Welcome to the Acadian Timber Corp 2025 Annual General Meeting. Please note the meeting is being recorded. I would like to introduce Malcolm Cockwell, Chairman of Acadian. Mr. Cockwell, please go ahead.
Thank you, Operator, and good morning, ladies and gentlemen. It's my pleasure to welcome everyone to the Acadian Timber Corp Annual General Meeting. It's now 11:00 A.M. Eastern Time and time to start the 2025 Annual Meeting. My name is Malcolm Cockwell, and as Chairman of the Corporation, I will chair this meeting today. With me are the Directors of Acadian: Heather Fitzpatrick, Karen Oldfield, Erica Riley, and Bruce Robertson. Also in attendance are Adam Sheparski, President and Chief Executive Officer and Director of Acadian, and Susan Wood, Chief Financial Officer of Acadian. We are committed to open communication and are pleased to host the meeting through TSX Trust Company's virtual meeting platform, accessible to all our shareholders regardless of physical location, to participate and view the meeting.
I officially call the meeting to order and appoint Susan Wood to act as Secretary of the Meeting and Jordan Shaffey of TSX Trust Company to act as Scrutineer of the Meeting. Only registered shareholders who held shares in their name as of March 28, 2025, the record date of this meeting, or their validly appointed proxy holders, are entitled to vote and ask questions at this meeting. Before we turn to the business before us, I would like to deal with a few procedural matters. The business of the meeting is described in the Management Information Circular dated March 28, 2025, which accompanied the Notice of Meeting. I will take the Notice of Meeting as read. We will conduct the votes on the matters before us by a poll.
On a poll, each registered shareholder or their duly appointed proxy holder who is entitled to vote on the matter and has joined the meeting using their control number has 1 vote in respect of each share entitled to be voted on the matter and held by that shareholder. The poll will be open for all resolutions at the same time. Click the voting button on the left menu of your screen when the poll is announced. This will allow you to choose to vote on each resolution immediately or wait until conclusion of discussion on each resolution prior to casting your vote. There will be an opportunity to ask questions on each resolution in turn. To submit a question, click the Ask a Question button on the left menu of your screen and type your question in the text box.
Once discussion on each item of business has concluded, I will give you a minute to enter your votes if you had not done so already. Once discussion on all items of business has concluded, I will provide a final opportunity to vote and then declare the voting closed on all resolutions. I now declare the polls open on all resolutions. Registered shareholders and duly appointed proxy holders who have joined the meeting using their control number, you may now click on the voting button in order to cast your votes or vote once discussion on each item has concluded. If you have already submitted your votes in advance and do not wish to change your vote, you do not need to take further action. To expedite matters today, Mr. Sheparski and I will move and second all motions with respect to the business of the meeting.
This is designed to facilitate the progression of the meeting and not intended to discourage comments. A copy of the materials together with an affidavit of TSX Trust Company confirming such materials were properly mailed to shareholders will be kept by the Secretary with the records of the meeting. The minutes of last year's Annual Meeting held on May 9, 2024, are available should any shareholder wish to review them. The Transfer Agent has provided a preliminary report on attendance, and based on this report, the Secretary has confirmed that there is a quorum present, and I therefore declare the meeting properly constituted for the transaction of business for which it has been called. I will now table the Corporation's 2024 Annual Report to shareholders, which includes the 2024 financial statements together with the auditor's report.
Copies of our Annual Report were mailed to registered shareholders and are accessible on the Corporation's website and profile on CDAR. We will now proceed to the appointment of auditors. As stated in the Notice of Meeting, it is the intention of the persons named in the form of proxy to vote in favor of a resolution appointing PricewaterhouseCoopers LLP as auditors of the Corporation, to hold office until the next Annual Meeting, and authorizing the Board to fix their remuneration subject to contrary instructions given in the form of proxy.
Mr. Chairman, I will move that PricewaterhouseCoopers LLP be appointed auditors of the Corporation until the next Annual Meeting and that the Directors be authorized to fix their remuneration.
Thank you, Mr. Sheparski. I second the motion. To submit a question, click the Ask a Question button on the left menu of your screen and type your question in the text box. If you have not already, please cast your votes using the voting button before we move on to the next item. We will now proceed with the election of six Directors, each of whom is to be elected at this meeting to hold office until the next Annual Meeting. Particulars of the six Director nominees are set out in the Management Information Circular, which was accompanied by the Notice of Meeting sent to the shareholders.
As stated in the Notice of Meeting, it is the intention of the persons named in the form of proxy to vote in favor of the election of each of the six Director nominees subject to contrary instructions given in the form of proxy. I will now call for nominations for the election of six Directors of the Corporation.
Mr. Chairman, I nominate the following persons: Malcolm Cockwell, Heather Fitzpatrick, Karen Oldfield, Erica Riley, Bruce Robertson, and Adam Sheparski, and move that they be elected Directors of the Corporation to hold office until the next Annual Meeting.
Thank you, Mr. Sheparski. Are there any further nominations? There being no further nominations, I declare the nominations closed.
Mr. Chairman, I will move that those nominees whose names have been read be elected to serve as Directors of the Corporation until the next Annual Meeting of shareholders or until their successors are elected or appointed.
Thank you, Mr. Sheparski. I second the motion. To submit a question, click the Ask a Question button on the left menu of your screen and type your question in the text box. Seeing no questions, if you have not already, please cast your votes using the voting button. This being our final resolution, for those of you who have not voted on either of the resolutions, please do so now as I will shortly close the poll. The polls are now closed, and I will read the results. Management has received proxies representing over 99% of the votes cast in favor of this resolution appointing PricewaterhouseCoopers LLP as auditors of the Corporation to hold office until the next Annual Meeting and authorizing the Board to fix their remuneration.
Since the votes withheld for this resolution are minimal, I will take the voting results from the proxy tabulation report and declare the motion carried. Management has received proxies representing over 99% of the votes cast in favor of each of the Directors nominated. Since the votes withheld for each nominee are minimal, I will take the voting results from the proxy tabulation report and declare the motion carried. As there are six persons nominated for the same number of positions, I now declare that those nominated have been duly elected Directors of the Corporation. Thank you, ladies and gentlemen. This concludes the formal part of today's meeting. Now I will turn the meeting over to Mr. Sheparski.
Thank you, Mr. Chairman, and good morning, everyone. Before I start my comments, I would like to remind listeners that during the course of our presentation and responding to questions about our financial and operating performance, we may make forward-looking statements. These statements are subject to known and unknown risks, and future results may differ materially. For further information on our risk factors, I encourage you to review Acadian's Annual Report and Annual Information Form, which are posted on our website at acadiantimber.com. Today, I'll start by providing you with a brief overview of our business and then discuss the company's achievements and performance during 2024. I will also provide an update on our performance so far in 2025 and comment on the outlook for the remainder of the year, after which I would be happy to take any questions. Let's begin with an overview of our business.
Acadian is a leading sustainable forest management company in Eastern North America. We own and manage approximately 1.1 million acres of private timberlands located in New Brunswick and Maine and manage an additional 1.3 million acres of crown land in New Brunswick, with all of our operations being SFI certified. Acadian's timberlands have been under active management for over 100 years. We have a very complete and comprehensive infrastructure in place and long-standing relationships with a large and diversified base of customers. Our strategy is to maximize cash flows from our timberland assets through sustainable forest management and other land use activities and then flow through the majority of our cash flows to our shareholders. Our primary business is forest management and the production of forest products, including saw logs, pulpwood, and biomass on our freehold timberlands, as well as providing forest management services on crown lands.
We also have flexibility to generate significant revenues through other land use activities, including real estate and environmental solutions. Environmental solutions include the development and sale of voluntary carbon credits on our first carbon credit project in Maine. This project, which is on the portion of our Maine timberlands that is subject to a working forest conservation easement, requires balancing harvest and growth, long-term planning, periodic carbon inventory verification, and maintenance of Acadian's sustainable forestry certification. Current real estate activities include land leases, land sales, and revenues from recreational use. We are always exploring opportunities to derive additional revenues from our forests while maintaining the same high standards of management. Turning to a review of Acadian's performance through 2024.
As always, Acadian's commitment to health and safety is our top priority, as we believe that emphasizing and achieving a good safety record is a leading indicator of success in the broader business. During 2024, there were 8 recordable safety incidents among our employees and contractors. These were mostly minor incidents that resulted in minimal lost time. However, incident reduction continues to be a primary focus for Acadian. 2024 was a busy year for Acadian, with several notable achievements. During 2024, we sold nearly all of the first tranche of registered voluntary carbon credits related to the project. The sales were comprised of approximately 752,000 voluntary carbon credits at an average price of approximately $24 US. The sale of carbon credits contributed $24.6 million to total sales. We also retrieved solid results from our timber operations in 2024, despite the challenges posed to our customers by weakened end-use markets.
New Brunswick continued making progress, increasing contractor capacity throughout the year. However, limited progress was made in Maine, and contractor availability and elevated cost remained an issue. Although unseasonably warm weather prevented the ground from freezing and somewhat hindered operations in both the first and fourth quarters, operating conditions were generally favorable for the rest of the year. 2024 saw a significant amount of real estate activity for Acadian. In March, we completed the acquisition of approximately 16,000 acres of timberland in New Brunswick at a price of $9 million. The timberlands are close in proximity to Acadian's existing operations and customer base. The property is well stocked, which will allow Acadian to expand its harvesting operations and also presents significant potential for revenue diversification through other land use opportunities. Further, we increased our activity surrounding opportunities within the renewable energy sector.
In February of 2024, Acadian executed an agreement for the option to lease approximately 10,000 acres of its Maine timberlands for the purpose of the development and operation of a solar-powered electric generating facility. Should the project reach the construction term, which will take several years, the incremental cash flows may become material to Acadian. In November 2024, Acadian installed a meteorological tower to collect wind data on our New Brunswick timberlands to deepen our understanding of the wind power potential on our land base, which we already understand to be considerable. In 2025, we are already working on additional opportunities related to renewable energy in both Maine and New Brunswick. Now, turning to our financial results.
During 2024, Acadian generated sales of $116.2 million, which includes $91.6 million related to timber sales and services and $24.6 million related to the sale of carbon credits, compared to $93.5 million in the prior year. Demand for our timber products remained stable. We met this demand and increased our volumes over the prior year through the hard work by the Acadian team to improve contractor availability, particularly in New Brunswick. Timber sales volume, excluding biomass, increased 16% year over year, but was offset by a 5% decrease in our weighted average selling price and lower timber services activity. Acadian's weighted average selling price, excluding biomass, was impacted by changes in product mix and weak end-use markets. In 2024, the company's adjusted EBITDA totaled $38.9 million, compared to $20.6 million during 2023. An adjusted EBITDA margin was 33%, compared to 22% in the prior year.
Acadian generated free cash flow per share of $1.69 in 2024, compared to $0.88 in 2023. Total dividends declared to shareholders during the year ended December 31, 2024, were $20.3 million, or $1.16 per share, consistent with 2023. The payout ratio for Acadian, which represents the amount of dividends declared as a percentage of the free cash flow generated, was 68% for 2024, or 39% based on cash dividends paid. Acadian ended the year with a solid net liquidity position of $29.3 million, which includes cash and funds available under the revolving credit facilities. Turning to our performance during the first quarter of 2025. Acadian's operations and financial results for the first quarter reflected mixed conditions. Demand for our products remained steady despite heightened economic uncertainty. However, unfavorable weather conditions in both New Brunswick and Maine impacted our ability to deliver to our customers.
Our results also continued being affected by limited contractor capacity in Maine. During the first quarter, we took meaningful steps towards addressing this challenge by establishing our own internal logging operations in Maine, which we expect to ramp up over the course of the year in order to increase volumes and reduce operating costs. In January 2025, Acadian purchased several pieces of harvesting equipment for $2.4 million and hired equipment operators to conduct harvesting operations on Acadian's Maine timberlands. On February 28th, Acadian acquired additional logging and related assets for a total cash consideration of $6.9 million. These assets include harvesting, trucking, and roadworking equipment and related real estate, which, combined with an established workforce, constitute an operational logging business which has operated on our land base for many years.
Although some operations will continue to be performed by external contractors in Maine in the near term, these initiatives represent a significant transition from contracted logging operations in Maine. Turning to our financial highlights. As reported yesterday, Acadian generated sales of $24.8 million, compared to $28.8 million in the prior year period. The first quarter of 2024 included $4.9 million in carbon credit sales, while no carbon credit sales occurred in the first quarter of 2025. Timber sales and services revenue increased $1 million year over year as a result of increased timber sales volumes and increased timber services activity, partially offset by a decrease in the weighted average selling price of timber. Timber sales volume, excluding biomass, increased 3%, supported by stable demand. However, unfavorable weather conditions hindered trucking activities.
Volumes in Maine were further impacted by continued limited contractor capacity, which we have taken steps to address, as I previously mentioned. The weighted average selling price, excluding biomass, decreased 5% year over year. Saw log prices decreased due to changes in product mix and weakness in lumber markets. Softwood pulpwood pricing decreased due to lower demand, while hardwood pulpwood pricing increased due to longer hauling distances. Operating costs and expenses were $20.4 million during the first quarter, compared to $21.2 million during the prior year period. The year-over-year decrease reflects an increase in operating costs and expenses related to timber sales and services of $2.2 million, offset by a decrease in costs related to carbon credit sales of $3 million.
Operating costs and expenses related to timber sales and services increased as a result of higher timber sales volumes and higher timber services activity, as well as transition costs associated with the establishment of our own logging operations in Maine. Adjusted EBITDA was $4.7 million, compared to $10.6 million in the prior year period. Included in the adjusted EBITDA in the prior year period was $4.1 million related to the carbon credit sales. Adjusted EBITDA margin for the quarter was 19%, compared to 37% in the prior year period. Free cash flow was $3 million, compared to $7.8 million in the prior year period. Net income for the first quarter totaled $3.7 million, or $0.21 per share, compared to net income of $6 million, or $0.35 per share in the same period of 2024.
Lower operating income and lower non-cash fair value adjustments were partially offset by lower income tax expense as compared to the prior year period. Acadian declared dividends of $5.2 million to our shareholders during the first quarter, or $0.29 per share. Turning to our outlook for the remainder of 2025. Demand for Acadian saw logs is mainly driven by regional supply and demand. Therefore, although we are experiencing economic uncertainty and concerns around potential tariffs, we remain confident that the stability of the northeastern forestry sector will support the demand for our products. Near-term demand and pricing is expected to remain relatively stable. We expect to maintain sufficient contractor availability in New Brunswick, and the establishment of our own internal logging operations is expected to alleviate capacity constraints in Maine and increase overall production over the course of 2025.
We will continue to expand our real estate activities over the course of the year, including further exploration of our renewable energy projects. With respect to voluntary carbon credits, demand and pricing are expected to remain stable. The registration of the second and third tranches is expected to be completed in the second quarter and is expected to result in approximately 350,000 credits being made available for sale. We are grounded by our vision, which is our commitment to long-term sustainable land management for the benefit of our stakeholders. We are committed to operating safely and managing our forests in a manner that is consistent with the principles of sustainable forestry. We are focused on retaining strong relationships with our diversified base of customers and contractors to ensure the long-term success of our business.
We recognize the importance of making positive contributions to the communities in which we live and work, and we continue to innovate in order to improve cash flow and provide attractive and sustainable distributions to our shareholders. At Acadian, we have the team, structure, and balance sheet to successfully weather challenging operating or market conditions as they arise, and we are dedicated to providing long-term value for shareholders. Before I conclude, on behalf of the management team, I would like to thank our employees and contractors for their hard work, contributions, and commitment to Acadian. This concludes my presentation, and I would now welcome any questions. With no questions received, I will now turn the meeting back to you, Mr. Chairman.
Thank you, Mr. Sheparski. Ladies and gentlemen, I would like to thank you for your participation and attendance. This brings us to the end of today's meeting.
As there is no other business, I declare the meeting terminated. Thank you and stay safe. Operator, over to you.
Thank you for attending today's meeting. You may now disconnect.