Boise Cascade Holdings Reports Third Quarter 2009 Financial Results


    


    
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<p><location>BOISE</location>, Idaho, <chron>Nov. 13</chron> /CNW/ -- <location>Boise</location> Cascade Holdings, L.L.C. (BC Holdings or Company) announced net income of <money>$26.2 million</money> for the quarter ended <chron>September 30, 2009</chron>.  Included in its net income was <money>$28.2 million</money> of noncash income associated with the Company's equity investment in <location>Boise</location> Inc.</p>
<p/>
<p>In third quarter 2009, BC Holdings' building products subsidiary, <location>Boise</location> Cascade, L.L.C., reported earnings before interest, taxes, depreciation, and amortization (EBITDA) of <money>$11.9 million</money>, as compared to negative EBITDA of <money>$3.5 million</money> in second quarter 2009.  The Company's cash and net debt position improved <money>$9.5 million</money> during the third quarter, with the company reporting <money>$279.1 million</money> of available liquidity at <chron>September 30, 2009</chron>.  The individual segment results are discussed in more detail below.</p>
<p/>
<p>"The lackluster demand for new residential construction continues to present challenges, but we are executing well.  In Building Materials Distribution, sales were up 9% from the second quarter and EBITDA increased 21%.  In Wood Products, sales increased 21% from the second quarter and the business reported positive EBITDA of <money>$3.4 million</money>, which was significantly better than the <money>$9.8 million</money> of negative EBITDA in the prior quarter.  The first few months of operations have gone well at the two acquisitions we made in June.  We have improved our cost position over the last year and it shows.  Most importantly, even in this difficult market our employees are achieving the best safety results in the history of our Wood Products and Building Materials Distribution operations.  We also have a very good liquidity position to get us through this winter and allow us to take advantage of market opportunities as we move into next year," commented <person>Tom Carlile</person>, CEO of <location>Boise</location> Cascade.</p>
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    Third Quarter Segment Results
    
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<p>U.S. housing starts declined 32% in the third quarter, dropping from an annualized rate of 0.87 million in third quarter 2008 to 0.59 million in third quarter 2009.  In the third quarter, continuing foreclosures, high inventories of unsold homes, rising unemployment, and low consumer confidence contributed to a weak demand environment for the building products we manufacture and distribute.</p>
<p/>
<p>Sales in our Building Materials Distribution (BMD) business during the third quarter were <money>$472.2 million</money>, compared with <money>$433.7 million</money> in second quarter 2009 and <money>$584.1 million</money> in third quarter 2008.  Compared with third quarter 2008, the 19% decline in sales resulted from a 13% decline in product volumes sold and a 7% decrease in product prices.  EBITDA generated by BMD improved 21% to <money>$11.6 million</money> in third quarter 2009 from <money>$9.6 million</money> of EBITDA in second quarter 2009.  BMD's third quarter 2008 EBITDA was <money>$12.1 million</money>.  The segment's lower sales activity, compared to the same quarter a year ago, resulted in fewer gross margin dollars being generated to cover cash operating costs, such as occupancy, payroll, and delivery.  However, well over 90% of the decline in gross profit dollars, compared to third quarter 2008, was offset by lower operating costs and cost reduction initiatives implemented over the last year.</p>
<p/>
<p>Sales in our Wood Products segment during the third quarter were <money>$163.2 million</money>, compared with <money>$134.4 million</money> in second quarter 2009 and <money>$215.1 million</money> in third quarter 2008.  Compared with third quarter 2008, sales of engineered wood products, plywood, and particleboard declined due to lower volumes and prices.  Lumber sales also declined on lower volumes and modestly higher prices than the same quarter a year ago.  Third quarter EBITDA for Wood Products was <money>$3.4 million</money>, a sharp improvement from the negative <money>$9.8 million</money> of EBITDA reported in second quarter 2009.  Wood Products reported <money>$3.6 million</money> of positive EBITDA in third quarter 2008.  Lower log costs, productivity improvements, and curtailments at facilities previously generating cash losses essentially offset the negative impact of lower sales volumes and prices compared to the same quarter a year ago.  We have been taking rolling curtailments at all of our Wood Products operations to maintain appropriate inventory levels, while trying to minimize the negative impact these curtailments have on our employees and our operating results.</p>
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    Outlook
    
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<p>We expect end-product demand to remain weak when compared to normal historical demand levels, with single-family housing starts unlikely to show any significant rebound during the remainder of 2009.  Absent a change in unemployment trends, stronger levels of consumer confidence, and a reduction in foreclosures and housing vacancy rates, weakness in final demand for the products we manufacture and distribute is likely to continue into the first half of 2010.  Industry product sales volumes are likely to remain depressed and commodity wood product prices will largely depend on operating rates.  We expect to manage our production levels to our sales demand, which will likely cause us to operate our facilities below their capacity.</p>
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    About Boise Cascade
    
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<p>BC Holdings is a privately held company headquartered in <location>Boise</location>, Idaho.  Our wholly owned subsidiary, <location>Boise</location> Cascade, L.L.C., is a leading U.S. wholesale distributor of building products and one of the largest producers of engineered wood products and plywood in <location>North America</location>.  BC Holdings is also a major shareholder of <location>Boise</location> Inc., a publicly traded North American paper and packaging producer listed on the New York Stock Exchange.  For more information, please visit our website at <a href="http://www.bc.com">www.bc.com</a>.</p>
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    Webcast and Conference Call
    
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<p>BC Holdings will host a webcast and conference call on <chron>Friday, November 13</chron>, at <chron>11:00 a.m.</chron> Eastern, at which time we will review the company's recent performance.  You can join the webcast through the <location>Boise</location> Cascade website.  Go to <a href="http://www.bc.com">www.bc.com</a> and click on the link to the webcast under the News & Events heading. Please go to the website at least 15 minutes before the start of the webcast to register.  To join the conference call, dial 800-374-0165 (international callers should dial 706-902-1407) at least 10 minutes before the start of the call.</p>
<p/>
<p>The archived webcast will be available in the News & Events section of <location>Boise</location> Cascade's website.  A replay of the conference call will be available from <chron>Friday, November 13</chron>, at <chron>2:00 p.m.</chron> Eastern through <chron>Friday, November 20</chron>, at <chron>11:59 p.m.</chron> Eastern.  Playback numbers are 800-642-1687 for U.S. calls and 706-645-9291 for international calls, and the passcode will be 37294207.</p>
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    Basis of Presentation
    
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<p>We present our consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP).  Our earnings release also supplements the GAAP presentations by reflecting EBITDA.  EBITDA represents income (loss) before interest (interest expense, interest income, and change in fair value of interest rate swaps), income taxes, 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.  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 expense, interest income, change in fair value of interest rate swaps, and associated significant cash requirements; and the exclusion of depreciation, amortization, and depletion.  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.</p>
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    Forward-Looking Statements
    
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<p>This news release contains statements that are "forward looking" within the Private Securities</p>
<p>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.</p>
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<p> </p>
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                          Boise Cascade Holdings, L.L.C.
                     Consolidated Statements of Income (Loss)
                            (unaudited, in thousands)
    
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<p> </p>
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                                                      Three Months Ended
                                                      ------------------
                                                    September 30      June 30,
                                                    ------------
                                                   2009       2008      2009
                                                   ----       ----      ----
    Sales
    Trade                                       $567,643   $705,912  $512,247
    Related parties                               11,364     21,214     8,933
                                                  ------     ------     -----
                                                 579,007    727,126   521,180
                                                 -------    -------   -------
    Costs and expenses
    Materials, labor, and other operating
     expenses (a)                                501,886    627,407   463,699
    Materials, labor, and other operating
     expenses from related parties                 6,094     19,045     6,332
    Depreciation, amortization, and
     depletion (a)                                 9,627      8,751    11,448
    Selling and distribution expenses             50,714     62,537    47,771
    General and administrative expenses            6,841      7,259     6,863
    General and administrative expenses
     from related party                            2,682      2,506     2,503
    Loss on sale of Paper and Packaging &
       Newsprint assets (b)                            -      1,739         -
    Other (income) expense, net (a)                 (575)    (3,768)   (1,751)
                                                    ----     ------    ------
                                                 577,269    725,476   536,865
                                                 -------    -------   -------
    
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    Income (loss) from operations                  1,738      1,650   (15,685)
                                                   -----      -----   -------
    
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<p> </p>
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    Equity in income of affiliate                 28,225      2,148    30,306
    Gain on sale of shares of equity
     affiliate (c)                                   997          -         -
    Impairment of investment in equity
     affiliate (e)                                     -   (208,074)        -
    Foreign exchange gain (loss)                     521       (406)      715
    Change in fair value of contingent value
     rights                                            -      2,227         -
    Interest expense                              (5,389)    (6,263)   (6,135)
    Interest income                                  185      1,469       178
                                                     ---      -----       ---
                                                  24,539   (208,899)   25,064
                                                  ------   --------    ------
    
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<p> </p>
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    Income (loss) before income taxes             26,277   (207,249)    9,379
    Income tax provision                             (72)      (391)      (68)
                                                     ---       ----       ---
    Net income (loss)                            $26,205  $(207,640)   $9,311
                                                 =======  =========    ======



    
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<p> </p>
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                                Segment Information
                             (unaudited, in thousands)
    
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<p> </p>
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                                                    Three Months Ended
                                                    ------------------
                                                  September 30      June 30,
                                                  ------------
                                                 2009       2008      2009
                                                 ----       ----      ----
    Segment sales
    Building Materials Distribution           $472,172   $584,094  $433,662
    Wood Products                              163,183    215,057   134,404
    Intersegment eliminations and other        (56,348)   (72,025)  (46,886)
                                               -------    -------   -------
                                              $579,007   $727,126  $521,180
                                              ========   ========  ========
    
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<p> </p>
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    Segment income (loss)
    Building Materials Distribution             $9,683    $10,223    $7,647
    Wood Products (a)                           (4,203)    (3,126)  (19,206)
    Corporate and Other (b)                     (3,221)    (5,853)   (3,411)
                                                ------     ------    ------
                                                 2,259      1,244   (14,970)
                                                 -----      -----   -------
    
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    Equity in net income of affiliate           28,225      2,148    30,306
    Gain on sale of shares of equity
     affiliate (c)                                 997          -         -
    Impairment of investment in equity
     affiliate (e)                                   -   (208,074)        -
    Change in fair value of contingent value
     rights                                          -      2,227         -
    Interest expense                            (5,389)    (6,263)   (6,135)
    Interest income                                185      1,469       178
                                                   ---      -----       ---
    Income (loss) before income taxes          $26,277  $(207,249)   $9,379
                                               =======  =========    ======
    
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<p> </p>
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    EBITDA (i)
    Building Materials Distribution            $11,563    $12,129    $9,560
    Wood Products (a)                            3,432      3,631    (9,785)
    Corporate and Other (b)                     (3,109)    (5,765)   (3,297)
    Equity in net income (loss) of affiliate    28,225      2,148    30,306
    Gain on sale of shares of equity
     affiliate (c)                                 997          -         -
    Impairment of investment in equity
     affiliate (e)                                   -   (208,074)        -
    Change in fair value of contingent value
     rights                                          -      2,227         -
                                                   ---      -----       ---
                                               $41,108  $(193,704)  $26,784
                                               =======  =========   =======



    
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<p> </p>
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                         Boise Cascade Holdings, L.L.C.
                    Consolidated Statements of Income (Loss)
                           (unaudited, in thousands)
    
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<p> </p>
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                                                        Nine Months Ended
                                                          September 30
                                                          ------------
                                                         2009    2008 (h)
                                                         ----    --------
    Sales
    Trade                                           $1,487,614  $2,330,114
    Related parties                                     26,000     130,782
                                                        ------     -------
                                                     1,513,614   2,460,896
                                                     ---------   ---------
    Costs and expenses
    Materials, labor, and other operating
     expenses (a)                                    1,346,656   2,157,951
    Materials, labor, and other operating expenses
     from related parties                               24,716      48,234
    Depreciation, amortization, and depletion (a)       32,194      27,470
    Selling and distribution expenses                  143,726     183,502
    General and administrative expenses                 20,629      29,770
    General and administrative expenses from
     related party                                       7,618       6,010
    Gain on sale of Paper and Packaging &
     Newsprint assets (b)                                    -      (2,996)
    Other (income) expense, net (a) (d)                    355       3,925
                                                           ---       -----
                                                     1,575,894   2,453,866
                                                     ---------   ---------
    
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    Income (loss) from operations                      (62,280)      7,030
                                                       -------       -----
    
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<p> </p>
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    Equity in net income (loss) of affiliate            61,536     (15,249)
    Gain on sale of shares of equity affiliate (c)         997           -
    Impairment of investment in equity
     affiliate (e)                                     (43,039)   (208,074)
    Foreign exchange gain (loss)                           904        (129)
    Change in fair value of contingent value rights        194      (1,803)
    Change in fair value of interest rate swaps (f)          -      (6,284)
    Gain on repurchase of long-term debt (g)             6,026           -
    Interest expense                                   (17,140)    (28,071)
    Interest income                                        760       6,629
                                                           ---       -----
                                                        10,238    (252,981)
                                                        ------    --------
    
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    Loss before income taxes                           (52,042)   (245,951)
    Income tax provision                                  (623)     (1,523)
                                                          ----      ------
    Net loss                                          $(52,665)  $(247,474)
                                                      ========   =========



    
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<p> </p>
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                               Segment Information
                            (unaudited, in thousands)
    
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<p> </p>
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                                                         Nine Months Ended
                                                           September 30
                                                           ------------
                                                          2009    2008 (h)
                                                          ----    --------
    Segment sales
    Building Materials Distribution                  $1,240,856  $1,697,956
    Wood Products                                       414,066     639,817
    Paper                                                     -     253,508
    Packaging & Newsprint                                     -     113,485
    Intersegment eliminations and other                (141,308)   (243,870)
                                                       --------    --------
                                                     $1,513,614  $2,460,896
                                                     ==========  ==========
    
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<p> </p>
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    Segment income (loss)
    Building Materials Distribution                      $8,786     $24,344
    Wood Products (a)                                   (61,040)    (23,607)
    Paper                                                     -      20,718
    Packaging & Newsprint                                     -       5,685
    Corporate and Other (b) (d)                          (9,122)    (20,239)
                                                         ------     -------
                                                        (61,376)      6,901
                                                        -------       -----
    
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<p> </p>
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    Equity in net income (loss) of affiliate             61,536     (15,249)
    Gain on sale of shares of equity affiliate (c)          997           -
    Impairment of investment in equity affiliate (e)    (43,039)   (208,074)
    Change in fair value of contingent value rights         194      (1,803)
    Change in fair value of interest rate swaps (f)           -      (6,284)
    Gain on repurchase of long-term debt (g)              6,026           -
    Interest expense                                    (17,140)    (28,071)
    Interest income                                         760       6,629
                                                            ---       -----
    Loss before income taxes                           $(52,042)  $(245,951)
                                                       ========   =========
    
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<p> </p>
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    EBITDA (i)
    Building Materials Distribution                     $14,512     $30,112
    Wood Products (a)                                   (34,912)     (2,654)
    Paper                                                     -      21,066
    Packaging & Newsprint                                     -       5,738
    Corporate and Other (b) (d)                          (8,782)    (19,891)
    Equity in net income (loss) of affiliate             61,536     (15,249)
    Gain on sale of shares of equity affiliate (c)          997           -
    Impairment of investment in equity affiliate (e)    (43,039)   (208,074)
    Change in fair value of contingent value rights         194      (1,803)
    Gain on repurchase of long-term debt (g)              6,026           -
                                                          -----         ---
                                                        $(3,468)  $(190,755)
                                                        =======   =========



    
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<p> </p>
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                          Boise Cascade Holdings, L.L.C.
                           Consolidated Balance Sheets
                            (unaudited, in thousands)
    
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<p> </p>
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                                                  September 30, December 31,
                                                       2009         2008
                                                       ----         ----
    ASSETS
    
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<p> </p>
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    Current
    Cash and cash equivalents                       $214,129     $275,803
    Receivables
       Trade, less allowances of $2,277 and
        $1,843                                       132,889       78,393
       Related parties                                 3,518        3,112
       Other                                           2,627        5,907
    Inventories                                      233,746      279,023
    Prepaid expenses and other                         4,753        1,296
                                                       -----        -----
                                                     591,662      643,534
                                                     -------      -------
    Property
    Property and equipment, net                      275,364      291,999
    Timber deposits                                    7,931        8,632
                                                       -----        -----
                                                     283,295      300,631
                                                     -------      -------
    
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    Investment in equity affiliate                    78,822       20,985
    Deferred financing costs                           6,064        7,862
    Goodwill                                          12,170       12,170
    Intangible assets, net                             8,955        9,248
    Other assets                                       9,038        6,009
                                                       -----        -----
    Total assets                                    $990,006   $1,000,439
                                                    ========   ==========



    
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<p> </p>
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                         Boise Cascade Holdings, L.L.C.
                     Consolidated Balance Sheets (continued)
              (unaudited, in thousands, except for equity units)
    
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<p> </p>
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                                                   September 30,  December 31,
                                                         2009        2008
                                                         ----        ----
    LIABILITIES AND CAPITAL
    
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<p> </p>
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    Current
    Accounts payable
       Trade                                          $108,205     $69,478
       Related parties                                   2,286       2,195
    Accrued liabilities
       Compensation and benefits                        31,744      38,228
       Interest payable                                  7,698       3,930
       Other                                            19,576      30,893
                                                        ------      ------
                                                       169,509     144,724
                                                       -------     -------
    Debt
    Long-term debt                                     303,146     315,000
                                                       -------     -------
    
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    Other
    Compensation and benefits                          124,073     172,275
    Other long-term liabilities                         13,367      12,125
                                                        ------      ------
                                                       137,440     184,400
                                                       -------     -------
    Redeemable equity units
    Series B equity units - 2,764,854 units and
     2,920,574 units outstanding                         2,765       2,920
    Series C equity units - 16,270,616 units and
     11,016,668 units outstanding                        4,768       3,037
                                                         -----       -----
                                                         7,533       5,957
                                                         -----       -----
    Commitments and contingent liabilities
    
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<p> </p>
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    Capital
    Series A equity units - no par value; 66,000,000
     units authorized and outstanding                   87,185      81,967
    Series B equity units - no par value; 550,000,000
     units authorized and 532,558,673 units and
     532,414,853 units outstanding                     285,193     268,391
    Series C equity units - no par value;
     44,000,000 units authorized and 11,951,751
     units and 11,183,000 units outstanding                  -           -
                                                           ---         ---
    Total capital                                      372,378     350,358
                                                       -------     -------
    Total liabilities and capital                     $990,006  $1,000,439
                                                      ========  ==========



    
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<p> </p>
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                          Boise Cascade Holdings, L.L.C.
                      Consolidated Statements of Cash Flows
                            (unaudited, in thousands)
    
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<p> </p>
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                                                           Nine Months Ended
                                                              September 30
                                                              ------------
                                                            2009        2008
                                                            ----        ----
    Cash provided by (used for) operations
    Net loss                                             $(52,665)  $(247,474)
    Items in net loss not using (providing) cash
       Equity in net (income) loss of affiliate           (61,536)     15,249
       Gain on sale of shares of equity affiliate            (997)          -
       Impairment of investment in equity affiliate        43,039     208,074
       Depreciation, depletion, and amortization of
        deferred financing costs and other                 34,469      28,630
       Related-party interest income                            -      (2,760)
       Pension and other postretirement benefit expense    10,002      10,616
       Change in fair value of contingent value rights       (194)      1,803
       Change in fair value of interest rate swaps              -       6,284
       Management equity units expense, excluding expense
        related to the Sale                                 2,306       1,349
       Gain on repurchase of long-term debt                (6,026)          -
       Gain on sale of assets, net                           (322)    (10,871)
       Facility closure and curtailment costs               1,968       1,965
       Loss on sale of note receivable from related
        party                                                   -       8,357
       Other                                               (1,106)        149
    Decrease (increase) in working capital, net of
     acquisitions and dispositions
       Receivables                                        (54,591)    (62,069)
       Inventories                                         46,114      39,982
       Prepaid expenses and other                          (2,059)      2,068
       Accounts payable and accrued liabilities            39,602      (6,322)
    Pension and other postretirement benefit payments     (28,080)    (20,820)
    Current and deferred income taxes                          15        (969)
    Other                                                  (3,044)      1,396
                                                           ------       -----
       Cash used for operations                           (33,105)    (25,363)
                                                          -------     -------
    Cash provided by (used for) investment
    Proceeds from sale of assets, net of cash
     contributed                                              315   1,269,081
    Proceeds from sale of shares of equity affiliate        3,032           -
    Proceeds from sale of note receivable from related
     party, net                                                 -      52,737
    Expenditures for property and equipment               (12,932)    (36,748)
    Acquisition of businesses and facilities               (4,598)          -
    Increase in restricted cash                                 -    (183,290)
    Decrease in restricted cash                                 -     183,290
    Other                                                   1,964       1,556
                                                            -----       -----
       Cash provided by (used for) investment             (12,219)  1,286,626
                                                          -------   ---------
    Cash provided by (used for) financing
    Issuances of long-term debt                            60,000     240,000
    Payments of long-term debt                            (65,627) (1,085,563)
    Short-term borrowings                                       -     (10,500)
    Tax distributions to members                          (10,705)   (128,024)
    Repurchase of management equity units                     (18)    (28,634)
    Cash paid for termination of interest rate swaps            -     (11,918)
    Other                                                       -      (4,155)
                                                              ---      ------
       Cash used for financing                            (16,350) (1,028,794)
                                                          -------  ----------
    Increase (decrease) in cash and cash equivalents      (61,674)    232,469
    Balance at beginning of the period                    275,803      57,623
                                                          -------      ------
    Balance at end of the period                         $214,129    $290,092
                                                         ========    ========



    Summary Notes to Consolidated Financial Statements and Segment Information

    
</pre>
<p>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 2008 Annual Report on Form 10-K and the company's Quarterly Report on Form 10Q for the period ended <chron>September 30, 2009</chron>.  Net income (loss) for all periods presented involved estimates and accruals.</p>
<p/>
<p>(a)  In <chron>June 2009</chron>, we closed the lumber manufacturing facility in La Grande, Oregon.  For the nine months ended <chron>September 30, 2009</chron>, and three months ended <chron>June 30, 2009</chron>, we recorded <money>$3.1 million</money> of expense and <money>$0.9 million</money> of income in "Other (income) expense, net" in the Wood Products segment in our Consolidated Statements of Income (Loss).  In addition, for the nine months ended <chron>September 30, 2009</chron>, and three months ended <chron>June 30, 2009</chron>, we recorded <money>$5.2 million</money> and <money>$2.6 million</money> of accelerated depreciation in "Depreciation, amortization, and depletion" and for the nine months ended <chron>September 30, 2009</chron>, we recorded <money>$0.6 million</money> of expenses in "Materials, labor, and other operating expenses" in the Wood Products segment in our Consolidated Statements of Income (Loss).</p>
<p/>
<p>During the three months ended <chron>September 30, 2008</chron>, we sold our indirect wholly owned subsidiary in <location>Brazil</location>, <location>Boise</location> Cascade do Brasil LTDA., and our indirect wholly owned subsidiary in the <location>United Kingdom</location>, <location>Boise</location> Building Products Limited.  Also, we permanently closed our veneer operation in St. Helens, Oregon. Collectively for these items, we recorded <money>$3.7 million</money> and <money>$2.1 million</money> of income in "Other (income) expense, net" in the Wood Products segment in our Consolidated Statements of Loss for the three and nine months ended <chron>September 30, 2008</chron>.</p>
<p/>
<p>(b)  In connection with the sale of our Paper and Packaging & Newsprint assets, and most of our Corporate and Other assets (the Sale), to <location>Boise</location> Inc. (formerly Aldabra 2 Acquisition Corp.), we recorded $(1.7) million and <money>$3.0 million</money> in "Gain (loss) on sale of Paper and Packaging & Newsprint assets" in the Corporate and Other segment in our Consolidated Statements of Loss during the three and nine months ended <chron>September 30, 2008</chron>.  For more information related to the Sale, see the Notes to Consolidated Financial Statements in our Form 10-K for the year ended <chron>December 31, 2008</chron>.</p>
<p/>
<p>(c)  During the three and nine months ended <chron>September 30, 2009</chron>, we sold 1.2 million <location>Boise</location> Inc. shares and recorded a <money>$1.0 million</money> gain in "Gain on sale of shares of equity affiliate" in our Consolidated Statements of Income (Loss).  We contributed substantially all of the cash proceeds from the sale of the shares to our pension plans.</p>
<p/>
<p>(d)  In <chron>June 2008</chron>, we sold a promissory note from <location>Boise</location> Inc. for <money>$52.7 million</money>, after selling expenses, and we recorded an <money>$8.4 million</money> loss on the sale in "Other (income) expense, net" in the Corporate and Other segment in our Consolidated Statement of Loss for the nine months ended <chron>September 30, 2008</chron>.</p>
<p/>
<p>(e)  On <chron>March 31, 2009</chron>, and <chron>September 30, 2008</chron>, we concluded that our investment in <location>Boise</location> Inc. met the definition of other than temporarily impaired.  Accordingly, we recorded a <money>$43.0 million</money> and <money>$208.1 million</money> charge in "Impairment of investment in equity affiliate" in our Consolidated Statements of Loss.  For more information, see the Notes to Unaudited Quarterly Consolidated Financial Statements in our Form 10-Q for the period ended <chron>September 30, 2009</chron>.</p>
<p/>
<p>(f)  The nine months ended <chron>September 30, 2008</chron>, included <money>$6.3 million</money> of expense related to changes in the fair value of our interest rate swaps, which were terminated in <chron>February 2008</chron>.</p>
<p/>
<p>(g)  The nine months ended <chron>September 30, 2009</chron>, included a <money>$6.0 million</money> net gain on the repurchase of <money>$11.9 million</money> of senior subordinated notes.</p>
<p/>
<p>(h)  The equity interest that we own in <location>Boise</location> Inc. represents a significant continuing involvement.  As a result, the Paper and Packaging & Newsprint segment results are included in continuing operations through <chron>February 21, 2008</chron>.</p>
<p/>
<p>(i)  EBITDA represents income (loss) 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 BC Holdings, L.L.C., net income (loss) to BC Holdings, L.L.C., EBITDA and <location>Boise</location> Cascade, L.L.C., EBITDA for the three months ended <chron>September 30, 2009</chron> and 2008, and June 30, 2009:</p>
<pre>
    


    
</pre>
<p> </p>
<pre>
    
                                                       Three Months Ended
                                                       ------------------
                                                    September 30     June 30,
                                                    ------------
                                                   2009       2008     2009
                                                   ----       ----     ----
    
</pre>
<p> </p>
<p>                                               (unaudited, in thousands)</p>
<p> </p>
<pre>
    
    BC Holdings, L.L.C., net income (loss)      $26,205  $(207,640)   $9,311
    Interest expense                              5,389      6,263     6,135
    Interest income                                (185)    (1,469)     (178)
    Income tax provision                             72        391        68
    Depreciation, amortization, and depletion     9,627      8,751    11,448
                                                  -----      -----    ------
    BC Holdings, L.L.C., EBITDA                  41,108   (193,704)   26,784
                                                 ------   --------    ------
    Loss on sale of note receivable from
     related party                                    -         44         -
    Equity in net income of affiliate           (28,225)    (2,148)  (30,306)
    Gain on sale of shares of equity affiliate     (997)         -         -
    Impairment of investment in equity
     affiliate                                        -    208,074         -
                                                    ---    -------       ---
    Boise Cascade, L.L.C., EBITDA               $11,886    $12,266   $(3,522)
                                                =======    =======   =======


    
</pre>
<p>The following table reconciles BC Holdings, L.L.C., net loss to BC Holdings, L.L.C., EBITDA and <location>Boise</location> Cascade, L.L.C., EBITDA for the nine months ended <chron>September 30, 2009</chron> and 2008:</p>
<pre>
    


    
</pre>
<p> </p>
<pre>
    
                                                        Nine Months Ended
                                                           September 30
                                                           ------------
                                                         2009       2008
                                                         ----       ----
    
</pre>
<p> </p>
<pre>
    
                                                         (unaudited, in
                                                            thousands)
    
</pre>
<p> </p>
<pre>
    
    BC Holdings, L.L.C., net loss                     $(52,665) $(247,474)
    Change in fair value of interest rate swaps              -      6,284
    Interest expense                                    17,140     28,071
    Interest income                                       (760)    (6,629)
    Income tax provision                                   623      1,523
    Depreciation, amortization, and depletion           32,194     27,470
                                                        ------     ------
    BC Holdings, L.L.C., EBITDA                         (3,468)  (190,755)
                                                        ------   --------
    Loss on sale of note receivable from related
     party                                                   -      8,357
    Equity in net (income) loss of affiliate           (61,536)    15,249
    Gain on sale of shares of equity affiliate            (997)         -
    Impairment of investment in equity affiliate        43,039    208,074
                                                        ------    -------
    Boise Cascade, L.L.C., EBITDA                     $(22,962)   $40,925
                                                      ========    =======





    

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

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BOISE CASCADE HOLDINGS, L.L.C.

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