Tembec sells its hardwood flooring assets
Montreal, Quebec – Tembec has reached an agreement with a private company to sells its Toronto (Ontario) flooring plant assets along with its Muskoka and Vintage brands. The closing of this transaction is expected to take place within the next few weeks.
Tembec will also close the Huntsville (Ontario) hardwood flooring plant, impacting 63 people. This plant will cease operations in January 2012. Management has met with employees to inform them of the Company’s decision.
The selling price related to the transaction is $13 million. The sale of the Toronto plant and the shutdown of the Huntsville plant will result in a one-time charge of $2 million that will be recorded in the Company’s December 2011 quarterly financial results. During the last 12-month period, the Toronto and Huntsville flooring plants generated sales of
$48 million, EBITDA of $1.9 million and operating earnings of $1.6 million.
“The sale of the hardwood flooring division is consistent with our strategy to focus on the Company's core businesses,” stated Tembec President and Chief Executive Officer James Lopez.
The Tembec hardwood sawmill operations located in Huntsville are unaffected by this transaction.
Tembec is a large, diversified and integrated forest products company which stands as the global leader in sustainable forest management practices. The Company’s principal operations are located in Canada and France. Tembec’s common shares are listed on the Toronto Stock Exchange under the symbol TMB and warrants under TMB.WT. Additional information on Tembec is available on its website at www.tembec.com.
This press release includes “forward-looking statements” within the meaning of securities laws. Such statements relate, without limitation, to the Company’s or management’s objectives, projections, estimates, expectations or predictions of the future and can be identified by words such as “may”, “will”, “could”, “anticipate”, “estimate”, “expect” and “project”, the negative or variation thereof, and expressions of similar nature. Forward looking statements are based on certain assumptions and analyses made by the Company in light of its experience, information available to it and its perception of future developments. Such statements are subject to a number of risks and uncertainties, including, but not limited to, changes in foreign exchange rates, product selling prices, raw material and operating costs and other factors identified in our periodic filings with securities regulatory authorities. Many of these risks are beyond the control of the Company and, therefore, may cause actual actions or results to materially differ from those expressed or implied herein. The forward-looking statements contained herein reflect the Company’s expectations as of the date hereof and are subject to change after such date. The Company disclaims any intention to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable securities legislation.
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