GreenFirst Announces 2021 Third Quarter Results

GreenFirst Announces 2021 Third Quarter Results

TORONTO, ON, November 24, 2021/CNW/ – GreenFirst Forest Products Inc. (TSXV: GFP) (“GreenFirst” or the “Company”) filed its unaudited interim financial statements for the quarter and the nine month period ended September 25, 2021 and the related management discussion and analysis, both of which are available under GreenFirst’s profile on SEDAR at  All amounts are in thousands of Canadian dollars unless indicated otherwise.

Third Quarter Highlights

  • On August 28, 2021 completed the acquisition of sawmill and newsprint assets from certain Canadian subsidiaries of Rayonier Advanced Materials Inc. in Ontario and Quebec.
  • The mills continue to operate as ‘business as usual’ as Management focuses on setting up its back-office functions in North Bay and Toronto.
  • Q3 results includes only 4 weeks of operating results for the newly acquired operations.
  • Q3 2021 reported a negative Adjusted EBITDA of $4,736 after adjusting for acquisition related expenses.
  • Q3 2021 net loss of $13,486 ($0.16 loss per share) includes the expensing of transaction costs.
  • Lumber markets have rebounded in September and October from the low prices in August.

“After closing our purchase transaction on August 28th, we immediately turned our attention to improving operational efficiency and yields. We have been very pleased with the efforts of our team,” said Rick Doman, CEO of GreenFirst.  “We look forward to continuing our efforts in improving operations and reducing manufacturing costs. Our goal is to build a global forest company with a focus on sustainable forestry operations.”

Q3 2021 Financial Highlights

  • For the period ended September 25, 2021, the Company operated its newly acquired assets for only four weeks. Inventory and some other identifiable assets were recognized at their fair values upon acquisition.  The short period of operations, together with the opening inventory recognized at fair value, means results for this period are of limited value in extrapolating future quarterly and annual results.

Select Financial Information

Three months ended Nine months ended
September 25, 2021 September 30, 2020 September 25, 2021 September 30, 2020
$ $ $ $
Net sales $28,928 $- $28,928 $-
  Manufacturing and production (31,082) (31,082)
  Selling, general and administrative (1,772) (776) (3,476) (1,168)
  Duties (1,790) (1,790)
  Other operating expenses, net (694) (28) (715) 20
  Operating loss 1 (6,410) (804) (8,135) (1,148)
Transaction costs (5,606) (7,668)
Interest expenses (1,480) (1,658)
Other income (expense) 10 450 (111) 426
Net loss for the period (13,486) (354) (17,572) (722)
Other comprehensive (loss) income (784) (287) (899) 305
Total comprehensive loss for the period ($14,270) ($641) ($18,471) ($417)
Basic and diluted loss per share ($0.16) ($0.02) ($0.41) ($0.03)
Adjusted EBITDA1
Net loss for the period  ($13,486)
Add back
Interest expenses                1,480
Depreciation and amortization 1,666
EBITDA1 (10,340)
Transaction costs 5,606
Adjusted EBITDA1 ($4,736)

1 These Non-GAAP Measures do not have any standardized meaning prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other issuers. (See section on Non-GAAP Measures in our MD&A)

  • Net sales for four weeks ended September 25, 2021 were $28,928 on lumber shipments of 30 MMfbm, with an additional 14 MMfbm in-transit to customers and not recognized in revenue.
  • Manufacturing and production costs for the four weeks were $31,082 reflecting inventory shipped at fair value.
  • Selling, general and administration includes both pre and post acquisition expenses for the quarter.
  • Transaction costs of $5,606 for the quarter ended September 25, 2021, relate to professional fees associated with the acquisition and non-capitalized financing related expenses.
  • The Company’s softwood lumber sales to US customer are subject to countervailing and anti-dumping duties as determined by the US Department of Commerce. Duties expensed for the first 4 weeks of operations were $1,790.  The Company is initially subject to 14.19% countervailing duties and 6.04% anti-dumping duties which it is challenging via a Change in Circumstances Review.  At the end of November, it’s expected that countervailing rates will be 6.27% and anti-dumping rates will be 12.05%.  This is consistent with the US Commerce Department’s preliminary determination announced in May 2021.
  • At September 25, 2021, the Company had total liquidity of $64,810 comprised of $33,778 cash on hand and $31,032, net of $8,491 open letters of credit, available under its $65 million revolving ABL facility. The facility was undrawn at quarter end except for the open letters of credit which reduced availability.  The amount available to the Company under the ABL at quarter end was lower than what is expected in future periods because the Company had no accounts receivable transferred upon closing the acquisition. Accounts receivable balances will contribute significantly to the amount available under the ABL in the future.
  • Subsequent to September 25, 2021, GreenFirst made a commitment to invest in Boreal Carbon Corporation (“Boreal”), a company that seeks to invest in and manage a portfolio of carbon credit projects through sustainable forest management. GreenFirst will acquire shares of Boreal representing approximately 6.1% of the outstanding securities of Boreal for cash consideration of $500 thousand. Two directors of GreenFirst are also directors and shareholders of Boreal. GreenFirst has applied to the TSX Venture Exchange for approval of the transaction.

“The Rayonier asset acquisition positions GreenFirst as one of the leading Canadian lumber producers in Eastern Canada. Rarely, do you get an opportunity to build a world class organization with its foundation based upon the ESG principles”, said Paul Rivett, Chairman of GreenFirst.  “We intend to invest capital in the operations of GreenFirst as we build sustainably for scale and look for accretive acquisition partnerships and opportunities in the future.”

GreenFirst will provide a presentation on its Q3 2021 results at its Annual and Special Meeting for shareholders to be held December 2, 2021 (the “Meeting”).

GreenFirst wishes to advise shareholders that it is amending the proposed by-law that will be adopted if shareholders approve the proposed continuance of the Company into Ontario at the Meeting.  The last sentence of Section 3.05(b) will be deleted in its entirety to remove the prohibition in the Advance Notice provisions of a new notice period in the event of a postponed or adjourned meeting.

About GreenFirst 

GreenFirst is a forest-first business, focused on sustainable forest management and lumber production.   We believe that responsible forest practices, coupled with the long-term green advantage of lumber, provide GreenFirst with significant cyclical and secular advantages in building products. GreenFirst has seven Sawmills in Ontario and Quebec and one Paper Mill in Ontario. GreenFirst’s long-term vision is to be an environmental leader in the global forestry industry.

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Forward Looking Information

Certain information in this news release constitutes forward-looking statements under applicable securities laws. Any statements that are contained in this news release that are not statements of historical fact are forward-looking statements. Forward looking statements are often identified by terms such as “may”, “should”, “anticipate”, “expect”, “potential”, “believe”, “intend”, “estimate” or the negative of these terms and similar expressions. Forward-looking statements are based on certain assumptions and, while GreenFirst considers these assumptions to be reasonable, based on information currently available, they may prove to be incorrect. In addition, forward-looking statements necessarily involve known and unknown risks, including those set out in GreenFirst’s public disclosure record filed under its profile on Readers are further cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are expressly qualified by this cautionary statement and reflect our expectations as of the date hereof, and thus are subject to change thereafter. GreenFirst disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Neither TSXV nor its Regulation Services Provider (as that term is defined in policies of the TSXV) accepts responsibility for the adequacy or accuracy of this news release.

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