Boise Cascade LLC (BC) posted today a fourth-quarter net loss of $16.2 million, swinging from a $33.6 million net profit in the year-earlier quarter that was fueled primarily by sales of stock in Boise Inc. On an operating basis, the company's loss for the quarter lightened to $11.8 million from a $21.2 million loss on a 10% rise in sales to $508.3 million.
The improved operating loss came even though the company saw increases in just about all cost and expenses areas, including a 9.4% increase in materials, labor, and other operating expenses.
Boise, Idaho-based BC also reported earnings before interest, taxes, depreciation and amortization (EBITDA) of negative $2.6 million, a marked improvement from the negative EBITDA of $12.4 million the company had during the final three months of 2009.
For the year, Boise Cascade reported a net loss of $6.1 million, improving from 2009's $19.1 million loss. Sales rose 14.5% to $2.22 billion, the operating loss lessened to $13.2 million from an $83.5 million loss in 2009, and EBITDA in 2010 swung to a positive $22.1 million from a negative $35.3 million in the prior year.
"I am proud of how both of our businesses performed last year at the second lowest level of housing starts in over 50 years," said CEO Tom Carlile. "Our wood products and BMD [building materials distribution] operating segments reported a combined $38.1 million of EBITDA, which was a $66.8 million year-over-year improvement. In addition, we were able to improve our net debt position by $61 million in 2010 and we are well positioned for the year ahead."
Nevertheless, BC's outlook was cautious. "Absent a decline in unemployment and a reduction in the housing supply overhang, we expect to continue to experience below-normal demand for the products we distribute and manufacture," the company said. "Industry commodity wood product prices could be volatile in response to operating rates and inventory levels in various distribution channels. We expect to manage our production levels to our sales demand, which willlikely cause us to operate our facilities below their capacity."
The company's building materials distribution reported income of $400,000 and was the only segment to post a profit. Segment sales increased by 9% from the year-earlier period to $402.7 million; an improvement aided by an 8% increase in prices and a 1% increase in volume. For the year, the segment posted a 47% increase in income to $11.6 million.
The building materials distribution segment also reported a 140% increase in EBITDA to $2.4 million for the quarter. For the year, the segment posted EBITDA of $19.1 million on $1.8 billion in sales. Gross margins declined by 70 basis points during the quarter, even though gross margin dollars increased due to higher sales.
The wood products segment reported a loss of $8.8 million during the quarter, halving its $16.2 million loss in 2009's fourth quarter. Sales increased 14% to $156.6 million thanks in part to 12% higher plywood sales volumes, 7% higher I-joist sales volumes, a 12% increase in I-joist net selling prices, and 13% higher laminated veneer lumber net selling prices.
The wood products segment suffered a negative EBITDA of $1.8 million, though that was an improvement from the negative $9.4 million EBITDA the segment suffered during the year-earlier period. For the year, the segment posted a positive EBITDA of $19 million on $687.4 million in sales. The company said improved product pricing for engineered wood products and lower per-unit manufacturing costs for plywood were the reasons for the solid financial performance.
Boise Inc. is a spinoff of BC's paper, packaging and newsprint, and transportation businesses. Since that company was created, BC has slowly sold off all its shares in that business.