Interfor Reports Q3’18 Results

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EBITDA(1) of $69 million and Net Earnings of $28 million
Operating Cash Flow(1) of $1.00 per share
Net Debt to Invested Capital(1) of 0%
Greenfield Decision Postponed Indefinitely

VANCOUVER, British Columbia, Nov. 08, 2018 (GLOBE NEWSWIRE) — INTERFOR CORPORATION (“Interfor” or the “Company”) (TSX: IFP) recorded net earnings in Q3’18 of $28.1 million, or $0.40 per share, compared to $63.8 million, or $0.91 per share in Q2’18 and $16.8 million, or $0.24 per share in Q3’17.  Adjusted net earnings in Q3’18 were $28.2 million or $0.40 per share, compared to $68.9 million, or $0.98 per share in Q2’18 and $20.0 million, or $0.29 per share in Q3’17.

Adjusted EBITDA was $69.4 million on sales of $570.5 million in Q3’18 versus $123.8 million on sales of $619.9 million in Q2’18.

In comparison to the third quarter of 2017, Interfor posted improved results across most key metrics, including an $8.9 million or 15% improvement in Adjusted EBITDA, an $11.3 million or 67% increase in net earnings and a 29 million board foot rise in lumber production.

Notable items in the quarter included:

•  Lower Lumber Prices

  • Key benchmark prices decreased quarter-over-quarter, with the SYP Composite, Western SPF Composite and KD H-F Stud 2×4 9’ benchmark dropping by US$63, US$98 and US$94 per mfbm, respectively. Interfor’s average lumber selling price fell $52 from Q2’18 to $701 per mfbm.
  • Lumber prices have experienced an unusual level of volatility in 2018. The logistics disruptions that occurred in Q1’18 led to a significant increase in lumber inventories being trapped at producer yards.  This supply side constraint, combined with growing demand, contributed to an unprecedented rise in lumber prices during the early part of the year. As shipment levels increased, prices responded, falling in record amounts from late May through the end of September and dropping further in the early part of Q4’18. Notwithstanding the volatility experienced in 2018, Interfor believes that the underlying fundamental drivers of demand for its lumber products remain positive.

•  Production Balanced With Shipments

  • Total lumber production was 674 million board feet or 14 million board feet lower than the prior quarter.  Production in the U.S. South region of 313 million board feet was negatively impacted by several factors including preventative downtime ahead of Hurricane Florence and maintenance/project related downtime, which contributed to a 12 million board feet decrease from the preceding quarter.  The B.C. and U.S. Northwest regions accounted for 224 million board feet and 137 million board feet, respectively, compared to 215 million board feet and 148 million board feet in Q2’18, respectively.
  • Total lumber shipments were 685 million board feet, of which 675 million board feet were Interfor produced volumes, with the balance of 10 million board feet being agency and wholesale volumes.  Total lumber shipments were 15 million board feet lower than Q2’18, as Q3’18 shipments were negatively impacted by adverse weather in the U.S. South.  The Company’s lumber inventory was reduced 2 million board feet quarter-over-quarter.
      
  • Production in Q4’18 from Interfor’s B.C. Interior operations will be impacted by a previously announced temporary curtailment.  The curtailment is in response to the combination of declining lumber prices and escalating log costs and is expected to reduce the Company’s production in the region by approximately 20% during the quarter.

•  Higher Operating Costs

  • Interfor’s production costs increased by $22 per mfbm of lumber sold in Q3’18 versus Q2’18, as a result of several factors, including:  (i) higher stumpage and log hauling costs in the B.C. Interior; (ii) higher log and lumber inventory valuation adjustments due to the decline in lumber prices; (iii) higher maintenance spending in the U.S. South; and (iv) lower production due to the downtime from several maintenance projects and adverse weather in the U.S. South.

•  Strong Cash Flows and Liquidity

  • Interfor generated $69.7 million of cash from operations before changes in working capital, or $1.00 per share.  Total cash generated from operations was $85.0 million.
  • Net debt ended the quarter at $3.8 million, or 0.4% of invested capital, resulting in available liquidity of $567.2 million.  The Company closed on its previously announced agreement to extend US$84 million of its 2021 to 2023 term debt maturities to 2027 to 2029, resulting in a weighted average fixed interest rate on its term debt of 4.47%.
  • Capital spending was $38.5 million on a mix of high-return discretionary, maintenance and woodlands projects.  In addition, Interfor has US$12.6 million of deposits placed with key suppliers for capital equipment related to Phases I and II of its strategic capital plan.
  • Interfor purchased and cancelled 597,245 of its common shares at a total cost of $12.0 million.  The Company’s existing normal course issuer bid (“NCIB”) permits the purchase of up to 3,500,000 common shares until its expiry on March 6, 2019.

•  Softwood Lumber Duties

  • Interfor expensed $15.9 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$52.9 million have been paid by Interfor since the inception of the current trade dispute and are held in trust by the U.S.  Of this total, US$3.2 million is recorded as a receivable in respect of overpayments arising from duty rate adjustments and US$49.7 million has been expensed and is not recorded on the balance sheet as a receivable.

__________________
(1)  Refer to Adjusted EBITDA, Operating cash flow per share and Net debt to invested capital in the Non-GAAP Measures section

Strategic Capital Plan Update

  • Interfor continues to make progress on previously announced Phases I and II strategic capital projects in the U.S. South.  The Phase I projects total US$65 million at the Meldrim, Georgia and Monticello, Arkansas sawmills.  Both of these projects remain on budget, with completion set for the Meldrim project in Q1’19 and the Monticello project by Q2’19.  The Phase II projects total US$240 million at the Thomaston and Eatonton sawmills in Georgia and the Georgetown sawmill in South Carolina.  These projects are on track for completion in various stages over the period of 2019 to 2021.

Greenfield Decision Postponed Indefinitely

  • Over the past year, Interfor has been assessing the feasibility of greenfield sawmill opportunities in the U.S. South.  In that regard, the Company has completed a detailed engineering study, secured the rights to a well-located site and negotiated a number of ancillary arrangements in support of the project.  However, based on prevailing market conditions for greenfield projects, including equipment lead times, contractor availability and projected capital costs, Interfor has concluded the project does not currently meet its criteria for discretionary investments and has postponed its decision on the project for an indefinite period.
  • In the meantime, the Company intends to focus on the previously announced Phase I and II internal capital projects and on other capital investment alternatives.  Any future decision on the greenfield project would likely result in that project being scheduled for construction, if at all, subsequent to the Phase I and II capital projects achieving substantial completion.

Financial and Operating Highlights (1) 

 

    For the 3 months ended   For the 9 months ended
    Sept. 30 Sept. 30 Jun. 30   Sept. 30 Sept. 30
  Unit 2018  2017 2018   2018 2017
               
Financial Highlights(2)              
Total sales $MM 570.5 489.2 619.9   1,718.0 1,457.3
Lumber $MM 480.3 410.2 527.0   1,453.2 1,233.4
Logs, residual products and other $MM 90.2 79.0 92.9   264.8 223.9
Operating earnings $MM 41.3 28.3 85.9   173.6 101.5
Net earnings $MM 28.1 16.8 63.8   124.8 61.0
Net earnings per share, basic $/share 0.40 0.24   0.91     1.78 0.87
Adjusted net earnings(3) $MM 28.2 20.0 68.9   133.9 71.4
Adjusted net earnings per share, basic(3) $/share 0.40   0.29   0.98   1.91   1.02
Operating cash flow per share (before working  capital changes)(3) $/share 1.00 0.82 1.76   3.83 2.72
Adjusted EBITDA(3) $MM 69.4 60.5 123.8   274.2 198.2
Adjusted EBITDA margin(3) % 12.2% 12.4% 20.0%   16.0% 13.6%
               
Total assets $MM 1,539.5   1,296.3 1,536.0     1,539.5   1,296.3
Total debt $MM 258.9 249.6 263.4   258.9 249.6
Net debt $MM 3.8 176.9 34.4   3.8 176.9
Net debt to invested capital(3) % 0.4% 17.8% 3.4%   0.4% 17.8%
Annualized return on invested capital(3) % 27.7% 23.9% 48.5%   37.3% 25.5%
               
Operating Highlights              
Lumber production million fbm 674 645 688     2,029   1,940
Total lumber sales million fbm 685 671 700   2,033 1,991
  Lumber sales – Interfor produced million fbm 675 650 689   1,999 1,928
  Lumber sales – wholesale and commission million fbm 10 21 11   34 63
Lumber – average selling price(4) $/thousand fbm 701 611 753   715 620
               
Average USD/CAD exchange rate(5) 1 USD in CAD 1.3070 1.2528 1.2911   1.2876 1.3074
Closing USD/CAD exchange rate(5) 1 USD in CAD 1.2945 1.2480 1.3168   1.2945 1.2480
               

Notes: 
(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 consolidated financial statements.
(4) Gross sales before duties.
(5) Based on Bank of Canada foreign exchange rates.
 

Liquidity

Balance Sheet

Interfor maintained a strong financial position throughout Q3’18.  Net debt at September 30, 2018 was $3.8 million, or 0.4% of invested capital, representing a decrease of $173.1 million from September 30, 2017, and a decrease of $115.5 million from December 31, 2017.  The majority of the decrease in net debt in Q3’18 is attributed to strong cash flows generated from operations.  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 hedged by the Company’s U.S. Dollar cash and marketable securities balances. 

  For the 3 months ended Sept. 30,   For the 9 months ended Sept. 30,
Thousands of Dollars 2018 2017   2018 2017
           
Net debt          
Net debt, period opening, CAD $34,415  $215,155   $119,300  $289,551
Net repayment on credit facilities, CAD 112  2    111  (40,216)
Impact on U.S. Dollar denominated debt from (strengthening) weakening CAD (4,572)  (9,942)   7,889  (19,005)
Decrease (increase) in cash and cash equivalents, CAD 63,392 (30,525)   (33,953) (52,543)
Decrease (increase) in marketable securities, CAD  (89,547)  2,176    (89,547) (921)
Net debt, period ending, CAD $3,800  $176,866    $3,800  $176,866
           
Net debt components by currency          
U.S. Dollar debt, period opening, USD  $200,000  $200,000    $200,000  $230,000
Net repayment on credit facilities, USD  –  –     –  (30,000)
U.S. Dollar debt, period ending, USD $200,000  $200,000    200,000  200,000
           
Spot rate, period end        1.2945  1.2480
           
U.S. Dollar debt expressed in CAD        258,900  249,600
Total debt, CAD       258,900 249,600
Cash and cash equivalents, CAD       (165,553) (71,813)
Marketable securities, CAD        (89,547) (921)
Net debt, period ending, CAD       $3,800 $176,866

As at September 30, 2018, the Company had net working capital of $411.7 million and available liquidity of $567.2 million, including unrestricted cash, marketable securities and borrowing capacity on operating and term line facilities. 

On June 15, 2018, the Company extended the maturity of its U.S. Operating line from May 1, 2019 to June 15, 2021, with no other significant changes.  On August 14, 2018, Interfor completed an agreement to extend US$84 million of its 2021 to 2023 Senior Secured Note maturities to 2027 to 2029.  As a result, Interfor’s weighted average fixed interest rate on its term debt is 4.47%.   

These resources, in addition to cash generated from operations, will be used to support capital expenditures, working capital requirements and debt servicing commitments.  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 September 30, 2018:

    Revolving Senior U.S.  
  Operating Term Secured Operating  
Thousands of Canadian Dollars Line Line Notes Line Total
Available line of credit $65,000  $200,000 $258,900  $64,725  $588,625
Maximum borrowing available  $65,000  $200,000  $258,900  $64,725  $588,625
Less:          
Drawings  –   –  258,900  –  258,900
Outstanding letters of credit included in line utilization 14,472 3,184 17,656
Unused portion of facility  $50,528  $200,000 $             – $61,541  312,069
           
Add:          
Cash and cash equivalents         165,553
Marketable securities         89,547
Available liquidity at September 30, 2018         $567,169

As of September 30, 2018, the Company had commitments for capital expenditures totaling $105.6 million.

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 Return on invested capital 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 unaudited interim consolidated financial statements prepared in accordance with IFRS:

  For the 3 months ended   For the 9 months ended
  Sept. 30 Sept. 30 Jun.30   Sept. 30 Sept. 30
Thousands of Canadian Dollars except number of shares and per share amounts 2018 2017 2018   2018 2017
             
Adjusted Net Earnings            
Net earnings   $28,092   $16,778   $63,775     $124,843   $60,957
Add:            
Capital asset write-downs and restructuring costs (recovery) 5,848 (21) 4,669   10,753 1,781
Other foreign exchange loss (gain) 1,847 1,353 (1,880)   (144) 2,447
Long term incentive compensation expense (recovery) (7,503) 3,004 3,996   1,351 9,867
Other expense (income) (192) 347 80   66 992
Post closure wind-down costs and losses (recoveries) (39)   4 (26)
Income tax effect of above adjustments 149 (1,456) (1,701)   (2,926) (4,588)
Adjusted net earnings  $28,241  $19,966  $68,939    $133,947  $71,430
Weighted average number of shares – basic (‘000) 69,908 70,030 70,038   69,993 70,030
Adjusted net earnings per share  $0.40  $0.29  $0.98    $1.91  $1.02
             
Adjusted EBITDA            
Net earnings  $28,092  $16,778  $63,775    $124,843  $60,957
Add:            
Depreciation of plant and equipment 20,071 18,836 20,851   60,990 58,406
Depletion and amortization of timber, roads and other 9,715 10,435 8,350   27,482 26,756
Capital asset write-downs and restructuring costs (recovery) 5,848 (21) 4,669   10,753 1,781
Finance costs 2,465 3,294 2,786   8,156 10,891
Other foreign exchange loss (gain) 1,847 1,353 (1,880)   (144) 2,447
Income tax expense 9,044 6,559 21,132   40,709 26,168
EBITDA 77,082 57,234 119,683   272,789 187,406
Add:            
Long term incentive compensation expense (recovery) (7,503) 3,004 3,996   1,351 9,867
Other expense (income) (192) 347 80   66 992
Post closure wind-down costs and losses (recoveries) (39)   4 (26)
Adjusted EBITDA $69,387  $60,546  $123,759   $274,210  $198,239
Sales $570,486 $489,169 $619,893   $1,718,023 $1,457,325
Adjusted EBITDA margin 12.2% 12.4% 20.0%   16.0% 13.6%
             
Net debt to invested capital            
Net debt            
Total debt  $258,900  $249,600  $263,360    $258,900 $249,600
Cash and cash equivalents (165,553) (71,813) (228,945)   (165,553) (71,813)
Marketable securities (89,547) (921)   (89,547) (921)
Total net debt  $3,800  $176,866  $34,415    $3,800  $176,866
Invested capital            
Net debt  $3,800  $176,866  $34,415    $3,800  $176,866
Shareholders’ equity 985,316 817,676 977,294   985,316 817,676
Total invested capital  $989,116  $994,542 $1,011,709   $989,116 $994,542
Net debt to invested capital(1) 0.4% 17.8% 3.4%   0.4% 17.8%
             
Operating cash flow per share (before working capital changes)            
Cash provided by operating activities  $84,956  $60,977  $133,729    $237,196  $171,475
Cash used in (generated from) operating working capital (15,223) (3,474) (10,579)   31,171 19,028
Operating cash flow (before working capital changes)  $69,733  $57,503  $123,150    $268,367  $190,503
Weighted average number of shares – basic (‘000) 69,908 70,030 70,038   69,993 70,030
Operating cash flow per share (before working capital changes) $1.00 $0.82 $1.76    $3.83  $2.72
             
Annualized return on invested capital            
Adjusted EBITDA $69,387 $60,546 $123,759   $274,210 $198,239
Invested capital, beginning of period $1,011,709 $1,031,291 $1,028,240   $973,488 $1,076,218
Invested capital, end of period 989,116 994,542 1,011,709   989,116 994,542
Average invested capital $1,000,413 $1,012,917 $1,019,975   $981,302 $1,035,380
Adjusted EBITDA divided by average invested capital 6.9% 6.0% 12.1%   27.9% 19.1%
Annualization factor 4.0 4.0 4.0   1.33 1.33
Annualized return on invested capital 27.7% 23.9% 48.5%   37.3% 25.5%
 
Notes:
(1)    Net debt to invested capital as of the period end.
 

 

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS    
For the three and nine months ended September 30, 2018 and 2017 (unaudited)      
(thousands of Canadian Dollars except earnings per share) Three Months
  Three Months
  Nine Months
  Nine Months
 
    Sep. 30, 2018
  Sep. 30, 2017
  Sep. 30, 2018
  Sep. 30, 2017
 
           
Sales
Costs and expenses:
$ 570,486   $ 489,169   $ 1,718,023   $ 1,457,325  
       
  Production   472,354     407,222     1,359,291     1,205,504  
  Selling and administration   12,825     11,936     40,850     36,817  
  Long term incentive compensation expense (recovery)   (7,503 )   3,004     1,351     9,867  
  U.S. countervailing and anti-dumping duty deposits   15,920     9,426     43,676     16,739  
  Depreciation of plant and equipment   20,071     18,836     60,990     58,406  
  Depletion and amortization of timber, roads and other   9,715     10,435     27,482     26,756  
      523,382     460,859     1,533,640     1,354,089  
         
Operating earnings before write-downs and restructuring   47,104     28,310     184,383     103,236  
         
Capital asset write-downs and restructuring costs (recovery)   5,848     (21 )   10,753     1,781  
Operating earnings   41,256     28,331     173,630     101,455  
         
Finance costs   (2,465 )   (3,294 )    (8,156 )   (10,891 )
Other foreign exchange gain (loss)   (1,847 )   (1,353 )   144     (2,447 )
Other expense   192     (347 )   (66 )   (992 )
    (4,120 )   (4,994 )   (8,078 )   (14,330 )
           
Earnings before income taxes   37,136     23,337     165,552     87,125  
           
Income tax expense:         
  Current   663     22     3,000     708  
  Deferred   8,381     6,537     37,709     25,460  
    9,044     6,559     40,709     26,168  
           
Net earnings $ 28,092   $ 16,778   $ 124,843   $ 60,957  
         
Net earnings per share, basic and diluted $ 0.40   $ 0.24   $ 1.78   $ 0.87  

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME 
For the three and nine months ended September 30, 2018 and 2017 (unaudited)
(thousands of Canadian Dollars) Three Months
  Three Months
  Nine Months
  Nine Months
 
    Sep. 30, 2018
  Sep. 30, 2017
  Sep. 30, 2018
  Sep. 30, 2017
 
                           
Net earnings
$ 28,092    $ 16,778    $ 124,843    $ 60,957  
                           
Other comprehensive income (loss):
                       
Items that will not be recycled to Net earnings:
                       
  Defined benefit plan actuarial gain, net of tax   957     1,192     2,846     794  
                           
Items that are or may be recycled to Net earnings:
                       
  Foreign currency translation differences for                        
  foreign operations, net of tax   (9,289 )   (16,589 )   14,688     (31,151
  Loss in fair value of interest rate swaps               (11
  Total items that are or may be recycled to Net earnings   (9,289 )   (16,589 )   14,688     (31,162 )
Total other comprehensive income (loss), net of tax
  (8,332 )   (15,397 )   17,534     (30,368
                           
Comprehensive income
$ 19,760   $ 1,381   $ 142,377   $ 30,589  
           

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three and nine months ended September 30, 2018 and 2017 (unaudited)
(thousands of Canadian Dollars) Three Months
  Three Months
  Nine Months
  Nine Months
 
        Sep. 30, 2018
  Sep. 30, 2017
  Sep. 30, 2018
  Sep. 30, 2017
 
                               
Cash provided by (used in):
Operating activities:
                       
                               
  Net earnings
$ 28,092   $ 16,778   $ 124,843   $ 60,957  
  Items not involving cash:
                       
      Depreciation of plant and equipment   20,071     18,836     60,990     58,406  
      Depletion and amortization of timber, roads and other   9,715     10,435     27,482     26,756  
      Income tax expense   9,044     6,559     40,709     26,168  
      Finance costs   2,465     3,294     8,156     10,891  
      Other assets   241     (252 )   (176 )   (70 )
      Reforestation liability   (2,111 )   (522 )   (684 )   1,787  
      Provisions and other liabilities   (3,724 )   2,178     (4,180 )   4,225  
      Stock options   212     159     558     420  
      Write-down of plant, equipment and intangibles   5,823         10,687      
      Unrealized foreign exchange loss (gain)   97     (2 )   (84 )   (11 )
      Other expense (income)   (192 )   40     66     974  
          69,733     57,503     268,367     190,503  
  Cash generated from (used in) operating working capital:
                       
      Trade accounts receivable and other   20,738     (8,785 )   (3,232 )   (21,041 )
      Inventories   951     10,417     (30,975 )   (5,255 )
      Prepayments   (560 )   (1,011 )   (3,344 )   (1,430 )
      Trade accounts payable and provisions   (3,952 )   3,576     9,656     9,841  
      Income taxes paid   (1,954 )   (723 )   (3,276 )   (1,143 )
          84,956     60,977     237,196     171,475  
                               
Investing activities:
                       
    Additions to property, plant and equipment   (28,968 )   (19,805 )   (56,133 )   (42,957
    Additions to roads and bridges   (9,473 )   (8,608 )   (23,641 )   (25,139
    Additions to timber licences and other intangible assets   (40 )   (461 )   (90 )   (1,826
    Proceeds on disposal of property, plant and equipment   324     63     509     461  
    Net proceeds from (additions to) investments and other assets   (93,354 )   2,805     (106,919 )   2,653  
          (131,511 )   (26,006 )   (186,274 )   (66,808 )
                               
Financing activities:
                       
    Issuance of share capital, net of expenses            143      
    Repurchase of share capital   (11,950 )       (11,950 )    
    Interest payments   (2,788 )   (2,832 )   (7,902 )   (9,585 )
    Debt refinancing costs   (67 )   (615 )   (70 )   (785 )
    Change in operating line components of long term debt       2     (1 )   (63 )
    Additions to long term debt   155,909         155,909     76,107  
    Repayments of long term debt   (155,797 )       (155,797 )   (116,260 )
          (14,693 )   (3,445 )   (19,668 )   (50,586 )
                               
Foreign exchange gain (loss) on cash and
                       
  cash equivalents held in a foreign currency
  (2,144 )   (1,001 )   2,699     (1,538 )
Increase (decrease) in cash
  (63,392 )   30,525     33,953     52,543  
                               
Cash and cash equivalents, beginning of period
  228,945     41,288     131,600     19,270  
                               
Cash and cash equivalents, end of period
$ 165,553   $ 71,813   $ 165,553   $ 71,813  
 

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION 
September 30, 2018 and December 31, 2017 (unaudited)
(thousands of Canadian Dollars)            
    Sep. 30, 2018
  Dec. 31, 2017
 
               
Assets

           
Current assets:            
  Cash and cash equivalents $ 165,553   $ 131,600  
  Marketable securities   89,547      
  Trade accounts receivable and other   117,593     112,470  
  Income taxes receivable   1,636     1,289  
  Inventories   199,294     165,156  
  Prepayments   16,363     12,562  
      589,986     423,077  
               
Employee future benefits
  3,497     502  
Deposits and other assets
  22,712     6,404  
Property, plant and equipment
  670,173     670,830  
Roads and bridges
  27,427     24,092  
Timber licences
  64,794     66,589  
Other intangible assets
  8,877     14,170  
Goodwill
  151,354     147,081  
Deferred income taxes
  653     251  
               
    $ 1,539,473   $ 1,352,996  
               
Liabilities and Shareholders’ Equity
           
Current liabilities:
           
  Trade accounts payable and provisions $ 164,066   $ 152,854  
  Reforestation liability   13,975     12,873  
  Income taxes payable    251     224  
      178,292     165,951  
               
Reforestation liability
  27,306     27,535  
Long term debt
  258,900     250,900  
Employee future benefits
  8,170     8,249  
Provisions and other liabilities
  22,724     26,976  
Deferred income taxes
  58,765     19,197  
               
Equity:
           
  Share capital   550,864     555,388  
  Contributed surplus   3,662     8,582  
  Translation reserve   55,408     40,720  
  Retained earnings   375,382     249,498  
               
      985,316     854,188  
               
    $ 1,539,473   $ 1,352,996  
               

Approved on behalf of the Board of Directors: 

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

FORWARD-LOOKING STATEMENTS

This release contains information and statements that are forward-looking in nature, including, but not limited to, statements containing the words “believes”, “will”, “should”, “expects”, “annualized” and similar expressions.  Such statements involve known and unknown risks and uncertainties that may cause Interfor’s actual results to be materially different from those expressed or implied by those forward-looking statements.  Such risks and uncertainties include, among other things: price volatility, competition, availability and cost of log supply, natural or man-made disasters, currency exchange sensitivity, regulatory changes, allowable annual cut reductions, Aboriginal title and rights claims, potential countervailing and anti-dumping duties, stumpage fee variables and changes, environmental impact and performance, labour disruptions, cyber-security measures, and other factors referenced herein and in Interfor’s Annual Report available on www.sedar.com and www.interfor.com.  The forward-looking information and statements contained in this release are based on Interfor’s current expectations and beliefs.  Readers are cautioned not to place undue reliance on forward-looking information or statements.  Interfor undertakes no obligation to update such forward-looking information or statements, except where required by law.

ABOUT INTERFOR

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 Q3’18 are available at www.sedar.com and www.interfor.com

There will be a conference call on Friday, November 9, 2018 at 8:00 a.m. (Pacific Time) hosted by INTERFOR CORPORATION for the purpose of reviewing the Company’s release of its third quarter 2018 financial results.

The dial-in number is 1-866-559-8291.  The conference call will also be recorded for those unable to join in for the live discussion, and will be available until December 9, 2018.  The number to call is 1-855-859-2056, Passcode 7288847.

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

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