Western Forest Products 2Q 2006 EBITDA improved to $7.7 million on higher log prices and volumes

Aug 15, 2006. /Lesprom Network/. Western Forest Products Inc. announced its results for the second quarter of 2006. EBITDA improved to positive $7.7 million in the quarter from negative $0.1 million in the first quarter of 2006 and negative $1.6 million in the second quarter of 2005. Higher log prices and volumes achieved for external log sales from the legacy Western operations compared to the first quarter of 2006 and lower softwood lumber duties compared to the second quarter of 2005 were the primary factors behind the improvement. Net loss from continuing operations of $7.5 million or $0.05 per share improved from a net loss of $46.5 million (includes a $27.9 million one time charge with respect to the early redemption of the company's 15% senior secured bonds) or $1.81 per share in the first quarter of 2006 and a net loss of $35.5 million or $1.39 per share in the second quarter of 2005. With the acquisition of Cascadia complete the proceeds from the $295 million rights offering were released from escrow. After paying $220.1 million (subject to post closing reductions for working capital and forestry liability adjustments) for the acquisition the balance plus interest was received by the company. Western completed its acquisition of Cascadia Forest Products on May 1, 2006, amalgamated the two companies immediately, and is implementing its integration plan. The new organizational structure for the combined company was finalized in June and will result in a reduction in salaried personnel by approximately 110 positions by early 2007, with the first group having left by the end of June. Reynold Hert, president and CEO noted, "We made progress in bringing the legacy Western, Cascadia and Englewood operations together since the acquisitions in May and March, 2006, respectively. We are now focusing our efforts on pursuing the synergies and operating efficiencies identified during our due diligence process." Mr. Hert went on to say: "The plans made by the various integration teams are leading to early changes in the way we flow logs and operate our mills, as well as combining operations such as dryland sorts for efficiency. Our employees recognize that we need to make many of the required changes in the early stages of building the new Western." Western is an integrated Canadian forest products company and the largest coastal British Columbia woodland operator and lumber producer with an annual allowable cut of approximately 7.7 million cubic meters of timber and lumber capacity in excess of 1.5 billion board feet from nine sawmills and five remanufacturing plants. Principal activities conducted by the company and its subsidiaries include timber harvesting, reforestation, sawmilling logs into lumber and wood chips, and value-added remanufacturing. Substantially all of Western's logging is conducted on government owned timberlands in British Columbia. All of Western's operations, employees and corporate facilities are located in the coastal region of British Columbia while its products are sold in over 20 countries worldwide.