Jemi Fibre Corp. Reports Results for the Second Quarter Ended October 31, 2015

Vancouver, British Columbia--(Newsfile Corp. - December 23, 2015) - Jemi Fibre Corp. (TSX-V: JFI) (“Jemi Fibre” or the “Company”) is pleased to announce its second quarter results for the three and six month period ended October 31, 2015.

Adjusted EBITDA for the three month period ended October 31, 2015 was $4.5 million on revenue of $18.5 million, compared to $4.1 million of adjusted EBITDA on revenue of $20.5 million for the first quarter of FY2016 and $2.6 million of adjusted EBITDA on revenue of $14.2 million for the three month period ended October 31, 2014. Adjusted EBITDA for the six month period ended October 31, 2015 was $8.6 million on revenue of $39 million, compared to $2.7 million adjusted EBITDA on revenue of $21.2 million for the six month period ended October 31, 2014.

“Jemi’s second quarter results continue to demonstrate the value of our integrated forestry assets,” stated Chairman and CEO Mike Jenks. “We continue to grow, with year-to-date adjusted EBITDA up 221% over the prior year, and, as we progress through our third quarter, we are pleased with the upward production trends we anticipated into the winter months.”

Second Quarter Highlights

• Successfully integrated Aallcann Wood Suppliers Inc. (“Aallcann”), an acquisition completed in Q1, into the Company’s wood treatment and post-peeling operations, and significantly increased production at Aallcann since the acquisition.

• Completed an agreement with CanAus Coal Limited (“CanAus”), under which CanAus is paying the Company $2.2 million over a 5 year option period, to acquire a portion of the Company’s private timberlands in the Kootenay region of B.C. for $14 million, subject to the Company retaining all timber rights on the optioned lands in perpetuity.

• Commenced operations under the Company’s 5 year agreement with the Northern Village of Beauval, in Northern Saskatchewan, to lease and operate a timber post-peeling operation and to manage a 40,000 m³ annual Crown license.

Financial Summary

Total assets increased from FY2015 (April 30, 2015) to October 31, 2015 by $7.7 million. Approximately $3.3 million of this increase is attributable to capital expenditures, including equipment and rolling stock related to the acquisitions of Bond Ventures Ltd. (“Bond”), Aallcann and the Company’s expansion of its logging and trucking operations into Saskatchewan. In addition, $2.0 million of this increase is attributable to purchases in connection with sustaining expenditures, which is mostly rolling stock.

During this same period, total liabilities increased by $7.6 million. Approximately $2.6 million of this increase is attributable to capital expenditures, including equipment and rolling stock related to the acquisitions of Bond, Aallcann and the Company’s expansion of its logging and trucking operations into Saskatchewan. In addition, $1.5 million of this increase is related to the financing of rolling stock purchases in connection with sustaining expenditures.

Summary by Division

Timber

In the second quarter of FY2016, the Company generated $4.24 million of adjusted EBITDA on revenue of $11.35 million, compared to $1.65 million of adjusted EBITDA on revenue of $6.61 million for the three months ended July 31, 2015. Harvest volumes in the second quarter were approximately 123,716 m³ from the Company’s private timberlands and 28,230 m³ from its Crown licenses, which, compared to the first quarter, increased 47% on the private timberlands and decreased 31% on the Crown licenses. Volumes and adjusted EBITDA margins (40%) for the second quarter were consistent with the Company’s expectations for this period. Toward the end of the period, adjusted EBITDA margins were trending above 45% due to higher per unit log sale revenues to customers outside of the Company’s long-term contractual commitments, including a new U.S. based customer (off-set by higher trucking costs to this new customer); and due to harvesting in areas with lower logging costs consistent with the Company’s seasonal harvesting plans.

Wood Treatment

Adjusted EBITDA from the Company’s wood treatment division was $1.06 million for the three months ended October 2015 on revenue of $6.48 million which compares to adjusted EBITDA of $2.65 million on revenue of $5.5 million for the first quarter of FY2016. The drop in adjusted EBITDA margin in the most recent quarter (60% decrease) is mostly due to one-time log purchase adjustments. For the six month period ended October 31, 2015, this division has produced adjusted EBITDA of $3.71 million with an adjusted EBITDA margin of 32%. These margins are ahead of the Company’s expectations for this division. These year-to-date results are ahead of the Company’s plans and are due to (i) continued strong demand in the agricultural treated post market, including a strong order profile through the balance of FY2016; (ii) the Company’s successful operation of its Aallcann wood treatment facility in Prince Albert; and (iii) the continued strength of the U.S. dollar from which a majority of Jemi Fibre’s treated wood product revenue is derived.

Logging and Trucking

For the three months ended October 31, 2015, the Company generated $0.32 million of adjusted EBITDA from its logging and trucking division on revenue of $8.55 million, compared to $0.41 million of adjusted EBITDA on revenue of $7.26 million for the first quarter of FY2016, down 20% and up 18% respectively. Adjusted EBITDA margins in the second quarter were 1.7% compared to 5.6% for the first quarter, a decrease largely attributable to higher costs related to repairs and maintenance and fuel. The Company continues to target over 12% adjusted EBITDA margins for this division on an annual basis and has been working on operational initiatives to improve efficiencies. These initiatives have the potential to translate into meaningful earnings growth on a Company consolidated basis.

Specialty Lumber Manufacturing

In the second quarter FY2016, the Company lost $(0.68) million of adjusted EBITDA from its specialty lumber division on revenue of $2.69 million, compared to a loss of $(0.13) million of adjusted EBITDA revenue of $2.93 million in the first quarter of FY2016. The increase in losses is largely due to weakness in lumber prices generally, and in particular to the Japanese export based product sold from this division, a weakening in market demand and pricing toward the end of the second quarter. As a result, the mill began to run down its sawlog inventory in October and November of 2015 and effective December 14, 2015, is temporarily shut-down until market conditions improve.

Outlook

At October 2015, U.S. housing starts had recorded seven straight months above 1 million units, which is the longest stretch since 2007. Coupled with a continued increase in new building permits in the U.S., this suggests a sustainable U.S. housing market recovery which is still a major economic driver in the forestry industry. However, weak demand in China and oversupply in North America have caused key benchmark lumber prices to fall in this quarter to levels not seen in the past three years. These benchmark prices are expected to remain stable through the first half of 2016 and show signs of recovery in the balance of the year. As noted above, weakening lumber demand and pricing in Japan have affected the Company’s lumber division and the Company does not anticipate some recovery in this area until the end of the first half of 2016.

The Company anticipates a continued upward trend in sawlog prices from its operating areas which is attributable to sustained lumber production in Western Canada and the North-Western United States and ongoing log supply constraints, particularly in British Columbia.

The Company continues to benefit from U.S. dollar foreign exchange gains in its wood treatment division and now its timber division, and anticipates maintaining this U.S. dollar sales exposure.

The Company remains focused on restructuring its balance sheet in the near term to eliminate its short-term, high yield debt and is pleased with its progress on its working capital financing, having secured, through November 2015, bank lines of credit up to $2.5 million. Jemi Fibre is also continuing its efforts to secure financing to complete, in an economical advantageous manner, the previously announced L&M acquisition.

Financial Information

For complete details of financial results, please refer to the unaudited condensed consolidated interim financial statements and accompanying Management’s Discussion and Analysis (“MD&A”) for the six months ended October 31, 2015. These financial statements and MD&A, and the comparative financial statements for the six months ended October 31, 2014 are all available on SEDAR at www.sedar.com and on the Company’s website at www.jemifibre.com.

(Correction: The Company’s Management’s Discussion and Analysis for the three month period ended July 31, 2015, which was filed September 21, 2015 incorrectly states that the Company’s Timber division manages approximately 1.45 million m³ of annual Crown license in southern Alberta and Northern Saskatchewan. The correct statement is that the Company’s Timber division manages approximately 40,000 m³ per annum in Northern Saskatchewan).

Teleconference call details:

Jemi Fibre will host a telephone conference call on Wednesday, December 23, 2015 at 7:30 a.m. PST (10:30 a.m. EST) to discuss these results. The conference call may be accessed by dialing 1-800-319-4610 in Canada and the United States.

The conference call will be available for instant replay until January 23, 2016 and can be accessed by dialing 1-800-319-6413 (passcode: 1416#).

For further information, please contact:

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

About Jemi Fibre

Jemi Fibre 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 Fibre, 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” and “adjusted EBITDA” are measures 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. Adjusted EBITDA 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 and adjusted EBITDA are measures 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 and adjusted EBITDA have 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 and adjusted 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 and adjusted 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.