Operating Legally, Weather and 'Operational Inefficiency' Puts a Crimp in PL's Style
According to Maxxam in an Aug. 11th press realease their subsidiary, Pacific Lumber (aka Palco, or, PL), suffered a $13.1 million decrease in net sales.
First they say the decrease in sales "was due to a decline in lumber shipments as a result of a lower log supply" and "an increase in the volume of lumber" put into PL's "redwood lumber drying program during the second quarter of 2006, as compared to the same period in 2005."
Maybe someone else can explain how an increase in the amount of lumber in the "drying program" contributes to a decrease in sales.
Then Maxxam goes on to explain that "The lower log supply from ScoPac was due to adverse weather conditions in early 2006 and harvest restrictions."
Then the kicker...
Buried in the document is the statement that PL's operating losses in the first half of 2006 are partly the result of "operational inefficiencies related to Palco's new sawmill".
Thats right, the new "Hi-Tech" sawmill that PL claimed had "taken redwood lumber production to new heights".
The one that needs less human operators and required a new runoff pond that leaches toxic waste into the river just upstream of Rio Dell's municipal water supply. Which in turn required a cover-up which required harrasment and intimidation of a potential whistle blower that led to a harrasment lawsuit filed against now former PL ceo Robert "Hatchet Man" Manne.
Funny, I've never saw anything about "operational inefficiencies" in any of the Hatchet Man or New Guy's ramblings.
Did anyone else hear about that?
Maybe PL's friends at the Eureka Reporter can get them to elaborate on this.
Later on in the press release Maxxam hits us with a doomsday prediction-
"As previously announced, ScoPac ( PL's land management branch) expects to incur substantial interest shortfalls over at least the next several years.
There can be no assurance that ScoPac will be able to generate sufficient additional liquidity to fund the expected future cash shortfalls. To the extent that ScoPac is unable to generate sufficient liquidity from property sales or other sources, the Company expects that ScoPac will be forced to take extraordinary actions, which may include: laying off employees, shutting down various operations, and seeking protection by filing under the Bankruptcy Code."