Boise Cascade Holdings LLC reported today sales declines of 15% in its Building Materials Distribution business and 17.9% in its Wood Products segment in the third quarter vs. the year-earlier period, but it continued to post profits in both groups. However, a $208.1 million writedown in the value of its 49% equity investment in Boise Inc. forced the privately held company to post a net loss of $207.6 million.
Business conditions will "seasonally weaken" in the months ahead, with no meaningful increase in single-family housing starts likely until at least spring 2009, the company said in a statement.
Building Materials Distribution group sales from July through September shrank to $584 million from $686.6 million in the year-earlier period. By volume, sales fell 22%, but the price of the goods sold increased 9%. For the group, earnings before interest, taxes, depreciation and amortization (EBITDA) slipped one-third to $12.1 million from $18 million. "[The group's]lower sales activity resulted in fewer gross margin dollars being generated to cover cash operating costs, such as occupancy, payroll, and delivery," Boise said.
Meanwhile, the Wood Products part of the business reported sales dropped to $215 million from $261.6 million in the third quarter of 2007. The volume and price of engineered wood products and lumber both shrank, Boise said. Plywood volumes rose but the price dropped, while particleboard volumes declined and the price increased a bit. EBITDA for the entire segment shrank 77.9% to $3.6 million from $16.3 million.
"We permanently closed our St. Helens, Ore., veneer mill in the third quarter and have been taking rolling curtailments at a number of our other Wood Products operations to maintain appropriate inventory levels, while trying to minimize the negative impact these curtailments have on our employees and our operating results," Boise said.
The entire company posted EBITDA of $10 million, thanks in part to the sale of Brazilian operations in July for $45.5 million.