Port Townsend reports negative $3.5 million EBITDA for quarter ended Dec. 31

By Caroline Salls

Pittsburgh, Jan. 30 - PT Holdings Co. Inc., parent company of Port Townsend Paper Corp., reported an EBITDA of negative $3.5 million for the quarter ended Dec. 31 on net sales of $54.6 million, according to a company news release.

For the same quarter of 2005, the company posted a $3.8 million EBITDA on $55.6 million in net sales.

The company reported a $7.69 million loss from operations for the quarter ended Dec. 31, compared with a $146,000 loss from operations for the period ended Dec. 31, 2005.

The net loss for the fourth quarter of 2006 was $12.34 million, a decline from a $5.55 million net loss for the same period of 2005.

Cash on Dec. 31 was $1.54 million, compared with $9.15 million on Dec. 31, 2005.

"During the quarter, we experienced much higher costs of sales from both increased prices in the fiber and energy markets, as well as a series of operational problems at our U.S. mill that unfavorably impacted revenue," president and chief executive officer John P. Begley said in the release.

"Our fiber costs have continued to increase due to the regional wood chip supply shortage resulting from the ongoing downturn in the U.S. housing market.

"These market factors coupled with significant operational problems experienced at our U.S. mill caused by machinery malfunctions associated with severe weather in the Pacific Northwest and other general maintenance problems resulted in lower production rates and gross margin losses this quarter.

"All of these issues have continued to affect our U.S. mill performance in January, but we anticipate more traditional production rates at our U.S. mill going forward and are seeing indications of downward pressure on fiber and energy costs."

For full-year 2006, the company reported a $13.7 million EBITDA, down from a $16.7 million 2005 EBITDA.

In addition, the company showed a $3.21 million loss from operations on $228.6 million in net sales in 2006, compared with a $1.49 income from operations for 2005 on $222.86 million in net sales.

The net loss for 2006 was $21.54 million, slipping from a $19.28 million 2005 net loss.

Port Townsend, a Port Townsend, Wash., paper maker, filed for bankruptcy on Jan. 29 in the U.S. Bankruptcy Court for the Western District of Washington. Its Chapter 11 case number is 07-10340.

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