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Interfor Reports Q4’19 Results

/EIN News/ -- EBITDA1 of $18 million on Sales of $457 million
Net Debt to Invested Capital1 of 21%; Liquidity of $363 million

VANCOUVER, British Columbia, Feb. 06, 2020 (GLOBE NEWSWIRE) -- INTERFOR CORPORATION (“Interfor” or the “Company”) (TSX: IFP) recorded a net loss of $103.8 million, or $1.54 per share, in 2019, compared to net earnings of $111.1 million, or $1.59 per share in 2018.  Adjusted EBITDA was $63.4 million on sales of $1.9 billion.

Interfor recorded a net loss in Q4’19 of $41.7 million, or $0.62 per share, compared to $35.6 million, or $0.53 per share in Q3’19 and $13.5 million, or $0.20 per share in Q4’18.  Adjusted net loss in Q4’19 was $17.4 million compared to $11.8 million in Q3’19 and $20.2 million in Q4’18.

Adjusted EBITDA was $17.6 million on sales of $456.8 million in Q4’19 versus $16.8 million on sales of $486.5 million in Q3’19.

Included in the Company’s results for Q4’19 are $22.7 million (after-tax) for capital asset write-downs and restructuring costs, or $30.4 million on a pre-tax basis.  This includes $13.1 million of non-cash impairments for goodwill related to the reconfiguration of the Company’s B.C. Coastal business and $16.1 million of non-cash asset impairments on assets in the U.S. Northwest business to reflect their fair value, as well as cash costs of $1.2 million for discontinued operations.

Notable items in the quarter included:

• Mixed Lumber Price Movements

  • Movements in key benchmark prices were mixed compared to Q3’19 as the Western SPF Composite and KD H-F Stud 2x4 9’ benchmarks rose by US$16 to US$354 per mfbm and US$10 to US$347 per mfbm, respectively while the SYP Composite declined by US$15 to US$340 per mfbm.

  • Interfor’s average lumber selling price fell $17 to $566 per mfbm, on 681 million board feet of lumber sales, partially due to a change in species mix and decline in specialty sales as a result of the closure of the Hammond sawmill.

• Production Balanced with Shipments

  • Total lumber production was 668 million board feet, down 17 million board feet from Q3’19.  Production in the B.C. region declined to 187 million board feet from 205 million board feet in the preceding quarter due to the previously announced closure of the Hammond sawmill.  The U.S. South and U.S. Northwest regions accounted for 342 million board feet compared to 348 million board feet and 139 million board feet compared to 131 million board feet in Q3’19, respectively.

  • Total lumber shipments were 681 million board feet, including Interfor produced volume of 671 million board feet and agency and wholesale volumes of 10 million board feet, or 11 million board feet lower than Q3’19.

  • Lumber inventory levels ended at 4 million board feet lower than in Q3’19.

• Continued Strong Financial Position

  • Net debt ended the quarter at $224.9 million, or 21.3% of invested capital, resulting in available liquidity of $363.1 million.

  • Interfor generated $16.3 million of cash flow from operations before changes in working capital, or $0.24 per share.  Total cash generated from operations was $24.6 million, resulting primarily from lower trade receivable balances.

  • Capital spending was $37.0 million in Q4’19, including $26.6 million on high-return discretionary projects primarily in the U.S. South.

• Softwood Lumber Duties

  • Interfor expensed $11.2 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%.

  • On February 3, 2020, the U.S. Department of Commerce (the “DoC”) issued preliminary revised combined rates of 8.37% for 2017 and 8.21% for 2018.  These rates are the result of the DoC’s administrative review and are subject to change until its final rate determinations which are expected in August 2020.  At such time, the final rates will be applied to new lumber shipments.  No adjustments have been recorded in the financial statements as of December 31, 2019 to reflect the preliminary revised duty rates.

  • Cumulative duties of US$94.2 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$3.3 million 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

Reconfiguration of B.C. Coastal Business

On September 3, 2019, Interfor announced a plan to reconfigure its B.C. Coastal business, including the permanent closure of its Hammond sawmill, located in Maple Ridge, B.C., and the reorganization of its forestry and woodlands operations. 

Hammond ceased lumber production in early October 2019, sold most of the related log and lumber inventories in Q3’19 and Q4’19 and is expected to sell its remaining lumber inventories by the end of Q1’20.  The Hammond site is no longer in use.

Strategic Capital Plan Update

Interfor’s previously announced Phase I strategic capital projects at the Meldrim, Georgia and Monticello, Arkansas sawmills were substantially completed at the end of Q2’19 and continue through the ramp-up phase. 

The Phase II projects at the Thomaston and Eatonton sawmills in Georgia and the Georgetown sawmill in South Carolina, with a budget of US$240 million, are on track for completion in various stages from 2020 to 2022.  As of December 31, 2019, US$56.9 million has been capitalized and the projects remain on budget.

Acquisition of B.C. Interior Cutting Rights from Canfor

On June 3, 2019, Interfor entered into a purchase agreement with Canadian Forest Products Ltd. (“Canfor”) to acquire two replaceable timber licences with annual cutting rights of approximately 349,000 cubic metres, an interest in a non-replaceable forest licence and other related forestry assets in the Adams Lake area of the B.C. Interior.

The transaction remains subject to various consents, including that by the Government of B.C. and is currently targeted to close in Q1’20 as consultation with stakeholders continues.

Financial and Operating Highlights1 

      For the 3 months ended        
      Dec. 31   Dec. 31   Sept. 30     For the year ended Dec.31  
    Unit 2019   2018   2019     2019   2018   2017  
          (restated)2             (restated)2   (restated)2  
  Financial Highlights3                            
  Total sales $MM 456.8   468.5   486.5     1,875.8   2,186.6   1,990.1  
  Lumber $MM 385.2   387.7   403.5     1,576.1   1,841.0   1,679.4  
  Logs, residual products and other $MM 71.6   80.8   83.0     299.7   345.6   310.7  
  Operating earnings (loss) $MM (49.0)   (16.9)   (44.8)     (128.8)   157.9   151.2  
  Net earnings (loss) $MM (41.7)   (13.5)   (35.6)     (103.8)   111.1   97.1  
  Net earnings (loss) per share, basic $/share (0.62)   (0.20)   (0.53)     (1.54)   1.59   1.39  
  Adjusted net earnings (loss)4 $MM (17.4)   (20.2)   (11.8)     (58.1)   113.5   116.5  
  Adjusted net earnings (loss) per share, basic4 $/share (0.26)   (0.29)   (0.17)     (0.86)   1.63   1.66  
  Operating cash flow per share (before working  capital changes)4 $/share 0.24   0.14   0.03     0.68   4.12   4.03  
  Adjusted EBITDA4 $MM 17.6   8.9   16.8     63.4   291.6   296.8  
  Adjusted EBITDA margin4 % 3.9%   1.9%   3.5%     3.4%   13.3%   14.9%  
                               
  Total assets $MM 1,341.9   1,565.3   1,421.0     1,341.9   1,565.3    1,389.6  
  Total debt $MM  259.8    272.8     264.9      259.8    272.8    250.9  
  Net debt4 $MM 224.9   63.8   212.7     224.9   63.8   119.3  
  Net debt to invested capital4 % 21.3%   6.2%   19.4%     21.3%   6.2%   12.3%  
  Annualized return on invested capital4 % 6.6%   3.6%   6.1%     6.3%   29.1%   29.0%  
                               
  Operating Highlights                            
  Lumber production million fbm 668    607   685     2,646    2,635    2,595  
  Total lumber sales million fbm  681    647   692      2,668    2,680    2,677  
  Lumber sales - Interfor produced million fbm  671    639   681      2,626    2,638    2,594  
  Lumber sales - wholesale and commission million fbm  10    8    11      42    42    83  
  Lumber - average selling price5 $/thousand fbm  566    599    583     591    687    627  
                               
  Average USD/CAD exchange rate6 1 USD in CAD  1.3200    1.3204   1.3204      1.3269    1.2957    1.2986  
  Closing USD/CAD exchange rate6 1 USD in CAD  1.2988    1.3642   1.3243      1.2988    1.3642    1.2545  

Notes:

  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.

Liquidity

Balance Sheet

Interfor’s net debt at December 31, 2019 was $224.9 million, or 21.3% of invested capital, representing an increase of $161.0 million from the level of net debt at December 31, 2018. 

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

    For the three months ended     For the year ended  
    Dec. 31,   Dec. 31,   Sept. 30,     Dec. 31,   Dec. 31,  
  Thousands of Dollars 2019   2018   2019     2019   2018  
                         
  Net debt                      
  Net debt, period opening  $212,674   $3,800    $198,209     $63,825   $119,300  
  Net drawing (repayment) on credit facilities (1)   (1)    -      754    110  
  Impact on U.S. Dollar denominated debt from (strengthening) weakening CAD (5,099)   13,941   3,120      (13,834)    21,830  
  Decrease (increase) in cash and cash equivalents 16,994   7,286   11,747      127,659    (23,968)  
  Decrease (increase) in marketable securities -   49,871   -     41,766   (41,140)  
  Impact on U.S. Dollar denominated cash and cash equivalents and marketable securities from strengthening (weakening) CAD 292   (11,072)    (402)     4,690   (12,307)  
  Net debt, period ending $224,860   $63,825   $212,674     $224,860   $63,825  

On March 28, 2019, the Company completed a modernization of its credit facilities.  The new facility replaced 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 December 31, 2019, the Company had net working capital of $187.9 million and available liquidity of $363.1 million, including cash and borrowing capacity on its credit 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 sufficient 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 December 31, 2019:

    Revolving Senior  
    Term Secured  
  Thousands of Canadian Dollars   Line   Notes   Total  
  Available line of credit   $350,000   $259,760    $609,760  
  Maximum borrowing available   $350,000   $259,760   $609,760  
  Less:              
  Drawings   -   259,760   259,760  
  Outstanding letters of credit included in line utilization   21,752   -    21,752  
  Unused portion of facility   $328,248     $          -    328,248  
             
  Add:          
  Cash and cash equivalents       34,900  
  Available liquidity at December 31, 2019       $363,148  

As of December 31, 2019, the Company had commitments for capital expenditures totaling $93.5 million for both maintenance and discretionary capital projects and $60 million in respect of its purchase agreement with Canfor to acquire two replaceable timber licences and a non-replaceable forest licence and other related forestry assets.

Non-GAAP Measures

This release makes reference to the following non-GAAP measures: Adjusted net earnings (loss), Adjusted net earnings (loss) 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 3 months ended                
  Thousands of Canadian Dollars except number of shares Dec. 31   Dec. 31   Sept. 30     For the year ended Dec.31  
  and per share amounts 2019   2018   2019     2019   2018   2017  
        (restated)¹             (restated)¹   (restated)¹  
  Adjusted Net Earnings (Loss)                          
  Net earnings (loss)  $(41,676)   $(13,512)   $(35,648)     $(103,785)   $111,058   $97,119  
  Add:            
  Capital asset and goodwill write-downs and  restructuring costs 30,416   4,551   31,814     63,982   15,304   9,203  
  Other foreign exchange loss (gain) 510   (3,330)   (216)     275   (3,474)   2,035  
  Long term incentive compensation expense (recovery) 1,265   (9,180)   1,049     3,446   (7,829)   12,977  
  Other (income) expense 298   (1,254)   100     (5,925)   (1,188)   1,987  
  Post closure wind-down costs and losses (recoveries) -   -   -     -   4   (21)  
  Income tax effect of above adjustments (8,241)   2,530   (8,867)     (16,117)   (396)   (6,848)  
  Adjusted net earnings (loss) $(17,428)   $(20,195)   $(11,768)     $(58,124)    $113,479   $116,452  
  Weighted average number of shares - basic ('000) 67,257   68,884   67,253     67,277   69,713   70,030  
  Adjusted net earnings (loss) per share $(0.26)   $(0.29)   $(0.17)     $(0.86)   $1.63   $1.66  
               
  Adjusted EBITDA            
  Net earnings (loss) $(41,676)    $(13,512)   $(35,648)     $(103,785)   $111,058   $97,119  
  Add:            
  Depreciation of plant and equipment 20,711   19,241   20,595     80,438   80,065   77,417  
  Depletion and amortization of timber, roads and other 14,214   11,229   8,142     44,294   46,148   45,957  
  Capital asset and goodwill write-downs and restructuring costs 30,416   4,551   31,814     63,982   15,304   9,203  
  Finance costs 3,740   2,758   3,784     15,024   12,452   15,978  
  Other foreign exchange loss (gain) 510   (3,330)   (216)     275   (3,474)   2,035  
  Income tax expense (recovery) (11,851)   (1,553)   (12,804)     (34,359)   39,092   34,115  
  EBITDA 16,064   19,384   15,667     65,869   300,645   281,824  
  Add:            
  Long term incentive compensation expense (recovery) 1,265   (9,180)   1,049     3,446   (7,829)   12,977  
  Other (income) expense 298   (1,254)   100     (5,925)   (1,188)   1,987  
  Post closure wind-down costs and losses (recoveries) -   -   -     -   4   (21)  
  Adjusted EBITDA $17,627    $8,950    $16,816     $63,390   $291,632    $296,767  
  Sales $456,819   $468,544   $486,494     $1,875,821   $2,186,567   $1,990,106  
  Adjusted EBITDA margin 3.9%   1.9%   3.5%     3.4%   13.3%   14.9%  
               
  Net debt to invested capital            
  Net debt            
  Total debt $259,760   $272,840    $264,860     $259,760    $272,840    $250,900  
  Cash and cash equivalents (34,900)   (166,152)   (52,186)     (34,900)   (166,152)   (131,600)  
  Marketable securities -   (42,863)   -     -   (42,863)   -  
  Total net debt $224,860   $63,825    $212,674     $224,860    $63,825    $119,300  
  Invested capital            
  Net debt $224,860   $63,825   $212,674     $224,860   $63,825   $119,300  
  Shareholders' equity 830,982   968,766   880,854     830,982   968,766   849,552  
  Total invested capital $1,055,842   $1,032,591    $1,093,528     $1,055,842    $1,032,591   $968,852  
  Net debt to invested capital2 21.3%   6.2%   19.4%     21.3%   6.2%   12.3%  
               
  Operating cash flow per share (before working capital changes)            
  Cash provided by operating activities $24,642    $21,096    $29,658     $28,252    $265,612   $266,748  
  Cash used in (generated from) operating working capital (8,334)   (11,253)   (27,336)     17,322   21,457   15,621  
  Operating cash flow (before working capital changes) $16,308    $9,843    $2,322     $45,574   $287,069   $282,369  
  Weighted average number of shares - basic ('000) 67,257   68,884   67,253     67,277   69,713   70,030  
  Operating cash flow per share (before working capital changes) $0.24   $0.14   $0.03     $0.68    $4.12    $4.03  
               
  Annualized return on invested capital            
  Adjusted EBITDA $17,627   $8,950   $16,816     $63,390   $291,632   $296,767  
  Invested capital, beginning of period $1,093,528   $984,189   $1,109,618     $1,032,591   $968,852   $1,076,218  
  Invested capital, end of period 1,055,842   1,032,591   1,093,528     1,055,842   1,032,591   968,852  
  Average invested capital $1,074,685   $1,008,390   $1,101,573     $1,044,217   $1,000,722   $1,022,535  
  Adjusted EBITDA divided by average invested capital 1.6%   0.9%   1.5%     6.1%   29.1%   29.0%  
  Annualization factor 4.0   4.0   4.0     1.0   1.0   1.0  
  Annualized return on invested capital 6.6%   3.6%   6.1%     6.1%   29.1%   29.0%  

Notes: 

  1. Financial information has been restated for implementation of IFRS 16, Leases.
  2. Net debt to invested capital as of the period end.
     
  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
 
  For the three months and year ended December 31, 2019 and 2018 (unaudited)
 
  (thousands of Canadian Dollars except earnings per share) Three Months   Three Months   Year   Year  
      Dec. 31, 2019   Dec. 31, 2018   Dec. 31, 2019   Dec. 31, 2018  
          (restated)¹       (restated)¹  
                     
  Sales
$456,819   $468,544   $1,875,821   $2,186,567  
  Costs and expenses:                
    Production 418,954   438,036   1,728,394   1,789,590  
    Selling and administration 8,992   11,897   38,748   52,012  
    Long term incentive compensation expense (recovery) 1,265   (9,180)   3,446   (7,829)  
    U.S. countervailing and anti-dumping duty deposits 11,246   9,661   45,289   53,337  
    Depreciation of plant and equipment 20,711   19,241   80,438   80,065  
    Depletion and amortization of timber, roads and other 14,214   11,229   44,294   46,148  
      475,382   480,884   1,940,609   2,013,323  
                     
  Operating earnings (loss) before write-downs and restructuring costs (18,563)   (12,340)   (64,788)   173,244  
                     
  Capital asset and goodwill write-downs and restructuring costs (30,416)   (4,551)   (63,982)   (15,304)  
  Operating earnings (loss) (48,979)   (16,891)   (128,770)   157,940  
                     
  Finance costs (3,740)   (2,758)   (15,024)    (12,452)  
  Other foreign exchange gain (loss) (510)   3,330   (275)   3,474  
  Other income (expense) (298)   1,254   5,925   1,188  
      (4,548)   1,826   (9,374)   (7,790)  
                     
  Earnings (loss) before income taxes (53,527)   (15,065)   (138,144)   150,150  
                     
  Income tax expense (recovery):                
    Current (783)   (45)   26   2,955  
    Deferred (11,068)   (1,508)   (34,385)   36,137  
      (11,851)   (1,553)   (34,359)   39,092  
                     
  Net earnings (loss)
$(41,676)   $(13,512)   $(103,785)   $111,058  
                     
  Net earnings (loss) per share, basic and diluted
$(0.62)   $(0.19)   $(1.54)   $1.59  


  CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)  
  For the three months and year ended December 31, 2019 and 2018 (unaudited)  
  (thousands of Canadian Dollars) Three Months   Three Months   Year   Year  
      Dec. 31, 2019   Dec. 31, 2018   Dec. 31, 2019   Dec. 31, 2018  
          (restated)¹       (restated)¹  
                     
                     
  Net earnings (loss) $(41,676)   $(13,512)   $(103,785)   $111,058  
                     
  Other comprehensive income (loss):                
  Items that will not be recycled to Net earnings (loss):                
    Defined benefit plan actuarial gain (loss), net of tax 1,621   (2,338)   603   508  
                     
  Items that are or may be recycled to Net earnings (loss):                
    Foreign currency translation differences for foreign operations, net of tax (10,053)   28,990   (27,634)   43,660  
  Total other comprehensive income (loss), net of tax (8,432)   26,652   (27,031)   44,168  
                     
  Comprehensive income (loss) $(50,108)   $13,140   $(130,816)   $155,226  

Notes:

  1. Financial information has been restated for implementation of IFRS 16, Leases.
                   
  CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS                
  For the three months and year ended December 31, 2019 and 2018 (unaudited)                
  (thousands of Canadian Dollars) Three Months   Three Months   Year   Year  
        Dec. 31, 2019   Dec. 31, 2018   Dec. 31, 2019   Dec. 31, 2018  
            (restated)¹       (restated)¹  
                       
  Cash provided by (used in):                
  Operating activities:                
    Net earnings (loss) $(41,676)   $(13,512)   $(103,785)   $111,058  
    Items not involving cash:                
      Depreciation of plant and equipment 20,711   19,241   80,438   80,065  
      Depletion and amortization of timber, roads and other 14,214   11,229   44,294   46,148  
      Income tax expense (recovery) (11,851)   (1,553)   (34,359)   39,092  
      Finance costs 3,740   2,758   15,024   12,452  
      Other assets 1,371   (2,824)   1,894   (3,000)  
      Reforestation liability 1,291   763   (1,286)   79  
      Provisions and other liabilities (1,586)   (4,980)   3,620   (8,972)  
      Stock options 151   216   692   774  
      Write-down of plant, equipment, intangibles, goodwill and other 29,100   3,238   45,494   13,925  
      Unrealized foreign exchange loss (gain) 544   (3,479)   554   (3,364)  
      Gain on lease modifications (1,140)   -   (1,140)   -  
      Other expense (income) 1,439   (1,254)   (5,866)   (1,188)  
        16,308   9,843   45,574   287,069  
    Cash generated from (used in) operating working capital:                
      Trade accounts receivable and other 26,706   30,618   1,517   27,414  
      Inventories (5,450)   (2,846)   22,632   (33,821)  
      Prepayments 2,639   225   (4,443)   (3,035)  
      Trade accounts payable and provisions (15,851)   (15,628)   (36,446)   (7,623)  
      Income taxes paid 290   (1,116)   (582)   (4,392)  
        24,642   21,096   28,252   265,612  
                       
  Investing activities:                
    Additions to property, plant and equipment (31,864)   (50,307)   (158,645)   (106,440)  
    Additions to roads and bridges (5,175)   (8,524)   (22,447)   (32,165)  
    Additions to timber licences and other intangible assets -   (68)   (77)   (158)  
    Proceeds on disposal of property, plant and equipment, timber and other 431   1,846   8,880   2,355  
    Net proceeds from (additions to) marketable securities, deposits and other assets 1,208   58,548   48,338   (48,385)  
        (35,400)   1,495   (123,951)   (184,793)  
                       
  Financing activities:                
    Issuance of share capital, net of expenses  85   -   165   143  
    Share repurchases -   (24,979)   (7,825)   (36,929)  
    Interest payments (3,345)   (2,271)   (12,193)   (10,151)  
    Lease payments (2,946)   (2,608)   (11,638)   (9,936)  
    Debt refinancing costs (29)   (18)   (1,223)   (88)  
    Change in operating line components of long term debt (1)   (1)   4   (2)  
    Additions to long term debt -   -   197,925   155,909  
    Repayments of long term debt -   -   (197,175)   (155,797)  
        (6,236)   (29,877)   (31,960)   (56,851)  
                       
                       
  Foreign exchange gain (loss) on cash and cash equivalents held in a foreign currency (292)   7,885   (3,593)   10,584  
  Increase (decrease) in cash (17,286)   599   (131,252)   34,552  
                       
  Cash and cash equivalents, beginning of period 52,186   165,553   166,152   131,600  
                       
  Cash and cash equivalents, end of period $34,900   $166,152   $34,900   $166,152  

Notes:

  1. Financial information has been restated for implementation of IFRS 16, Leases.
     
  CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION  
  December 31, 2019, 2018 and January 1, 2018 (unaudited)
 
  (thousands of Canadian Dollars)            
      Dec. 31, 2019   Dec. 31, 2018   Jan. 1, 2018  
          (restated)¹   (restated)¹  
  Assets            
  Current assets:            
    Cash and cash equivalents $34,900   $166,152   $131,600  
    Marketable securities -   42,863   -  
    Trade accounts receivable and other 86,608   90,384   112,470  
    Income taxes receivable 1,995   3,008   1,289  
    Inventories 181,577   209,178   165,156  
    Prepayments 20,449   16,833   12,186  
      325,529   528,418   422,701  
                 
  Employee future benefits 673   303   502  
  Deposits and other assets 9,296   16,842   6,404  
  Right of use assets 32,780   37,778   38,600  
  Property, plant and equipment 739,515   723,773   669,165  
  Roads and bridges 24,353   29,829   24,092  
  Timber licences 60,596   64,153   66,589  
  Other intangible assets 3,480   5,288   14,170  
  Goodwill 138,734   158,799   147,081  
  Deferred income taxes 6,961   133   253  
                 
      $1,341,917   $1,565,316   $1,389,557  
                 
  Liabilities and Shareholders’ Equity            
  Current liabilities:            
    Trade accounts payable and provisions $114,358   $154,869   $152,355  
    Reforestation liability 13,021   13,947   12,873  
    Lease liabilities 10,105   10,158   8,019  
    Income taxes payable  163   356   224  
      137,647   179,330   173,471  
                 
  Reforestation liability 27,401   28,235   27,535  
  Lease liabilities 27,718   33,954   36,165  
  Long term debt 259,760   272,840   250,900  
  Employee future benefits 11,843   8,687   8,249  
  Provisions and other liabilities 18,957   16,421   25,808  
  Deferred income taxes 27,609   57,083   17,877  
                 
  Equity:            
    Share capital 533,685   537,534   555,388  
    Contributed surplus 4,471   3,851   8,582  
    Translation reserve 56,759   84,393   40,733  
    Retained earnings 236,067   342,988   244,849  
                 
      830,982   968,766   849,552  
                 
      $1,341,917   $1,565,316   $1,389,557  

Notes:

  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

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.  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.

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 3.0 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 2019 audited consolidated financial statements and Management’s Discussion and Analysis are available at www.sedar.com and www.interfor.com

There will be an analyst conference call on Friday, February 7, 2020 at 8:00 a.m. (Pacific Time) hosted by INTERFOR CORPORATION for the purpose of reviewing the Company’s release of its fourth quarter and fiscal 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 March 7, 2020.  The number to call is
1-855-859-2056, Passcode 1874063.

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

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