Mr. Paul Rivett reports

GREENFIRST REPORTS FINANCIAL RESULTS FOR THE FIRST QUARTER OF 2023

Greenfirst Forest Products Inc. has released results for the first quarter ended April 1, 2023. The company's interim financial statements and related management's discussion and analysis for the first quarter ended April 1, 2023, are available on Greenfirst's website and on SEDAR. All amounts are in thousands of dollars unless indicated otherwise.

First quarter 2023 highlights:

• First quarter 2023 net loss from continuing operations was $20.2-million or an 11-cent loss per share (diluted), compared with net loss of $25.9-million or a 15-cent loss per share (diluted) in the fourth quarter of 2022 on the same basis; lumber prices dropped, reflecting economic headwinds and lower demand in Q1 2023, with an average selling price of $605 per thousand board feet compared with $644 per thousand board feet in Q4 2022; the Q1 2023 valuation provision for lumber and log inventory was increased to $11.9-million from $8.7-million at the end of Q4 2022;
• Sold its two Quebec mills for gross proceeds of $94.1-million, subject to working capital adjustments, at a $3.5-million loss on disposal;
• Reducing overheads and operating costs while increasing production efficiencies;
• Signed a non-binding letter of intent to sell approximately 30 of 118 acres of the land in Kenora;
• The company has significantly deleveraged its balance sheet by reducing its outstanding debt and is no longer subject to financial covenant ratios.

"Greenfirst is now focused on optimizing its core assets in Ontario, supported by a streamlined, cost-effective operating platform. We have strengthened our balance sheet, and our recent efforts to improve operational efficiencies have begun to yield positive results," said Paul Rivett, interim chief executive officer and executive chairman of Greenfirst. "In August, 2023, we expect the duty rates to drop from 20.23 per cent to 8.24 per cent, which will increase profitability," added Mr. Rivett.

Financial highlights

The attached selected financial information is from the company's financial statements and management's discussion and analysis.

Outlook

The impacts of rising interest rates in response to continuing inflation resulted in softened lumber demand since midyear 2022. This led to a decline in lumber market prices throughout the second half of 2022, with those levels persisting in the first quarter of 2023 and through early spring thus far. Further monetary tightening and interest rate rises would continue to put downward pressure on lumber market prices, which are expected to remain volatile over the near term. However, there is optimism amongst U.S. home builders for growth during the balance of 2023.

Partially offsetting the negative impact is the tightening lumber supply, spurred on by the curtailment of lumber production in the province of British Columbia and in other regions of North America. There is an expectation that there could be further curtailments in British Columbia and the Pacific Northwest if the current low levels of pricing persist.

The company continues to experience challenges with a continuing tight labour market, with some residual impacts of COVID-19 in early 2023. This continues to cause disruptions in the flow of production at the company's mills. From a logistics standpoint, disruptions in trucking and rail have only been limited since the second quarter of 2022.

Inflationary pressures in North America have raised the cost of many inputs required for operations. Continuing shortages of people, materials or equipment could negatively impact the company, as well as the industry. Many of these pressures arose due to the COVID-19 pandemic, and they continue to be a significant factor affecting business.

Earnings conference call

Greenfirst will host a conference call to review the first quarter 2023 financial results on Tuesday, May 16, 2023, at 8:30 a.m. Eastern Time. The live webcast of the earnings conference call will be available on-line and by phone: 1-416-764-8658 or 1-888-886-7786. A replay of the webcast and presentation slides will be available on Greenfirst's website following the conference call.

About Greenfirst Forest Products Inc.

Greenfirst is a forest-first business, focused on sustainable forest management and lumber production. The company owns four sawmills located in rich wood baskets proudly operating over 6.1 million hectares of FSC certified public Ontario forestlands (FSC-C167905). The company believes that responsible forest practices, coupled with the long-term green advantage of lumber, provide Greenfirst with significant cyclical and secular advantages in building products.

We seek Safe Harbor.