U.S. Markets open in 3 hrs

Interfor Reports Q2’19 Results

EBITDA1 of $13 million on Sales of $481 million 
Net Debt to Invested Capital1 of 18%; Liquidity of $392 million

VANCOUVER, British Columbia, Aug. 08, 2019 (GLOBE NEWSWIRE) -- INTERFOR CORPORATION (“Interfor” or the “Company”) (IFP.TO) Interfor recorded a net loss in Q2’19 of $11.2 million, or $0.17 per share, compared to a net loss of $15.3 million, or $0.23 per share in Q1’19 and net earnings of $63.7 million, or $0.91 per share in Q2’18.  Adjusted net loss in Q2’19 was $16.2 million compared to an Adjusted net loss of $12.7 million in Q1’19 and Adjusted net earnings of $68.9 million in Q2’18.

Adjusted EBITDA was $12.6 million on sales of $481.3 million in Q2’19 versus $16.3 million on sales of $451.2 million in Q1’19. 

Notable items in the quarter included:

  • Lower Lumber Prices

    • The key benchmark prices decreased quarter-over-sequential-quarter with the SYP Composite, Western SPF Composite and KD H-F Stud 2x4 9’ falling by US$23, US$36 and US$19 per mfbm, respectively.  Interfor’s average lumber selling price dropped $10 from Q1’19 to $603 per mfbm.    

  • Higher Shipments and Reduced Inventories

    • Total lumber production was 647 million board feet, consistent with the prior quarter.  Production in the U.S. South increased slightly to 320 million board feet from 316 million board feet in the preceding quarter as capital project-related downtime at the Monticello sawmill was more than offset by higher operating rates at most mills in the region.  The B.C. and U.S. Northwest regions accounted for 187 million board feet and 140 million board feet, respectively, compared to 195 million board feet and 135 million board feet in Q1’19.  Production was influenced by the curtailments taken in the B.C. Interior in response to weak lumber prices and continuing high log costs.

    • Total lumber shipments were 674 million board feet, including agency and wholesale volumes, or 53 million board feet higher than Q1’19.

    • Lumber inventories at June 30, 2019 were 211 million board feet, down from 229 million board feet at March 31, 2019.

    • Interfor’s operating costs were negatively impacted by an increase in its net realizable value provision for log and lumber inventories of $10.3 million in Q2’19. 

  • Continued Strong Financial Position

    • Net debt ended the quarter at $198.2 million, or 17.9% of invested capital, resulting in available liquidity of $392.5 million.

    • The Company generated $9.9 million of cash flow from operations before changes in working capital, or $0.15 per share. 

    • Capital investments of $64.6 million in Q2’19 included $51.4 million primarily on U.S. South focused high-return discretionary projects, with the remainder related to maintenance capital and woodlands projects.

    • On June 28, 2019, the Company received compensation of $7.7 million from the Government of B.C. as settlement for the 2017 cancellation of two timber licences on the B.C. Coast, which is excluded from Adjusted EBITDA.

  • Softwood Lumber Duties

    • Interfor expensed $10.8 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$76.5 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

Strategic Capital Plan Update

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

  • The Phase I projects at the Meldrim, Georgia and Monticello, Arkansas sawmills were completed before quarter-end and are now in the ramp-up phase.  Total project costs are expected to be US$70.1 million versus the original budget of US$62.5 million.  The spending overage was due to vendor delays, additional steel costs and labour issues with contractors.  As of June 30, 2019, US$67.7 million has been capitalized.

  • The Phase II projects at the Thomaston and Eatonton sawmills in Georgia and the Georgetown sawmill in South Carolina are on track for completion in various stages over the period of 2019 to 2022.  As of June 30, 2019, US$32.0 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.  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 “Forestry Assets”), and assume certain liabilities relating to the Forestry Assets.  The cash purchase price of $60 million will be financed from Interfor’s available cash balance and/or borrowings under its existing bank credit facility.

The transaction is subject to various consents, including that by the Government of B.C. and is targeted to close in the third quarter, 2019.

By acquiring the Forestry Assets, Interfor will solidify its long-term log supply at its Adams Lake sawmill, supporting the continuation of a two-shift operating configuration at the mill in the face of declining allowable annual cuts in the region.  The Forestry Assets are located adjacent to Adams Lake’s woodlands operations, with log production flowing logically to the sawmill from a transportation and logistics standpoint.

Upon closing the transaction, Interfor will pursue a follow-on, high return investment opportunity by adding a new dry kiln to support additional value-added processing at the Adams Lake mill.

Interfor Appoints New Director

At its meeting today, the Interfor Board appointed Christopher Griffin of Chicago, Illinois as a director of the Company.  Mr. Griffin, who is 57, is the President & CEO of USG Corporation, a global manufacturer of gypsum wallboard and other building products.  Mr. Griffin’s appointment increases the number of directors from ten to eleven and was made in line with the Company’s Board succession plan.

Financial and Operating Highlights 1 

    For the 3 months ended   For the 6 months ended
 
    Jun. 30 Jun. 30 Mar. 31   Jun. 30 Jun. 30  
  Unit 2019 2018 2019   2019 2018  
      (restated)2       (restated)2  
Financial Highlights3                
Total sales $MM 481.3 619.9 451.2   932.5 1,147.5  
Lumber $MM 406.9 527.0 380.5   787.4 972.9  
Logs, residual products and other $MM 74.4 92.9 70.7   145.1 174.6  
Operating earnings (loss) $MM (18.2) 86.4 (16.8)   (35.0) 133.0  
Net earnings (loss) $MM (11.2) 63.7 (15.3)   (26.5) 96.4  
Net earnings (loss) per share, basic $/share (0.17) 0.91 (0.23)   (0.39) 1.38  
Adjusted net earnings (loss)4 $MM (16.2) 68.9 (12.7)   (28.9) 105.4  
Adjusted net earnings (loss) per share, basic4 $/share (0.24) 0.98 (0.19)   (0.43) 1.50  
Operating cash flow per share (before working  capital changes)4 $/share 0.15 1.80 0.25   0.40 2.92  
Adjusted EBITDA4 $MM 12.6 126.7 16.3   28.9 210.2  
Adjusted EBITDA margin4 % 2.6% 20.4% 3.6%   3.1% 18.3%  
                 
Total assets $MM 1,459.8 1,573.3 1,491.5   1,459.8 1,573.3  
Total debt $MM 261.7 263.4 267.3   261.7 263.4  
Net debt4 $MM 198.2 34.4 172.7   198.2 34.4  
Net debt to invested capital4 % 17.9% 3.4% 15.6%   17.9% 3.4%  
Annualized return on invested capital4 % 4.6% 49.9% 6.1%   5.4% 42.6%  
                 
Operating Highlights                
Lumber production million fbm 647 688 646   1,293 1,354  
Total lumber sales million fbm 674 700 621   1,295 1,348  
Lumber sales - Interfor produced million fbm 664 689 610   1,274 1,324  
Lumber sales - wholesale and commission million fbm 10 11 11   21 24  
Lumber - average selling price5 $/thousand fbm 603 753 613   608 722  
                 
Average USD/CAD exchange rate6 1 USD in CAD 1.3377 1.2911 1.3295   1.3336 1.2781  
Closing USD/CAD exchange rate6 1 USD in CAD 1.3087 1.3168 1.3363   1.3087 1.3168  
                 

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 June 30, 2019 was $198.2 million, or 17.9% of invested capital, representing an increase of $163.8 million from the level at June 30, 2018 and an increase of $134.4 million from December 31, 2018.  These increases primarily reflect funding of capital projects, share repurchases and short term incentive compensation payments.

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

  For the 3 months ended
Jun. 30,
  For the 6 months ended
Jun. 30,

 
Thousands of Dollars 2019
2018
  2019
2018
 
             
Net debt            
Net debt, period opening $172,746 $127,064   $63,825 $119,300  
Net drawing (repayment) on credit facilities - -   750 (1)  
Impact on U.S. Dollar denominated debt from (strengthening) weakening CAD (5,520) 5,480   (11,850) 12,461  
Decrease (increase) in cash and cash equivalents 30,028 (95,011)   98,918 (92,502)  
Decrease in marketable securities - -   41,766 -  
Impact on U.S. Dollar denominated cash and cash equivalents and marketable securities from strengthening (weakening) CAD 955 (3,118)   4,800 (4,843)  
Net debt, period ending, CAD $198,209 $34,415   $198,209 $34,415  

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 June 30, 2019, the Company had net working capital of $253.4 million and available liquidity of $392.5 million, including cash and borrowing capacity on its term line facility. 

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

Capital Resources

The following table summarizes Interfor’s credit facilities and availability as of June 30, 2019:

  Revolving Senior    
  Term Secured    
Thousands of Canadian Dollars Line Notes Total  
Available line of credit $350,000 $261,740 $611,740  
Maximum borrowing available $350,000 $261,740 $611,740  
Less:        
Drawings -   261,740 261,740  
Outstanding letters of credit included in line utilization 21,053   - 21,053  
Unused portion of facility $328,947 $ - 328,947  
         
Add:        
Cash and cash equivalents     63,531  
Available liquidity at June 30, 2019     $392,478  

As of June 30, 2019, the Company had commitments for capital expenditures totaling $119.1 million for both maintenance and discretionary capital projects. 

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   For the 6 months ended
 
  Jun. 30 Jun. 30 Mar. 31   Jun. 30 Jun. 30  
Thousands of Canadian Dollars except number of shares and per share amounts 2019 2018 2019   2019 2018  
    (restated)¹       (restated)¹  
Adjusted Net Earnings (Loss)              
Net earnings (loss) $(11,159) $63,732 $(15,302)   $(26,461) $96,397  
Add:              
Capital asset write-downs and restructuring costs 87 4,669 1,665   1,752 4,905  
Other foreign exchange loss (gain) 321 (1,880) (340)   (19) (1,991)  
Long term incentive compensation expense (recovery) (851) 3,996 1,983   1,132 8,854  
Other (income) expense (6,487) 80 164   (6,323) 258  
Post closure wind-down costs and losses - - -   - 4  
Income tax effect of above adjustments 1,866 (1,701) (875)   991 (3,075)  
Adjusted net earnings (loss) $(16,223) $68,896 $(12,705)   $(28,928) $105,352  
Weighted average number of shares - basic ('000) 67,252 70,038 67,348   67,300 70,036  
Adjusted net earnings (loss) per share $(0.24) $0.98 $(0.19)   $(0.43) $1.50  
               
Adjusted EBITDA              
Net earnings (loss) $(11,159) $63,732 $(15,302)   $(26,461) $96,397  
Add:              
Depreciation of plant and equipment 19,410 20,781 19,722   39,132 40,802  
Depletion and amortization of timber, roads and other 12,201 10,854 9,737   21,938 22,618  
Capital asset write-downs and restructuring costs 87 4,669 1,665   1,752 4,905  
Finance costs 3,324 3,303 4,176   7,500 6,714  
Other foreign exchange loss (gain) 321 (1,880) (340)   (19) (1,991)  
Income tax expense (recovery) (4,196) 21,150 (5,508)   (9,704) 31,617  
EBITDA 19,988 122,609 14,150   34,138 201,062  
Add:              
Long term incentive compensation expense (recovery) (851) 3,996 1,983   1,132 8,854  
Other (income) expense (6,487) 80 164   (6,323) 258  
Post closure wind-down costs and losses - - -   - 4  
Adjusted EBITDA $12,650 $126,685 $16,297   $28,947 $210,178  
Sales $481,345 $619,893 $451,163   $932,508 $1,147,537  
Adjusted EBITDA margin 2.6% 20.4% 3.6%   3.1% 18.3%  
               
Net debt to invested capital              
Net debt              
Total debt $261,740 $263,360 $267,260   $261,740 $263,360  
Cash and cash equivalents (63,531) (228,945) (94,514)   (63,531) (228,945)  
Total net debt $198,209 $34,415 $172,746   $198,209 $34,415  
Invested capital              
Net debt $198,209 $34,415 $172,746   $198,209 $34,415  
Shareholders' equity 911,409 972,281 933,509   911,409 972,281  
Total invested capital $1,109,618 $1,006,696 $1,106,255   $1,109,618 $1,006,696  
Net debt to invested capital2 17.9% 3.4% 15.6%   17.9% 3.4%  
               
Operating cash flow per share (before working capital changes)              
Cash (used in) provided by operating activities $32,302 $136,724 $(58,350)   $(26,048) $157,797  
Cash used in (generated from) operating working capital (22,443) (10,414) 75,435   52,992 46,636  
Operating cash flow (before working capital changes) $9,859 $126,310 $17,085   $26,944 $204,433  
Weighted average number of shares - basic ('000) 67,252 70,038 67,348   67,300 70,036  
Operating cash flow per share (before working capital changes) $0.15 $1.80 $0.25   $0.40 $2.92  
               
Annualized return on invested capital              
Adjusted EBITDA $12,650 $126,685 $16,297   $28,947 $210,178  
Invested capital, beginning of period $1,106,255 $1,023,279 $1,032,591   $1,032,591 $968,852  
Invested capital, end of period 1,109,618 1,006,696 1,106,255   1,109,618 1,006,696  
Average invested capital $1,107,937 $1,014,988 $1,069,423   $1,071,105 $987,774  
Adjusted EBITDA divided by average invested capital 1.1% 12.5% 1.5%   2.7% 21.3%  
Annualization factor 4.0 4.0 4.0   2.0 2.0  
Annualized return on invested capital 4.6% 49.9% 6.1%   5.4% 42.6%  

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 and six months ended June 30, 2019 and 2018 (unaudited)
(thousands of Canadian Dollars except earnings per share) Three Months Three Months Six Months Six Months  
    Jun. 30, 2019 Jun. 30, 2018 Jun. 30, 2019 Jun. 30, 2018  
      (restated)¹   (restated)¹  
             
Sales $481,345 $619,893 $932,508 $1,147,537  
Costs and expenses:          
  Production 448,043 464,675 861,226 882,072  
  Selling and administration 9,808 13,706 20,373 27,535  
  Long term incentive compensation expense (recovery) (851) 3,996 1,132 8,854  
  U.S. countervailing and anti-dumping duty deposits 10,844 14,827 21,962 27,756  
  Depreciation of plant and equipment 19,410 20,781 39,132 40,802  
  Depletion and amortization of timber, roads and other 12,201 10,854 21,938 22,618  
    499,455 528,839 965,763 1,009,637  
             
Operating earnings (loss) before restructuring costs (18,110) 91,054 (33,255) 137,900  
             
Capital asset write-downs and restructuring costs 87 4,669 1,752 4,905  
Operating earnings (loss) (18,197) 86,385 (35,007) 132,995  
             
Finance costs (3,324) (3,303)  (7,500) (6,714)  
Other foreign exchange gain (loss) (321) 1,880 19 1,991  
Other income (expense) 6,487 (80) 6,323 (258)  
    2,842 (1,503) (1,158) (4,981)  
             
Earnings (loss) before income taxes (15,355) 84,882 (36,165) 128,014  
             
Income tax expense (recovery):          
  Current 233 1,567 393 2,337  
  Deferred (4,429) 19,583 (10,097) 29,280  
    (4,196) 21,150 (9,704) 31,617  
             
Net earnings (loss) $(11,159) $63,732 $(26,461) $96,397  
             
Net earnings (loss) per share          
  Basic $(0.17) $0.91 $(0.39) $1.38  
  Diluted $(0.17) $0.91 $(0.39) $1.37  


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the three and six months ended June 30, 2019 and 2018 (unaudited)
(thousands of Canadian Dollars) Three Months Three Months Six Months Six Months  
    Jun. 30, 2019 Jun. 30, 2018 Jun. 30, 2019 Jun. 30, 2018  
    (restated)¹   (restated)¹  
           
Net earnings (loss)
$(11,159) $63,732  $(26,461) $96,397  
             
Other comprehensive income (loss):          
Items that will not be recycled to Net earnings (loss):          
  Defined benefit plan actuarial gain (loss), net of tax (439) 1,004 133
1,889  
             
Items that are or may be recycled to Net earnings (loss):          
  Foreign currency translation differences for          
  foreign operations, net of tax (10,728) 11,121 (23,601) 23,954  
Total other comprehensive income (loss), net of tax (11,167) 12,125 (23,468) 25,843  
           
Comprehensive income (loss) $(22,326) $75,857 $(49,929) $122,240  

Notes:

  1. Financial information has been restated for implementation of IFRS 16, Leases.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three and six months ended June 30, 2019 and 2018 (unaudited)
(thousands of Canadian Dollars) Three Months Three Months Six Months Six Months  
    Jun. 30, 2019 Jun. 30, 2018 Jun. 30, 2019 Jun. 30, 2018  
    (restated)¹   (restated)¹  
           
Cash provided by (used in):          
Operating activities:          
  Net earnings (loss) $(11,159) $63,732 $(26,461) $96,397  
  Items not involving cash:          
    Depreciation of plant and equipment 19,410 20,781 39,132 40,802  
    Depletion and amortization of timber, roads and other 12,201 10,854 21,938 22,618  
    Income tax expense (recovery) (4,196) 21,150 (9,704) 31,617  
    Finance costs 3,324 3,303 7,500 6,714  
    Other assets 304 (122) 321 (417)  
    Reforestation liability (3,250) (862) (743) 1,427  
    Provisions and other liabilities (801) 2,496 (1,004) (320)  
    Stock options 209 209 317 346  
    Write-down of plant, equipment and intangibles 88 4,645 1,811 4,864  
    Unrealized foreign exchange loss 216 44 160 127  
    Other expense (income) (6,487) 80 (6,323) 258  
    9,859 126,310 26,944 204,433  
  Cash generated from (used in) operating working capital:          
    Trade accounts receivable and other (5,873) (13,222) (20,448) (23,970)  
    Inventories 17,605 2,111 (9,565) (31,926)  
    Prepayments (2,873) 1,597 (5,742) (2,658)  
    Trade accounts payable and provisions 13,862 21,079 (16,662) 13,240  
    Income taxes paid (278) (1,151) (575) (1,322)  
  32,302 136,724 (26,048) 157,797  
           
Investing activities:          
  Additions to property, plant and equipment (58,904) (15,126) (94,830) (27,165)  
  Additions to roads and bridges (5,661) (8,086) (13,505) (14,168)  
  Additions to timber licences and other intangible assets (20) (63) (72) (50)  
  Proceeds on disposal of property, plant and equipment and other 8,032 76 8,140 185  
  Net proceeds from (additions to) marketable securities,          
  deposits and other assets (11) (13,077) 46,760 (13,579)  
  (56,564) (36,276) (53,507) (54,777)  
             
Financing activities:          
  Issuance of share capital, net of expenses 17 - 80 143  
  Share repurchases - - (7,825) -  
  Interest payments (2,837) (2,799) (5,417) (5,832)  
  Lease liability payments (2,779) (2,636) (5,765) (4,825)  
  Debt refinancing costs (172) (2) (1,191) (3)  
  Change in operating line components of long-term debt 5 - 5 (1)  
  Additions to long term debt - - 197,925 -  
  Repayments of long term debt - - (197,175) -  
  (5,766) (5,437) (19,363) (10,518)  
             
Foreign exchange gain (loss) on cash and          
  cash equivalents held in a foreign currency (955) 3,118 (3,703) 4,843  
Increase (decrease) in cash (30,983) 98,129 (102,621) 97,345  
           
Cash and cash equivalents, beginning of period 94,514 130,816 166,152 131,600  
           
Cash and cash equivalents, end of period $63,531 $228,945 $63,531 $228,945  

Notes:

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


CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
June 30, 2019, December 31, 2018 and January 1, 2018 (unaudited)
(thousands of Canadian Dollars)        
  Jun. 30, 2019 Dec. 31, 2018 Jan. 1, 2018  
      (restated)¹  (restated)¹  
Assets        
Current assets:        
  Cash and cash equivalents $63,531 $166,152 $131,600  
  Marketable securities - 42,863 -  
  Trade accounts receivable and other 108,066 90,384 112,470  
  Income taxes receivable 3,013 3,008 1,289  
  Inventories 213,435 209,178 165,156  
  Prepayments 21,673 16,833 12,186  
    409,718 528,418 422,701  
         
Employee future benefits 820 303 502  
Deposits and other assets 10,685 16,842 6,404  
Right of use assets 36,760 37,778 38,600  
Property, plant and equipment 752,194 723,773 669,165  
Roads and bridges 30,154 29,829 24,092  
Timber licences 61,851 64,153 66,589  
Other intangible assets 4,047 5,288 14,170  
Goodwill 152,870 158,799 147,081  
Deferred income taxes 704 133 253  
         
  $1,459,803 $1,565,316 $1,389,557  
         
Liabilities and Shareholders’ Equity        
Current liabilities:        
  Trade accounts payable and provisions $130,983 $154,869 $152,355  
  Reforestation liability 14,580 13,947 12,873  
  Lease liabilities 10,501 10,158 8,019  
  Income taxes payable  292 356 224  
  156,356 179,330 173,471  
           
Reforestation liability 27,755 28,235 27,535  
Lease liabilities 32,268 33,954 36,165  
Long term debt 261,740 272,840 250,900  
Employee future benefits 8,988 8,687 8,249  
Provisions and other liabilities 15,698 16,421 25,808  
Deferred income taxes 45,589 57,083 17,877  
         
Equity:        
  Share capital 533,563 537,534 555,388  
  Contributed surplus 4,133 3,851 8,582  
  Translation reserve 60,792 84,393 40,733  
  Retained earnings 312,921 342,988 244,849  
         
    911,409 968,766 849,552  
           
  $1,459,803 $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 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 Q2’19 are available at www.sedar.com and www.interfor.com

There will be a conference call on Friday, August 9, 2019 at 8:00 a.m. (Pacific Time) hosted by INTERFOR CORPORATION for the purpose of reviewing the Company’s release of its second quarter 2019 financial results.

The dial-in number is 1-833-297-9919.  The conference call will also be recorded for those unable to join in for the live discussion and will be available until September 7, 2019.  The number to call is
1-855-859-2056, Passcode 7768927.

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