Atlas Cold Storage feels the chill

TORONTO, (Sept. 24, 2003) — With stock values dropping to a three-year low late last week, Atlas Cold Storage announced that it will discontinue some of its Canadian trucking operations, as well suspend third-quarter cash payouts to unitholders.

The company — which operates North America’s second-largest network of temperature-controlled warehouses, as well as trucking assets that supply food distributors and grocery chains — cited its main troubles are in Western Canada, particularly at TCT Logistics, which sold all its refrigerated trucking assets to Atlas after it went into receivership in January of 2002. Atlas also blamed the ‘loss of a large customer in the Chicago area after the customer’s decision to build its own capacity,” as another prime reason for its recent financial losses.

The company said the reefer division had experienced an extreme slowdown since May, when a single case of mad cow disease was discovered in Alberta, shutting down the U.S. border, and effectively bringing the beef-hauling and storage industry to a standstill. “We don’t believe in the near future this is a business we want to stay in,” Canadian Press reported Patrick Gouveia, the trust’s president and chief executive, as saying of the transportation business.

Atlas units fell as low as $7.32 on the Toronto Stock Exchange — their lowest value since June 2000. That’s down $4.98, or 38 per cent, from Aug. 29, when the units closed at $13.11 before the company’s Labour Day weekend disclosure that it would restate its 2002 and 2001 financial statements after an internal investigation found accounting irregularities.

As if that admission wasn’t enough to scare investors, Atlas also announced last week that CFO Andrew Peters had been let go. It has set up a special committee to look into trust’s internal controls.

— with files from Canadian Press

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