Consumables

Boise Inc. Reports Financial Results for First Quarter 2011

Tuesday 03. May 2011 - Boise Inc. (NYSE: BZ) today reported net income of $18.7 million or $0.21 per diluted share for first quarter 2011 compared with a net loss of $12.7 million or $(0.16) per diluted share for first quarter 2010.

Net income excluding special items was $20.0 million or $0.22 per diluted share for first quarter 2011 compared with $3.0 million or $0.04 per diluted share for first quarter 2010.
EBITDA excluding special items was $84.4 million for first quarter 2011 compared with $54.9 million for first quarter 2010.
FINANCIAL HIGHLIGHTS
(in millions, except per-share data)
1Q 2011 1Q 2010 4Q 2010
Sales $568.8 $494.1 $524.1
Net income (loss) $18.7 $(12.7) $26.2
Net income (loss) per diluted share $0.21 $(0.16) $0.31
Net income excluding special items (a) $20.0 $3.0 $25.8
Net income excluding special items
per diluted share (a) $0.22 $0.04 $0.31
EBITDA (b) $82.2 $29.3 $93.4
EBITDA excluding special items (b) $84.4 $54.9 $92.8
Net total debt at period end (c) $770.4 $693.9 $604.4


a) For a reconciliation of net income (loss) to net income excluding special items, see “Summary Notes to Consolidated Financial Statements and Segment Information.”
(b) For a reconciliation of net income (loss) to EBITDA and EBITDA to EBITDA excluding special items, see “Summary Notes to Consolidated Financial Statements and Segment Information.”
(c) For a reconciliation of total debt to net total debt, see “Summary Notes to Consolidated Financial Statements and Segment Information.”
“We performed well in first quarter 2011, delivering strong earnings and cash flow despite sequential increases in input and maintenance costs,” said Alexander Toeldte, president and chief executive officer of Boise Inc. “With our acquisition of Tharco Packaging, we expanded and diversified our presence in packaging markets and increased our vertical integration opportunities. We also continued to grow sales volumes of our packaging demand-driven and premium office papers and corrugated packaging products.
“During the first quarter, we completed our annual outage at DeRidder and expect increased maintenance costs from scheduled outages at three of our mills in the second quarter.
“In April, we announced a special cash dividend of $0.40 per share, payable to shareholders of record on May 4, 2011, reflecting our intention to return cash to shareholders when both our performance and outlook create the appropriate opportunity. We remain focused on creating shareholder value through well-performing operations, disciplined capital allocation, and targeted growth.”
Sales
Total sales for first quarter 2011 were $568.8 million, up $74.7 million, or 15%, from $494.1 million for first quarter 2010 and up $44.7 million from fourth quarter 2010 sales of $524.1 million.
Paper segment sales increased $21.7 million during first quarter 2011 compared with first quarter 2010, due primarily to increased sales prices. Packaging segment sales increased $55.2 million during first quarter 2011 compared with first quarter 2010, driven by higher sales prices for linerboard, newsprint, and corrugated products and the acquisition of Tharco Packaging, Inc. (Tharco).
Prices and Volumes
Uncoated freesheet net selling prices increased 5% in first quarter 2011 compared with first quarter 2010 and decreased 1% compared with fourth quarter 2010. Total uncoated freesheet sales volumes were 311,000 short tons during first quarter 2011, flat versus the prior-year period and an increase of 7% from fourth quarter 2010. Combined sales volumes of premium office, label and release, and flexible packaging papers represented 31% of our total first quarter 2011 uncoated freesheet sales volumes compared with 29% in first quarter 2010. This growth displaced primarily sales volumes of commodity paper products.
Corrugated container and sheet sales volumes improved 18% during first quarter 2011 compared with first quarter 2010 and increased 13% from fourth quarter 2010. This increase was due primarily to the acquisition of Tharco and, to a lesser extent, to increased sales of sheets from our sheet feeder plant in Texas. Corrugated container and sheet prices increased 19% during first quarter 2011 compared with first quarter 2010 and increased 7% sequentially from fourth quarter 2010, driven primarily by product mix changes resulting from the Tharco acquisition. Improved market conditions and pass-through of increased prices for linerboard and medium compared with first quarter 2010 also contributed.
Linerboard net selling prices to third parties increased 43% in first quarter 2011 compared with first quarter 2010, as a result of price increases implemented during 2010, and decreased 2% sequentially from fourth quarter 2010. Linerboard sales volumes to third parties were 62,000 short tons in first quarter 2011, flat from first quarter 2010 and an increase of 1% sequentially from fourth quarter 2010.
Input Costs
Total fiber, energy, and chemical costs for first quarter 2011 were $223.3 million, a decrease of $4.7 million, or 2%, compared with costs of $228.0 million for first quarter 2010. The decrease was driven primarily by reduced energy costs as a result of lower natural gas prices compared with first quarter 2010. Prices for chemicals and fiber increased sequentially in first quarter 2011 from fourth quarter 2010.
INPUT COST SUMMARY
(in millions)
1Q 2011 1Q 2010 4Q 2010
Fiber $116.3 $115.5 $110.0
Energy 52.8 63.4 47.8
Chemicals 54.3 49.1 51.4
Total $223.3 $228.0 $209.2


Total fiber costs during first quarter 2011 were $116.3 million, an increase of $0.8 million, or 1%, from $115.5 million incurred in first quarter 2010, and increased $6.3 million, or 6%, compared with $110.0 million in fourth quarter 2010. These increases were driven primarily by additional fiber costs as a result of the Tharco acquisition and higher fiber prices, offset largely by lower fiber consumption as a result of lower production.
Energy costs in first quarter 2011 were $52.8 million, a decrease of $10.6 million, or 17%, compared with $63.4 million in first quarter 2010. This was driven primarily by lower prices and consumption of fuel, primarily natural gas, compared with first quarter 2010. Energy costs increased $5.0 million, or 10%, from $47.8 million in fourth quarter 2010, due primarily to increased energy consumption due to colder seasonal weather.
Chemical costs in first quarter 2011 were $54.3 million, an increase of $5.2 million, or 11%, compared with $49.1 million in first quarter 2010, and up $2.9 million, or 6%, from fourth quarter 2010, driven primarily by higher prices for commodity chemicals.