Boise Cascade Holdings LLC (BC) today posted a net loss of $5.6 milion for the third quarter, swinging from a $26.2 million profit in the year-earlier period, even though sales increased 2.5% to $593.5 million.
BC's building products unit, Boise Cascade LLC, reported EBITDA--earnings before interest, taxes, depreciation, and amortization--totaling $7.7 million in the third quarter down from $11.9 million in the year-earlier period. The latest quarter's EBITDA would have been even weaker had it not been for $4.6 million received in a litigation settlement, presumably involving price-fixing for oriented strand board. Meanwhile, last year's net was affected by its investment in Boise Inc., which contributed $28.2 million of non-cash income in 3Q09. BC has since divested all of its holdings in Boise Inc.
On an operating basis, BC swung to a $1.4 million loss from operations in the third quarter from a $1.7 million profit in the July-to-September 2009 period.
BC's building material distribution segment saw its income shrink to $4.7 million from $9.7 million. The group recorded essentially flat sales totals at $470.7 million as prices rose 9% but sales volumes declined. EBITDA shrank to $6.5 million (again including the $4.6 million litigation settlement) from 3Q09's $11.6 million. Gross margins narrowed to 11.7% from 13%, while operating epxenses as a percent of sales increased because of higher payroll costs and expenses related to facility relocations and expansions, BC said.
Meanwhile, the wood products segment saw its operating loss lighten to $972,000 from a year-earlier $4.2 million. The segment posted a 12% rise in sales to $183.4 million, primarily because of plywood; BC shipped 18% more of the product by volume than a year earlier and sold it for 9% more. EBITDA increased to $5.8 million from $3.4 million.
"There were a few bright spots in the quarter compared to the same quarter a year ago, namely higher plywood sales volumes and modestly higher prices for most of the products we manufacture," Tom Carlile, BC's chief executive officer, said in a statement. "However, the third quarter this year was largely a disappointment when compared to the seasonal demand strength of the third quarter in most years. We are expecting the difficult operating environment to continue at least through the coming winter months."
Below-normal demand is likely for the products BC distributes, it said, while commodity wood product prices will be volatile.