Acadian Timber Corp reports net income of $4.3 million in first quarter, 2012
Acadian Timber Corp. generated net sales of $18.6 million on sales volume of 352 thousand m3, which represents a $3.1 million, or 14%, decrease in net sales compared to the same period in 2011. Net income for the quarter is $4.368 million.
Results for the first quarter were impacted by Acadian’s implementation of a short-term vendor managed inventory program (VMI) with one of its larger customers. At the end of the first quarter, Acadian held 72 thousand m3 of harvested logs in inventory related to the VMI. As purchase commitments are filled under the VMI during the second quarter of 2012, additional sales of approximately $3.4 million and Adjusted EBITDA of approximately $1.5 million are expected to be realized.
Adjusted EBITDA of $4.8 million for the first quarter was $2.5 million lower than in the first quarter of 2011, and Adjusted EBITDA margin decreased to 26% from 33% in the same period of last year. This decrease in margin is attributed to a lower contribution from the land management services agreement and significantly lower sales of higher margin spruce-fir sawlogs owing to the sale of these volumes being delayed until the second quarter as a result of the VMI.
“Operating conditions were excellent during January and February followed by exceptionally warm weather in early March causing an early spring break-up disrupting production and sales” said Reid Carter, Chief Executive Officer of Acadian. Mr. Carter further noted that “we were pleased with the results in our Maine operations during the first quarter as strategies to improve contractor availability resulted in harvest levels meeting targets.”
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 second 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. 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 90 regional customers.
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