Write-off for paper-segment sale overwhelms Potlatch report

SPOKANE, Wash. (AP) -- Potlatch Corp. wrote down the costs of its decision to get out of the printing paper business -- including the planned closure of its paper mill in Brainerd -- to create a $167.4 million first-quarter net loss.

The Spokane-based company said the $149.8 million charge pushed its per-share loss for the January-March quarter to $5.90.

Potlatch took the write-off to cover the cost of the pending $480 million sale of a majority of its coated printing paper segment assets to Sappi Limited including its mill in Cloquet, closure of the Brainerd mill and its exit from the business.

But excluding those one-time costs, Potlatch's loss on continuing operations was less than Wall Street expected and just half the red ink reported a year earlier.

Potlatch has hired a forest products industry consulting firm to help in the search for a buyer for the Brainerd mill, which employed 616 workers and is set to be shut down in about two months. The firm will look at opportunities to make other types of paper at the mill that will not interfere with a noncompete clause in Sappi's agreement to buy Potlatch's coated fine paper business and the mill in Cloquet.