Business News
Fraser Papers Reports Financial Results for the Second Quarter of 2010
Friday 22. October 2010 - Fraser Papers Inc. ("Fraser Papers" or the "Company") today reported financial results for the second quarter ended July 3, 2010.
(All financial references are in U.S. dollars unless otherwise noted)
During the quarter, the Company sold its specialty papers assets to Twin Rivers Paper Company Inc. (“Twin Rivers”) and its pulp mill in Thurso, Québec. The Company classified its specialty papers business and Thurso pulp mill as “held for sale” as at December 31, 2009. The operating results of these operations have been disclosed as “discontinued operations” in the Statements of Operations.
The Company generated an EBITDA loss of $2.1 million from continuing operations in the second quarter of 2010 compared to positive EBITDA of $1.0 million in second quarter of 2009. Net loss for the second quarter amounted to $302.7 million or $6.03 per share compared to a loss of $8.0 million or $0.16 per share in the second quarter of 2009. During the quarter, the Company recorded net non-cash charges of $298.5 million related to the Company’s pension plans and post-retirement benefit programs.
For the six months ended July 3, 2010, Fraser Papers generated an EBITDA loss of $2.9 million from continuing operations compared to positive EBITDA of $3.4 million in 2009. Net loss amounted to $315.8 million or $6.32 per share compared to a loss of $26.1 million or $0.52 per share in 2009.
Fraser Papers has filed its second quarter 2010 financial statements, including the related management discussion and analysis, on SEDAR at www.sedar.com. As a result, the Company is now in compliance with its continuous disclosure obligations.
The proceeds from the sale of the specialty papers assets to Twin Rivers were used, in part, to settle certain claims against Fraser Papers. Fraser Papers continues to own a 49% minority equity interest in Twin Rivers as well as certain unsecured notes issued by Twin Rivers. These assets are expected to be distributed to creditors under a plan of arrangement and distribution in the coming months. The Company is in the process of selling its remaining assets which include a paper mill in Gorham, New Hampshire and two lumber mills in northern Maine.
On June 18, 2009, citing continued operating losses, weak markets for its products, impending debt repayments and significant pension funding obligations, the Company and its subsidiaries filed for creditor protection under the Companies’ Creditors Arrangement Act (“CCAA”) in Canada and Chapter 15 of the U.S. Bankruptcy Code.
The ultimate recovery for the creditors of Fraser Papers, if any, will not be determined until a final determination of all the claims against the Company and a distribution of the net proceeds.