EACOM REPORTS FINANCIAL RESULTS – QUARTER ENDED SEP 30, 2010

2010-11-29 | News / Press Releases

VANCOUVER, B.C. MONTREAL, QUEBEC— 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 nonoperating
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 Vald’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.

 

Michael Liggett
CFO
514 848 5133


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