Interfor Reports Q4’19 Results

2/6/2020, 11:28 PM (Source: GlobeNewswire)

INTERFOR+5.10%

24.13
Chart for: INTERFOR CORPORATION

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 
  Unit2019 2018 2019  2019 2018 2017 
     (restated)2      (restated)2 (restated)2 
 Financial Highlights3              
 Total sales$MM456.8 468.5 486.5  1,875.8 2,186.6 1,990.1 
 Lumber$MM385.2 387.7 403.5  1,576.1 1,841.0 1,679.4 
 Logs, residual products and other$MM71.6 80.8 83.0  299.7 345.6 310.7 
 Operating earnings (loss)$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$/share0.24 0.14 0.03  0.68 4.12 4.03 
 Adjusted EBITDA4$MM17.6 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$MM1,341.9 1,565.3 1,421.0  1,341.9 1,565.3  1,389.6 
 Total debt$MM 259.8  272.8   264.9   259.8  272.8  250.9 
 Net debt4$MM224.9 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 productionmillion fbm668  607 685  2,646  2,635  2,595 
 Total lumber salesmillion fbm 681  647 692   2,668  2,680  2,677 
 Lumber sales - Interfor producedmillion fbm 671  639 681   2,626  2,638  2,594 
 Lumber sales - wholesale and commissionmillion fbm 10  8  11   42  42  83 
 Lumber - average selling price5$/thousand fbm 566  599  583  591  687  627 
                
 Average USD/CAD exchange rate61 USD in CAD 1.3200  1.3204 1.3204   1.3269  1.2957  1.2986 
 Closing USD/CAD exchange rate61 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 Dollars2019 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 equivalents16,994 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) CAD292 (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:

  RevolvingSenior 
  TermSecured 
 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 sharesDec. 31 Dec. 31 Sept. 30  For the year ended Dec.31 
 and per share amounts2019 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 $97,119 
 Add:      
 Capital asset and goodwill write-downs and  restructuring costs30,416 4,551 31,814  63,982 15,304 9,203 
 Other foreign exchange loss (gain)510 (3,330) (216)  275 (3,474) 2,035 
 Long term incentive compensation expense (recovery)1,265 (9,180) 1,049  3,446 (7,829) 12,977 
 Other (income) expense298 (1,254) 100  (5,925) (1,188) 1,987 
 Post closure wind-down costs and losses (recoveries)- - -  - 4 (21) 
 Income tax effect of above adjustments(8,241) 2,530 (8,867)  (16,117) (396) (6,848) 
 Adjusted net earnings (loss)$(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 equipment20,711 19,241 20,595  80,438 80,065 77,417 
 Depletion and amortization of timber, roads and other14,214 11,229 8,142  44,294 46,148 45,957 
 Capital asset and goodwill write-downs and restructuring costs30,416 4,551 31,814  63,982 15,304 9,203 
 Finance costs3,740 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 
 EBITDA16,064 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) expense298 (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 margin3.9% 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' equity830,982 968,766 880,854  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 capital221.3% 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 period1,055,842 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 capital1.6% 0.9% 1.5%  6.1% 29.1% 29.0% 
 Annualization factor4.0 4.0 4.0  1.0 1.0 1.0 
 Annualized return on invested capital6.6% 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:        
  Production418,954 438,036 1,728,394 1,789,590 
  Selling and administration8,992 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 deposits11,246 9,661 45,289 53,337 
  Depreciation of plant and equipment20,711 19,241 80,438 80,065 
  Depletion and amortization of timber, roads and other14,214 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 tax1,621 (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 equipment20,711 19,241 80,438 80,065 
   Depletion and amortization of timber, roads and other14,214 11,229 44,294 46,148 
   Income tax expense (recovery)(11,851) (1,553) (34,359) 39,092 
   Finance costs3,740 2,758 15,024 12,452 
   Other assets1,371 (2,824) 1,894 (3,000) 
   Reforestation liability1,291 763 (1,286) 79 
   Provisions and other liabilities(1,586) (4,980) 3,620 (8,972) 
   Stock options151 216 692 774 
   Write-down of plant, equipment, intangibles, goodwill and other29,100 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 other26,706 30,618 1,517 27,414 
   Inventories(5,450) (2,846) 22,632 (33,821) 
   Prepayments2,639 225 (4,443) (3,035) 
   Trade accounts payable and provisions(15,851) (15,628) (36,446) (7,623) 
   Income taxes paid290 (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 other431 1,846 8,880 2,355 
  Net proceeds from (additions to) marketable securities, deposits and other assets1,208 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 period52,186 165,553 166,152 131,600 
            
 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 other86,608 90,384 112,470 
  Income taxes receivable1,995 3,008 1,289 
  Inventories181,577 209,178 165,156 
  Prepayments20,449 16,833 12,186 
   325,529 528,418 422,701 
         
 Employee future benefits673 303 502 
 Deposits and other assets9,296 16,842 6,404 
 Right of use assets32,780 37,778 38,600 
 Property, plant and equipment739,515 723,773 669,165 
 Roads and bridges24,353 29,829 24,092 
 Timber licences60,596 64,153 66,589 
 Other intangible assets3,480 5,288 14,170 
 Goodwill138,734 158,799 147,081 
 Deferred income taxes6,961 133 253 
         
   $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 liability13,021 13,947 12,873 
  Lease liabilities10,105 10,158 8,019 
  Income taxes payable 163 356 224 
   137,647 179,330 173,471 
         
 Reforestation liability27,401 28,235 27,535 
 Lease liabilities27,718 33,954 36,165 
 Long term debt259,760 272,840 250,900 
 Employee future benefits11,843 8,687 8,249 
 Provisions and other liabilities18,957 16,421 25,808 
 Deferred income taxes27,609 57,083 17,877 
         
 Equity:      
  Share capital533,685 537,534 555,388 
  Contributed surplus4,471 3,851 8,582 
  Translation reserve56,759 84,393 40,733 
  Retained earnings236,067 342,988 244,849 
         
   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. SauderThomas V. Milroy
 DirectorDirector

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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