Western Forest Products reports net income of $6.9 million

Western Forest Products is reporting a net income of $6.9 million in its third quarter on sales of $175.5 million.

For comparison, in the second quarter of 2010, the company reported a net income of $9.5 million and a net loss was reported for the third quarter of 2009 of $16.6 million.

Dominic Gammiero, Chairman and Chief Executive Officer of Western Forest Products is extremely pleased with the company's progress.

"We have come through two of the toughest years in our industry history and have now reported four consecutive quarters of positive EBITDA. We have demonstrated that we can generate income and cash in even the toughest market environments. Our balance sheet and liquidity are stronger now then when we entered the recession.

"From this strong financial position, and with our continuing expansion of market opportunities in China, we now look forward to improvement in demand in our traditional markets," says Gammiero. "Our operational and balance sheet improvements make us ready to execute the long term strategies that the global recession put on hold. While the current operating environment requires us to remain focused on our immediate operating priorities, over the coming months we will finalize the investment priorities we had identified in support of our strategic plan."

Western Forest Products improved financial results were largely driven by lower fibre and manufacturing costs, higher sales volumes of logs, lumber and by-products and their continued focus on higher margin production programs.

The company has seen some modest improvements in their U.S. markets. The Chinese market has helped offset the weak U.S. market, but Western feels that further expansion in the U.S. market will be challenging as a result of increased competition. Economic activity in Canada has been more positive and provides some hope for increased sales, while European lumber demand has slowed as a result of economic concerns in that region.

Western Forest Products continues to pursue further opportunities that may arise to sell non-core or other land assets as appropriate. The company said proceeds from such sales will first be directed to reduce or eliminate long-term debt with any surplus being used to provide additional liquidity.

Source: Western Forest Products