Conifex Timber Inc. ('Conifex', 'we' or 'us') (TSX: CFF) today reported results for the second quarter ended June 30, 2020. Adjusted EBITDA from continuing operations was negative $1.1 million for the quarter, which reflected the curtailment of the Mackenzie sawmill for most of the period, offset partially by steady and positive results from bioenergy operations.
'Even though the economic disruptions caused by the unprecedented global pandemic resulted in our core sawmill business being curtailed for 12 weeks in the quarter, we are pleased that our quarter end cash balance of $11.5 million was only $0.6 million lower than at the beginning of the quarter,' said Ken Shields, CEO. 'With the recent surge in lumber prices and our July 6, 2020 sawmill re-start, we expect to achieve profitable operations during the closing six months of 2020
Outlook
Following the recommencement of our lumber operations on July 6, 2020, we expect that our Mackenzie sawmill will achieve annualized operating rates approaching 90% at improved conversion costs in the second half of the year. We anticipate that we will also benefit from lower log costs from the reset of stumpage calculations in July, resulting in lower unit lumber costs. We expect our Mackenzie power plant to continue to provide a steady diversified source of cash flow in the second half of the year. We expect to see the continued benefit of sustained efforts to reduce SG&A costs as we align our resources with our smaller and more geographically focused operations.
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About Conifex Timber Inc.
Forward-Looking Statements Certain statements in this news release may constitute 'forward-looking statements'. Forward-looking statements are statements that address or discuss activities, events or developments that Conifex expects or anticipates may occur in the future. When used in this news release, words such as 'estimates', 'expects', 'plans', 'anticipates', 'projects', 'will', 'believes', 'intends' 'should', 'could', 'may' and other similar terminology are intended to identify such forward-looking statements. Forward-looking statements reflect the current expectations and beliefs of Conifex's management. Because forward-looking statements involve known and unknown risks, uncertainties and other factors, actual results, performance or achievements of Conifex or the industry may be materially different from those implied by such forward-looking statements. Examples of such forward-looking information that may be contained in this news release include statements regarding: growth and future prospects of our business, including the impact of COVID-19 thereon; our planned operating format and expected operating rates; our perceptions of the industry and markets in which we operate and anticipated trends in such markets and in the countries in which we do business; planned capital expenditures and benefits that may accrue to Conifex as a result of capital expenditure programs; U.S. benchmark lumber prices; Conifex's expectations regarding the operation of the Mackenzie power plant and our expectations for U.S. dollar benchmark prices. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking statements may include, but are not limited to, our future debt levels; that we will complete our projects in the expected timeframes and as budgeted; that we will effectively market our products; that capital expenditure levels will be consistent with those estimated by our management that the US housing market will improve; that there will be no unforeseen disruptions affecting the operation of our power generation plant and that we will be able to continue to deliver power therefrom; our ability to obtain financing on acceptable terms, or at all; that interest and foreign exchange rates will not vary materially from current levels; the general health of the capital markets and the lumber industry and the general stability of the economic environments within the countries in which we operate or do business. Forward-looking statements involve significant uncertainties, should not be read as a guarantee of future performance or results, and will not necessarily be an accurate indication of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, without limitation: those relating to potential disruptions to production - 6 - and delivery, including as a result of equipment failures, labour issues, the complex integration of processes and equipment and other factors; labour relations; failure to meet regulatory requirements; changes in the market; potential downturns in economic conditions; fluctuations in the price and supply of required materials, including log costs; fluctuations in the market price for products sold; foreign exchange fluctuations; trade restrictions or import duties imposed by foreign governments; availability of financing (as necessary); shipping or logging disruptions and other risk factors described in Conifex's 2019 annual information form and management's discussion and analysis for the quarter ended June 30, 2020, each of which is available on SEDAR at www.sedar.com. These risks, as well as others, could cause actual results and events to vary significantly. Accordingly, readers should exercise caution in relying upon forward-looking statements and Conifex undertakes no obligation to publicly revise them to reflect subsequent events or circumstances, except as required by law.
Conifex and its subsidiaries' primary business currently includes timber harvesting, reforestation, forest management, sawmilling logs into lumber and wood chips, and value added lumber finishing and distribution. Conifex's lumber products are sold in the United States, Chinese, Canadian and Japanese markets. Conifex also produces bioenergy at its power generation facility at Mackenzie, BC.
CONIFEX TIMBER INC. 
