Acadian Timber Corp. Reports Fourth Quarter and Year End Results

Investors, analysts and other interested parties may access Acadian Timber Corp.’s 2024 Fourth Quarter Results conference call and webcast on Thursday, February 13, 2025 at 1:00PM ET. Please register here or follow the link on our website at www.acadiantimber.com/presentations-webcasts, to receive your unique PIN. For those unable to participate, a recorded rebroadcast will be available until 4:00PM ET February 13, 2026.

/EIN News/ -- EDMUNDSTON, New Brunswick, Feb. 12, 2025 (GLOBE NEWSWIRE) -- Acadian Timber Corp. (“Acadian” or the “Company”) (TSX:ADN) today reported financial and operating results¹ for the three months ended December 31, 2024 (the “fourth quarter”) as well as for the full 2024 fiscal year.

“We achieved steady results from our timber operations in the face of weakened end use markets and our financial results received a significant boost from our first significant sale of voluntary carbon credits during 2024,” said Adam Sheparski, President and Chief Executive Officer. “We have started 2025 with the establishment of our own harvesting operation in Maine to address the persistent issue of contractor availability, and we look forward to a productive winter season.“

Acadian generated sales of $116.2 million, compared to $93.5 million in the prior year. The sale of 752,100 voluntary carbon credits contributed $24.6 million to total sales in 2024. Acadian generated $29.7 million of Free Cash Flow during the year, compared to $15.0 million in 2023, and declared dividends of $20.3 million or $1.16 per share to our shareholders. Acadian’s balance sheet remains solid with $29.3 million of net liquidity as at December 31, 2024, which includes funds available under our credit facilities.

Internal Harvesting Operations

With the goal of expanding harvesting capacity in Maine and reducing operating costs, Acadian has established its own internal harvesting operation. In January 2025, subsequent to year end, Acadian purchased several pieces of harvesting equipment and hired equipment operators, who have begun harvesting on Acadian’s Maine timberlands.

On February 10, 2025, Acadian signed an agreement to purchase certain logging and related assets of A & A Brochu, LLC (“A & A Brochu”) and its affiliates for a total price of U.S.$4.8 million to further expand its internal harvesting operations. 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. A & A Brochu has provided contractor services to Acadian for many years. The transaction is expected to close in the second quarter of 2025.

______________________________________
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, and capital expenditures excluding acquisitions of timberlands, 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. 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

	Three Months Ended								Year Ended
(CAD thousands, except volume and per share information)	December 31, 2024				December 31, 2023				December 31, 2024				December 31, 2023
Timber sales volume (000s m3)		232.3				231.9				977.2				894.2
Carbon credit sales volume (000s credits)		—				1.5				752.1				1.5
Timber sales and services	$	20,226			$	23,778			$	91,597			$	93,440
Carbon credit sales		—				37				24,588				37
Operating income		3,215				4,312				23,659				19,566
Net income		5,585				11,593				21,738				29,434
Adjusted EBITDA	$	3,698			$	4,418			$	38,893			$	20,586
Adjusted EBITDA margin		18	%			19	%			33	%			22	%
Free Cash Flow	$	3,051			$	2,811			$	29,733			$	14,999
Dividends declared		5,126				4,983				20,259				19,802
Dividends paid in cash		2,588				3,702				11,488				14,868
Payout Ratio		168	%			177	%			68	%			132	%
Payout Ratio with DRIP		85	%			132	%			39	%			99	%
Per share – basic and diluted
Net income	$	0.32			$	0.68			$	1.24			$	1.72
Free Cash Flow		0.17				0.16				1.69				0.88
Dividends declared		0.29				0.29				1.16				1.16

Three Months Ended December 31, 2024

During the fourth quarter, Acadian generated sales of $20.3 million compared to $23.8 million in the prior year period. Sales volume, excluding biomass, were consistent with the same period of 2023. In New Brunswick, a favourable change in customer mix shifted harvesting volumes from Crown licensed timberlands to our freehold timberlands, increasing our freehold sales and decreasing our timber services revenue. New Brunswick experienced improved contractor availability and increased volumes, however, contractor availability remained a significant challenge in Maine. Volumes were also impacted by unfavourable weather conditions stemming from a late start to winter conditions and longer than usual customer shutdowns due to the timing of holidays.

The weighted average selling price, excluding biomass, decreased 5% year-over-year. Softwood sawlog pricing decreased, as compared to the prior year period, due to a lower value product mix and weakness in end use markets. Hardwood sawlog pricing decreased primarily due to weakness in lumber markets. Softwood pulpwood pricing decreased as a result of abundant regional sawmill residuals impacting demand and pricing. Hardwood pulpwood pricing increased as compared to the prior year period due to a favourable customer mix.

Operating costs and expenses were $17.0 million during the fourth quarter, compared to $19.5 million during the fourth quarter of 2023. Increased costs related to increased freehold harvesting activity were offset by lower timber services activity and lower land management costs. Weighted average variable costs, excluding biomass, were flat as compared to the prior year period. Greater hauling distances and increased contractor rates were offset by a higher proportion of softwood products which carry lower variable costs and lower fuel adjustment costs.

Adjusted EBITDA was $3.7 million during the fourth quarter, compared to $4.4 million in the prior year period and Adjusted EBITDA margin for the quarter was 18% compared to 19% in the prior year period. Free Cash Flow was $3.0 million compared to $2.8 million in the same period of 2023 as a result of higher additions to land, roads, and other fixed assets and current income tax expense offset by increased proceeds from the sale of timberlands.

Year Ended December 31, 2024

Acadian generated sales of $116.2 million, compared to $93.5 million in the prior year. The sale of 752,100 voluntary carbon credits contributed $24.6 million to total sales in 2024. Timber sales volume, excluding biomass, increased 16% year-over-year primarily as a result of increased contractor availability and a favourable change in customer mix which shifted harvesting volumes from Crown licensed timberlands to our freehold timberlands, increasing our freehold sales and decreasing our timber services revenue, as compared to 2023.

Increased timber sales volumes were offset by decreased pricing as a result of changes in product mix and weak end use markets. Acadian’s weighted average selling price, excluding biomass, decreased 5% from the prior year. Lower sawlog prices stemming from changes in product mix and weakness in lumber pricing as well as lower hardwood pulpwood prices due to shorter hauling distances were partially offset by higher softwood pulpwood prices early in 2024.

Operating costs and expenses were $92.5 million during 2024, compared to $73.9 million in the prior year. The year-over-year increase reflects the addition of costs related to carbon credit sales as well as higher timber sales volumes. Weighted average variable costs, excluding biomass, increased 2% over the prior year due to greater softwood sawlog hauling distances and higher contractor rates partially offset by changes in product mix and lower fuel adjustment costs.

Adjusted EBITDA for the year ended December 31, 2024 was $38.9 million, compared to $20.6 million in the prior year for the reasons discussed above and Adjusted EBITDA margin was 33% compared to 22% in the prior year. Free Cash Flow was $29.7 million compared to $15.0 million in 2023 due to higher Adjusted EBITDA and higher proceeds from sale of timberlands, partially offset by higher current income tax expense.

Net income for the year ended December 31, 2024 totaled $21.7 million, or $1.24 per share, compared to net income of $29.4 million, or $1.72 per share, in the prior year with higher operating income offset by lower non-cash fair value adjustments in 2024 compared to 2023.

Segment Performance

New Brunswick Timberlands

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

		Three Months Ended								Year Ended
		December 31, 2024				December 31, 2023				December 31, 2024				December 31, 2023
Sales (000s m3)
Softwood			108.7				98.9				463.1				374.1
Hardwood			62.7				61.3				270.4				249.2
Biomass			28.4				23.5				60.7				98.0
Total			199.8				183.7				794.2				721.3
Sales ($000s)
Softwood		$	7,777			$	7,490			$	33,705			$	27,675
Hardwood			5,739				5,884				24,242				23,977
Biomass			359				982				1,305				3,948
Total		$	13,875			$	14,356			$	59,252			$	55,600
Timber services and other			3,347				5,432				15,062				21,499
Total Sales ($000s)		$	17,222			$	19,788			$	74,314			$	77,099
Adjusted EBITDA ($000s)		$	4,168			$	4,942			$	19,471			$	20,315
Adjusted EBITDA margin			24	%			25	%			26	%			26	%

Three Months Ended December 31, 2024

Sales for New Brunswick Timberlands were $17.2 million compared to $19.8 million during the prior year period. Freehold sales volume, excluding biomass, increased 7% compared to the prior year period primarily due to increased contractor availability and a favourable change in customer mix which shifted harvesting volumes from Crown licensed timberlands to our freehold timberlands, increasing our freehold sales and decreasing our timber services revenue, partially offset by unfavourable weather conditions and longer than usual customer shutdowns due to the timing of holidays.

The weighted average selling price, excluding biomass, for the fourth quarter was $78.83 per m³, or 6% lower than the prior year period. Softwood sawlog pricing decreased, as compared to the prior year period, due to a lower value product mix and weakness in end use markets. Hardwood sawlog pricing decreased primarily due to weakness in lumber markets. Softwood pulpwood pricing decreased as a result of abundant regional sawmill residuals impacting demand and pricing. Hardwood pulpwood pricing increased as compared to the prior year period due to a favourable customer mix.

Operating costs and expenses were $13.4 million during the fourth quarter, compared to $14.9 million in the prior year period. Increased freehold harvesting activity and increased weighted average variable costs were offset by lower timber services activity. Weighted average variable costs, excluding biomass, increased 2% as a result of greater hauling distances for sawlogs and higher contractor rates partially offset by lower fuel adjustment costs.

Adjusted EBITDA for the quarter was $4.2 million compared to $4.9 million during the prior year period and Adjusted EBITDA margin was 24% compared to 25% as a result of lower operating income for the reasons discussed above.

Year Ended December 31, 2024

Sales for New Brunswick Timberlands totaled $74.3 million, compared to $77.1 million in 2023 reflecting increased freehold sales volumes offset by a lower weighted average selling price and decreased timber services activity. Freehold sales volume, excluding biomass, increased 18% compared to the prior year primarily due to a favourable change in customer mix which shifted harvesting volumes from Crown licensed timberlands to our freehold timberlands, increasing our freehold sales and decreasing our timber services revenue, as well as improved contractor availability. Biomass sales volume was lower compared to the prior year due to limited processing capacity.

The weighted average selling price, excluding biomass, for the year was $79.00 per m³, or 5% lower year-over-year. Softwood sawlog pricing decreased 6% compared to the prior year period, due to a lower value product mix and weakness in end use markets. Hardwood sawlog pricing decreased 12% primarily due to weakness in lumber markets. Softwood pulpwood pricing increased 4% year-over-year due to strong demand early in the year. In the second half of the year, abundant regional sawmill residuals reduced demand and pricing. Hardwood pulpwood pricing decreased 2% as compared to the prior year period as a result of shorter hauling distances.

Operating costs and expenses were $55.5 million during 2024, compared to $57.6 million in the prior year. Increased freehold harvesting activity and increased weighted average variable costs were offset by lower timber services activity. Weighted average variable costs, excluding biomass, increased 2% as a result of greater softwood sawlog hauling distances and higher contractor rates partially offset by a higher proportion of softwood products which carry lower variable costs.

Adjusted EBITDA for the year ended December 31, 2024 was $19.5 million, compared to $20.3 million in the prior year, while Adjusted EBITDA margin was 26%, consistent with the prior year.

Maine Timberlands

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

		Three Months Ended								Year Ended
		December 31, 2024				December 31, 2023				December 31, 2024				December 31, 2023
Sales (000s m3)
Softwood			18.7				19.3				103.0				92.1
Hardwood			10.8				22.5				71.8				67.9
Biomass			3.0				6.4				8.2				12.9
Total			32.5				48.2				183.0				172.9
Sales ($000s)
Softwood		$	1,695			$	1,690			$	9,589			$	9,177
Hardwood			917				1,914				6,333				6,063
Biomass			82				152				182				212
Total		$	2,694			$	3,756			$	16,104			$	15,452
Other sales			310				234				1,179				889
Total Sales ($000s)		$	3,004			$	3,990			$	17,283			$	16,341
Adjusted EBITDA ($000s)		$	(223	)		$	(155	)		$	1,620			$	1,960
Adjusted EBITDA margin			(7	)%			(4	)%			9	%			12	%

Three Months Ended December 31, 2024

Sales for Maine Timberlands during the fourth quarter totaled $3.0 million compared to $4.0 million in the prior year period. Sales volume, excluding biomass, decreased by 29% compared to the same period of 2023, primarily due to unfavourable weather conditions stemming from a late start to winter conditions and longer than usual customer shutdowns due to the timing of holidays.

The weighted average selling price, excluding biomass, in Canadian dollar terms was $88.36 per m³, or 3% higher than the same period of 2023 primarily due to the impacts of foreign exchange. In U.S dollar terms, the weighted average selling price, excluding biomass, was $63.38 per m³, flat as compared to 2023 with lower prices for hardwood sawlogs driven by weak end use markets offset by slight increases in softwood sawlog and hardwood pulpwood prices.

Operating costs and expenses for the fourth quarter were $3.3 million, compared to $4.2 million during the same period in 2023 as a result of lower harvesting activity partially offset by higher variable costs. Weighted average variable costs, excluding biomass, increased 3% primarily as a result of greater hauling distances and the impacts of foreign exchange.

Adjusted EBITDA for the quarter was $(0.2) million flat as compared to the prior year period and Adjusted EBITDA margin was (7)% compared to (4)% in the prior year period.

Year Ended December 31, 2024

Sales for Maine Timberlands were $17.3 million compared to $16.3 million in 2023. Sales volume, excluding biomass, increased 9%. Contractor availability remained a significant challenge throughout the year.

The weighted average selling price, excluding biomass, in Canadian dollar terms was $91.09 per m³, compared to $95.23 per m³ in 2023. In U.S. dollar terms, the weighted average selling price, excluding biomass, was $66.70 per m³, compared to $70.51 per m³ in 2023. Softwood sawlog pricing decreased 7% in U.S. dollars terms, compared to the prior year period, due to a lower value product mix and weakness in end use markets. Hardwood sawlog pricing increased 8% in U.S. dollars terms due to a more favourable product mix as compared to 2023, however, volumes were low. Softwood pulpwood pricing increased 3% in U.S. dollars terms year-over-year due to increased demand. Hardwood pulpwood pricing remained relatively flat in U.S. dollars terms as compared to the prior year period.

Operating costs and expenses for 2024 were $16.0 million, compared to $14.6 million in 2023 due to higher harvesting activity and higher weighted average variable costs. Weighted average variable costs, excluding biomass, increased 3% primarily as a result of greater hauling distances and the impacts of foreign exchange, partially offset by changes in product mix.

Adjusted EBITDA for the year ended December 31, 2024 was $1.6 million compared to $2.0 million in the prior year and Adjusted EBITDA margin was 9% compared to 12% during the prior year.

Environmental Solutions

As a result of increased diversification in business activities, an additional reportable segment, Environmental Solutions, was added in the first quarter of 2024. Environmental Solutions leverages the ecological functions of Acadian’s land to address pressing environmental challenges, such as climate change and biodiversity. In line with these objectives, Acadian has undertaken a voluntary carbon credit project which increases carbon sequestration and provides significant environmental benefits.

The project is registered on the ACR under the name Anew – Katahdin Forestry Project, and requires balancing harvest and growth, long-term planning, periodic carbon inventory verification, and maintenance of the Acadian’s sustainable forestry certification.

On June 8, 2023, 770,071 voluntary carbon credits relating to the first reporting period of the project were registered and made available for sale. The first sale of 1,500 credits occurred in December 2023. During 2024, 752,100 credits were sold at an average price of approximately U.S.$24/credit.

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

	Three Months Ended								Year Ended
	December 31, 2024				December 31, 2023				December 31, 2024				December 31, 2023
Sales volume (000s credits)		—				1.5				752.1				1.5
Sales ($000s)	$	—			$	37			$	24,588			$	37
Adjusted EBITDA ($000s)	$	—			$	31			$	19,839			$	31

The registration process for the second and third tranches of carbon credits for the project is expected to result in approximately 0.4 million credits in total and is expected to be completed in the first quarter of 2025. The project is expected to generate an additional 0.8 million credits related to reporting periods four through ten. 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.

Outlook

Near-term pressures on end use markets persist and potential tariffs are causing concern among forest products companies in both the US 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 1.36 million starts in 2025, as compared to 1.35 million in 2024. We therefore 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 as has been demonstrated in recent years.

Labour markets remained tight in Maine, but we maintained sufficient contractor availability in New Brunswick through the fourth quarter, which is expected to continue into 2025. Subsequent to year end, we started increasing harvesting capacity in Maine through the establishment of our own harvesting operations. We do not expect an immediate significant impact on our financial results, but we do expect to increase production and reduce operating costs in Maine over the course of 2025.

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 is expected to remain at reduced levels in the near term due to abundant regional sawmill residuals and hardwood pulpwood is expected to be steady.

With respect to voluntary carbon credits, demand and pricing are expected to remain stable. The protocol for developing compliance market carbon credits from managed forests in Canada was finalized during the year. Acadian is evaluating the opportunities to develop eligible carbon credits that the compliance protocol may present, in conjunction with the opportunities that exist under the current 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 April 15, 2025 to shareholders of record March 31, 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:  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. Forward-looking information is included in this News Release and includes statements made in the sections entitled “Internal Harvesting 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 future production volumes and costs associated with internal harvesting operations which may be impacted by operational efficiency, the regional supply of skilled operators, product demand, pricing and end use markets.
• 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 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, 2015 and in the Annual Information Form dated March 28, 2024 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

(unaudited)

As at December 31 (CAD thousands)			2024				2023
Assets
Current assets
Cash and cash equivalents		$	15,250			$	1,831
Accounts receivable and other assets			8,576				9,301
Current income taxes receivable			—				1,668
Inventories			2,094				15,329
			25,920				28,129
Timber			471,890				442,830
Land, roads, and other fixed assets			104,067				90,854
Intangible asset			6,140				6,140
Total assets		$	608,017			$	567,953
Liabilities and shareholders’ equity
Current liabilities
Accounts payable and accrued liabilities		$	10,922			$	9,370
Current income taxes payable			229				—
Dividends payable to shareholders			5,126				4,983
Current portion of long-term debt			46,045				—
			62,322				14,353
Long-term debt			68,896				105,515
Deferred income tax liabilities, net			137,770				129,103
Total liabilities			268,988				248,971
Shareholders’ equity			339,029				318,982
Total liabilities and shareholders’ equity		$	608,017			$	567,953

Acadian Timber Corp.
Consolidated Statements of Net Income

(unaudited)

		Three Months Ended								Year Ended
(CAD thousands, except per share data)		December 31, 2024				December 31, 2023				December 31, 2024				December 31, 2023
Sales		$	20,226			$	23,815			$	116,185			$	93,477
Operating costs and expenses
Cost of sales			14,507				17,247				77,920				63,895
Selling, administration and other			2,218				2,062				12,520				8,127
Silviculture			138				93				1,569				1,526
Depreciation and amortization			148				101				517				363
			17,011				19,503				92,526				73,911
Operating income			3,215				4,312				23,659				19,566
Interest expense, net			(721	)			(778	)			(3,121	)			(3,153	)
Other items
Fair value adjustments and other			4,920				12,849				9,911				22,975
Gain on sale of timberlands and other fixed assets			335				5				539				657
Income before income taxes			7,749				16,388				30,988				40,045
Income tax expense			(2,164	)			(4,795	)			(9,250	)			(10,611	)
Net income		$	5,585			$	11,593			$	21,738			$	29,434
Net income per share – basic and diluted		$	0.32			$	0.68			$	1.24			$	1.72

Acadian Timber Corp.
Consolidated Statements of Comprehensive Income

(unaudited)

	Three Months Ended								Year Ended
(CAD thousands)	December 31, 2024				December 31, 2023				December 31, 2024				December 31, 2023
Net income	$	5,585			$	11,593			$	21,738			$	29,434
Other comprehensive income
Items that may be reclassified subsequently to net income:
Gain on revaluation of land and roads, net of deferred income tax expense		4,798				2,522				4,799				2,522
Unrealized foreign currency translation gain / (loss), net of deferred income tax expense		3,501				(1,833	)			5,120				(1,748	)
		8,299				689				9,919				774
Comprehensive income	$	13,884			$	12,282			$	31,657			$	30,208

Acadian Timber Corp.
Consolidated Statements of Cash Flows

(unaudited)

	Three Months Ended								Year Ended
(CAD thousands)	December 31, 2024				December 31, 2023				December 31, 2024				December 31, 2023
Cash provided by (used for):
Operating activities
Net income	$	5,585			$	11,593			$	21,738			$	29,434
Adjustments to net income:
Income tax expense		2,164				4,795				9,250				10,611
Depreciation and amortization		148				101				517				363
Fair value adjustments and other		(4,920	)			(12,849	)			(9,911	)			(22,995	)
Non-cash cost of sales related to carbon credits		—				20				14,178				20
Gain on sale of timberlands and other fixed assets		(335	)			(5	)			(539	)			(657	)
Income taxes paid		(507	)			(511	)			(3,426	)			(3,679	)
Net change in non-cash working capital balances and other		284				(266	)			2,239				(2,684	)
		2,419				2,878				34,046				10,413
Financing activities
Proceeds from short-term debt		—				—				10,298				—
Repayment of short-term debt		—				—				(10,298	)			—
Dividends paid to shareholders		(2,588	)			(3,702	)			(11,488	)			(14,868	)
		(2,588	)			(3,702	)			(11,488	)			(14,868	)
Investing activities
Additions to timber, land, roads, and other fixed assets		(342	)			(69	)			(10,499	)			(619	)
Proceeds from sale of timberlands and other fixed assets		1,142				5				1,360				675
		800				(64	)			(9,139	)			56
Increase / (Decrease) in cash during the period		631				(888	)			13,419				(4,399	)
Cash and cash equivalents, beginning of period		14,619				2,719				1,831				6,230
Cash and cash equivalents, end of period	$	15,250			$	1,831			$	15,250			$	1,831

Acadian Timber Corp.
Reconciliations to Adjusted EBITDA and Free Cash Flow

(unaudited)

	Three Months Ended								Year Ended
(CAD thousands)	December 31, 2024				December 31, 2023				December 31, 2024				December 31, 2023
Net income	$	5,585			$	11,593			$	21,738			$	29,434
Add / (deduct):
Interest expense, net		721				778				3,121				3,153
Income tax expense		2,164				4,795				9,250				10,611
Depreciation and amortization		148				101				517				363
Fair value adjustments and other		(4,920	)			(12,869	)			(9,911	)			(22,995	)
Non-cash cost of sales related to carbon credits		—				20				14,178				20
Adjusted EBITDA	$	3,698			$	4,418			$	38,893			$	20,586
Add / (deduct):
Interest paid on debt, net		(814	)			(793	)			(3,299	)			(3,031	)
Additions to land, roads, and other fixed assets		(342	)			(69	)			(1,082	)			(619	)
Gain on sale of timberlands and other fixed assets		(335	)			(5	)			(539	)			(657	)
Proceeds from sale of timberlands and other assets		1,142				5				1,360				675
Current income tax expense		(298	)			(745	)			(5,600	)			(1,955	)
Free Cash Flow	$	3,051			$	2,811			$	29,733			$	14,999
Dividends declared	$	5,126			$	4,983			$	20,259			$	19,802
Dividends paid in cash	$	2,588			$	3,702			$	11,488			$	14,868
Payout Ratio		168	%			177	%			68	%			132	%
Payout Ratio with DRIP		85	%			132	%			39	%			99	%