Interfor Reports Q2’22 Results

Vancouver, British Columbia, CANADA

Adjusted EBITDA of $429 million and Net Earnings of $270 million With Record Production, Shipments and Sales

BURNABY, British Columbia, Aug. 04, 2022 (GLOBE NEWSWIRE) -- INTERFOR CORPORATION (“Interfor” or the “Company”) (TSX: IFP) recorded Net earnings in Q2’22 of $269.9 million, or $4.92 per share, compared to $397.0 million, or $6.69 per share in Q1’22 and $419.2 million, or $6.45 per share in Q2’21. Adjusted net earnings in Q2’22 were $280.2 million compared to $392.5 million in Q1’22 and $433.5 million in Q2’21.

Adjusted EBITDA was $428.6 million on record sales of $1.4 billion in Q2’22 versus $570.1 million on sales of $1.3 billion in Q1’22.

Notable items in the quarter:

  • Record Lumber Production and Shipments
    • Lumber production totaled a record 1.0 billion board feet, representing an increase of 99 million board feet quarter-over-quarter and the fifth consecutive quarter of record production. This growth was mostly driven by the first full quarter of contribution from the Eastern Canada Operations; these operations produced 211 million board feet versus 96 million board feet in the preceding quarter. The U.S. South and U.S. Northwest regions accounted for 467 million board feet and 163 million board feet, respectively, compared to 452 million board feet and 173 million board feet in Q1’22. Production in the B.C. region decreased to 174 million board feet from 196 million board feet in Q1’22, in part due to the sale of the Acorn sawmill during the quarter.
    • Lumber shipments were a record 1.1 billion board feet, or 239 million higher than Q1’22.
    • Ongoing improvement in the availability of logistics contributed to a reduction of lumber inventories by 46 million board feet during the quarter. Further reductions following quarter-end have now positioned total lumber inventory volume within the Company’s targeted range.
  • Moderating Lumber Prices
    • Interfor’s average selling price was $1,104 per mfbm, down $306 per mfbm versus Q1’22. The SYP Composite, Western SPF Composite, KD H-F Stud 2x4 9’ and ESPF Composite price benchmarks decreased quarter-over-quarter by US$437, US$322, US$402 and US$313 per mfbm to US$682, US$837, US$891, and US$938 per mfbm, respectively, with the majority of these decreases occurring in the second half of the quarter.
  • Strong Free Cash Flow Generation
    • Interfor generated $218.2 million of cash flow from operations before changes in working capital, or $3.98 per share. A reduction in working capital investment added $175.6 million of cash flow, primarily related to the collection of trade receivables recorded at higher lumber prices and a reduction in log and lumber inventories.
    • Net debt ended the quarter at $102.0 million, or 4.6% of invested capital, resulting in ample available liquidity of $726.5 million.
  • Strong results from Eastern Canada Operations
    • The Eastern Canada Operations contributed $115.7 million of Adjusted EBITDA to Interfor’s second quarter results, which is net of $17.3 million recorded in production costs related to fair value adjustments recognized at the acquisition date.
    • Since being acquired on February 22, 2022, the Eastern Canada Operations have generated $120.8 million of Adjusted EBITDA, which is net of $85.3 million recorded in production costs related to fair value adjustments recognized at the acquisition date.
  • Ramp-up of DeQuincy, LA Sawmill
    • The DeQuincy, LA sawmill, with an annual two-shift capacity of 200 million board feet, has continued to ramp up ahead of schedule following its July 2021 acquisition in an idled state. Its operating schedule increased from one shift to two shifts during the quarter and the mill is expected to reach its full production run-rate in Q3 2022.
  • Strategic Capital Investments
    • Capital spending was $65.1 million, including $40.6 million on discretionary projects. The majority of this discretionary spending was focused on the multi-year rebuild of the Eatonton, GA sawmill, a new planer at the Castlegar, B.C. sawmill and upgrades to the Perry, GA sawmill.
  • Minority Interest in GreenFirst Forest Products Inc. (“GreenFirst”)
    • On May 2, 2022, a wholly-owned subsidiary of Interfor acquired a total of 28,684,433 common shares in the capital of GreenFirst from Rayonier A.M. Canada G.P., which represents approximately 16.2% of GreenFirst’s issued and outstanding common shares. The Company paid total cash consideration of $55.6 million.
  • Ongoing Monetization of Coastal B.C. Operations
    • On May 13, 2022, the Company completed the sale of its Acorn specialty sawmill located near Vancouver, British Columbia and related working capital to an affiliate of San Industries Ltd. for cash consideration of $25.2 million, and recorded a gain of $6.2 million. With this sawmill sale completed, Interfor no longer has any lumber manufacturing assets within the Coastal B.C. region.
    • Interfor is currently undertaking a strategic review of its remaining Coastal B.C. operations, which consist solely of timber harvesting and sales related to its 1.67 million cubic meters of annual harvesting rights. Any alternatives, including disposition of harvesting rights, would be subject to consultation with First Nations and consent from the Government of B.C.
  • Share Repurchases
    • During Q2’22, Interfor purchased 1,015,396 common shares under the Company’s Normal Course Issuer Bid (“NCIB”) for total consideration of $32.9 million. This completed the purchase of all 6,041,701 common shares allowable under the NCIB for total consideration of $227.2 million, representing an average price of $37.60 per share or 0.98 times book value per share at June 30, 2022.
    • On July 26, 2022, the Company announced its intention to commence a substantial issuer bid (“SIB”) pursuant to which the Company will offer to purchase up to $100,000,000 in value of its outstanding common shares for cancellation from holders of common shares for cash. The SIB will proceed by way of a “modified Dutch auction” procedure with a tender price range from $29.00 to $34.00 per common share.
  • Softwood Lumber Duties
    • Interfor expensed $46.3 million of duties in the quarter, representing the full amount of countervailing (“CV”) and anti-dumping (“AD”) duties incurred on shipments of softwood lumber from its Canadian operations to the U.S. at a combined rate of 17.91%.
    • Interfor has cumulative duties of US$401.0 million held in trust by U.S. Customs and Border Protection as at June 30, 2022. Except for US$105.0 million recorded as a receivable in respect of overpayments arising from duty rate adjustments and the fair value of rights to duties acquired, Interfor has recorded the duty deposits as an expense.

Interfor Appoints New Director

At its meeting today, the Interfor Board appointed Tom Temple of Kingston, Washington as a director of the Company. Mr. Temple, who is 65, is the former VP, Wood Products and Southern Resources of PotlatchDeltic, a diversified forest products company. Mr. Temple’s appointment increased the number of directors from ten to eleven, while deepening the Board’s operations and sales expertise in the U.S. in line with the Company’s Board succession plan.

Sustainability Performance

On April 22, 2022, Interfor released its fifth annual Sustainability Report, which provides detailed information on the Company’s commitments and actions, including a number of new targets and enhanced metrics. Sustainability is at the core of Interfor’s culture and integrated within its strategy, and the targets set represent an ongoing commitment to take strong action to enhance performance. Interfor’s Sustainability Report can be found at


North American lumber markets over the near term are expected to be volatile as the economy continues to adjust to inflationary pressures, higher interest rates, supply chain constraints and labour shortages.  

Interfor expects that over the mid-term, lumber markets will continue to benefit from favourable underlying supply and demand fundamentals. Positive demand factors include the advanced age of the U.S. housing stock, a shortage of available housing and various demographic factors, while growth in lumber supply is expected to be limited by extended capital project completion and ramp-up timelines and constrained overall fibre availability.

Interfor’s strategy of maintaining a diversified portfolio of operations in multiple regions allows the Company to both reduce risk and maximize returns on capital over the business cycle. Interfor is well positioned with its strong balance sheet and significant available liquidity to continue pursuing its strategic plans despite ongoing economic and geo-political uncertainty globally.

Financial and Operating Highlights1  

  For the 3 months ended For the 6 months ended
  Jun. 30Jun. 30Mar. 31 Jun. 30Jun. 30
 Unit202220212022 20222021
Financial Highlights2       
Total sales$MM1,389.11,099.71,349.0 2,738.11,949.0
Lumber$MM1,190.81,012.91,212.5 2,403.31,775.3
Logs, residual products and other$MM198.386.8136.5 334.8173.7
Operating earnings$MM385.9568.3512.7 898.5923.9
Net earnings$MM269.9419.2397.0 666.9683.7
Net earnings per share, basic$/share4.926.456.69 11.6810.45
Adjusted net earnings3$MM280.2433.5392.5 672.6704.2
Adjusted net earnings per share, basic3$/share5.116.676.61 11.7810.76
Operating cash flow per share (before working
    capital changes)3
$/share3.987.466.38 10.4513.17
Adjusted EBITDA3$MM428.6611.3570.1 998.71,003.4
Adjusted EBITDA margin3%30.9%55.6%42.3% 36.5%51.5%
Total assets$MM3,269.52,409.43,081.4 3,269.52,409.4
Total debt$MM372.6365.1403.1 372.6365.1
Net debt3$MM102.0(490.7)340.2 102.0(490.7)
Net debt to invested capital3%4.6%(46.1%)15.8% 4.6%(46.1%)
Annualized return on capital employed3%52.9%110.8%86.6% 69.4%96.2%
Operating Highlights       
Lumber productionmillion fbm1,016716917 1,9331,402
Lumber salesmillion fbm1,082714843 1,9251,380
Lumber - average selling price4$/thousand fbm1,1041,4191,410 1,2401,286
Average USD/CAD exchange rate51 USD in CAD1.27681.22821.2662 1.27151.2470
Closing USD/CAD exchange rate51 USD in CAD1.28861.23941.2496 1.28861.2394


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


Balance Sheet

Interfor’s Net debt at June 30, 2022 was $102.0 million, or 4.6% of invested capital, representing an increase of $264.9 million from the level of Net debt at December 31, 2021.

As at June 30, 2022 the Company had net working capital of $607.1 million and available liquidity of $726.5 million, based on the full borrowing capacity under its $500 million Revolving Term Line.

The Revolving Term Line and Senior Secured Notes are subject to financial covenants, including a net debt to total capitalization ratio 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 Dollars20222021 20222021
Net debt     
Net debt, period opening$340,180$(235,966) $(162,886)$(75,432)
Repayment of Senior Secured Notes(7,005)(6,671) (7,005)(6,671)
Revolving Term Line net drawings(35,000)- (3,850)-
Impact on U.S. Dollar denominated debt from weakening (strengthening) CAD11,513(5,473) 7,800(10,183)
(Increase) decrease in cash and cash equivalents(201,899)(251,402) 276,304(413,569)
Impact on U.S. Dollar denominated cash and cash equivalents from strengthening (weakening) CAD(5,798)8,830 (8,372)15,173
Net debt, period ending$101,991$(490,682) $101,991$(490,682)

On December 17, 2021, the Company completed an early renewal and expansion of its Revolving Term Line. The commitment under the facility was increased by $150 million to a total of $500 million, and the term was extended from March 2024 to December 2026.

Capital Resources

The following table summarizes Interfor’s credit facilities and availability as of June 30, 2022:

Thousands of Canadian DollarsLineNotesTotal
Available line of credit and maximum borrowing available$500,000$372,620$872,620
Outstanding letters of credit included in line utilization44,083-44,083
Unused portion of facility$455,917$         -455,917
Cash and cash equivalents  270,629
Available liquidity at June 30, 2022  $726,546

Interfor’s Revolving Term Line matures in December 2026 and its Senior Secured Notes have maturities principally in the years 2024-2030.

As of June 30, 2022, the Company had commitments for capital expenditures totaling $196.2 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. 30Jun. 30Mar. 31 Jun. 30Jun. 30
Thousands of Canadian Dollars except number of shares and per share amounts202220212022 20222021
Adjusted Net Earnings      
Net earnings$269,881$419,241$397,031 $666,913$683,728
Asset write-downs and restructuring costs1,0882,2133,198 4,2862,355
Other foreign exchange loss (gain)20,2994,645(12,823) 7,4766,991
Long-term incentive compensation expense (recovery)(10,403)11,1453,671 (6,732)18,815
Other expense (income) excluding business interruption insurance3,0851,045(395) 2,690(951)
Post closure wind-down costs-251- -475
Income tax effect of above adjustments(3,787)(4,991)1,794 (1,993)(7,220)
Adjusted net earnings$280,163$433,549$392,476 $672,640$704,193
Weighted average number of shares - basic ('000)54,87464,98459,357 57,10365,453
Adjusted net earnings per share$5.11$6.67$6.61 $11.78$10.76
Adjusted EBITDA      
Net earnings$269,881$419,241$397,031 $666,913$683,728
Depreciation of plant and equipment41,64722,71733,113 74,76044,191
Depletion and amortization of timber, roads and other9,1546,6699,124 18,27913,637
Finance costs4,3574,4375,169 9,5248,961
Income tax expense89,474138,922132,026 221,500225,178
EBITDA414,513591,986576,463 990,976975,695
Long-term incentive compensation expense (recovery)(10,403)11,1453,671 (6,732)18,815
Other foreign exchange loss (gain)20,2994,645(12,823) 7,4766,991
Other expense (income) excluding business interruption insurance3,0851,045(395) 2,690(951)
Asset write-downs and restructuring costs1,0882,2133,198 4,2862,355
Post closure wind-down costs-251- -475
Adjusted EBITDA$428,582$611,285$570,114 $998,696$1,003,380
Sales$1,389,050$1,099,670$1,349,038 $2,738,087$1,948,977
Adjusted EBITDA margin30.9%55.6%42.3% 36.5%51.5%
Net debt to invested capital      
Net debt      
Total debt$372,620$365,106$403,112 $372,620$365,106
Cash and cash equivalents(270,629)(855,788)(62,932) (270,629)(855,788)
Total net debt$101,991$(490,682)$340,180 $101,991$(490,682)
Invested capital      
Net debt$101,991$(490,682)$340,180 $101,991$(490,682)
Shareholders' equity2,106,0971,554,2051,817,371 2,106,0971,554,205
Total invested capital$2,208,088$1,063,523$2,157,551 $2,208,088$1,063,523
Net debt to invested capital14.6%(46.1%)15.8% 4.6%(46.1%)
Operating cash flow per share (before working capital changes)      
Cash provided by operating activities$393,806$484,723$281,214 $675,020$769,803
Cash (generated from) used in operating working capital(175,586)(249)97,567 (78,019)92,355
Operating cash flow (before working capital changes)$218,220$484,474$378,781 $597,001$862,158
Weighted average number of shares - basic ('000)54,87464,98459,357 57,10365,453
Operating cash flow per share (before working capital changes)$3.98$7.46$6.38 $10.45$13.17
Annualized return on capital employed      
Net earnings$269,881$419,241$397,031 $666,913$683,728
Finance costs4,3574,4375,169 9,5248,961
Income tax expense89,474138,922132,026 221,500225,178
Earnings before income taxes and finance costs$363,712$562,600$534,226 $897,937$917,867
Capital Employed      
Total assets$3,269,508$2,409,388$3,081,351 $3,269,508$2,409,388
Current liabilities(421,383)(285,081)(472,686) (421,383)(285,081)
Current portion of long-term debt6,9806,7136,769 6,9806,713
Current portion of lease liabilities14,77611,75815,014 14,77611,758
Capital employed, end of period$2,869,881$2,142,778$2,630,448 $2,869,881$2,142,778
Capital employed, beginning of period2,630,4481,915,1462,303,177 2,303,1771,672,103
Average capital employed$2,750,164$2,028,962$2,466,812 $2,586,529$1,907,441
Earnings before income taxes and finance costs divided by average
   capital employed
13.2%27.7%21.7% 34.7%48.1%
Annualization factor4.04.04.0 2.02.0
Annualized return on capital employed52.9%110.8%86.6% 69.4%96.2%

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

For the three and six months ended June 30, 2022 and 2021 (unaudited)
(thousands of Canadian Dollars except earnings per share)Three MonthsThree MonthsSix MonthsSix Months
 Jun. 30, 2022Jun. 30, 2021Jun. 30, 2022Jun. 30, 2021
Costs and expenses:    
Selling and administration16,10212,13633,73025,015
Long-term incentive compensation expense (recovery)(10,403)11,145(6,732)18,815
U.S. countervailing and anti-dumping duty deposits46,31119,17182,12831,561
Depreciation of plant and equipment41,64722,71774,76044,191
Depletion and amortization of timber, roads and other9,1546,66918,27913,637
Operating earnings before write-downs and
   restructuring costs
Asset write-downs and restructuring costs1,0882,2134,2862,355
Operating earnings385,862568,290898,518923,907
Finance costs(4,357)(4,437)(9,524)(8,961)
Other foreign exchange loss(20,299)(4,645)(7,476)(6,991)
Other income (expense)(1,851)(1,045)6,895951
Earnings before income taxes359,355558,163888,413908,906
Income tax expense (recovery):    
Net earnings$269,881$419,241$666,913$683,728
Net earnings per share    

For the three and six months ended June 30, 2022 and 2021 (unaudited)
(thousands of Canadian Dollars)Three MonthsThree MonthsSix MonthsSix Months
 Jun. 30, 2022Jun. 30, 2021Jun. 30, 2022Jun. 30, 2021
Net earnings
Other comprehensive income (loss):    
Items that will not be recycled to Net earnings:    
Defined benefit plan actuarial gain (loss), net of tax(1,064)1,1101,7225,582
Items that are or may be recycled to Net earnings:    
Foreign currency translation differences for
   foreign operations, net of tax
Total other comprehensive income (loss), net of tax51,560(7,766)29,617(12,181)
Comprehensive income$321,441$411,475$696,530$671,547

For the three and six months ended June 30, 2022 and 2021 (unaudited)
(thousands of Canadian Dollars)Three MonthsThree MonthsSix MonthsSix Months
 Jun. 30, 2022Jun. 30, 2021Jun. 30, 2022Jun. 30, 2021
Cash provided by (used in):    
Operating activities:    
Net earnings$269,881$419,241$666,913$683,728
Items not involving cash:    
Depreciation of plant and equipment41,64722,71774,76044,191
Depletion and amortization of timber, roads and other9,1546,66918,27913,637
Deferred income tax expense (recovery)(3,354)3,7826,0926,865
Current income tax expense92,828135,140215,408218,313
Finance costs4,3574,4379,5248,961
Other assets(2,447)655(2,487)224
Reforestation liability(1,665)(1,187)71(691)
Provisions and other liabilities(12,798)6,392(25,708)6,887
Stock options213167454363
Write-down of plant and equipment1,1172,0352,3402,035
Unrealized foreign exchange gain (loss)(6,338)5,406(4,530)8,417
Other income (expense)1,8511,045(6,895)(951)
Income taxes paid(176,226)(122,025)(357,220)(129,821)
Cash generated from (used in) operating working capital:    
Trade accounts receivable and other83,534(4,741)18,883(72,600)
Trade accounts payable and provisions34,80615,29126,48618,246
Investing activities:    
Additions to property, plant and equipment(60,939)(36,263)(111,962)(62,594)
Additions to roads and bridges(4,214)(4,312)(4,059)(7,197)
Proceeds on disposal of property, plant and equipment10,18128311,3715,976
Investment in GreenFirst Forest Products Inc.(55,648)-(55,648)-
Net proceeds from (additions to) deposits and other assets(224)725168882
Financing activities:    
Issuance of share capital, net of expenses-4013772,346
Share repurchases
Dividend paid-(130,625)-(130,625)
Interest payments(4,314)(4,161)(9,326)(8,419)
Lease liability payments(3,333)(3,263)(7,803)(6,564)
Debt refinancing costs(74)-(263)-
Term line net repayments--(2,209)-
Additions to long-term debt--328,720-
Repayments of long-term debt(42,005)(6,671)(337,366)(6,671)
Foreign exchange gain (loss) on cash and
   cash equivalents held in a foreign currency
Increase (decrease) in cash207,697242,572(267,932)398,396
Cash and cash equivalents, beginning of period62,932613,216538,561457,392
Cash and cash equivalents, end of period$270,629$855,788$270,629$855,788

June 30, 2022 and December 31, 2021 (unaudited)
(thousands of Canadian Dollars)Jun. 30, 2022Dec. 31, 2021
Current assets:  
Cash and cash equivalents$270,629$538,561
Trade accounts receivable and other265,220147,764
Income tax receivable1912,776
Employee future benefits20,3928,338
Deposits and other assets192,95252,221
Right of use assets33,19533,547
Property, plant and equipment1,472,0141,067,754
Roads and bridges34,25027,101
Timber licences104,189106,136
Goodwill and other intangible assets383,367342,291
Deferred income taxes689415
Liabilities and Shareholders’ Equity  
Current liabilities:
Bank indebtedness$         -$2,202
Trade accounts payable and provisions340,049218,825
Current portion of long-term debt6,9806,868
Reforestation liability15,92016,670
Lease liabilities14,77612,239
Income taxes payable43,65864,838
Reforestation liability29,61229,250
Lease liabilities20,38826,850
Long-term debt365,640366,605
Employee future benefits9,5799,069
Provisions and other liabilities23,47443,686
Deferred income taxes293,335170,435
Share capital436,352484,721
Contributed surplus4,9864,694
Translation reserve86,31558,420
Retained earnings1,578,4441,088,138

Approved on behalf of the Board:

 L. Sauder T.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. 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 and under Interfor’s profile on 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; Indigenous reconciliation; the Company’s ability to export its products; the softwood lumber trade dispute between Canada and the U.S.; environmental impacts of the Company’s operations; labour disruptions; information systems security; and the existence of a public health crisis. 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 or statements, except as required by law.


Interfor is a growth-oriented forest products company with operations in Canada and the United States. The Company has annual lumber production capacity of approximately 4.7 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

The Company’s unaudited condensed consolidated interim financial statements and Management’s Discussion and Analysis for Q2’22 are available at and

There will be a conference call on Friday, August 5, 2022 at 8:00 a.m. (Pacific Time) hosted by INTERFOR CORPORATION for the purpose of reviewing the Company’s release of its second quarter 2022 financial results.

The dial-in number is 1-888-396-8049. The conference call will also be recorded for those unable to join in for the live discussion and will be available until September 5, 2022. The number to call is 1-877-674-7070, Passcode 637113#.

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