First Quarter (Acadian 2026 Q1 Interim Report)

Letter to Shareholders1

Acadian generated $4.8 million of Adjusted EBITDA2 and $3.5 million of Net Income during Q1 2026, compared to $4.7 million and $3.7 million during the same period last year.

These results reflect steady operations in New Brunswick and improving performance in Maine, where the efficiency of our internal harvesting operations has advanced. We made further changes to the structure and scale of these operations in late-Q1 2026. We expect our business in Maine to deliver stronger results in 2026 compared to last year.

Our markets continue being resilient in the face of tariffs and weak demand for end-products, a testament to our customers and Acadian's position as a major regional supplier of primary forest products. However, the higher fuel prices that took effect in early-Q2 2026 represent a new challenge, which we are working to mitigate.

Looking beyond our core operations, we continued developing the Real Estate and Environmental Solutions segments of our business during Q1 2026. Reflecting the optionality entailed by Acadian's large forest properties, and the values that our forests can generate beyond timber, we expect that these segments will become pillars of the business in time.

The Board of Directors has declared a dividend of $0.29 per share, consistent with prior quarters. At the same time, Macer Forest Holdings Inc., our largest shareholder, has reiterated its intention to participate in the DRIP for 100% of dividends payable to it. We believe that this approach will continue delivering the most value for our shareholders.

This year is Acadian's 20th anniversary as a pure-play timberland company. Since 2006, Acadian has returned approximately

$325 million to shareholders, while conducting sustainable, science-driven forest management across its land - thereby enabling our core operations to continue for many years to come, and cultivating significant long-term asset value. With healthy forests and a strong team in one of North America's best forestry jurisdictions, we believe that the next 20 years will be even more rewarding for Acadian and our shareholders.

In closing, and on behalf of the Board of Directors, thank you for your ongoing support.

Interim President and Chief Executive Officer May 6, 2026

1. The following contains forward-looking information about Acadian Timber Corp.'s outlook for the remainder of 2026. Reference should be made to the section entitled "Cautionary Statement Regarding Forward-Looking Information and Statements" in Management's Discussion and Analysis for further details.

2. Adjusted EBITDA is a Non-IFRS measure. Please refer to the section entitled "Non-IFRS Measures" in Management's Discussion and Analysis for further details.

MANAGEMENT'S DISCUSSION AND ANALYSIS

(All figures in Canadian dollars unless otherwise stated)

May 6, 2026

This management's discussion and analysis ("MD&A") discusses the financial condition and results of operations of Acadian Timber Corp. ("Acadian", the "Company" or "we") for the three months ended March 28, 2026 (the "first quarter" or "Q1 2026") compared to the three months ended March 29, 2025 ("Q1 2025") and should be read in conjunction with the unaudited interim condensed consolidated financial statements and notes thereto for the first quarter and the audited annual consolidated financial statements and the related MD&A for the fiscal year ended December 31, 2025.

Our first quarter unaudited interim condensed consolidated financial statements have been prepared in accordance with IAS 34 "Interim Financial Reporting" using the accounting policies adopted and disclosed in Note 2 of Acadian's audited 2025 consolidated financial statements and as updated in Note 2 of the first quarter unaudited condensed consolidated financial statements, and are expressed in Canadian dollars unless otherwise noted. External economic and industry factors remain broadly unchanged since the previous annual report, unless otherwise noted. This MD&A has been prepared based on information available as at May 6, 2026. Additional information is available on Acadian's website at www.acadiantimber.com and on SEDAR+ at www.sedarplus.ca

Throughout this MD&A, reference is made to "Adjusted EBITDA", which Acadian's management defines as net income before interest, income taxes, fair value adjustments, non-cash cost of sales related to carbon credits, recovery of or impairment of land and roads and depreciation and amortization, and to "Adjusted EBITDA margin", which is Adjusted EBITDA as a percentage of sales. Reference is also made to "Free Cash Flow", which Acadian's management defines as Adjusted EBITDA less interest paid, current income tax expense, capital expenditures excluding acquisitions of timberlands and non-cash expenditures, and mandatory debt repayments plus net proceeds from the sale of timberlands and other fixed assets (proceeds less gains or losses). Management believes that Adjusted EBITDA, Adjusted EBITDA margin, and Free Cash Flow are key performance measures in evaluating Acadian's operations and are important in enhancing investors' understanding of the Company's operational performance. Adjusted EBITDA and Adjusted EBITDA margin are indicative of the underlying profitability of Acadian's operating segments and are used to evaluate operational performance. Free Cash Flow is used to evaluate Acadian's ability to generate sustainable cash flows from operations that are available for dividends, repurchases of common shares, debt reduction, acquisitions, and other capital allocation activities. We have provided reconciliations of net income as determined in accordance with IFRS, to Adjusted EBITDA and Free Cash Flow in the "Adjusted EBITDA and Free Cash Flow" section of this MD&A. Reference is also made to "net liquidity" which includes cash and cash equivalents and funds available under credit facilities less amounts reserved to support the minimum cash balance related to long-term debt.

As these measures do not have a standardized meaning prescribed by IFRS, they may not be comparable to similar measures presented by other companies.

Management, including the Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures as at December 31, 2025. There have been no changes in our disclosure controls and procedures during the three months ended March 28, 2026 that have materially affected, or are reasonably likely to materially affect, our disclosure controls and procedures.

Management, including the Chief Executive Officer and Chief Financial Officer, have also evaluated the design and effectiveness of our internal controls over financial reporting in accordance with Multilateral Instrument 52-109 using the COSO Framework 2013 as at December 31, 2025. There have been no changes in our internal controls over financial reporting during the three months ended March 28, 2026 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

REVIEW OF OPERATIONS

Acadian is one of the largest timberland owners in Eastern Canada and the Northeastern U.S. We own and manage 775,000 acres of freehold timberlands in New Brunswick ("New Brunswick Timberlands") and approximately 300,000 acres of freehold timberlands in Maine ("Maine Timberlands"). Acadian also provides timber services relating to 1.3 million acres of Crown licensed timberlands in New Brunswick.

Our primary business is the production of softwood and hardwood sawlogs, pulpwood, and biomass by-products, sold to approximately 85 regional customers. Acadian also generates income through other operations, including Real Estate and Environmental Solutions.

Acadian's business strategy is to maximize cash flows from its existing timberland assets through sustainable forest management and other land use activities. We aim to grow our business by acquiring additional timberland assets at value and actively manage those assets to drive improved performance.

The table below summarizes operating and financial data for Acadian:

1. Non-IFRS Measure. See "Non-IFRS Measures" on page 2 of this report.

2. As at May 6, 2026 there were 18,619,712 common shares outstanding.

Revenue in Q1 2026 reflects consistent volumes compared to the same period last year. While demand for softwood pulpwood decreased relative to Q1 2025 due to an increase in available sawmill residuals in the region, the sales mix included a higher proportion of softwood sawlogs. The weighted average selling price was consistent with Q1 2025.

Operating costs and expenses decreased $1.3 million compared to the same period last year as a result of decreased timber services activity in New Brunswick, partially offset by higher average operating costs and expenses per m3 in Maine, as well as higher selling and administration costs.

Net income for Q1 2026 totaled $3.5 million, or $0.19 per share, compared to $3.7 million or $0.21 per share during the same period last year. Lower operating income and higher interest expense were partially offset by higher non-cash fair value adjustments and lower income tax expense.

New Brunswick Timberlands

Acadian's New Brunswick Timberlands business owns and manages 775,000 acres of freehold timberlands in New Brunswick, and provides management services to 1.3 million acres of Crown licensed timberlands in New Brunswick. All harvesting operations are performed by third-party contractors.

Freehold sales were $17.8 million, consistent with the prior year period, with similar volumes and weighted average selling price, excluding biomass. Freehold variable costs per m3 were 4% higher than Q1 2025 as a result of a higher proportion of sawlogs in the product mix and longer hauling distances. Timber services activity was lower year-over-year but had a minimal impact on Adjusted EBITDA, which was in line with Q1 2025 at $5.8 million.

Maine Timberlands

Acadian's Maine Timberlands business owns and manages 300,000 acres of freehold timberlands in Maine. Prior to January 1, 2025, all harvesting operations in Maine Timberlands were performed by third-party contractors. During Q1 2025, Acadian established its own internal harvesting operations. The transition and rationale for the relevant transactions were described in Acadian's Q1 2025 interim report dated May 7, 2025.

Freehold sales were $3.2 million compared to $2.4 million during the prior year period, due to timber sales volume, excluding biomass, increasing by 57% as a result of increased productivity of the internal harvesting capacity. Higher volumes were partially offset by a 10% decrease in the weighted average selling price in U.S. dollar terms, excluding biomass, due to stumpage sales in Q1 2026 that did not occur in Q1 2025, and increased roadside sales. Timber services activity increased year-over-year as internal harvesting capacity also operated on neighbouring landowners. Freehold variable costs per m3 were 18% higher than Q1 2025, reflecting the transition towards internal harvesting operations. Adjusted EBITDA was $0.4 million compared to $(0.7) million in Q1 2025.

Other Businesses1

Environmental Solutions leverages the ecological functions of Acadian's land and technical expertise of its team to address pressing environmental challenges, such as climate change. During Q1 2026 and Q1 2025, no carbon credits were sold. Acadian is in the process of registering additional carbon credits for sale, which is expected to occur in the second half of 2026.

Real Estate is an emerging business, which develops new sources of revenue from Acadian's land through recreational activities and leases, commercial leases, and land sales. The financial performance of Real Estate is currently included in the reported results for New Brunswick Timberlands and Maine Timberlands. As these activities are further developed, Real Estate may be reported as its own segment.

LIQUIDITY AND CAPITAL RESOURCES

Acadian had net liquidity of $15.0 million as at March 28, 2026, which includes cash and funds available under credit facilities less amounts reserved to support the minimum cash balance related to long-term debt.

Liquidity and capital resources are discussed in the Company's MD&A for the year ended December 31, 2025.

OUTLOOK1

Sufficient contractor availability in New Brunswick is expected to continue through 2026. Production from our internal harvesting operations in Maine improved during Q1 2026. We expect to continue progressing towards our targeted production levels as well as cost structure with these operations over the rest of the year. Reflecting the typical spring slowdown and lower productivity of harvesting during the summer months, our overall harvesting activity is expected to ease

‌1 The following contains forward-looking information about Acadian Timber Corp.'s outlook for the remainder of 2026. Reference should be made to the section entitled "Cautionary Statement Regarding Forward-Looking Information and Statements" for further details.

during Q2.

Demand for Acadian's products is mainly driven by regional supply dynamics. Near-term sawlog demand is expected to remain stable, but pricing may be challenged until end-use markets improve. Demand and pricing for pulpwood is expected to remain at reduced levels until existing customers increase their production and new facilities that consume pulpwood as well as biomass are commissioned.

Looking through to end-use markets, near-term headwinds, such as tariffs and duties, have continued to impact most of our customers. However, most macroeconomic indicators are positive. North American interest rates have eased and the consensus forecast for U.S. housing starts is steady at approximately 1.3 million starts in 2026. Furthermore, temporary and permanent curtailments of forest products facilities in other regions of North America are expected to support the demand and pricing conditions for Acadian's customers in New Brunswick and Maine. These trends align with our conviction in the stability of the northeastern forestry sector.

Elevated fuel prices present a new challenge for Acadian's operations and our customers. Acadian's contractor agreements typically allow rate adjustments as fuel prices change, and most customer contracts provide partial recovery of fuel-related cost increases. The same structure in effect during previous fuel price spikes, such as in 2022, is still in place today, but the overall impact on Acadian and its customers will depend on broader market conditions and the duration of elevated prices.

With respect to voluntary carbon credits, demand and pricing are expected to remain stable. Issuance of the next tranche of carbon credits from Acadian's current project has been delayed due to the transition to ACR's updated Improved Forest Management protocol. The registration of additional carbon credits is anticipated in the second half of 2026, and the updated protocol is expected to improve the marketability of the resulting carbon credits. While Acadian is evaluating opportunities to develop additional projects, our focus is on the existing carbon credit project in Maine.

ADDITIONAL INFORMATION

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

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

The following table provides a reconciliation of net income, as determined in accordance with IFRS, to Adjusted EBITDA and Free Cash Flow during each respective period:

1. Non-IFRS Measure. See "Non-IFRS Measures" on page 2 of this report.

The table below sets forth selected consolidated quarterly information for the current and last seven quarters.

Results are impacted by seasonality. Harvest activity is highest during the winter months, when the ground is frozen, providing a solid base for harvesting and hauling equipment. There is a significant decrease in activity during the spring when the ground thaws. Harvesting activity resumes in late spring or early summer when the ground dries and continues through the fall.

Net income can be significantly impacted by non-cash items such as fluctuations in foreign exchange and the fair value adjustment of the Company's timberlands, which are revalued at each reporting period. During the fourth quarter of 2025, Acadian recorded a fair value adjustment gain on timberlands which increased net income by $52.1 million.

During the second quarter of 2024, Acadian sold significant volumes of voluntary carbon credits, which increased total sales

$19.7 million.

Acadian declares dividends from its available cash to the extent determined prudent by the Board of Directors. Dividends are paid on or about the 15th day following each dividend record date.

Total dividends declared to shareholders during the three months ended March 28, 2026 were $5.4 million, or $0.29 per share, compared to $5.2 million, or $0.29 per share during the same period in 2025.

Acadian has in place a dividend reinvestment plan ("DRIP") effective with eligible shareholders whereby Canadian resident shareholders may elect to automatically have their dividends reinvested in additional shares issued directly from the treasury of the Company. During the three months ended March 28, 2026, Acadian issued 169,080 common shares in accordance with the DRIP.

Macer Forest Holdings Inc. ("Macer"), which owns approximately 52% of the outstanding common shares of Acadian as at May 6, 2026, participates in the DRIP for 100% of dividends payable to it.

There were no related party transactions during the first quarter other than shares issued to Macer in accordance with the DRIP, as included within Dividend Policy of the Company.

The preparation of financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reported period. The critical estimates and judgements applied in preparing Acadian's consolidated financial statements affect the determination of the timing of satisfaction of performance obligations related to revenue recognition, assessment of net recoverable amounts, net realizable values and fair values, including the fair value of assets acquired as part of a business combination, depreciation

rates and useful lives, determination of functional currency and the selection of accounting policies.

The critical judgements and estimates made in the preparation of Acadian's consolidated financial statements include, among other things, determining Acadian's customer and the timing of transfer of control in carbon credit sales arrangements, future prices and margins, future sales volumes, future harvest rates and sustainable yields, and discount rates utilized in the valuation of Acadian's timber, roads and land. In making estimates and judgements, management relies on external information and observable conditions where possible, supplemented by internal analysis as required. These estimates and judgements have been applied in a manner consistent with prior periods and there are no known trends, commitments, events or uncertainties that we believe will materially affect the methodology or assumptions utilized in making these estimates and judgements in these consolidated financial statements.

For further reference on critical accounting policies, see our material accounting policies contained in Note 2 of Acadian's audited 2025 consolidated financial statements.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

The Company has two significant contractual obligations, being the Fibre Supply Agreement and the Crown Lands Services Agreement.

The Fibre Supply Agreement between the Company and Groupe Lebel expires in 2031. The provision of timber services under the Crown Lands Services Agreement at the direction of Twin Rivers Paper Company has a term equal to the term of the Crown License, including any renewal terms.

The table below summarizes the Company's long-term debt obligations as at March 28, 2026:

RISK FACTORS

Risk factors are discussed in the Company's Annual Information Form dated March 27, 2026 except as noted below.

Fuel Costs

Acadian, its contractors, and its customers are exposed to fuel costs through their direct and indirect reliance on fuel-intensive harvesting, processing, and transportation equipment. Rising fuel costs therefore affect both Acadian's operating costs and the financial health of its customers. Acadian maintains contractual mechanisms with both contractors that allow for rate increases when fuel prices exceed defined thresholds and customers that allow for partial recovery of increased fuel-related costs incurred by Acadian. Other customer arrangements are short-term in nature, enabling more frequent price resets. While these mechanisms can mitigate the impact of fuel price fluctuations to Acadian, they may not fully offset rapid or sustained increases, and there is no assurance that such adjustments will be available or accepted in all market conditions. Sustained or further increases in fuel prices could materially adversely affect our future financial performance.

This MD&A contains forward-looking information and statements 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. Forward-looking information is included in this MD&A and includes statements made in the section entitled "Outlook" and without limitation other statements regarding management's beliefs, intentions, results, performance, goals, achievements, future events, plans and objectives, business strategy, growth strategy and prospects, 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. All forward-looking statements in this MD&A 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. Actual results may vary. These forward-looking statements include, but are not limited to:

• Expectations regarding the number and timing of carbon credits that will be successfully registered and available for sale. Actual credit issuances will be adjusted each reporting period based on actual harvesting, natural disturbances and other factors, as well as periodic updating for inventory and verification activities.

• Expectations regarding product demand, pricing and end use markets, including expectations for U.S. housing starts, which may be impacted by changes in interest rates, U.S. population demographics and the inventory of homes for sale. Expectations regarding product demand and pricing are based on anticipated market conditions, anticipated regional inventory levels of key customers, and the economic situation of key customers. Estimates for U.S. housing starts are based on forecasts published by major financial institutions.

• Expectations regarding future production volumes and costs which may be impacted by operational efficiency, the regional supply of skilled operators, product demand, sales pricing, fuel price volatility, and end use markets.

• Expectations regarding the impacts of escalated duties on softwood lumber and tariffs or potential tariffs levied on

  U.S. imports from Canada, which may include direct impacts related to changes to the price of and demand for Acadian's products originating in Canada as well as the U.S., and indirect impacts associated with changes in the price of and demand for the products of Acadian's key customers and the greater economy.

• Expectations regarding future contractor availability, which may be impacted by regional supply of trained contractors and changes in the demographics of the available workforce.

Other risks and factors are discussed in each of the Annual Information Form dated March 27, 2026 and the Management Information Circular dated March 27, 2026 and other filings of Acadian made with securities regulatory authorities, which are available on SEDAR+ at www.sedarplus.ca.. Forward-looking information is based on various material factors or assumptions, which are based on information currently available to Acadian. Readers are cautioned that the preceding list of material factors or assumptions is not exhaustive. Although the forward-looking statements contained in this MD&A 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 MD&A are made as of the date of this MD&A based on information currently available to management and should not be relied upon as representing Acadian's views as of any date subsequent to the date of this MD&A. 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.

INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

See accompanying notes to interim condensed consolidated financial statements.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF NET INCOME AND COMPREHENSIVE INCOME

(unaudited)

See accompanying notes to interim condensed consolidated financial statements.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(unaudited)

See accompanying notes to interim condensed consolidated financial statements.

INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

See accompanying notes to interim condensed consolidated financial statements.

Details of the net change in non-cash working capital balances and other:

NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited) (All figures in Canadian dollars unless otherwise stated)

1. GENERAL

   Acadian Timber Corp. (the "Company") is governed by the Canada Business Corporations Act pursuant to articles of arrangement dated January 1, 2010. The Company is a reporting issuer and its common shares are publicly traded on the Toronto Stock Exchange under the stock symbol "ADN". The principal and head office of the Company is located at 6 Crabtree Ave., Edmundston, New Brunswick, E3V 3K5.

   The Company and all of its consolidated subsidiaries (collectively "Acadian") own and manage approximately 775,000 acres of freehold timberlands in New Brunswick and approximately 300,000 acres of freehold timberlands in Maine and provide timber services relating to approximately 1.3 million acres of Crown licensed timberlands in New Brunswick. Acadian's primary business is forest management and the production of timber products, including softwood and hardwood sawlogs, pulpwood, and biomass by-products, sold to approximately 85 regional customers. Acadian also generates income through other operations, including real estate and environmental solutions.

   Acadian's operations are subject to seasonal variations and, as a result, operating results vary from quarter to quarter. Harvesting activity can be compromised by inaccessibility to some sites during wet seasons, resulting in decreased harvest levels. Results of one quarter will not be indicative of results that may be achieved in other quarters or for the full year.

   As at March 28, 2026, Macer Forest Holdings Inc. owns 9,411,589 shares representing approximately 51% of the outstanding shares of the Company and is the ultimate parent entity of the Company.

2. MATERIAL ACCOUNTING POLICIES

   These unaudited interim condensed consolidated financial statements have been prepared in accordance with International Accounting Standard ("IAS") 34, Interim Financial Reporting, as issued by the International Accounting Standards Board ("IASB") and using the accounting policies adopted and disclosed in Note 2 of Acadian's audited 2025 consolidated financial statements, except for the adoption of new accounting standards effective January 1, 2026. These interim condensed consolidated financial statements should be read in conjunction with Acadian's audited annual consolidated financial statements for the fiscal year ended December 31, 2025.

   These unaudited interim condensed consolidated financial statements were authorized for issuance by the Board of Directors of Acadian on May 6, 2026.

   Adoption of New Accounting Standards

   Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments: Disclosures re: Classification and Measurement of Financial Instruments

   The amendments clarify the date of recognition and derecognition of some financial assets and liabilities and introduce an accounting policy option to derecognize financial liabilities settled using an electronic payment system when certain criteria are met. The amendments also, provide additional clarity and guidance for assessing whether a financial asset meets the solely payments of principal and interest criterion, add new disclosures for certain financial instruments with contractual terms that can change cash flows and update the disclosures for equity instruments designated at fair value through other comprehensive income. The amendments are effective for reporting periods beginning on or after January 1, 2026. The Company elected the accounting policy option to derecognize financial liabilities settled through electronic payment systems prior to the settlement date when the criteria are met. The adoption of these amendments did not have a material impact to these consolidated financial statements.

3. INVENTORIES

   (CAD thousands) As at	March 28, 2026	December 31, 2025
   Log inventory	$ 2,708	$ 2,116
   Carbon credits	248	245
   Supplies	732	671
   Total	$ 3,688	$ 3,032

4. TIMBER

   (CAD thousands)
   Balance as at December 31, 2024	$ 471,890
   Disposals	(80)
   Gains arising from growth	30,465
   Reduction arising from harvest	(23,755)
   Gain from fair value adjustment and other changes	51,482
   Foreign exchange	(8,137)
   Balance as at December 31, 2025	$ 521,865
   Gains arising from growth	10,102
   Reduction arising from harvest	(8,794)
   Foreign exchange	2,135
   Balance as at March 28, 2026	$ 525,308

   Timber is measured at fair value. During the year, adjustments are made to standing timber assets to reflect the change in fair value due to gains arising from growth and reductions arising from harvest. Average selling price less costs of harvesting and selling is applied to expected volume growth to calculate gains arising from growth, and to the harvested volume to calculate reductions arising from harvest. On an annual basis, the fair value of standing timber assets is reassessed with the assistance of licensed independent third-party appraisers. Fair value adjustments are recognized in net income.

5. LAND, ROADS AND OTHER FIXED ASSETS

   (CAD thousands)	Land	Roads	Bridges and Pavement	Equipment and Other	Total
   Cost
   Balance as at December 31, 2024	$ 88,715	$ 10,182	$ 6,346	$ 4,356	$ 109,599
   Additions	170	-	41	2,710	2,921
   Business acquisition (Note 3)	22	-	-	6,616	6,638
   Disposals	(11)	-	-	(899)	(910)
   Foreign exchange	(2,059)	(356)	(157)	(53)	(2,625)
   Revaluations	(19,849)	(264)	-	-	(20,113)
   Balance as at December 31, 2025	$ 66,988	$ 9,562	$ 6,230	$ 12,730	$ 95,510
   Additions	15	-	-	66	81
   Disposals	-	-	-	(24)	(24)
   Foreign exchange	429	73	39	117	658
   Balance as at March 28, 2026	$ 67,432	$ 9,635	$ 6,269	$ 12,889	$ 96,225
   Accumulated Depreciation
   Balance as at December 31, 2024	$ -	$ -	$ (3,148)	$ (2,384)	$ (5,532)
   Depreciation for the year	-	-	(141)	(1,683)	(1,824)
   Disposals		-	-	209	209
   Foreign exchange	-	-	105	30	135
   Balance as at December 31, 2025	$ -	$ -	$ (3,184)	$ (3,828)	$ (7,012)
   Depreciation for the quarter	-	-	(29)	(435)	(464)
   Disposals	-	-	-	5	5
   Foreign exchange	-	-	(27)	(21)	(48)
   Balance as at March 28, 2026	$ -	$ -	$ (3,240)	$ (4,279)	$ (7,519)
   Carrying Amounts
   As at December 31, 2025	$ 66,988	$ 9,562	$ 3,046	$ 8,902	$ 88,498
   As at March 28, 2026	$ 67,432	$ 9,635	$ 3,029	$ 8,610	$ 88,706

6. LONG-TERM DEBT

   (CAD thousands) As at	March 28, 2026	December 31, 2025
   Term facilities	$ 111,000	$ 109,648
   Equipment loan	1,378	1,534
   	112,378	111,182
   Less:
   Deferred debt issuance costs	(438)	(475)
   Net long-term debt	$ 111,940	$ 110,707
   Less:
   Current portion	(711)	(698)
   Net long-term debt, long-term portion	$ 111,229	$ 110,009

   Acadian has term credit facilities with MetLife Insurance Company, with maturity dates ranging from March 6, 2027 to March 6, 2030. These credit facilities include a revolving credit facility of up to U.S. $10.0 million (the "Revolving Facility") for general corporate purposes and term credit facilities of U.S. $80 million (the "Term Facilities"). The Term Facilities bear interest at rates ranging from 2.7% to 5.3%. The Revolving Facility bears interest at floating rates based on the Secured Overnight

   Financing Rate plus applicable margin. There are no scheduled repayments of principal required prior to the maturity dates of the Term Facilities.

   As at March 28, 2026, Acadian had borrowed U.S.$80.0 million (December 31, 2025 - U.S. $80.0 million) under the Term Facilities and U.S.$nil (December 31, 2025 - U.S.$nil) under the Revolving Facility. U.S.$2.3 million of the Revolving Facility is reserved to support the minimum cash balance requirement of the Term Facilities. As security for these facilities, Acadian granted the lenders a security interest over the majority of its assets. The facilities are subject to customary terms and conditions for borrowers of this nature, including limits on incurring additional indebtedness and granting liens or selling assets without the consent of the lenders. The credit facilities are also subject to the maintenance of a maximum loan-to-value ratio. Acadian is in compliance with all covenants as at March 28, 2026 and December 31, 2025.

   Acadian has a $2.0 million Canadian dollar denominated revolving credit facility with a major Canadian bank for general corporate purposes. This facility bears interest at floating rates based on bank prime rates plus applicable margin and is due on demand. No amounts were drawn on this facility as at March 28, 2026 or December 31, 2025.

   Acadian has equipment financing with a remaining balance of U.S.$1.0 million as at March 28, 2026 (December 31, 2025 -U.S.$1.1 million) which bears interest at 2.5% and is repayable in monthly principal and interest instalments ending January 2028. The related equipment has been pledged as security.

   The fair value of the Term Facilities as at March 28, 2026 is $107.9 million (December 31, 2025 - $107.5 million). The fair value of the Term Facilities is determined using the discounted cash flow approach and is measured under Level 2 of the fair value hierarchy. Future cash flows are estimated based on the terms under the Term Facilities and discounted at a rate reflecting appropriate market fundamentals relating to the debt. The carrying value of the equipment loan is assumed to reasonably approximate fair value given the lack of significant changes in underlying market conditions.

7. SHAREHOLDERS' EQUITY

   Acadian is authorized to issue an unlimited number of common shares. The common shares have no stated par value.

   Acadian has in place a dividend reinvestment plan ("DRIP") whereby Canadian resident shareholders may elect to automatically have their dividends reinvested in additional shares. Shares issued under the DRIP are issued directly from the treasury of the Company at a price equal to the volume-weighted average trading price of the Company's shares on the TSX for the five trading days immediately preceding the relevant dividend payment date, which is typically on or about the 15th of April, July, October and January. During the quarter, Acadian issued 169,080 common shares in accordance with the DRIP.

   The Company's issued and outstanding common shares are as follows:

   (CAD thousands except share data)	Number of Shares	Share Capital
   Balance as at December 31, 2025	18,286,767	$ 166,693
   Common shares issued - DRIP	169,080	2,773
   Balance as at March 28, 2026	18,455,847	$ 169,466

8. NET INCOME PER SHARE

   Basic net income per share is calculated by dividing net income attributable to common shareholders by the weighted average number of common shares outstanding during the period. There are no dilutive potential shares.

   Three Months Ended	March 28, 2026	March 29, 2025
   Weighted average number of common shares - basic and diluted	18,426,695	17,797,714

9. SEGMENTED INFORMATION

   Acadian's presentation of reportable segments is based on how management has organized the business in making operating and capital allocation decisions and assessing performance. Acadian has three reportable segments: New Brunswick Timberlands, Maine Timberlands and Environmental Solutions. The Environmental Solutions segment includes business activities related to the development and sale of voluntary carbon credits. There were no sales, expenses or Adjusted EBITDA related to Environmental Solutions during the three months ended March 28, 2026 or March 29, 2025.

   The material accounting policies followed for the segments are consistent with those described in Note 2. Adjusted EBITDA is used to evaluate the operational performance of reportable segments. Adjusted EBITDA is defined as net income before interest, income taxes, fair value adjustments, non-cash cost of sales related to carbon credits, recovery of or impairment of land and roads, and depreciation and amortization.

   Sales, Cost of sales, Selling administration and other expenses and Adjusted EBITDA by reportable segment are as follows:

   (CAD thousands) Three Months Ended	March 28, 2026	March 29, 2025
   Sales
   New Brunswick Timberlands
   Softwood	$ 11,181	$ 9,293
   Hardwood	6,466	8,078
   Biomass	170	423
   Timber services and other sales	1,133	4,274
   Total New Brunswick Timberlands sales	$ 18,950	$ 22,068
   Maine Timberlands
   Softwood	$ 2,515	$ 1,518
   Hardwood	720	878
   Biomass	-	26
   Timber services and other sales	1,227	344
   Total Maine Timberlands sales	$ 4,462	$ 2,766
   Total sales	$ 23,412	$ 24,834
   Cost of sales
   New Brunswick Timberlands	$ 11,974	$ 14,799
   Maine Timberlands	3,920	2,562
   Total cost of sales	$ 15,894	$ 17,361
   Selling, administration and other
   New Brunswick Timberlands	$ 1,275	$ 1,350
   Maine Timberlands	506	898
   Corporate	1,428	562
   Total selling, administration and other	$ 3,209	$ 2,810
   Adjusted EBITDA
   New Brunswick Timberlands	$ 5,772	$ 5,892
   Maine Timberlands	405	(674)
   Total segment Adjusted EBITDA	6,177	5,218
   Corporate expenses	(1,399)	(539)
   Fair value adjustments and other	1,664	1,554
   Interest expense, net	(1,096)	(816)
   Depreciation and amortization	(478)	(236)
   Income before income taxes	$ 4,868	$ 5,181

   Approximately 19% of total sales during the three months ended March 28, 2026 were originated with customers domiciled in the U.S. and the balance in Canada (March 29, 2025 - 23%). Approximately 22% of total sales were denominated in U.S. dollars during the same period (March 29, 2025 - 17%).

   Acadian sells its products to many companies in North America. For the three months ended March 28, 2026, sales to the largest and next largest customer accounted for 34% and 15%, respectively (March 29, 2025 - 23% and 12%, respectively).

10. FINANCIAL INSTRUMENTS

    Financial Risk management - Foreign Currency Risk

    Acadian has designated a hedging relationship between part of the net investment in its Maine subsidiary and its U.S. dollar-denominated debt, which mitigates the foreign currency risk arising from the subsidiary's net assets. The long-term debt is designated as a hedging instrument for the changes in the value of the net investment that is attributable to changes in the Canadian dollar/U.S. dollar spot rate.

    To assess hedge effectiveness, Acadian determines the economic relationship between the hedging instrument and the hedged item by comparing changes in the carrying amount of the debt that is attributable to a change in the spot rate with changes in the investment in the foreign operation due to movements in the spot rate (the offset method). Acadian's policy is to hedge the net investment only to the extent of the debt principal. There was no ineffectiveness to be recorded from the hedge during the quarter.

    The change in the carrying amount of long-term debt as a result of foreign currency movements during the quarter, as recognized in OCI, and the change in the hedged item was $1.4 million for the three months ended March 28,2026 (March 29, 2025 - $(0.4) million).

    Interest Rate Risk

    Acadian's interest rate risk exposure arises from its floating interest rate revolving credit facility, to the extent funds are drawn (Note 6). As at March 28, 2026, no balance was drawn (December 31, 2025 - $nil). A change in interest rates would have no impact on the fixed interest rate Term Facilities or Equipment Loan.

11. INCOME TAXES

    The components of income taxes recognized in profit or loss are as follows:

    (CAD thousands) Three Months Ended	March 28, 2026	March 29, 2025
    Current income tax expense	$ 1,015	$ 577
    Deferred income tax expense	382	945
    Total income tax expense	$ 1,397	$ 1,522

    Acadian's effective tax rate is different from the domestic statutory income tax rate due to the differences set out below:

    (CAD thousands) Three Months Ended	March 28, 2026	March 29, 2025
    Income taxes at statutory rate	$ 1,411	$ 1,503
    Foreign tax rate differential	(15)	5
    Other	1	14
    Total income tax expense	$ 1,397	$ 1,522

12. DIVIDENDS TO SHAREHOLDERS

Acadian pays quarterly dividends to the extent determined prudent by the Board of Directors. Total dividends declared for the three months ended March 28, 2026 were $5.4 million (March 29, 2025 - $5.2 million) or $0.29 per share (March 29, 2025 - $0.29 per share).

https://www.acadiantimber.com

6 Crabtree Ave. Edmundston, NB E3V 3K5

acadiantimber.com