Fraser Papers reports financial results

Fraser Papers Inc. recently reported financial results for the second quarter ended July 3, 2010.

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.

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.