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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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