For the three months ended June 27, 2020, Acadian Timber's generated sales were $11.5 million, compared to $17.9 million in the prior year period.
Adjusted EBITDA was $1.4 million during the 2Q 2020 compared to $3 million in the prior year period while Adjusted EBITDA margin for the quarter was 12%, compared to 17% in the prior year period. The decrease in Adjusted EBITDA margin is largely due to a $0.5 million gain recorded on timberland sales in the 2Q of the prior year, whereas there were no timberland sales during the 2Q 2020.
Net income for the 2Q totaled $5.2 million, or $0.31 per share, compared to net income of $5.8 million, or $0.35 per share in the same period of 2019. The variance from the prior year period is primarily due to higher gains on non-cash items such as unrealized foreign exchange on long-term debt and fair value adjustments compared to the prior year period and a one-time income tax expense of $0.7 million related to new tax legislation as disclosed last quarter.
“Acadian operations were impacted by challenging operating conditions during the 2Q,” commented Erika Reilly, CEO. “While the 2Q of the year is traditionally our weakest due to seasonal operating conditions, operating activity was impacted by an earlier end to winter operations this year compared to 2019, followed by highly unusual dry and hot weather that led to extreme fire risk and operating restrictions later in the quarter. All told, Acadian operated four fewer weeks in the 2Q 2020 compared to the same period last year.”
During the first half of 2020, Acadian generated sales of $42.9 million compared to $48.9 million in the prior year period. The 12% decrease was largely a result of challenging operating conditions during the 2Q 2020 that led to a 13% decrease in sales volumes, excluding biomass, year-to-date.
Lower volumes and no gains from timberland sales in 2020 resulted in Adjusted EBITDA of $9.7 million compared to $11.9 million during the first half of 2019. Adjusted EBITDA margin remained relatively stable year-over-year.
For the six months ended June 27, 2020, net income was $1.5 million, or $0.09 per share, which represents a decrease of $10.4 million as a result of a non-cash unrealized foreign exchange loss on long term debt of $5.2 million this year compared to a gain of $4 million in 2019 and the one-time income tax expense noted above.
Acadian Timber Corp. is a leading supplier of primary forest products in Eastern Canada and the Northeastern U.S.