TRADING SYMBOL: Toronto Stock Exchange – HWD
LANGLEY, BC, Dec. 4, 2017 /CNW/ - Hardwoods Distribution Inc. ("Hardwoods" or the "Company") today provided an update regarding the US trade case against hardwood plywood manufactured in China and imported into the United States. The Company estimates that approximately 11% of its total sales is product imported from China that would be subject to the trade case.
As previously announced, on November 18, 2016, this trade case was initiated by US domestic hardwood plywood manufacturers seeking the imposition of countervailing duties ("CVD") and antidumping duties ("AD") against imported hardwood plywood imported from China. On April 19, 2017 the Department of Commerce ("Commerce") announced a preliminary CVD of 9.89%, and on June 20, 2017 Commerce announced a preliminary AD of 57.36%. The duties applied to most Chinese producers, including those that Hardwoods does business with. On November 13, 2017 Commerce announced final CVD and AD rates of 22.98% and 183.36% respectively.
The concluding phase of this trade case then passed to a separate US government body, the International Trade Commission ("ITC"), to rule on whether final CVD and AD duties determined by Commerce would be affirmed or rejected. On December 1, 2017, the ITC voted affirmatively that the final CVD and AD rates determined by Commerce will be implemented (the "Final Determination").
"We are pleased to have reached the Final Determination," said Rob Brown, President and CEO of Hardwoods. "Over a year has passed since this trade case was launched, making purchasing decisions for this product line a challenge while investigations were ongoing. Looking forward, the final combined duty rate of 206.34% is expected to make Chinese hardwood plywood non-competitive in the US market. However, we have spent the last year planning for this potential outcome and, now that final duty rates are known, we believe we are well positioned to adjust our sourcing for this product line in due course."
Hardwoods sells a wide range of architectural building products to its customers, including hardwood plywood, for which it offers both domestic and import product alternatives to meet the varying manufacturing needs of the customer.
"Our job as a distributor is to make available a wide range of architectural building products to our over 35,000 customers," commented Mr. Brown. "We accomplish this through our long-standing and diverse supply lines, and we are confident in our ability to successfully service our customers' product requirements going forward."
The ITC is expected to issue a written decision explaining its vote on or about December 21, 2017. The written decision will provide further detail on the ITC's rationale; however it is not expected to change the Final Determination.
About Hardwoods Distribution Inc.
Hardwoods is North America's largest distributor of architectural building products to the residential and commercial construction markets. The Company operates a North American network of 62 distribution centres, as well as one sawmill and kiln drying operation.
CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION
This news release includes forward-looking statements. These involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are identified by the use of terms and phrases such as "anticipate", "believe", "estimate", "expect", "may", "plan", "will", and similar terms and phrases, including references to assumptions. Such statements may involve, but are not limited to: Looking forward, the final combined duty rate of 206.34% is expected to make Chinese hardwood plywood non-competitive in the US market; we are confident in our ability to successfully service our customers' product requirements going forward; the ITC is expected to issue a written decision explaining its vote on or about December 21, 2017; and the written decision will provide further detail on the ITC's rationale; however it is not expected to change the Final Determination.
These forward-looking statements reflect current expectations of management regarding future events and operating performance as of the date of this news release. Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to: national and local business conditions; political or economic instability in local markets; competition; consumer preferences; spending patterns and demographic trends; legislation or governmental regulation; acquisition and integration risks.
Although the forward-looking statements contained in this news release are based upon what management believes to be reasonable assumptions, management cannot assure investors that actual results will be consistent with these forward-looking statements. The forward-looking statements reflect management's current beliefs and are based on information currently available.
All forward-looking information in this news release is qualified in its entirety by this cautionary statement and, except as may be required by law, Hardwoods undertakes no obligation to revise or update any forward-looking information as a result of new information, future events or otherwise after the date hereof.
SOURCE Hardwoods Distribution Inc.
For further information: Faiz Karmally, Chief Financial Officer, Phone: (604) 881-1982, Email: [email protected], Website: http://www.hardwoods-inc.com