EX-99.1 2 dex991.htm BOISE INC. EARNINGS RELEASE Boise Inc. Earnings Release

Exhibit 99.1

 

Boise Inc.

Investor Relations

1111 West Jefferson PO Box 990050 Boise, ID 83799-0050

T 208 384 7456 F 208 395 7400

   LOGO

 

News Release

 

  

For Immediate Release: August 4, 2011

 

Media Contact

Virginia Aulin – 208 384 7837

  

Investor Relations Contact

Jason Bowman – 208 384 7456

 

Boise Inc. Reports Financial Results for Second Quarter 2011 and Announces Authorization of $75 million Share Repurchase Program

BOISE, Idaho – Boise Inc. (NYSE: BZ) today reported net income of $11.9 million, or $0.11 per diluted share, for second quarter 2011, compared with net income of $13.3 million, or $0.16 per diluted share, for second quarter 2010. There were no special items for second quarter 2011. Net income excluding special items was $11.4 million, or $0.14 per diluted share, for second quarter 2010.

EBITDA excluding special items was $70.5 million for second quarter 2011, compared with $67.0 million for second quarter 2010.

In August, Boise Inc.’s board of directors authorized a program, effective immediately, to repurchase up to $75 million of Boise’s outstanding common stock. The timing and exact number of shares actually repurchased will be affected by several factors, including legal and regulatory requirements and changes in the market price of Boise Inc. stock.

FINANCIAL HIGHLIGHTS

(in millions, except per-share data)

 

  

 

 

    

 

 

    

 

 

 
     2Q 2011      2Q 2010      1Q 2011  

Sales

   $   603.1       $   521.6       $   568.8   

Net income

   $ 11.9       $ 13.3       $ 18.7   

Net income per diluted share (a)

   $ 0.11       $ 0.16       $ 0.21   

Net income excluding special items (b)

   $ 11.9       $ 11.4       $ 20.0   

Net income excluding special items per diluted share (a)(b)

   $ 0.11       $ 0.14       $ 0.22   

EBITDA (b)

   $ 70.5       $ 70.1       $ 82.2   

EBITDA excluding special items (b)

   $ 70.5       $ 67.0       $ 84.4   

Net total debt at period end (b)

   $   526.8       $   657.1       $   770.4   

 

(a) During second quarter 2011, Boise Inc. warrant holders exercised 40.3 million warrants, resulting in the issuance of 38.4 million additional common shares. For additional information see “Summary Notes to Consolidated Financial Statements and Segment Information.”

 

(b) For reconciliations of net income to net income excluding special items, net income to EBITDA, EBITDA to EBITDA excluding special items, and total debt to net total debt, see “Summary Notes to Consolidated Financial Statements and Segment Information.”


“During the second quarter, our Packaging segment delivered strong results, and we extended our partnership with OfficeMax through a new long-term contract,” said Alexander Toeldte, president and chief executive officer of Boise Inc. “Our Paper segment results were affected by increased input costs, maintenance outage costs, and operational challenges. We have aggressively taken steps to resolve the operating issues and improve our performance going forward.

“Our integration of Tharco is progressing well, expanding our presence in packaging markets, and we continue to grow sales volumes of our packaging demand-driven and premium office papers over last year. After completing three planned outages in the second quarter, we have now completed the majority of our scheduled outages for the year, with just one remaining in the fourth quarter.

“The announced share repurchase authorization will enable us to return capital to shareholders opportunistically. We have returned approximately $80 million, or $0.80 per share, in cash to shareholders through special dividends over the last eight months. We will continue to look for ways to return capital to shareholders when our performance and outlook create the appropriate opportunities.

“Looking ahead, we expect to begin to benefit from the recently implemented price increase on cut-size office papers in the third quarter. We remain focused on serving our customers with distinction and creating shareholder value through well-performing operations, disciplined capital allocation, and targeted growth.”

Sales

Total sales for second quarter 2011 were $603.1 million, up $81.5 million, or 16%, from $521.6 million for second quarter 2010 and up $34.3 million, or 6%, from first quarter 2011 sales of $568.8 million. The primary driver of the increase in both periods was the acquisition of Tharco Packaging, Inc. (Tharco), which we completed in March 2011. Higher net selling prices across all of our product lines also contributed to the increase, compared with the prior-year period.

Prices and Volumes

Uncoated freesheet net selling prices increased 1% for second quarter 2011, compared with second quarter 2010, and decreased 1%, compared with first quarter 2011. Total uncoated freesheet sales volumes were 313,000 short tons for second quarter 2011, flat versus the prior-year period and up 1% versus first quarter 2011. During second quarter 2011, we announced a $60-per-ton price increase

 

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effective in June across our cut-size office papers, from which we expect to benefit beginning in third quarter 2011.

Corrugated container and sheet sales volumes improved 32% during second quarter 2011, compared with second quarter 2010, and increased 17%, compared with first quarter 2011. This increase was due primarily to the acquisition of Tharco. Corrugated container and sheet prices increased 23% during second quarter 2011, compared with second quarter 2010, and increased 10% sequentially from first quarter 2011, driven primarily by product mix changes due to the Tharco acquisition.

Linerboard net selling prices to third parties increased 25% in second quarter 2011, compared with second quarter 2010, as a result of price increases implemented during 2010, and were flat from first quarter 2011. Linerboard sales volumes to third parties were 55,000 short tons in second quarter 2011, up 3% compared with second quarter 2010 and down 10% sequentially from first quarter 2011. The sequential decline was due primarily to replenishment of low containerboard inventories in our corrugated container and sheet operations, which resulted in less linerboard available for sales to third parties.

Input Costs

Total fiber, energy, and chemical costs for second quarter 2011 were $247.0 million, an increase of $31.9 million, or 15%, compared with costs of $215.1 million for second quarter 2010. This increase was driven primarily by fiber costs associated with Tharco in our Packaging segment as well as higher chemical and energy costs in our Paper segment. Prices for chemicals and fiber increased sequentially from first quarter 2011 to second quarter 2011.

 

    

INPUT COST SUMMARY

(in millions)

 
    

 

    

 

    

 

 
     2Q 2011      2Q 2010      1Q 2011  

Fiber

   $   137.7       $   117.1       $   116.3   

Energy

     52.7         48.1         52.8   

Chemicals

     56.6         49.9         54.3   
  

 

 

    

 

 

    

 

 

 

Total

   $ 247.0       $ 215.1       $ 223.3   
  

 

 

    

 

 

    

 

 

 

 

3


Total fiber costs during second quarter 2011 were $137.7 million, an increase of $20.6 million, or 18%, compared with $117.1 million incurred in second quarter 2010. This was driven primarily by increased costs of purchased containerboard rollstock as a result of the Tharco acquisition in our Packaging segment and by increased prices for fiber in our Paper segment. These costs were offset partially by lower wood prices in our Packaging segment. Fiber costs increased $21.4 million, or 18%, compared with $116.3 million incurred in first quarter 2011, driven primarily by increased purchased pulp consumption due to the scheduled maintenance outages, as well as higher wood prices in our Paper segment.

Energy costs in second quarter 2011 were $52.7 million, an increase of $4.6 million, or 10%, compared with $48.1 million in second quarter 2010. This was driven primarily by higher prices for electricity in our Paper segment and higher consumption of electricity in our Packaging segment. These costs were offset partially by lower natural gas prices. Energy costs were flat, compared with $52.8 million in first quarter 2011.

Chemical costs in second quarter 2011 were $56.6 million, an increase of $6.7 million, or 13%, compared with $49.9 million in second quarter 2010, and an increase of $2.3 million, or 4%, from $54.3 million in first quarter 2011, a result of increased prices for commodity chemicals.

Webcast and Conference Call

Boise Inc. will host a webcast and conference call on Thursday, August 4, 2011, at 11:00 a.m. ET, 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 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 4 at 2:00 p.m. ET through September 2 at 11:45 p.m. ET. Playback numbers are 855-859-2056 for U.S. callers and 404-537-3406 for international callers. The passcode is 82337154.

 

4


About Boise Inc.

Headquartered in Boise, Idaho, Boise Inc. (NYSE: BZ) manufactures paper and packaging products, including imaging papers for the office and home, printing and converting papers, label and release and flexible packaging papers, corrugated containers, containerboard, newsprint, and market pulp. Our employees are committed to delivering excellent value while managing our businesses to sustain environmental resources for future generations. Visit our website at www.BoiseInc.com.

Forward-Looking Statements

This news release contains 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. Statements regarding the changes we have made to improve our operational performance, and the expected price increases for our products, are forward-looking statements. There can be no assurance the steps we have taken will improve our operational performance or that we will be able to implement or realize all or any part of the described price increases. Similarly, the statements related to our stock repurchase program are forward-looking statements, and there can be no assurances about the timing or number of shares, if any, that will be repurchased under the program. For further information about the risks and uncertainties associated with our business, please refer to our filings with the Securities and Exchange Commission. The company does not intend, and undertakes no obligation, to update any forward-looking statements.

 

5


Boise Inc.

Consolidated Statements of Income

(unaudited, dollars and shares in thousands, except per-share data)

 

     Three Months Ended  
     June 30     March 31,
2011 (1)
 
     2011 (1)     2010    

Sales

      

Trade

   $   592,784      $   511,012      $   560,320   

Related parties

     10,351        10,549        8,443   
  

 

 

   

 

 

   

 

 

 
     603,135        521,561        568,763   
  

 

 

   

 

 

   

 

 

 

Costs and expenses

      

Materials, labor, and other operating expenses

     485,001        419,594        449,070   

Fiber costs from related parties

     4,383        5,168        4,440   

Depreciation, amortization, and depletion

     36,090        32,267        33,974   

Selling and distribution expenses

     29,483        14,254        19,373   

General and administrative expenses

     14,622        12,569        12,697   

Other (income) expense, net

     (813     (445     1,077   
  

 

 

   

 

 

   

 

 

 
     568,766        483,407        520,631   
  

 

 

   

 

 

   

 

 

 

Income from operations

     34,369        38,154        48,132   
  

 

 

   

 

 

   

 

 

 

Foreign exchange gain (loss)

     55        (323     132   

Loss on extinguishment of debt

     —          (28     —     

Interest expense

     (16,072     (16,178     (16,367

Interest income

     74        61        78   
  

 

 

   

 

 

   

 

 

 
     (15,943     (16,468     (16,157
  

 

 

   

 

 

   

 

 

 

Income before income taxes

     18,426        21,686        31,975   

Income tax provision

     (6,529     (8,376     (13,281
  

 

 

   

 

 

   

 

 

 

Net income

   $ 11,897      $ 13,310      $ 18,694   
  

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding (2):

      

Basic

     106,754        80,624        80,964   

Diluted

     111,772        84,093        90,417   

Net income per common share (2):

      

Basic

   $ 0.11      $ 0.17      $ 0.23   

Diluted

   $ 0.11      $ 0.16      $ 0.21   

For footnotes, see Summary Notes to Consolidated Financial Statements and Segment Information beginning on page 13.

 

6


Boise Inc.

Segment Information

(unaudited, dollars in thousands)

 

     Three Months Ended  
     June 30     March 31,
2011 (1)
 
     2011 (1)     2010    

Segment sales

      

Paper

   $   371,052      $   364,199      $   375,180   

Packaging

     243,318        166,143        203,393   

Intersegment eliminations and other

     (11,235     (8,781     (9,810
  

 

 

   

 

 

   

 

 

 
   $   603,135      $   521,561      $   568,763   
  

 

 

   

 

 

   

 

 

 

Segment income (loss)

      

Paper

   $ 13,150      $ 25,708      $ 40,970   

Packaging

     27,494        17,105        13,626   

Corporate and Other

     (6,220     (4,982     (6,332
  

 

 

   

 

 

   

 

 

 
     34,424        37,831        48,264   
  

 

 

   

 

 

   

 

 

 

Loss on extinguishment of debt

     —          (28     —     

Interest expense

     (16,072     (16,178     (16,367

Interest income

     74        61        78   
  

 

 

   

 

 

   

 

 

 

Income before income taxes

   $ 18,426      $ 21,686      $ 31,975   
  

 

 

   

 

 

   

 

 

 

EBITDA (4)

      

Paper

   $ 35,513      $ 47,406      $ 63,022   

Packaging

     40,343        26,684        24,599   

Corporate and Other

     (5,342     (4,020     (5,383
  

 

 

   

 

 

   

 

 

 
   $ 70,514      $ 70,070      $ 82,238   
  

 

 

   

 

 

   

 

 

 

 

7


Boise Inc.

Consolidated Statements of Income

(unaudited, dollars and shares in thousands, except per-share data)

 

     Six Months Ended June 30  
     2011 (1)     2010  

Sales

    

Trade

   $   1,153,104      $ 996,863   

Related parties

     18,794        18,803   
  

 

 

   

 

 

 
     1,171,898        1,015,666   
  

 

 

   

 

 

 

Costs and expenses

    

Materials, labor, and other operating expenses

     934,071        828,079   

Fiber costs from related parties

     8,823        14,999   

Depreciation, amortization, and depletion

     70,064        64,398   

Selling and distribution expenses

     48,856        27,988   

General and administrative expenses

     27,319        24,028   

Other (income) expense, net

     264        (620
  

 

 

   

 

 

 
     1,089,397        958,872   
  

 

 

   

 

 

 

Income from operations

     82,501        56,794   
  

 

 

   

 

 

 

Foreign exchange gain

     187        364   

Loss on extinguishment of debt (3)

     —          (22,225

Interest expense

     (32,439     (32,652

Interest income

     152        98   
  

 

 

   

 

 

 
     (32,100     (54,415
  

 

 

   

 

 

 

Income before income taxes

     50,401        2,379   

Income tax provision

     (19,810     (1,754
  

 

 

   

 

 

 

Net income

   $ 30,591      $ 625   
  

 

 

   

 

 

 

Weighted average common shares outstanding (2):

    

Basic

     93,928        80,214   

Diluted

     101,117        84,143   

Net income per common share (2):

    

Basic

   $ 0.33      $ 0.01   

Diluted

   $ 0.30      $ 0.01   

 

8


Boise Inc.

Segment Information

(unaudited, dollars in thousands)

 

     Six Months Ended June 30  
     2011 (1)     2010  

Segment sales

    

Paper

   $ 746,232      $ 717,688   

Packaging

     446,711        314,297   

Intersegment eliminations and other

     (21,045     (16,319
  

 

 

   

 

 

 
   $   1,171,898      $   1,015,666   
  

 

 

   

 

 

 

Segment income (loss)

    

Paper

   $ 54,120      $ 55,651   

Packaging

     41,120        11,335   

Corporate and Other

     (12,552     (9,828
  

 

 

   

 

 

 
     82,688        57,158   
  

 

 

   

 

 

 

Loss on extinguishment of debt (3)

     —          (22,225

Interest expense

     (32,439     (32,652

Interest income

     152        98   
  

 

 

   

 

 

 

Income before income taxes

   $ 50,401      $ 2,379   
  

 

 

   

 

 

 

EBITDA (4)

    

Paper

   $ 98,535      $ 98,818   

Packaging

     64,942        30,610   

Corporate and Other (3)

     (10,725     (30,097
  

 

 

   

 

 

 
   $ 152,752      $ 99,331   
  

 

 

   

 

 

 

 

9


Boise Inc.

Consolidated Balance Sheets

(unaudited, dollars in thousands)

 

     June 30, 2011 (1)      December 31, 2010  

ASSETS

     

Current

     

Cash and cash equivalents

   $ 236,263       $ 166,833   

Short-term investments

     —           10,621   

Receivables

     

Trade, less allowances of $879 and $603

     228,631         188,589   

Other

     7,629         3,839   

Inventories

     271,759         261,471   

Deferred income taxes

     19,473         16,658   

Prepaid and other

     12,568         5,214   
  

 

 

    

 

 

 
     776,323         653,225   
  

 

 

    

 

 

 

Property

     

Property and equipment, net

     1,213,357         1,199,035   

Fiber farms and deposits

     19,373         18,285   
  

 

 

    

 

 

 
     1,232,730         1,217,320   
  

 

 

    

 

 

 

Deferred financing costs

     27,534         30,396   

Goodwill

     103,280         —     

Intangible assets, net

     99,129         29,605   

Other assets

     8,414         8,444   
  

 

 

    

 

 

 

Total assets

   $   2,247,410       $   1,938,990   
  

 

 

    

 

 

 

 

10


Boise Inc.

Consolidated Balance Sheets (continued)

(unaudited, dollars and shares in thousands, except per-share data)

 

     June 30, 2011 (1)     December 31, 2010  

LIABILITIES AND STOCKHOLDERS’ EQUITY

    

Current

    

Current portion of long-term debt

   $ 76,563      $ 43,750   

Income taxes payable

     311        82   

Accounts payable

     194,294        179,214   

Accrued liabilities

    

Compensation and benefits

     55,386        54,574   

Interest payable

     10,525        10,535   

Other

     18,146        16,123   
  

 

 

   

 

 

 
     355,225        304,278   
  

 

 

   

 

 

 

Debt

    

Long-term debt, less current portion

     686,518        738,081   
  

 

 

   

 

 

 

Other

    

Deferred income taxes

     141,328        88,200   

Compensation and benefits

     100,554        121,318   

Other long-term liabilities

     48,953        40,278   
  

 

 

   

 

 

 
     290,835        249,796   
  

 

 

   

 

 

 

Commitments and contingent liabilities

    

Stockholders’ equity

    

Preferred stock, $0.0001 par value per share: 1,000 shares authorized; none issued

     —          —     

Common stock, $0.0001 par value per share: 250,000 shares authorized; 121,421 shares and 84,845 shares issued and outstanding (2)

     12        8   

Additional paid-in capital (2)

     865,229        581,442   

Accumulated other comprehensive income (loss)

     (77,107     (78,822

Retained earnings

     126,698        144,207   
  

 

 

   

 

 

 

Total stockholders’ equity

     914,832        646,835   
  

 

 

   

 

 

 
    
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $   2,247,410      $   1,938,990   
  

 

 

   

 

 

 

 

11


Boise Inc.

Consolidated Statements of Cash Flows

(unaudited, dollars in thousands)

 

     Six Months Ended June 30  
     2011 (1)     2010  

Cash provided by (used for) operations

    

Net income

   $ 30,591      $ 625   

Items in net income not using (providing) cash

    

Depreciation, depletion, and amortization of deferred financing costs and other

     73,188        68,864   

Share-based compensation expense

     1,771        1,834   

Pension expense

     6,096        4,830   

Deferred income taxes

     17,182        912   

Change in fair value of energy derivatives

     (684     617   

Other

     982        (277

Loss on extinguishment of debt

     —          22,225   

Decrease (increase) in working capital, net of acquisitions

    

Receivables

     (11,060     37,899   

Inventories

     8,640        (5,347

Prepaid expenses

     (3,326     1,503   

Accounts payable and accrued liabilities

     (4,505     6,352   

Current and deferred income taxes

     690        344   

Pension payments

     (25,512     (5,824

Other

     2,726        (266
  

 

 

   

 

 

 

Cash provided by operations

     96,779        134,291   
  

 

 

   

 

 

 

Cash provided by (used for) investment

    

Acquisition of businesses and facilities, net of cash acquired

     (201,509     —     

Expenditures for property and equipment

     (53,737     (37,481

Purchases of short-term investments

     (3,494     (11,825

Maturities of short-term investments

     14,114        11,247   

Sales of assets

     1,181        575   

Other

     137        230   
  

 

 

   

 

 

 

Cash used for investment

     (243,308     (37,254
  

 

 

   

 

 

 

Cash provided by (used for) financing

    

Issuances of long-term debt

     75,000        300,000   

Payments of long-term debt

     (93,750     (323,683

Payments of deferred financing costs

     (160     (11,613

Proceeds from exercise of warrants (2)

     284,785        —     

Payments of special dividend

     (47,916     —     

Other

     (2,000     (3,072
  

 

 

   

 

 

 

Cash provided by (used for) financing

     215,959        (38,368
  

 

 

   

 

 

 

Increase in cash and cash equivalents

     69,430        58,669   

Balance at beginning of the period

     166,833        69,393   
  

 

 

   

 

 

 

Balance at end of the period

   $ 236,263      $ 128,062   
  

 

 

   

 

 

 

 

12


Summary Notes to Consolidated Financial Statements and Segment Information

The Consolidated Statements of Income, Consolidated Balance Sheets, Consolidated Statements of Cash Flows, and Segment Information do not include all Notes to Consolidated Financial Statements and should be read in conjunction with the Company’s 2010 Annual Report on Form 10-K and the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2011, as well as other reports the Company files with the SEC. Net income for all periods presented involved estimates and accruals.

 

1. On March 1, 2011, our wholly owned subsidiary Boise Paper Holdings, L.L.C., acquired 100% of the outstanding stock of Tharco Packaging, Inc. (Tharco) for a preliminary purchase price of $200.8 million plus or minus working capital adjustments. We financed the acquisition with existing cash and $75 million in borrowings on our revolving credit facility. For more information, including an allocation of the purchase price to the assets acquired and liabilities assumed, based on our estimates of the fair value at the date of the acquisition, see Note 2, Acquisition of Tharco Packaging, Inc., of the Condensed Notes to Unaudited Quarterly Consolidated Financial Statements in our June 30, 2011, Form 10-Q.

The consolidated financial statements included herein include Tharco for the period of March 1 through June 30, 2011, in the Packaging segment. In connection with the acquisition, we recognized $2.2 million of expense related to inventory purchase accounting adjustments during the three months ended March 31, 2011, and the six months ended June 30, 2011.

 

2. During the three months ended June 30, 2011, Boise Inc. warrant holders exercised 40.3 million warrants, resulting in the issuance of 38.4 million additional common shares. For the three and six months ended June 30, 2011, the exercise added 25.3 million and 12.7 million, respectively, to the number of weighted average shares included in basic net income per share and an incremental 2.5 million and 4.5 million, respectively, to the weighted average diluted net income per share for the period the warrants were outstanding. There were approximately 4.0 million unexercised warrants on June 20, 2011, when the warrants expired. During 2011, we received cash proceeds of approximately $284.8 million, which primarily increased “Additional paid-in capital” on our Consolidated Balance Sheet at June 30, 2011, compared with December 31, 2010, and is recorded in “Proceeds from exercise of warrants” in our Consolidated Statement of Cash Flows for the six months ended June 30, 2011.

 

3. The six months ended June 30, 2010, included $22.2 million of expense related to a loss on the extinguishment of debt.

 

4. This release contains several financial measures that are not measures under U.S. generally accepted accounting principles (GAAP). These measures include EBITDA, EBITDA excluding special items, net income excluding special items, net total debt, and other similar measures. Management uses these measures to evaluate ongoing operations and believes they are useful to investors because they enable them to perform meaningful comparisons of past and present operating results. The tables that follow reconcile these non-GAAP measures with the most directly comparable GAAP measures.

EBITDA represents income before interest (interest expense and interest income), income taxes, and depreciation, amortization, and depletion. The following table reconciles net income to EBITDA for the three months ended June 30, 2011 and 2010, the three months ended March 31, 2011, and the six months ended June 30, 2011 and 2010 (unaudited, dollars in thousands):

 

     Three Months Ended     Six Months Ended  
     June 30     March  31,
2011
    June 30  
     2011     2010       2011     2010  

Net income

   $ 11,897      $ 13,310      $ 18,694      $ 30,591      $ 625   

Interest expense

     16,072        16,178        16,367        32,439        32,652   

Interest income

     (74     (61     (78     (152     (98

Income tax provision

     6,529        8,376        13,281        19,810        1,754   

Depreciation, amortization, and depletion

     36,090        32,267        33,974        70,064        64,398   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

   $     70,514      $     70,070      $     82,238      $     152,752      $     99,331   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

13


The following table reconciles segment income (loss) and EBITDA to EBITDA excluding special items for the three months ended June 30, 2011 and 2010, the three months ended March 31, 2011, and the six months ended June 30, 2011 and 2010 (unaudited, dollars in thousands):

 

     Three Months Ended     Six Months Ended  
     June 30     March 31,     June 30  
     2011     2010     2011     2011     2010  

Paper

          

Segment income

   $   13,150      $   25,708      $   40,970      $ 54,120      $ 55,651   

Depreciation, amortization, and depletion

     22,363        21,698        22,052        44,415        43,167   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     35,513        47,406        63,022        98,535        98,818   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

St. Helens mill restructuring

     —          (434     —          —          (306

Change in fair value of energy hedges

     —          (2,312     —          —          521   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA excluding special items

   $ 35,513      $ 44,660      $ 63,022      $ 98,535      $ 99,033   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Packaging

          

Segment income

   $ 27,494      $ 17,105      $ 13,626      $ 41,120      $ 11,335   

Depreciation, amortization, and depletion

     12,849        9,579        10,973        23,822        19,275   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     40,343        26,684        24,599        64,942        30,610   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Inventory purchase accounting expense

     —          —          2,200        2,200        —     

Change in fair value of energy hedges

     —          (401     —          —          96   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA excluding special items

   $ 40,343      $ 26,283      $ 26,799      $ 67,142      $ 30,706   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Corporate and Other

          

Segment loss

   $ (6,220   $ (4,982   $ (6,332   $ (12,552   $ (9,828

Depreciation, amortization, and depletion

     878        990        949        1,827        1,956   

Loss on extinguishment of debt

     —          (28     —          —          (22,225
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     (5,342     (4,020     (5,383     (10,725     (30,097
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss on extinguishment of debt

     —          28        —          —          22,225   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA excluding special items

   $ (5,342   $ (3,992   $ (5,383   $ (10,725   $ (7,872
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
          
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

   $ 70,514      $ 70,070      $ 82,238      $   152,752      $ 99,331   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
          
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA excluding special items

   $ 70,514      $ 66,951      $ 84,438      $ 154,952      $   121,867   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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The following tables reconcile net income to net income excluding special items and presents net income excluding special items per diluted share for the three months ended June 30, 2011 and 2010, the three months ended March 31, 2011, and the six months ended June 30, 2011 and 2010 (unaudited, dollars and shares in thousands):

 

     Three Months Ended     Six Months Ended  
     June 30     March  31,
2011
    June 30  
     2011      2010       2011     2010  

Net income

   $ 11,897       $   13,310      $   18,694      $ 30,591      $ 625   

Inventory purchase accounting expense

     —           —          2,200        2,200        —     

Change in fair value of energy hedges

     —           (2,713     —          —          617   

St. Helens mill restructuring

     —           (434     —          —          (306

Loss on extinguishment of debt

     —           28        —          —          22,225   

Tax (provision) benefit for special items (a)

     —           1,207        (851     (851     (8,721
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Net income excluding special items

   $ 11,897       $ 11,398      $ 20,043      $ 31,940      $   14,440   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding: diluted (b)

     111,772         84,093        90,417        101,117        84,143   

Net income excluding special items per diluted share (b)

   $ 0.11       $ 0.14      $ 0.22      $ 0.32      $ 0.17   

 

(a) Special items are tax effected in the aggregate at an assumed combined federal and state statutory rate of 38.7%.

 

(b) During second quarter 2011, Boise Inc. warrant holders exercised 40.3 million warrants, resulting in the issuance of 38.4 million additional common shares. For more information see Note 2 within this Summary Notes to Consolidated Financial Statements and Segment Information.

The following table reconciles total debt to net total debt as of June 30, 2011 and 2010, and March 31, 2011 (unaudited, dollars in thousands):

 

     June 30     March  31,
2011
 
     2011     2010    

Short-term borrowings

   $ —        $ 3,536      $ —     

Current portion of long-term debt

     76,563        29,163        50,000   

Long term debt, less current portion

     686,518        763,081        780,581   
  

 

 

   

 

 

   

 

 

 

Total debt

     763,081        795,780        830,581   

Less cash and cash equivalents and short-term investments

     (236,263     (138,668     (60,136
  

 

 

   

 

 

   

 

 

 

Net total debt

   $ 526,818      $ 657,112      $   770,445   
  

 

 

   

 

 

   

 

 

 

 

15