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Pope & Talbot In Chapter 11

BY HBSDEALER Staff

Lumber producer Pope & Talbot filed for bankruptcy protection in a Canadian court on Oct. 29, saying it needed more time to pursue strategic alternatives, including selling some of its assets.

The company blamed the low demand for lumber, high cost of raw materials, the appreciation of the Canadian dollar and high debt service as factors contributing to its financial woes.

Although it is headquartered in Portland, Ore., the bulk of Pope & Talbot’s operations are in British Columbia, qualifying it for a Chapter 11 filing in the Ontario Superior Court of Justice. As of Oct. 29, the company owes $276 million in outstanding debts. According to its latest filing with the Securities & Exchange Commission, Pope & Talbot has total assets of $682 million and approximately $355 million in long-term debt.

In a prepared statement, the 150-year-old company said it is “taking all available steps to allow its business to continue operating as a going concern.” But the statement also said its restructuring efforts may include the sale of “certain or all of the company’s assets.”

These assets include a pulp mill in Halsey, Ore., and a sawmill in Spearfish, S.D. The company is also trying to sell thousands of acres of forestland in British Columbia, which is subject to the approval of the Canadian government. These transactions have already generated some controversy in the Canadian press.

In its second quarter, Pope & Talbot reported a loss of US$42.9 million compared with losses of US$21.8 million in the same period last year. Sales were US$236.6 million, up from sales of US$213.6 million last year.

Based in Portland, Ore., Pope & Talbot produces market pulp and softwood lumber at mills in the United States and Canada.

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Lumber Liquidators closes IPO

BY HBSDEALER Staff

Toano, Va.-based specialty hardwood flooring retailer Lumber Liquidators has closed its initial public offering.

The company offered 10 million shares of common stock at a price of $11 per share, including 3.8 million shares offered by the company and 6.2 million shares offered by selling stockholders.

The company intends to use the net proceeds of approximately $36.4 million from the offering to repay outstanding debt and support the growth of the business, which includes plans for 25 stores in 2007, followed by 30 to 40 new stores per year until 2011.

Goldman Sachs and Merrill Lynch acted as joint book-running managers with Lehman Brothers, Banc of America Securities and Piper Jaffray serving as co-managers for the offering.

Lumber Liquidators has seen same-store sales growth of 8.5 percent to 9 percent each quarter this year. According to the company’s S-1 filing with the Securities and Exchange Commission, in 2006 Lumber Liquidators had sales of $332 million, up 35 percent from sales of $245 million in 2005.

The retailer currently operates 111 small-format stores in the United States. The company is traded on the New York Stock Exchange under the symbol “LL.”

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NKT Holdings withdraws initial public offering

BY HBSDEALER Staff

Providence, R.I.-based HVAC company NTK Holdings has canceled its initial public offering according to a Securities and Exchange Commission filing this week.

The company said that the application was withdrawn “due to the unsettled market conditions.” The company had planned to use the IPO proceeds to repay debt.

The announcement was part of Nortek’s third-quarter earnings statement. Nortek, which reported a 4 percent increase in sales, is a subsidiary of NKT.

The company reported net earnings of $37.6 million for the period ended Sept. 29, down 44.9 percent from last year’s earnings of $67.7 million in the same period last year. Nortek also reported net sales of $602 million, up 4 percent from $579 million last year.

NTK Holdings manufactures air conditioning, heating ventilation and home environmental control technology products.

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