EACOM Timber Corporation Announces Financial Results for the Year Ended March
31, 2010

VANCOUVER and MONTREAL, July 29 /CNW Telbec/ - EACOM Timber Corporation (TSX VENTURE: ETR; "EACOM" or the "Company") today reported its financial results for the year ended March 31, 2010.

On March 26, 2010, EACOM entered into a definitive purchase agreement to acquire the forest products business of Domtar Corporation ("Domtar"). The Company closed the acquisition on June 30, 2010 and accordingly the acquisition is not reflected in the operating results of the Company for the year ended March 31, 2010. The Company paid approximately $102 million in cash and issued 48,070,712 common shares (valued at approximately $27 million) to Domtar upon closing the acquisition.

At March 31, 2010, the Company has $145 million recorded as restricted cash which related to the acquisition of the Domtar forest products business. The Company closed in escrow a $145 million brokered private placement financing for subscription receipts on March 26, 2010. The financing was to fund the cash portion of the acquisition purchase price for the Domtar forest products business acquisition, as well as provide working capital for the business. The financing was completed at $0.50 per subscription receipt. On closing the acquisition on June 30, 2010, the subscription receipts were converted into common shares on a one for one basis for no additional consideration and the escrowed proceeds were released to the Company.

RESULTS OF OPERATIONS FOR THE YEAR ENDED MARCH 31, 2010

The loss and comprehensive loss for the year ended March 31, 2010 was $3,369,000 ($0.07 per common share) compared to $1,870,000 ($0.05 per common share) for 2009, an increase of $1,499,000. This increase was due mainly to higher professional and due diligence fees, travel expenses and Big River Sawmill holding costs for the year ended March 31, 2010 compared to the same period in 2009. In addition, there was a higher gross profit from sales in 2009 compared to 2010. Partially offsetting these factors was a gain on investments of $231,000 in 2010 compared to a loss of $84,000 in 2009.

SALES, COST OF SALES AND GROSS MARGIN

For the year ended March 31, 2010, the Company recognized sales of $4,285,000 and cost of sales of $4,227,000 for a gross profit of $58,000 and a gross profit margin of approximately 1.4% of sales. North American customers accounted for 5% of the total sales, 2% of sales were to Middle East customers and the balance of 93% of the sales were to other overseas customers. The Company purchased 20% of the lumber from Canadian vendors and 80% from US vendors. For the year ended March 31, 2009, the Company recognized sales of $880,000 and cost of sales of $783,000 for a gross profit of $97,000 and a gross profit margin of approximately 11.0% of sales.

GENERAL AND ADMINISTRATION

Personnel expenses

Personnel expenses for the twelve months ended March 31, 2010 were $318,000 compared to $379,000 in 2009. The decrease of $61,000 was due to lower salaries and benefits resulting from a reduction in the number of employees for the year.

Professional fees

Professional fees for the year ended March 31, 2010 were $2,042,000 compared to $331,000 in 2009, an increase of $1,711,000. The increase was due primarily to higher consulting and advisory services related to the acquisition of the Big River sawmill assets and the Domtar forest products business. In addition, the Company incurred higher expenses in 2010 than in 2009 as a result of the preparation of a filing statement required to seek graduation to the TSX Venture exchange from the NEX.

Shareholder and other corporate expenses

For the twelve months ended March 31, 2010, shareholder and other corporate expenses were $155,000 compared to $140,000 in the corresponding period last year. The increase of $15,000 was also due to additional filing fees associated with the Company's application to graduate to the TSX Venture exchange and the associated sponsorship fee.

Insurance and other office

For the twelve months ended March 31, 2010, insurance and other office expenses were $512,000 compared to $286,000 in the corresponding period last year. The increase of $226,000 was due primarily to the Big River Sawmill insurance expense offset with a reduction of office general expenses.

Facilities

For the twelve months ended March 31, 2010, facility expenses were $199,000 compared to $251,000 in the prior year. The decrease of $52,000 was due to reduced facility maintenance expense and a sublease of part of the facility. The decrease in facility maintenance expense was partially offset by the recognition of the costs to return a portion of the Company's laboratory space to warehouse space.

Travel

For the twelve months ended March 31, 2010, travel expenses were $352,000 compared to $130,000 in the corresponding period last year. The increase of $222,000 due primarily to travel related to the acquisition of the Big River sawmill assets and the Domtar forest products business.

STOCK-BASED COMPENSATION

Stock-based compensation for the twelve months ended March 31, 2010 were $149,000 compared to $98,000 in 2009. This increase was due primarily to a higher fair value of options granted during the current fiscal year resulting in a higher amortized expense recognized during the period.

GAIN/LOSS ON INVESTMENTS HELD FOR TRADING

For the year ended March 31, 2010 the Company recognized a gain of $231,000 compared to a loss of $84,000 in same period last year. The gains recognized in the current year are due to gains realized on equity investments and lumber future contracts whereas the loss in the prior year was due primarily to losses on lumber futures contracts.

OTHER INCOME

For the twelve months ended March 31, 2010, interest and other revenue were $83,000 compared to $134,000 in the prior year. The decrease was due primarily to a lower interest and dividend income on investments. In the current year the Company received a $70,000 payment from a third party pursuant to the Sell Option Agreement for the Big River sawmill. The Sell Option Agreement was not exercised by the third party.

LIQUIDITY AND CAPITAL RESOURCES

At March 31, 2010 the Company's cash and cash equivalents totaled $2,244,000 compared to $1,234,000 at March 31, 2009. Working capital at March 31, 2010 was $637,000 compared to $1,517,000 at March 31, 2009. Accounts payable and accrued liabilities at March 31, 2010 include accrued liabilities of $1,530,000 related to the due diligence and purchase agreement negotiations for the acquisition of the Domtar forest products business.

For the twelve months ended March 31, 2010, the Company used $1,386,000 for operations compared to $2,171,000 for the corresponding period of the prior year. The cash used in operations decreased even though the net loss in 2010 increased to $3,369,000 from $1,858,000 in 2009 as the changes in non-cash working capital increased to a $1,858,000 inflow in 2010 compared to a $325,000 outflow in 2009.

Cash from financing activities for the twelve months ended March 31, 2010, was $6,232,000 compared to $277,000 for the corresponding period of the prior year. During 2010 the Company completed two private placements for gross proceeds of $3,800,000 and received $2,875,000 from the exercise of warrants. In 2009, the Company completed one private placement for gross proceeds of $300,000.

Cash consumed from investing activities for the year ended March 31, 2010 was $3,836,000 compared to $119,000 in the corresponding period of the prior year. Cash used for investing in 2010 was primarily related to $3,185,000 used for the acquisition of the Big River sawmill.

The Company has $145 million included in restricted cash which relates to the acquisition of the Domtar forest products business. On March 26, 2010, the Company closed a $145 million brokered private placement of subscription receipt financing in escrow. The financing is to fund the cash portion (estimated to be $102 million) of the acquisition purchase price of $129.4 million, as well as provide working capital for the business. The financing was completed at $0.50 per subscription receipt. On closing the acquisition on June 30, 2010, the subscription receipts were converted into common shares on a one for one basis for no additional consideration and the escrowed proceeds were released to the Company. If the acquisition had not closed, then the escrowed proceeds would have been returned to the investors and the subscription receipts cancelled. At the closing of the financing, the Company was obliged to pay a cash commission of 6% of the proceeds on the completion of the Domtar forest products business acquisition and agent's warrants to acquire common shares equal to 6% of the common shares issued under the subscription receipts at a price of $0.50 per share. The agent's warrants expire two years from the date of grant. At March 31, 2010, the Company had paid $387,760 in deferred financing costs in relation to this financing.

About EACOM

EACOM Timber Corporation is a TSX-V listed company. EACOM owns seven sawmills and an equity interest in an eighth sawmill, all located in Eastern Canada and related tenures. The mills are Timmins, Nairn Centre, Gogama and Ear Falls in Ontario and Val-d'Or, Ste-Marie and Matagami in Quebec. The equity interest is in the Elk Lake sawmill located in Ontario. The sawmills in Ear Falls, Ontario, and Ste-Marie, Quebec, are currently idled. EACOM also owns one idle mill in Big River Saskatchewan.

The TSX Venture Exchange has neither approved nor disapproved the contents of this press release. All directorships are subject to TSX Venture Exchange approval.

Forward-Looking Statements

All statements in this news release that are not based on historical fact are "forward-looking statements." While management has based any forward-looking statements contained herein on its current expectations, the information on which such expectations were based may change. These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks, uncertainties, and other factors, many of which are outside of our control that could cause actual results to materially differ from such statements. Such risks, uncertainties, and other factors include, but are not necessarily limited to, those set forth under the captions "Risk Factors" of the Filing Statement dated January 8, 2010 and the current MD&A for EACOM Timber Corporation on file with the Canadian Securities Commissions.

    
    EACOM Timber Corporation
    Consolidated Balance Sheets
    As at March 31, 2010 and 2009

                                                        2010            2009
                                              --------------- ---------------
    Assets

    Current assets
    Cash and cash equivalents                     $2,244,428      $1,233,513
    Investments held for trading                      56,630          89,467
    Other receivables and deposits                    98,806         101,097
    Trade accounts receivable                        275,718         263,052
    Inventory                                         37,396          74,469
    Prepaid expenses                                  89,388          99,686
                                              --------------- ---------------
                                                   2,802,366       1,861,284

    Property, plant and equipment                  3,598,058          13,167
    Restricted cash                              145,750,637         130,000
    Deferred costs                                   487,760               -

                                              --------------- ---------------
                                               $ 152,638,821   $   2,004,451
                                              --------------- ---------------
                                              --------------- ---------------

    Liabilities

    Current liabilities
    Accounts payable and accrued liabilities   $   2,165,424   $     344,715
                                              --------------- ---------------
                                                   2,165,424         344,715

    Asset retirement obligation                      413,000               -
    Subscription receipts helds in trust         145,000,000               -
                                              --------------- ---------------

                                                 147,578,424         344,715
                                              --------------- ---------------

    Shareholders' Equity

    Capital stock                                  6,033,208     141,349,555

    Contributed surplus                            1,762,645       2,439,104

    Deficit                                       (2,735,456)   (142,128,923)
                                              --------------- ---------------
                                                   5,060,397       1,659,736

                                              --------------- ---------------
                                               $ 152,638,821   $   2,004,451
                                              --------------- ---------------
                                              --------------- ---------------


    On behalf of the board

    Rick Doman (signed)                        Terry Lyons (signed)
    -------------------                        --------------------
    President and CEO                          Director
    Director


    EACOM Timber Corporation
    Consolidated Statements of Loss, Comprehensive Loss and Deficit

                For the Three Months Ended          For the Years Ended
              ------------------------------- -------------------------------
              March 31, 2010  March 31, 2009  March 31, 2010  March 31, 2009
              --------------- --------------- --------------- ---------------

    Sales      $     920,880   $     880,573   $   4,284,923   $     880,573
    Cost of
     sales          (912,339)       (783,286)     (4,227,389)       (783,286)
              --------------- --------------- --------------- ---------------
    Gross
     margin            8,541          97,287          57,534          97,287

    Expenses

    General
     and
     adminis-
     tration       1,972,305         287,995       3,577,641       1,516,974
    Stock-
     based
     compen-
     sation           44,597          34,781         149,411          97,848
    Amortiza-
     tion of
     property,
     equip-
     ment,
     patents
     and
     licenses              -           6,583          13,167          26,331
    (Gain)
     loss on
     invest-
     ments
     held for
     trading        (135,071)         37,577        (230,970)         83,880
    Employee
     termina-
     tions                 -               -               -         376,972
              --------------- --------------- --------------- ---------------
                   1,881,831         366,936       3,509,249       2,102,005
              --------------- --------------- --------------- ---------------

    Loss from
     opera-
     tions        (1,873,290)       (269,649)     (3,451,715)     (2,004,718)

    Other
     income            2,274           8,763          83,115         134,400

              --------------- --------------- --------------- ---------------
    Loss and
     compre-
     hensive
     loss for
     the
     period       (1,871,016)       (260,886)     (3,368,600)     (1,870,318)

    Deficit,
     beginning
     of period      (864,440)   (141,868,037)   (142,128,923)   (140,258,605)

    Elimina-
     tion of
     deficit               -               -     142,762,067               -
              --------------- --------------- --------------- ---------------

    Deficit,
     end of
     period    $  (2,735,456)  $(142,128,923)  $  (2,735,456)  $(142,128,923)
              --------------- --------------- --------------- ---------------
              --------------- --------------- --------------- ---------------

    Basic and
     diluted
     loss per
     common
     share     $       (0.03)  $       (0.01)  $       (0.07)  $       (0.05)
              --------------- --------------- --------------- ---------------
              --------------- --------------- --------------- ---------------

    Weighted
     average
     number of
     common
     shares
     outstan-
     ding         69,720,344      36,545,344      51,319,317      35,035,070
              --------------- --------------- --------------- ---------------
              --------------- --------------- --------------- ---------------


    EACOM Timber Corporation
    Consolidated Statements of Cash Flows

                For the Three Months Ended          For the Years Ended
              ------------------------------- -------------------------------
              March 31, 2010  March 31, 2009  March 31, 2010  March 31, 2009
              ------------------------------- -------------------------------

    Cash flows
     from
     operating
     activi-
     ties
    Loss for
     the
     period   $   (1,871,016)  $    (260,886)  $  (3,368,600)  $  (1,870,318)
    Items not
     affec-
     ting
     cash:
      Amorti-
       zation
       of pro-
       perty,
       equip-
       ment,
       patents
       and
       licen-
       ses                 -           6,583          13,167          26,331
      Other
       income              -               -         (70,000)        (74,813)
      (Gain)/
       loss on
       sale of
       invest-
       ments
       held
       for
       trading           845         (29,316)         32,837         (25,317)
      Stock-
       based
       compen-
       sation         44,597          34,781         149,411          97,848
              ------------------------------- -------------------------------
                  (1,825,574)       (248,838)     (3,243,185)     (1,846,269)
    Changes in
     non-cash
     working
     capital       1,258,783        (193,000)      1,857,705        (324,603)
              ------------------------------- -------------------------------
                    (566,791)       (441,838)     (1,385,480)     (2,170,872)
              ------------------------------- -------------------------------

    Cash flows
     from
     financing
     activi-
     ties
    Proceeds
     from
     private
     place-
     ments         3,000,000               -       3,800,000         300,000
    Financing
     costs
     related
     to
     private
     place-
     ments           (37,305)              -         (55,150)        (23,375)
    Proceeds
     from
     exercise
     of
     Warrants         62,500               -       2,875,000               -
    Deferred
     financing
     expenses       (350,455)              -        (387,760)              -
              ------------------------------- -------------------------------
                   2,674,740               -       6,232,090         276,625

    Cash flows
     from
     investing
     activi-
     ties
    Purchase
     of Big
     River
     assets       (3,185,058)              -      (3,185,058)              -
    Purchase
     of
     invest-
     ments
     held-for-
     trading               -         (20,950)              -         (87,050)
    Proceeds
     from sale
     of
     invest-
     ments
     held for
     trading               -          22,899               -          22,899
    Purchase
     of
     restric-
     ted cash       (606,149)       (130,000)       (620,637)       (130,000)
    Proceeds
     from
     sale of
     biophar-
     maceuti-
     cal
     assets                                                -          74,813
    Option fee
     received
     for Big
     River
     sawmill               -               -          70,000               -
    Deferred
     acquisi-
     tion
     costs          (100,000)              -        (100,000)              -
              ------------------------------- -------------------------------
                  (3,891,207)       (128,051)     (3,835,695)       (119,338)

              ------------------------------- -------------------------------
    Increase
     /(Decrea-
     se) in
     cash and
     cash
     equiva-
     lents        (1,783,258)       (569,889)      1,010,915      (2,013,585)

    Cash and
     cash
     equiva-
     lents,
     beginning
     of period     4,027,686       1,803,402       1,233,513       3,247,098
              ------------------------------- -------------------------------

    Cash and
     cash
     equiva-
     lents,
     end of
     period    $   2,244,428   $   1,233,513   $   2,244,428   $   1,233,513
              ------------------------------- -------------------------------
              ------------------------------- -------------------------------

    Supple-
     mental
     disclosu-
     re of
     cash flow
     informa-
     tion
    Interest
     received          2,273           9,984          13,114          50,146

    Restricted
     cash from
     the
     issuance
     of
     subscrip-
     tion
     receipts    145,000,000               -     145,000,000               -
    

For further information: For further information: Sophie Merven, Media relations, (514) 917-1040

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EACOM TIMBER CORPORATION

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