Langley, B.C., September 12, 2011  – Hardwoods Distribution Inc. (“Hardwoods”) announced today it has entered into an agreement to purchase the business operations (the “Transaction”) of the Frank Paxton Lumber Company LLC (“Paxton”).

Paxton is a leading remanufacturer and distributor of premium hardwood lumber, millwork and architectural sheet goods. The Frank Paxton Lumber Company name is synonymous with quality, service and value and is recognized as a long term industry leader with roots going back to 1914.

 Today, Paxton serves its customers from five branches located in Chicago, Illinois, Cincinnati, Ohio, Denver, Colorado, Kansas City, Missouri, and San Antonio, Texas.

 Transaction Highlights

 The Transaction is structured as a purchase of assets. The acquired assets will consist principally of trade accounts receivable, inventory, and equipment. Hardwoods will not acquire any real estate as part of the Transaction, but will enter into lease agreements covering Paxton’s five operating locations.

  The purchase price of the acquired assets is estimated to be approximately US$13 million, but will be finalized based upon the value of the acquired assets on the closing date.

 Hardwoods existing credit facilities will be utilized to finance the purchase price. After financing the Transaction, Hardwoods expects it will still have sufficient unused borrowing availability under the credit facilities to continue to grow its’ business.

 Closing of the Transaction is anticipated to occur on or about September 19, 2011, subject to satisfaction of final closing conditions by Hardwoods and Paxton.

“In the latter part of 2010 Hardwoods introduced an updated business strategy,” said Lance Blanco, President and CEO of Hardwoods. “Our board of directors and management team identified that while expense reduction had played a vital role in seeing us safely through the recent economic downturn, the time was now right to make a shift to strengthen our emphasis on market expansion.”

 “We identified three specific areas to focus our market expansion strategy. First was end-market diversification, in particular doing more business in commercial and institutional construction markets, to help offset the slow recovery anticipated for the residential construction market. Second was leveraging our import products, to build upon the success of our strong import product offering by seeking out additional products and introducing our import lines to a broader range of customers. Third was focusing on expansion in high-potential geographic markets where demand for hardwood products is significant, but Hardwoods currently holds relatively small or no market share.”

“The acquisition of the Frank Paxton Lumber Company is an excellent fit with our market expansion strategies, and will add some $45 million annually in profitable sales to our business,” said Mr. Blanco. “Paxton’s expertise in architectural millwork provides it with a strong base of customers in commercial and institutional markets, a segment where Hardwoods intends to grow. We believe the expertise that Hardwoods brings in import products can also offer positive benefits to Paxton’s customer base.

 In addition, Paxton branches located in Chicago, Cincinnati, and Kansas City represent an attractive entry point into three high-potential markets where Hardwoods does not currently have a significant presence.”

 “We remain cautious in our overall outlook for the economy, and will continue to focus on executing our strategy while tightly managing our business,” added Mr. Blanco. “However with this accretive acquisition, the improving performance of our existing business, completion of our conversion to a corporation earlier in the year, and commencement of a quarterly dividend of $0.02 per share starting in October, we believe we are on track to increase the value of Hardwoods for our shareholders.”

About Hardwoods Distribution Inc.

Hardwoods Distribution Inc. (“Hardwoods”) (TSX: HWD) is a publicly traded company that holds, indirectly, a 100% ownership interest in Hardwoods Specialty Products LP and Hardwoods Specialty Products US LP (collectively, the “Business”). The Business is one of North America's largest distributors of high-grade hardwood lumber and sheet goods to the cabinet, moulding, millwork, furniture and specialty wood products industries. The Company currently operates a network of 26 distribution centers in the U.S. and Canada.

 Forward-Looking Statements

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING INFORMATION

This news release includes forward-looking statements. These involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These forward-looking statements are identified by the use of terms and phrases such as “anticipate”, “believe”, “estimate”, “expect”, “may”, “plan”, “will”, and similar terms and phrases, including references to assumptions.

Such statements may involve, but are not limited to: the purchase price of the acquired assets is estimated to be approximately US$13 million, but will be finalized based upon the value of the acquired assets on the closing date; Hardwoods existing credit facilities will be utilized to finance the purchase price; after financing the Transaction, Hardwoods expects it will still have sufficient unused borrowing availability under the credit facilities to continue to grow its’ business; that closing of the Transaction is anticipated to occur on or about September 19, 2011, subject to satisfaction of final closing conditions by Hardwoods and Paxton; that the Frank Paxton Lumber Company is an excellent fit with Hardwood’s market expansion strategies, and will add some $45 million annually in profitable sales to Hardwood’s business; Hardwoods belief that the expertise Hardwoods brings in import products can also offer positive benefits to Paxton’s customer base; that Hardwoods remains cautious in its overall outlook for the economy, and will continue to focus on executing our strategy while tightly manage its business; and that Hardwoods expects the acquisition to be accretive.