Core Insights - Interfor Corporation reported a net loss of $215.8 million in Q3 2025, a significant decline from net earnings of $11.1 million in Q2 2025 and a net loss of $105.7 million in Q3 2024 [1][2][21] - The adjusted EBITDA loss was $183.8 million on sales of $689.3 million, compared to an adjusted EBITDA of $17.2 million on sales of $780.5 million in Q2 2025 [2][8] - The company is facing ongoing challenges in the lumber market, leading to production curtailments and a decrease in average selling prices [2][3][4] Financial Performance - Total sales for Q3 2025 were $689.3 million, down from $692.7 million in Q3 2024 and $780.5 million in Q2 2025 [8][21] - Lumber production decreased to 912 million board feet, down from 935 million board feet in Q2 2025 [2][8] - The average selling price of lumber fell to $618 per thousand board feet, a decrease of $66 from Q2 2025 [2][8] Production and Market Conditions - Interfor announced plans to reduce lumber production by approximately 250 million board feet, or 26%, in Q4 2025 due to weak market conditions [2][3] - The company recorded a $147.4 million net duties expense related to U.S. tariffs, significantly impacting earnings [2][4][6] - The North American lumber market is expected to remain volatile due to economic adjustments, tariffs, and geopolitical uncertainties [3][4] Capital and Liquidity - Net debt increased to $893.3 million, representing 41.6% of invested capital, up from $798.0 million in Q2 2025 [2][9][11] - The company completed a bought deal offering generating gross proceeds of $143.8 million, which was used to pay down existing debt [10][12] - Interfor has available liquidity of $247.9 million based on its credit facilities [9][16] Strategic Outlook - The company maintains a diversified portfolio to mitigate risks and maximize returns, with approximately 60% of its lumber produced and sold in the U.S. [4][5][6] - Canadian lumber is expected to remain a key supply source for the U.S. market despite production constraints [5][6] - Interfor's capital expenditures for 2025 are projected to be between $90 million and $95 million, with a focus on strategic investments [6][17]

Core Insights - Interfor Corporation reported a net loss of $215.8 million in Q3 2025, a significant decline from a net profit of $11.1 million in Q2 2025 and a loss of $105.7 million in Q3 2024 [1][2][9] - The adjusted EBITDA loss was $183.8 million on sales of $689.3 million, compared to an adjusted EBITDA of $17.2 million on sales of $780.5 million in Q2 2025 [2][9] - The company is facing ongoing challenges in the lumber market, leading to production curtailments and a decrease in average selling prices [2][3][4] Financial Performance - The adjusted EBITDA loss of $183.8 million includes a $147.4 million net duties expense related to U.S. tariffs [2][8] - Lumber production decreased to 912 million board feet, down from 935 million board feet in Q2 2025, reflecting a 23 million board feet reduction [2][9] - The average selling price of lumber fell to $618 per thousand board feet, a decrease of $66 from Q2 2025 [2][9] Market Conditions - North American lumber markets are expected to remain volatile due to economic adjustments, tariffs, and labor shortages [3][4] - The company anticipates that Canadian lumber will continue to be a key supply source for the U.S. market despite challenges [5][6] - Interfor's diversified operations across Canada and the U.S. position it to navigate market volatility effectively [4][6] Capital and Liquidity - Net debt increased to $893.3 million, representing 41.6% of invested capital, up from $798.0 million in Q2 2025 [2][12] - The company completed a bought deal equity offering generating gross proceeds of $143.8 million, which was used to reduce existing debt [2][13] - Total capital expenditures for 2025 are projected to be between $90 million and $95 million [8] Strategic Initiatives - Interfor sold Coastal B.C. forest tenures for gross proceeds of $3.4 million, indicating a focus on monetizing assets [2][8] - The company has plans to reduce lumber production by approximately 250 million board feet in Q4 2025 due to weak market conditions [2][3] - An early renewal of the Revolving Term Line was completed, enhancing financial flexibility with a commitment of $562.5 million [2][20]

Financial Data and Key Metrics Changes - West Fraser Timber Co. Ltd. reported an adjusted EBITDA of negative $144 million for Q3 2025, indicating continued operation within an extended cycle trough [3] - The lumber segment's adjusted EBITDA was negative $123 million, a significant decline from $15 million in Q2 2025, primarily due to lower pricing and a $67 million out-of-period duty expense [7] - Cash flow from operations was $58 million, with a net cash balance of $212 million, down from $310 million in the prior quarter [9] Business Line Data and Key Metrics Changes - The North America EWP segment posted negative $15 million in adjusted EBITDA for Q3 2025, down from $68 million in Q2, driven by lower OSB pricing [7] - The pulp and paper segment reported negative $6 million in adjusted EBITDA, compared to negative $1 million in the previous quarter, largely due to an annual maintenance shutdown [8] - The Europe business generated $1 million in adjusted EBITDA, similar to the $2 million reported in Q2 2025 [8] Market Data and Key Metrics Changes - U.S. housing starts averaged 1.31 million units annually through August, reflecting stable but uninspiring levels of new home construction [4] - The company noted subdued demand in repair and remodeling, continuing a trend observed in previous quarters [4] Company Strategy and Development Direction - The company is focused on maintaining a strong balance sheet and liquidity profile, allowing for countercyclical investments and opportunistic growth [5][11] - Actions taken include the permanent removal of 820 million board feet of capacity, representing approximately 12% of the company's lumber capacity, to create a more resilient business [11][12] - The company plans to continue managing its asset portfolio prudently while remaining flexible in its operating strategy to meet customer needs [12][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to navigate the challenging business environment, supported by a strong financial position [11] - The company is monitoring macroeconomic conditions and trade policies closely, indicating readiness to respond to changes in the market [15] - Despite a challenging year-to-year outlook, management remains optimistic about the longer-term prospects for the industry [16] Other Important Information - The U.S. Department of Commerce announced final CVD and ADD rates for AR6 at a combined rate of 26.5%, with West Fraser having the lowest duty rate in the Canadian industry [10] - A proclamation imposing Section 232 tariffs of 10% on imported softwood timber and lumber into the U.S. took effect on October 14, 2025 [10] Q&A Session Summary Question: Approach to managing production in lumber and North America OSB - Management highlighted actions taken early in the cycle, including mill closures and adjustments to shift configurations, to remain nimble in production management [18][19] Question: Implied Q4 operating rate for OSB - The implied operating rate for Q4 is expected to be around 80%, influenced by maintenance shutdowns during the weaker seasonal period [20][22] Question: M&A opportunities in the current down cycle - Management emphasized a quality-first approach to M&A, indicating that while there are opportunities, they remain selective and focused on enhancing the company's strength [23][24] Question: Federal support for the lumber industry - Management noted ongoing discussions with the government regarding support measures for the industry, although specific details were not provided [28][30] Question: Inventory levels in the U.S. channel - Management indicated that their inventory levels are intentionally lean, with customers purchasing as needed, but they do not have visibility into customer inventory levels [31][34] Question: Conditions in Canadian markets and competitor behavior - The Canadian market remains competitive, with no significant changes in demand or competitor behavior noted since the imposition of higher U.S. duties [46][47] Question: Capital expenditures outlook for 2026 - Management indicated that they will provide 2026 capital expenditure guidance in February, with a focus on operationalizing major projects completed in recent years [50] Question: State of the Caribou Pulp facility post-fire - The Caribou Pulp facility has been repaired and is back up and running, with positive signs of improvement in the European segment [51]

Financial Data and Key Metrics Changes - West Fraser reported an adjusted EBITDA of negative $144 million for Q3 2025, indicating continued operation within an extended cycle trough [4][6] - The lumber segment posted adjusted EBITDA of negative $123 million, a significant decline from $15 million in Q2 2025, primarily due to lower pricing and a $67 million out-of-period duty expense [8][10] - Cash flow from operations was $58 million, with a net cash balance of $212 million, down from $310 million in the prior quarter [11] Business Line Data and Key Metrics Changes - The North America EWP segment reported adjusted EBITDA of negative $15 million, down from $68 million in Q2, driven by lower OSB pricing [8] - The Pulp and Paper segment's adjusted EBITDA was negative $6 million, compared to negative $1 million in Q2, largely due to maintenance shutdowns [9] - The Europe business generated $1 million of adjusted EBITDA, similar to the $2 million reported in Q2 [10] Market Data and Key Metrics Changes - U.S. housing starts averaged 1,310,000 units through August, reflecting stable but uninspiring demand [5] - The company noted subdued repair and remodeling demand during the quarter, continuing a trend observed in previous quarters [6] Company Strategy and Development Direction - The company is focused on maintaining a strong balance sheet and liquidity profile, allowing for counter-cyclical investments [6][16] - West Fraser has permanently removed 170 million board feet of capacity in its Canadian lumber business to optimize its asset portfolio [14][15] - The company aims to leverage its product and geographic diversity while maintaining cost discipline and a commitment to sustainability [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic conditions and the impact of shifting trade policies on operations [14] - The company remains optimistic about the long-term prospects for the industry despite a challenging near-term outlook [20] - Management emphasized the importance of quality in potential M&A opportunities, particularly in the current down cycle [28][30] Other Important Information - The U.S. Department of Commerce released final CVD and ADD rates for AR6 at a combined rate of 26.5%, with West Fraser having the lowest duty rate in the Canadian industry [12] - A proclamation imposing a 10% tariff on imported softwood timber and lumber into the U.S. took effect on October 14, 2025 [13] Q&A Session Summary Question: Approach to managing production in lumber and OSB - Management highlighted actions taken early in the cycle, including mill closures and shift adjustments, to remain nimble in production [22][24] Question: Implied Q4 operating rate for OSB - The implied operating rate for OSB in Q4 is expected to be around 80%, influenced by seasonal maintenance shuts [26] Question: M&A opportunities in the down cycle - The company maintains a quality-first approach to M&A, focusing on high-quality assets that enhance strength during the cycle [28][30] Question: Federal support for lumber industry - Management noted ongoing discussions with the government regarding support measures for the lumber industry, but specifics were limited [34][35] Question: Inventory levels in the U.S. channel - Management indicated that their own inventory levels are intentionally lean, but they do not have visibility into customer inventory levels [37][39] Question: Conditions in the Canadian market - The Canadian market remains competitive, but it is smaller than the U.S. market and does not drive demand significantly [51] Question: CapEx outlook for 2026 - The company is wrapping up major projects and will provide 2026 CapEx guidance in February, with a focus on operationalizing recent investments [55] Question: State of the Cowrie facility post-fire - The Cowrie facility has been repaired and is back up and running, with positive signs in the European segment [55] Question: European lumber imports and OSB demand - Management noted no significant changes in visibility regarding European lumber imports and observed some price improvement in OSB demand in Europe [60][61]

Financial Performance - Interfor Corporation reported net earnings of $11.1 million, or $0.22 per share, in Q2'25, a significant recovery from a net loss of $35.1 million in Q1'25 and a net loss of $75.8 million in Q2'24 [1][23][24] - Adjusted EBITDA for Q2'25 was $17.2 million on sales of $780.5 million, compared to $48.6 million on sales of $735.5 million in Q1'25 and an Adjusted EBITDA loss of $16.7 million on sales of $771.2 million in Q2'24 [2][7][19] - The company achieved a 37 million board foot reduction in inventory volume during the quarter, with lumber shipments of 978 million board feet exceeding production by approximately 5% [2][4] Financial Position - Net debt at the end of Q2'25 was $798.0 million, representing 35.6% of invested capital, down from $886.3 million or 37.3% in Q1'25 [2][10][12] - The company generated $84.9 million in positive operating cash flow, aided by a $60.5 million reduction in working capital [2][10] - Interfor completed an early renewal and extension of its Revolving Term Line, increasing the commitment to $562.5 million and extending maturity to July 25, 2029 [2][17] Market Conditions - North American lumber markets are expected to remain volatile due to changing monetary policies, tariffs, labor shortages, and geopolitical uncertainty [3][4] - The U.S. Department of Commerce published a final anti-dumping duty rate of 20.56% on Canadian lumber, with an expected incremental expense of approximately $100 million in Q3'25 [2][8] - Canadian lumber is anticipated to remain a key supply source for the U.S. market, despite growth constraints in U.S. lumber manufacturing capacity [5][6] Operational Highlights - Lumber production for Q2'25 was 935 million board feet, with significant contributions from various regions including the U.S. South and Eastern Canada [9][28] - The average selling price of lumber was $684 per thousand board feet, down $28 from Q1'25, primarily due to the strengthening of the Canadian Dollar against the U.S. Dollar [2][9] - Capital expenditures for 2025 are projected to be between $85 million and $95 million, with $23.6 million spent in Q2'25 [2][18]

Financial Performance - Interfor Corporation reported net earnings of $11.1 million, or $0.22 per share, in Q2'25, a significant recovery from a net loss of $35.1 million in Q1'25 and a net loss of $75.8 million in Q2'24 [1][22][24] - Adjusted EBITDA for Q2'25 was $17.2 million on sales of $780.5 million, compared to $48.6 million on sales of $735.5 million in Q1'25 and an Adjusted EBITDA loss of $16.7 million on sales of $771.2 million in Q2'24 [2][7][19] - The company achieved a 37 million board foot reduction in inventory volume during the quarter, with lumber shipments of 978 million board feet exceeding production by approximately 5% [2][4] Financial Position - Net debt at the end of Q2'25 was $798.0 million, representing 35.6% of invested capital, down from $886.3 million or 37.3% in Q1'25 [2][11][28] - The company generated $84.9 million in positive operating cash flow, aided by a $60.5 million reduction in working capital [2][11] - Interfor completed an early renewal and extension of its Revolving Term Line, increasing the commitment to $562.5 million and extending maturity to July 25, 2029 [2][18] Market Conditions - North American lumber markets are expected to remain volatile due to economic adjustments, tariffs, labor shortages, and geopolitical uncertainties [3][4] - The U.S. Department of Commerce published a final anti-dumping duty rate of 20.56% on Canadian lumber, with an expected incremental expense of approximately $100 million in Q3'25 [2][8] - Canadian lumber is anticipated to remain a key supply source for the U.S. market, despite growth constraints in U.S. lumber manufacturing capacity [5][6] Strategic Initiatives - Interfor's strategy includes maintaining a diversified portfolio of operations to mitigate risks and maximize returns [6][32] - The company sold Coastal B.C. forest tenures for gross proceeds of $8.2 million, reflecting its ongoing efforts to monetize assets [2][11] - Capital expenditures for 2025 are projected to be between $85 million and $95 million, with $23.6 million spent in Q2'25 [2][18]