EX-99 2 tin8kexrelease20090723.htm 2Q 2009 EARNINGS RELEASE


 

NEWS

RELEASE___________________________________________________

 

FOR IMMEDIATE RELEASE

CONTACT: Chris Mathis

(512) 434-3766

 

 

TEMPLE-INLAND INC. REPORTS SECOND QUARTER 2009 RESULTS

 

AUSTIN, TEXAS, July 23, 2009--Temple-Inland Inc. today reported second quarter 2009 net income of $66 million, or $0.61 per diluted share, compared with first quarter 2009 net income of $35 million, or $0.33 per diluted share, and second quarter 2008 net income of $8 million, or $0.07 per diluted share. Second quarter 2009 net income excluding special items was $26 million, or $0.24 per diluted share.

 

 

 

 

Second Quarter

First Quarter

 

 

 

 

 

 

 

 

 

 

2009

 

2008

 

2009

 

 

 

 

 

 

 

 

 

Net income per share

 

$0.61

 

$0.07

 

$0.33

 

 

Adjustment for special items

 

($0.37)

 

$0.00

 

($0.03)

 

 

Net income per share,

excluding special items

 

 

$0.24

 

 

$0.07

 

 

$0.30

 

 

 

Doyle R. Simons, chairman and chief executive officer of Temple-Inland Inc., said, “We had another very good quarter. We delivered solid operating results, return on investment, and cash flow, despite continued tough economic conditions. In the quarter, we generated $172 million of cash from operations and reduced our debt by $116 million.

 

“In Corrugated Packaging, we had a record second quarter as both our mills and box plants ran well in the quarter and we continued to drive down cost. Our results reflect the continued benefit from our box plant transformation, the acquisition of PBL, our heavy orientation to the food and beverage market and our integrated system. We reduced our inventories further in the quarter and our quarter-ending inventories were at their lowest level since 2002.

 

4

 

 

“In Building Products, we did not experience the traditional seasonal pick-up in demand in the quarter. Even so, due to our low cost structure, declining input costs and our favorable mix of products, we generated $8 million of EBITDA in the quarter. We remain focused on matching our supply with our demand, lowering costs, generating cash and returning to profitability in this business.

 

“As we look forward, economic conditions, while still uncertain, appear to be stabilizing. The actions we have taken to improve asset utilization, drive down costs, match our production to our demand and profitably grow our business, position us to continue to deliver solid relative results.”

 

Corrugated Packaging

 

 

 

Second Quarter

First Quarter

 

 

 

 

 

 

 

 

 

 

2009

 

2008

 

2009

 

 

 

 

 

 

 

 

 

Segment Operating Income ($ in Millions)

 

$91

 

$52

 

$105

 

 

 

Corrugated Packaging operating income was $91 million, a record second quarter. Earnings improved in second quarter 2009 compared with second quarter 2008 as lower mill and converting costs and the benefits of the PBL acquisition more than offset lower box volumes and prices. Operating results declined compared with the all-time record first quarter 2009 earnings due primarily to lower box prices, partially offset by lower costs and higher box volumes.

 

.

 

Building Products

 

 

 

Second Quarter

First Quarter

 

 

 

 

 

 

 

 

 

 

2009

 

2008

 

2009

 

 

 

 

 

 

 

 

 

Segment Operating Income ($ in Millions)

 

($3)

 

$1

 

($2)

 

 

 

Building Products operating results declined in second quarter 2009 compared with second quarter 2008 as higher gypsum prices were more than offset by lower lumber prices and lower shipments for lumber, gypsum and panel products. Operating results declined in second quarter 2009 compared with first quarter 2009 principally due to lower gypsum prices and lower shipments for all products.

 

5

 

Special items for second quarter 2009 after tax were $40 million, or $0.37 per diluted share, including: (i) income of $47 million, or $0.43 per diluted share, for alternative fuel mixture tax credits; (ii) a charge of $11 million, or $0.10 per diluted share, related to the previously disclosed substitution in connection with the 2007 sale of the timberland; and (iii) a gain of $5 million, or $0.05 per diluted share, related to the purchase and early retirement of $100 million of our term debt.

 

Temple-Inland will host a conference call on July 23, 2009, at 9:30 am ET to discuss results of second quarter 2009. To access the conference call, listeners calling from the United States and Canada should dial 1-866-394-6665 at least 15 minutes prior to the start of the call. The passcode for the conference call is: 19111527. Those wishing to access the call from outside the United States and Canada should dial 1-706-634-1667 and use the same passcode as set forth above. Replays of the call will be available for two weeks following completion of the live call and can be accessed at 1-800-642-1687 in the United States and Canada and at 1-706-645-9291 outside the United States and Canada. The passcode for the replay is: 19111527.

 

The conference call may also be accessed through Temple-Inland’s Internet site, www.templeinland.com, by clicking on "Investor Relations – Investor Events."

 

Temple-Inland Inc. is a manufacturing company focused on corrugated packaging and building products. The fully integrated corrugated packaging operation consists of 7 mills and 63 converting facilities. The building products operation manufactures a diverse line of building products for new home construction, commercial and repair and remodeling markets. Temple-Inland's address on the World Wide Web is www.templeinland.com.

 

This release contains “forward-looking statements” within the meaning of the federal securities laws. These statements reflect management’s current views with respect to future events and are subject to risk and uncertainties. We note that a variety of factors and uncertainties could cause our actual results to differ significantly from the results discussed in the forward-looking statements. Factors and uncertainties that might cause such differences include, but are not limited to: general economic, market, or business conditions; the opportunities (or lack thereof) that may be presented to us and that we may pursue; fluctuations in costs and expenses including the costs of raw materials, purchased energy, and freight; changes in interest rates; current conditions in financial markets could adversely affect our ability to finance our operations; demand for new housing; accuracy of accounting assumptions related to impaired assets, pension and postretirement costs, contingency reserves and income taxes; competitive actions by other companies; changes in laws or regulations; our ability to execute certain strategic and business improvement initiatives; the accuracy of certain judgments and estimates concerning the integration of acquired operations; and other factors, many of which are beyond our control.

 

This release includes non-GAAP financial measures. The required reconciliations to GAAP financial measures are included in this release.

 

 

6

 

TEMPLE-INLAND INC. AND SUBSIDIARIES

CONSOLIDATED EARNINGS AND SEGMENT RESULTS

(Preliminary and Unaudited)

 

 

 

Second Quarter

 

 

First Six Months

 

 

 

2009

 

 

2008

 

 

2009

 

 

2008

 

 

 

(In millions, except per share)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

Corrugated packaging

$

762

 

$

798

 

$

1,552

 

$

1,574

 

Building products

 

144

 

 

193

 

 

295

 

 

361

 

Total revenues

$

906

 

$

991

 

$

1,847

 

$

1,935

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income

 

 

 

 

 

 

 

 

 

 

 

 

Corrugated packaging

$

91

 

$

52

 

$

196

 

$

107

 

Building products

 

(3

)

 

1

 

 

(5

)

 

(20

)

Total segment operating income

 

88

 

 

53

 

 

191

 

 

87

 

Items not included in segments:

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative expense

 

(18

)

 

(21

)

 

(35

)

 

(42

)

Share-based and long-term incentive compensation

 

(17

)

 

(2

)

 

(26

)

 

(6

)

Other operating income (expense)

 

75

 

 

––

 

 

71

 

 

(15

)

Other non-operating income (expense)

 

(9

)

 

1

 

 

1

 

 

2

 

Net interest income (expense) on financial assets and nonrecourse financial liabilities of special purpose entities

 

(1

)

 

––

 

 

1

 

 

(3

)

Interest expense on debt

 

(17

)

 

(20

)

 

(36

)

 

(37

)

Income (loss) before taxes

 

101

 

 

11

 

 

167

 

 

(14

)

Income tax (expense) benefit

 

(35

)

 

(3

)

 

(65

)

 

9

 

Net Income (loss)

 

66

 

 

8

 

 

102

 

 

(5

)

Net income attributable to noncontrolling interest of special purpose entities

 

––

 

 

––

 

 

(1

)

 

––

 

Net income (loss) attributable to Temple-Inland Inc.

$

66

 

$

8

 

$

101

 

$

(5

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Average basic shares outstanding

 

106.7

 

 

106.6

 

 

106.7

 

 

106.7

 

Average diluted shares outstanding

 

107.8

 

 

107.4

 

 

107.2

 

 

107.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share information:

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings

$

0.62

 

$

0.07

 

$

0.95

 

$

(0.05

)

Diluted earnings (a)

$

0.61

 

$

0.07

 

$

0.94

 

$

(0.05

)

Dividends per share

$

0.10

 

$

0.10

 

$

0.20

 

$

0.20

 

 

____________

 

(a)

Earnings per share for first six months 2008 is based on average basic shares outstanding due to our year-to-date net loss.

 

 

 

 

 

 

 

7

 

 

 

TEMPLE-INLAND INC. AND SUBSIDIARIES

SUMMARIZED CONSOLIDATED BALANCE SHEETS

(Preliminary and Unaudited)

 

 

 

Second

Quarter-End 2009

 

Year-End 2008

 

 

 

(Dollars in millions)

 

ASSETS

 

 

 

 

 

 

Current Assets

$

1,057

 

$

1,073

 

Property and Equipment

 

1,615

 

 

1,664

 

Financial Assets of Special Purpose Entities

 

2,475

 

 

2,474

 

Goodwill

 

394

 

 

394

 

Other Assets

 

261

 

 

264

 

TOTAL ASSETS

$

5,802

 

$

5,869

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

Current Liabilities

$

405

 

$

446

 

Long-Term Debt

 

1,026

 

 

1,191

 

Nonrecourse Financial Liabilities of Special Purpose Entities

 

2,140

 

 

2,140

 

Deferred Tax Liability

 

772

 

 

750

 

Liability for Pension Benefits

 

167

 

 

172

 

Liability for Postretirement Benefits

 

101

 

 

101

 

Other Long-Term Liabilities

 

323

 

 

292

 

TOTAL LIABILITIES

 

4,934

 

 

5,092

 

SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

Temple-Inland Inc. Shareholders’ Equity

 

776

 

 

686

 

Noncontrolling Interest of Special Purpose Entities

 

92

 

 

91

 

TOTAL SHAREHOLDERS’ EQUITY

 

868

 

 

777

 

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$

5,802

 

$

5,869

 

 

 

8

 

TEMPLE-INLAND INC. AND SUBSIDIARIES

SUMMARIZED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Preliminary and Unaudited)

 

 

Second Quarter

 

First Six Months

 

2009

 

2008

 

2009

 

2008

 

(In millions)

CASH PROVIDED BY (USED FOR) OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operations

$

150

(a)(b)

$

57

(a)

 

$

264

(a)(b)

$

76

(a)(c)

Working capital

 

22

 

 

 

(7

)(d)

 

 

(12

)

 

 

(365

)(d)

 

 

172

 

 

 

50

 

 

 

252

 

 

 

(289

)

CASH PROVIDED BY (USED FOR) INVESTING

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

(33

)

 

 

(42

)

 

 

(52

)

 

 

(76

)

Acquisition, net of cash acquired

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Other

 

(7

)

 

 

(3

)

 

 

(8

)

 

 

(4

)

 

 

(40

)

 

 

(45

)

 

 

(60

)

 

 

(80

)

CASH PROVIDED BY (USED FOR) FINANCING

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends to shareholders

 

(11

)

 

 

(10

)

 

 

(21

)

 

 

(21

)

Net change in debt

 

(108

)

 

 

15

 

 

 

(148

)

 

 

219

 

Fees related to special purpose entities

 

(4

)

 

 

—

 

 

 

(19

)

 

 

—

 

Other

 

(4

)

 

 

(3

)

 

 

(15

)

 

 

(13

)

 

 

(127

)

 

 

2

 

 

 

(203

)

 

 

185

 

Effect of exchange rate changes on cash and cash equivalents

 

2

 

 

 

(1

)

 

 

1

 

 

 

1

 

Net increase (decrease) in cash and cash equivalents

 

7

 

 

 

6

 

 

 

(10

)

 

 

(183

)

Cash and cash equivalents at beginning of period

 

24

 

 

 

38

 

 

 

41

 

 

 

227

 

Cash and cash equivalents at end of period

$

31

 

 

$

44

 

 

$

31

 

 

$

44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL INFORMATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

$

50

 

 

$

50

 

 

$

101

 

 

$

100

 

 

_____________

 

(a)

Includes $15 million of voluntary, discretionary contributions to our defined benefit plan in second quarter and first six months 2009 and 2008.

(b)

Includes $63 million of alternative fuel mixture credits, net of related costs and tax payments, in second quarter and first six months 2009.

(c)

Includes payments related to our 2007 transformation plan of $39 million in first six months 2008.

(d)

Includes payments related to our 2007 transformation plan of $1 million in second quarter 2008 and $277 million in first six months 2008.

 

 

9

 

TEMPLE-INLAND INC. AND SUBSIDIARIES

SUMMARIZED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Preliminary and Unaudited)

 

 

Second

 

First

 

Fourth

 

Third

 

Second

 

 

Quarter

 

Quarter

 

Quarter

 

Quarter

 

Quarter

 

 

2009

 

2009

 

2008

 

2008

 

2008

 

 

(In millions)

 

CASH PROVIDED BY (USED FOR) OPERATIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operations

$

150

(a)(b)

$

114

 

 

$

80

(a)

 

$

66

(c)

 

$

57

(a)

 

Working capital

 

22

 

 

 

(34

)

 

 

(19

)

 

 

(20

)(d)

 

 

(7

)(d)

 

 

 

172

 

 

 

80

 

 

 

61

 

 

 

46

 

 

 

50

 

 

CASH PROVIDED BY (USED FOR) INVESTING

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

(33

)

 

 

(19

)

 

 

(48

)

 

 

(40

)

 

 

(42

)

 

Acquisition, net of cash acquired

 

—

 

 

 

—

 

 

 

—

 

 

 

(57

)

 

 

—

 

 

Other

 

(7

)

 

 

(1

)

 

 

—

 

 

 

(2

)

 

 

(3

)

 

 

 

(40

)

 

 

(20

)

 

 

(48

)

 

 

(99

)

 

 

(45

)

 

CASH PROVIDED BY (USED FOR) FINANCING

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends to shareholders

 

(11

)

 

 

(10

)

 

 

(11

)

 

 

(11

)

 

 

(10

)

 

Net change in debt

 

(108

)

 

 

(40

)

 

 

(1

)

 

 

68

 

 

 

15

 

 

Fees related to special purpose entities

 

(4

)

 

 

(15

)

 

 

—

 

 

 

—

 

 

 

—

 

 

Other

 

(4

)

 

 

(11

)

 

 

(7

)

 

 

3

 

 

 

(3

)

 

 

 

(127

)

 

 

(76

)

 

 

(19

)

 

 

60

 

 

 

2

 

 

Effect of exchange rate changes on cash and cash equivalents

 

2

 

 

 

(1

)

 

 

(3

)

 

 

(1

)

 

 

(1

)

 

Net increase (decrease) in cash and cash equivalents

 

7

 

 

 

(17

)

 

 

(9

)

 

 

6

 

 

 

6

 

 

Cash and cash equivalents at beginning of period

 

24

 

 

 

41

 

 

 

50

 

 

 

44

 

 

 

38

 

 

Cash and cash equivalents at end of period

$

31

 

 

$

24

 

 

$

41

 

 

$

50

 

 

$

44

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL INFORMATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

$

50

 

 

$

51

 

 

$

55

 

 

$

51

 

 

$

50

 

 

 

_____________

 

(a)

Includes $15 million of voluntary, discretionary contributions to our defined benefit plan in second quarter 2009 and 2008 and fourth quarter 2008.

(b)

Includes $63 million of alternative fuel mixture credits, net of related costs and tax payments, in second quarter 2009.

(c)

Includes payments related to our 2007 transformation plan of $11 million in third quarter 2008.

(d)

Includes payments related to our 2007 transformation plan of $20 million in third quarter 2008 and $1 million in second quarter 2008.

 

 

10

 

 

TEMPLE-INLAND INC. AND SUBSIDIARIES

REVENUES AND UNIT SALES, EXCLUDING JOINT VENTURE OPERATIONS

(Preliminary and Unaudited)

 

 

 

Second Quarter

 

 

First Six Months

 

 

 

2009

 

 

2008

 

 

2009

 

 

2008

 

Revenues

 

(Dollars in millions)

 

Corrugated packaging

 

 

 

 

 

 

 

 

 

 

 

 

Corrugated packaging

$

727

 

$

765

 

$

1,478

 

$

1,502

 

Paperboard (a) (b)

 

35

 

 

33

 

 

74

 

 

72

 

Total corrugated packaging

$

762

 

$

798

 

$

1,552

 

$

1,574

 

Building products

 

 

 

 

 

 

 

 

 

 

 

 

Lumber

$

45

 

$

64

 

$

91

 

$

117

 

Particleboard

 

35

 

 

49

 

 

73

 

 

92

 

Gypsum wallboard

 

33

 

 

34

 

 

71

 

 

68

 

Medium density fiberboard

 

15

 

 

19

 

 

33

 

 

38

 

Fiberboard

 

7

 

 

13

 

 

10

 

 

22

 

Other

 

9

 

 

14

 

 

17

 

 

24

 

Total building products

$

144

 

$

193

 

$

295

 

$

361

 

 

Unit Sales

 

 

 

 

 

 

 

 

 

 

 

 

Corrugated packaging

 

 

 

 

 

 

 

 

 

 

 

 

Corrugated packaging, thousands of tons

 

836

 

 

867

 

 

1,665

 

 

1,694

 

Paperboard, thousands of tons (a) (b)

 

86

 

 

72

 

 

175

 

 

154

 

Total, thousands of tons

 

922

 

 

939

 

 

1,840

 

 

1,848

 

Building products

 

 

 

 

 

 

 

 

 

 

 

 

Lumber, mbf

 

184

 

 

204

 

 

372

 

 

404

 

Particleboard, msf

 

99

 

 

135

 

 

206

 

 

255

 

Gypsum wallboard, msf

 

259

 

 

278

 

 

542

 

 

558

 

Medium density fiberboard, msf

 

31

 

 

38

 

 

65

 

 

76

 

Fiberboard, msf

 

37

 

 

68

 

 

54

 

 

118

 

 

____________

 

(a)

Paperboard includes containerboard and light-weight gypsum facing paper.

(b)

Comparisons of revenue and unit sales of paperboard are affected by the July 25, 2008 purchase of our partner’s interest in Premier Boxboard Limited LLC.

 

 

11

 

 

TEMPLE-INLAND INC. AND SUBSIDIARIES

CALCULATION OF NON-GAAP FINANCIAL MEASURES

(Preliminary and Unaudited)

 

 

 

Second Quarter

 

 

First Quarter

 

 

 

2009

 

 

2008

 

 

2009

 

 

 

(In millions, except per share)

NET INCOME EXCLUDING SPECIAL ITEMS

 

 

Net income in accordance with GAAP

$

66

 

$

8

 

$

35

 

Special items, after-tax:

 

 

 

 

 

 

 

 

 

Facility closures and headcount reductions

 

(1

)

 

––

 

 

(2

)

Alternative fuel mixture credits, net of costs

 

47

 

 

––

 

 

––

 

Litigation and other

 

––

 

 

––

 

 

(1

)

Substitution costs

 

(11

)

 

––

 

 

––

 

Gains related to purchase and retirement of long-term debt

 

5

 

 

––

 

 

6

 

Total special items, after-tax

 

40

 

 

––

 

 

3

 

Net income, excluding special items

$

26

 

$

8

 

$

32

 

 

 

 

 

 

 

 

 

 

 

Net income, per share, in accordance with GAAP

$

0.61

 

$

0.07

 

$

0.33

 

Special items, after-tax, per share:

 

 

 

 

 

 

 

 

 

Facility closures and headcount reductions

 

(0.01

)

 

––

 

 

(0.02

)

Alternative fuel mixture credits, net of costs

 

0.43

 

 

––

 

 

––

 

Litigation and other

 

––

 

 

––

 

 

(0.01

)

Substitution costs

 

(0.10

)

 

––

 

 

––

 

Gains related to purchase and retirement of long-term debt

 

0.05

 

 

––

 

 

0.06

 

Total special items, after-tax

 

0.37

 

 

––

 

 

0.03

 

Net income, per share, excluding special items

$

0.24

 

$

0.07

 

$

0.30

 

 

 

 

 

 

 

 

 

 

 

Average basic shares outstanding

 

106.7

 

 

106.6

 

 

106.7

 

Average diluted shares outstanding

 

107.8

 

 

107.4

 

 

106.7

 

 

 

 

Second Quarter

 

 

 

 

 

2009

 

EBITDA

(In millions)

Building Products

 

 

Segment operating loss determined in

accordance with GAAP

$

(3

)

 

Depreciation and amortization

 

11

 

 

EBITDA

$

8

 

 

 

 

 

 

 

 

 

 

12