Selected Highlights
- First quarter Operating EBITDA* of
$7.8 million (net loss of$52.0 million ), including a non-cash inventory impairment of$22.0 million , compared to$47.1 million (net loss of$22.3 million ) in the same quarter of 2025 - Secured an extended waiver for the German revolving credit facility to address covenant compliance and to provide flexibility to pursue and implement steps to enhance liquidity and financial condition to position for an eventual market recovery
- On track for our
$100 million "One Goal One Hundred" goal, attaining$11.0 million of cost savings in the first quarter, and a total of approximately$41.0 million since launch inApril 2025 ; one of various initiatives to improve our balance sheet - Mass timber momentum continues to build, backed by an order book and commitments of
$171 million that support a multi-year production plan
In the first quarter of 2026, net loss was
Mr.
The current conflicts in the
We continue to pursue our "One Goal One Hundred" program and remain confident that we will achieve our targeted
In the first quarter of 2026, European softwood pulp prices increased compared to the fourth quarter of 2025 due to supply constraints, although these gains were offset by higher discounts. In
Our lumber sales realizations in both the
Per unit fiber costs for our pulp and solid wood segments increased in the first quarter of 2026 compared to the fourth quarter of 2025 driven by supply constraints and strong demand. We currently expect per unit fiber costs to stabilize in the second quarter of 2026 as improved availability is offset by strong demand.
In the first quarter of 2026, we had relatively stable production but fiber constraints in
Overall, our solid wood segment remains pressured by high
As a result of ongoing economic uncertainty and softness in the markets for our products, we did not meet the requisite leverage ratio required under our German revolving credit facility at the end of the first quarter. As announced, to address this, we secured a waiver of the applicable covenant from the lenders under the facility. Based on management's current forecasts and assumptions, including with respect to pricing and demand for our products, we currently expect to achieve compliance with the leverage ratio by the fourth quarter of 2026. Accordingly, amounts outstanding under our German revolving credit facility remain classified as "non-current liabilities" at the end of the first quarter.
The waiver gives us additional flexibility to pursue and implement measures and solutions with the goal of enhancing our liquidity and financial condition in the current economic environment, including to address maturing indebtedness, and to assist our positioning for an eventual market recovery. To this end, we are also evaluating strategic alternatives and financing options to address our liquidity needs and goals. Our board of directors has appointed a special committee of independent directors to oversee, review and evaluate the development and implementation of potential liquidity management strategies and other transactions to improve our capital structure."
______________
*Operating EBITDA is not a measure of financial performance under accounting principles generally accepted in
Consolidated Financial Results
| Q1 | Q4 | Q1 | |||||||||
| 2026 | 2025 | 2025 | |||||||||
| (in thousands, except per share amounts) | |||||||||||
| Revenues | $ | 489,304 | $ | 449,504 | $ | 506,974 | |||||
| Operating income (loss) | $ | (32,892 | ) | $ | (278,489 | ) | $ | 6,733 | |||
| Operating EBITDA | $ | 7,848 | $ | (20,149 | ) | $ | 47,088 | ||||
| Net loss | $ | (51,996 | ) | $ | (308,700 | ) | $ | (22,339 | ) | ||
| Net loss per common share | |||||||||||
| Basic | $ | (0.78 | ) | $ | (4.61 | ) | $ | (0.33 | ) | ||
| Diluted | $ | (0.78 | ) | $ | (4.61 | ) | $ | (0.33 | ) | ||
Consolidated – Three Months Ended
Total revenues for the first quarter of 2026 decreased by approximately 3% to
Costs and expenses in the first quarter of 2026 increased by approximately 4% to
In the first quarter of 2026, Operating EBITDA decreased to
Segment Results
Pulp
| Three Months Ended | |||||||
| 2026 | 2025 | ||||||
| (in thousands) | |||||||
| Pulp revenues | $ | 319,170 | $ | 356,964 | |||
| Energy and chemical revenues | $ | 25,813 | $ | 24,116 | |||
| Segment Operating EBITDA(1) | $ | 6,897 | $ | 49,872 | |||
______________
(1) Segment Operating EBITDA is a measure of segment profit or loss presented in our financial statements under GAAP. Refer to the segment information note in our consolidated financial statements for more information.
In the first quarter of 2026, Segment Operating EBITDA for the pulp segment decreased to
Pulp segment revenues, comprised of pulp, energy and chemical revenues, in the first quarter of 2026 decreased by approximately 9% to
Pulp revenues in the first quarter of 2026 decreased by approximately 11% to
In the first quarter of 2026, the third-party industry quoted average list price for NBSK pulp in
In the first quarter of 2026, the third-party industry quoted average list price for NBHK pulp in
Pulp sales volumes in the first quarter of 2026 were relatively steady at 470,700 ADMTs compared to 477,879 ADMTs in the same period of 2025.
Energy and chemical revenues in the first quarter of 2026 were relatively flat at
Costs and expenses in the first quarter of 2026 remained stable at
Total pulp production in the first quarter of 2026 was relatively flat at 465,717 ADMTs compared to 458,909 ADMTs in the same period of 2025. There was no planned maintenance downtime in the first quarter of 2026, compared to 22 days (approximately 29,700 ADMTs) at our Celgar mill in the same period of 2025. This benefit was mostly offset by the impact of reduced production at our German mills due to fiber supply constraints in
Overall average per unit fiber costs in the first quarter of 2026 increased by approximately 22% compared to the same period of 2025 primarily as a result of reduced supply in
Solid Wood
| Three Months Ended | |||||||
| 2026 | 2025 | ||||||
| (in thousands) | |||||||
| Lumber revenues | $ | 60,091 | $ | 65,386 | |||
| Manufactured products revenues(1) | $ | 21,041 | $ | 18,824 | |||
| Pallet revenues | $ | 29,860 | $ | 23,177 | |||
| Biofuels revenues(2) | $ | 12,180 | $ | 9,224 | |||
| Energy revenues | $ | 5,598 | $ | 4,866 | |||
| Wood residuals revenues | $ | 2,972 | $ | 1,243 | |||
| Segment Operating EBITDA(3) | $ | (5,631 | ) | $ | (292 | ) | |
______________
(1) Manufactured products primarily include cross-laminated timber ("CLT") and glue-laminated timber ("glulam").
(2) Biofuels include pellets and briquettes.
(3) Segment Operating EBITDA is a measure of segment profit or loss presented in our financial statements under GAAP. Refer to the segment information note in our consolidated financial statements for more information.
In the first quarter of 2026, Segment Operating EBITDA for the solid wood segment was negative
Solid wood segment revenues in the first quarter of 2026 increased by approximately 7% to
Lumber revenues in the first quarter of 2026 decreased by approximately 8% to
Lumber sales volumes in the first quarter of 2026 decreased by approximately 14% to 112.1 MMfbm from 130.9 MMfbm in the same period of 2025 as a result of lower production.
In the first quarter of 2026, manufactured products revenues increased by approximately 12% to
Lumber production in the first quarter of 2026 decreased by approximately 9% to 115.9 MMfbm from 128.0 MMfbm in the same period of 2025 due to fiber supply constraints.
Fiber costs were approximately 85% of our lumber cash production costs in the first quarter of 2026. In the first quarter of 2026, per unit fiber costs for lumber production increased by approximately 36% compared to the same period of 2025 due to reduced supply and strong demand. For the second quarter of 2026, we currently expect per unit fiber costs to be flat as the positive impact of improved supply will be offset by strong demand.
Liquidity
As of
The following table is a summary of selected financial information as of the dates indicated:
| 2026 | 2025 | ||||||
| (in thousands) | |||||||
| Cash and cash equivalents | $ | 84,541 | $ | 186,805 | |||
| Working capital | $ | 449,976 | $ | 582,176 | |||
| Total assets | $ | 1,963,836 | $ | 2,041,420 | |||
| Current liabilities | $ | 384,776 | $ | 283,626 | |||
| Long-term liabilities | $ | 1,584,598 | $ | 1,689,734 | |||
| Total shareholders’ equity (deficit) | $ | (5,538 | ) | $ | 68,060 | ||
Earnings Release Call
In conjunction with this release,
The preceding includes forward-looking statements which involve known and unknown risks and uncertainties which may cause our actual results in future periods to differ materially from forecasted results. Words such as "expects", "anticipates", "are optimistic that", "projects", "intends", "designed", "will", "believes", "estimates", "may", "could" and variations of such words and similar expressions are intended to identify such forward-looking statements. Among those factors which could cause actual results to differ materially are the following: the highly cyclical nature of our business, raw material costs, our level of indebtedness, ability to refinance or obtain any necessary financing on acceptable terms in the future, competition, foreign exchange and interest rate fluctuations, our use of derivatives, expenditures for capital projects, environmental regulation and compliance, disruptions to our production, market conditions and other risk factors listed from time to time in our
APPROVED BY:
Chairman
(604) 684-1099
Chief Executive Officer
(604) 684-1099
-FINANCIAL TABLES FOLLOW-
Summary Financial Highlights
| Q1 | Q4 | Q1 | |||||||||
| 2026 | 2025 | 2025 | |||||||||
| (in thousands, except per share amounts) | |||||||||||
| Revenues from external customers | |||||||||||
| Pulp segment | $ | 344,983 | $ | 334,254 | $ | 381,080 | |||||
| Solid wood segment | 131,742 | 110,216 | 122,720 | ||||||||
| Corporate and other | 12,579 | 5,034 | 3,174 | ||||||||
| Total revenues | $ | 489,304 | $ | 449,504 | $ | 506,974 | |||||
| Pulp Segment Operating EBITDA(1) | $ | 6,897 | $ | (11,323 | ) | $ | 49,872 | ||||
| Solid wood Segment Operating EBITDA(1) | (5,631 | ) | (10,771 | ) | (292 | ) | |||||
| Corporate and other | 6,582 | 1,945 | (2,492 | ) | |||||||
| Operating EBITDA(2) | $ | 7,848 | $ | (20,149 | ) | $ | 47,088 | ||||
| Net loss | $ | (51,996 | ) | $ | (308,700 | ) | $ | (22,339 | ) | ||
| Net loss per common share | |||||||||||
| Basic | $ | (0.78 | ) | $ | (4.61 | ) | $ | (0.33 | ) | ||
| Diluted | $ | (0.78 | ) | $ | (4.61 | ) | $ | (0.33 | ) | ||
| Common shares outstanding at period end | 66,983 | 66,983 | 66,871 | ||||||||
______________
(1) Segment Operating EBITDA is a measure of segment profit or loss presented in our financial statements under GAAP. Refer to the segment information note in our consolidated financial statements for more information.
(2) Operating EBITDA is not a measure of financial performance under GAAP and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. See page 6 of the financial tables included in this press release for a reconciliation of net loss to Operating EBITDA.
Summary Operating Highlights
| Q1 | Q4 | Q1 | |||||||||
| 2026 | 2025 | 2025 | |||||||||
| Pulp Segment | |||||||||||
| Pulp production ('000 ADMTs) | |||||||||||
| NBSK | 362.5 | 378.0 | 370.4 | ||||||||
| NBHK | 103.2 | 82.0 | 88.5 | ||||||||
| Annual maintenance downtime ('000 ADMTs) | — | 41.5 | 29.7 | ||||||||
| Annual maintenance downtime (days) | — | 21 | 22 | ||||||||
| Pulp sales ('000 ADMTs) | |||||||||||
| NBSK | 385.1 | 367.0 | 388.1 | ||||||||
| NBHK | 85.6 | 105.4 | 89.8 | ||||||||
| Average NBSK pulp prices ($/ADMT)(1) | |||||||||||
| 1,618 | 1,498 | 1,550 | |||||||||
| 685 | 671 | 793 | |||||||||
| 1,563 | 1,568 | 1,753 | |||||||||
| Average NBHK pulp prices ($/ADMT)(1) | |||||||||||
| 595 | 540 | 578 | |||||||||
| 1,338 | 1,198 | 1,268 | |||||||||
| Average pulp sales realizations ($/ADMT)(2) | |||||||||||
| NBSK | 696 | 702 | 783 | ||||||||
| NBHK | 564 | 528 | 570 | ||||||||
| Energy production ('000 MWh) | 544.6 | 500.4 | 527.1 | ||||||||
| Energy sales ('000 MWh) | 179.3 | 166.0 | 198.7 | ||||||||
| Average energy sales realizations ($/MWh) | 123 | 97 | 108 | ||||||||
| Solid Wood Segment | |||||||||||
| Lumber | |||||||||||
| Production (MMfbm) | 115.9 | 108.6 | 128.0 | ||||||||
| Sales (MMfbm) | 112.1 | 103.0 | 130.9 | ||||||||
| Average sales realizations ($/Mfbm) | 536 | 533 | 499 | ||||||||
| Energy | |||||||||||
| Production and sales ('000 MWh) | 38.0 | 35.5 | 36.0 | ||||||||
| Average sales realizations ($/MWh) | 147 | 141 | 135 | ||||||||
| Manufactured products(3) | |||||||||||
| Production ('000 cubic meters) | 7.9 | 6.5 | 7.1 | ||||||||
| Sales ('000 cubic meters) | 10.7 | 6.5 | 5.9 | ||||||||
| Average sales realizations ($/cubic meter) | 1,801 | 1,805 | 2,832 | ||||||||
| Pallets | |||||||||||
| Production ('000 units) | 2,433.3 | 1,836.6 | 2,096.4 | ||||||||
| Sales ('000 units) | 2,381.3 | 2,020.8 | 2,128.8 | ||||||||
| Average sales realizations ($/unit) | 13 | 12 | 11 | ||||||||
| Biofuels(4) | |||||||||||
| Production ('000 tonnes) | 35.4 | 38.2 | 44.5 | ||||||||
| Sales ('000 tonnes) | 38.1 | 35.8 | 40.3 | ||||||||
| Average sales realizations ($/tonne) | 320 | 278 | 229 | ||||||||
| Average Spot Currency Exchange Rates | |||||||||||
| $ / €(5) | 1.1701 | 1.1641 | 1.0531 | ||||||||
| $ / C$(5) | 0.7292 | 0.7175 | 0.6969 | ||||||||
______________
(1) Source: RISI pricing report.
(2) Sales realizations after customer discounts, rebates and other selling concessions.
(3) Manufactured products primarily include CLT and glulam.
(4) Biofuels include pellets and briquettes.
(5)
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share data) | ||||||||
| Three Months Ended | ||||||||
| 2026 | 2025 | |||||||
| Revenues | $ | 489,304 | $ | 506,974 | ||||
| Costs and expenses | ||||||||
| Cost of sales, excluding depreciation and amortization | 452,985 | 430,247 | ||||||
| Cost of sales depreciation and amortization | 40,666 | 40,290 | ||||||
| Selling, general and administrative expenses | 28,545 | 29,704 | ||||||
| Operating income (loss) | (32,892 | ) | 6,733 | |||||
| Other income (expenses) | ||||||||
| Interest expense | (29,101 | ) | (28,155 | ) | ||||
| Other income (expenses) | 1,820 | (185 | ) | |||||
| Total other expenses, net | (27,281 | ) | (28,340 | ) | ||||
| Loss before income taxes | (60,173 | ) | (21,607 | ) | ||||
| Income tax recovery (provision) | 8,177 | (732 | ) | |||||
| Net loss | $ | (51,996 | ) | $ | (22,339 | ) | ||
| Net loss per common share | ||||||||
| Basic | $ | (0.78 | ) | $ | (0.33 | ) | ||
| Diluted | $ | (0.78 | ) | $ | (0.33 | ) | ||
| Dividends declared per common share | $ | — | $ | 0.075 | ||||
INTERIM CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except share and per share data) | ||||||||
2026 | 2025 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 84,541 | $ | 186,805 | ||||
| Restricted cash | 5,000 | — | ||||||
| Accounts receivable, net | 329,070 | 298,889 | ||||||
| Inventories | 366,024 | 359,401 | ||||||
| Prepaid expenses and other | 50,117 | 20,707 | ||||||
| Total current assets | 834,752 | 865,802 | ||||||
| Property, plant and equipment, net | 1,068,595 | 1,115,490 | ||||||
| Amortizable intangible assets, net | 26,247 | 26,110 | ||||||
| Operating lease right-of-use assets | 6,307 | 6,818 | ||||||
| Pension asset | 12,758 | 12,975 | ||||||
| Deferred income tax assets | 7,586 | 7,839 | ||||||
| Other long-term assets | 7,591 | 6,386 | ||||||
| Total assets | $ | 1,963,836 | $ | 2,041,420 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable and other | $ | 275,705 | $ | 269,217 | ||||
| Pension and other post-retirement benefit obligations | 732 | 745 | ||||||
| Current debt | 108,339 | 13,664 | ||||||
| Total current liabilities | 384,776 | 283,626 | ||||||
| Long-term debt | 1,509,588 | 1,605,144 | ||||||
| Pension and other post-retirement benefit obligations | 10,607 | 10,392 | ||||||
| Operating lease liabilities | 3,463 | 3,858 | ||||||
| Deferred income tax liabilities | 49,084 | 58,298 | ||||||
| Other long-term liabilities | 11,856 | 12,042 | ||||||
| Total liabilities | 1,969,374 | 1,973,360 | ||||||
| Shareholders’ equity | ||||||||
| Common shares | 66,871 | 66,871 | ||||||
| Additional paid-in capital | 366,228 | 365,357 | ||||||
| Accumulated deficit | (329,012 | ) | (277,016 | ) | ||||
| Accumulated other comprehensive loss | (109,625 | ) | (87,152 | ) | ||||
| Total shareholders’ equity (deficit) | (5,538 | ) | 68,060 | |||||
| Total liabilities and shareholders’ equity | $ | 1,963,836 | $ | 2,041,420 | ||||
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) | ||||||||
| Three Months Ended | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from (used in) operating activities | ||||||||
| Net loss | $ | (51,996 | ) | $ | (22,339 | ) | ||
| Adjustments to reconcile net loss to cash flows from operating activities | ||||||||
| Depreciation and amortization | 40,740 | 40,355 | ||||||
| Deferred income tax recovery | (8,009 | ) | (9,506 | ) | ||||
| Inventory impairment | 22,000 | — | ||||||
| Defined benefit pension plans and other post-retirement benefit plan expense (income) | (79 | ) | 169 | |||||
| Stock compensation expense | 788 | 1,006 | ||||||
| Foreign exchange transaction losses (gains) | (4,640 | ) | 8,418 | |||||
| Other | (212 | ) | 1,628 | |||||
| Changes in working capital | ||||||||
| Accounts receivable | (32,032 | ) | (16,798 | ) | ||||
| Inventories | (35,130 | ) | (6,891 | ) | ||||
| Accounts payable and accrued expenses | 12,666 | 28,432 | ||||||
| Prepaid expenses and other | (29,762 | ) | (27,463 | ) | ||||
| Net cash used in operating activities | (85,666 | ) | (2,989 | ) | ||||
| Cash flows from (used in) investing activities | ||||||||
| Purchase of property, plant and equipment | (13,166 | ) | (20,082 | ) | ||||
| Other | 341 | 222 | ||||||
| Net cash used in investing activities | (12,825 | ) | (19,860 | ) | ||||
| Cash flows from (used in) financing activities | ||||||||
| Proceeds from revolving credit facilities, net | 5,848 | 21,754 | ||||||
| Payment of finance lease obligations | (3,563 | ) | (2,508 | ) | ||||
| Other | (527 | ) | — | |||||
| Net cash from financing activities | 1,758 | 19,246 | ||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (531 | ) | 151 | |||||
| Net decrease in cash, cash equivalents and restricted cash | (97,264 | ) | (3,452 | ) | ||||
| Cash, cash equivalents and restricted cash, beginning of period | 186,805 | 184,925 | ||||||
| Cash, cash equivalents and restricted cash, end of period | $ | 89,541 | $ | 181,473 | ||||
COMPUTATION OF OPERATING EBITDA (Unaudited) (In thousands) |
Operating EBITDA is defined as operating income (loss) plus depreciation and amortization and long-lived asset impairment charges. Management uses Operating EBITDA as a benchmark measurement of its own operating results, and as a benchmark relative to its competitors. Management considers it to be a meaningful supplement to operating income (loss) as a performance measure primarily because depreciation expense and long-lived asset impairment charges are not actual cash costs, and depreciation expense varies widely from company to company in a manner that management considers largely independent of the underlying cost efficiency of our operating facilities. In addition, management believes Operating EBITDA is commonly used by securities analysts, investors and other interested parties to evaluate our financial performance.
Operating EBITDA does not reflect the impact of a number of items that affect our net income (loss), including financing costs, income taxes and the effect of derivative instruments. Operating EBITDA is not a measure of financial performance under GAAP and should not be considered as an alternative to net income (loss) or operating income (loss) as a measure of performance, nor as an alternative to net cash from (used in) operating activities as a measure of liquidity. Operating EBITDA is an internal measure and therefore may not be comparable to other companies.
Operating EBITDA is a non-GAAP financial measure at the consolidated level and is considered different from Operating EBITDA at the segment level, referred to as "Segment Operating EBITDA", which is our single measure of segment profit or loss presented in our financial statements under GAAP. For more information on Segment Operating EBITDA, refer to the segment information note within our consolidated financial statements.
The following table sets forth a reconciliation of net loss to Operating EBITDA for the periods indicated:
| Q1 | Q4 | Q1 | |||||||||
| 2026 | 2025 | 2025 | |||||||||
| Net loss | $ | (51,996 | ) | $ | (308,700 | ) | $ | (22,339 | ) | ||
| Income tax provision (recovery) | (8,177 | ) | 2,587 | 732 | |||||||
| Interest expense | 29,101 | 29,762 | 28,155 | ||||||||
| Other expenses (income) | (1,820 | ) | (2,138 | ) | 185 | ||||||
| Operating income (loss) | (32,892 | ) | (278,489 | ) | 6,733 | ||||||
| Add: Depreciation and amortization | 40,740 | 42,658 | 40,355 | ||||||||
| Add: Impairments of long-lived assets | — | 215,682 | — | ||||||||
| Operating EBITDA | $ | 7,848 | $ | (20,149 | ) | $ | 47,088 | ||||
