PRT Forest Regeneration Income Fund posts net loss of $1.4 million

PRT Forest Regeneration Income Fund has announced results for its third quarter ended September 30, 2009.

For the nine month period, the Fund reported operating earnings of $1,271,000 and Cash Available for Distribution of $636,000 ($0.07 per unit) as compared to operating earnings of $3,269,000 and Cash Available for Distribution of $2,355,000 ($0.25 per unit) respectively for 2008. Operating Earnings and Cash Available for Distribution decreased year-over-year due to approximately 27% lower seedling volumes in 2009.

The reported net loss for the nine month period was $1,317,000 or ($0.14) per unit compared to a net loss of $19,000,000 for the comparable period in 2008 which was impacted by a $19.2 million non-cash write-down of goodwill. Excluding the write down, the net earnings for the 2008 nine month period would have been $175,000 ($0.02 per unit).

For the three months ended September 30, 2009, the Fund reported a net loss of $1,404,000 ($0.14 per unit) and Cash Available for Distribution of ($762,000) or ($0.07) per unit. Quarterly results were in line with management's expectations given consideration for the current economic recession and the seasonal nature of PRT's business. The third quarter is typically the lowest seasonal revenue period in PRT's business cycle.

Revenues in the nine month period decreased by $6.3 million or 21.7%, with lower contract volumes and prices being the primary cause. Of note however, is that despite the lower volumes, management estimates that market share remained relatively stable. While production expenditures were scaled to the lower volumes, margins declined due to lower efficiencies of scale and higher relative materials and utility costs. Selling, general and administration costs were 13.5% lower than the first nine months of 2008 due to cost reduction efforts as a response to the economic downturn.

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PRT Announces Results for Third Quarter of 2009