Canfor Corporation

Good morning. My name is Lara, and I will be your conference operator today. Welcome to Canfor and Canfor Pulp's first quarter analyst call. All lines have been placed on mute to prevent any background noise. During this call, Canfor and Canfor Pulp's chief financial officer will be referring to a slide presentation that is available in the investor relations section of the company's website. Also, the companies would like to point out that this call will include forward-looking statements, so please refer to the press releases for the associated risks of such statements. I would now like to turn the meeting over to Mr. Don Kane, Canfor Corporation's President and Chief Executive Officer. Please go ahead, Mr. Kane.

Thank you, Lara, and good morning, everyone. Thank you for joining the Canfor and Canfor PULP Q1 2023 Results Conference Call. I'm going to make a few comments before I turn things over to Kevin Edson, Canfor's pulp president and chief executive officer, and Pat Elliott, chief financial officer of Canfor Corporation and Canfor Pulp, and our senior vice president of sustainability. In addition, we are joined by Kevin Pinecrafts, our senior vice president of sales and marketing. The first quarter and April were very challenging for Canfor, as we announced and implemented the restructuring plans for our lumber and pulp operations in British Columbia. Our Chuntwin Sawmill and Pella plant, as well as our pulp line at Prince George Pulp and Paper, have permanently closed, while our Houston facility has been closed for an extended period. Despite the current challenges operating in British Columbia, this province remains a critical part of our diversified operating platform. To that end, we continue to make progress on finalizing the business case to build a new operation in Houston. We sincerely regret the impact these decisions have had on our employees, our contractors and our communities. However, With a smaller but more stable operating platform in British Columbia, we will be stronger and better positioned for the future. Turning to our other operating regions, construction of our Greenfield Sawmill in Derrida, Louisiana is progressing well, with the sawmill starting up in late February, followed by the planer in early April. With the facility now fully operational, we continue to make progress through the startup curve. We're pleased with the initial performance. We will continue to ramp up production through the bounce of this year and on into 2024. In addition, we continue to execute on our other growth initiatives, including the rebuild of our sawmill in Arkansas, second greenfield sawmill in Alabama, and some organic growth in Sweden. Notwithstanding current lumber markets, we continue to believe the longer-term market fundamentals remain strong, supported by favorable demographic trends, continued strength in the repair and remodel sector, and pent-up demand for new home construction activity. Despite the seasonal working capital build in the first quarter, our balance sheet remains strong. While we are prepared to remain patient and disciplined until the right opportunities present themselves, we continue to assess additional organic and external growth opportunities as we look to grow our lumber business on a global basis. I will now turn it over to Kevin to provide an overview of Kenfort Pulse.

Thank you, Don, and good morning, everyone. As Don mentioned, Canfor Pulp implemented the permanent closure this quarter of the pulp line at our print storage pulp and paper mill. This was a very difficult decision, and we regret the impact it has had on our employees and the community, but we are focused on improving operational efficiency and reliability with a more stable operating footprint. In addition, over the next several years, we have identified a significant capital reinvestment plan aimed at improving the operational reliability and stability of our remaining pulp mills, To that end, we are pleased to announce a refinancing that will provide the necessary liquidity for the next four years to backstop this recapitalization. We have provided guidance of $70 million of capital this year, but expect taking into account market conditions and cash flow, that in the coming years, our capital expenditures will trend in the neighborhood of $100 million, consistent with the past couple of years. This spending will focus on improving reliability and the only Significant project that we see on the horizon is the completion of the rebuild of recovery boiler number one at Northwood, which was started in late 2021. Notwithstanding the significant challenges we have experienced over the last several years, we believe an expanded reinvestment plan will support the sustainability of the company for the foreseeable future and allow us to capitalize on the strong global pulp market fundamentals we believe will remain over the medium to long term. I will now turn it over to Pat to provide an overview of our financial results.