Consumables
Boise Inc. Reports Financial Results for Second Quarter 2012
Tuesday 07. August 2012 - Boise Inc. (NYSE: BZ) today reported net income of $13.7 million, or $0.14 per diluted share, for second quarter 2012, compared with net income of $11.9 million, or $0.11 per diluted share, for the same period in 2011. EBITDA was $75.1 million for second quarter 2012, compared with $70.5 million for second quarter 2011.
“Our businesses performed well in second quarter 2012. Total sales grew 6% and net income grew 15% over second quarter 2011. These results were driven by record quarterly sales from our packaging business and improved earnings in our paper business. Additionally, we efficiently and safely worked through annual maintenance outages at three of our mills during the quarter,” said Alexander Toeldte, president and chief executive officer.
“We continue to integrate Tharco and Hexacomb into our packaging business, increasing our vertical integration. In our paper business, increased sales volumes of label and release papers offset secular declines in communication papers,” said Mr. Toeldte.
“As we look ahead to third quarter, we anticipate improved selling prices, moderately increasing chemical and energy costs, and lower annual outage costs. We continue to focus on building shareholder value through well-performing operations, disciplined capital allocation, and growth.”
Second Quarter Highlights
-Overall sales of $637.8 million, up 6% from second quarter 2011
-Net income of $13.7 million, up 15% from second quarter 2011
-EBITDA of $75.1 million, up 7% from second quarter 2011
-Record sales in Packaging segment of $284.8 million, up 17% from second quarter 2011
Financial Highlights
(in millions, except per-share data)
2Q 2012 2Q 2011 1Q 2012
Sales $637.8 $603.1 $644.8
Net income $13.7 $11.9 $21.3
Net income per diluted share $0.14 $0.11 $0.21
Weighted average diluted shares outstanding 101.0 111.8 101.4
EBITDA (1) $75.1 $70.5 $87.4
(1) For reconciliations of non-GAAP measures, see “Summary Notes to Consolidated Financial Statements and Segment Information.”
Packaging Segment
Packaging segment sales for second quarter 2012 were $284.8 million, an increase of $41.5 million, or 17%, compared with second quarter 2011. The acquisition of Hexacomb on December 1, 2011, increased our corrugated product sales volumes, compared with the prior period. Additionally, corrugated sales volumes for our other operations also increased. During the quarter, we continued to increase our vertical integration as a result of our acquisitions of Tharco and Hexacomb, successfully reducing our exposure to linerboard export markets, which experienced a significant decline in selling prices, compared with the prior-year quarter. In second quarter 2012, we sold 31% less linerboard to external markets, compared with the same quarter a year ago. Packaging segment sales for second quarter 2012 were up 5%, compared with first quarter 2012, a result of higher corrugated product and newsprint sales volumes and higher net selling prices of linerboard. In July, we announced a $50-per-short-ton increase on linerboard sales. Due to our increased vertical integration, we expect to recognize most of the benefits of the price increase in the fourth quarter.
Packaging segment EBITDA was $40.0 million for second quarter 2012, flat compared with $40.3 million for the same period last year. Compared with second quarter 2011, the benefits from higher corrugated sales volumes and lower energy costs were offset by higher annual maintenance outage costs and increased chemical costs. In 2011, our maintenance outage occurred in first quarter, while in 2012 the majority of the outage occurred in second quarter. This also resulted in reduced linerboard available for external sales. Packaging segment EBITDA increased $2.1 million in second quarter 2012, or 5%, compared with first quarter 2012, due primarily to lower fiber and energy costs, offset by increased maintenance outage costs.
Paper Segment
Paper segment sales for second quarter 2012 were $363.3 million, a decrease of $7.8 million, or 2%, compared with second quarter 2011, due to decreased net selling prices and volumes of market pulp. Net selling prices of uncoated freesheet decreased slightly and volumes remained flat, compared with second quarter 2011. Paper segment sales decreased $19.1 million, or 5%, compared with first quarter 2012, due to decreased volumes and prices of uncoated freesheet.
Paper segment EBITDA was $40.9 million for second quarter 2012, an increase of $5.4 million, or 15%, compared with second quarter 2011. Lower natural gas prices and lower fiber costs were offset partially by the effect of weak market pulp sales and higher chemical input costs. Paper segment EBITDA for second quarter 2012 decreased $14.3 million from first quarter 2012 as a result of maintenance outage costs and decreased sales volumes of uncoated freesheet, offset by lower energy costs.
Other
Selling and distribution costs were $30.6 million in second quarter 2012, an increase of $1.1 million, compared with second quarter 2011. Selling and distribution costs were flat from $30.6 million in first quarter 2012. General and administrative expenses were $20.0 million in second quarter 2012, an increase of $5.4 million, compared with $14.6 million in second quarter 2011, and flat from $20.0 million in first quarter 2012. The increase compared with the prior-year quarter is due primarily to Hexacomb, which was acquired in December 2011.