On Tuesday, June 14, 2011, Phenix Lumber Company received Citations and Notifications of Penalties based on two inspections conducted by the Occupational Safety and Health Administration (OSHA). The Company fully cooperated with OSHA during these inspections and in fact was in the midst of working with OSHA to improve its safety management program and processes. Phenix Lumber takes seriously its safety obligations and OSHA's concerns. We are fully committed to our employees' safety.

The Company has continued to significantly improve its safety and health program especially over the past year. Specifically, it has continued to revise its safety policies and procedures and to address OSHA concerns, has trained and retrained all of its employees and managers including the OSHA 10-hour safety training course, has provided additional personal protective equipment to all its employees and is providing weekly safety talks to all employees. We will without fail continue to cooperate fully with the agency.

However, the Company is obviously disappointed that OSHA apparently failed to take into account the dramatic improvement in the Company's safety program when it decided on the citation classifications and penalty amounts. The Company respects OSHA and hopes that OSHA would want to work with an employer who has demonstrated a commitment to move ahead in a struggling economy and industry.

Phenix Lumber is currently reviewing the OSHA citations and its legal rights and options. The Company will continue to improve its safety and health programs and policies to ensure that all of its employees return safely to their homes each and every night.

SOURCE: Phenix Lumber