Conifex Announces Third Quarter 2026 Results

Conifex posted near-zero sales and deep losses as both core operations remained idle.

What the company is saying

Conifex presents a stark account of its third quarter, emphasizing that both its Mackenzie Mill and Power Plant were fully curtailed, resulting in almost no production, shipments, or sales. The company highlights a negative EBITDA of $5.7 million and a net loss of $7.9 million ($0.19 per share), with total sales collapsing to $0.7 million from $23.0 million in the prior quarter. Management attributes these results directly to the operational shutdowns, noting that cost of goods sold ($6.0 million) reflects fixed costs and maintenance during the curtailment. The narrative is factual and unembellished, with explicit acknowledgment of material uncertainty about the company’s ability to continue as a going concern. Forward-looking statements are cautious: the Power Plant resumed on November 10, 2026, and the Mackenzie Mill is expected to restart in or about December 2026, conditional on financing and sawlog inventory. The company details its liquidity position ($7.4 million in cash, $10.2 million undrawn on the LETL Loan) and rising debt ($122.5 million), but does not frame these as imminent solutions.

What the data suggests

The numbers show a business in severe distress. Lumber and bioenergy sales were effectively zero in Q3 2026, with by-product sales at just $0.6 million. Production and shipments of lumber and electricity were also zero, confirming the complete halt of core operations. EBITDA and net loss remain deeply negative, though losses narrowed compared to the prior year due to cost-cutting and the absence of anti-dumping and countervailing duty expenses. Cash outflow from operations was $8.8 million for the quarter, and overall debt increased to $122.5 million, up from $101.8 million in the previous quarter. Liquidity improved to $7.4 million, mainly due to new borrowings, but this is offset by the company’s ongoing cash burn and the conditional nature of further loan access. The company’s deferred tax asset rose to $27.4 million, reflecting continued losses. The explicit recognition of going concern risk is supported by the data: without a rapid and successful restart, the company’s financial position will likely deteriorate further.

Analysis

The announcement is factual and direct, with no evidence of exaggerated or promotional language. The company discloses severe operational and financial distress: sales, production, and shipments were effectively zero for the quarter, and both the Mackenzie Mill and Power Plant were curtailed. While there are forward-looking statements about the expected restart of operations (Power Plant resumed November 10, 2026; Mackenzie Mill expected to resume in or about December 2026), these are presented cautiously and are contingent on financing and inventory. The company explicitly recognizes material uncertainty regarding its ability to continue as a going concern. There is no attempt to inflate the narrative or downplay the seriousness of the situation. The capital intensity flag is true, as significant debt and undrawn loan facilities are discussed in the context of funding restarts, but there is no suggestion of imminent financial turnaround.

Risk flags

• ●Operational restart risk is high: the Mackenzie Mill restart is contingent on securing additional financing and sawlog inventory, with no guarantee these conditions will be met in time for the targeted December 2026 timeline.
• ●Liquidity and solvency risk is acute: available cash is $7.4 million, but net cash outflow from operations was $8.8 million in the quarter, and further liquidity depends on meeting conditions for undrawn loan facilities.
• ●Debt burden is escalating: total debt rose to $122.5 million, and new borrowings are being used to cover operating losses rather than growth or investment, increasing financial leverage without generating returns.
• ●Going concern uncertainty is explicit: management states there is material uncertainty about the company’s ability to continue as a going concern, reflecting the cumulative impact of operational shutdowns, cash burn, and high fixed costs.
• ●Market and regulatory risk persists: cumulative duties of US$49.4 million remain held in trust by US authorities, and future cash flows could be further impacted by anti-dumping and countervailing duties if US shipments resume without price improvement.

Bottom line

Conifex’s Q3 2026 results reveal a company in crisis, with both its sawmill and power plant shut for the full quarter, resulting in almost no revenue and deep operating losses. While liquidity has been temporarily boosted by new debt, the business continues to burn cash and faces a rising debt load, now at $122.5 million. The planned restart of the Mackenzie Mill in December 2026 is critical but remains subject to financing and inventory hurdles, and there is no evidence yet of operational turnaround. Management’s acknowledgment of going concern risk is justified by the numbers: unless the restart delivers immediate and sustained cash flow, the company’s survival is in doubt. Investors should focus on whether the December restart occurs on schedule, whether production and sales resume at meaningful levels, and whether cash burn can be contained. The most important takeaway is that Conifex’s future now hinges entirely on a successful, near-term operational restart and access to further funding.

Announcement summary

(TSX:CFF) Conifex Timber Inc. reported results for the third quarter ended September 30, 2026. EBITDA was negative $5.7 million for the quarter, compared to negative $6.3 million in the second quarter of 2026 and negative $16.6 million in the third quarter of 2025. Net loss was $7.9 million or ($0.19) per share for the quarter, versus a net loss of $9.5 million or ($0.23) per share in the previous quarter and a net loss of $16.6 million or ($0.41) per share in the third quarter of 2025. Sales from lumber produced by Conifex were $0.0 million in Q3 2026, $19.0 million in Q2 2026, and $26.4 million in Q3 2025. By-products and other sales were $0.6 million in Q3 2026, $1.2 million in Q2 2026, and $4.9 million in Q3 2025. Bioenergy sales were $0.0 million in Q3 2026, $2.8 million in Q2 2026, and $6.8 million in Q3 2025. Total sales were $0.7 million in Q3 2026, $23.0 million in Q2 2026, and $38.2 million in Q3 2025. Operating loss was $6.3 million in Q3 2026, $7.8 million in Q2 2026, and $19.5 million in Q3 2025. Weighted average shares outstanding were 40.8 million for all periods. Production of WSPF lumber was 0.0 million board feet in Q3 2026, 14.1 million in Q2 2026, and 38.5 million in Q3 2025. Shipments of WSPF lumber were 0.0 million board feet in Q3 2026, 23.6 million in Q2 2026, and 40.1 million in Q3 2025. Electricity production was 0.0 GWh in Q3 2026, 19.8 GWh in Q2 2026, and 47.6 GWh in Q3 2025. The average exchange rate was $0.715 per US$ in Q3 2026, $0.723 in Q2 2026, and $0.726 in Q3 2025. The average WSPF 2x4 #2 & Btr lumber price was $487 (US$) and $681 (CDN$) in Q3 2026, $488 (US$) and $675 (CDN$) in Q2 2026, and $477 (US$) and $657 (CDN$) in Q3 2025. Finished lumber inventory at the Mackenzie Mill was approximately 0.3 million board feet at September 30, 2026. Cost of goods sold was $6.0 million in Q3 2026, $21.4 million in Q2 2026, and $35.4 million in Q3 2025. Of this, approximately $3.6 million was at the Mackenzie Mill and $2.4 million at the Power Plant in Q3 2026. No anti-dumping or countervailing duty deposits were expensed in Q3 2026, compared to $3.7 million in Q2 2026 and $15.3 million in Q3 2025, which included a non-cash export duty expense of $12.0 million. Cumulative duties paid total US$49.4 million. Selling, general and administrative costs were $0.9 million in Q3 2026, $1.4 million in Q2 2026, and $1.4 million in Q3 2025, net of a refund of US$0.2 million ($0.3 million) of softwood lumber duties. Finance costs and accretion were $3.3 million in Q3 2026, $3.1 million in Q2 2026, and $4.4 million in Q3 2025. At September 30, 2026, overall debt was approximately $122.5 million, with $46.0 million outstanding on the CPLP Term Loan, $35.4 million on the PenderFund Term Loan, $19.8 million under the LETL Loan, $19.0 million under the BDC Loan, and $2.2 million in leases and other borrowings. Available liquidity was $7.4 million at September 30, 2026, up from $1.3 million at June 30, 2026 and $1.7 million at September 30, 2025. $10.2 million remained undrawn under the LETL Loan at September 30, 2026, subject to certain conditions. Deferred income tax assets were $27.4 million at September 30, 2026, $25.9 million at June 30, 2026, and $13.1 million at September 30, 2025. Net cash outflow from operations was $8.8 million for the three months ended September 30, 2026. The Mackenzie Mill and Power Plant were curtailed during Q3 2026, with the Power Plant resuming operations on November 10, 2026 and the Mackenzie Mill expected to resume in or about December 2026. Conifex recognizes material uncertainty that may cast significant doubt on its ability to continue as a going concern but has concluded it is appropriate to prepare the consolidated financial statements on a going concern basis.

Disagree with this article?