Oct 24, 2007. /Lesprom Network/. Rayonier reported on October 23, 2007 third quarter net income of $71.5 million, or $0.90 per share. This compares to $33.3 million, or $0.42 per share, in second quarter 2007 and $55.1 million, or $0.70 per share, in third quarter 2006. There were no special items in this quarter. Second quarter results included a special item charge of $10.1 million, or $0.13 per share, for timber damaged by forest fires. Third quarter 2006 included a special item gain of $5.3 million, or $0.07 per share, for IRS audit settlements including associated interest expense." Lee M. Thomas, chairman, president and CEO said, "Our financial performance reflects the strength and diversity of our core businesses. Real Estate and Performance Fibers provided strong operating results and cash flows. In Timber, cash generation remained solid due to our ability to shift product mix in response to strong pulpwood demand. In our Real Estate business, we benefited from continued interest in our rural properties, as evidenced by our recent $46.6 million, 3,100 acre land sale in Florida. Sales of $334 million were $34 million and $22 million above second quarter 2007 and third quarter 2006, respectively. For the nine months ended September 30, cash provided by operating activities was $264 million, or $41 million above the comparable 2006 period. Cash available for distribution (CAD) of $217 million was $70 million above 2006, primarily due to improved earnings. (CAD is a non-GAAP measure defined and reconciled to the nearest GAAP measure in the attached exhibits.) Debt of $622 million was $37 million below year-end 2006, while the debt-to-capital ratio of 38.7 percent improved from 41.7 percent. Cash and cash equivalents of $92 million were $52 million above year-end 2006. Timber Sales of $50 million and operating income of $12 million were $6 million and $9 million below second quarter, respectively, reflecting reduced demand for sawlogs and lower salvage value for fire-damaged timber, somewhat offset by favorable demand for pulpwood. Compared to third quarter 2006, sales increased $6 million largely due to increased pulpwood and salvage timber volumes, while operating income declined by $5 million due to product mix. Performance Fibers Sales and operating income of $189 million and $43 million, respectively, were $21 million and $12 million above second quarter, and $25 million and $22 million above third quarter 2006. As compared to both prior periods, the improvements were primarily driven by increased pricing and volume, coupled with lower costs. Wood Products Sales of $24 million were comparable to second quarter. An operating loss of $2 million was unfavorable by nearly $1 million to second quarter. Compared to third quarter 2006, sales declined $2 million although the operating loss was favorable by nearly $2 million, as cost reductions more than offset lower prices. Other Operations Sales of $15 million were $8 million below second quarter and $17 million lower than third quarter 2006, reflecting the closure of the company's wood products trading business in the Northwest U.S. Operating results for the quarter were essentially breakeven. Outlook "We expect another good year, with 2007 earnings between $2.25 and $2.32 per share, excluding special items," Thomas said. "The diversity of our core businesses should position us to generate favorable results through a range of economic conditions." "In Performance Fibers, we should realize strong earnings and cash flow as a result of our market-leading position in high-value cellulose specialties. In Real Estate, we expect to receive entitlements on 3,300 acres in coastal Georgia in the near term. In addition, we are seeing continued interest from industrial buyers for rural properties, especially where population growth is driving infrastructure needs. In Timber, our ability to manage product mix allows us to take advantage of strong pulpwood demand while waiting for sawlog markets to recover. The success of our $300 million convertible debt offering provides us lower interest cost and greater flexibility to pursue strategic growth initiatives. In all, we're well positioned to deliver solid results for our shareholders." Rayonier is a leading international forest products company with three core businesses: timber, real estate and performance fibers. It owns, leases or manages 2.6 million acres of timber and land in the U.S. and New Zealand. Its performance fibers business is the world's leading producer of high-value specialty cellulose fibers. Approximately 40% of Rayonier's sales are outside the U.S. to customers in more than 50 countries. Rayonier is structured as a real estate investment trust.