Core Viewpoint - Conifex Timber Inc. reported significant financial losses for the fourth quarter and the year ended December 31, 2025, with a net loss of $35.7 million for the year and negative EBITDA of $27.5 million, reflecting challenges in lumber production and increased duty rates [1][6][11]. Financial Performance - EBITDA from continuing operations was negative $12.6 million for Q4 2025 and negative $27.5 million for the full year, compared to negative EBITDA of $2.1 million in Q4 2024 and negative $13.6 million for the year [1][3]. - Net loss for 2025 was $35.7 million or negative $0.87 per share, compared to a net loss of $29.8 million or $0.73 per share in 2024 [1][3]. - Revenue from lumber products was $101.0 million in 2025, a 7% increase from 2024, driven by higher average lumber prices and increased shipment volumes [8][9]. Lumber Operations - Lumber production totaled 147.9 million board feet in 2025, reflecting an annualized operating rate of 62%, up from 134.8 million board feet in 2024 [6][7]. - Shipments of Conifex produced lumber increased by 3% to 141.1 million board feet in 2025, primarily due to higher production output earlier in the year [7][8]. - Average WSPF lumber price increased from $559 in 2024 to $651 in 2025, a 16% rise, despite market volatility and increased duty rates [9][10]. Cost Structure - Cost of goods sold increased by 6% in 2025, primarily due to higher production volumes and a $3.0 million non-cash inventory write-down in Q4 [10][11]. - Selling, general and administrative costs decreased by 19% to $5.8 million in 2025, attributed to lower salaries and benefits costs [18]. - Finance costs and accretion rose by 59% to $12.7 million in 2025, mainly due to higher interest expenses from additional draws under the Pender Term Loan [19]. Bioenergy Operations - The Power Plant sold 179.0 GWh of electricity in 2025, contributing revenues of $25.6 million, an 8% increase from 2024 [16][17]. - Electricity production was approximately 80% of targeted operating rates, reflecting improved operational availability [16]. Market Conditions and Outlook - The North American lumber market experienced volatility due to elevated duty deposit rates and tariff uncertainty, impacting production and pricing [9][11]. - Future cash flows may be adversely affected by the combined duty and tariff rate of 45.16% on US-bound shipments, constraining operating margins [49]. - The company anticipates a potential reduction in duty rates in Q4 2026 and expects a recovery in softwood lumber pricing and demand over the medium term [50][58].

Financial Performance - Conifex Timber Inc. reported a net loss of $8.3 million or ($0.20) per share for Q2 2025, compared to net income of $0.6 million or $0.02 per share in Q1 2025 and a net loss of $9.7 million or ($0.24) per share in Q2 2024 [1][6] - EBITDA for Q2 2025 was negative $3.2 million, a decrease from $4.9 million in Q1 2025 and an improvement from negative $7.1 million in Q2 2024 [1][3] - Revenue from lumber products was $27.4 million in Q2 2025, a decrease of 12% from Q1 2025 but an increase of 10% from Q2 2024 [9] Lumber Operations - Lumber production in Q2 2025 totaled approximately 35.3 million board feet, representing a 24% decrease from 46.3 million board feet in Q1 2025 but a 4% increase from 34 million board feet in Q2 2024 [7] - Shipments of Conifex-produced lumber were 38.9 million board feet in Q2 2025, a 2% increase from Q1 2025 and a 1% increase from Q2 2024 [8] - The average price of WSPF 2x4 2 & Btr lumber was $471 (US$) in Q2 2025, compared to $492 in Q1 2025 and $386 in Q2 2024 [5] Bioenergy Operations - The Power Plant sold 29.6 GWh of electricity in Q2 2025, down from 47.6 GWh in Q1 2025 and 38.0 GWh in Q2 2024, primarily due to an annual maintenance shutdown [13][14] - Revenue from electricity production was $3.6 million in Q2 2025, a decrease from $7.0 million in Q1 2025 and $4.5 million in Q2 2024 [14] Cost Management - Cost of goods sold decreased by 7% from Q1 2025 and by 10% from Q2 2024, driven by lower production volume and lower inventoried unit costs [10] - Selling, general and administrative costs were $1.5 million in Q1 2025, down from $1.8 million in Q1 2025 and $1.9 million in Q2 2024 [15] Financial Position and Liquidity - Overall debt decreased to $81.6 million at June 30, 2025, from $84.2 million at March 31, 2025, and increased from $73.8 million at June 30, 2024 [23] - Available liquidity was $3.0 million at June 30, 2025, down from $4.2 million at March 31, 2025, and $10.9 million at June 30, 2024 [24] Market Outlook - North American lumber markets are expected to experience continued volatility and uncertainty throughout the remainder of 2025, with duty deposit rate increases and potential tariffs posing significant challenges [30]