Q1 2021 Western Forest Products Inc Earnings Call

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Great. Thanks, Sean.

Thank you once again, please press star one at this time if you have a question. Our next question is from Paul Quinn. Please go ahead. Your line is open.

Yes, thanks very much.

Good afternoon, guys and the good results.

Steve you brought up the higher SG&A costs, maybe you can give us the expectation for what do you think it'll be totally in the total cost in 2020 one.

Yeah. So maybe I'll just help you out quarter over quarter to give you a.

Better sense of the fleet players of the.

Any of the increase relates to performance of incentive based compensation as a result of the significant improvement in our results in the 41% an increase of the share price. So.

Approximately $3 9 million was the performance based comp another three one is mark to Mark expense on long term.

Compensation liabilities due to the appreciation of the share price.

The other half a million dollars quarter over quarter on the.

Pertaining to.

COVID-19 protocols flow.

Again.

The big driver will be the change in share price go forward too.

Okay and then.

It's just a I guess.

With with the with pulp prices rallying here.

How material will be the the increase in byproduct.

Revenue going forward here.

Yes.

Yes.

So as you know like our as you know Paul.

Our chips are tied to the pulp pricing and as we see any any inc.

Incremental increases in pulp pricing, that's going to afford for the bottom line I think Steve Steve highlighted was the $3 5 million or something.

Q4 to Q1.

We might see about half of that again this quarter.

It also depend of course on how much organic growth, we are able to drive out of our businesses. The more lumber production of the more chips would make the more more of a total dollar basis, we're going to receive so.

Organic growth perspective.

We're looking at.

I guess, we grew 11% Q4 to Q1, another 5% to 7% this quarter it would be a good number to consider and through the year I would like to see us grow kind of 10% to 15%.

That's going to be on the basis of additional hours of our mills in both the U S and Canada.

Paul I would just add pulp log pricing has essentially stayed flat.

Through the period, we don't expect it to change materially either.

Okay, and then I guess just seasonally.

This should Q2 generally is your is your best quarter it should be of pickup from from what we've done in Q1 just.

On the capital allocation side, you've been buying back shares.

For the confidante buying back shares of this price and.

And what does the M&A pipeline look like.

Sure.

At the point as we said our first priority in the capital allocation perspective was the quarterly dividend providing that to the shareholders second we'll be investing in our current business and the drive down costs improve value extraction of ore.

Or acquisitions as you pointed out and then of course, the third priority. If we've got excess capital, we'll return that to the shareholders.

On the acquisition front.

We're always on the lookout for for businesses are accretive to ours, and especially in product lines, we really like.

<unk> said in the past we're looking in the Pacific Northwest is the first priority but.

I think and we're going to continue to do that so.

We would expect to see of.

Opportunities present themselves over the over the near term, we're going to continue to look at ways to expand our business.

Especially given our strong balance sheet.

And the time will tell because we don't we often or we don't control of the timelines that others have when it when it comes to what they would like to do with their existing businesses.

Okay.

And then just lastly, just on the 22 million sales for the way it.

Just wondering what the the financial drag on that debt do you consider that.

All of four times multiple business of six times multiple of business.

What is the.

No.

The drag.

Well I think when you think of Tfl 44 as well.

Over time.

Yes.

The business.

We believe we're getting fair value for the business. In addition, we've got a log supply agreement for our mills.

No.

In any of these these transactions on the with the 10 years, we're always looking at ensuring that we're receiving fair value.

I think there is a real positive story here.

In working with first nations.

As business can on opportunities.

To have them invest in the business and.

And for us to participate in reconciliation and make the business stronger. So so kind of some of it up I think we're getting fair value for the business.

And we're retaining log supply to support our mills, where we also make margin.

And I think for making the business stronger.

Okay. That's all I had the best of luck, Thanks, guys Alright, great. Thanks, Paul.

Thank you once again, please press star one at this time if you have a question you may cancel your question at any time by pressing star too. Please.

Please press star one at this time to ask a question.

And there are no further questions registered at this time I would like to turn the meeting I'll go back to Mr. Dennis Greg.

Well. Thank you operator, and thanks, everyone for your continued support I appreciate your interest in our company and your time on the call today, Steve and I are both available. If you have any follow up questions and we look forward of sharing with you our second quarter results in August for that have a great day. Thank you.

Thank you. The conference has now ended please disconnect your lines at this time and we thank you for your participation.

Yes.