Saskatchewan Wheat Pool Inc. posted stronger sales, earnings and cash flow from continuing operations in its third quarter of fiscal 2005 versus the previous year’s quarter, building on the momentum that continues as a result of its recent recapitalization and rights offering.

Quarterly Highlights

· All segments posted improved sales results during the quarter with higher shipments in Grain Handling and Marketing and strong sales in Agri-products and Agri-food Processing. Consolidated sales and operating revenue increased 12.9% to $288.0 million in the third quarter of 2005 compared to $255.2 million generated in the third quarter of 2004.

· EBITDA of $11.5 million for the quarter exceeded last year’s result by 11.7% after excluding a $1.6 million one-time capital refund recorded in last year’s quarterly results.

· Cash flow from continuing operations for the quarter was $4.8 million, up from the $1.8 million generated in the third quarter last year.

· The Pool’s net loss for the third quarter was $0.9 million, which compares to a loss in the third quarter of fiscal 2004 of $9.1 million.

Chief Executive Officer, Mayo Schmidt says, “The third quarter was a pivotal period for the Pool. Corporately, we completed our recapitalization and subsequent to quarter-end completed the rights offering, which has allowed us to strengthen our balance sheet and benefit from greater financial flexibility as we move forward. Operationally, we are executing to plan as illustrated by the results this quarter. We look forward to the potential for a good crop this fall and to the operational and growth opportunities that may now be available to us because of the Pool’s renewed financial health.”

Corporate Highlights

· On February 7, 2005, the Pool launched a recapitalization initiative, which included: (i) the continuance of the Pool as a corporation governed by the Canada Business Corporations Act; (ii) the changing of Saskatchewan Wheat Pool Inc.’s previously existing Class A Shares and Class B Shares into common shares; and (iii) the exchange of $172 million of Convertible Subordinated Notes into common shares. Delegates, shareholders and noteholders approved the plan and on March 31, 2005 the recapitalization was completed and the Pool officially became a federal corporation registered as Saskatchewan Wheat Pool Inc.

· On March 3, 2005, the Pool secured grain volume insurance for the 2006 fiscal year, which provides partial payments if production falls by 20% and a full payout if production drops by approximately 45%. The plan allows for up to $30 million in coverage.

· On March 14, 2005, the Pool announced that it had refinanced its operating line securing a three-year $250 million revolving asset-based loan facilitated through a syndicate of financial institutions led by GE Canada Finance Holding Company. Interest on the loan is a floating rate of prime plus 1.5%. The Pool also secured $100 million of Senior Secured Notes, which replaced $79 million in term bank debt. Interest on the Notes was set at the 1-month LIBOR rate plus 6.5%. The Notes were repayable without penalty at the option of the Pool.

· On April 6, 2005, the Pool and James Richardson International Limited (JRI) announced their agreement to jointly operate their Vancouver port terminals. The joint venture will improve operating efficiencies, increase productivity and throughput potential through the specialization of each facility and will result in better railcar utilization. The venture is awaiting regulatory approval.

· On April 14, 2005, the Pool filed the final prospectus for a $150.1 million rights offering of common shares. Under the offering, common shareholders were granted one right for each common share held. Each right entitled the holder to purchase one and one-third common shares at a price of $3.21 per share. In total, shareholders were granted 35.1 million rights to purchase 46.8 million common shares.

· On May 27, 2005, the transaction, which was substantially oversubscribed, closed and the Pool issued 46,762,078 new shares, bringing its total common shares issued and outstanding to 81,834,137.

· On the same date, which was subsequent to quarter-end, the Pool received net proceeds of approximately $142.3 million from the offering and on June 7, 2005, used $100 million to repay in full its Senior Secured Notes. The remaining proceeds are being used for general corporate purposes, primarily working capital for the purchase of grains, oilseeds, and agri-products inventory. The recapitalization and equity offering have substantially improved the Pool’s balance sheet and have provided the Pool with greater financial flexibility to pursue operational and growth strategies in the future.

· The Pool’s debt-to-equity ratio at April 30, 2005 was 61:39 compared to 74:26 at April 30, 2004. Assuming the recapitalization and rights offering was complete on April 30, 2005, the Pool’s debt-to-equity ratio would have been 38:62.

Complete results in PDF format: