Core Insights - Western Forest Products Inc. reported a significant decline in financial performance for Q3 2025, with Adjusted EBITDA of negative $65.9 million, largely due to a non-cash export duty expense of $59.5 million [1][2] - The company experienced a net loss of $61.3 million in Q3 2025, compared to a net loss of $19.6 million in Q3 2024 and $17.4 million in Q2 2025 [2][3] - Revenue for Q3 2025 was $233.0 million, a decrease from $241.7 million in Q3 2024 and $289.1 million in Q2 2025 [2][3] Financial Performance - Adjusted EBITDA margin for Q3 2025 was negative 28%, compared to negative 4% in Q3 2024 and 0% in Q2 2025 [2][3] - Operating loss prior to restructuring and other items was $78.0 million in Q3 2025, up from $24.4 million in Q3 2024 and $12.3 million in Q2 2025 [2][3] - The company reduced net debt by $15.7 million compared to the end of Q2 2025, resulting in a net debt to capitalization ratio of 2% [6][2] Production and Sales - Lumber production was 107 million board feet in Q3 2025, down from 127 million board feet in Q3 2024 [6] - Lumber shipments totaled 129 million board feet in Q3 2025, compared to 138 million board feet in Q3 2024 [6] - The average lumber selling price increased to $1,409 per thousand board feet in Q3 2025, up from $1,378 per thousand board feet in Q3 2024 [6] Market Conditions - The North American lumber market is expected to remain weak due to high interest rates and low consumer confidence, compounded by elevated inventory levels [9] - An incremental 10% tariff on imported lumber products, effective October 14, 2025, is expected to further complicate market dynamics [8][9] - In international markets like Japan and China, housing demand is declining, but low lumber inventories are stabilizing prices [10] Strategic Developments - The company is focusing on transitioning to higher value products and has ongoing construction of two continuous dry kilns, with completion expected in early to mid-2026 [6][4] - Planned capital expenditures for 2025 have been reduced to approximately $30 to $35 million, including $16 million for the continuous dry kilns [6][4] - The company recorded $5.0 million in other income as an initial insurance recovery related to the Columbia Vista sawmill [14]