Tag Archives: eacom timber

EACOM Timber has reported net earnings attributable to shareholders of $1,556,000 on record sales of $70,960,000.

Increased US housing starts had a positive impact on lumber consumption and contributed to a strong pricing environment and higher mill realizations for EACOM Timber.

However, manufacturing costs relative to sales were higher than those incurred in the previous quarter, mostly due to additional costs still being incurred as a result of the fire at Timmins which, since January 1, 2013, are no longer offset through business interruption claims, and to a longer than expected ramp-up at the Elk Lake mill where a substantial capital upgrade was completed late in the fourth quarter of 2012.

As a result, the company recorded a negative adjusted EBITDA of $855,000 for the quarter ended March 31, 2013, against a positive adjusted EBITDA of $3,150,000 in the previous quarter and a negative adjusted EBITDA of $5,355,000 in the corresponding quarter of 2012.

Read more:
EACOM Timber Corporation announces its first quarter results

One of the funds that MM Asset Management Inc. manages and advises, MMCAP International Inc. SPC (MMCAP), has acquired 435,000 common shares of EACOM Timber Corporation.

These shares were acquired through  facilities of the TSX Venture Exchange since a take-over bid for all of the outstanding Shares was filed by ET Acquisition Corporation, a corporation indirectly owned by funds managed by Kelso & Company, with the securities regulatory authorities on April 8, 2013 (today).

MMCAP now beneficially owns and MM Asset Management Inc. exercises control and direction over 32,154,998 shares, representing approximately 6.71% of the outstanding shares based on 478,880,000 outstanding shares as of March 18, 2013 as per EACOM’s Management Discussion and Analysis.

MMCAP has acquired such securities for investment purposes only.

Depending on market conditions and other factors, MMCAP may from time to time acquire additional securities of EACOM or dispose of such securities in the open market, by private agreement or otherwise.

Source: MM Asset Management Inc.

EACOM Timber Corporation and Kelso & Company jointly announce that Kelso & Company, through a wholly owned subsidiary has agreed, subject to certain conditions, to make a take-over bid to acquire all of the common shares of EACOM for C$0.38 in cash per common share. EACOM and Kelso have entered into a support agreement in connection with the Offer.

The Offer represents a premium of 46.2% to EACOM’s closing share price of C$0.26 on the TSX Venture Exchange on March 21, 2013 and a premium of 63.7% to the VWAP of the EACOM common shares for the 30-day period ending on that date.

“We are pleased with Kelso’s offer, which recognizes the Company’s inherent value. Kelso is extremely well capitalized and is in a position to provide the capital to implement EACOM’s long term growth and mill modernization plan. We believe that the Offer is in the best interests of the Company and its stakeholders, including its shareholders and employees”, said Terry Lyons, Chair of the Special Committee of the Board of Directors of EACOM.

The Special Committee of the Board of Directors of EACOM, following review of the terms and conditions of the Offer and consideration of a number of factors unanimously recommended the Offer to EACOM’s Board of Directors. The Special Committee and the Board of Directors have received an opinion from each of Canaccord Genuity Corp. and Sanabe & Associates LLC that as of the date of the opinion and subject to the assumptions outlined therein, the consideration payable to EACOM shareholders under the transaction is fair, from a financial point of view.

EACOM’s Board of Directors, after receiving the recommendation of the Special Committee, has unanimously determined that the Offer is in the best interests of EACOM and its shareholders and unanimously recommends that shareholders accept the Offer.

The directors and senior executive officers of EACOM, as well as certain significant securityholders of EACOM, have entered into lock-up agreements with Kelso and have agreed to tender all of their common shares (including common shares issuable upon the exercise of options and warrants) to the Offer. Common shares representing approximately 44% of the issued and outstanding EACOM common shares on a fully diluted basis are subject to the lock up agreements.

The Support Agreement provides that the Board of Directors of EACOM may under certain circumstances terminate the Support Agreement in favour of an unsolicited superior proposal, subject to the payment of a break fee of C$7.0 million and subject to a right by Kelso to match such superior proposal.

Full details of the Offer will be included in a take-over bid circular that is expected to be mailed to EACOM shareholders in the first week of April. The Offer will be open for a period of not less than 35 days and the Offer will be subject to certain customary conditions, including there having been validly deposited and not withdrawn at the expiry time of the Offer that number of EACOM common shares that constitutes at least 66⅔ per cent of the outstanding common shares of EACOM on a fully diluted basis and receipt of all required regulatory approvals. The Offer is not subject to any financing condition.

About Kelso & Company

Kelso & Company is one of the oldest and most established firms specializing in private equity. Since 1980, Kelso has invested in over 115 companies in a broad range of industry sectors with aggregate initial capitalization at closing of over $40 billion. The firm is currently investing its eighth investment partnership, Kelso Investment Associates VIII, L.P., with $5.1 billion of committed capital. For more information, please visit http://www.kelso.com.

About EACOM Timber

EACOM Timber Corporation owns eight sawmills, all located in Eastern Canada, and related tenures. The mills are Timmins, Nairn Centre, Gogama, Elk Lake and Ear Falls in Ontario, and Val-d’Or, Ste-Marie and Matagami in Quebec. The mills in Ear Falls, Ontario and Ste-Marie, Quebec are currently idled. As a result of improved market conditions, operations in Val-d’Or and Matagami which had been temporarily shut down in 2011 resumed during the third quarter of 2012. The mill in Timmins was seriously damaged by fire in January 2012 and remains shut down. EACOM also owns a lumber remanufacturing facility in Val-d’Or, Quebec, and a 50% interest in an “I” joist plant in Sault Ste-Marie, Ontario.

EACOM Timber Corp. is reporting net earnings attributable to shareholders of $4,285,000, compared to a net loss of $47,412,000 in 2011.

The 2012 results include a gain of $15,183,000 on disposal of property, plant and equipment destroyed by fire whereas the 2011 results included an impairment charge of $15,000,000, partially offset by a gain of $4,339,000 on the sale of the Big River mill and a $3,769,000 recovery of income taxes.

Net sales in 2012 were $248,937,000, down 11% against sales of $279,967,000 in 2011.

EBITDA

EACOM Timber recorded a positive adjusted EBITDA of $2,481,000 for the year ended December 31, 2012, compared to a negative adjusted EBITDA of $26,285,000 in 2011.

In the fourth quarter, EACOM Timber recorded a positive adjusted EBITDA of $3.4 million.

Current lumber markets have improved due to a stronger U.S. housing market. In 2013, the Company will focus on its cost reduction efforts to increase productivity and improve recovery’, stated Rick Doman, President and CEO.

Capital Upgrades

During the second half of 2012, EACOM Timber completed capital upgrades targeted at
increasing the production capacity at two of its mills, Nairn Centre and Elk Lake.

These upgrades are expected to partially offset the capacity lost at Timmins and mitigate some of the damages incurred as a result of the fire.

On December 12, 2012, EACOM Timber entered into an agreement with USNR Kockums Cancar Inc. to rebuild the Timmins mill. The total cost of the project is estimated at $25,000,000, of which $18,900,000 will be funded from the proceeds of insurance.

Construction is expected to be completed in the third quarter of 2013.

Read more from EACOM Timber:
EACOM Timber Corporation announces its fourth quarter and year end results

EACOM Timber Corporation announced this week that it has concluded with its insurer the negotiation of a global settlement in the amount of $48,250,000 in respect of the fire that occurred at its Timmins, Ontario mill in January 2012.

As at September 30, 2012, the company had received $23,700,000 of insurance proceeds, of which $13,700,000 related to business interruption and $10,000,000 for damage or destruction of assets.

During the fourth quarter, the company collected a further $6,900,000 in respect of business interruption. The company received the remaining proceeds of $17,400,000 this week.

The Timmins mill is currently under reconstruction which is expected to be completed in the summer of 2013.

Source: EACOM Timber

EACOM Timber plans to have its rebuilt sawmill in Timmins, Ontario ready for operation in July.

The sawmill was destroyed by fire a year ago.

Rich Doman, president of EACOM Timber, told The Daily Press that the rebuilt sawmill will be expanded, resulting in an increased capacity of 20-25%.

The company is investing $25 million into rebuilding the sawmill, and hope to employ the same number of employees (about 120) on a 2-shift operation.

Read the full article from The Daily Press (Timmins):

EACOM eyes July restart for Timmins sawmill

EACOM Timber Corporation has announced that its Board of Directors has established a special committee of independent directors to consider strategic alternatives that may be available to the company with the objective of seeking to maximize shareholder value.

EACOM Timber has been presented with a number of opportunities. The mandate of the Special Committee is to review these and other opportunities and recommend a strategic course of action to the Board.

There are no assurances that the strategic review process will lead to any action. Further information will be provided if the company intends to propose a strategic course of action.

The Special Committee is composed of the following members of EACOM’s Board of Directors and are considered independent:

• Terry Lyons (Chair)
• Frank Guistra
• Jay Gurandiano
• Chris Hodgson

The Special Committee may retain, at the expense of EACOM, independent advisors to assist in its review and evaluation of alternatives and to otherwise assist the Special Committee in the discharge of its mandate.

Source: EACOM Timber

EACOM Timber Corporation is pleased to announce that the Board has approved entering into an agreement with USNRKockums Cancar Inc., to rebuild the Timmins Mill that was destroyed by fire in January, 2012.

The total cost of the project is estimated at $25 million, a substantial portion of which is being funded from proceeds of insurance related to a fire.

To date EACOM Timber has received $23,700,000 of insurance proceeds, $13,700,000 related to business interruption, and $10,000,000 for damage or destruction of assets.

EACOM has also completed its capital project on the sawline at the Elk Lake facility. The mill has been restarted and expected to operate at full production in January 2013.

“We are continuing our capital expenditure program designed to increase productivity and capacity at our mills to reduce manufacturing costs. The rebuild of Timmins has also been designed to provide for improved productivity. Lumber markets have improved and continue to contribute to the overall performance of the Company” commented Rick Doman, President and CEO of EACOM Timber.

Source: EACOM Timber

EACOM Timber Corporation is reporting a positive adjusted EBITDA of $1.5 million for the third quarter of 2012.

The net loss attributable to shareholders amounted to $964,000, compared to a net loss of $709,000 in the previous quarter and a net loss of $564,000 in the same quarter of 2011.

During the third quarter, the Company recorded sales of $63,380,000, down 3% against
sales of $65,256,000 in the previous quarter but up 3% against sales of $61,396,000 in the
corresponding quarter of 2011.

Nairn Centre and Elk Lake Upgrades

Upgrades are now complete on EACOM’s Nairn Centre mill in Ontario.

Construction at the company’s Elk Lake, Ontario mill is expected to be completely shortly, following a 6 week shutdown of the mill.

The upgrades at Nairn Centre and Elk Lake are expected to partially offset the capacity lost at the company’s Timmins, Ontario mill and mitigate some of the damages incurred as a result of the fire on January 22, 2012. A significant portion of these investments will be reimbursed under the business interruption insurance claim.

Timmins Update

EACOM Timber is planning to reconstruct its Timmins, Ontario mill that was destroyed by fire.

A substantial portion of the total cost of the project is being funded from proceeds of insurance related to the fire. To date, EACOM has received $23,700,000 of insurance proceeds, of which $10,000,000 for damage or destruction of assets and $13,700,000 related to business interruption.

‘We are progressing well with our capital expenditure program at Nairn Centre and Elk Lake.
We also moved forward with the commencement of the rebuilding process at Timmins. The
Company intends to continue its focused capital investments with a view to increase
capacity and recovery, and reduce manufacturing costs. This should contribute to improve
our competitiveness in the global forestry sector. It should also provide a more stable and
sustainable employment environment for our employees in the communities where we
operate’, stated Rick Doman, President and CEO.

About EACOM Timber

EACOM owns 8 sawmills, all located in Eastern Canada, and related tenures. The mills are Timmins, Nairn Centre, Gogama, Elk Lake and Ear Falls in Ontario, and Val-d’Or, Ste-Marie and Matagami in Quebec. The mills in Ear Falls, Ontario and Ste-Marie, Quebec are currently idled.
Operations in Val-d’Or and Matagami which had been temporarily shut down due to weak
market conditions resumed during the third quarter. The mill in Timmins was substantially
damaged by fire in January 2012 and remains shut down. EACOM also owns a lumber
remanufacturing facility in Val-d’Or, Quebec, and a 50% interest in an “I” joist plant in Sault
Ste. Marie, Ontario.

EACOM Timber Corp. is reporting an operating loss of $7.788 million on sales of $59.9 million in the first quarter of 2012.

EACOM Timber is reporting a net income attributable to shareholders of $6.3 million in the first quarter.

During the quarter, the company shipped 128 million board feet of lumber (159 million board feet in the previous quarter and 170 million board feet in the corresponding quarter of 2011) and 120,000 oven-dried metric tons of by-products (129,000 oven-dried metric tons in the previous quarter and 161,000 oven-dried metric tons in the corresponding quarter of 2011).

In the first quarter of 2012, shipments were impacted as the Timmins operations have been interrupted since January 22, 2012 as a result of the fire at the mill site. The first quarter of 2012 results include a gain of $14,283,000 on disposal of property, plant and equipment destroyed by fire.

Pricing has improved in the first quarter of 2012 with benchmark lumber prices averaging US$329/Mfbm for studs and US$360/Mfbm for random lengths delivered Great Lakes, up 8% and 10% from US$304/Mfbm and US$326/Mfbm respectively in the fourth quarter of 2011. Mill realizations were, however, somewhat impacted by a strengthening Canadian dollar with the exchange rate averaging 1.001 in the first quarter of 2012, up 2% against an average of 0.977 in the previous quarter. Pricing for random lengths still remains 6% below the level achieved in the first quarter of 2011, whereas studs are trading at a similar level.

Lumber production for the quarter ended March 31, 2012 was 113 million board feet of lumber, against 111 million board feet in the previous quarter and 166 million board feet in the corresponding quarter of 2011. During the three-month period, the Company operated at 46% of its capacity with two of the eight mills acquired from Domtar idled, Ear Falls in Ontario and Ste-Marie in Quebec (45% during the previous quarter and 65% in the corresponding quarter of 2011 with no change to idled mills). Compared to the previous quarter, the lost capacity at Timmins has been partially mitigated by higher production levels at other mills while production in the fourth quarter was negatively impacted by the six-week closure at Gogama due to a fire at the mill site. Compared to the first quarter of 2011, operations in Val-d’Or and Matagami have been temporarily shut down in the second half of 2011 and the Timmins mill closed on January 22, 2012. These closures have been somewhat offset by the additional production at Elk Lake following the acquisition of the remaining one-third interest in the mill in the third quarter of 2011.

Unit costs improved compared to those experienced in previous quarters as a result of the higher cost mills taking market-related downtime. The positive impact of lower unit costs was, however, offset by the fixed costs incurred in respect of those mills that are either idled or shut down.

Read EACOM Timber’s full release