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Press Release: Interfor Reports Q4'20 Results -2-

· 02/04/2021 18:44
For the three months ended ------------------------------------------ (Thousands of Canadian Dollars except number of shares) Dec. 31 Dec. 31 Sept. 30 For the year ended Dec.31 ------------------------------------------ (and per share amounts) 2020 2019 2020 2020 2019 2018(1) --------- --------- Adjusted Net Earnings (Loss) Net earnings (loss) $ 149,148 $ (41,676) $ 121,604 $ 280,296 $ (103,785) $ 111,058 Add: Asset and goodwill write-downs and restructuring costs 1,793 30,416 12,985 15,264 63,982 15,304 Other foreign exchange loss (gain) 8,162 510 2,907 16,881 275 (3,474) Long term incentive compensation expense (recovery) 10,254 1,265 5,576 12,513 3,446 (7,829) Other (income) expense 92 298 43 (336) (5,925) (1,188) Post closure wind-down costs 949 - 3,085 4,034 - 4 Income tax effect of above adjustments (5,652) (8,241) (6,206) (12,527) (16,117) (396) Adjusted net earnings (loss) $ 164,746 $ (17,428) $ 139,994 $ 316,125 $ (58,124) $ 113,479 Weighted average number of shares - basic ('000) 66,687 67,257 67,270 67,119 67,277 69,713 Adjusted net earnings (loss) per share $ 2.47 $ (0.26) $ 2.08 $ 4.71 $ (0.86) $ 1.63 ------------------ --------- --------- --------- --------- --------- --------- Adjusted EBITDA Net earnings (loss) $ 149,148 $ (41,676) $ 121,604 $ 280,296 $ (103,785) $ 111,058 Add: Depreciation of plant and equipment 21,947 20,711 20,850 78,459 80,438 80,065 Depletion and amortization of timber, roads and other 10,511 14,214 7,922 37,071 44,294 46,148 Asset and goodwill write-downs and restructuring costs 1,793 30,416 12,985 15,264 63,982 15,304 Finance costs 1,891 3,740 4,907 16,079 15,024 12,452 Other foreign exchange loss (gain) 8,162 510 2,907 16,881 275 (3,474) Income tax expense (recovery) 43,889 (11,851) 41,916 89,573 (34,359) 39,092 ------------------ --------- --------- --------- --------- --------- --------- EBITDA 237,341 16,064 213,091 533,623 65,869 300,645 Add: Long term incentive compensation expense (recovery) 10,254 1,265 5,576 12,513 3,446 (7,829) Other (income) expense 92 298 43 (336) (5,925) (1,188) Post closure wind-down costs 947 - 2,967 3,914 - 4 ------------------ --------- --------- --------- --------- --------- --------- Adjusted EBITDA $ 248,634 $ 17,627 $ 221,677 $ 549,714 $ 63,390 $ 291,632 ------------------ --------- --------- --------- --------- --------- --------- Sales $ 662,301 $ 456,819 $ 644,884 $2,183,609 $1,875,821 $2,186,567 ------------------ --------- --------- --------- --------- --------- --------- Adjusted EBITDA margin 37.5% 3.9% 34.4% 25.2% 3.4% 13.3% ------------------ --------- --------- --------- --------- --------- --------- Net debt to invested capital Net debt Total debt $ 381,960 $ 259,760 $ 400,170 $ 381,960 $ 259,760 $ 272,840 Cash and cash equivalents (457,392) (34,900) (311,465) (457,392) (34,900) (166,152) Marketable securities - - - - - (42,863) Total net debt $ (75,432) $ 224,860 $ 88,705 $ (75,432) $ 224,860 $ 63,825 ------------------ --------- --------- --------- --------- --------- --------- Invested capitalRevolving Senior Term Secured Thousands of Canadian Dollars Line Notes Total ----------------------------------- ----------- -------- -------------- Available line of credit and maximum borrowing available $ 350,000 $381,960 $ 731,960 Less: Drawings - 381,960 381,960 Outstanding letters of credit included in line utilization 19,887 - 19,887 ----------------------------------- ------- ------- ----- ------- Unused portion of facility $ 330,113 $ - 330,113 ----------------------------------- ------- ------- Add: Cash and cash equivalents 457,392 ----------------------------------- ----------- -------- ----- ------- Available liquidity at December 31, 2020 $ 787,505 ----------------------------------- ----------- -------- ----- -------For the three months ended For the year ended -------------------------------- -------------------- Dec. 31, Dec. 31, Sept. 30, Dec. 31, Dec. 31, Thousands of Dollars 2020 2019 2020 2020 2019 -------- ------- -------- -------- ------- Net debt Net debt, period opening $ 88,705 $212,674 $ 239,114 $ 224,860 $ 63,825 Issuance of Senior Secure Notes - - - 140,770 - Term Line net drawings (repayments) - (1) (23) (82) 754 Impact on U.S. Dollar denominated debt from strengthening CAD (18,210) (5,099) (8,647) (18,488) (13,834) Decrease (increase) in cash and cash equivalents (165,294) 16,994 (144,849) (450,767) 127,659 Decrease in marketable securities - - - - 41,766 Impact on U.S. Dollar denominated cash and cash equivalents and marketable securities from strengthening CAD 19,367 292 3,110 28,275 4,690 -------------- -------- ------- -------- -------- ------- Net debt, period ending $ (75,432) $224,860 $ 88,705 $ (75,432) $224,860 -------------- -------- ------- -------- -------- -------

The Revolving Term Line and Senior Secured Notes are subject to financial covenants, including net debt to total capitalization ratios, and an EBITDA interest coverage ratio.

Management believes, based on circumstances known today, that Interfor has sufficient working capital and liquidity to fund operating and capital requirements for the foreseeable future.

On March 26, 2020, the Company issued US$50,000,000 of Series F Senior Secured Notes, bearing interest at 3.34%, and US$50,000,000 of Series G Senior Secured Notes, bearing interest at 3.25%. Each series of these Senior Secured Notes have equal payments of US$16,667,000 due on each of March 26, 2028, 2029 and on maturity in 2030.

Capital Resources

The following table summarizes Interfor's credit facilities and availability as of December 31, 2020:

Interfor's Revolving Term Line matures in March 2024 and its Senior Secured Notes have maturities principally in the years 2024-2030.

As of December 31, 2020, the Company had commitments for capital expenditures totaling $70.1 million for both maintenance and discretionary capital projects.

Non-GAAP Measures

This release makes reference to the following non-GAAP measures: Adjusted net earnings (loss), Adjusted net earnings (loss) per share, EBITDA, Adjusted EBITDA, Adjusted EBITDA margin, Net debt to invested capital, Operating cash flow per share (before working capital changes), and Annualized return on invested capital which are used by the Company and certain investors to evaluate operating performance and financial position. These non-GAAP measures do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers.

The following table provides a reconciliation of these non-GAAP measures to figures as reported in the Company's audited consolidated financial statements (unaudited for interim periods) prepared in accordance with IFRS:

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February 04, 2021 18:44 ET (23:44 GMT)