Boise Announces 2007 Financial Results



    BOISE, Idaho, Feb. 20 /CNW/ -- Boise Cascade Holdings, L.L.C. today
reported net income of $127.7 million for 2007, compared with net income of
$71.6 million for 2006.  Net income for 2007 included $41.8 million of lower
depreciation as the result of discontinuing depreciation and amortization on
the assets recorded as held for sale related to the announced agreement to
sell our Paper and Packaging & Newsprint businesses.  Income from operations
for 2007 was $220.2 million, compared to $183.4 million in 2006.  Boise also
reported net income for the fourth quarter 2007 of $39.1 million, compared to
$2.0 million for the same period in 2006.  Income from operations for the
fourth quarter 2007 was $66.3 million, compared with $28.7 million for the
same period in 2006.
    "In 2007, we made significant progress in our businesses," said Tom
Stephens, chairman and chief executive officer.  "We completed a project at
Wallula, Washington, which has given that paper mill the capability to produce
label and release grades.  We improved our service capability in our Building
Materials Distribution segment by opening a new distribution facility in
Milton, Florida, and relocating our Atlanta operation to a larger site.  Our
Building Materials Distribution and Wood Products businesses operated in
increasingly difficult markets as the year progressed, but their performance
on a relative basis was good.  We also took the next step in focusing our
company as we entered into an agreement with Aldabra to sell our Paper and
Packaging & Newsprint businesses."



    
                             FINANCIAL HIGHLIGHTS
                               ($ in millions)
    

    
                                                               Year Ended
                                                               December 31
                             4Q 2007   4Q 2006   3Q 2007     2007      2006
    Sales                    $1,242.0  $1,269.5  $1,402.1  $5,413.5  $5,779.9
    Income from operations      $66.3     $28.7     $72.0    $220.2    $183.4
    Net income                  $39.1      $2.0     $49.2    $127.7     $71.6
    EBITDA(a)                   $76.8     $68.3    $106.6    $348.6    $339.1
    

    
    (a)  For reconciliation of net income to EBITDA, see "Segment Information"
         in the financial section.
    Sales
    
    Sales for the year 2007 were $5.4 billion, compared to $5.8 billion in
2006.  Year-over-year sales were lower in both the Building Materials
Distribution and Wood Products segments due primarily to the slowdown in the
housing market, which contributed to lower sales prices and lower sales
volumes in both segments.  Sales increased in our Paper segment due primarily
to increases in sales prices.  The increase in Packaging & Newsprint segment
sales was driven primarily by higher sales prices for corrugated products and
linerboard offset, in part, by lower newsprint sales prices.
    Fourth quarter 2007 sales were $1.2 billion, compared to $1.3 billion for
the same period of 2006.  Comparing the fourth quarter 2007 to the same period
of 2006, Building Materials Distribution segment sales decreased 9% due to
lower sales volumes.  Wood Products segment sales were down 6% due primarily
to lower prices, coupled with lower sales volumes.  Paper segment sales were
up 8% over the same period in 2006 due to higher sales prices and sales
volumes.  Packaging & Newsprint segment sales increased 7% due to higher sales
prices for corrugated products and linerboard prices.
    
    Income From Operations
    
    Income from operations increased 20% in 2007 to $220.2 million from
$183.4 million in 2006.  Segment income decreased in both Building Materials
Distribution and Wood Products driven by softer housing markets.  Segment
income also decreased in Packaging & Newsprint as lower newsprint prices,
coupled with higher raw materials costs, offset improved pricing in corrugated
products and linerboard and lower depreciation and amortization.  Paper
segment income was higher as the result of higher sales prices coupled with
lower depreciation and amortization.  The lower depreciation and amortization
costs in both the Paper and Packaging & Newsprint segments was the result of
suspending depreciation and amortization in these segments beginning in
September 2007 due to the agreement to sell both of these segments.
    Comparing fourth quarter 2007 with fourth quarter 2006, segment income in
Building Materials Distribution decreased $7.3 million, from $12.1 million in
2006 to $4.8 million, due primarily to lower sales volumes.  Segment loss in
Wood Products increased $0.6 million from a loss of $4.4 million in 2006 to a
loss of $5.0 million, due primarily to lower engineered wood products sales
prices and volumes, coupled with higher per unit conversion costs, offset in
part, by lower wood costs.  Paper segment income increased $35.3 million from
$16.3 million in 2006 to $51.6 million in 2007, due to higher sales prices and
lower depreciation and amortization costs.  Packaging & Newsprint segment
income increased $11.0 million, from $14.5 million a year ago to $25.5
million, due primarily to increased prices for linerboard and corrugated
products and lower depreciation and amortization costs.  These improvements
were offset, in part, by lower newsprint prices and higher raw materials
costs.
    
    About Boise Cascade
    
    Boise, headquartered in Boise, Idaho, manufactures engineered wood
products, plywood, lumber, and particleboard and distributes a broad line of
building materials, including wood products manufactured by the company. Boise
also manufactures a wide range of specialty and premium papers, including
imaging papers for the office and home and papers for pressure-sensitive
applications, as well as printing and converting papers, containerboard and
corrugated products, newsprint, and market pulp.  Visit Boise's website at
http://www.bc.com.
    
    Forward-Looking Statements
    
    This news release contains statements that are "forward-looking" within
the Private Securities Litigation Reform Act of 1995.  These statements speak
only as of the date of this press release.  While they are based on the
current expectations and beliefs of management, they are subject to a number
of uncertainties and assumptions that could cause actual results to differ
from the expectations expressed in this release.  The announced transaction
with Aldabra 2 is subject to a number of risks and uncertainties, including
Aldabra's ability to secure debt financing, approval by Aldabra 2's
stockholders, and the satisfaction of closing conditions, all of which affect
the timing of and our ability to complete the transaction.



    
                        Boise Cascade Holdings, L.L.C.
                      Consolidated Statements of Income
                          (unaudited, in thousands)
    

    
                                               Three Months Ended
                                            December 31         September 30,
                                        2007         2006 (a)        2007
    Sales
    Trade                            $1,098,138     $1,118,483  $1,247,563
    Related parties                     143,819        150,984     154,570
                                      1,241,957      1,269,467   1,402,133
    Costs and expenses Materials,
     labor, and other operating
     expenses                         1,075,585      1,104,377   1,202,547
    Depreciation, amortization, and
     depletion                           10,554 (b)     40,921      32,273 (b)
    Selling and distribution expenses    71,249         69,397      72,356
    General and administrative
     expenses                            21,760         21,019      22,597
    Other (income) expense, net          (3,538)         5,086         390
                                      1,175,610      1,240,800   1,330,163
    

    Income from operations               66,347         28,667      71,970

    
    Foreign exchange gain (loss)           (144)        (1,249)      2,333
    Change in fair value of interest
     rate swaps (c)                      (1,662)           -           -
    Interest expense                    (26,751)(d)    (25,218)    (23,356)
    Interest income                       1,566          1,334       1,274
                                        (26,991)       (25,133)    (19,749)
    

    
    Income before income taxes           39,356          3,534      52,221
    Income tax provision                   (259)        (1,492)     (3,056)
    Net income                          $39,097         $2,042     $49,165
    



    
                             Segment Information
                          (unaudited, in thousands)
    

    
                                                Three Months Ended
                                            December 31         September 30,
                                        2007         2006 (a)        2007
    Segment sales
    Building Materials Distribution    $545,007       $599,119    $686,610
    Wood Products                       215,952        229,447     261,634
    Paper                               397,949        369,170     402,143
    Packaging & Newsprint               203,177        190,144     193,018
    Intersegment eliminations and
     other                             (120,128)      (118,413)   (141,272)
                                     $1,241,957     $1,269,467  $1,402,133
    

    
    Segment income (loss)
    Building Materials Distribution      $4,791        $12,088     $16,146
    Wood Products                        (5,005)        (4,388)      9,161
    Paper                                51,609 (b)     16,257      49,492 (b)
    Packaging & Newsprint                25,471 (b)     14,528       4,224 (b)
    Corporate and Other                 (10,663)(b)    (11,067)     (4,720)(b)
                                         66,203         27,418      74,303
    

    
    Change in fair value of interest
     rate swaps (c)                      (1,662)           -           -
    Interest expense                    (26,751)(d)    (25,218)    (23,356)
    Interest income                       1,566          1,334       1,274
    Income before income taxes          $39,356         $3,534     $52,221
    

    
    EBITDA (g)
    Building Materials Distribution      $6,603        $14,201     $17,971
    Wood Products                         3,042          3,183      16,306
    Paper                                51,857         32,807      61,519
    Packaging & Newsprint                25,556         27,816      14,519
    Corporate and Other                 (10,301)        (9,668)     (3,739)
                                        $76,757        $68,339    $106,576
    



    
                        Boise Cascade Holdings, L.L.C.
                      Consolidated Statements of Income
                                (in thousands)
    

    
                                              Year Ended December 31
                                                2007           2006
    Sales
    Trade                                    $4,797,795    $5,203,952
    Related parties                             615,661       575,913
                                              5,413,456     5,779,865
    Costs and expenses
    Materials, labor, and other operating
     expenses                                 4,705,325     5,063,041
    Depreciation, amortization, and
     depletion                                  123,909 (b)   155,311
    Selling and distribution expenses           285,633       283,636
    General and administrative expenses          84,062        88,364
    Other (income) expense, net                  (5,693)(e)     6,089 (e)(f)
                                              5,193,236     5,596,441
    

    Income from operations                      220,220       183,424

    
    Foreign exchange gain                         4,451           401
    Change in fair value of interest rate
     swaps (c)                                    3,733           -
    Interest expense                            (96,802)(d)  (112,404)
    Interest income                               4,083         3,781
                                                (84,535)     (108,222)
    

    
    Income before income taxes                  135,685        75,202
    Income tax provision                         (7,988)       (3,631)
    Net income                                 $127,697       $71,571
    



    
                             Segment Information
                                (in thousands)
    

    
                                           Year Ended December 31
                                             2007           2006
    Segment sales
    Building Materials Distribution       $2,564,007     $2,950,273
    Wood Products                          1,010,167      1,155,873
    Paper                                  1,596,224      1,494,687
    Packaging & Newsprint                    783,100        766,537
    Intersegment eliminations and other     (540,042)      (587,505)
                                          $5,413,456     $5,779,865
    

    
    Segment income (loss)
    Building Materials Distribution          $51,778        $75,343
    Wood Products                             23,605         37,231 (f)
    Paper                                    132,325 (b)     63,080
    Packaging & Newsprint                     40,115 (b)     45,259
    Corporate and Other                      (23,152)(b)(e) (37,088)(e)(f)
                                             224,671        183,825
    

    
    Change in fair value of interest rate
     swaps  (c)                                3,733            -
    Interest expense                         (96,802)(d)   (112,404)
    Interest income                            4,083          3,781
    Income before income taxes              $135,685        $75,202
    

    
    EBITDA (g)
    Building Materials Distribution          $59,151        $84,574
    Wood Products                             53,650         64,854 (f)
    Paper                                    177,286        125,411
    Packaging & Newsprint                     77,798         96,074
    Corporate and Other                      (19,305)(e)    (31,777)(e)(f)
                                            $348,580       $339,136
    



    
                        Boise Cascade Holdings, L.L.C.
                         Consolidated Balance Sheets
                                (in thousands)
    

    
                                                         December 31
                                                    2007              2006
    ASSETS
    

    
    Current
    Cash and cash equivalents                      $57,623           $45,169
    Receivables
       Trade, less allowances of $1,664
        and $1,734                                 115,209           327,138
       Related parties                                   9            37,986
       Other                                         7,458            19,027
    Inventories                                    342,015           640,826
    Assets held for sale                         1,853,039               -
    Other                                            5,426            13,027
                                                 2,380,779         1,083,173
    Property
    Property and equipment, net                    313,117         1,462,315
    Fiber farms and timber deposits                 24,010            40,492
                                                   337,127         1,502,807
    

    
    Deferred financing costs                        23,074            31,474
    Goodwill                                        12,170            21,846
    Intangible assets, net                           9,668            37,507
    Other assets                                    11,374            28,390
    Total assets                                $2,774,192        $2,705,197
    



    
                        Boise Cascade Holdings, L.L.C.
                   Consolidated Balance Sheets (continued)
                   (in thousands, except for equity units)
    

    
                                                          December 31
                                                    2007              2006
    LIABILITIES AND CAPITAL
    

    
    Current
    Short-term borrowings                          $10,500            $3,200
    Current portion of long-term debt               47,250               -
    Accounts payable                               141,502           341,201
    Accrued liabilities
       Compensation and benefits                    36,909            93,287
       Interest payable                              7,140            11,847
       Other                                        29,959            54,600
    Liabilities related to assets held
     for sale                                      331,636               -
                                                   604,896           504,135
    Debt
    Long-term debt, less current portion         1,113,313         1,213,900
    

    
    Other
    Compensation and benefits                       46,981           111,676
    Other long-term liabilities                     17,097            36,642
                                                    64,078           148,318
    Redeemable equity units
    Series B equity units -- 16,622,421
     and 17,107,889 units outstanding               16,992            17,477
    Series C equity units -- 39,069,411
     and 39,576,540 units outstanding                9,489             6,434
                                                    26,481            23,911
    Commitments and contingent liabilities
    

    
    Capital
    Series A equity units -- no par value;
     66,000,000 units authorized and outstanding    78,463            78,290
    Series B equity units - no par value;
     550,000,000 units authorized;
     530,356,601 units outstanding                 876,693           724,988
    Series C equity units - no par value;
     44,000,000 units authorized                    10,268            11,655
    Total capital                                  965,424           814,933
    Total liabilities and capital               $2,774,192        $2,705,197
    



    
                        Boise Cascade Holdings, L.L.C.
                    Consolidated Statements of Cash Flows
                                (in thousands)
    

    
                                                    Year Ended December 31
                                                    2007              2006
    Cash provided by (used for) operations
    Net income                                     $127,697          $71,571
    Items in net income not using (providing)
     cash
       Depreciation, depletion, and amortization
        of deferred financing costs and other       129,289          157,312
       Related-party interest expense                   -             14,070
       Deferred income taxes                          4,195              968
       Pension and other postretirement benefit
        expense                                      25,366           27,447
       Gain on changes in retiree healthcare
        programs                                     (4,367)          (3,741)
       Change in fair value of interest rate swaps   (3,733)             -
       Management equity units expense                3,110            3,514
       (Gain) loss on sales of assets                (2,354)           3,311
       Other                                         (3,819)           2,990
    Decrease (increase) in working capital, net
     of acquisitions
       Receivables                                   34,156           23,558
       Inventories                                  (29,397)          (4,813)
       Prepaid expenses                                 679           (1,650)
       Accounts payable and accrued liabilities     (31,804)         (25,103)
    Pension and other postretirement benefit
     payments                                        (1,117)         (20,736)
    Current and deferred income taxes                 1,077            4,385
    Other                                             1,113              595
       Cash provided by operations                  250,091          253,678
    

    
    Cash provided by (used for) investment
    Expenditures for property and equipment        (187,972)        (153,524)
    Decrease in restricted cash held for bond
     redemption                                     200,000              -
    Increase in restricted cash held for bond
     redemption                                    (200,000)             -
    Acquisition of businesses and facilities            -            (42,609)
    Sales of assets                                  27,797           43,487
    Additional Consideration Agreement payment      (32,542)             -
    Other                                             6,065            1,908
       Cash used for investment                    (186,652)        (150,738)
    

    
    Cash provided by (used for) financing
    Issuances of long-term debt                   1,085,000          373,300
    Payments of long-term debt                   (1,138,337)        (525,200)
    Short-term borrowings                             7,300            3,200
    Note payable to related party, net                  -           (283,847)
    Proceeds from changes to interest rate
     swaps                                            2,848           25,620
    Tax distributions to members                     (2,753)         (19,269)
    Capital contributions from members                  -            280,366
    Other                                            (5,043)            (112)
       Cash used for financing                      (50,985)        (145,942)
    

    
    Increase (decrease) in cash and cash
     equivalents                                     12,454          (43,002)
    

    Balance at beginning of the year                 45,169           88,171

    Balance at end of the year                      $57,623          $45,169


    Summary Notes to Consolidated Financial Statements and Segment
Information
    The Consolidated Statements of Income, Consolidated Balance Sheets,
Consolidated Statements of Cash Flows, and Segment Information do not include
all Notes to Consolidated Financial Statements and should be read in
conjunction with the company's 2007 Annual Report on Form 10-K.  Net income
for all periods presented involved estimates and accruals.
    In September 2007, Boise Cascade, L.L.C. (Boise LLC), our wholly owned
direct subsidiary, entered into a purchase and sale agreement with Aldabra 2
Acquisition Corp. (Aldabra) for the sale of our Paper and Packaging &
Newsprint segments, and most of our Corporate and Other segment, for cash and
shares of Aldabra common stock equal to approximately $1.625 billion, plus
working capital adjustments.  Following the transaction, Boise LLC will
maintain 100% ownership of our Building Materials Distribution and Wood
Products segments, and we will own up to 49% of Boise Inc.'s shares.  Both
companies will be headquartered in Boise, Idaho.
    In September 2007, in connection with the Aldabra transaction, we
reclassified the assets and liabilities of our Paper and Packaging & Newsprint
segments, as well as some of the assets and liabilities included in our
Corporate and Other segment, to "Assets held for sale" and "Liabilities
related to assets held for sale" on our Consolidated Balance Sheet and stopped
depreciating and amortizing those assets.  The equity interest that we will
own in Boise Inc. after the transaction represents a significant continuing
involvement.  As a result, through the date of the transaction, the operating
results of the Paper and Packaging & Newsprint businesses will continue to be
included in continuing operations in the Consolidated Statements of Income
(Loss).  For the carrying amounts of the major classes of assets and
liabilities classified as "Assets held for sale" and "Liabilities related to
assets held for sale" at December 31, 2007, see the Notes to Consolidated
Financial Statements in our Form 10-K for the year ended December 31, 2007.

    
    (a) In January 2007, we adopted Financial Accounting Standards Board Staff
        Position (FSP) No. AUG AIR-1, Accounting for Planned Major Maintenance
        Activities.  Prior to adopting this FSP, we charged planned shutdown
        maintenance costs in our Paper and Packaging & Newsprint segments to
        income (loss) ratably over the year.  The FSP prohibits this, and as a
        result, we recast our 2006 interim financial information using the
        direct expense method.  As a result of adopting this FSP, for the
        three months ended December 31, 2006, income decreased $2.1 million in
        our Paper segment, increased approximately $1.0 million in our
        Packaging & Newsprint segment, and decreased consolidated net income
        approximately $1.1 million.
    

    
    (b) The three and twelve months ended December 31, 2007, included
        approximately $31.4 million and $41.8 million, respectively, of lower
        depreciation and amortization expense as a result of discontinuing
        depreciation and amortization on the assets recorded as held for sale.
        Of the $31.4 million and $41.8 million of lower depreciation and
        amortization expense, $16.3 million and $21.7 million related to our
        Paper segment, $14.3 million and $19.1 million related to our
        Packaging & Newsprint segment, and $0.8 million and $1.0 million
        related to our Corporate and Other segment, respectively.  The three
        months ended September 30, 2007, included approximately $10.4 million
        of lower depreciation and amortization expense, of which $5.4 million
        related to our Paper segment, $4.8 million related to our Packaging &
        Newsprint segment, and $0.2 million related to our Corporate and Other
        segment.
    

    
    (c) The three months ended December 31, 2007, included $3.0 million of
        income related to the change in the fair value of interest rate swaps
        in connection with the repayment of the $250 million senior unsecured
        floating-rate notes, offset by $4.6 million of expense related to
        changes in the fair value of our interest rate swaps that we account
        for as economic hedges.
    

    
        The twelve months ended December 31, 2007, included $8.4 million of
        income related to the change in the fair value of interest rate swaps
        in connection with the repayment of some of our variable-rate debt,
        partially offset by $4.6 million of expense related to changes in the
        fair value of our interest rate swaps that we account for as economic
        hedges.
    

    
    (d) The three and twelve months ended December 31, 2007, included the
        write-off of $4.5 million of deferred financing costs related to the
        repayment of $250 million of senior unsecured floating-rate notes. The
        year ended December 31, 2007, also included the write-off of
        $1.8 million of deferred financing costs related to the repayment of
        our Tranche D term loan and reduction in borrowing capacity under our
        revolving credit facility.
    

    
    (e) The years ended December 31, 2007 and 2006, included a $4.4 million
        and $3.7 million gain for changes in our retiree healthcare programs.
    

    
    (f) Includes $4.5 million of special projects, of which $3.0 million is
        recorded in Corporate and Other and $1.5 million is recorded in our
        Wood Products segment.
    

    
    (g) EBITDA represents income before interest (interest expense, interest
        income, and change in fair value of interest rate swaps), income
        taxes, and depreciation, amortization, and depletion.  The following
        table reconciles net income to EBITDA for the three months ended
        December 31, 2007 and 2006, and September 30, 2007:
    



    
                                                 Three Months Ended
                                            December 31          September 30,
                                        2007         2006 (a)        2007
                                           (unaudited, in thousands)
    

    
    Net income                         $39,097         $2,042      $49,165
    Change in fair value of interest
     rate swaps (c)                      1,662            -            -
    Interest expense                    26,751 (d)     25,218       23,356
    Interest income                     (1,566)        (1,334)      (1,274)
    Income tax provision                   259          1,492        3,056
    Depreciation, amortization, and
     depletion                          10,554 (b)     40,921       32,273 (b)
    EBITDA                             $76,757        $68,339     $106,576
    



    The following table reconciles net income to EBITDA for the year ended
December 31, 2007 and 2006:


    
                                                 Year Ended December 31
                                                 2007               2006
                                                     (in thousands)
    

    
    Net income                                $127,697 (b)(e)    $71,571 (e)
    Change in fair value of interest rate
     swaps (c)                                  (3,733)             -
    Interest expense                            96,802 (d)       112,404
    Interest income                             (4,083)           (3,781)
    Income tax provision                         7,988             3,631
    Depreciation, amortization, and
     depletion                                 123,909 (b)       155,311
    EBITDA                                    $348,580          $339,136
    




For further information:

For further information: Wayne Rancourt of Boise Cascade Holdings,
L.L.C.,  +1-208-384-6073 Web Site: http://www.bc.com

Organization Profile

BOISE CASCADE HOLDINGS, L.L.C.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890