Crown Pacific reports eighth quarter of losses

Portland forest products firm lost $59.1 million in '02

Crown Pacific Partners LP Ñ under the gun to reduce its multimillion-dollar debt Ñ has reported its eighth consecutive quarterly loss.

The company said Wednesday that it lost $12.2 million, or 40 cents per unit (the equivalent of a share), in the fourth quarter of 2002 and that revenues for the period fell 18 percent from a year ago to $106.2 million.

The firm lost $20.7 million, or 67 cents per unit, on revenues of $124 million in the same period a year ago.

For 2002 as a whole, the firm lost $59.1 million, or $1.92 per unit, on sales of $484.2 million.

Peter Stott, Crown Pacific's president and chief executive officer, called last quarter's performance 'very disappointing.'

'That number is pretty much in line with what they've been projecting,' said Dan Nelson, an industry analyst at Ragen MacKenzie in Seattle.

The firm was hammered by an estimated $15.3 million in penalties and charges last year to restructure $512 million in debt owed to several banks and investors.

Crown Pacific spokesman John Mangan said the company's priority is recapitalization: 'As soon as they can do that, they will be operating profitably. They're strong enough to survive.'

Crown Pacific's chief financial officer, Steve Dietrich, said last week that the firm is considering several options, including selling assets or finding a merger partner, to help reduce its $512 million in debt. He said it could involve in-state or out-of-state partnerships.

'The best you can hope for is for prices to improve as we get into March,' Nelson said.

'If you're highly leveraged like they are, it's hard to make interest payments on debt,' added the analyst, who does not own Crown Pacific stock.

Crown Pacific paid $12 million in interest on loans in the fourth quarter of 2002 alone.

Stott responded Wednesday to a report that the firm's headquarters might leave Portland, saying there was no chance of that:

'Crown Pacific was founded in Portland, we went public while in Portland, and we have every intention of maintaining our headquarters in Portland.'

D.A. Davidson analyst Steve Chercover said Crown Pacific leadership needs 'to act fast to sell assets or even liquidate. The sharks smell blood, and they use that as leverage.'

Chercover urged the company to act for its unit holders, not creditors. Crown Pacific stock closed Wednesday at $1.61 a share, up 8 cents.

Two other wood products giants with substantial Oregon operations reported profitable fourth quarters Wednesday.

Federal Way, Wash.-based Weyerhaeuser Co., which acquired Portland's Willamette Industries Inc. last year, reported a $126 million profit versus a $15 million loss a year ago. Idaho's Boise Cascade Corp. recorded a profit of $6.2 million, compared with a net loss of $41.7 million last year.

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