Acadian Timber Q2 Revenue Falls 15%, Maine Cost Fix Gains Traction

Acadian Timber reported second-quarter revenue of $14.6 million, down 15% from $17.1 million a year earlier, as high customer inventories and seasonal conditions hit sales volumes. Adjusted EBITDA fell to $1.3 million from $2.4 million, while net income dropped to $1.3 million, or $0.07 per share, from $2.7 million, or $0.15 per share.

Susan Wood, Acadian's chief financial officer, said the second quarter is typically the company's lowest production period because of seasonal conditions. This year, volumes were further affected by elevated customer inventories after a productive winter, particularly in New Brunswick.

Revenue declined primarily on lower volumes. That was partly offset by a 19% increase in the weighted average selling price, which Wood attributed to stronger softwood lumber markets, higher fuel surcharges and longer hauling distances.

Operating costs and expenses fell $1.7 million from the prior-year period, reflecting lower sales volumes, operating efficiencies that began taking effect in Maine, and lower selling and administrative costs. Higher fuel adjustment costs and longer hauling distances partly offset those gains.

Maine Operations Show Improvement

Malcolm Cockwell, Acadian's chair, interim president and chief executive officer, said the company made significant changes to its internal harvesting operations in Maine during the second quarter. The company established internal harvesting in early 2025 to address reduced regional capacity and rising costs. Cockwell said results from those operations were poor throughout 2025.

During the second quarter, Acadian shifted focus from maximizing production volume to reducing cost per cubic meter. It scaled internal operations to its most productive operators and equipment, improved data flows to identify bottlenecks, increased use of machine optimization software, and adjusted equipment deployment and harvest-block selection. The company also reduced fixed costs in Maine.

Cost of sales per cubic meter produced in Maine decreased 7% as operational efficiencies outweighed pressure from fuel costs and transportation distances. Maine adjusted EBITDA improved to a loss of $400,000 from a loss of $900,000 a year earlier.

"While Maine did not achieve profitability during the quarter, the year-over-year improvement in Adjusted EBITDA demonstrates that these operational changes are progressing in the right direction," Cockwell said. He added that Acadian expects stronger Maine results through the rest of 2026.

Maine freehold sales volumes fell 31% as the company reduced internal harvesting activity. Maine sales were $2.6 million, compared with $2.7 million a year earlier.

Outlook and Catalysts

In New Brunswick, elevated customer roundwood inventories that constrained second-quarter deliveries have returned to more normal levels, management said. Acadian expects sales to match harvesting capacity. New Brunswick freehold sales volumes fell 38% year over year, with sales of $12 million versus $14.4 million. Adjusted EBITDA in the segment declined to $2.1 million from $4 million.

Management expects sawlog demand to remain relatively stable in the near term, though pricing could face pressure until end-use markets improve. Pulpwood demand and pricing in both New Brunswick and Maine are expected to remain soft until current customers increase output or new pulpwood- and biomass-consuming facilities begin operations.

Cockwell said management is encouraged by forecasts for steady U.S. housing starts and by temporary and permanent curtailments at forest-products facilities elsewhere in North America. Tariffs, duties and higher fuel costs continue to pressure customers' operations, he said. Acadian had not seen significant customer curtailments in New Brunswick or Maine so far in 2026.

The company ended the quarter with $15 million of net liquidity, including cash and available credit capacity net of required minimum balances. Acadian has $45 million of long-term debt scheduled to mature in March 2027 and said it intends to refinance that debt before maturity.

During the question-and-answer session, Cockwell said a newly signed renewable-energy option and lease is expected to provide modest, accretive income initially. If the related project is developed, the economics could become substantially more favorable in roughly four to five years and could last for decades.

Demand and pricing for carbon credits remain stable, according to management. The next carbon-credit issuance from Acadian's current project has been delayed by the transition to ACR's updated improved forest management protocol. The company now expects registration in the second half of 2026 and believes the new protocol will improve the credits' marketability.

Acadian is also advancing a residential development project in Maine. Cockwell said the project remains on track to become substantially shovel-ready by the end of 2026 and could be in a revenue-generating position in 2027. He described it as potentially material to the Maine business over several years.