PORT TOWNSEND — A long-delayed audit report released Friday questions if Port Townsend Paper Corp. can stay afloat.
“The 2004 report from its independent accounting firm expresses doubt about the company’s ability to continue as a going concern,” according to a statement released by the company, which employs about 320 at the mill just south of Port Townsend.
That accounting firm is PriceWaterhouseCooper.
The firm’s financial data reported shows Port Townsend Paper’s parent company suffered a net loss of $15.4 million in 2002 and $919,000 in 2003 followed by $11.4 million in 2004.
Losses during that period totaled $27.76 million.
The report shows net sales increased in each of the three years, from $180 million in 2002 to $204.2 million in 2004.
The company’s debt load is estimated at $146 million, with $125 million in bonds held as senior secured notes, company Chief Financial Officer Tim Leybold has said.
Standard & Poors on April 3 lowered PT Holding’s credit from CCC+ to CCC because of the company’s high debt and interest and its failure to release audited financial reports, all of which created a negative outlook.
2004 audit received
PT Holdings Company Inc., the parent company of Port Townsend Paper Corp., announced on Friday delivery of the company’s 2004 audited financial statements required by its revolving credit lender.
Repeated delays in delivering the 2004 statements were necessary to complete the restatement of the company’s 2002 and 2003 statements, according to a company statement.
Port Townsend Paper had announced it was restating and re-auditing its 2002 and 2003 financial statements to correct 1997 and 2001 purchase accounting, accounting for inventory including replacement spare parts, valuation of deferred tax assets and treatment of other significant accounting issues.
A summary of 2002, 2003 and 2004 accountings contained audited results and earnings before interest, taxes, depreciation and amortization.
The company also announced it has provided its audited financial statements for 2004 and its restated and re-audited financial statements for the years ended Dec. 31, 2003, and 2002, together with 2004.
2005 statement Sept. 15
The company said it has received an extension from its lender to deliver its 2005 audited financial statements by Sept. 15.
Upon completion of the audit of its 2005 financial statements, the company expects to complete the independent review of each of its 2005 prior quarterly operating results for the periods ended through Sept. 30, 2005, and the independent review of its quarterly operating results for the two quarters ended June 30.
It then expects to file a registration statement for its senior secured notes with the U.S. Securities and Exchange Commission.
PT Holdings earlier this year met a $7.5 million interest payment to creditors after steps were taken to free up $5 million from a lender.
