Accelerating the Transition to Higher Value Products

• Continue to advance two continuous dry kilns, with site preparation completed and site construction commencing.

• Deferring spending on one continuous dry kiln from 2025 to 2026 to support maintaining a strong balance sheet in the near-term.

• Anticipate the first continuous dry kiln will be completed and commissioned in early 2026, while the completion and commissioning of the second continuous dry kiln has been deferred to mid-2026.

• Extended the maturity of our $250 million credit facility to July 21, 2028.

• Ended the quarter with liquidity of $189.7 million and a net debt to capitalization ratio of 5%, compared to $141.5 million of liquidity and a net debt to capitalization ratio of 13% as at June 30, 2024.

• Reducing planned 2025 capital expenditure spending to between $35 to $40 million, down from our prior estimate of $60 to $65 million in May 2025, to support maintaining a strong balance sheet and financial flexibility.

• Received a $3.4 million income tax refund in July 2025.

Other Items

• Our Columbia Vista Sawmill sustained extensive damage in a fire in late June which rendered the mill inoperable. We are currently evaluating our plans related to the sawmill and are working with our insurers to determine available proceeds related to the damage and business interruption.

• Employees represented by the United Steelworkers Local 1-1937 commenced a strike at our La-kwa sa muqw Forestry Limited Partnership ("LFLP"). LFLP is actively working to resume bargaining and bring an end to the work stoppage.

• Plan to take various operating curtailments at our BC sawmills in the third quarter of 2025, including curtailing our Chemainus sawmill for the entire third quarter. We estimate these curtailments will reduce production by approximately 25 million board feet.

• Completed a share consolidation of one post-consolidation common share for every 30 pre-consolidation common shares on July 28, 2025. As a result of the share consolidation, earnings (loss) per share have been retrospectively adjusted for all periods presented.

On July 24, 2025, the US Department of Commerce ("DoC") published the final antidumping ("AD") rates applicable to Western related to the sixth Administrative Review ("AR") of 20.56%. Final countervailing duty ("CV") rates related to the sixth AR are expected in the third quarter of 2025, with preliminary CV rates of 14.38% announced in April 2025.

If final CV rates are unchanged from preliminary rates, Western will record a non-cash export tax expense of USD$43.8 million, plus accrued interest of approximately USD$7.0 million, in the third quarter of 2025 related to the increase in AD and CV rates. This amount will be partially offset against the current long-term duty receivable of USD$58.9 million on the Company's balance sheet as at June 30, 2025. Cash deposits accrue at the most recent final AD and CV duty rates.

Markets in North America are expected to be volatile through the third quarter of 2025 as softwood lumber duties have increased significantly. Persistently high interest rates, low consumer confidence and general economic uncertainty are leading to a slower pace in repairs and renovations, and housing activity. Expectations are for this trend to continue throughout the third quarter of 2025, and as a result, lumber markets will be challenged for both commodity and specialty products with demand and pricing expected to remain weak across most species and product categories.

Demand remains strong for specialty products into all export markets, with anticipated price increases for western red cedar, hemlock and fir species throughout the third quarter of 2025. In Japan and China, housing activity continues to trend downwards, however, market lumber inventories remain low. Because of the lower lumber inventory levels, pricing remains stable with price gains expected on key products in Japan, Taiwan, and Hong Kong.