, hardwood sawlog sales to Acadian’s Canadian customers remain stable as they are focused on species such as hard maple and yellow birch and on industrial lumber products, including railway ties, pallets, and flooring, that have not been as impacted by the U.S.-China trade war.

Demand for softwood pulpwood from our New Brunswick timberlands remains steady, however markets for softwood pulpwood in Maine have recently weakened with high regional softwood pulpwood inventories due to the slower than anticipated startup of a pulp mill in the region. Once this mill reaches full operating capacity, demand for this product is expected to improve.

Finally, while the 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. We have been successful in developing relationships with new customers to replace volume to customers that have reduced or closed their operations, which is improving the outlook for 2020.

Management Team Changes

Acadian announced today that Mr. Adam Sheparski has been appointed Chief Financial Officer of Acadian effective February 13, 2020. Mr. Sheparski is a Chartered Professional Accountant who most recently worked with one of Canada’s largest grocery retailers. Adam brings a wealth of experience in public company reporting, treasury, and taxation and has participated in several large M&A transactions during his career.

Brian Banfill, who was appointed Interim Chief Financial Officer in September 2019, will remain with the company for an interim period to ensure a smooth transition of his responsibilities. “Acadian would like to thank Brian for his efforts as the company transitions to an internally managed organization,” said Ms. Reilly.

Acadian also announced today that after nearly 35 years of loyal service, Mr. Luc Ouellet, Senior Vice President of Operations, has retired. Normand Haché, Senior Vice President of Marketing and Operations, who has over 35 years of experience in the timberland sector and more than 14 years with Acadian, will assume Mr. Ouellet’s responsibilities. “We thank Luc for his valuable contributions to Acadian since its inception,” commented Ms. Reilly. “Mr. Hache and Acadian’s senior management team have a wealth of experience and are well positioned to lead Acadian’s continued success.”

Quarterly Dividend

Acadian is pleased to announce a dividend of $0.29 per share, payable on April 15, 2020 to shareholders of record on March 31, 2020.

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Acadian Timber Corp. is a leading supplier of primary forest products in Eastern Canada and the Northeastern U.S. With a total of approximately 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 its business by acquiring assets on a value basis and utilizing its operations-oriented approach to drive improved performance.

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

* * * * * * * * *

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 or U.S. 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 . 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.
Consolidated Statements of Net Income
(unaudited)

 Three Months Ended Year Ended (CAD thousands, except per share data)Dec 31,
2019

 Dec 31,
2018 Dec 31,
2019

 Dec 31,
2018      Sales$   25,835  $24,167 $  100,048  $99,848 Operating costs and expenses    Cost of sales 17,360  16,802  67,260  68,164 Selling, administration and other 2,079  2,629  9,491  9,741 Reforestation 29  142  778  595 Depreciation and amortization 71  73  286  303   19,539  19,646  77,815  78,803 Operating earnings 6,296  4,521  22,233  21,045 Interest expense, net (1,141) (1,004) (4,130) (3,901)Other items    Fair value adjustments and other 14,494  26,206  15,903  28,294 Unrealized exchange gain / (loss) on long-term debt 1,826  (5,118) 4,733  (7,489)Management agreement termination fee   —  (18,000) — Gain on sale of timberlands 192  56  1,056  906 Gain / (loss) on disposal of other fixed assets 27  (19) 29  (112)Earnings before income taxes 21,694  24,642  21,824  38,743 Current income tax expense (446) (490) (111) (2,334)Deferred income tax expense (5,020) (7,711) (4,388) (10,145)Net income$ 16,228 $16,441 $   17,325  $26,264 Net income per share – basic and diluted$  0.97  $0.98 $   1.04  $1.57              

Acadian Timber Corp.
Consolidated Statements of Comprehensive Income
(unaudited)

 Three Months Ended Year Ended (CAD thousands)Dec 31,
2019

 Dec 31,
2018 Dec 31,
2019

 Dec 31,
2018      Net income$  16,228  $16,441 $   17,325  $26,264 Other comprehensive (loss) / income    Items that may be reclassified subsequently to net income:    Deferred income tax (expense) / recovery (2,191) 1,459  (2,184) 1,459 Gain / (loss) on revaluation of land and roads 7,614  (5,064) 7,591  (5,064)Unrealized foreign currency translation (loss) / gain (2,601) 7,781  (7,048) 11,007 Comprehensive income$  19,050 $20,617 $  15,684  $33,666              

Acadian Timber Corp.
Consolidated Balance Sheets
(unaudited) 

As at
(CAD thousands) December 31, 2019December 31, 2018Assets  Current assets  Cash$    7,601$22,320Accounts receivable and other assets   11,602 7,230Current taxes receivable   2,245 —Inventory   1,545 2,756    22,993 32,306Timber   377,992 367,901Land, roads and other fixed assets   91,584 86,103Intangible asset   6,140 6,140Total assets$    498,709$492,450Liabilities and shareholders’ equity   Current liabilities  Short-term debt$    7,793$—Accounts payable and accrued liabilities   9,190 7,963Current taxes payable    647Dividends payable to shareholders   4,839 4,714Current portion of long-term debt   93,084 —    114,906 13,324Long-term debt    96,595Deferred income tax liabilities   97,102 92,119Shareholders’ equity   286,701 290,412Total liabilities and shareholders’ equity$    498,709$492,450     

Acadian Timber Corp.
Consolidated Statements of Cash Flows
(unaudited) 

 Three Months Ended Year Ended (CAD thousands)Dec 31,
2019

 Dec 31,
2018 Dec 31,
2019

 Dec 31,
2018 Cash provided by / (used for):            Operating activities    Net income$  16,228  $16,441 $  17,325  $26,264 Adjustments to net income:    Deferred income tax expense 5,020  7,711  4,388  10,145 Depreciation and amortization 71  73  286  303 Fair value adjustments and other (14,494) (26,206) (15,903) (28,294)Unrealized exchange (gain) / loss on long term debt (1,826) 5,118  (4,733) 7,489 Gain on sale of timberlands (192) (56) (1,056) (906)(Gain) / loss on disposal of other fixed assets (27) 19  (29) 112 Accretion of gain from refinancing long-term debt 274  273  1,135  1,046 Net change in non-cash working capital balances and other (3,439) 2,604  (5,553) 44   1,615  5,977  (4,140) 16,203 Financing activities    (Repayment of) / proceeds from operating loans (2,137) —  7,793  — Deferred financing costs (175) —  (175) — Dividends paid to shareholders (4,839) (4,728) (19,233) (18,656)Common shares repurchased under NCIB   (636) (37) (636)  (7,151) (5,364) (11,652) (19,292)Investing activities    Additions to timber, land, roads and other fixed assets   (34) (86) (224)Proceeds from sale of timberlands 210  117  1,130  1,083 Proceeds from sale of other fixed assets 27  25  29  599   237  108  1,073  1,458 (Decrease) / increase in cash during the period (5,299) 721  (14,719) (1,631)Cash, beginning of period 12,900  21,599  22,320  23,951 Cash, end of period$  7,601  $22,320 $  7,601 $22,320              

Reconciliations to Adjusted EBITDA and Free Cash Flow

 Three Months Ended Year Ended (CAD thousands) Dec 31,
2019

 Dec 31,
2018 Dec 31,
2019

 Dec 31,
2018      Net income$16,228 $16,441 $17,325 $26,264 Add / (deduct):    Interest expense, net 1,141  1,004  4,130  3,901 Current income tax expense 446  490  111  2,334 Deferred income tax expense 5,020  7,711  4,388  10,145 Depreciation and amortization 71  73  286  303 Fair value adjustments and other (14,494) (26,206) (15,903) (28,294)Management agreement termination fee   —  18,000  — Unrealized exchange (gain) / loss on long-term debt (1,826) 5,118  (4,733) 7,489 Adjusted EBITDA$  6,586  $4,631 $  23,604 $22,142 Add / (deduct):    Interest paid on debt, net (785) (687) (2,834) (2,701)Additions to timber, land, roads and other fixed assets   (34) (86) (224)Gain on sale of timberlands (192) (56) (1,056) (906)(Gain) / loss on disposal of other fixed assets (27) 19  (29) 112 Proceeds on sale of timberlands 210  117  1,130  1,083 Proceeds on sale of other fixed assets 27  25  29  599 Current income tax expense (446) (490) (111) (2,334)Current tax effect of termination fee (77) —  (1,925) — Free Cash Flow$  5,296 $3,525 $  18,722 $17,771 Dividends declared$  4,839 $4,715 $  19,358 $18,769 Payout ratio 91% 134% 103% 106%For further information, please visit our website at www.acadiantimber or : Brian Banfill Interim Chief Financial Officer Tel: 

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