Interfor Q4 Earnings Call Highlights

Revenue and Costs - The company experienced weaker realized selling prices due to lower market pricing, higher countervailing and antidumping duties, and a 10% Section 232 tariff introduced in October [1] - Production cost per unit improved by 4%, as higher conversion costs from downtime were offset by positive inventory valuation adjustments due to improved lumber prices [1] Financial Performance - Interfor reported a negative adjusted EBITDA of CAD 29 million in Q4, an improvement from the negative CAD 36 million in Q3 after normalizing for non-cash duty expenses [2] - Cash flow from operations was break-even for the quarter, with positive cash flow totaling just over CAD 300 million over the last three years, attributed to working capital management and cost structure initiatives [6] Operational Highlights - The company significantly reduced log and lumber inventories and advanced the final phase of the Thomaston Mill project in Georgia, expecting it to be a top decile performer [3] - Interfor permanently closed two high-cost facilities in the U.S. South and adjusted operating postures at several mills to align production with demand [4][5] Liquidity and Capital Management - At year-end, Interfor had pro forma available liquidity of CAD 482 million and a net debt to capitalization ratio of 36.5% [6][7] - The company expects lower capital expenditures of CAD 75–80 million in 2026, with any free cash flow directed towards leverage reduction [10] Market Outlook - The outlook for 2026 remains uncertain due to trade and geopolitical risks, with expectations for interest rate easing potentially shifting later into the year [12] - Supply curtailments across the industry are beginning to impact the market, with Canadian lumber shipments to the U.S. annualized at about 8.5 billion board feet, down from over 10 billion in 2025 [13]