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Interfor Reports Record Q2’21 Results

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EBITDA1 of $611 million on Sales of $1.1 billion

Net Cash Position and Available Liquidity of $1.2 billion

BURNABY, British Columbia, Aug. 05, 2021 (GLOBE NEWSWIRE) -- INTERFOR CORPORATION (“Interfor” or the “Company”) (TSX: IFP) recorded Net earnings in Q2’21 of $419.2 million, or $6.45 per share, compared to $264.5 million, or $4.01 per share in Q1’21 and $3.2 million, or $0.05 per share in Q2’20. Adjusted net earnings in Q2’21 were $433.5 million compared to $270.6 million in Q1’21 and $10.6 million in Q2’20.

Robust lumber prices in North America and strong operating performance during the second quarter of 2021 led to Interfor realizing record financial results, including records for Net earnings, Adjusted EBITDA and cash flow from operations.

Adjusted EBITDA was $611.3 million on sales of $1.1 billion in Q2’21 versus $392.1 million on sales of $849.3 million in Q1’21. $484.5 million of cash flow was generated from operations before changes in working capital, or $7.46 per share.

These record financial results bolstered Interfor’s balance sheet and enabled the deployment of a significant amount of capital in the quarter. Interfor’s balanced approach to capital allocation included growth through a four-sawmill acquisition and strategic capital expenditures, and rewarding shareholders with returns of capital through share repurchases and a special cash dividend.

Even with a significant amount of capital deployed in the quarter, Interfor’s balance sheet remains very well positioned to support further strategic investment. Net debt ended the quarter at $(490.7) million, or (46.1)% of invested capital, resulting in available liquidity of $1.2 billion.

Notable items in the quarter:

• Record Production Balanced with Shipments

  • Total lumber production in Q2’21 was 716 million board feet, representing an increase of 29 million board feet quarter-over-quarter and setting an Interfor production record. The U.S. South and U.S. Northwest regions accounted for 387 million board feet and 137 million board feet, respectively, compared to 338 million board feet and 141 million board feet in Q1’21. The Summerville sawmill, acquired March 12, 2021, contributed to the increased output in the U.S. South region with a full quarter of its production. Production in the B.C. region decreased to 192 million board feet from 208 million board feet in the preceding quarter.

  • Total lumber shipments were 714 million board feet, or 48 million board feet higher than Q1’21.

  • Interfor’s average selling price was $1,419 per mfbm, up $276 per mfbm versus Q1’21. The key benchmark prices increased quarter-over-quarter with the SYP Composite, Western SPF Composite and KD H-F Stud 2x4 9’ benchmarks increasing by US$113, US$384 and US$447 per mfbm to US$1,028, US$1,319 and US$1,609 per mfbm, respectively.

• Strategic Capital Investments

  • Capital spending was $40.6 million, including $24.2 million on high-return discretionary projects. The majority of this discretionary spending was focused on the ongoing multi-year rebuild of the Eatonton, GA sawmill, which will be substantially complete in Q4’21. Inclusive of this project, US$120.8 million has been spent on the Company’s Phase II strategic capital plan through June 30, 2021.

• Acquisition of Four US Sawmills and Restart of the DeQuincy, LA Operation

  • On July 9, 2021, Interfor concluded the acquisition of four sawmill operations located in Bay Springs, MS, Fayette, AL, DeQuincy, LA and Philomath, OR from Georgia-Pacific Wood Products LLC and GP Wood Products LLC. The Company paid total consideration of US$372.0 million.

  • This acquisition added high quality assets with 720 million board feet of annual lumber production capacity, increasing Interfor’s total capacity by approximately 23% to 3.9 billion board feet.

  • Interfor is restarting operations at the sawmill in DeQuincy, LA, which has annual lumber production capacity of 200 million board feet. Lumber production is expected to begin in the first half of 2022. The sawmill was idled in May 2020 by its previous owner at the outset of the COVID-19 pandemic.

• Special Cash Dividend

  • On May 12, 2021, Interfor’s Board of Directors declared a one-time special cash dividend of $2.00 per share, which was paid on June 28, 2021 to shareholders of record on May 28, 2021. The special dividend resulted in an aggregate distribution of $130.6 million. The dividend was funded from cash on hand.

• Normal Course Issuer Bid (“NCIB”)

  • During Q2’21, Interfor purchased 1,688,770 common shares under the Company’s NCIB for total consideration of $49.4 million.

  • Interfor has purchased 3,790,610 common shares for total consideration of $94.2 million since the outset of its NCIB, representing an average price of $24.84 per share, or 1.02 times book value per share at June 30, 2021. The NCIB will continue to be used to opportunistically purchase Interfor common shares at attractive prices.

• Sale of Former Sawmill Property

  • On July 21, 2021, the Company completed the sale of property, plant and equipment at its former Hammond sawmill located in Maple Ridge, B.C. for net cash proceeds of $40.0 million, representing $0.63 per common share outstanding at June 30, 2021. This sale contributes to the successful reconfiguration of Interfor’s B.C. Coastal operations announced on September 3, 2019, which resulted in the monetization of approximately $40.0 million of working capital following the closure of the Hammond sawmill and led to increased profitability from its remaining forestry operations.

• Softwood Lumber Duties

  • On May 21, 2021, the U.S. Department of Commerce issued its preliminary revised countervailing (“CV”) and anti-dumping (“AD”) duty rates based on completion of its second administrative review for the year ended December 31, 2019. The preliminary combined rate for 2019 is 18.32%, compared to a cash deposit rate of 20.23%.

  • Interfor expensed $19.2 million of duties in the quarter, representing the full amount of CV and AD duties incurred on its Canadian shipments of softwood lumber into the U.S. at a combined rate of 8.99%.

  • Cumulative duties of US$158.2 million have been paid by Interfor since the inception of the current trade dispute and are held in trust by the U.S. Except for US$32.9 million in respect of overpayments arising from duty rate adjustments, Interfor has recorded the duty deposits as an expense.

Expanded Organic Growth in the U.S. South

Interfor is expanding its multi-year strategic capital plan with an additional US$230 million of strategic investments in its U.S. South platform through 2024. These investments include re-initiation of the major rebuild of the Thomaston, GA sawmill, a follow-on investment at the recently acquired sawmill in Summerville, SC, a second phase to the modernization of the Georgetown, SC sawmill, and several other targeted upgrades. In total, these investments are expected to grow annual lumber production by about 250 million board feet and further optimize conversion costs, improve lumber recovery, and enhance grade and product mix. Each project is expected to generate very attractive risk-adjusted returns at conservative lumber prices.

Interfor’s total capital expenditures are expected to be approximately $175 million in 2021, up $25 million from prior guidance as certain projects have been accelerated, and likely in the range of $200 - $250 million in 2022, as the Company executes on its expanded strategic capital plans.

Wildfire Season

Significant wildfires are currently in progress in the U.S. Northwest and B.C. Interior regions in which Interfor has operations. The start of the annual wildfire season has been accelerated by abnormally dry conditions and wildfires are now impacting log harvesting activities and rail availability to varying extents across these regions; the B.C. government currently has a restriction on all log harvesting activities in the B.C. Interior. As a result, Interfor announced on July 29, 2021 supply related downtime at its B.C. Interior sawmills which will reduce lumber production by at least 50 million board feet in the third quarter of this year. Interfor is monitoring the situation closely and will take ongoing actions to protect the safety of its employees and contractors, the communities in which it operates and its assets.

Outlook

North American lumber markets over the near term are expected to remain above historical trends driven by continued strong demand from new housing starts, albeit with volatility driven by the level of demand from repair and remodel activity as the North American economy adjusts to the COVID-19 pandemic recovery.

Interfor expects lumber demand to continue to grow over the mid-term, as repair and renovation activities and U.S. housing starts benefit from favourable underlying economic fundamentals and trends.

Interfor’s strategy of maintaining a diversified portfolio of operations allows the Company to both reduce risk and maximize returns on invested capital over the business cycle. While uncertainty remains as to the duration and extent of the economic impact from the COVID-19 pandemic, Interfor is well positioned with its strong balance sheet and significant available liquidity.

Financial and Operating Highlights1

For the 3 months ended

For the 6 months ended

Jun. 30

Jun. 30

Mar. 31

Jun. 30

Jun. 30

Unit

2021

2020

2021

2021

2020

Financial Highlights2

Total sales

$MM

1,099.7

396.8

849.3

1,949.0

876.4

Lumber

$MM

1,012.9

322.1

762.4

1,775.3

701.4

Logs, residual products and other

$MM

86.8

74.7

86.9

173.7

175.0

Operating earnings

$MM

568.3

13.3

355.6

923.9

27.9

Net earnings

$MM

419.2

3.2

264.5

683.7

9.5

Net earnings per share, basic

$/share

6.45

0.05

4.01

10.45

0.14

Adjusted net earnings3

$MM

433.5

10.6

270.6

704.2

11.4

Adjusted net earnings per share, basic3

$/share

6.67

0.16

4.11

10.76

0.17

Operating cash flow per share (before working capital changes)3

$/share

7.46

0.56

5.73

13.17

1.13

Adjusted EBITDA3

$MM

611.3

42.8

392.1

1,003.4

79.4

Adjusted EBITDA margin3

%

55.6%

10.8%

46.2%

51.5%

9.1%

Total assets

$MM

2,409.4

1,538.8

2,159.7

2,409.4

1,538.8

Total debt

$MM

365.1

408.8

377.3

365.1

408.8

Net debt3

$MM

(490.7)

239.1

(236.0)

(490.7)

239.1

Net debt to invested capital3

%

(46.1%)

21.6%

(21.7%)

(46.1%)

21.6%

Annualized return on capital employed3

%

110.8%

2.4%

79.2%

96.1%

3.4%

Operating Highlights

Lumber production

million fbm

716

421

687

1,402

1,047

Total lumber sales

million fbm

714

499

666

1,380

1,140

Lumber sales - Interfor produced

million fbm

713

488

662

1,375

1,120

Lumber sales - wholesale and commission

million fbm

1

11

4

5

20

Lumber - average selling price4

$/thousand fbm

1,419

646

1,143

1,286

616

Average USD/CAD exchange rate5

1 USD in CAD

1.2282

1.3862

1.2660

1.2470

1.3651

Closing USD/CAD exchange rate5

1 USD in CAD

1.2394

1.3628

1.2575

1.2394

1.3628


Notes:

Liquidity

Balance Sheet

Interfor’s Net debt at June 30, 2021 was $(490.7) million, or (46.1)% of invested capital, representing a decrease of $415.3 million from the level of Net debt at December 31, 2020.

As at June 30, 2021 the Company had net working capital of $991.5 million and available liquidity of $1.2 billion, based on the full borrowing capacity under its $350 million Revolving Term Line.

The Revolving Term Line and Senior Secured Notes are subject to financial covenants, including net debt to total capitalization ratios, and an EBITDA interest coverage ratio.

Management believes, based on circumstances known today, that Interfor has sufficient working capital and liquidity to fund operating and capital requirements for the foreseeable future.

For the 3 months ended
Jun. 30,

For the 6 months ended
Jun. 30,

Thousands of Dollars

2021

2020

2021

2020

Net debt

Net debt, period opening

$(235,966)

$322,036

$(75,432)

$224,860

(Repayment) issuance of Senior Secured Notes

(6,671)

-

(6,671)

140,770

Revolving Term Line net repayments

-

-

-

(59)

Impact on U.S. Dollar denominated debt from (strengthening) weakening CAD

(5,473)

(16,770)

(10,183)

8,370

Increase in cash and cash equivalents

(251,402)

(71,640)

(413,569)

(140,624)

Impact on U.S. Dollar denominated cash and cash equivalents from strengthening CAD

8,830

5,488

15,173

5,798

Net debt, period ending

$(490,682)

$239,114

$(490,682)

$239,114

On March 26, 2020, the Company issued US$50,000,000 of Series F Senior Secured Notes, bearing interest at 3.34%, and US$50,000,000 of Series G Senior Secured Notes, bearing interest at 3.25%. Each series of these Senior Secured Notes have equal payments of US$16,667,000 due on each of March 26, 2028, 2029 and on maturity in 2030.

Capital Resources

The following table summarizes Interfor’s credit facilities and availability as of June 30, 2021:

Revolving

Senior

Term

Secured

Thousands of Canadian Dollars

Line

Notes

Total

Available line of credit and maximum borrowing available

$350,000

$365,106

$715,106

Less:

Drawings

-

365,106

365,106

Outstanding letters of credit included in line utilization

22,236

-

22,236

Unused portion of facility

$327,764

$ -

327,764

Add:

Cash and cash equivalents

855,788

Available liquidity at June 30, 2021

$1,183,552

Interfor’s Revolving Term Line matures in March 2024 and its Senior Secured Notes have maturities principally in the years 2024-2030.

As of June 30, 2021, the Company had commitments for capital expenditures totaling $78.5 million for both maintenance and discretionary capital projects.

Non-GAAP Measures

This release makes reference to the following non-GAAP measures: Adjusted net earnings, Adjusted net earnings per share, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Net debt to invested capital, Operating cash flow per share (before working capital changes), and Annualized return on capital employed which are used by the Company and certain investors to evaluate operating performance and financial position. These non-GAAP measures do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers.

The following table provides a reconciliation of these non-GAAP measures to figures as reported in the Company’s audited consolidated financial statements (unaudited for interim periods) prepared in accordance with IFRS:

For the 3 months ended

For the 6 months ended

Jun. 30

Jun. 30

Mar. 31

Jun. 30

Jun. 30

Thousands of Canadian Dollars except number of shares and per share amounts

2021

2020

2021

2021

2020

Adjusted Net Earnings

Net earnings

$419,241

$3,235

$264,487

$683,728

$9,544

Add:

Asset write-downs and restructuring costs

2,213

115

142

2,355

486

Other foreign exchange loss

4,645

4,963

2,346

6,991

5,812

Long term incentive compensation expense (recovery)

11,145

5,629

7,670

18,815

(3,317)

Other expense (income)

1,045

(586)

(1,996)

(951)

(471)

Post closure wind-down costs

251

-

224

475

-

Income tax effect of above adjustments

(4,991)

(2,712)

(2,229)

(7,220)

(669)

Adjusted net earnings

$433,549

$10,644

$270,644

$704,193

$11,385

Weighted average number of shares - basic ('000)

64,984

67,260

65,927

65,453

67,260

Adjusted net earnings per share

$6.67

$0.16

$4.11

$10.76

$0.17

Adjusted EBITDA

Net earnings

$419,241

$3,235

$264,487

$683,728

$9,544

Add:

Depreciation of plant and equipment

22,717

15,601

21,474

44,191

35,662

Depletion and amortization of timber, roads and other

6,669

8,108

6,968

13,637

18,638

Finance costs

4,437

5,185

4,524

8,961

9,281

Income tax expense

138,922

563

86,256

225,178

3,768

EBITDA

591,986

32,692

383,709

975,695

76,893

Add:

Long term incentive compensation expense (recovery)

11,145

5,629

7,670

18,815

(3,317)

Other foreign exchange loss

4,645

4,963

2,346

6,991

5,812

Other expense (income)

1,045

(586)

(1,996)

(951)

(471)

Asset write-downs and restructuring costs

2,213

115

142

2,355

486

Post closure wind-down costs

251

-

224

475

-

Adjusted EBITDA

$611,285

$42,813

$392,095

$1,003,380

$79,403

Sales

$1,099,670

$396,778

$849,307

$1,948,977

$876,424

Adjusted EBITDA margin

55.6%

10.8%

46.2%

51.5%

9.1%

Net debt to invested capital

Net debt

Total debt

$365,106

$408,840

$377,250

$365,106

$408,840

Cash and cash equivalents

(855,788)

(169,726)

(613,216)

(855,788)

(169,726)

Total net debt

$(490,682)

$239,114

$(235,966)

$(490,682)

$239,114

Invested capital

Net debt

$(490,682)

$239,114

$(235,966)

$(490,682)

$239,114

Shareholders' equity

1,554,205

869,443

1,322,222

1,554,205

869,443

Total invested capital

$1,063,523

$1,108,557

$1,086,256

$1,063,523

$1,108,557

Net debt to invested capital1

(46.1%)

21.6%

(21.7%)

(46.1%)

21.6%

Operating cash flow per share (before working capital changes)

Cash provided by operating activities

$484,723

$103,003

$285,080

$769,803

$122,322

Cash (generated from) used in operating working capital

(249)

(65,433)

92,604

92,355

(46,324)

Operating cash flow (before working capital changes)

$484,474

$37,570

$377,684

$862,158

$75,998

Weighted average number of shares - basic ('000)

64,984

67,260

65,927

65,453

67,260

Operating cash flow per share (before working capital changes)

$7.46

$0.56

$5.73

$13.17

$1.13

Annualized return on capital employed

Net earnings

$419,241

$3,235

$264,487

$683,728

$9,544

Add:

Finance costs

4,437

5,185

4,524

8,961

9,281

Income tax expense

138,922

563

86,256

225,178

3,768

Earnings before income taxes and finance costs

$562,600

$8,983

$355,267

$917,867

$22,593

Capital Employed

Total assets

$2,409,388

$1,538,824

$2,159,692

$2,409,388

$1,538,824

Current liabilities

(285,081)

(155,036)

(263,526)

(285,081)

(155,036)

Less:

Current portion of long term debt

6,713

7,381

6,811

6,713

7,381

Current portion of lease liabilities

11,758

11,210

12,169

11,758

11,210

Capital employed, end of period

$2,142,778

$1,402,379

$1,915,146

$2,142,778

$1,402,379

Capital employed, beginning of period

1,915,146

1,431,579

1,672,103

1,672,103

1,214,375

Average capital employed

$2,028,962

$1,416,979

$1,793,624

$1,907,441

$1,308,377

Earnings before income taxes and finance costs divided by average capital employed

27.7%

0.6%

19.8%

48.1%

1.7%

Annualization factor

4.0

4.0

4.0

2.0

2.0

Annualized return on capital employed

110.8%

2.4%

79.2%

96.2%

3.4%


Note: 1 Net debt to invested capital as of the period end



CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

For the three and six months ended June 30, 2021 and 2020 (unaudited)

(thousands of Canadian Dollars except earnings per share)

Three Months

Three Months

Six Months

Six Months

Jun. 30, 2021

Jun. 30, 2020

Jun. 30, 2021

Jun. 30, 2020

Sales

$1,099,670

$396,778

$1,948,977

$876,424

Costs and expenses:

Production

457,329

337,134

889,496

760,362

Selling and administration

12,136

9,444

25,015

18,672

Long term incentive compensation expense (recovery)

11,145

5,629

18,815

(3,317)

U.S. countervailing and anti-dumping duty deposits

19,171

7,387

31,561

17,987

Depreciation of plant and equipment

22,717

15,601

44,191

35,662

Depletion and amortization of timber, roads and other

6,669

8,108

13,637

18,638

529,167

383,303

1,022,715

848,004

Operating earnings before write-downs and

restructuring costs

570,503

13,475

926,262

28,420

Asset write-downs and restructuring costs

2,213

115

2,355

486

Operating earnings

568,290

13,360

923,907

27,934

Finance costs

(4,437)

(5,185)

(8,961)

(9,281)

Other foreign exchange loss

(4,645)

(4,963)

(6,991)

(5,812)

Other (expense) income

(1,045)

586

951

471

(10,127)

(9,562)

(15,001)

(14,622)

Earnings before income taxes

558,163

3,798

908,906

13,312

Income tax expense (recovery):

Current

135,140

(193)

218,313

136

Deferred

3,782

756

6,865

3,632

138,922

563

225,178

3,768

Net earnings

$419,241

$3,235

$683,728

$9,544

Net earnings per share

Basic

$6.45

$0.05

$10.45

$0.14

Diluted

$6.43

$0.05

$10.42

$0.14


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

For the three and six months ended June 30, 2021 and 2020 (unaudited)

(thousands of Canadian Dollars)

Three Months

Three Months

Six Months

Six Months

Jun. 30, 2021

Jun. 30, 2020

Jun. 30, 2021

Jun. 30, 2020

Net earnings

$419,241

$3,235

$683,728

$9,544

Other comprehensive income (loss):

Items that will not be recycled to Net earnings:

Defined benefit plan actuarial gain (loss), net of tax

1,110

(543)

5,582

(1,256)

Items that are or may be recycled to Net earnings:

Foreign currency translation differences for

foreign operations, net of tax

(8,876)

(16,400)

(17,763)

29,683

Total other comprehensive (loss) income, net of tax

(7,766)

(16,943)

(12,181)

28,427

Comprehensive income (loss)

$411,475

$(13,708)

$671,547

$37,971



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three and six months ended June 30, 2021 and 2020 (unaudited)

(thousands of Canadian Dollars)

Three Months

Three Months

Six Months

Six Months

Jun. 30, 2021

Jun. 30, 2020

Jun. 30, 2021

Jun. 30, 2020

Cash provided by (used in):

Operating activities:

Net earnings

$419,241

$3,235

$683,728

$9,544

Items not involving cash:

Depreciation of plant and equipment

22,717

15,601

44,191

35,662

Depletion and amortization of timber, roads and other

6,669

8,108

13,637

18,638

Deferred income tax expense

3,782

756

6,865

3,632

Current income tax expense (recovery)

135,140

(193)

218,313

136

Finance costs

4,437

5,185

8,961

9,281

Other assets

655

(450)

224

486

Reforestation liability

(1,187)

(4,616)

(691)

(1,850)

Provisions and other liabilities

6,392

4,993

6,887

(5,300)

Stock options

167

234

363

490

Write-down (recovery) of plant and equipment

2,035

(53)

2,035

(53)

Unrealized foreign exchange loss

5,406

5,350

8,417

5,791

Other expense (income)

1,045

(586)

(951)

(471)

Income tax (paid) refund

(122,025)

6

(129,821)

12

484,474

37,570

862,158

75,998

Cash generated from (used in) operating working capital:

Trade accounts receivable and other

(4,741)

(6,164)

(72,600)

(29,577)

Inventories

(8,873)

65,968

(33,225)

67,323

Prepayments

(1,428)

4,020

(4,776)

1,907

Trade accounts payable and provisions

15,291

1,609

18,246

6,671

484,723

103,003

769,803

122,322

Investing activities:

Additions to property, plant and equipment

(36,263)

(21,116)

(62,594)

(45,988)

Additions to roads and bridges

(4,312)

(2,439)

(7,197)

(5,143)

Acquisitions

-

-

(73,630)

(56,606)

Proceeds on disposal of property, plant and equipment and other

283

705

5,976

867

Net proceeds from (additions to) deposits and other assets

725

(681)

882

(879)

(39,567)

(23,531)

(136,563)

(107,749)

Financing activities:

Issuance of share capital, net of expenses

401

-

2,346

-

Share repurchases

(49,435)

-

(69,738)

-

Dividend paid

(130,625)

-

(130,625)

-

Interest payments

(4,161)

(4,751)

(8,419)

(8,509)

Lease liability payments

(3,263)

(3,074)

(6,564)

(6,008)

Debt refinancing costs

-

(7)

-

(143)

Term line net repayments

-

-

-

(59)

Additions to long term debt

-

-

-

140,770

Repayments of long-term debt

(6,671)

-

(6,671)

-

(193,754)

(7,832)

(219,671)

126,051

Foreign exchange loss on cash and

cash equivalents held in a foreign currency

(8,830)

(5,488)

(15,173)

(5,798)

Increase in cash

242,572

66,152

398,396

134,826

Cash and cash equivalents, beginning of period

613,216

103,574

457,392

34,900

Cash and cash equivalents, end of period

$855,788

$169,726

$855,788

$169,726



CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

June 30, 2021 and December 31, 2020 (unaudited)

(thousands of Canadian Dollars)

Jun. 30, 2021

Dec. 31, 2020

Assets

Current assets:

Cash and cash equivalents

$855,788

$457,392

Trade accounts receivable and other

184,971

117,371

Income taxes receivable

76

169

Inventories

197,006

160,188

Prepayments

21,869

17,970

Assets held for sale

16,849

-

1,276,559

753,090

Employee future benefits

6,136

106

Deposits and other assets

46,855

48,957

Right of use assets

35,016

35,471

Property, plant and equipment

763,243

729,163

Roads and bridges

24,705

22,379

Timber licences

113,075

114,953

Goodwill and other intangible assets

142,895

138,838

Deferred income taxes

904

230

$2,409,388

$1,843,187

Liabilities and Shareholders’ Equity

Current liabilities:

Trade accounts payable and provisions

$162,293

$150,509

Current portion of long-term debt

6,713

6,897

Reforestation liability

15,076

16,181

Lease liabilities

11,758

11,745

Income taxes payable

89,241

4,394

285,081

189,726

Reforestation liability

29,214

29,735

Lease liabilities

27,795

28,541

Long term debt

358,393

375,063

Employee future benefits

9,595

11,137

Provisions and other liabilities

34,068

26,637

Deferred income taxes

111,037

102,036

Equity:

Share capital

507,092

523,605

Contributed surplus

4,483

5,157

Translation reserve

32,083

49,846

Retained earnings

1,010,547

501,704

1,554,205

1,080,312

$2,409,388

$1,843,187



Approved on behalf of the Board:

L. Sauder” “T. V. Milroy
Director Director

FORWARD-LOOKING STATEMENTS

This release contains forward-looking information about the Company’s business outlook, objectives, plans, strategic priorities and other information that is not historical fact. A statement contains forward-looking information when the Company uses what it knows and expects today, to make a statement about the future. Statements containing forward-looking information may include words such as: will, could, should, believe, expect, anticipate, intend, forecast, projection, target, outlook, opportunity, risk or strategy. Readers are cautioned that actual results may vary from the forward-looking information in this release, and undue reliance should not be placed on such forward-looking information. Risk factors that could cause actual results to differ materially from the forward-looking information in this release are described in Interfor’s second quarter and annual Management’s Discussion and Analysis under the heading “Risks and Uncertainties”, which are available on www.interfor.com and under Interfor’s profile on www.sedar.com. Material factors and assumptions used to develop the forward-looking information in this release include volatility in the selling prices for lumber, logs and wood chips; the Company’s ability to compete on a global basis; the availability and cost of log supply; natural or man-made disasters; currency exchange rates; changes in government regulations; the availability of the Company’s allowable annual cut (“AAC”); claims by and treaty settlements with Indigenous peoples; the Company’s ability to export its products; the softwood lumber trade dispute between Canada and the U.S.; stumpage fees payable to the Province of British Columbia (“B.C.”); environmental impacts of the Company’s operations; labour disruptions; information systems security; and the existence of a public health crisis (such as the current COVID-19 pandemic). Unless otherwise indicated, the forward-looking statements in this release are based on the Company’s expectations at the date of this release. Interfor undertakes no obligation to update such forward-looking information, except as required by law.

ABOUT INTERFOR

Interfor is a growth-oriented forest products company with operations in Canada and the United States. The Company has annual production capacity of approximately 3.9 billion board feet and offers a diverse line of lumber products to customers around the world. For more information about Interfor, visit our website at www.interfor.com.

The Company’s unaudited condensed consolidated interim financial statements and Management’s Discussion and Analysis for Q2’21 are available at www.sedar.com and www.interfor.com.

There will be a conference call on Friday, August 6, 2021 at 8:00 a.m. (Pacific Time) hosted by INTERFOR CORPORATION for the purpose of reviewing the Company’s release of its second quarter 2021 financial results.

The dial-in number is 1-833-297-9919. The conference call will also be recorded for those unable to join in for the live discussion and will be available until September 6, 2021. The number to call is
1-855-859-2056, Passcode 8194915.

For further information:
Richard Pozzebon, Senior Vice President and Chief Financial Officer
(604) 422-3400


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