Riverside Forest Products Financial Results for the 3 Months Ended June 30, 1997.

KELOWNA, British Columbia--(BUSINESS WIRE)--July 21, 1997-- Riverside Forest Pro (TSE, VSE:RFP.) Riverside Forest Products Limited reports a net loss for the third quarter of fiscal 1997 of $385,000 or $0.05 per share compared with a net loss of $2,084,000 or $.27 per share for the quarter ended June 30, 1996.

Net sales for the quarter were $99.3 million compared with $91.4 million for the quarter ended June 30, 1996.

The company's net loss for the nine months ended June 30, 1997 was $2.2 million or $0.29 per share compared with a net loss of $5 million or $0.65 per share for the nine months ended June 30, 1996. Net sales were $295.2 million for the nine months ended June 30, 1997 compared with $265.4 million for the same period in 1996. Earnings before interest, taxes, depreciation and amortization were $19.2 million for the nine months ended June 30, 1997 compared with $11.2 million for the nine months ended June 30, 1996 - an $8 million improvement.

During the quarter the company generated $1.8 million cash from operations before changes to non-cash operating working capital compared with $1.9 million for the same quarter a year ago. This brings the cash generated from operations before changes to non- cash working capital for the nine months ended June 30, 1997, to $13.3 million compared with $14.7 million for the same period in 1996. The company spent $8.7 million on capital additions bringing total capital expenditures for the year to date to $24.6 million.

Working capital as at June 30, 1997 amounts to $72.6 million compared with $87.9 million as at June 30, 1996. Shareholder's Equity amounts to $139 million which is equivalent to $15.11 per share ($118.3 million and $15.57 book value per share for the respective period in the last fiscal year). The ratio of long-term debt to total capitalization is 48.4 percent. (47.2 percent at June 30, 1996.)

Consistent with the company's dividend policy to pay a quarterly dividend at a rate that is sustainable over a range of economic conditions the Board of Directors declared a quarterly dividend of $0.04 per share on the common shares of the company payable August 12, 1997 to shareholders of record August 1, 1997.

On June 23, 1997 the company purchased the sawmilling and timber base operations of TimberWest Forest Limited at Williams Lake in the interior region of British Columbia, as well as the railway tie treatment plant at Ashcroft, B.C. The sawmilling assets and operations at Williams Lake have an annual production capacity of 165 million board feet of lumber and have annual timber harvesting rights of 590 thousand cubic metres. The Williams Lake operations include a studmill, a small log line, a planermill, a fingerjointing plant, a whole log chipper and dry kilns. The purchase price was $50 million (after the assumption of $8.4 million of long-term reforestation obligation) plus the amount of working capital at closing (estimated to be $15 million).

The acquisition was financed by a combination of cash, a $25 million bridge loan and by the issuance of $24.8 million in equity. The equity issue has increased the number of common shares outstanding to 9,199,493. Operating results for the acquisition will be included in the results of the company for the quarter commencing on July 1, 1997.

On July 17, 1997 the company issued U.S. $25 million in senior unsecured notes. The notes have an average life of eight years with final maturity on July 17, 2007. Proceeds from the private placement were utilized to repay the above $25 million bridge loan and for operating working capital.

CONTACT: Riverside Forest Products Limited

Gordon W. Steele, 250/762-3411