Consumables

Boise Cascade Holdings Reports Fourth Quarter 2010 Financial Results

Thursday 03. March 2011 - Boise Cascade Holdings, L.L.C. (BC Holdings or Company) announced a $16.2 million net loss for the quarter ended December 31, 2010, and a $6.1 million full year 2010 net loss. During 2010, BC Holdings sold its remaining equity interest in Boise Inc. for net proceeds of $86.1 million and recognized a $25.3 million gain. The Company contributed the proceeds to its wholly owned operating subsidiary, Boise Cascade, L.L.C.

Boise Cascade, L.L.C. reported negative fourth quarter 2010 earnings before interest, taxes, depreciation, and amortization (EBITDA) of $2.6 million, compared with negative EBITDA of $12.4 million in fourth quarter 2009. Boise Cascade, L.L.C. reported full year 2010 sales of $2.2 billion and positive EBITDA of $22.1 million, which included $4.6 million of litigation proceeds. This compared with 2009 sales of $2.0 billion and negative EBITDA of $35.3 million, which included a $6.0 million gain on debt repurchases and $3.7 million of asset closure costs. At December 31, 2010, we had $264.6 million of cash and $219.6 million of debt.
The Company’s 2010 revenues and earnings continued to be negatively impacted by reduced demand for the products it distributes and manufactures. New residential construction remained weak in 2010 with housing starts of approximately 587,000. 2010 housing starts were slightly higher than the 554,000 starts experienced in 2009, but were still approximately 60% lower than the 10-year historical trend of about 1.5 million per year.
“I am proud of how both of our businesses performed last year at the second lowest level of housing starts in over 50 years. Our Wood Products and BMD operating segments reported a combined $38.1 million of EBITDA, which was a $66.8 million year-over-year improvement. In addition, we were able to improve our net debt position by $61 million in 2010, and we are well positioned for the year ahead,” stated Tom Carlile, CEO.
Building Materials Distribution (BMD) segment sales were $402.7 million in the fourth quarter, up 9% from the same quarter a year ago. Prices for the segment were up approximately 8%, with volumes up about 1%. BMD reported $2.4 million of EBITDA in fourth quarter. This was up from the $1.0 million reported in fourth quarter 2009. Gross margins declined 70 basis points in the quarter compared to the same quarter a year ago; however, gross margin dollars increased as a result of higher sales. Total expenses were lower as a percent of sales, resulting in an improved operating margin. For the full year of 2010, BMD reported positive EBITDA of $19.1 million on $1.8 billion of sales.
Wood Products segment sales in the fourth quarter were $156.6 million, up 14% from the same quarter a year ago. The sales increase was attributable primarily to 12% higher plywood sales volumes, 7% higher I-joist sales volumes, 12% higher I-joist net selling prices, and 13% higher laminated veneer lumber net selling prices. The segment reported negative $1.8 million of EBITDA for the quarter, an improvement of $7.6 million from the negative $9.4 million reported in fourth quarter 2009. The main factors contributing to the improved financial performance were improved product pricing for engineered wood products and lower per-unit manufacturing costs for plywood. For the full year of 2010, Wood Products reported positive EBITDA of $19.0 million on $687.4 million of sales.
Outlook
Absent a decline in unemployment and a reduction in the housing supply overhang, we expect to continue to experience below normal demand for the products we distribute and manufacture. Industry commodity wood product prices could be volatile in response to operating rates and inventory levels in various distribution channels. We expect to manage our production levels to our sales demand, which will likely cause us to operate our facilities below their capacity.