Consistent with Tembec’s previously announced plans to enhance its liquidity and improve its balance sheet, the Company is evaluating current market conditions, and in connection therewith, will have discussions with certain investors. Such discussions may lead to questions regarding the Company’s performance in the current fiscal quarter. As such, Tembec today issued a forecast for its third quarter ending on June 26, 2010.
The Company expects that EBITDA will be in the range of $47 million to $53 million. This compares with EBITDA of $32 million in the most recent quarter ended March 27, 2010. Following the recent sale of two pulp mills, liquidity is expected to be approximately $250 million, up from $138 million at the end of the March 2010 quarter. Liquidity consists of cash and undrawn revolving lines of credit.
Tembec defines EBITDA as earnings before non-recurring items, interest, income taxes, depreciation, amortization and other non-operating expenses and revenues. The Company considers EBITDA to be a useful indicator of the financial performance of the Company, the various business segments and the individual business units. EBITDA is not a measure of performance under GAAP, and it should not be considered as an alternative to operating earnings, net income, cash flow from operating activities or any other measure of performance derived in accordance with GAAP. As there is no generally accepted method of calculating EBITDA, it may not be directly comparable to similar measures reported by other companies.