GreenFirst Forest Products Inc.

Good morning ladies and gentlemen and welcome to Green First fourth quarter and year-end 2022 results conference call. Please note that all 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's 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 MDNA 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. Mr. Rivett, you may now begin your conference.

Thank you, Michelle. Thank you for joining us for our first earnings call of the year. This morning, we will discuss our fourth quarter and year-end 2022 results. Joined with me today are Michelle Lessard, our president, Alfred Koldas, our chief financial officer, and Gwen Webster, our chief of staff. 2022 was a very busy year for us. Despite only being in existence for approximately a year and a half, we have successfully reached some major milestones. We opened our corporate back office in North Bay, Ontario. This office brings us closer to the forest we manage and the mills and people we work with. We partnered with Bank of Montreal to provide a credit facility to replace our acquisition debt financing. This has resulted in substantial savings from reduced interest payments. The team did an exceptional job putting this together. We sold a little over 200,000 acres of excess land near Capus Casing, Ontario, for net proceeds of $49 million. We entered into a multi-year partnership with a leading commercial printing company that provides longer-term contracted revenue for our paper mill. And just yesterday, you would have seen that we officially closed the sale of our Lassar and Byrne sawmills, along with related operations in Quebec for approximately $94 million. Despite our recent land and sawmill dispositions, it is important to note that we continue to possess substantial assets with significant value, some of which we believe continues to be unrecognized. Firstly, we now have four uniquely positioned sawmills in the heart of the Ontario wood fibre basket. With this concentrated production, we believe we can achieve increased productivity both in our mills and in the forest. We have 2.6 million cubic meters of well-located, dedicated, annual allowable cut that supports our operations. Next, it is important to make note of our overfunded pension. We ended the year with a 27% funding surplus. This was a result of us moving Green First's defined benefit pension of over $86 million into cash and short-term investments in order to protect us against what we believe would be impending rate hikes. Thirdly, despite selling over 200,000 acres of property, the company still owns over 40,000 acres of property in Ontario with key developable lots in Kenora, Capuscasing and Timmins. And lastly, we have accumulated a staggering $77 million in duties on deposit. These US duties impair our profitability, unfortunately, and are essentially forced savings that have been a significant drag on our free cash flow. Our duty rate is expected to be reduced in August of this year from the current 20.23% to align in the all others category, which was preliminarily calculated to be 8.24%. The fourth quarter of 2022 continued to be a tough lumber pricing environment, as we also saw in the third quarter of 2022. And for the fourth quarter, Green First reported a net loss of $25.9 million based on its continuing operations or quarterly loss of $0.15 per share on a diluted basis. This result for the fourth quarter includes the impact of $8.8 million charge for the temporary write down of inventory for accounting purposes. Including this impact, adjusted EBITDA for the fourth quarter was negative $27.4 million. This will be discussed in further detail by Alfred shortly. I will now briefly discuss some of the main factors affecting our outlook in 2023. We continue to see near-term volatility in lumber demand and pricing. However, we believe longer-term fundamentals for lumber demand remain very favorable. Inflation and rapidly increasing interest rates are having a negative near-term impact on housing construction and therefore lumber markets. But there has been some price support due to curtailments in BC and other parts of North America, while tightening supply around the world due to natural disasters and other world events. While we have seen supply and logistic constraints steadily improving in the fourth quarter of We continue to see inflationary cost pressures in new equipment and with some contractors. To explain our outlook a little better, I will run through some relevant slides with you starting with our look at lumber futures price performance. As this graph that you can see on the web shows, unlike other commodities, lumber has been markedly more volatile, particularly over the last three years. This recent volatility was fueled by temporary factors, we believe, including pandemic-related renovation demand combined with reduced supply resulting from production shutdowns. Longer term, there is a growing scarcity of wood fiber supply brought about by a number of factors, including deforestation through insect infestations and fires, increasing conservation and carbon credit forest sequestration projects, and trade restrictions. The insect and fire devastation in Canada, principally in British Columbia, has resulted in the curtailment or closure of a number of sawmills and a gradual decline of Canadian lumber sales into the United States. We are hopeful this decline should eventually lead to a realization that Canadian lumber producers are not a threat to the US lumber industry. While concerns about constrained wood fiber supply will be a moderating factor for at least a generation, In the short term, lumber demand will be dampened by these higher interest rates and the corresponding impact of new home construction in the U.S. We have seen inflation across the industrial spectrum, and construction industry is not immune. However, despite increasing costs and corresponding increases in lumber prices, as you can see in this pie chart, lumber continues to represent a very small proportion of the construction cost of a new home. Family formation and immigration continue to outpace new construction in North America, forcing the housing deficit to reach new crisis-level heights. The reality is that, from a long-term perspective, more homes will need to be built, which will increase demand, while longer-term lumber supply will continue to moderate with Western Canadian wood supply continuing to reduce. In short, we continue to be bullish on the long-term supply-demand dynamics for the lumber market in North America. And now, Alfred will walk us through our financials in further detail.

Thanks, Paul. And good morning, everyone. As highlighted by Paul, Green First weathered a challenging fourth quarter and reported a net loss of $25.9 million, on the basis of its continuing operations, or a quarterly loss of 15 cents per share on a diluted basis. Now, first, a short word on this reporting basis, which is seen in our fourth quarter and year-end figures. The operations of the two Quebec sawmills were held for sale at the end of 22 and are presented in a separate category called discontinued operations in our year-end financial statements. The net loss for the fourth quarter includes the $8.8 million impact of temporary inventory write-downs to their net realizable value, which was below their cost due to the drop in lumber prices by the end of 22. Adjusted EBITDA for the fourth quarter was negative $27.4 million, which includes this net realizable value impact. Lumber sales in the fourth quarter were 99.7 million board feet, at an average realized price of $644 Canadian per thousand. which compares to a realized lumber price of $800 Canadian in the third quarter. Lumber market prices to date in the first quarter have trended slightly lower, still depressed by higher interest rates, including signaling of more rate rises from the US Federal Reserve just last week. Our paper shipments in the fourth quarter of over 32,000 metric tons drove revenues of $30.6 million, Each of these values is higher than the preceding quarter, and they reflect the ongoing commissioning of the second paper machine at our campus casing paper mill. Cost of sales for the paper products was $34 million in the fourth quarter for an operating loss of $3.4 million, as the second paper machine did not reach full production capacity, although we have seen improvements and expect to turn the corner in the first quarter of 2023. For the year ended December 31st, 22, Green First reported $492 million in net sales from continuing operations, operating earnings of $23.8 million, which was driven by the lumber business, a $4.1 million net loss from continuing operations, and an EBITDA of $39.4 million. This net loss includes an $11.5 million charge for the temporary write-down of inventories to the net reliable value. Now, on a consolidated basis, including all six sawmills, which we owned through yesterday, essentially, Green first realized an adjusted EBITDA of $45.8 million in 2022. This EBITDA includes the negative impact of a $25.4 million charge for the temporary write-down of inventories to their NRV. On a consolidated basis, this NRV write-down represents about 18% of our inventories and this proportion is in line with what is being reported for Q4 by some of our larger peers in the lumber business. Selling, general, and administrative, or SG&A, expenses were $5.9 million in the fourth quarter, which was roughly in line with the third quarter and reflected higher professional fees related to our corporate development activities in the fourth quarter, which were offset by savings from ongoing rationalizing third-party services and prudently managing headcounts. Now, turning to liquidity, we ended the fourth quarter and the year with a cash position of $25.4 million and $46.9 million in excess availability under our credit facility for a total liquidity of $72.3 million at the end of 2022. We ended 2022 with a total debt position of $53.4 million, which is half the total deposition we had at the end of the second quarter. During the fourth quarter, we were able to reduce our debt by $30 million, using part of the proceeds from the sale of our private forest property, which closed in November. The recent sale of our Quebec sawmills for about $94 million, which closed yesterday, will enable us to further reduce interest expense by paying down our asset-backed revolving credit facility. This additional liquidity is a big asset to Green First as we navigate the difficult lumber market for the coming months. Now I'd like to pass things to Michel.