Boise Cascade Holding's building products subsidiary, Boise Cascade LLC, swung to an EBITDA loss of $3.5 million in the second quarter from a $14.3 million profit a year earlier, the parent company announced today.
Overall, Boise Cascade Holdings swung back in the second quarter, reporting a net income of $9.3 million for the three-month period endied June 30 from a net loss of $15.4 million in the same period a year ago. However, this came in big part because of $30.3 million of noncash income from the company's investment in Boise Inc.
EBITDA--earnings before interest, taxes, depreciation and amortization--in the company's Building Materials Distribution unit shrank to $9.6 million from a year-earlier $17.3 million. Sales fell 29% to $433.7 million. Boise cited a 23% decline in product volumes sold and 8% decrease in product pricing as reasons for the fall-off. It added: "(M)ore than half of the decline in gross profit dollars compared to second quarter 2008 was offset by lower operating costs and cost reduction initiatives implemented over the last year."
Meanwhile, the Wood Products unit swung to a loss of $9.8 million from a profit of $3.3 million in April through June 2008. Sales in the segment, which includes engineered wood products, plywood, particleboard and lumber, fell nearly 82% to $113.4 million. "The decrease in Wood Products EBITDA from the same quarter a year ago was driven primarily by pricing and volume declines for plywood, offset in part by lower input costs and productivity improvements," the company said. "We have been taking rolling curtailments at all of our Wood Products operations to maintain appropriate inventory levels."
"Our operations made great strides this quarter on a number of fronts," Boise Cascade CEO Duane McDougall said in a statement. "In Building Materials Distribution, sales were up 29% from the first quarter; gross margin dollars were up 52%; and working capital came down while the operations continued to maintain high order fill rates. Based on the volume of product we sold relative to the overall decline in housing starts, it also looks like we gained market share in a number of geographies. Wood Products also made good progress in reducing working capital, had a strong safety performance, and made significant productivity gains. ... We continue to operate in a very difficult demand environment, but our employees have responded to the challenges in a positive way and it shows."
In other news, the company named Tom Carlile as its new CEO and a member of the Boise Cascade's board of directors effective Aug. 16. McDougall, who served as CEO since December 2008, is retiring, but will remain as chairman of the board. Carlile has served as Boise's CFO since November 2004.