GreenFirst Forest Products Inc.

Good morning ladies and gentlemen and welcome to the Green First's first quarter 2024 results conference call. Please note that all lines have been placed on mute 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 in Green First's MD&A, which can be accessed on the company's website or through CDAR+. After the speaker's remarks, there will be a question and answer session, at which time you can submit web questions by typing them in the Q&A pod. Mr. Rivett, you may now begin the conference.

Thank you very much, Sylvie. Good morning, everyone, and welcome to our first quarter 2024 earnings call. As Sylvie mentioned, I am Paul Rivett, Chair of Green First, and today I am joined by our esteemed management team, led by Joelle Fournier, our CEO, Terry Skiffington, CEO of Cap Paper, Ankit Kapoor, our interim CFO, and Michelle Lessard, our president. We entered 2024 as a much more focused organization, with Joelle leading our operations and Terry, who was brought in to focus on the paper mill. So far, 2024 has been a roller coaster ride for the industry. We saw some positive price momentum during portions of the quarter, with that momentum subsiding in the recent months. This has brought forth curtailments in our industry, particularly in western Canadian region, with significant pressures to operations in the east as well. In addition, With recent indefinite closures of the Domtar, Espanola and Burla A.V. Terrace Bay pulp mills, and now with the announcement of the indefinite closure to Tumiskaming's HPC operations, there is a perfect storm impacting the lumber ecosystem in Northern Ontario. We remain confident that these short-term pressures are a precursor to a strong second half of 2024 and beyond. The long-term fundamentals for the lumber industry remain promising. However, the industry continues to face near-term challenges. Inflationary pressures continue to be stubborn, which is delaying potential interest rate cuts by the U.S. Federal Reserve and Bank of Canada, a boost that is much needed for the rebound of lumber markets. With prices hopefully bottoming in recent weeks, we remain optimistic for a market recovery later in the year and into 2025. Supply side pressures continue to mount in the industry with mill closures in British Columbia and other parts of North America. We again want to reiterate that we are very thankful to operate in Ontario in these tough times. Ontario is a province that is business friendly and supportive of lumber producers and is solutions focused for the forest products ecosystem. On the paper side, we face some disruptions caused by external events as well as pricing erosion, which has led to deeper losses, which Terry will discuss in more detail. We are very focused on exploring ways to reduce the negative financial impact of the paper mill on our overall results. Our management team will now take us through the results of the quarter and year, starting off with Ankit giving us the financial highlights. Over to you, Ankit.

Thanks, Paul, and good morning, everyone. The company's net loss in Q1 was $13.4 million. This includes a $4.9 million deferred tax expense in Q1. Adjusted EBITDA for Q1 was negative $3.5 million compared to an adjusted EBITDA of negative $18 million in Q4 2023. For Q1, we had positive contribution from our lumber segment, which was offset by losses in the paper segment and overhead. Net lumber sales recorded in the quarter were $69 million, closely compared to $70 million in Q4. Q1 saw higher prices on average compared to Q4, but this was offset by lower overall volumes in Q1. Pricing in Q1 showed some resilience. However, the momentum was lost toward the end of the quarter and into Q2, driven by weaker housing affordability as mortgage rates in the U.S. started to climb. There was some volume support in Q1 due to field takeaways driven by unseasonably warmer climate, which aided buyer sentiment. Cost of sales in the lumber segment was $2 million compared to $76 million in Q4. This was due to a $6 million swing in net realizable value adjustments as Q4 had an increase to NRV provisions while Q1 had a net credit. Additionally, cost of sales decreased due to lower volume sold and gained efficiencies in Q1. Compared to Q1 of last year, the company's net sales in the forest product segment improved by over 12% as demand in the comparative first quarter of 2023 was heavily impacted by weak buyer sentiment resulting from sustained interest rate increases. Cost of sales in the lumber segment improved by 14% compared to Q1 of last year, primarily due to a net benefit related to inventory NRV recorded compared to a charge recorded in the first quarter of last year, and due to better efficiencies. This was partially offset by the impact of higher volume sold in the first quarter of 2024. The paper segment saw net sales of $24 million in Q1 versus $33 million in Q4. Sales were negatively impacted due to lower average pricing and lower volume sold in North American markets. Cost of sales for paper segment decreased to $33 million compared to $39 million in Q4 as a result of lower volume sold. Both Q4 and Q1 saw higher maintenance-related costs due to production-related disruptions. Compared to Q1 of last year, the company's net sales in the paper segment decreased by 36%. This was primarily driven by the lower volume due to production-related disruptions and continued pricing pressures seen during the course of 2023 and into 2024. Cost of sales in the paper segment compared to Q1 of last year decreased by 8%. This decrease in cost of sales in the first quarter of 2024 was primarily due to lower paper production and sales offset by higher costs related to unplanned maintenance. SG&A expenses of $2.5 million in Q1 were lower compared to $5.7 million in Q4. This was primarily due to a recovery of $1.5 million related to the reversals of incentive payouts that were accrued last year. Lower spend on external services and credits related to fringe benefits. For Q1 2024, finance costs were $1.1 million, primarily reflecting interest charges on the company's outstanding debt under the credit facility. During Q1 2024, the company made net borrowings of $20.5 million against the revolving portion of the credit facility, primarily to support the company's seasonal harvesting activities. The company also made a draw of $5.3 million on its equipment lending facility, which has a $25 million gross availability, and this was done to finance a key strategic project. Subsequent to Q1, the company was able to access an additional $10 million under the equipment lending facility. This was done to provide the company added flexibility and liquidity as we continue to manage our liquidity through the volatile lumber markets and harvesting season. We're ensuring tight inventory management at the mill level. Our lending facility is supported by borings against our inventory. As such, higher levels of inventory are supported by the credit facility during the harvesting season. I will now pass it over to Joël for his commentary.