Eacom Timber Corporation (TSXV:ETR)
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VANCOUVER, Nov. 29 /CNW/ --
VANCOUVER, Nov. 29 /CNW Telbec/ - EACOM Timber Corporation (TSX VENTURE: ETR; "EACOM" or the "Company")
today reported its first quarter of results since acquiring Domtar's
forest products business on June 30, 2010.
During the quarter, low lumber prices and a strong Canadian dollar
negatively impacted operations. The Company reported a negative EBITDA
after excluding specific items (inventory valuation adjustments and
stock based compensation) of $5.4 million. Also included in these
operating results are holding costs of approximately $1.5 million
related to idled and non-operating mills. If these holding costs are
also excluded, the resulting negative EBITDA after excluding specific
items would have been $3.9 million.
Operating Results
Sales for the quarter were $73.6 million on shipments of approximately
150 million board feet. The benchmark prices for great lakes delivery,
for random lengths two and better and studs averaged US$316 and US$283
per thousand board feet, respectively, down significantly from earlier
in the year. Price declines were seen for all dimensions and grades
but were particularly notable for studs.
Production for the quarter was 130 million board feet representing about
58% of capacity. EACOM recorded an inventory valuation adjustment of
$1.7 million as a result of a write down of log and lumber inventory to
net realizable value
EACOM's loss and comprehensive loss for the quarter was $10.5 million
($0.03 per common share).
Liquidity
At September 30, 2010, EACOM had cash and cash equivalents of $15.3
million (excluding restricted cash of $1.1 million) and working capital
of $69.1 million. On November 25, 2010, EACOM entered into a three
year credit facility for up to $50 million to fund working capital and
general corporate purposes. EACOM has not drawn down on the facility.
Outlook
It's expected that lumber demand will remain soft and that this will
keep pressure on lumber prices for the remainder of the calendar year.
About EACOM
EACOM Timber Corporation is a TSX-V listed company. EACOM owns seven
sawmills and an equity interest in an eighth sawmill, all located in
Eastern Canada and related tenures. The mills are Timmins, Nairn
Centre, Gogama and Ear Falls in Ontario and Val-d'Or, Ste-Marie and
Matagami in Quebec. The equity interest is in the Elk Lake sawmill
located in Ontario. The sawmills in Ear Falls, Ontario, and Ste-Marie,
Quebec, are currently idled. EACOM also owns one idle mill in Big
River Saskatchewan. EACOM also owns a remanufacturing facility and a
50% interest in an "I" joist plant.
The TSX Venture Exchange has neither approved nor disapproved the
contents of this press release. All directorships are subject to TSX
Venture Exchange approval.
Forward-Looking Statements
All statements in this news release that are not based on historical
fact are "forward-looking statements." While management has based any
forward-looking statements contained herein on its current
expectations, the information on which such expectations were based may
change. These forward-looking statements rely on a number of
assumptions concerning future events and are subject to a number of
risks, uncertainties, and other factors, many of which are outside of
our control that could cause actual results to materially differ from
such statements. Such risks, uncertainties, and other factors include,
but are not necessarily limited to, those set forth under the captions
"Risk Factors" of the Filing Statement dated January 8, 2010 and the
current MD&A for EACOM Timber Corporation on file with the Canadian
Securities Commissions.
p align="justify"Michael Liggettbr/ CFObr/ 514 848 5133/p