HRNEWS
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VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 31, 2012) -

Investors, analysts and other interested parties can access Acadian Timber Corp.'s 2012 Second Quarter Results conference call via webcast on Wednesday, August 1, 2012 at 1:00 p.m. ET at www.acadiantimber.com or via teleconference at 1-800-319-4610, toll free in North America. For overseas calls please dial +1-604-638-5340, at approximately 12:50 p.m. ET. The teleconference taped rebroadcast can be accessed at 1-800-319-6413 or +1-604-638-9010 and enter passcode 2826.

All figures in Canadian dollars unless otherwise noted

Acadian Timber Corp. ("Acadian" or the "Company") (TSX:ADN) today reported financial and operating results¹ for the three months ended June 30, 2012 (the "second quarter").

"Demand for spruce-fir sawlogs continues to be reasonably strong with most of Acadian's softwood sawmilling customers maintaining active operations", said Reid Carter, Chief Executive Officer of Acadian. "Markets for hardwood pulpwood are also reasonably strong with Acadian's major hardwood pulp customers all operating and actively competing for deliveries". 

For the second quarter of 2012, Acadian generated net sales of $14.3 million on sales volume of 306 thousand m³, which represents a $2.5 million, or 22%, increase in net sales compared to the same period in 2011. Operating results for the period benefitted from sales carried over from the first quarter of 2012 under the short-term vender managed inventory ("VMI") program discussed in Acadian's First Quarter 2012 Interim Report.

Adjusted EBITDA of $2.2 million for the second quarter of 2012 was $1.6 million higher than in the second quarter of 2011, while Adjusted EBITDA margin increased to 15% from 5% in the same period of last year. 

For the six months ended June 30, 2012, Acadian generated net sales of $32.9 million on sales volume of 658 thousand m³ as compared to net sales of $33.5 million on sales volume of 669 thousand m³ in the comparable period of 2011. Adjusted EBITDA of $7.0 million during the six months ended June 30, 2012 is $0.9 million lower than the first half of 2011.

¹ This news release makes reference to Adjusted EBITDA and free cash flow which are key performance measures in evaluating Acadian's operations and are important in enhancing investors' understanding of Acadian's operating performance.  Acadian's management defines Adjusted EBITDA as earnings before interest, taxes, fair value adjustments, unrealized exchange gain/loss on debt, depreciation and amortization.  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 Ended							Six Months Ended
(CAD thousands, except per share information)			June 30 2012			June 25 2011				June 30 2012			June 25 2011
Sales volume (000s m3)				306.0			242.7				657.5			669.1
Net sales			$	14,257		$	11,723			$	32,905		$	33,479
Adjusted EBITDA				2,196			608				6,966			7,873
Free cash flow				2,087			(37	)			6,122			7,015
Dividends declared				3,451			3,451				6,902			6,902
Net income (loss)				575			(261	)			4,943			2,673
Per share (fully diluted)
	Net income (loss)			0.03			(0.02	)			0.30			0.16
	Free cash flow			0.12			-				0.37			0.42
	Dividends declared			0.21			0.21				0.41			0.41

Acadian traditionally experiences very low levels of operating, marketing and selling activity during the second quarter of each year owing to spring break-up which causes much of the infrastructure to be temporarily inoperable. However, results for the second quarter of 2012 benefitted from sales carried over from the first quarter under the aforementioned VMI program. As per the terms of this agreement, all purchase commitments were filled during the second quarter generating net sales of $3.9 million on a sales volume of 84 thousand m³ and Adjusted EBITDA of $1.7 million, slightly above the indication provided in the First Quarter 2012 Interim Report.

New Brunswick Timberlands

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

	Three Months Ended June 30, 2012						Three Months Ended June 25, 2011
	Harvest	Sales		Results			Harvest	Sales		Results
	(000s m3)	(000s m3)		($000s)			(000s m3)	(000s m3)		($000s)
Softwood	54.2	130.4		$	6,161		88.9	96.3		$	5,131
Hardwood	91.9	94.0			5,667		87.6	91.6			5,315
Biomass	46.3	46.3			748		34.2	34.2			472
	192.4	270.7			12,576		210.7	222.1			10,918
Other sales					(184	)					(301	)
Net sales				$	12,392					$	10,617
Adjusted EBITDA				$	2,485					$	1,139
Adjusted EBITDA margin					20	%					11	%

	Six Months Ended June 30, 2012						Six Months Ended June 25, 2011
	Harvest	Sales		Results			Harvest	Sales		Results
	(000s m3)	(000s m3)		($000s)			(000s m3)	(000s m3)		($000s)
Softwood	209.7	212.6		$	10,322		254.8	252.6		$	12,714
Hardwood	185.1	208.7			12,652		225.2	218.2			12,921
Biomass	106.1	106.1			1,868		103.9	103.9			1,635
	500.9	527.4			24,842		583.9	574.7			27,270
Other sales					705						1,278
Net sales				$	25,547					$	28,548
Adjusted EBITDA				$	5,601					$	7,494
Adjusted EBITDA margin					22	%					26	%

Softwood, hardwood and biomass shipments were 130 thousand m³, 94 thousand m³ and 46 thousand m³, respectively, for the second quarter of 2012. Approximately 39% was sold as sawlogs, 44% as pulpwood and 17% as biomass. This compares to 37% sold as sawlogs, 48% as pulpwood and 15% as biomass in the second quarter of 2011.

Net sales for the second quarter of 2012 were $12.4 million (2011 - $10.6 million) with an average selling price across all products of $46.45 per m³, which compares to an average selling price of $49.18 per m³ during the second quarter of 2011. This year-over-year decrease in the average selling price reflects a higher proportion of sales made to closer proximity markets. Approximately $3.9 million of the sales during the second quarter were the result of the completion of purchase commitments under the VMI. Net sales for the first six months ended June 30, 2012 were $25.5 million, a decrease of $3.0 million over the first half of 2011 primarily as a result of decreased sales volume.

Costs for the second quarter were $9.9 million (2011 - $9.5 million). Variable costs per m³ were 9% lower than the second quarter of 2011 due to decreased hauling costs as a greater proportion of sales were made to closer proximity markets.

Adjusted EBITDA for the second quarter was $2.5 million, compared to $1.1 million in the comparable period of 2011 as NB Timberlands realized approximately $1.7 million in Adjusted EBITDA from the completion of purchase commitments under the VMI. Adjusted EBITDA margin increased to 20%, as compared to 11% for the second quarter of 2011, reflecting the effect of increased sales volume on fixed cost absorption.

NB Timberlands experienced no recordable safety incidents among contractors and one minor recordable incident involving an employee during the second quarter of 2012.

Maine Timberlands

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

	Three Months Ended June 30, 2012						Three Months Ended June 25, 2011
	Harvest	Sales		Results			Harvest	Sales		Results
	(000s m3)	(000s m3)		($000s)			(000s m3)	(000s m3)		($000s)
Softwood	20.4	21.6		$	1,176		11.7	11.8		$	627
Hardwood	8.4	9.3			550		5.8	6.7			380
Biomass	4.4	4.4			34		2.1	2.1			13
	33.2	35.3			1,760		19.6	20.6			1,020
Other sales					105						86
Net sales				$	1,865					$	1,106
Adjusted EBITDA				$	(7	)				$	(148	)
Adjusted EBITDA margin					-	%					(13	)%

	Six Months Ended June 30, 2012						Six Months Ended June 25, 2011
	Harvest	Sales		Results			Harvest	Sales		Results
	(000s m3)	(000s m3)		($000s)			(000s m3)	(000s m3)		($000s)
Softwood	96.4	96.2		$	5,384		70.0	70.0		$	3,685
Hardwood	28.2	28.9			1,773		16.4	17.8			1,045
Biomass	5.0	5.0			53		6.6	6.6			57
	129.6	130.1			7,210		93.0	94.4			4,787
Other sales					148						144
Net sales				$	7,358					$	4,931
Adjusted EBITDA				$	1,801					$	1,081
Adjusted EBITDA margin					24	%					22	%

Softwood, hardwood and biomass shipments were 22 thousand m³, 9 thousand m³ and 4 thousand m³, respectively, for the second quarter of 2012. Approximately 52% was sold as sawlogs, 35% as pulpwood and 13% as biomass. This compares to 50% sold as sawlogs, 40% as pulpwood and 10% as biomass in the second quarter of 2011.

Net sales for the second quarter of 2012 were $1.9 million (2011 - $1.1 million) with an average selling price across all products of $49.90 per m³, comparable to the average selling price of $49.61 per m³ during the second quarter of 2011. Strategies implemented by Acadian have allowed for improved contractor availability which, together with favourable operating conditions, resulted in increased sales volume. Net sales for the first six months ended June 30, 2012 were $7.4 million, an increase of $2.4 million over the first half of 2011.

Costs for the second quarter were $1.9 million (2011 - $1.3 million). Variable costs per m³ increased 7% in Canadian dollar terms due to changes in contractor rates driven by increases in fuel costs and greater distances from the harvest site to mill delivery locations.

Adjusted EBITDA for the second quarter was nil, compared to negative $0.1 million in the comparable period of 2011. Adjusted EBITDA margin was 0% in the second quarter of 2012 as compared to negative 13% during the second quarter of 2011.

We are pleased to report that during the second quarter of 2012, Maine Timberlands experienced no recordable safety incidents among employees or contractors.

Market Outlook

The following Market Outlook contains forward-looking statements about Acadian Timber Corp.'s market outlook for the remainder of fiscal 2012. Reference should be made to the "Forward-looking 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 www.acadiantimber.com or filed with SEDAR at www.sedar.com.

The U.S. housing market appears to be gradually gaining momentum. Milder than usual weather in the Northeast and Midwest during the seasonally slow winter months, modest gains in employment, increased household formations and resurgent demand for apartments has led to a significant improvement in new construction and sales during the first six months of 2012. Single-family starts are 20% ahead of their year-ago pace through June with multi-family starts up an impressive 45%. As well, the inventory of existing homes for sale declined by 20% year-over-year in June and home prices have firmed up. We believe the first half of 2012 has been a promising start to the recovery of the U.S. housing market, but we continue to expect this recovery to be gradual with normalization of home inventories and recovery of new home construction to trend levels not expected before 2014-2015.

Our outlook for the remainder of 2012 and into 2013 remains cautiously optimistic as demand for spruce-fir sawlogs continues to be reasonably strong with most of Acadian's softwood sawmilling customers maintaining active operations and markets for hardwood sawlogs remain stable and appear to have a similar outlook for the foreseeable future. Markets for hardwood pulpwood are also reasonably strong with Acadian's major hardwood pulp customers all operating and actively competing for deliveries suggesting prices will remain stable through the remainder of 2012. Softwood pulpwood markets, however, have become increasingly soft as there has been an ample supply of sawmill residuals and too little demand from regional pulp mills due to mill closures. This is particularly true in our New Brunswick operations where the provincial government has responded to the oversupply situation by allowing Crown licensees to leave softwood pulpwood in the woods as an interim solution until markets improve. We expect markets for softwood pulpwood will be very challenging through the summer and expect prices to continue to soften. However, this will not significantly affect Acadian's financial performance as softwood pulpwood typically accounts for only 7 - 8% of total sales and an even smaller proportion of cash flows.

Biomass markets continue to face significant market challenges. Cogeneration plants associated with manufacturing facilities are generally in good shape, but stand-alone wood-to-energy plants continue to suffer from depressed prices for electricity and decade-low prices for natural gas. Despite this challenging market environment, Acadian continues to be able to sell all of its biomass with a stable price outlook.

Quarterly Dividend

Acadian is pleased to announce a dividend of $0.20625 per share, payable on October 15, 2012 to shareholders of record on September 28, 2012.

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.

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.

Forward-Looking Statements

This News Release contains forward-looking information 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 statements may contain such words as "may," "will," "intend," "should," "expect," "believe," "outlook," "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 regarding management's beliefs, intentions, results, performance, goals, achievements, future events, plans and objectives, business strategy, 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; 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 income tax law;
economic situation of key customers; and other risks and factors discussed under the heading "Risk Factors" in each of the Annual Information Form dated March 28, 2012 and the Management Information Circular dated March 28, 2012, and other filings of Acadian made with securities regulatory authorities, which are available on SEDAR at www.sedar.com. 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: anticipated financial performance; business prospects; 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, which are subject to change based on commodity prices, market conditions for timber and wood products, and the economic situation of key customers. 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.
Interim Consolidated Statements of Net Income
(unaudited)
		Three Months Ended							Six Months Ended
(CAD thousands)		June 30 2012			June 25 2011				June 30 2012				June 25 2011
Net sales		$	14,257		$	11,723			$	32,905			$	33,479
Operating costs and expenses
	Cost of sales		10,378			9,237				22,825				22,224
	Selling, administration and other		1,536			1,682				2,971				3,187
	Reforestation		162			293				162				293
	Depreciation and amortization		136			135				273				272
			12,212			11,347				26,231				25,976
Operating earnings			2,045			376				6,674				7,503
Interest expense, net			(743	)		(737	)			(1,458	)			(1,677	)
Other items:
	Fair value adjustments		808			1,235				407				(398	)
	Unrealized exchange gain (loss) on long-term debt		(1,399	)		(450	)			370				(987	)
	Gain on sale of timberlands		15			97				19				98
Earnings before income taxes			726			521				6,012				4,539
Deferred tax expense			(151	)		(782	)			(1,069	)			(1,866	)
Net income (loss) for the period		$	575		$	(261	)		$	4,943			$	2,673
Net income (loss) per share - basic and diluted		$	0.03		$	(0.02	)		$	0.30			$	0.16

Acadian Timber Corp.
Interim Consolidated Statements of Comprehensive Income
(unaudited)
			Three Months Ended								Six Months Ended
(CAD thousands)			June 30 2012				June 25 2011				June 30 2012				June 25 2011
Net income (loss)			$	575			$	(261	)		$	4,943			$	2,673
Other comprehensive income (loss)
	Unrealized foreign currency translation income (loss)			1,655				704				(417	)			(232	)
	Amortization of derivatives designated as hedges			(49	)			(77	)			(98	)			(222	)
Comprehensive income			$	2,181			$	366			$	4,428			$	2,219

Acadian Timber Corp.
Interim Consolidated Balance Sheets
(unaudited)
As at (CAD thousands)			June 30  2012			December 31  2011
ASSETS
Current Assets:
	Cash and cash equivalents		$	6,128		$	4,019
	Accounts receivable and other assets			7,112			8,726
	Inventory			936			2,263
				14,176			15,008
Timber				231,830			231,370
Land, roads and other fixed assets				33,193			33,438
Intangible Assets				6,140			6,140
Deferred income tax asset				2,140			3,038
			$	287,479		$	288,994
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
	Accounts payable and accrued liabilities		$	5,740		$	4,534
	Dividends payable to shareholders			3,451			3,451
				9,191			7,985
Long-term debt				72,832			73,079
Deferred income tax liability				21,572			21,572
Shareholders' equity				183,884			186,358
			$	287,479		$	288,994

Acadian Timber Corp.
Interim Consolidated Statements of Cash Flows
(unaudited)
			Three Months Ended								Six Months Ended
(CAD thousands)			June 30 2012				June 25 2011				June 30 2012				June 25 2011
Cash provided by (used for):
Operating activities
Net income (loss)			$	575			$	(261	)		$	4,943			$	2,673
Items not affecting cash:
	Deferred tax expense			151				782				1,069				1,866
	Depreciation and amortization			136				135				273				272
	Fair value adjustments			(808	)			(1,235	)			(407	)			398
	Unrealized exchange (gain) loss on long term debt			1,399				450				(370	)			987
	Interest expense, net			743				737				1,458				1,677
	Interest paid, net			(16	)			(639	)			(736	)			(844	)
	Gain on sale of timberlands			(15	)			(97	)			(19	)			(98	)
				2,165				(128	)			6,211				6,931
Net change in non-cash working capital and other				1,008				(1,264	)			2,889				721
				3,173				(1,392	)			9,100				7,652
Financing activities
Borrowings on term facility				-				-				-				70,608
Repayment of bank term credit facility and term loan				-				-				-				(73,639	)
Deferred financing costs				-				-				-				(1,205	)
Dividends paid to shareholders				(3,451	)			(3,451	)			(6,902	)			(4,287	)
				(3,451	)			(3,451	)			(6,902	)			(8,523	)
Investing activities
Additions to timber, property, plant and equipment				(95	)			(8	)			(110	)			(16	)
Proceeds from sale of timberlands				17				99				21				100
				(78	)			91				(89	)			84
Increase (decrease) in cash and cash equivalents during the period				(356	)			(4,752	)			2,109				(787	)
Cash and cash equivalents, beginning of period				6,484				11,298				4,019				7,333
Cash and cash equivalents, end of period			$	6,128			$	6,546			$	6,128			$	6,546

Reconciliations to Adjusted EBITDA and Free Cash Flow
			Three Months Ended								Six Months Ended
(CAD thousands)			June 30 2012				June 25 2011				June 30 2012				June 25 2011
Net income (loss)			$	575			$	(261	)		$	4,943			$	2,673
Add (deduct):
	Interest expense, net			743				737				1,458				1,677
	Deferred tax expense			151				782				1,069				1,866
	Depreciation and amortization			136				135				273				272
	Fair value adjustments			(808	)			(1,235	)			(407	)			398
	Unrealized exchange (gain) loss on long-term debt			1,399				450				(370	)			987
Adjusted EBITDA				2,196				608				6,966				7,873
Add (deduct):
	Interest paid on debt, net			(16	)			(639	)			(736	)			(844	)
	Capital expenditures			(95	)			(8	)			(110	)			(16	)
	Gain on sale of timberlands			(15	)			(97	)			(19	)			(98	)
	Proceeds on sale of timberlands			17				99				21				100
Free cash flow			$	2,087			$	(37	)		$	6,122			$	7,015
Dividends declared			$	3,451			$	3,451			$	6,902			$	6,902