GreenFirst Forest Products Inc.

Good afternoon, ladies and gentlemen, and welcome to Green First Q4 2021 results conference call. Please note that all phone lines are muted to prevent any background noise. During this conference call, Green First representatives will be making certain statements about future financial and operational performance, business outlook, and capital plans. These statements may contain forward-looking information or forward-looking statements within the meaning of Canadian securities law. Such statements involve certain risks, uncertainties, and assumptions which may cause green first actual or future results and performance to be materially different from those expressed or implied in these statements. Additional information about these risks, factors, and assumptions is included both in the accompanying presentation and in our 2021 annual MD&A and annual information form, which can be accessed on our website or through CDAR. After the speaker's remarks, there will be a question and answer session, at which time you can submit questions on the bottom right of the webcast player. Mr. Doman, you may begin the conference.

Good afternoon. Thank you for joining our Q4 2021 results earning call. I am Rick Doman, CEO of Green First, and I am joined today with Michelle Lessard, our president, and Mike Liggett, our CFO. We successfully completed our first quarter with an adjusted EBITDA of $18 million after adjusting for acquisition-related expenses. Lumber markets improved in Q4, and they have remained strong in 2022. Accordingly, Q1 will be another profitable quarter, we expect. My philosophy is you may cave. when the sun is shining like a good farmer. We made significant strides in reducing reliance on transitional services arrangement with higher than human resources. IT and accounting. The integration of the Rainier assets has been a success. Most importantly, we are integrating ESG into all aspects into our operation and we expect to issue a full sustainability report in second half of 2022. Michelle, Mike, and myself will now go into our detailed remarks. We encourage you to write us questions as we move along. They will be addressed at the end. Green First is already one of Canada's top lumber producers in Canada. We are working towards becoming a global leader through five strategies, integrating ESG into all aspects of our business, Michelle will spend a significant portion of today's presentation explaining this. We are also committed to being an employer of choice. Each mill needs to be an integral part of the community. Low cost of production and operational excellence is a key focus. Based on my over 40 years in the industry, you always want to be the lowest cost producer to ensure long-term stable employment for our workforce and make competitive products for our customers. Accretive acquisitions. We are true value buyers, as demonstrated by the Rainier and Kenora acquisitions. Rational capital allocation. We first look to optimize operations with little or no capital outlay, and then as cash flow from operations provides, we plan to make selective capital investments in our operations that generate costs savings with shorter payback periods. We believe our strategies will lead to enhanced value for our shareholders and stakeholders. We have a powerful network of lumber-producing assets from timberlands, owned lands, to mills with an annual lumber production of approximately 905 million board feet per year. I find it hard to describe the value of these assets, especially at the price we paid for them. Moreover, it is truly exciting to have a Canadian management team collectively working together to maximize productivity from our assets. Our focus is simple. We plan to increase production capacity and reduce costs. In September, we were successfully in hiring a proven industry veteran, Mel Lemke, who has a track record of improving sawmill productivity and optimization. Mel worked with me at ECOM and did a great job in doing this and is working hard at Green First to do the same. He brings a fresh perspective in industry best practices and working well together with our president, Michelle Lessard, to complete these opportunities. We bought the operating assets from Rainier that did not come with back office positions like human resources, IT, and finance. As mentioned, we have made great strides in hiring and onboarding these functions. Many of them are new hires, are located at our office, which we're very proud of in North Bay, Ontario, which is closer to our operations, and we're very pleased to have established an office there. is open in the fourth quarter. The office can accommodate up to approximately 30 full-time employees and is strategically located close to our operating sites, as I mentioned. As of today, most of the transitional support from Rainier has ended, with the balance expected to finish by about the end of May 2022. Our IT and supporting infrastructure are fully operational. We bought recruiting in-house, and it is difficult to outsource such an important function. Our in-house recruiting is using their expertise to significantly improve our hiring processes for the mill. Entering into 2022, North American home construction and repair and remodeling demand for lumber was very strong. Expected rising interest rates in 2022 may moderate this demand, but we believe that will depend as to the extent of the increase of interest rates. On the supply side, we expect uncertainty around future COVID-19 waves disrupting industry production will remain throughout 2022. In addition, disruptions to most of transportation utilized by the industry have contributed to tightening supply of lumber to the North American market. Given this backdrop, we expect North American lumber prices to continue to be volatile but to remain above historical trends. Although outlook for lumber prices is expecting to remain strong, our operations supply chain and transportation and delivery services are currently experiencing a wide range of inflationary cost, pressure, and operational challenges. Increase in stumpage rates, which is tied to the price of lumber, logging costs have increased, Lumber price results in more demand for harvesters who are able to command higher wages. Quebec log costs are increasing due to tight supply and competition bidding up. Increased fuel costs. Transportation costs increases in availability issues. Softwood lumber duties associated with green firs increased to 20.2% from 8.99% after we took over. A 11.21% increase occurs on the day we acquired the Rainier assets and negatively affected our four-month earnings in Q3 and Q4. We are currently appealing this. Experiencing delays in increased costs in ordering new equipment and parts, some equipment manufacturers now have as much as 24-month backlogs. and Q1 caused canceled shifts and lower production. At the peak of Omicron, up to 11% of our workforce was absent. Albeit many of these inflationary factors are beyond our control and are not unique to Green First, I'm confident we have taken proactive measures to mitigate the impact and continue to drive production as much as possible. I'm now turning over the table to Michelle Lessard, to talk about our valuable woodlands and sustainability plans. We are a proudly bilingual company, so I've asked Michelle to present in both French and English. You can follow along with our English version of the presentation located on our website. Merci beaucoup.

So thanks, Rick. Merci, Rick. Rick summarized the effect of the offer and demand on the prices of wood and some of the inflationary pressures that we are facing. It is important to point out that the success of our society largely depends on the availability of raw materials as well as on our ability to have access directly to these materials and to maintain effective and profitable operations. Forestry management is at the heart of our activities. Forest management is the core of our business. Nos séries ont un accès de longue durée à quelques 3,7 millions de mètres cubes de matière ligneuse en vertu de permis d'aménagement forestier durable de l'Ontario et de garantie d'approvisionnement du Québec. La société croit que l'accès à ce volume de matière ligneuse est suffisant pour nous permettre d'accroître notre capacité de production de bois d'oeufs, comme nous avons prévu de le faire. Green First has long-term forestry exploitation permits on Ontario's public lands. In Quebec, Green First has a couple of rights granted through supply guarantees. The forestry development plans approved by provincial authorities have been implemented and allow us to harvest and renew our forests by applying sustainable forestry development practices. We have also implemented advanced analysis measures for our supply, so that our plants can be assured of a certified quality line material at a reasonable cost. In addition to the state land use permits, Green First has about 200,000 acres of private forest in Ontario, south of our Capuskasing plants. We are currently evaluating how to use these forests optimally. These lands have received all the appropriate use permits according to the silviculture practices provided by the law. Le 16 octobre 2021, Green First a annoncé que notre société était récipiendaire d'un prix du leadership du FSC en 2021, un prix reconnaissant les efforts d'une excellence hors du commun pour faire progresser la gestion forestière responsable et la conservation des forêts. En octobre 16 2021, Green First annoncé que c'était le récipient du 2021 FSC Leadership Award Recognizing Uncommon Excellence that Advances Responsible Forest Management and Forest Conservation. This award has been awarded to us for preserving for more than 15 years the FSC certification on more than 9 million acres of complex boreal areas in Ontario and Quebec. This award has been awarded to us for two forest regions managed by Green First, the Garden Cousins forest in Ontario et les forêts gérées par notre équipe d'Abitibi-Ouest, soit au nord de la Phare et dans le secteur de Rouyn-Noranda au Québec. Nous avons à cœur d'appliquer rigoureusement de solides pratiques environnementales, sociales et de gouvernance, car nous sommes persuadés que la croissance à long terme de Green First passe obligatoirement par ce genre de pratiques. Et cet engagement envers l'environnement procure maintenant une valeur ajoutée à nos actionnaires. During the fourth quarter, we invested in Boreal Carbon Corporation. This company was created to acquire and manage forest projects in North America in order to produce carbon credits. Our investment opens a direct window to the carbon markets. Today, we announce that our team has undertaken the exhaustive report on sustainable development, which will be published during the second half of 2022. L'élaboration d'engagements et de mesures à court et à long terme sur les plans environnemental, social et de gouvernement, soit l'ESG, seront publiés en 2023. La planification de nos engagements en matière d'ESG est fondée sur notre système de valeurs P4 ou encore P par 4. Ces quatre P sont le personnel, les principes, la planète et le progrès. Je vais vous les résumer brièvement à l'aide des deux prochaines diapos. Notre actif le plus important est notre personnel. Nos valeurs à l'égard du personnel sont les suivantes. Maintenir un milieu de travail sûr et sain. Promouvoir un milieu de travail inclusif où la diversité est bien accueillie et où règne l'égalité et la positivité. Appuyer la croissance et les réalisations des employés en leur offrant des possibilités de perfectionnement et de formation continue. Valoriser les forces de chacun et les conjuguer afin d'atteindre nos objectifs communs. En accord avec nos principes élevés, nous menons nos affaires en nous appuyant sur un processus décisionnel éthique, une saine gouvernance et des systèmes de gestion efficaces. Fabriquons des produits de qualité pour nos clients. Soutenons les initiatives qui ont des effets bénéfiques durables pour Green First, la société en général et la planète. Assumons la responsabilité de nos gestes, de nos efforts et de nos résultats. Nous devons prendre soin aussi de notre planète. Nous nous engageons donc à assurer la vérification externe de nos pratiques forestières en vertu des normes internationalement reconnues les plus rigoureuses. Réduire, réutiliser et recycler dans toutes nos activités, réduire au minimum notre empreinte écologique dans toute la chaîne de valeur. Rendre compte publiquement de notre performance environnementale. Afin d'aller constamment de l'avant, nous voulons démontrer la valeur de nos progrès en demeurant axés sur l'excellence. My last slide is is on significant growth opportunities at Green First. Currently, we have been focusing on non-capital and capital light projects with quick payback profiles. Additionally, we are also working on some priority strategic projects to prevent operational disruptions. The company is working on a three-year plan to update its sawmill, increase productivity, improving recovery and reducing processing costs. Combination of Elevated lumber prices and expectation to reduce cash costs will support free cash flow generation, which will be used to reduce leverage and fund capital expenditure plans. I will now turn to our CFO, Mike, to explain the drivers of profitability and cash. Mike?