Boise Inc. announces financial results for Q1 2010
Wednesday, May 05, 2010
Press release from the issuing company
Boise, Idaho - Boise Inc. today reported a net loss of $12.7 million or ($0.16) per diluted share for first quarter 2010 compared with a first quarter 2009 net loss of $0.9 million or ($0.01) per diluted share. Net income excluding special items in first quarter 2010 was $3.0 million or $0.04 per diluted share compared with $2.7 million or $0.03 per diluted share in first quarter 2009.
EBITDA excluding special items was $54.9 million for first quarter 2010 compared with $58.6 million for first quarter 2009.
"We operated well during the first quarter and saw improving conditions in our key markets," said Alexander Toeldte, President and Chief Executive Officer of Boise Inc. "We grew our premium office, label and release, and flexible packaging products sales volumes 17% over the prior year, experienced strong demand in our corrugated packaging products, and continued to deliver solid results in our office papers business. We extended debt maturities and reduced balance sheet risk through the debt refinancing we completed in March. As expected, fiber and energy input costs increased during the quarter, and we experienced seasonal increases in working capital and increased maintenance expenditures from our planned annual outage at DeRidder. Looking ahead, we expect to begin to benefit from recent price increases across our businesses in the second quarter."
Total sales for first quarter 2010 were $494.1 million, down $6.2 million, or 1%, from $500.3 million for first quarter 2009 and up $3.8 million from fourth quarter 2009 sales of $490.3 million.
Paper segment sales increased $1.5 million during first quarter 2010 compared with first quarter 2009, as increased sales volumes were offset partially by lower sales prices. In first quarter 2009, we took market downtime to balance supply with customer demand.
Packaging segment sales decreased $8.9 million during first quarter 2010 compared with first quarter 2009, driven by lower sales prices for segment linerboard, newsprint, and corrugated products and lower sales volumes of newsprint due to the idling of our DeRidder #2 newsprint machine in April 2009. These declines were offset partially by higher sales volumes of segment linerboard and corrugated products.
Prices and Volumes
Corrugated container and sheet sales volumes improved 14% during first quarter 2010 compared with first quarter 2009 and increased 4% from fourth quarter 2009, due primarily to increased sales of sheets from our sheet feeder plant in Texas. Corrugated container and sheet prices declined 12% in first quarter 2010 from first quarter 2009, driven by lower selling prices for containerboard and product mix changes. Corrugated container and sheet prices decreased 2% compared with fourth quarter 2009.
More favorable market conditions led to increased linerboard sales volumes to third parties, which were up 62%, to 62,000 tons, compared with first quarter 2009. Third-party sales volumes decreased by 26% sequentially from fourth quarter 2009 as improved sales volumes in our corrugated product and sheet operations during first quarter 2010 resulted in less linerboard available for sales to third parties. Linerboard net selling prices to third parties declined to $296 per ton in first quarter 2010 from $352 per ton in first quarter 2009 and improved 1% compared with fourth quarter 2009. In first quarter 2010, we implemented a $50-per-ton and $70-per-ton price increase on domestic linerboard sales in the eastern and western U.S., respectively. In April, we announced an additional $60-per-ton increase on domestic linerboard sales.
Total fiber costs during first quarter 2010 were $115.5 million, an increase of $21.4 million, or 23%, from $94.1 million incurred in first quarter 2009. This was due to increased fiber consumption, higher pulp prices, and increased wood costs in our Alabama operating region as a result of wet weather during the quarter. Fiber costs in first quarter 2010 increased $9.0 million, or 8%, compared with $106.5 million in fourth quarter 2009.
Energy costs in first quarter 2010 were $63.4 million, an increase of $2.6 million, or 4%, compared with $60.8 million in first quarter 2009, driven by increased consumption of energy due to higher production volumes, offset partially by lower prices for natural gas and electricity. Energy costs in first quarter 2010 increased $17.7 million, or 39%, from $45.7 million in fourth quarter 2009 due to seasonal increases in consumption as a result of colder winter weather.
Chemical costs in first quarter 2010 were $49.1 million, a decrease of $1.7 million, or 3%, compared with $50.8 million in first quarter 2009. Chemical costs were down $3.7 million, or 7%, compared with $52.8 million in fourth quarter 2009. The key drivers were lower prices offset partially by higher consumption of commodity chemicals.
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