IFP Interfor Corporation

INTERFOR CORPORATION (“Interfor” or the “Company”) (TSX: IFP) recorded Net earnings in Q2’21 of $419.2 million, or $6.45 per share, compared to $264.5 million, or $4.01 per share in Q1’21 and $3.2 million, or $0.05 per share in Q2’20. Adjusted net earnings in Q2’21 were $433.5 million compared to $270.6 million in Q1’21 and $10.6 million in Q2’20.

Robust lumber prices in North America and strong operating performance during the second quarter of 2021 led to Interfor realizing record financial results, including records for Net earnings, Adjusted EBITDA and cash flow from operations.

Adjusted EBITDA was $611.3 million on sales of $1.1 billion in Q2’21 versus $392.1 million on sales of $849.3 million in Q1’21. $484.5 million of cash flow was generated from operations before changes in working capital, or $7.46 per share.

These record financial results bolstered Interfor’s balance sheet and enabled the deployment of a significant amount of capital in the quarter. Interfor’s balanced approach to capital allocation included growth through a four-sawmill acquisition and strategic capital expenditures, and rewarding shareholders with returns of capital through share repurchases and a special cash dividend.

Even with a significant amount of capital deployed in the quarter, Interfor’s balance sheet remains very well positioned to support further strategic investment. Net debt ended the quarter at $(490.7) million, or (46.1)% of invested capital, resulting in available liquidity of $1.2 billion.

Notable items in the quarter:

• Record Production Balanced with Shipments

• Total lumber production in Q2’21 was 716 million board feet, representing an increase of 29 million board feet quarter-over-quarter and setting an Interfor production record. The U.S. South and U.S. Northwest regions accounted for 387 million board feet and 137 million board feet, respectively, compared to 338 million board feet and 141 million board feet in Q1’21. The Summerville sawmill, acquired March 12, 2021, contributed to the increased output in the U.S. South region with a full quarter of its production. Production in the B.C. region decreased to 192 million board feet from 208 million board feet in the preceding quarter.
• Total lumber shipments were 714 million board feet, or 48 million board feet higher than Q1’21.
• Interfor’s average selling price was $1,419 per mfbm, up $276 per mfbm versus Q1’21. The key benchmark prices increased quarter-over-quarter with the SYP Composite, Western SPF Composite and KD H-F Stud 2x4 9’ benchmarks increasing by US$113, US$384 and US$447 per mfbm to US$1,028, US$1,319 and US$1,609 per mfbm, respectively.

• Strategic Capital Investments

• Capital spending was $40.6 million, including $24.2 million on high-return discretionary projects. The majority of this discretionary spending was focused on the ongoing multi-year rebuild of the Eatonton, GA sawmill, which will be substantially complete in Q4’21. Inclusive of this project, US$120.8 million has been spent on the Company’s Phase II strategic capital plan through June 30, 2021.

• Acquisition of Four US Sawmills and Restart of the DeQuincy, LA Operation

• On July 9, 2021, Interfor concluded the acquisition of four sawmill operations located in Bay Springs, MS, Fayette, AL, DeQuincy, LA and Philomath, OR from Georgia-Pacific Wood Products LLC and GP Wood Products LLC. The Company paid total consideration of US$372.0 million.
• This acquisition added high quality assets with 720 million board feet of annual lumber production capacity, increasing Interfor’s total capacity by approximately 23% to 3.9 billion board feet.
• Interfor is restarting operations at the sawmill in DeQuincy, LA, which has annual lumber production capacity of 200 million board feet. Lumber production is expected to begin in the first half of 2022. The sawmill was idled in May 2020 by its previous owner at the outset of the COVID-19 pandemic.

• Special Cash Dividend

• On May 12, 2021, Interfor’s Board of Directors declared a one-time special cash dividend of $2.00 per share, which was paid on June 28, 2021 to shareholders of record on May 28, 2021. The special dividend resulted in an aggregate distribution of $130.6 million. The dividend was funded from cash on hand.

• Normal Course Issuer Bid (“NCIB”)

• During Q2’21, Interfor purchased 1,688,770 common shares under the Company’s NCIB for total consideration of $49.4 million.
• Interfor has purchased 3,790,610 common shares for total consideration of $94.2 million since the outset of its NCIB, representing an average price of $24.84 per share, or 1.02 times book value per share at June 30, 2021. The NCIB will continue to be used to opportunistically purchase Interfor common shares at attractive prices.

• Sale of Former Sawmill Property

• On July 21, 2021, the Company completed the sale of property, plant and equipment at its former Hammond sawmill located in Maple Ridge, B.C. for net cash proceeds of $40.0 million, representing $0.63 per common share outstanding at June 30, 2021. This sale contributes to the successful reconfiguration of Interfor’s B.C. Coastal operations announced on September 3, 2019, which resulted in the monetization of approximately $40.0 million of working capital following the closure of the Hammond sawmill and led to increased profitability from its remaining forestry operations.

• Softwood Lumber Duties

• On May 21, 2021, the U.S. Department of Commerce issued its preliminary revised countervailing (“CV”) and anti-dumping (“AD”) duty rates based on completion of its second administrative review for the year ended December 31, 2019. The preliminary combined rate for 2019 is 18.32%, compared to a cash deposit rate of 20.23%.
• Interfor expensed $19.2 million of duties in the quarter, representing the full amount of CV and AD duties incurred on its Canadian shipments of softwood lumber into the U.S. at a combined rate of 8.99%.  
• Cumulative duties of US$158.2 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$32.9 million in respect of overpayments arising from duty rate adjustments, Interfor has recorded the duty deposits as an expense.

Expanded Organic Growth in the U.S. South

Interfor is expanding its multi-year strategic capital plan with an additional US$230 million of strategic investments in its U.S. South platform through 2024. These investments include re-initiation of the major rebuild of the Thomaston, GA sawmill, a follow-on investment at the recently acquired sawmill in Summerville, SC, a second phase to the modernization of the Georgetown, SC sawmill, and several other targeted upgrades. In total, these investments are expected to grow annual lumber production by about 250 million board feet and further optimize conversion costs, improve lumber recovery, and enhance grade and product mix. Each project is expected to generate very attractive risk-adjusted returns at conservative lumber prices.

Interfor’s total capital expenditures are expected to be approximately $175 million in 2021, up $25 million from prior guidance as certain projects have been accelerated, and likely in the range of $200 - $250 million in 2022, as the Company executes on its expanded strategic capital plans.

Wildfire Season

Significant wildfires are currently in progress in the U.S. Northwest and B.C. Interior regions in which Interfor has operations. The start of the annual wildfire season has been accelerated by abnormally dry conditions and wildfires are now impacting log harvesting activities and rail availability to varying extents across these regions; the B.C. government currently has a restriction on all log harvesting activities in the B.C. Interior. As a result, Interfor announced on July 29, 2021 supply related downtime at its B.C. Interior sawmills which will reduce lumber production by at least 50 million board feet in the third quarter of this year. Interfor is monitoring the situation closely and will take ongoing actions to protect the safety of its employees and contractors, the communities in which it operates and its assets.

Outlook

North American lumber markets over the near term are expected to remain above historical trends driven by continued strong demand from new housing starts, albeit with volatility driven by the level of demand from repair and remodel activity as the North American economy adjusts to the COVID-19 pandemic recovery.  

Interfor expects lumber demand to continue to grow over the mid-term, as repair and renovation activities and U.S. housing starts benefit from favourable underlying economic fundamentals and trends.

Interfor’s strategy of maintaining a diversified portfolio of operations allows the Company to both reduce risk and maximize returns on invested capital over the business cycle. While uncertainty remains as to the duration and extent of the economic impact from the COVID-19 pandemic, Interfor is well positioned with its strong balance sheet and significant available liquidity.

Financial and Operating Highlights1  

		For the 3 months ended				For the 6 months ended
		Jun. 30	Jun. 30	Mar. 31		Jun. 30	Jun. 30
	Unit	2021	2020	2021		2021	2020
Financial Highlights2
Total sales	$MM	1,099.7	396.8	849.3		1,949.0	876.4
Lumber	$MM	1,012.9	322.1	762.4		1,775.3	701.4
Logs, residual products and other	$MM	86.8	74.7	86.9		173.7	175.0
Operating earnings	$MM	568.3	13.3	355.6		923.9	27.9
Net earnings	$MM	419.2	3.2	264.5		683.7	9.5
Net earnings per share, basic	$/share	6.45	0.05	4.01		10.45	0.14
Adjusted net earnings3	$MM	433.5	10.6	270.6		704.2	11.4
Adjusted net earnings per share, basic3	$/share	6.67	0.16	4.11		10.76	0.17
Operating cash flow per share (before working capital changes)3	$/share	7.46	0.56	5.73		13.17	1.13
Adjusted EBITDA3	$MM	611.3	42.8	392.1		1,003.4	79.4
Adjusted EBITDA margin3	%	55.6%	10.8%	46.2%		51.5%	9.1%
Total assets	$MM	2,409.4	1,538.8	2,159.7		2,409.4	1,538.8
Total debt	$MM	365.1	408.8	377.3		365.1	408.8
Net debt3	$MM	(490.7)	239.1	(236.0)		(490.7)	239.1
Net debt to invested capital3	%	(46.1%)	21.6%	(21.7%)		(46.1%)	21.6%
Annualized return on capital employed3	%	110.8%	2.4%	79.2%		96.1%	3.4%
Operating Highlights
Lumber production	million fbm	716	421	687		1,402	1,047
Total lumber sales	million fbm	714	499	666		1,380	1,140
Lumber sales - Interfor produced	million fbm	713	488	662		1,375	1,120
Lumber sales - wholesale and commission	million fbm	1	11	4		5	20
Lumber - average selling price4	$/thousand fbm	1,419	646	1,143		1,286	616
Average USD/CAD exchange rate5	1 USD in CAD	1.2282	1.3862	1.2660		1.2470	1.3651
Closing USD/CAD exchange rate5	1 USD in CAD	1.2394	1.3628	1.2575		1.2394	1.3628
Notes: Figures in this table may not equal or sum to figures presented elsewhere due to rounding. Financial information presented for interim periods in this release is prepared in accordance with IFRS and is unaudited. Refer to the Non-GAAP Measures section of this release for definitions and reconciliations of these measures to figures reported in the Company’s unaudited condensed consolidated interim financial statements. Gross sales before duties. Based on Bank of Canada foreign exchange rates.

Liquidity

Balance Sheet

Interfor’s Net debt at June 30, 2021 was $(490.7) million, or (46.1)% of invested capital, representing a decrease of $415.3 million from the level of Net debt at December 31, 2020.

As at June 30, 2021 the Company had net working capital of $991.5 million and available liquidity of $1.2 billion, based on the full borrowing capacity under its $350 million Revolving Term Line.

The Revolving Term Line and Senior Secured Notes are subject to financial covenants, including net debt to total capitalization ratios, and an EBITDA interest coverage ratio.

Management believes, based on circumstances known today, that Interfor has sufficient working capital and liquidity to fund operating and capital requirements for the foreseeable future.

	For the 3 months ended Jun. 30,					For the 6 months ended Jun. 30,
Thousands of Dollars		2021		2020			2021		2020
Net debt
Net debt, period opening	$(235,966)		$322,036			$(75,432)		$224,860
(Repayment) issuance of Senior Secured Notes		(6,671)		-			(6,671)		140,770
Revolving Term Line net repayments		-		-			-		(59)
Impact on U.S. Dollar denominated debt from (strengthening) weakening CAD		(5,473)		(16,770)			(10,183)		8,370
Increase in cash and cash equivalents		(251,402)		(71,640)			(413,569)		(140,624)
Impact on U.S. Dollar denominated cash and cash equivalents from strengthening CAD		8,830		5,488			15,173		5,798
Net debt, period ending	$(490,682)		$239,114			$(490,682)		$239,114

On March 26, 2020, the Company issued US$50,000,000 of Series F Senior Secured Notes, bearing interest at 3.34%, and US$50,000,000 of Series G Senior Secured Notes, bearing interest at 3.25%. Each series of these Senior Secured Notes have equal payments of US$16,667,000 due on each of March 26, 2028, 2029 and on maturity in 2030.

Capital Resources

The following table summarizes Interfor’s credit facilities and availability as of June 30, 2021:

	Revolving		Senior
	Term		Secured
Thousands of Canadian Dollars	Line		Notes		Total
Available line of credit and maximum borrowing available	$350,000		$365,106		$715,106
Less:
Drawings		-		365,106		365,106
Outstanding letters of credit included in line utilization		22,236		-		22,236
Unused portion of facility	$327,764			$            -		327,764
Add:
Cash and cash equivalents						855,788
Available liquidity at June 30, 2021					$1,183,552

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

As of June 30, 2021, the Company had commitments for capital expenditures totaling $78.5 million for both maintenance and discretionary capital projects.

Non-GAAP Measures

This release makes reference to the following non-GAAP measures: Adjusted net earnings, Adjusted net earnings per share, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Net debt to invested capital, Operating cash flow per share (before working capital changes), and Annualized return on capital employed which are used by the Company and certain investors to evaluate operating performance and financial position. These non-GAAP measures do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers.

The following table provides a reconciliation of these non-GAAP measures to figures as reported in the Company’s audited consolidated financial statements (unaudited for interim periods) prepared in accordance with IFRS:

	For the 3 months ended									For the 6 months ended
	Jun. 30		Jun. 30			Mar. 31				Jun. 30		Jun. 30
Thousands of Canadian Dollars except number of shares and per share amounts		2021		2020			2021				2021		2020
Adjusted Net Earnings
Net earnings	$419,241		$3,235			$264,487				$683,728		$9,544
Add:
Asset write-downs and restructuring costs		2,213		115			142				2,355		486
Other foreign exchange loss		4,645		4,963			2,346				6,991		5,812
Long term incentive compensation expense (recovery)		11,145		5,629			7,670				18,815		(3,317)
Other expense (income)		1,045		(586)			(1,996)				(951)		(471)
Post closure wind-down costs		251		-			224				475		-
Income tax effect of above adjustments		(4,991)		(2,712)			(2,229)				(7,220)		(669)
Adjusted net earnings	$433,549		$10,644			$270,644				$704,193		$11,385
Weighted average number of shares - basic ('000)		64,984		67,260			65,927				65,453		67,260
Adjusted net earnings per share	$6.67		$0.16			$4.11				$10.76		$0.17
Adjusted EBITDA
Net earnings	$419,241		$3,235			$264,487				$683,728		$9,544
Add:
Depreciation of plant and equipment		22,717		15,601			21,474				44,191		35,662
Depletion and amortization of timber, roads and other		6,669		8,108			6,968				13,637		18,638
Finance costs		4,437		5,185			4,524				8,961		9,281
Income tax expense		138,922		563			86,256				225,178		3,768
EBITDA		591,986		32,692			383,709				975,695		76,893
Add:
Long term incentive compensation expense (recovery)		11,145		5,629			7,670				18,815		(3,317)
Other foreign exchange loss		4,645		4,963			2,346				6,991		5,812
Other expense (income)		1,045		(586)			(1,996)				(951)		(471)
Asset write-downs and restructuring costs		2,213		115			142				2,355		486
Post closure wind-down costs		251		-			224				475		-
Adjusted EBITDA	$611,285		$42,813			$392,095				$1,003,380		$79,403
Sales	$1,099,670		$396,778			$849,307				$1,948,977		$876,424
Adjusted EBITDA margin		55.6%		10.8%			46.2%				51.5%		9.1%
Net debt to invested capital
Net debt
Total debt	$365,106		$408,840			$377,250				$365,106		$408,840
Cash and cash equivalents		(855,788)		(169,726)			(613,216)				(855,788)		(169,726)
Total net debt	$(490,682)		$239,114			$(235,966)				$(490,682)		$239,114
Invested capital
Net debt	$(490,682)		$239,114			$(235,966)				$(490,682)		$239,114
Shareholders' equity		1,554,205		869,443			1,322,222				1,554,205		869,443
Total invested capital	$1,063,523		$1,108,557			$1,086,256				$1,063,523		$1,108,557
Net debt to invested capital1		(46.1%)		21.6%			(21.7%)				(46.1%)		21.6%
Operating cash flow per share (before working capital changes)
Cash provided by operating activities	$484,723		$103,003			$285,080				$769,803		$122,322
Cash (generated from) used in operating working capital		(249)		(65,433)			92,604				92,355		(46,324)
Operating cash flow (before working capital changes)	$484,474		$37,570			$377,684				$862,158		$75,998
Weighted average number of shares - basic ('000)		64,984		67,260			65,927				65,453		67,260
Operating cash flow per share (before working capital changes)	$7.46		$0.56			$5.73				$13.17		$1.13
Annualized return on capital employed
Net earnings	$419,241		$3,235			$264,487				$683,728		$9,544
Add:
Finance costs		4,437		5,185			4,524				8,961		9,281
Income tax expense		138,922		563			86,256				225,178		3,768
Earnings before income taxes and finance costs	$562,600		$8,983			$355,267				$917,867		$22,593
Capital Employed
Total assets	$2,409,388		$1,538,824			$2,159,692				$2,409,388		$1,538,824
Current liabilities		(285,081)		(155,036)			(263,526)				(285,081)		(155,036)
Less:
Current portion of long term debt		6,713		7,381			6,811				6,713		7,381
Current portion of lease liabilities		11,758		11,210			12,169				11,758		11,210
Capital employed, end of period	$2,142,778		$1,402,379			$1,915,146				$2,142,778		$1,402,379
Capital employed, beginning of period		1,915,146		1,431,579			1,672,103				1,672,103		1,214,375
Average capital employed	$2,028,962		$1,416,979			$1,793,624				$1,907,441		$1,308,377
Earnings before income taxes and finance costs divided by average capital employed		27.7%		0.6%			19.8%				48.1%		1.7%
Annualization factor		4.0		4.0			4.0				2.0		2.0
Annualized return on capital employed		110.8%		2.4%			79.2%				96.2%		3.4%
Note: 1 Net debt to invested capital as of the period end

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
For the three and six months ended June 30, 2021 and 2020 (unaudited)
(thousands of Canadian Dollars except earnings per share)			Three Months		Three Months		Six Months		Six Months
			Jun. 30, 2021		Jun. 30, 2020		Jun. 30, 2021		Jun. 30, 2020
Sales			$1,099,670		$396,778		$1,948,977		$876,424
Costs and expenses:
	Production			457,329		337,134		889,496		760,362
	Selling and administration			12,136		9,444		25,015		18,672
	Long term incentive compensation expense (recovery)			11,145		5,629		18,815		(3,317)
	U.S. countervailing and anti-dumping duty deposits			19,171		7,387		31,561		17,987
	Depreciation of plant and equipment			22,717		15,601		44,191		35,662
	Depletion and amortization of timber, roads and other			6,669		8,108		13,637		18,638
				529,167		383,303		1,022,715		848,004
Operating earnings before write-downs and
restructuring costs				570,503		13,475		926,262		28,420
Asset write-downs and restructuring costs				2,213		115		2,355		486
Operating earnings				568,290		13,360		923,907		27,934
Finance costs				(4,437)		(5,185)		(8,961)		(9,281)
Other foreign exchange loss				(4,645)		(4,963)		(6,991)		(5,812)
Other (expense) income				(1,045)		586		951		471
				(10,127)		(9,562)		(15,001)		(14,622)
Earnings before income taxes				558,163		3,798		908,906		13,312
Income tax expense (recovery):
	Current			135,140		(193)		218,313		136
	Deferred			3,782		756		6,865		3,632
				138,922		563		225,178		3,768
Net earnings			$419,241		$3,235		$683,728		$9,544
Net earnings per share
Basic			$6.45		$0.05		$10.45		$0.14
Diluted			$6.43		$0.05		$10.42		$0.14

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the three and six months ended June 30, 2021 and 2020 (unaudited)
(thousands of Canadian Dollars)		Three Months		Three Months		Six Months		Six Months
		Jun. 30, 2021		Jun. 30, 2020		Jun. 30, 2021		Jun. 30, 2020
Net earnings		$419,241		$3,235		$683,728		$9,544
Other comprehensive income (loss):
Items that will not be recycled to Net earnings:
	Defined benefit plan actuarial gain (loss), net of tax		1,110		(543)		5,582		(1,256)
Items that are or may be recycled to Net earnings:
	Foreign currency translation differences for
	foreign operations, net of tax		(8,876)		(16,400)		(17,763)		29,683
Total other comprehensive (loss) income, net of tax			(7,766)		(16,943)		(12,181)		28,427
Comprehensive income (loss)		$411,475		$(13,708)		$671,547		$37,971

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three and six months ended June 30, 2021 and 2020 (unaudited)
(thousands of Canadian Dollars)					Three Months	Three Months				Six Months			Six Months
			Jun. 30, 2021			Jun. 30, 2020				Jun. 30, 2021			Jun. 30, 2020
Cash provided by (used in):
Operating activities:
	Net earnings				$419,241	$3,235				$683,728			$9,544
	Items not involving cash:
		Depreciation of plant and equipment			22,717		15,601				44,191			35,662
		Depletion and amortization of timber, roads and other			6,669		8,108				13,637			18,638
		Deferred income tax expense			3,782		756				6,865			3,632
		Current income tax expense (recovery)			135,140		(193)				218,313			136
		Finance costs			4,437		5,185				8,961			9,281
		Other assets			655		(450)				224			486
		Reforestation liability			(1,187)		(4,616)				(691)			(1,850)
		Provisions and other liabilities			6,392		4,993				6,887			(5,300)
		Stock options			167		234				363			490
		Write-down (recovery) of plant and equipment			2,035		(53)				2,035			(53)
		Unrealized foreign exchange loss			5,406		5,350				8,417			5,791
		Other expense (income)			1,045		(586)				(951)			(471)
	Income tax (paid) refund				(122,025)			6	(129,821)						12
				484,474			37,570				862,158			75,998
	Cash generated from (used in) operating working capital:
		Trade accounts receivable and other			(4,741)		(6,164)				(72,600)			(29,577)
		Inventories			(8,873)		65,968				(33,225)			67,323
		Prepayments			(1,428)		4,020				(4,776)			1,907
		Trade accounts payable and provisions			15,291		1,609				18,246			6,671
				484,723			103,003				769,803			122,322
Investing activities:
	Additions to property, plant and equipment			(36,263)			(21,116)				(62,594)			(45,988)
	Additions to roads and bridges			(4,312)			(2,439)				(7,197)			(5,143)
	Acquisitions			-			-				(73,630)			(56,606)
	Proceeds on disposal of property, plant and equipment and other			283			705				5,976			867
	Net proceeds from (additions to) deposits and other assets			725			(681)				882			(879)
				(39,567)			(23,531)				(136,563)			(107,749)
Financing activities:
	Issuance of share capital, net of expenses			401			-				2,346			-
	Share repurchases			(49,435)			-				(69,738)			-
	Dividend paid			(130,625)			-				(130,625)			-
	Interest payments			(4,161)			(4,751)				(8,419)			(8,509)
	Lease liability payments			(3,263)			(3,074)				(6,564)			(6,008)
	Debt refinancing costs			-			(7)				-			(143)
	Term line net repayments			-			-				-			(59)
	Additions to long term debt			-			-				-			140,770
	Repayments of long-term debt			(6,671)			-				(6,671)			-
				(193,754)			(7,832)				(219,671)			126,051
Foreign exchange loss on cash and
	cash equivalents held in a foreign currency			(8,830)			(5,488)				(15,173)			(5,798)
Increase in cash				242,572			66,152				398,396			134,826
Cash and cash equivalents, beginning of period				613,216			103,574				457,392			34,900
Cash and cash equivalents, end of period					$855,788	$169,726				$855,788			$169,726

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
June 30, 2021 and December 31, 2020 (unaudited)
(thousands of Canadian Dollars)
			Jun. 30, 2021		Dec. 31, 2020
Assets
Current assets:
	Cash and cash equivalents		$855,788		$457,392
	Trade accounts receivable and other			184,971		117,371
	Income taxes receivable			76		169
	Inventories			197,006		160,188
	Prepayments			21,869		17,970
	Assets held for sale			16,849		-
				1,276,559		753,090
Employee future benefits				6,136		106
Deposits and other assets				46,855		48,957
Right of use assets				35,016		35,471
Property, plant and equipment				763,243		729,163
Roads and bridges				24,705		22,379
Timber licences				113,075		114,953
Goodwill and other intangible assets				142,895		138,838
Deferred income taxes				904		230
			$2,409,388		$1,843,187
Liabilities and Shareholders’ Equity
Current liabilities:
	Trade accounts payable and provisions		$162,293		$150,509
	Current portion of long-term debt			6,713		6,897
	Reforestation liability			15,076		16,181
	Lease liabilities			11,758		11,745
	Income taxes payable			89,241		4,394
				285,081		189,726
Reforestation liability				29,214		29,735
Lease liabilities				27,795		28,541
Long term debt				358,393		375,063
Employee future benefits				9,595		11,137
Provisions and other liabilities				34,068		26,637
Deferred income taxes				111,037		102,036
Equity:
	Share capital			507,092		523,605
	Contributed surplus			4,483		5,157
	Translation reserve			32,083		49,846
	Retained earnings			1,010,547		501,704
				1,554,205		1,080,312
			$2,409,388		$1,843,187

Approved on behalf of the Board:

“L. Sauder”                                        “T. 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. Statements containing forward-looking information may include words such as: will, could, should, believe, expect, anticipate, intend, forecast, projection, target, outlook, opportunity, risk or strategy. Readers are cautioned that actual results may vary from the forward-looking information in this release, and undue reliance should not be placed on such forward-looking information. Risk factors that could cause actual results to differ materially from the forward-looking information in this release are described in Interfor’s second quarter and annual Management’s Discussion and Analysis under the heading “Risks and Uncertainties”, which are available on 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 volatility in the selling prices for lumber, logs and wood chips; the Company’s ability to compete on a global basis; the availability and cost of log supply; natural or man-made disasters; currency exchange rates; changes in government regulations; 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 trade dispute between Canada and the U.S.; stumpage fees payable to the Province of British Columbia (“B.C.”); environmental impacts of the Company’s operations; labour disruptions; information systems security; and the existence of a public health crisis (such as the current COVID-19 pandemic). Unless otherwise indicated, the forward-looking statements in this release are based on the Company’s expectations at the date of this release. Interfor undertakes no obligation to update such forward-looking information, 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 3.9 billion board feet and offers a diverse line of lumber products to customers around the world. For more information about Interfor, visit our website at www.interfor.com.

The Company’s unaudited condensed consolidated interim financial statements and Management’s Discussion and Analysis for Q2’21 are available at www.sedar.com and www.interfor.com.

There will be a conference call on Friday, August 6, 2021 at 8:00 a.m. (Pacific Time) hosted by INTERFOR CORPORATION for the purpose of reviewing the Company’s release of its second quarter 2021 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 6, 2021. The number to call is 1-855-859-2056, Passcode 8194915.

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