Jemi Fibre Corp. Reports Results for the Fiscal 2015 Year-End and Fourth Quarter

VANCOUVER, BC / ACCESSWIRE / August 31, 2015 / Jemi Fibre Corp. (TSXV: JFI) (“Jemi Fibre” or the “Company”) is pleased to announce results for the fiscal 2015 year-end and fourth quarter.

EBITDA for the year ended April 30, 2015 was $8.1 million on recorded annual revenue of $53.6 million, compared to EBITDA of $0.3 million on revenue of $11.3 million for the year ended April 30, 2014.

Financial highlights for the Company’s 2015 fiscal year include:

EBITDA for the fourth quarter ended April 30, 2015 was $0.3 million on recorded quarterly revenue of $13.0 million, compared to EBITDA of $0.2 million on revenue of $3.4 million for the fourth quarter ended April 30, 2014. EBITDA and revenue for the comparable time period decreased by 60% and revenue increased by 283% respectively. Operations in the fourth quarter were negatively affected by an early, and longer, spring break-up in the areas in which the Company operates. Road bans, which typically run from mid-April to mid-June, started in January 2015 due to the unusually mild, winter weather conditions experienced in British Columbia this year. As a result, the Company’s operating costs significantly increased during the fourth quarter.

Summary of financial information:

⁽¹⁾Net debt is defined as the sum of long-term debt, current portion of long-term debt, obligations under finance lease, current portion of obligations under finance lease, demand loan payable, callable loan, less cash and cash equivalents

A reconciliation of net income to EBITDA is summarized below:

The Company’s growth during the most recent fiscal year resulted from its successful strategic acquisitions in the forestry sector during the period. The acquisitions were completed between June and December, 2014. By year end, these acquisitions were fully integrated into the Company’s operations. The results for the most fiscal year only reflect a portion of the annual production from all of the Company’s operating divisions. Further, the results do not reflect the Company’s move into Saskatchewan with the: (1) May 2015 acquisition of Aallcann Wood Suppliers; and (2) pending acquisition of L&M Wood Products, which, subject to successful financing, the Company anticipates closing in the Fall 2015. The Company anticipates these acquisitions will increase production and EBITDA in its wood treatment division for the 2016 fiscal year.

For the fiscal year ending April 30, 2016, the Company intends to segment its financial reporting based on the four divisions discussed below.

Timber

The Company’s timber division includes fibre controlled by Jemi through its ownership of private timberlands and its ownership or management of Crown licenses. The majority of timber harvested by Jemi is sold to third parties through long-term and short-term contracts. The Company’s largest contract is a 10 year supply agreement with Canadian Forest Products Ltd. (Canfor) to supply timber from its private timberlands in the Kootenay region. The balance of harvested timber supplies Jemi’s wood treatment and lumber manufacturing facilities. At April 30, 2015, the Company owned approximately 136,000 acres of private timberland in the Kootenay region of BC and approximately 4000 acres of timberland located near Hazelton, B.C. In addition, the Company owns or controls Crown licenses in the Kootenay region, near Hazelton and near Prince Albert, Saskatchewan. The Company anticipates harvesting approximately 900,000 m³ of timber from this division for the year ending April 30, 2016 compared to approximately 330,000 m³ harvested in the year ended April 30, 2015.

Logging and Trucking

The Company’s logging and trucking division consists of over 300 pieces of rolling stock, in-house maintenance and re-build facilities and incorporates assets from the Company’s original operations, Dual Enterprises Ltd., and its acquisition of Prairie Holdings Inc. This division services Jemi’s own timber supply as well as third party contracting in the Kootenay region of B.C., near Mackenzie and Hazelton, B.C., southern Alberta and the area surrounding Prince Albert, Saskatchewan. The Company anticipates harvesting (logging, road construction and trucking) approximately 1.1 million m³ for the year ending April 30, 2016 compared to approximately 477,000 m³ in the year ended April 30, 2015.

Wood Treatment

The Company’s wood treatment division manufactures treated posts and poles, primarily for fencing and crops, for the agricultural markets in Western North America. This division, operating in the Kootenay region of BC, southern Alberta and Prince Albert, Saskatchewan, includes two wood preserving plants and six post peeling yards. Pressure-treated wooden posts and poles remain the most cost effective solution in this sector when compared to steel, concrete and alternative materials, and are replaced and replenished by the end-user on a regular basis. The Company’s wood treatment operations optimizes the use of Jemi’s fibre supply by generally utilizing smaller, non-sawmill sized fibre, which would sell for low value, to manufacture a high-value finished product. The Company anticipates over 15% growth in EBITDA for this division for the year ending April 30, 2016 compared to the year ended April 30, 2015.

Specialty Lumber Manufacturing

The Company’s specialty lumber manufacturing division operates a sawmill in Edgewater, BC which produces a high-value, Douglas Fir product for the Japanese market. Located in close proximity to Jemi’s private timberlands in the Kootenay region, the mill provides a strategic outlet for a component of this fibre. The mill also has the flexibility to produce both standard and various high-value products for the North American market. Substantial investment in the mill has been made since 2009 in order to increase lumber capacity and improve operational efficiencies. The Company anticipates one-shift mill production of 22 million board feet for the year ending April 30, 2016 compared to 9.18 million board feet of production for the year ended April 30, 2015. In addition, the Company is reviewing opportunities to increase production to a second shift with products for the North American market.

Outlook

After experiencing an unusually long, seasonal spring break-up during the first half of calendar 2015, which significantly decreased the Company’s overall production during that time, the Company has been performing to its plan for the 2016 fiscal year. The Company is targeting mid-September to announce results for the fiscal 2015 first quarter, and at that time, Jemi will hold an investor’s call to discuss results for the fiscal 2015 year end and the fiscal 2016 first quarter.

For the balance of fiscal 2016, the Company expects to focus its efforts on continuing to maximize production for all of its operations, completing the L&M Wood Products acquisition, securing a larger revolving line of credit to meet its growing inventory and receivables, and refinancing its debt, in whole or in part, to reduce overall debt service payments.

“We have achieved significant growth over the past year and have successfully integrated our recent acquisitions into our operations.” commented Mike Jenks, Chairman and CEO. “Over the next year, we anticipate generating strong cash flows from our combined divisions and working to maximize production from each business unit. I would like extend my gratitude for the tremendous efforts of our entire team and look forward to further expanding our company through both organic growth, and acquiring undervalued assets in the forestry sector.”

For further information, please contact:

Brent Lokash, President

Tel: 1-604-428-1075 ext: 200
Email: brent.lokash@jemifibre.com

About Jemi Fibre

Jemi is a Western Canadian based forest products company which trades on the TSX Venture Exchange under the symbol JFI. Jemi Fibre’s operations consist of timber ownership and management of private timberlands and Crown forest licenses, full service logging and trucking operations, post-peeling and wood treatment operations for the agricultural market and specialty lumber manufacturing. The Company’s head office and principal place of business is located at 1110-1111 West Georgia Street, Vancouver, British Columbia, Canada.

Forward Looking Statements

Certain statements included herein constitute forward-looking statements. The words “expect”, “intend”, “anticipate”, “propose” and “may” and similar expressions identify forward-looking statements. Forward-looking statements include, among other things, such risks, uncertainties and other factors set forth under “Risk Factors” in the Company’s current MD&A filed with the British Columbia Securities Commission. Forward-looking statements are necessarily based upon a number of estimates and assumptions. While such estimates and assumptions are considered reasonable by the management teams of Jemi, they are inherently subject to significant business, economic, competitive and regulatory uncertainties and risks and accordingly may not occur as described herein or at all. Investors are cautioned that forward-looking statements are not guarantees of future performance or events and, accordingly are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty of such statements.

The financial information included in this release also contains certain data that are not measures of performance under IFRS. For example, “EBITDA”, which includes “EBITDA excluding specific items” is a measure used by management to assess the operating and financial performance of the Company. The Company defines EBITDA as earnings before income, interest, taxes and depreciation. EBITDA excluding specific items excludes non-cash items such as restructuring income or expenses, impairment adjustments and changes in fair value of biological assets. The Company believes that EBITDA is a measure often used by investors to assess a company’s operating performance and is meaningful for the Company to measure the performance of its divisions on a cash basis. EBITDA has limitations and should not be considered in isolation, or as a substitute for an analysis of the Company’s results as reported under IFRS. Because of these limitations, EBITDA should not be used as a substitute for net loss or cash flows from operating activities as determined in accordance with IFRS, nor is it necessarily indicative of whether or not cash flow will be sufficient to fund our cash requirements. In addition, the Company’s definitions of EBITDA may differ from those of other companies.

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

SOURCE: Jemi Fibre Corp.

ReleaseID: 431641