May 05, 2006. /Lesprom Network/. For the first quarter ended April 1, 2006, Fraser Papers generated EBITDA of $2 million and reported a net loss of $78 million or $2.64 per share. Compared to the fourth quarter of 2005, EBITDA improved by $9 million and earnings (before transaction specific items, restructuring and loss in equity accounted Smart Papers) improved by $8 million or $0.27 per share. The quarter over quarter improvement in EBITDA is due to improved selling prices for paper and pulp and lumber. The results for the first quarter of 2006 included significant charges related to the closure of the company's 230 000 mtpy hardwood kraft pulp mill located in Berlin, New Hampshire and the write down of its equity investment in Smart Papers LLC. These two charges were partly offset by gains on the sale of the Company's New Brunswick timberlands and the repurchase of certain of the Company's outstanding senior unsecured notes. Excluding these transaction specific items, the net loss for the quarter was $4 million or $0.14 per share. In the first quarter of 2005, Fraser Papers generated EBITDA of $11 million and net earnings of $3 million or $0.10 per share. The year over year decline in EBITDA reflects the sale of Fraser's timberlands business, weaker selling prices for lumber, higher costs for energy and chemicals and a stronger Canadian dollar. "The past quarter was a difficult period for the Company with sustained compression on our operating margins from high input prices and a rising Canadian dollar. We continued to focus on the costs under our control and in particular took the decision to close our hardwood kraft mill in New Hampshire when a turnaround at the operation could not be achieved in the current business environment. We also wrote down our investment in Smart Papers as that company works to reorganize its business affairs under Chapter 11 proceedings in the United States. The initiatives from this quarter largely complete our original objectives set out in June 2004 when Fraser Papers was launched as a public company. Our focus at that time was to position the Company for long term success by surfacing value for shareholders through the sale of our timberlands and selling or closing operations that were either underperforming or simply non-core to our paper business. With a focus on operational discipline and a strong balance sheet, we are now well placed to compete in a challenging business environment," said Dominic Gammiero, president and CEO of Fraser Papers. In first quarter 2006 Fraser Papers reported $2 million in EBITDA, an improvement of $9 million over the fourth quarter of 2005 reflecting higher average prices for paper and lumber combined with improved product mix. Fraser Papers completed the sale of timberlands in New Brunswick to Acadian Timber Income Fund for total proceeds of $125 million consisting of net pre-tax cash proceeds of $94 million and retained a $31 million investment in the Acadian Fund. The company announced the closure of the 230 000 tonnes per year Berlin hardwood kraft pulp mill in New Hampshire, significantly reducing the company's exposure to market pulp prices. Fraser Papers is an integrated specialty paper company which produces a broad range of technical and printing and writing papers. The company has operations in New Brunswick, Maine, New Hampshire and Quebec. Fraser Papers is listed on the Toronto Stock Exchange.