EBITDA1 of $16 million on Sales of $451 million
Net Debt to Invested Capital1 of 16%; Liquidity of $425 million

VANCOUVER, British Columbia, May 02, 2019 (GLOBE NEWSWIRE) -- INTERFOR CORPORATION (“Interfor” or the “Company”) (TSX: IFP) recorded a net loss in Q1’19 of $15.3 million, or $0.23 per share, compared to $13.5 million, or $0.20 per share in Q4’18 and net earnings of $32.7 million, or $0.47 per share in Q1’18.  Adjusted net loss in Q1’19 was $12.7 million compared to $20.2 million in Q4’18 and Adjusted net earnings of $36.5 million in Q1’18.

Adjusted EBITDA was $16.3 million on sales of $451.2 million in Q1’19 versus $8.9 million on sales of $468.5 million in Q4’18.  The Q1’19 Adjusted EBITDA included approximately $1.2 million of expenses that were refinements of prior estimates.

Other notable items in the quarter included:

  • Marginally Higher Lumber Prices

    • The key benchmark prices improved marginally quarter-over-quarter with the SYP Composite, Western SPF Composite and KD H-F Stud 2x4 9’ increasing by US$10, US$41 and US$21 per mfbm, respectively.  Interfor’s average lumber selling price increased $14 from Q4’18 to $613 per mfbm.   

  • Increased Production/Reduced Shipments

    • Total lumber production was 646 million board feet, or 39 million board feet more than the prior quarter with a return to normal operating schedules after the holidays and the easing of temporary production curtailments in the B.C. Interior.  Production in the U.S. South increased to 316 million board feet from 303 million board feet in the preceding quarter.  The B.C. and U.S. Northwest regions accounted for 195 million board feet and 135 million board feet, respectively, compared to 174 million board feet and 130 million board feet in Q4’18. 

    • Total lumber shipments were 621 million board feet, including agency and wholesale volumes, or 26 million board feet lower than Q4’18.

    • On April 25, 2019, the Company announced temporary reductions in operating hours at its sawmills in the B.C. Interior for the month of May 2019 due to a combination of weak lumber prices and continuing high log costs.

  • Continued Strong Financial Position

    • Net debt ended the quarter at $172.7 million, or 15.6% of invested capital, resulting in available liquidity of $425.3 million. 

    • On March 28, 2019, the Company completed a modernization of its credit facilities.  The new facility replaces the U.S. Operating Line, Canadian Operating Line, and Revolving Term Line with one consolidated facility.  The new facility increased credit availability to $350 million, which is in addition to the Company’s US$200 million of Senior Secured Notes, and matures in March 2024. 

    • The Company generated $17.1 million of cash flow from operations before changes in working capital, or $0.25 per share.  During the quarter, working capital increased by $75.4 million as a result of the payment of 2018 incentive compensation as well as typical seasonal factors including a build up of lumber and log inventories in the B.C. Interior.

    • Capital investments of $43.8 million in Q1’19 included $32.1 million primarily on U.S. South focused high-return discretionary projects, with the remainder related to maintenance capital and woodlands projects.

    • Interfor purchased and cancelled 515,100 of its Common Shares (“Shares”) at a cost of $7.8 million in Q1’19.  The Company’s normal course issuer bid (“NCIB”) was renewed on March 4, 2019 and permits the purchase of up to 6,652,006 Shares until its expiry on March 6, 2020. 
  • Softwood Lumber Duties

    • Interfor expensed $11.1 million of duties in the quarter, representing the full amount of countervailing (“CV”) and anti-dumping (“AD”) duties incurred on its Canadian shipments of softwood lumber into the U.S. at a combined rate of 20.23%.

    • Cumulative duties of US$68.7 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$3.3 million recorded as a long-term receivable in respect of overpayments arising from duty rate adjustments, Interfor has recorded the duty deposits as an expense.

1 Refer to Adjusted EBITDA and Net debt to invested capital in the Non-GAAP Measures section

Strategic Capital Plan Update

  • Interfor continues to make progress on previously announced Phase I and II strategic capital projects in the U.S. South. 

  • The Phase I projects at the Meldrim, Georgia and Monticello, Arkansas sawmills are scheduled for completion in May 2019.  Total project costs are expected to be within a 10% variance of the original US$62.5 million budget.  As of March 31, 2019, US$48.7 million has been capitalized.

  • The Phase II projects at the Thomaston and Eatonton sawmills in Georgia and the Georgetown sawmill in South Carolina are on track for completion in various stages over the period of 2019 to 2021.  As of March 31, 2019, US$21.7 million has been capitalized and the projects remain on budget.

Financial and Operating Highlights 1 

   For the three months ended 
   Mar.  31 Mar.  31 Dec.  31 
 Unit 2019 2018 2018 
    (restated)2 (restated)2 
Financial Highlights3     
Total sales$MM 451.2 527.6 468.5 
Lumber$MM 380.5 445.9 387.7 
Logs, residual products and other$MM 70.7 81.7 80.8 
Operating earnings (loss)$MM (16.8)46.8 (16.9)
Net earnings (loss)$MM (15.3)32.7 (13.5)
Net earnings (loss) per share, basic$/share (0.23)0.47 (0.20)
Adjusted net earnings (loss)3$MM (12.7)36.5 (20.2)
Adjusted net earnings (loss) per share, basic4$/share (0.19)0.52 (0.29)
Operating cash flow per share (before working capital changes)4$/share 0.25 1.12 0.14 
Adjusted EBITDA4$MM 16.3 83.5 8.9 
Adjusted EBITDA margin4% 3.6% 15.8% 1.9% 
Total assets$MM 1,491.5 1,448.2  1,565.3 
Total debt$MM  267.3  257.9  272.8 
Net debt4$MM  172.7  127.1  63.8 
Net debt to invested capital4% 15.6% 12.4% 6.2% 
Annualized return on invested capital4% 6.1% 33.5% 3.6% 
Operating Highlights     
Lumber productionmillion fbm  646  666  607 
Total lumber salesmillion fbm  621  648  647 
  Lumber sales - Interfor producedmillion fbm  610  635  639 
  Lumber sales - wholesale and commissionmillion fbm  11  13  8 
Lumber - average selling price5$/thousand fbm  613  688  599 
Average USD/CAD exchange rate61 USD in CAD  1.3295  1.2647  1.3204 
Closing USD/CAD exchange rate61 USD in CAD  1.3363  1.2894  1.3642 


  1. Figures in this table may not equal or sum to figures presented elsewhere due to rounding.
  2. Financial information has been restated for implementation of IFRS 16, Leases.
  3. Financial information presented for interim periods in this release is prepared in accordance with IFRS and is unaudited.
  4. Refer to the Non-GAAP Measures section of this release for definitions and reconciliations of these measures to figures reported in the Company’s consolidated financial statements. 
  5. Gross sales before duties.
  6. Based on Bank of Canada foreign exchange rates.


Balance Sheet

Interfor’s net debt at March 31, 2019 was $172.7 million, or 15.6% of invested capital, representing an increase of $108.9 million from the level at December 31, 2018.  This increase includes funding of capital projects, short term incentive compensation payments, inventory builds, share capital repurchases, and finance and leasing costs. 

Net debt was negatively impacted by a weaker Canadian Dollar against the U.S. Dollar as all debt held was denominated in U.S. Dollars; this was partially hedged by the Company’s U.S. Dollar cash balances.  

  For the three months ended
  Mar.  31, Dec.  31, Mar.  31, 
Thousands of Dollars 2019 2018 2018 
Net debt    
Net debt, period opening $63,825 $3,800 $119,300 
Net drawing (repayment) on credit facilities 750  (1)  (1) 
Impact on U.S. Dollar denominated debt from (strengthening) weakening CAD  (6,330)  13,941  6,981 
Decrease in cash and cash equivalents 68,890  7,286  2,509 
Decrease in marketable securities 41,766 49,871  - 
Impact on U.S. Dollar denominated cash and cash equivalents and marketable securities from strengthening (weakening) CAD 3,845 (11,072) (1,725) 
Net debt, period ending, CAD $172,746 $63,825 $127,064 

On March 28, 2019, the Company completed a modernization of its credit facilities.  The new facility replaces the U.S. Operating Line, Canadian Operating Line, and Revolving Term Line with one consolidated facility.  The new facility increased credit availability to $350 million and matures in March 2024. 

As at March 31, 2019, the Company had net working capital of $306.8 million and available liquidity of $425.3 million, including cash and borrowing capacity on its term line facility. 

These resources, in addition to cash generated from operations, will be used to support working capital requirements, debt servicing commitments and capital expenditures.  We believe that Interfor will have enough liquidity to fund operating and capital requirements for the foreseeable future.

Capital Resources

The following table summarizes Interfor’s credit facilities and availability as of March 31, 2019:

Thousands of Canadian Dollars LineNotesTotal
Available line of credit $350,000$ 267,260$617,260
Maximum borrowing available $350,000$ 267,260$617,260
Drawings  -  267,260 267,260
Outstanding letters of credit included in line utilization  19,249  -   19,249
Unused portion of facility $330,751 $           -   330,751
Cash and cash equivalents    94,514
Available liquidity at March 31, 2019   $425,265

As of March 31, 2019, the Company had commitments for capital expenditures totaling $154.4 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, Net debt to invested capital and Operating cash flow per share (before working capital changes) 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 three months ended
  Mar.  31,  Mar.  31,  Dec.  31, 
Thousands of Canadian Dollars except number of shares and per share amounts2019  2018  2018 
    (restated)¹  (restated)¹ 
Adjusted Net Earnings (Loss)        
Net earnings (loss) $(15,302) $32,665 $(13,512) 
  Restructuring costs and capital asset write-downs 1,665  236  4,551 
  Other foreign exchange gain (340)  (111)  (3,330) 
  Long term incentive compensation expense (recovery) 1,983  4,858  (9,180) 
  Other income (expense) 164  178  (1,254) 
  Post closure wind-down costs and losses -  4  - 
  Income tax effect of above adjustments (875)  (1,374)  2,530 
Adjusted net earnings (loss) $(12,705) $36,456 $(20,195) 
Weighted average number of shares - basic ('000) 67,348   70,033   68,884  
Adjusted net earnings (loss) per share $(0.19) $0.52 $(0.29) 
Adjusted EBITDA    
Net earnings (loss) $(15,302) $32,665 $(13,512) 
  Depreciation of plant and equipment 19,722  20,021  19,241 
  Depletion and amortization of timber, roads and other 9,737  11,764  11,229 
  Restructuring costs and capital asset write-downs 1,665  236  4,551 
  Finance costs 4,176  3,411  2,758 
  Other foreign exchange gain (340)  (111)  (3,330) 
  Income tax expense (recovery) (5,508)  10,467  (1,553) 
EBITDA 14,150  78,453  19,384 
  Long term incentive compensation expense (recovery) 1,983  4,858  (9,180) 
  Other income (expense) 164  178  (1,254) 
  Post closure wind-down costs and losses -  4  - 
Adjusted EBITDA $16,297 $83,493 $8,950 
Sales 451,163  527,644  468,544 
Adjusted EBITDA margin 3.6%  15.8%  1.9% 
Net debt to invested capital    
Net debt    
  Total debt $267,260 $257,880 $272,840 
  Cash and cash equivalents (94,514)  (130,816)  (166,152) 
  Marketable securities -  -  (42,863) 
Total net debt $172,746 $127,064 $63,825 
Invested capital    
  Net debt $172,746 $127,064 $63,825 
  Shareholders' equity 933,509  896,215  968,766 
Total invested capital $1,106,255 $1,023,279 $1,032,591 
Net debt to invested capital2 15.6%  12.4%  6.2% 
Operating cash flow per share (before working capital changes)    
Cash (used in) provided by operating activities $(58,350) $21,073 $21,096 
Cash used in (generated from) operating working capital 75,435  57,050  (11,253) 
Operating cash flow (before working capital changes) $17,085 $78,123 $9,843 
Weighted average number of shares - basic ('000) 67,348   70,033   68,884  
Operating cash flow per share (before working capital changes) $0.25 $1.12 $0.14 
Return on invested capital    
Adjusted EBITDA $16,297 $83,493 $8,950 
Invested capital, beginning of period $1,032,591 $968,853 $984,189 
Invested capital, end of period 1,106,255  1,023,279  1,032,591 
Average invested capital $1,069,423 $996,066 $1,008,390 
Adjusted EBITDA divided by average invested capital 1.5%  8.4%  0.9% 
Annualization factor 4.0  4.0  4.0 
Return on invested capital 6.1%  33.5%  3.6% 


  1. Financial information has been restated for implementation of IFRS 16, Leases.
  2. Net debt to invested capital as of the period end.
For the three months ended March 31, 2019 and 2018 (unaudited)
(thousands of Canadian Dollars except earnings per share) Three Months Three Months 
   Mar. 31, 2019 Mar. 31, 2018 
 $451,163 $527,644 
Costs and expenses:   
 Production 413,183 417,397 
 Selling and administration 10,565 13,829 
 Long term incentive compensation expense 1,983 4,858 
 U.S. countervailing and anti-dumping duty deposits 11,118 12,929 
 Depreciation of plant and equipment 19,722 20,021 
 Depletion and amortization of timber, roads and other 9,737 11,764 
   466,308 480,798 
Operating earnings (loss) before write-downs and restructuring (15,145) 46,846 
Capital asset write-downs and restructuring costs 1,665 236 
Operating earnings (loss) (16,810) 46,610 
Finance costs  (4,176)  (3,411) 
Other foreign exchange gain 340 111 
Other expense (164) (178) 
  (4,000) (3,478) 
Earnings (loss) before income taxes (20,810) 43,132 
Income tax expense (recovery):    
 Current 160 770 
 Deferred (5,668) 9,697 
  (5,508) 10,467 
Net earnings (loss) $(15,302) $32,665 
Net earnings (loss) per share, basic and diluted $(0.23) $0.47 

For the three months ended March 31, 2019 and 2018 (unaudited)
(thousands of Canadian Dollars) Three Months Three Months
   Mar. 31, 2019 Mar. 31, 2018
Net earnings (loss)
 $(15,302) $32,665 
Other comprehensive income (loss):   
Items that will not be recycled to Net earnings (loss):   
 Defined benefit plan actuarial gain, net of tax 572  885
Items that are or may be recycled to Net earnings (loss):   
 Foreign currency translation differences for foreign operations, net of tax(12,873)  12,833
Total other comprehensive income (loss), net of tax (12,301)  13,718
Comprehensive income (loss) $(27,603) $46,383


  1. Financial information has been restated for implementation of IFRS 16, Leases.
For the three months ended March 31, 2019 and 2018 (unaudited)
(thousands of Canadian Dollars) Three Months  Three Months 
   Mar. 31, 2019  Mar. 31, 2018 
Cash provided by (used in):
Operating activities:
 Net earnings (loss) $(15,302) $32,665 
 Items not involving cash:   
  Depreciation of plant and equipment 19,722  20,021 
  Depletion and amortization of timber, roads and other 9,737  11,764 
  Income tax expense (recovery) (5,508)  10,467 
  Finance costs 4,176  3,411 
  Other assets 17  (295) 
  Reforestation liability 2,507  2,289 
  Provisions and other liabilities (203)  (2,816) 
  Stock options 108  137 
  Write-down of plant, equipment and intangibles 1,723  219 
  Unrealized foreign exchange loss (gain) (56)  83 
  Other expense 164  178 
   17,085  78,123 
 Cash generated from (used in) operating working capital:   
  Trade accounts receivable and other (14,575)  (10,748) 
  Inventories (27,170)  (34,037) 
  Prepayments (2,869)  (4,255) 
  Trade accounts payable and provisions (30,524)  (7,839) 
  Income taxes paid (297)  (171) 
  (58,350)  21,073 
Investing activities:   
 Additions to property, plant and equipment (35,926)  (12,039) 
 Additions to roads and bridges (7,844)  (6,082) 
 Additions to timber licences and other intangible assets (52)  13 
 Proceeds on disposal of property, plant and equipment 108  109 
 Net proceeds from (additions to) investments and other assets 46,771  (502) 
  3,057  (18,501) 
Financing activities:   
 Share issuance, net of expenses  63  143 
 Share repurchase (7,825)  - 
 Interest payments (2,580)  (3,033) 
 Lease liability payments (2,986)  (2,189) 
 Debt refinancing costs (1,019)  (1) 
 Change in operating line components of long term debt -  (1) 
 Additions to long term debt 197,925  - 
 Repayments of long term debt (197,175)  - 
   (13,597)  (5,081) 
Foreign exchange gain (loss) on cash and cash equivalents   
 held in a foreign currency (2,748)  1,725 
Decrease in cash and cash equivalents (71,638)  (784) 
Cash and cash equivalents, beginning of period 166,152  131,600 
Cash and cash equivalents, end of period $94,514 $130,816 


  1. Financial information has been restated for implementation of IFRS 16, Leases.
March 31, 2019, December 31, 2018 and January 1, 2018 (unaudited)
(thousands of Canadian Dollars)    
   Mar. 31, 2019Dec. 31, 2018Jan. 1, 2018
Current assets:
 Cash and cash equivalents $94,514$166,152$131,600
 Marketable securities - 42,863 -
 Trade accounts receivable and other 104,528 90,384 112,470
 Income taxes receivable 2,938 3,008 1,289
 Inventories 235,231 209,178 165,156
 Prepayments 19,513 16,833 12,186
   456,724 528,418 422,701
Employee future benefits 1,058 303 502
Deposits and other assets 11,362 16,842 6,404
Right of use assets 38,220 37,778 38,600
Property, plant and equipment 726,778 723,773 669,165
Roads and bridges 32,776 29,829 24,092
Timber licences 63,549 64,153 66,589
Other intangible assets 4,358 5,288 14,170
Goodwill 155,819 158,799 147,081
Deferred income taxes 872 133 253
Liabilities and Shareholders’ Equity    
Current liabilities:    
 Trade accounts payable and provisions $124,945$154,869$152,355
 Reforestation liability 14,212 13,947 12,873
 Lease liability 10,577 10,158 8,019
 Income taxes payable  202 356 224
  149,936 179,330 173,471
Reforestation liability
 30,879 28,235 27,535
Lease liability
 33,660 33,954 36,165
Long term debt
 267,260 272,840 250,900
Employee future benefits
 8,880 8,687 8,249
Provisions and other liabilities
 16,252 16,421 25,808
Deferred income taxes
 51,140 57,083 17,877
 Share capital 533,539 537,534 555,388
 Contributed surplus 3,931 3,851 8,582
 Translation reserve 71,520 84,393 40,733
 Retained earnings 324,519 342,988 244,849
   933,509 968,766 849,552


  1. Financial information has been restated for implementation of IFRS 16, Leases.

Approved on behalf of the Board:

 L. Sauder”   Thomas V. Milroy
 Director     Director


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.  Generally, statements containing forward-looking information can be identified by the use of words such as: believe, expect, intend, forecast, plan, target, budget, outlook, opportunity, risk, strategy or variations or comparable language, or statements that certain actions, events or results may, could, would, should, might, or will occur or not occur.  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 annual Management’s Discussion & Analysis under the heading “Risks and Uncertainties”, which is 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 assumptions regarding 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; the effects of 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 dispute between Canada and the U.S.; stumpage fees payable to the Province of British Columbia; environmental impacts of the Company’s operations; labour disruptions; and the efficacy of information systems security.  Unless otherwise indicated, the forward-looking information in this release is 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.


Interfor is a growth-oriented lumber company with operations in Canada and the United States.  The Company has annual production capacity of approximately 3.1 billion board feet and offers one of the most diverse lines of lumber products to customers around the world.  For more information about Interfor, visit our website at www.interfor.com.

The Company’s unaudited consolidated financial statements and Management’s Discussion and Analysis for Q1’19 are available at www.sedar.com and www.interfor.com

There will be a conference call on Friday, May 3, 2019 at 8:00 a.m. (Pacific Time) hosted by INTERFOR CORPORATION for the purpose of reviewing the Company’s release of its first quarter 2019 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 June 2, 2019.  The number to call is 1-855-859-2056, Passcode 8868218.

For further information:
Martin L. Juravsky, Senior Vice President and Chief Financial Officer
(604) 689-6873