Thank you, Operator, and thank you, everyone, for joining us this morning. With me on the call, I have Mike Mackay, our Executive Vice President and Chief Financial Officer.

The second quarter reflected strong execution across our business, supported by stronger lumber markets, continued progress on our cost reduction, improved mill productivity, and disciplined inventory management. While uncertainty remains, particularly around the softwood lumber trade dispute, we are encouraged by the progress our teams are making and remain focused on further strengthening our balance sheet.

Our previously announced 2-year company-wide cost reduction initiative continues to perform well, with results tracking on our annualized $80 million target. In addition, our Thomaston mill in Georgia delivered a strong quarter and has been transformed into 1 of our top-performing assets in our portfolio.

In the second quarter, we generated $92 million of EBITDA, strengthened our financial position, aligned our product mix with market demand, reduced inventories, lowered production costs, and continued to successfully navigate the ongoing uncertainty around the softwood lumber trade dispute. If you look ahead, our priorities remain unchanged.

We will continue to focus on operating our mills safely and efficiently, aligning production with market demand, maintaining a relentless focus on costs, and preserving the financial strength and flexibility of our balance sheet. These fundamentals position us to withstand prolonged market volatility while continuing to create long-term value for our shareholders.

Consistent with that focus, we recently announced the transition of certain corporate support roles to our Peachtree City office in Georgia, where the majority of our operations are located within the Central, Eastern, Atlantic time zones. This change is intended to better align our support functions with the needs of our business while maintaining a strong corporate presence in both Canada and the U.S.

Transition will occur gradually over time, primarily through attrition and future hiring decisions. This will allow us to evolve our organizational footprint in a measured manner.

This is not a re-domiciling of the company, nor does it alter our long-standing commitment within our Canadian operations, mills, employees, or communities. The leadership team remains in place, and Burnaby will continue to play an important role as our corporate headquarters.

With that, I'll turn the call over to Mike.

Thanks, Ian, and good morning, everybody. From an earnings standpoint, Interfor generated $92 million of adjusted EBITDA in the second quarter, a significant improvement from the first quarter, and 1 of our best quarterly results in nearly 4 years.

Sequential improvement was driven by stronger realized pricing, higher production volumes, and lower manufacturing costs. From a sales perspective, realized selling prices increased approximately 11% quarter-over-quarter, with all five of our operating regions benefiting from stronger market conditions.

Production cost per unit improved by approximately 1% and were down 6% compared to full-year 2025 levels. These improvements were driven by higher operating rates, the continued ramp-up of Thomaston, and ongoing productivity gains driven by our performance improvement initiatives.

Production volumes increased by just over 70 million board feet, or 8%, compared to the first quarter. This increase was driven primarily by higher production in the U.S.

South, following the ramp-up of Thomaston, along with a more normalized operating posture in the U.S. Northwest.

This was partially offset by the indefinite curtailment of 2 mills in Ontario. Shipments exceeded production, and while logistics remain challenging in certain markets, the actions taken earlier in the year helped improve our shipment execution and supported inventory reductions.

Turning to cash flow and the balance sheet, improved earnings, disciplined working capital management, and lower capital spending all contributed to a strengthening financial position. Net debt declined, and our net debt to invested capital ratio improved to 36.7%, down from 38.3% at the end of the first quarter.

Available liquidity also improved, ending the period at just over $440 million. Looking ahead, benchmark lumber prices have maintained positive momentum into the early part of the third quarter, and our order files have remained solid.

At the same time, the summer building season can introduce increased volatility in end-use demand and pricing, and we continue to plan cautiously for the back half of the year. At a broader level, though, the industry supply rationalization that began in prior years has continued through the first half of 2026.

We believe this has contributed to a much more balanced and disciplined market environment despite the ongoing macro trade and geopolitical uncertainty. Also looking ahead over the next several months, we continue to anticipate proceeds from divestitures, including the ongoing sale of our B.C.

Coast forest tenures and the anticipated sale of real estate at 2 of our former facilities in the U.S. South.

Turning lastly to capital allocation, total capital expenditures for 2026 are expected to be approximately $90 million. This reflects mostly maintenance spending in the back half of the year as our priority remains focused on reducing leverage.

With that, I'll now turn the call back over to you, Ian.

Okay, thanks, Mike. Operator, we're ready to take questions from our analysts at this point.

Congrats on a strong quarter.

Ketan. Thank you.

Maybe to start with, on the $80 million cost program that Ian, you talked about last quarter, can you give us just a rough order of magnitude, how much do you expect to capture this year in 2026?

Well, it's early in the 2-year program, Ketan, but the first half of this year was very strong, and so, you know, the run rate at this point is showing achieving that fully this year. But again, the first half was a very strong performance by our teams.

I would caution that this is a 2-year program, and I wouldn't want to adjust our timeline on achieving that any sooner than that at this point, but it's off to a good start.

Okay. Is it fair to say, Ian, though, we get sort of, I don't know, like half of it this year and half of it next year, or it's skewed more to next year versus this year?

Yes, I think, Ketan, that's probably a good approach to take at this point. And then, obviously, as we go through the next quarters, we'll be able to adjust that depending upon how things are progressing.

But from a baseline projection, that might be a fair assumption.

That is 50-50 split, Ian?

Yes.

Okay, understood. And then on Thomaston, Ian, just curious, how is the ramp-up coming along?

What are you -- What is the current operating rate like, and where do you expect to be by end of the year?

Yes, while we expect to be fully ramped up by the end of the year, I believe we're at around 97% of our production pro forma, and we've had several performance that have been well above our pro forma target. It's a complex mill to start up, or any mill of that size and magnitude.

It's been done safely, and it's just a few percent off of the pro forma target. From an industry perspective -- or from Interfor's perspective, this will be one of the best startups that we've had in our capital project team and operating team.

Got it. That's helpful.

Good luck in the back half. I'll jump back in the queue.

You talked about three consecutive quarters of cost reductions. My question is, how much additional structural cost reductions remain available, or is Q2 really a good run rate as to how we think costs should play out going forward?

Hey, Ben, Mike here. I can take that one.

I think it's -- if you look back the last three quarters, it's been a combination of the, you know, initiatives, performance improvement, some of the portfolio optimization as well. As Ian alluded to at the first question, we're on a run rate basis, captured a lot of that today.

I think the key is anchoring it going forward more than anything. So as we said before, a good chunk's in the bag, but we need to kind of solidify that from a long-term perspective.

We've done a lot, Ben, in the last little while. As I said in my opening comments, our manufacturing costs are down about $41 per 1,000 board feet, or about 6% versus 2025 levels.

And as Ian can probably attest to, it's pretty hard to push that type of cost out of your system in this business. So we feel really good where we are.

I don't know if we take too much structural changes going forward per se. It's just anchoring a lot of what we have.

Perfect. And then my second question is, CapEx is $90 million.

Can you talk about what is maintenance versus discretionary? And with Thomaston complete, what does maintenance CapEx look like going into '27?

Yes, I think, Ben, if you look on a go-forward basis, it's effectively all maintenance in the back half of the year. So the $90 million, if you look at what the projection implies there, it's around $15 million or $16 million per quarter.

We would consider that effectively all maintenance spend. And so that's a run rate of $60 million, $65 million per year.

That's kind of what we're continuing to guide to from a pure maintenance perspective.

Okay, that's great.

Congratulations on the strong quarter. First, just wanted to check in on the transportation constraints.

It sounds like that is maybe still a bit of a challenge into Q3. Can you just talk about how that is progressing and how you might be running your business any differently as a result?

Yes, Matt, Ian here. It's a focus area for us for sure.

The teams, particularly in the South, I would kind of point towards that region as the most challenging on the transportation. But the team has done a great job with partnering with our carriers, creating win-win incentives to secure additional truck volume.

We have seen it also in the, on transportation, get into the rail more in the quarter. But at this point in time, you know, we're matching our production, and actually outshipped our production last quarter.

And we're right where we need to be at this quarter so far. So through the initiatives that our logistics team implemented, I would say that at this point, it's looking okay for us, but it's definitely something that we need to keep an eye on and adjust.

Truck demand across all industries is a problem, is tight, which kind of points us towards an economy that's busy. There's products moving, whether it's oil and gas or mining, that's putting constraints on this.

But from an Interfor perspective, we're doing pretty well right now.

Okay, very helpful. It looks like lumber futures have rolled over here in the past couple of weeks.

Does that line up with what you're feeling in the cash market today? Are you seeing or hearing more caution from your customers, maybe with recent rates and oil movements, seasonal summer softness?

Any color on recent changes in demand?

Yes, Matt, it depends on the region, just given our footprint across North America. Some regions are a little bit more sensitive to the August, sort of, seasonal slowdown.

But as far as our order file goes, which is out a few weeks into August, it's solid. The pricing is, you know, strong, you know.

But we do notice the trend that you're talking about and whether futures is kind of starting to align with the cash market. It looks like that's happening.

But from our perspective, demand is strong given our supply constraints that Mike talked about that have been done in the industry. So at this point, we don't have any, you know, caution to put on this, but I would say that we're in, again, pretty good shape relative to order file and shipments.

But we are monitoring the price, and if it gets to a point where some capacity needs to come out, we would always do that, but we don't anticipate that happening, and we don't see that in the immediate future.

Okay. I'll turn it back.

Nice result. Ian, your deck, and you've talked about this a lot before, shows over the long term fairly even EBITDA per thousand board feet contributions across the regions.

And I imagine given the strength of this quarter's results, each region was comfortably EBITDA positive. Can you give a sense of the spread in relative margins right now across the footprint?

Yes. Sean, that's a good question.

I would say that when we look at our operations from an EBITDA margin, run through our entire portfolio, it's really a mix. Like, we'll have, you know, a mill that's in the South, which will be, you know, a leading mill 1 month, you know.

But then the #2 mill will be from the Pacific Northwest, and the #3 mill will be from B.C. The next month, you know, some of that shifts around, and I think that just -- it's pretty great to see that given our geography and our strategy to diversify.

We have mills from each region that will be top performers on a month-to-month basis. Often #1 mill will be in 1 region, #2 will be in a different region, #3 will be in a different region.

For us, it's just evidence around the strategy of being diversified and having different mills and woodlands operating at different points in time in the cycle. So we don't have 1 concentrated region that's got the top 5, let's put it that way.

We have it spread out, and it's really a month-to-month basis.

That's great detail. And just following up on one of Matt's questions with respect to markets right now, where we have seen, I guess, in the cash market, some relative weakness the last 3, 4 weeks is wider dimensions in the U.S.

South. And can you give us an updated perspective on your dimension bias in the South and your ability to switch to take advantage of relative price swings from across the dimension spectrum?

Any perspective you can give us there?

Yes, that's a good detailed question, Sean. So I'll use an example of our Thomaston mill, but we have examples of this throughout the organization.

The Thomaston mill is classified as a wide mill, but when we rebuilt the mill, we were able to put in a piece of equipment that could split the wide to narrows when the narrow product line would be at a premium to wide. And so similar to many of our capital projects, which started with Adams Lake, anytime that we rebuild, we're looking for how do we put in the right equipment to be able to chase the premiums on different product lines.

And we have several mills that can do that, Sean. So being able to flip to, you know, from a wide mill to producing narrows is a real strategic advantage in this business, and we have that capability to do that.

So we will chase the premium. If the premiums are, you know, kind of a long-standing, you know, week, week, week up, then we'll chase it.

I feel really good about the setup of our portfolios across the whole organization because that's sort of in our DNA of how we think about being able to capitalize margin in this business, not to be too tied to one particular product line.

Yep, that makes sense. One quick last one for Mike.

Updated targets for divestitures, any change in the dollar figures we should be thinking about as you sell off the non-core stuff?

Yes, thanks, Sean. Essentially, no change from prior guidance.

The B.C. Coast forest tenures, kind of back half of the year, between $20 million to $25 million cash proceeds, the real estate in and around the $40 million mark in the back half of the year.

I will say just timing remains the key piece of uncertainty on both those files. Exact timing to kind of peg down one quarter per se, but we feel good about the number of the proceeds coming in, say, over the next 12 months.

Great. Okay, that's all I have.

I want to ask a follow-up on the end markets. We've seen various commentary from some of the U.S.

building products companies around the R&R channel. What's been your experience there?

Are you seeing any growth in volumes in the channel this year? And just, yes, any comments you'd have there?

Yes, thanks, Hamir. We see the R&R is hanging in there, I guess would be the way to put that.

The housing starts are also fairly muted with multifamily kind of up and down, but from an R&R perspective, our experience is that it's steady and we've got good takeaway happening with our customers on that front. I would point out as we looked to what the last half of 2025 was and we kind of look towards what's the next half of year of 2026.

I mean, fundamental difference from last year's inventory build from customers in all channels. There was the Section 232 tariff that was hanging around us at this point in time with speculation that would be quite a bit higher than it did.

We saw an inventory build and then a real drawdown as the year progressed in 2025. The setup this year, I would classify on all of our channels is more of a hand-to-mouth situation right now, which in some ways can be a little bit frustrating, but in other ways, I think it's much stronger than it was last year at this time as we look forward.

Fair enough. And Ian, you mentioned with the relocation of some of the head office functions to the U.S.

that you were still planning on being domiciled in Canada. Would there be any potential tax benefits to redomiciling?

We haven't looked at it in that much detail. And so I don't have a view of that at this point, Hamir.

Okay, fair enough. And just the last question I had on the capital projects side, you know, it sounds like it's maintenance for the remainder of the year.

But as you think about with the balance sheet improving, 2027, what are some of the sort of higher return projects that you might look to action as you continue to see the balance sheet improve here?

Yes, well, we've always got a lineup of projects on our books. They're really scattered throughout.

Primarily, there's a few projects in Eastern Canada, in Ontario, New Brunswick, and then there's a few projects in the South. But we remain cautious and conservative until we achieve what we want to do relative to our balance sheet targets, which are relevant first and foremost.

But we do have several projects that are identified, but I would say, Hamir, that they're smaller projects. They're not, you know, Thomaston-level projects.

They're higher payback, lower capital expenditures, but there's a few that we have in mind in Eastern Canada and the South. But again, I just want to make sure that I communicate that we're cautious on that.

We're planning for those, but the timing will be when we're ready to do that.

Okay, great. I'll turn it over.

Okay, thank you, everyone, for joining us this morning and your thoughtful questions. As the market conditions improved in Q2, we continue to plan conservatively.

And as always, Mike, myself, and Bryan Fast, our Director of Investor Relations, are available for any questions, follow-up calls, or communication. Thank you.

Have a great day, and goodbye.