Conifex Provides Financial Update

VANCOUVER, British Columbia, March 07, 2024 (GLOBE NEWSWIRE) -- Conifex Timber Inc. ("Conifex") (TSX: CFF) announced today that it has completed a first amendment to credit agreement and accommodation agreement (the "Amendment") with Wells Fargo Capital Finance Corporation Canada ("Wells Fargo"), pursuant to which Wells Fargo agreed, subject to certain terms and conditions, to amend Conifex's existing lumber business credit facility (the "Facility") and provide certain accommodations thereunder.  Following the Amendment, the Facility is secured by substantially all Conifex's lumber business assets.

Benchmark SPF lumber prices declined 50% in 2023¹ which resulted in negative earnings before finance costs, taxes, depreciation and amortization ("EBITDA") in 2023 versus positive EBITDA of $46.7 million in 2022.  As we progressed through 2023, our liquidity diminished, and accumulating losses made it increasingly difficult to comply with our fixed charge coverage ratio requirements under the Facility. On May 4, 2023, the Chief Forester in British Columbia permitted licensees in the Mackenzie Timber Supply Area to transition to a “green” log diet which enabled us to benefit from increased sawmill productivity, improved lumber grade outturns, and higher mill net sales price realizations. These benefits have significantly contributed to reduced Q4, 2023 EBITDA losses compared to Q3, 2023. Q1, 2024 benchmark prices are currently 10% higher than in the preceding quarter.²  If these prices hold, and assuming quarter-to-date productivity levels are maintained at our sawmill complex and green power generation facility, we expect further improvement in EBITDA in the first quarter of 2024.

Pursuant to the Amendment, Wells Fargo agreed to provide additional short-term liquidity, continue funding revolving loans and refrain from exercising certain of its rights under the Facility until May 31, 2024, subject to certain terms and conditions. The Amendment follows Conifex's non-maintenance of the minimum excess availability and fixed charge coverage ratio required by the terms of the Facility.  Among other conditions, Conifex shall commence a process to secure replacement funding in an amount sufficient to repay in full the Facility.  Conifex has engaged Raymond James Ltd. to assist in the process.