Thank you, Justina. And good morning or afternoon everyone.

I'd like to welcome you to Western Forest Products 2021 first quarter conference call. Joining me on the call today is Steve Williams, our Executive Vice President and Chief Financial Officer.

Before we get into our first quarter results, I'd like to extend our heartfelt thoughts to the family, friends, colleagues and communities impacted by the fatality of a contractor's employee working on our Gold River operations in March. We were saddened by this tragic event, and have offered our support to the family, contractor and those impacted by the incident.

We'll work with authorities as appropriate to understand how this incident occurred and endeavor to ensure an incident like this does not happen again. Safety and security of our employees has always been and will continue to be our highest priority.

I'd like to thank the emergency responders, and all those who attended the incident. We're humbled and appreciative of their support.

Turning to our financial results, we shared our 2021 first quarter results yesterday. I'll provide you some introductory comments and then I'll ask Steve to take you through a summary of our financial results.

I will then share with you our outlook. And then we will take your questions.

First quarter of 2021 was another exceptional quarter for Western. We continue to manage successfully through the ongoing COVID-19 pandemic.

Our team's adherence to our robust COVID protocols resulted in no COVID workplace transmissions or downtime during the quarter. Our safety protocols, solid operating execution and stronger markets enabled us to generate a record first quarter adjusted EBITDA of $62.9 million an increase of about 60% compared to our operating EBITDA in the fourth quarter of last year.

During the quarter demand for our products continued to outpace supply, driving higher pricing across all of our product segments. We continue to leverage our flexible operating platform by redirecting production from export markets to higher margin product lines in North America.

Our strong operating results combined with the sale of non-core assets, drove our balance sheet into a net cash position at the end of the quarter. The strength of our balance sheet provides significant financial flexibility to continue with our balanced approach to capital allocation and to support growth initiatives.

Year-to-date, we've returned $11.3 million to shareholders via dividends and share repurchases. We also continue to advance our commitment to ESG.

We'll be releasing our next sustainability report in the coming weeks, which will include our first full lifecycle carbon assessment. And last week, we completed the sale of an incremental 28% of our TL 44 Limited Partnership to the Huu-ay-aht First Nations.

This has increased the Huu-ay-aht ownership stake to 35% while we retain 65% of the LP. Really this transaction is a great example of how business can participate in First Nations reconciliation, and that how by working together, we can extend benefits from our business activities to more people.

Overall, I'm very proud of what our team of Western has been able to accomplish together. We're well positioned as we head into the second quarter, which is typically the strongest quarter of the year for our business.

Now, I'd like to turn it over to Steve to review our key financial results.

Thanks, Don. My comments will focus primarily on our financial results for the first quarter of 2021, with comparison to the fourth quarter of last year.

Our results from the first quarter of 2020 are less comparable due to the impact of the USW strike. We reported first quarter adjusted EBITDA of $62.9 million as compared to $39.5 million of adjusted EBITDA, excluding the non-cash duty recovery in the fourth quarter of last year.

Results in the quarter benefited from improved lumber pricing. Lower harvesting costs as we managed road expenditures and by increased harvest levels on our private lands and by continuing to leverage our flexible operating platform, redirecting volume to capture incremental margin from strong North American markets.

Results were offset by higher performance-based compensation expense related to our improved financial performance and a 41% appreciation of our share price, as well as incremental selling and admin expenses due to health safety and IT related costs associated with COVID-19. Lumber revenue increased 8% compared to the fourth quarter of 2020 on the strength of higher prices, and increased North American shipments.

We were successful in maintaining shipment volumes compared to the fourth quarter of last year, despite global logistics challenges. Our North American commodity shipping volumes represented 64% of total commodity shipment volumes during the first quarter of 2021, well above our historical average of approximately 30 to 35%.

Our first quarter average realized lumber price was $1,356 per thousand board feet despite a weaker sales mix in a stronger Canadian to U.S. dollar exchange rate.

Log revenue was lower in the first quarter of 2021 compared to the fourth quarter of last year. Consistent with seasonal trends, we continue to direct the majority of export quality logs to our sawmills to capitalize on the strong North American lumber market.

Byproduct revenue increased by $3.9 million, as compared to the fourth quarter of 2020 benefiting from an increase in the NBSK pulp price and higher production volumes. Rate decreased by $2.1 million as compared to the fourth quarter of 2020.

Increases in shipping rates were more than offset by lower export log shipment volumes. First Quarter results included $8.2 million of export duty expense compared to $12.1 million in the fourth quarter of last year.

Increased US-destined lumber shipments and higher price realizations were more than offset by lower duty rates. At the end of the quarter, we had approximately $101 million US dollars of duties on deposit.

Lumber production increased 11% compared to the fourth quarter of 2020. We achieved higher production through increased operating hours; improve production efficiency and a shift to more domestic lumber production.

Log production in the first quarter of 2021 was 24% lower than the fourth quarter of last year. Consistent with typical seasonal operating conditions, we ended the quarter with approximately 745,000 cubic meters of log inventory.

This is slightly lower than our historical levels for the end of the first quarter. But we were comfortable with our log inventory as we head into the spring harvest season.

From a profit and loss perspective, first quarter net income was $53.8 million as compared to $34.4 million in the fourth quarter of 2020. Looking at cash, first quarter cash flow and capital management.

Cash provided by operating activities before changes in noncash working capital is $66.3 million in the first quarter as compared to $38.7 million in the fourth quarter of last year. Cash provided by investing activities was $33.4 million during the first quarter of 2021 as compared to cash utilize of $5.5 million in the fourth quarter of last year.

Capital expenditures in the first quarter of 2021 were more than offset by $37.7 million in proceeds from the sale of non-core assets. First Quarter non-core asset sales included $36 million from the sale of certain properties and their underlying rights related to the Orca Quarry.

We returned $6.1 million to shareholders during the quarter via dividends and share repurchases. Subsequent to the end of the quarter we've returned an additional $5.2 million to shareholders via share repurchases.

Year-to-date, we have returned $11.3 million to shareholders. We successfully reduced our net debt by $70 million in the first quarter.

As a result, we ended the quarter in a net cash position on our balance sheet and had liquidity of $244 million. Subsequent to the end of the quarter, we completed the sale of the next phase of our TFL 44 LP transaction for $22 million with a Huu-ay-aht First Nations.

Don that concludes my comments.

Well, thanks, Steve. Let me start off our outlook section by touching on second quarter seasonality.

Typically in the second quarter, our harvest volumes increased as snow recedes and we're able to expand operations across the complete timber harvesting land base. As our harvest activity moves further up the hillsides, our costs tend to rise.

As steeper, more difficult terrain increases harvesting complexity. From a market perspective, lumber consumption typically increases as we move into the more active spring season.

So as we look to our markets, our lumber markets in North America are being supported by strong fundamentals, including low mortgage rates, housing supply deficit, and a strong repair and renovation segment as more people work from home. At the same time supply has been constrained due to permanent production curtailment in the BC Interior from the Mountain Pine Beetle, and COVID related manufacturing labor constraints.

In the near-term markets are likely to be further supported by higher seasonal demand. Specifically, indoor segments demand for - and pricing for Cedar and Niche products has improved across all product categories on the strength of this robust residential repair and renovation market.

And the fundamentals and export markets have also improved. Low inventory levels combined with a lack of supply should support improved pricing over the next couple of quarters.

That said we may be faced with some logistics challenges due to container shipping shortages. In our log business, we expect domestic saw log prices to continue to rise supported by the strong lumber markets and increased competition from export log markets.

Improving pulp market should support higher chip and pulp log prices. Currently, our second quarter lumber order file extends through mid-June and we anticipate pricing to be 10% to 20% better than the first quarter.

Now actual performance could be impacted by production or logistic issues that we currently do not perceive. Turning to capital allocation, we are committed to a balanced approach to capital allocation.

Returning cash to shareholders will maintain the flexibility to support growth initiatives. Our first priority continues to be the payment of a regular quarterly dividend.

Our second priority is to invest strategic and discretionary capital in jurisdictions that will grow long-term shareholder value and meet our desired return thresholds. We currently have approximately $10 million in strategic capital projects in process.

We've identified an additional $20 million to $25 million of capital projects, which could be implemented over the next 18 months. Strategic capital projects will be focused on reducing manufacturing costs or addressing secondary processing capacity constraints on the BC Coast, to support growth of our higher value targeted product lines.

Strategic capital investments may also include acquisitions which complement or grow our specialty product lines. Any acquisitions will need to make financial and strategic sense through entire lumber cycles.

To the extent there are limited near term internal and external investment opportunities with appropriate returns, and we have excess capital available to deploy. Our third priority is to return additional cash to shareholders.

So we plan to remain disciplined in our capital allocation approach and ensure we maintain financial flexibility. Turning to what's next.

Our top priority remains the health and safety of our employee's contractors and communities. Our strong balance sheet has given us financial flexibility to continue with our balanced approach to capital allocation, while also supporting the execution of our strategic growth and priorities.

We continue to progress with our sales and marketing initiatives, including our Japanese cedar fencing product line, growing our wholesale lumber volumes, and growing our volumes to home centers. We remain encouraged with the long-term growth opportunity for our Hemlock products in the specialty treating sector.

Given the reduced supply of SPF lumber from the BC Interior due to the Mountain Pine Beetle, treating companies in Canada and the Pacific Northwest are looking for volume to support business growth and offset the SPS supply gap. Western's hemlock products are well positioned to fill this supply gap.

Longer term, we remain excited about the potential growth opportunities for wood products and a low carbon future and in mass timber building technologies. In addition to increasing demand for wood products, we see mass timber as further helping solidify wood as one of the world's most sustainable building materials.

We continue to evaluate how we may best participate in this potential growth opportunity. Our long-term focus remains the same to successfully and sustainably implement our strategic initiatives to strengthen our foundation, grow our base, grow our business and deliver long-term shareholder value.

With that operator, we can now open up the call to questions.

Thanks. Good afternoon, guys.

Great quarter. Few questions to get through.

The 64% of the commodity product that you moved into the states last quarter versus I think you said the long-term average is 30% to 35%. What's the sustainability of that ratio?

And is there even upside into these spectacular Q2 markets where you can move it even higher?

Good afternoon, Sean thanks for the question. So, maybe a little more context for you.

When we think about North American shipments and this transition we have made from the export markets. Compared to Q3 2020 North American shipments are up about 50% overall, and up about 65% into the U.S.

So it's not just the U.S., Sean, its Canada as well. So overall, I think we look at commodity business, as you rightly pointed out, we were kind of 70-30 export, we're now sort of 60-40 North American, how much more can we do?

I think in there 5% or 10%, certainly possible. We talked about how sustainable this is.

We think it's sustainable. We think there's been a permanent shift in the supply base, especially into the Western North America due to the Mountain Pine Beetle.

FDA has actually done some analysis on this. And the number could be anywhere from 3.6 to 5.5-billion-foot gap in supply coming from SPS, but also coming from reduced supply over the years from the coast and also the inland region.

So we believe it's sustainable, we think we've got the flexibility and the functional operating platform to seize the opportunity. And we think we've got a product line that is actually sought after in the treating segment.

So we're pretty excited about the transition we've made. As we said we think it's sustainable.

That said, markets change and margins are higher, going back into the export markets, we are well positioned to do that.

Thanks for that detail, Don. Second question.

You guys logged the Orca Quarry lands before the sale. And there was reference to stump and savings, logging a private land.

Can you put a number to that? How much did that contribute to EBITDA this quarter?

Yes, I think the stumpage benefit of the Orca Quarry private lands, it would not be material. But maybe I can answer the question on stumpage this way.

I mean, I think, our stumpage formula is on the Coast, they're different than the Interior. So the drivers of the formula are different.

However, they're both consistent in one phase and one point, which would be, as lumber markets move up, you'd expect to pay more stumpage. So, I think we were somewhere around $13 or $15, a meter in Q1.

And I think your logical question, what's it going to look like? And I would say, I could see another $5 or $7 over the next few quarters and stumpage increases.

That said it will be dependent upon what our species mix is, and the blocks that we are harvesting. And if there's anything unforeseen that we don't see in our harvest profile.

So I hope that can answers a question, I just don't think the stumpage benefit from logging Orca Quarry lands would not have been material.

That's useful. I'll get back in the queue.

Thanks, Don.

Thanks, Sean.

Yes, thanks very much. Good afternoon, guys and good results.

Just, Steve you brought up the higher SG&A cost, maybe you can give us an expectation for what do you think it'll be in total costs in 2021?

Maybe I'll just help you out, quarter-over-quarter to give you a better sense of the flavor. So the majority of the increase relates to performance and incentive base compensation as a result of the significant improvement in our results in the 41% increase in the share price.

So proximately $3.9 million was performance base comp, another $3.1 is mark-to-mark. Expense on long-term compensation liabilities, due to the appreciation of the share price, I mean, other $0.5 million, quarter-over-quarter on pertaining to COVID protocol.

So, again, a big driver will be the change in share price going forward.

Okay, and then just I guess with pulp prices rally in here, how material will be the increase in byproduct revenue going forward here?

So as you know, Paul, our chips are tied to the pulp pricing. And as we see any incremental increases in Pulp pricing that's going to flow to the bottom line, I think Steve highlighted, it was $3.5 million or something in Q4 to Q1.

You might see about half of that, again, this quarter. It also depends, of course, on how much organic growth we are able to drive out of our businesses, more lumber production, the more chips we make, the more on a total dollar basis, we're going to receive.

So and on an organic growth perspective, we're looking at, if we grew 11%, Q4 to Q1, another 5% to 7%, this quarter would be a good number to consider. And through the year, I'd like to see us grow kind of 105 to 15%.

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

And Paul, I would just add pulp log pricing is essentially stayed flat through the period, we don't expect it to change material either.

And then, I guess, just seasonally. I mean, they should Q2 generally is your best quarter, it should be a pickup from what we've done in Q1, just on the capital allocation side, you've been buying back shares, still feel confident buying back shares at this price, and what is the M&A pipeline look like?

Sure, well, good point as we said, our first priority in the capital allocation perspective is a quarterly dividend, providing that to the shareholders. Second will be investing in our current business and to drive down costs, improve value extraction or acquisitions, as you pointed out, and then of course, the third priority, if you've got excess capitals will return that to the shareholders.

On the acquisition front, we're always on the lookout for businesses or accretive to ours and especially in product lines we really like. We've said in the past, we're looking in the Pacific Northwest is the first priority.

But we know I think, and we're going to continue to do that. So, we'd expect to see 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 the timelines that others have, when it comes to what they would like to do with their existing businesses.

Okay, and then just lastly, just on that $22 million sales to the Huu-ay-aht. Just wondering what the financial drag on that, is that, do you consider that four times multiple business, six times multiple business, what is the subsequent drag?

Well, I think we need to think of TFL 44. And, well, over time the business - we believe we're getting fair value for the business.

In addition, we've got a log supply agreement for our mills. So in any of these transactions with the 10 years, we're always looking at ensuring that we're receiving fair value.

I think there's a real positive story here, in working with First Nations as business can on opportunities to have them invest in the business and for us to participate in reconciliation and make the business stronger. So kind of sum 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 we're making the business stronger.

That's all I had. Best of luck.

Thanks, guys.

Great. Thanks, Paul.

Great. Well, thank you, operator and thanks, everyone for your continued support.

Appreciate your interest in our company and your time on the call today. Steve and I both available if you have any follow-up questions, and we look forward to sharing with you our second quarter results in August.

Have a great day. Thank you.