Boise Inc. Announces Financial Results for Second Quarter 2008



    
    - Sales increased 5% to $618.4 million vs. combined first quarter 2008(1)

    - Income from operations of $7.6 million, net loss of $18.1 million ($0.23
    per share)

    - EBITDA(2) of $40.1 million, up from $26.3 million in combined first
    quarter 2008

    
    BOISE, Idaho, Aug. 6 /CNW/ -- Boise Inc. (NYSE:   BZ) today reported
financial results for second quarter 2008.  Sales for second quarter 2008 were
$618.4 million, an increase of $35.8 million, or 6% above sales of $582.6
million for the packaging and paper assets of Boise Cascade, L.L.C. ("the
Predecessor") for second quarter 2007(3), and 5% over combined first quarter
2008 sales of $587.9 million.  The company reported a net loss of $18.1
million ($0.23 per diluted share) for second quarter 2008 compared to
Predecessor net income of $16.5 million for second quarter 2007, which did not
include interest expense.  EBITDA was $40.1 million for second quarter 2008,
an increase of 53% over $26.3 million for combined first quarter 2008.



    
                             FINANCIAL HIGHLIGHTS
    

    
    ($ in
     millions)    Boise Inc.  Predecessor   Combined   Boise Inc.  Predecessor
                    2Q 2008    2Q 2007      1Q 2008     1Q 2008    1Q 2008(a)
    

    
    Sales            $618.4     $582.6       $587.9       $228.0      $359.9
    Income (loss)
     from
     operations        $7.6      $16.6                     $(9.3)      $23.1
    Net income
     (loss)          $(18.1)     $16.5                    $(16.4)      $22.8
    EBITDA(b)         $40.1      $47.9        $26.3         $2.6       $23.7
    Net income
     (loss) per
     share basic
     and diluted     $(0.23)        $-                    $(0.26)         $-
    

    
    Interest
     expense         $(26.1)        $-       $(11.4)      $(11.4)         $-
    Inventory
     revaluation
     expense(c)       $(3.7)        $-        $(6.5)       $(6.5)         $-
    Impact of
     DeRidder
     outage(d)                               $(20.5)      $(20.5)         $-
    Depreciation
     and
     amortization(e)  $32.7      $30.8                     $12.7        $0.5
    

    
    (a)   For the period January 1 - February 21, 2008.
    (b)   For reconciliation of net income (loss) to EBITDA, see "Segment
          Information" in the financial section.
    (c)   Impact of inventory purchase accounting adjustments to materials,
          labor, and other operating expenses associated with transaction.
    (d)   Includes estimated lost contribution from lower production and
          higher costs of maintenance and energy during outage and startup.
    (e)   Depreciation for certain Predecessor periods was suspended due to
          classification of property as assets held for sale.
    
    "We experienced improved pricing in most of our markets, along with
continuing rapid and significant cost increases in fiber, energy, and
chemicals that offset the benefits of the price improvements," said Alexander
Toeldte, President and Chief Executive Officer of Boise Inc.  "We are
aggressively addressing cost pressures by focusing on input usage, effectively
implementing price increases, and where appropriate, managing production."
    
    Financial Highlights
    
    EBITDA was $40.1 million for second quarter 2008, an increase of 53% over
$26.3 million for first quarter 2008.  This compares with EBITDA of $47.9
million for the Predecessor in second quarter 2007.  Second quarter 2008
results were negatively impacted by a transaction-related inventory
revaluation of $3.7 million associated with the acquisition of Boise Cascade,
L.L.C.'s packaging and paper manufacturing businesses.
    Boise Inc. reported a net loss of $18.1 million ($0.23 per diluted share)
for second quarter 2008 compared to Predecessor net income of $16.5 million
for second quarter 2007.  Results for the Predecessor period do not include
interest expense.  Interest expense for second quarter 2008 was $26.1 million.
    Operating income for second quarter 2008 was $7.6 million compared to
Predecessor operating income of $16.6 million in second quarter 2007 and was
negatively impacted by the previously mentioned $3.7 million transaction-
related inventory revaluation.
    
    Sales
    
    Sales for second quarter 2008 were $618.4 million, an increase of $35.8
million, or 6% compared to Predecessor sales of $582.6 million for second
quarter 2007, and 5% over combined first quarter 2008 sales of $587.9 million.
Paper segment sales increased 2% during second quarter 2008 compared to second
quarter 2007, driven by higher prices partially offset by lower volumes.
Packaging segment sales increased 13% during second quarter 2008 as compared
to the second quarter of last year, driven by higher pricing and partially
offset by lower corrugated sheet volume.
    
    Prices and Volumes
    
    Boise Inc. implemented price increases for most uncoated freesheet grades
during second quarter 2008 as the pricing environment continued to be strong.
Average net selling prices of uncoated freesheet improved $70 per ton, or 8%
to $925 per ton during second quarter 2008 compared to second quarter 2007 and
improved 5% over first quarter 2008.  In late May 2008, we announced an
additional $60-per-ton price increase on most freesheet papers, which has been
implemented on shipments starting in July.  Overall, uncoated freesheet
volumes were down 7% to 350,000 tons versus the prior year quarter and down 2%
year to date compared to 2007.  Premium and specialty volumes increased 8%
from the prior year second quarter, led by a 20% increase in combined sales of
premium office papers, label and release, and flexible packaging grades over
second quarter 2007, and increased 1% from first quarter 2008.
    During the second quarter, the company's mills in International Falls,
Minnesota, and Wallula, Washington, were shut down for annual planned
maintenance.  There are no significant planned maintenance shutdowns in third
quarter 2008.
    Linerboard net selling prices improved 4% to $394 per ton in second
quarter 2008 compared to second quarter 2007 and declined 1% over first
quarter 2008, due to changes in product and customer mix.  In June, we
announced a $55-per-ton increase, which is currently being implemented.
Volumes increased 13% compared to the prior year period and increased 38% from
first quarter 2008, which had fewer operating days due to the planned outage
at our mill in DeRidder, Louisiana.
    Corrugated container and sheet prices improved 10% in second quarter 2008
compared to second quarter 2007 and improved 2% over first quarter 2008.
Volumes declined 6% versus second quarter 2007, due mainly to lower volumes of
sheet products as a result of slowing industrial markets.  Volumes increased
1% over first quarter 2008.
    Newsprint pricing also continued to improve in second quarter 2008.
Newsprint net selling prices increased to $544 per ton, a 10% increase versus
second quarter 2007, and 9% over first quarter 2008.  All of our newsprint
production is sold through AbitibiBowater.  In May, AbitibiBowater announced
an additional $60-per-ton price increase, to be phased in during the third
quarter 2008.  Newsprint volumes increased 3% over second quarter 2007 and 23%
over first quarter 2008, due mainly to fewer operating days in first quarter
2008 as a result of the DeRidder mill outage.
    
    Input Costs
    
    Financial results for the quarter benefited from higher sales and an
improved pricing environment but were negatively impacted by increased fiber,
energy, and chemical costs.  Total fiber costs during second quarter 2008 were
$142.3 million, an increase of $23.1 million, or 19% compared to $119.2
million for second quarter 2007 and 12% over $127.3 million for first quarter
2008.  The fiber cost increases were driven primarily by increased purchased
pulp costs due to the planned maintenance shutdown at our International Falls
mill in May and increased residual chip prices in the Pacific Northwest.
Energy costs in second quarter 2008 were $84.3 million, an increase of $11.3
million, or 16% compared to $73.0 million in the same quarter a year ago,
driven mainly by higher natural gas and electricity prices, and increased 2%
compared to $82.8 million in first quarter 2008.  Chemical costs in the second
quarter 2008 were $63.4 million, an increase of $8.2 million, or 15% compared
to $55.2 million in the prior year's second quarter, and 2% compared to $62.0
million in first quarter 2008, driven by higher prices for commodity
chemicals.  Total fiber, energy, and chemical costs for second quarter 2008
were $289.9 million, an increase of $42.5 million, or 17% compared to $247.4
million for second quarter 2007.
    
    Webcast and Conference Call
    
    Boise Inc. will host a webcast and conference call on Wednesday, August
6, 2008, at 11:00 a.m. Eastern, at which time we will review the company's
recent performance.  To participate in the conference call, dial 866-841-1001
(international callers should dial 832-445-1689).  The webcast may be accessed
through Boise's Internet site and will be archived for one year following the
call.  Go to http://www.BoiseInc.com and click on the link to the webcast
under Webcasts & Presentations on the Investors drop-down menu.
    A replay of the conference call will be available in Webcasts &
Presentations from August 6 at 12:00 p.m. Eastern through September 3 at 11:59
p.m. Eastern.  Playback numbers are 800-642-1687 for U.S. callers and
706-645-9291 for international callers.  The passcode is 57382697.
    
    About Boise Inc.
    
    Headquartered in Boise, Idaho, Boise Inc. (NYSE:   BZ) manufactures
packaging products and papers including corrugated containers, containerboard,
label and release and flexible packaging papers, imaging papers for the office
and home, printing and converting papers, newsprint, and market pulp.  Our
entire team of more than 4,600 employees is committed to delivering excellent
value while managing our businesses to sustain environmental resources for
future generations.  Visit our website at www.BoiseInc.com.
    
    Basis of Presentation
    
    On February 22, 2008, we completed the acquisition of Boise Cascade,
L.L.C.'s packaging and paper manufacturing businesses (the Acquisition).  The
Acquisition was accounted for in accordance with SFAS No. 141, Business
Combinations, resulting in a new basis of accounting from that previously
reported by the Predecessor.  However, sales and most operating cost items are
substantially consistent with those reflected by the Predecessor.  Finished
goods inventory was revalued to estimated selling prices less costs of
disposal and a reasonable profit on the disposal.  Depreciation changed as a
result of adjustments to the fair values of property and equipment due to our
preliminary purchase price allocation.  Management believes this combined
three months ended March 31, 2008, presentation of Boise Inc. and the
Predecessor statement of operations is the most useful comparison between
periods.
    We present our consolidated financial statements in accordance with
generally accepted accounting principles (GAAP).  Our earnings release also
supplements the GAAP presentations by reflecting EBITDA.  EBITDA represents
income (loss) before interest, income tax provision (benefit), and
depreciation, amortization, and depletion.  EBITDA is the primary measure used
by our chief operating decision makers to evaluate segment operating
performance and to decide how to allocate resources to segments.  We believe
EBITDA is useful to investors because it provides a means to evaluate the
operating performance of our segments and our company on an ongoing basis
using criteria that are used by our internal decision makers and because it is
frequently used by investors and other interested parties in the evaluation of
companies with substantial financial leverage.  We believe EBITDA is a
meaningful measure because it presents a transparent view of our recurring
operating performance and allows management to readily view operating trends,
perform analytical comparisons, and identify strategies to improve operating
performance.  For example, we believe that the inclusion of items such as
taxes, interest expense, and interest income distorts management's ability to
assess and view the core operating trends in our segments.  EBITDA, however,
is not a measure of our liquidity or financial performance under GAAP and
should not be considered as an alternative to net income (loss), income (loss)
from operations, or any other performance measure derived in accordance with
GAAP or as an alternative to cash flow from operating activities as a measure
of our liquidity.  The use of EBITDA instead of net income (loss) or segment
income (loss) has limitations as an analytical tool, including the inability
to determine profitability; the exclusion of interest and associated
significant cash requirements; and the exclusion of depreciation,
amortization, and depletion, which represent significant and unavoidable
operating costs, given the level of our indebtedness and the capital
expenditures needed to maintain our businesses.  Management compensates for
these limitations by relying on our GAAP results.  Our measures of EBITDA are
not necessarily comparable to other similarly titled captions of other
companies due to potential inconsistencies in the methods of calculation.
    
    Forward-Looking Statements
    
    This news release may contain statements that are "forward looking" as
defined by the Private Securities Litigation Reform Act of 1995.  Forward-
looking statements include, without limitation, any statement that may
predict, forecast, indicate, or imply future results, performance, or
achievements.  Forward-looking statements involve risks and uncertainties,
including but not limited to economic, competitive, and technological factors
outside our control that may cause our business, strategy, or actual results
to differ materially from the forward-looking statements.  Factors that could
cause actual results to differ materially from the forward-looking statements
include, among others, our ability to realize the announced price increases;
our substantial level of indebtedness; changes in the supply of, demand for,
or prices of our products; the activities of competitors; changes in
significant operating expenses, including raw material and energy costs;
changes in currency exchange rates; changes in the availability of capital;
general economic and business conditions in the United States and elsewhere;
changes in the regulatory environment, including requirements for enhanced
environmental compliance; and other risks and uncertainties that are detailed
in our filings with the Securities and Exchange Commission.  The Company does
not intend, and undertakes no obligation, to update any forward-looking
statements.

    
    (1) All references to first quarter 2008 refer to the combined results for
        the period of Boise Inc. and Predecessor unless otherwise specified.
    (2) For reconciliation of net income (loss) to EBITDA, see "Summary Notes"
        in the financial section.
    (3) All references to second quarter 2007 refer to Predecessor results for
        the period unless otherwise specified.
    



    Boise Inc. (Formerly Aldabra 2 Acquisition Corp., a Corporation in the
Development Stage)
    
                   Consolidated Statements of Income (Loss)
                 (unaudited, in thousands, except share data)
    

    
                                    Boise Inc.              Predecessor
    

    
                       Three         Three     Three                  Three
                       Months        Months    Months   January 1     Months
                       Ended         Ended     Ended     through      Ended
                      June 30,      June 30,  March 31, February 21, June 30,
                        2008          2007      2008       2008        2007
    Sales
    Trade            $586,583          $-     $226,044   $258,430    $403,472
    Related
     parties           31,824           -        1,944    101,490     179,150
                      618,407           -      227,988    359,920     582,622
    Costs and
     expenses
    Materials,
     labor, and
     other
     operating
     expenses         544,090           -      195,429    313,931     503,465
    Fiber costs
     from related
     parties            7,015           -       18,629      7,662      10,280
    Depreciation,
     amortization,
     and depletion     32,689           -       12,747        477      30,796
    Selling and
     distribution
     expenses          14,817           -        5,943      9,097      14,545
    General and
     administrative
     expenses          12,262          18        4,549      6,606      10,277
    Other
     (income)
     expense, net         (96)          -          (28)      (989)     (3,292)
                      610,777          18      237,269    336,784     566,071
    

    
    Income (loss)
     from
     operations         7,630         (18)      (9,281)    23,136      16,551
    

    
    Foreign
     exchange gain
     (loss)              (209)          -         (853)        54         530
    Change in
     fair value of
     interest rate
     derivatives          510           -            -          -           -
    Interest
     expense          (26,145)          -      (11,435)        (2)          -
    Interest
     income               178         511        1,821        161         157
                      (25,666)        511      (10,467)       213         687
    

    
    Income (loss)
     before income
     taxes            (18,036)        493      (19,748)    23,349      17,238
    Income tax
     (provision)
     benefit              (14)       (224)       3,377       (563)       (703)
    Net income
     (loss)          $(18,050)       $269     $(16,371)   $22,786     $16,535
    

    
    Weighted
     average
     common shares
     outstanding:
    Basic and
     diluted       77,259,947  14,444,506   62,682,834          -           -
    

    
    Net income
    (loss) per
    common share:
    Basic and
     diluted           $(0.23)      $0.02      $(0.26)         $-          $-
    



    
                             Segment Information
                          (unaudited, in thousands)
    

    
                                    Boise Inc.              Predecessor
    

    
                       Three         Three     Three                  Three
                       Months        Months    Months   January 1     Months
                       Ended         Ended     Ended     through      Ended
                      June 30,      June 30,  March 31, February 21, June 30,
                        2008          2007      2008       2008        2007
    Segment sales
    Paper             $410,877        $-     $172,203    $253,508    $401,099
    Packaging          217,147         -       59,885     113,485     192,933
    Intersegment
     eliminations
     and other          (9,617)        -       (4,100)     (7,073)    (11,410)
                      $618,407        $-     $227,988    $359,920    $582,622
    

    
    Segment
     income (loss)
    Paper               $7,835        $-      $11,849     $20,718     $13,729
    Packaging            4,642         -      (19,761)      5,685       2,337
    Corporate
     and Other          (5,056)      (18)      (2,222)     (3,213)      1,015
                         7,421       (18)     (10,134)     23,190      17,081
    

    
    Change in fair
     value of
     interest rate
     derivatives           510         -            -           -           -
    Interest
     expense           (26,145)        -      (11,435)         (2)          -
    Interest
     income                178       511        1,821         161         157
    Income (loss)
     before income
     taxes            $(18,036)     $493     $(19,748)    $23,349     $17,238
    

    
    EBITDA (a)
    Paper              $26,777        $-      $18,969     $21,066     $29,841
    Packaging           17,637         -      (14,548)      5,738      16,228
    Corporate
     and Other          (4,304)      (18)      (1,808)     (3,137)      1,808
                       $40,110      $(18)      $2,613     $23,667     $47,877
    



    Boise Inc. (Formerly Aldabra 2 Acquisition Corp., a Corporation in the
Development Stage)
    
                   Consolidated Statements of Income (Loss)
                 (unaudited, in thousands, except share data)
    

    
                                 Boise Inc.                 Predecessor
    

    
                             Six          February 1                   Six
                            Months       (Inception)   January 1      Months
                            Ended          through     through        Ended
                            June 30,       June 30,   February 21,   June 30,
                             2008            2007        2008          2007
    Sales
    Trade                 $812,627            $-       $258,430      $806,384
    Related parties         33,768             -        101,490       354,939
                           846,395             -        359,920     1,161,323
    Costs and expenses
    Materials, labor,
     and other operating
     expenses              739,519             -        313,931       991,419
    Fiber costs from
     related parties        25,644             -          7,662        21,307
    Depreciation,
     amortization,
     and depletion          45,436             -            477        61,567
    Selling and
     distribution expenses  20,760             -          9,097        28,867
    General and
     administrative
     expenses               16,811            19          6,606        19,727
    Other (income)
     expense, net             (124)            -           (989)         (884)
                           848,046            19        336,784     1,122,003
    

    
    Income (loss) from
     operations             (1,651)          (19)        23,136        39,320
    

    
    Foreign exchange
     gain (loss)            (1,062)            -             54           602
    Change in fair value
     of interest rate
     derivatives               510             -              -             -
    Interest expense       (37,580)            -             (2)            -
    Interest income          1,999           511            161           285
                           (36,133)          511            213           887
    

    
    Income (loss) before
     income taxes          (37,784)          492         23,349        40,207
    Income tax (provision)
     benefit                 3,363          (224)          (563)       (1,681)
    Net income (loss)     $(34,421)         $268        $22,786       $38,526
    

    
    Weighted average
     common shares
     outstanding:
    Basic and diluted   69,971,391    12,834,000              -             -
    

    
    Net income (loss)
     per common share:
    Basic and diluted       $(0.49)        $0.02             $-            $-
    



    
                             Segment Information
                          (unaudited, in thousands)
    

    
                                Boise Inc.                 Predecessor
    

    
                             Six          February 1                   Six
                            Months       (Inception)   January 1      Months
                            Ended          through     through        Ended
                           June 30,        June 30,   February 21,   June 30,
                             2008            2007        2008          2007
    Segment sales
    Paper                 $583,080            $-       $253,508     $796,132
    Packaging              277,032             -        113,485      386,905
    Intersegment
     eliminations and
     other                 (13,717)            -         (7,073)     (21,714)
                          $846,395            $-       $359,920   $1,161,323
    

    
    Segment income (loss)
    Paper                  $19,684            $-        $20,718      $31,824
    Packaging              (15,119)            -          5,685       10,420
    Corporate and Other     (7,278)          (19)        (3,213)      (2,322)
                            (2,713)          (19)        23,190       39,922
    

    
    Change in fair value
     of interest rate
     derivatives               510             -              -            -
    Interest expense       (37,580)            -             (2)           -
    Interest income          1,999           511            161          285
    Income (loss) before
     income taxes         $(37,784)         $492        $23,349      $40,207
    

    
    EBITDA (a)
    Paper                  $45,746            $-        $21,066      $64,509
    Packaging                3,089             -          5,738       37,723
    Corporate and Other     (6,112)          (19)        (3,137)        (743)
                           $42,723          $(19)       $23,667     $101,489
    



    Boise Inc. (Formerly Aldabra 2 Acquisition Corp., a Corporation in the
Development Stage)
    
                         Consolidated Balance Sheets
                          (unaudited, in thousands)
    

    
                                          Boise Inc.             Predecessor
    

    
                                    June 30,      December 31,   December 31,
                                      2008           2007           2007
    ASSETS
    

    
    Current
    Cash and cash equivalents       $21,125            $186            $8
    Cash held in trust                    -         403,989             -
    Receivables
      Trade, less allowances of
       $831, $0, and $1,063         233,786               -       181,799
      Related parties                 3,940               -        36,452
      Other                           8,213               -        10,224
    Inventories                     340,702               -       324,679
    Other                            14,862             144         6,936
                                    622,628         404,319       560,098
    Property
    Property and equipment, net   1,284,229               -     1,192,344
    Fiber farms and timber
     deposits                        13,022               -        17,843
                                  1,297,251               -     1,210,187
    

    
    Deferred financing costs         78,881               -             -
    Goodwill                              -               -        42,218
    Intangible assets, net           22,524               -        23,967
    Other assets                     11,162           3,293         9,242
    Total assets                 $2,032,446        $407,612    $1,845,712
    



    Boise Inc. (Formerly Aldabra 2 Acquisition Corp., a Corporation in the
Development Stage)
    
                   Consolidated Balance Sheets (continued)
                 (unaudited, in thousands, except share data)
    

    
                                           Boise Inc.            Predecessor
    

    
                                    June 30,        December 31,  December 31,
                                      2008             2007          2007
    

    
    LIABILITIES AND STOCKHOLDERS' EQUITY
    

    
    Current
    Current portion of long-term
     debt                           $12,563               $-            $-
    Income taxes payable                  6            1,280           306
    Accounts payable
      Trade                         222,312                -       178,686
      Related parties                 6,080                -           299
    Accrued liabilities
      Compensation and benefits      41,542                -        53,573
      Interest payable                  617                -             -
      Deferred underwriting fee           -           12,420             -
      Other                          14,603            1,015        16,716
                                    297,723           14,715       249,580
    Debt
    Long-term debt, less current
     portion                      1,035,388                -             -
    Notes payable                    61,655                -             -
                                  1,097,043                -             -
    Other
    Deferred income taxes               322                 -           896
    Compensation and benefits        61,965                 -         6,030
    Other long-term liabilities      30,975                 -        29,427
                                     93,262                 -        36,353
    Common stock subject to possible
     conversion (16,555,860 shares at
     conversion value at December 31,
     2007)                                -           159,760             -
    

    
    Commitments and contingent
     liabilities
    

    
    Stockholders' Equity
    Business unit equity                  -                 -     1,559,779
    Preferred stock, $.0001 par value
     per share:                           -                 -             -
      1,000,000 shares authorized;
       none issued
      Common stock, $.0001 par
       value per share:                   8                 5             -
       250,000,000 shares authorized:
        79,722,147 shares and
        51,750,000 shares issued
        and outstanding (which
        included 16,555,860 shares
        subject to possible
        conversion at
        December 31, 2007)
    Additional paid-in capital      572,829           227,640             -
    Accumulated other comprehensive
     income                             510                 -             -
    Income accumulated during
     development stage                    -             5,492             -
    Accumulated deficit             (28,929)                -             -
    Total stockholders' equity      544,418           233,137     1,559,779
    Total liabilities and
     stockholders' equity        $2,032,446          $407,612    $1,845,712
    



    Boise Inc. (Formerly Aldabra 2 Acquisition Corp., a Corporation in the
Development Stage)
    
                    Consolidated Statements of Cash Flows
                          (Unaudited, in thousands)
    

    
                                  Boise Inc.                 Predecessor
    

    
                              Six         February 1                   Six
                             Months      (Inception)   January 1      Months
                             Ended         through      through       Ended
                            June 30,       June 30,   February 21,   June 30,
                              2008           2007        2008          2007
    

    
    Cash provided by
     (used for) operations
    Net income (loss)       $(34,421)        $268        $22,786      $38,526
    Items in net income
     (loss) not using
     (providing) cash
      Depreciation,
       amortization, and
       depletion of deferred
       financing costs and
        other                 48,453            -            477       61,567
      Share-based
       compensation expense      775            -              -            -
      Related-party interest
       expense                 2,760            -              -            -
      Notes payable interest
       expense                   561            -              -            -
      Interest income on cash
       held in trust               -         (510)             -            -
      Pension and other
       postretirement
       benefit expense         4,180            -          1,826        6,581
      Deferred income taxes    (3,276)          -             11           59
      Change in fair value
       of interest rate
       derivatives              (510)           -              -            -
      Gain on changes in
       retiree healthcare
       programs                    -            -              -       (4,367)
      (Gain) loss on
       sales of assets, net      (20)           -           (943)       1,342
      Other                   (2,808)           -            (91)         (27)
    Decrease (increase) in
     working capital, net
     of acquisitions
      Receivables             10,278            -        (23,522)     (12,584)
      Inventories             (7,457)           -          5,343        4,695
      Prepaid expense         (6,654)         (62)           875       (2,537)
      Accounts payable and
       accrued liabilities    26,033           12        (10,718)      (1,155)
    Current and deferred
     income taxes               (976)         224            335          393
    Pension and other
     postretirement
     benefit payments           (171)           -         (1,826)      (6,581)
    Other                       (902)           -          2,326        3,371
      Cash provided by
       (used for)
       operations             35,845          (68)        (3,121)      89,283
    

    
    Cash provided by
     (used for) investment
    Acquisitions of
     businesses and
     facilities           (1,215,601)           -              -            -
    Cash released from
     (held in) trust         403,989     (399,500)             -            -
    Expenditures for
     property and
     equipment               (35,853)           -        (10,168)     (68,699)
    Sales of assets               37            -         17,662        3,996
    Other                       (941)           -            863        1,776
      Cash provided by
       (used for)
       investment           (848,369)    (399,500)         8,357      (62,927)
    

    
    Cash provided by
     (used for) financing
    Issuances of long-
     term debt             1,085,700            -              -            -
    Payments of long-
     term debt               (37,749)           -              -            -
    Issuances of short-
     term debt                     -          137              -            -
    Payments of short-
     term debt                     -         (137)             -            -
    Payments to stockholders
     for exercise of
     conversion rights      (120,170)           -              -            -
    Payments of deferred
     financing fees          (81,898)           -              -            -
    Payments of deferred
     underwriters fees       (12,420)     (16,560)             -            -
    Proceeds from sale of
     shares of common stock
     to initial stockholders       -           25              -            -
    Proceeds from public
     offering                      -      414,000              -            -
    Proceeds from issuance
     of insider warrants           -        3,000              -            -
    Net equity transactions
     with related parties          -            -         (5,237)     (26,356)
    Other                          -         (607)             -            -
      Cash provided by
       (used for)
       financing             833,463      399,858         (5,237)     (26,356)
    

    
    Increase (decrease) in
     cash and cash
     equivalents              20,939          290            (1)            -
    Balance at beginning
     of the period               186            -              8            7
    Balance at end of the
     period                  $21,125         $290             $7           $7
    



    
              Summary Notes to Consolidated Financial Statements
                           and Segment Information
    
    The Consolidated Statements of Income (Loss), 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, Current Report
on Form 8-K filed with the Securities and Exchange Commission (SEC) on
February 28, 2008, the Company's Quarterly Report on Form 10-Q for the period
ended June 30, 2008, as well as the other reports the Company files with the
SEC.  Net income (loss) for all periods presented involved estimates and
accruals.
    Boise Inc. (formerly Aldabra 2 Acquisition Corp.) or "the Company," "we,"
"us," or  "our" was a blank check company, created on February 1, 2007
(inception) and organized for the purpose of effecting a merger, capital stock
exchange, asset acquisition, or other similar business combination with an
operating business.  On February 22, 2008, Boise Inc. completed the
Acquisition of Boise White Paper, L.L.C., Boise Packaging & Newsprint, L.L.C.,
Boise Cascade Transportation Holdings Corp. (collectively, the Paper Group),
and other assets and liabilities related to the operation of the paper,
packaging and newsprint, and transportation businesses of the Paper Group and
part of the headquarters operations of Boise Cascade, L.L.C. (Boise Cascade).
The business we acquired is referred to as the "Predecessor."
    The accompanying consolidated statements of income (loss) for the three
months ended March 31, 2008, the three and six months ended June 30, 2008, and
cash flows for the six months ended June 30, 2008, include the activities of
Aldabra 2 Acquisition Corp. prior to the Acquisition and the operations of the
acquired businesses from February 22, 2008, through June 30, 2008.  The
consolidated statements of income for the period of January 1 through February
21, 2008, and for the three and six months ended June 30, 2007, and the
consolidated statements of cash flows for the period of January 1 through
February 21, 2008, and the six months ended June 30, 2007, of the Predecessor
are presented for comparative purposes.  The three months ended June 30, 2007,
and the period February 1 (inception) through June 30, 2007, represent the
activities of Aldabra 2 Acquisition Corp.
    Boise Inc. operates its business in three reportable segments: Paper,
Packaging, and Corporate and Other (support services) and is headquartered in
Boise, Idaho.  Boise Inc. manufactures commodity and premium office papers, a
range of packaging products including corrugated containers, containerboard,
label and release papers, and flexible packaging papers.  Boise Inc. also
manufactures printing and converting papers, newsprint, and market pulp.

    
    (a)  EBITDA represents income (loss) before interest (interest expense and
         interest income), income taxes, and depreciation, amortization, and
         depletion.  The following table reconciles net income (loss) to
         EBITDA for Boise Inc. for the three months ended June 30, 2008 and
         2007, and the three months ended March 31, 2008; for the Predecessor
         three months ended June 30, 2007, and for the period of January 1
         through February 21, 2008 (unaudited, in thousands):
    



    
                                   Boise Inc.              Predecessor
    

    
                       Three         Three     Three                  Three
                       Months        Months    Months   January 1     Months
                       Ended         Ended     Ended     through      Ended
                      June 30,      June 30,  March 31, February 21, June 30,
                        2008          2007      2008       2008        2007
    

    
    Net income
     (loss)           $(18,050)       $269    $(16,371)  $22,786     $16,535
    Change in fair
     value of
     interest rate
     derivatives          (510)          -           -         -           -
    Interest
     expense            26,145           -      11,435         2           -
    Interest income       (178)       (511)     (1,821)     (161)       (157)
    Income tax
     provision
     (benefit)              14         224      (3,377)      563         703
    Depreciation,
     amortization,
     and depletion      32,689           -      12,747       477      30,796
    EBITDA             $40,110        $(18)     $2,613   $23,667     $47,877
    



    The following table reconciles net income (loss) to EBITDA for Boise Inc.
for the six months ended June 30, 2008, the period of February 1 (inception)
through June 30, 2007; for the Predecessor period of January 1 through
February 21, 2008, and the six months ended June 30, 2007 (unaudited, in
thousands):



    
                                Boise Inc.                 Predecessor
    

    
                              Six          February 1                  Six
                             Months       (Inception)  January 1      Months
                             Ended          through     through        Ended
                            June 30,       June 30,   February 21,   June 30,
                              2008           2007        2008          2007
    

    
    Net income (loss)       $(34,421)        $268       $22,786      $38,526
    Change in fair value
     of interest rate
     derivatives                (510)           -             -            -
    Interest expense          37,580            -             2            -
    Interest income           (1,999)        (511)         (161)        (285)
    Income tax provision
     (benefit)                (3,363)         224           563        1,681
    Depreciation,
     amortization,
     and depletion            45,436            -           477       61,567
    EBITDA                   $42,723         $(19)      $23,667     $101,489
    
    The Combined EBITDA for the three months ended March 31, 2008, and for
the six months ended June 30, 2008 (unaudited in thousands):



    
                                                      Three           Six
                                                   Months Ended   Months Ended
                                                     March 31,      June 30,
                                                       2008           2008
    

    
    Boise Inc.                                        $2,613        $42,723
    Predecessor                                       23,667         23,667
                                                     $26,280        $66,390
    



    
     Media Contact                                Investor Relations Contact
     Virginia Aulin,                              Jason Bowman
     Office 208 384 7837                          208 384 7456

    




For further information:

For further information: Media, Virginia Aulin, +1-208-384-7837, or
Investors Relations, Jason Bowman, +1-208-384-7456, both of Boise Inc. Web
Site: http://www.BoiseInc.com

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