VANCOUVER - Ainsworth Lumber Co. Ltd. (TSX:ANS) said Wednesday it lost $88.2 million in the first quarter as sales dropped sharply and the company took a $36.1-million unrealized foreign exchange loss on long-term debt.

The forestry company said the loss amounted to $6.02 per share for the three months ended March 31 compared with a loss of $22.8 million or $1.55 per share a year ago.

Quarterly revenue was $88.5 million, down from $135 million.

The company attributed the decrease in sales on low oriented strand board sales prices and the strong Canadian dollar, in combination with reduced shipment volumes due to production curtailments.

"OSB business conditions continue to be challenging, as the U.S. housing industry, a key driver of OSB demand, remains in a protracted downturn," the company said in a statement.

"U.S. housing starts continued to drop due to excess housing inventories and the constriction of credit availability in light of the mortgage credit market crisis."

Earlier this month, Ainsworth said it was exploring strategic alternatives to strengthen its balance sheet and enhance its liquidity.

In March, the company failed in a bid to refinance US$823.5 million worth of corporate debt by exchanging a series of older unsecured bonds with new secured ones.

Ainsworth announced in mid February it had begun an offer to exchange several series of unsecured bonds which expired between 2010 and 2014 for new secured bonds that would expire in June 2014.

The offer was conditional on 50.1 per cent of bondholders tendering their securities.

The proposed refinancing was meant to lower the company's debt costs at a time the North American forestry sector is facing tough times because of the slump in the U.S. housing market.

Shares in the company, which reported its results after the close of markets, were last traded on the Toronto Stock Exchange for $2.75 on Tuesday.

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