Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT ON FORM 8-K - BOISE INC. | bz12312012form8-k.htm |
| EX-99.2 - BOISE INC. QUARTERLY STATISTICAL INFORMATION - BOISE INC. | a12312012exhibit992.htm |
Exhibit 99.1
Boise Inc.
Investor Relations
1111 West Jefferson PO Box 990050 Boise, ID 83799-0050
T 208 384 7456 F 208 395 7400
News Release | For Immediate Release: February 26, 2013 |
Media Contact | Investor Relations Contact |
Virginia Aulin - 208 384 7837 | Greg Jones - 208 384 7141 |
Boise Inc. Reports Financial Results for Fourth Quarter and Year-End 2012
BOISE, Idaho - Boise Inc. (NYSE: BZ) today reported net income of $13.5 million, or $0.13 per diluted share, for fourth quarter 2012, compared with net income of $16.3 million, or $0.15 per diluted share, for fourth quarter 2011. Net income for the year ended 2012 was $52.2 million, or $0.52 per diluted share, compared with $75.2 million, or $0.70 per diluted share, for the year ended 2011. Net income excluding special items for the year ended 2012 was $71.6 million, compared with $79.9 million for the year ended 2011.
EBITDA excluding special items(1) was $78.7 million for fourth quarter 2012, compared with EBITDA excluding special items of $85.0 million for fourth quarter 2011. EBITDA excluding special items was $331.8 million for the year ended 2012, versus our record 2011 EBITDA excluding special items of $340.2 million.
2012 Highlights |
Ÿ Record annual sales of $2.56 billion, a 6% increase over 2011 |
Ÿ EBITDA excluding special items of $331.8 million for 2012 and $78.7 million for 4Q 2012(1) |
Ÿ Special items include pretax costs of $31.7 million, primarily related to ceasing |
uncoated freesheet production at our paper mill in St. Helens, Oregon |
Ÿ Generated annual free cash flow of $97.4 million(1) |
Ÿ Paid two special cash dividends totaling $1.20 per common share, or $119.7 million |
"We were pleased with our overall 2012 operating results," said Alexander Toeldte, president and chief executive officer of Boise Inc. "Our mills and converting operations ran well, and we reduced costs through productivity improvement by reducing usage of key raw materials. During the year, we generated significant free cash flow and returned capital to our shareholders through the payment of two special cash dividends totaling $1.20 per common share. Despite these achievements, our 2012 results were affected adversely by margin compression in some of our Packaging operations and declining prices in our Paper business."
"In Packaging, we experienced margin compression in some of our converting operations, primarily in our California and Texas markets. We saw little benefit from the announced $50 per ton linerboard price increase during the fourth quarter in our converting operations, but we expect to more fully benefit from the increase in first quarter 2013. As of January 31, 2013, we had implemented over 90% of the $50 price increase through our converting operations. We are making targeted capital investments in our converting operations to improve efficiency and keep pace with our sales growth."
"In Paper, we faced declining prices for communication-grade papers throughout the year, particularly in the fourth quarter. The average price for uncoated freesheet in the fourth quarter 2012 declined $27 per ton from the previous quarter and dropped $45 per ton from the fourth quarter 2011, as industry supply continued to outpace demand. These dynamics factored heavily into our decision to cease paper production at our mill in St. Helens, Oregon, reducing our production capacity in 2013 by 60,000 tons. During fourth quarter, we took 16,000 tons of market-related downtime in addition to the 8,000 tons of downtime from our annual maintenance outage at our mill in Jackson, Alabama. Going forward, we will continue to aggressively manage our costs and evaluate the optimal configuration of our white paper assets, to balance our production with demand for our products."
____________
(1) | For reconciliations of non-GAAP measures, see "Summary Notes to Consolidated Financial Statements and Segment Information." |
1
Quarterly and Annual Financial Results | |||||||||||||||||||||
(in millions, except per-share data) | |||||||||||||||||||||
4Q 2012 | 4Q 2011 | 3Q 2012 | 2012 | 2011 | |||||||||||||||||
Sales | $ | 627.5 | $ | 600.4 | $ | 645.2 | $ | 2,555.4 | $ | 2,404.1 | |||||||||||
Net income | $ | 13.5 | $ | 16.3 | $ | 3.6 | $ | 52.2 | $ | 75.2 | |||||||||||
Net income per diluted share (2) | $ | 0.13 | $ | 0.15 | $ | 0.04 | $ | 0.52 | $ | 0.70 | |||||||||||
Net income excluding special items (1) | $ | 13.8 | $ | 18.5 | $ | 22.8 | $ | 71.6 | $ | 79.9 | |||||||||||
Net income excluding special items per diluted share (1) | $ | 0.14 | $ | 0.17 | $ | 0.23 | $ | 0.71 | $ | 0.75 | |||||||||||
Weighted average diluted common shares outstanding (2) | 101.2 | 106.6 | 101.0 | 101.1 | 106.7 | ||||||||||||||||
EBITDA (1) | $ | 78.3 | $ | 81.4 | $ | 59.2 | $ | 300.0 | $ | 332.6 | |||||||||||
EBITDA excluding special items (1) | $ | 78.7 | $ | 85.0 | $ | 90.5 | $ | 331.8 | $ | 340.2 | |||||||||||
(1) For reconciliations of non-GAAP measures, see "Summary Notes to Consolidated Financial Statements and Segment Information." | |||||||||||||||||||||
(2) As of December 31, 2012, we had 100.5 million common shares outstanding. For additional information, see "Summary Notes to Consolidated Financial Statements and Segment Information." | |||||||||||||||||||||
Packaging Segment
Packaging segment sales for fourth quarter 2012 were $287.3 million, an increase of $35.9 million, or 14%, compared with $251.4 million in fourth quarter 2011. About half of the increase was the result of our acquisition of Hexacomb on December 1, 2011. The remaining increase resulted from sales volume growth in our network of box plants, which increased 9% in fourth quarter 2012, compared with the same quarter in 2011. Our vertical integration rose from an average of 71% during 2011 to 84% in 2012, and we expect it to increase to approximately 90% in 2013 based on our current volumes. Our increased vertical integration decreased our sales to third parties by 46% in fourth quarter 2012, compared with fourth quarter 2011. Net sales prices for our corrugated products, excluding Hexacomb, increased 2% during fourth quarter 2012, compared with fourth quarter 2011. Packaging segment sales for fourth quarter 2012 were essentially flat, compared with third quarter 2012.
Packaging segment sales for full year 2012 were $1,130.1 million, an increase of $180.4 million, or 19%, compared with $949.7 million for 2011. Sales volumes of corrugated products increased 16% in 2012, compared with 2011. Slightly more than half of this increase related to growth from our 2011 acquisitions and the remainder was due to increased sales from our network of box plants, which offset the decline in linerboard net sales prices and volumes sold to third parties during 2012 by 2% and 31%, respectively, compared with 2011.
Packaging segment EBITDA, excluding special items, was $47.1 million for fourth quarter 2012, a slight increase from $46.9 million in fourth quarter 2011. Although we benefited from two additional months of operations at Hexacomb in the quarter, this was offset by higher input costs and margin compression on the sale of some of our corrugated products at our converting operations. Packaging segment EBITDA in fourth quarter 2012 increased $9.6 million, or 25%, compared with third quarter 2012, due to improved sales prices of linerboard sold to third parties and lower maintenance outage costs, offset partially by higher fiber costs.
Packaging segment EBITDA, excluding special items, for full year 2012 was $162.5 million, an increase of $3.2 million, or 2%, compared with 2011. The increase reflects a full year impact from our acquisitions. Our corrugated products sales volumes increased 16% year over year; however, these increases were largely offset by margin compression on the sale of some of our corrugated products.
During first quarter 2013, we will conduct a cold outage at our mill in DeRidder, Louisiana. Cold outages at this facility occur every five years and are more extensive and costly than our normal annual maintenance outages. We expect total maintenance outage costs for our Packaging segment in 2013 to be approximately $23 million, an increase of approximately $12 million from 2012, with $20 million expected in first quarter 2013, relative to $2 million in first quarter 2012, with the remaining $3 million expected in third quarter 2013.
2
Paper Segment
Lower uncoated freesheet sales prices affected our fourth quarter 2012 sales, compared with fourth quarter 2011 and third quarter 2012. Paper segment sales for fourth quarter 2012 were $352.7 million, a decrease of $7.0 million, or 2%, compared with fourth quarter 2011. Paper segment sales decreased $17.3 million, or 5%, compared with third quarter 2012. Our average sales price of uncoated freesheet declined from $993 per short ton in fourth quarter 2011 and $975 per short ton in third quarter 2012 to $948 per short ton in fourth quarter 2012. Total uncoated freesheet sales volumes increased 3% versus the prior-year period but were down 4% versus third quarter 2012 as a result of seasonal demand decline.
Paper segment sales for full year 2012 were $1,468.3 million, down 2% compared with 2011, due to lower sales prices of uncoated freesheet and lower sales prices and volumes of market pulp. Our average sales price of uncoated freesheet was $968 per short ton in 2012, down from an average of $990 per short ton in 2011. Sales volumes of uncoated freesheet were up 2% in 2012, compared with 2011. The increase in our uncoated freesheet sales volumes for the year is due to a 5% increase in sales of label and release and premium office papers and higher purchase volumes by our cut-size customers. Combined sales volumes of label and release and premium office papers represented 34% of our total uncoated freesheet sales volumes for 2012, up from 33% in the prior year.
Paper segment EBITDA, excluding special items, was $38.7 million for fourth quarter 2012, a decrease of $5.7 million, or 13%, compared with fourth quarter 2011. This decrease was due primarily to lower sales prices of uncoated freesheet. This decline was largely offset by generally lower input and maintenance outage costs. Paper segment EBITDA, excluding special items, for fourth quarter 2012 decreased $19.9 million from third quarter 2012 as a result of lower sales volumes and net selling prices for uncoated freesheet and higher maintenance outage costs as a result of our annual outage at our Jackson, Alabama, mill.
Paper segment EBITDA, excluding special items, for full year 2012 was $193.3 million, a decrease of $8.2 million, or 4%, compared with $201.5 million for the year ended December 31, 2011. This decrease resulted from the $22 per short ton reduction in the average sales price of uncoated freesheet and the $107 per short ton reduction in the average sales price of market pulp. Additionally, chemical costs increased $13.8 million year over year, due to higher prices and increased volumes for key chemicals such as caustic soda and starch. These changes were offset partially by an overall $34.0 million reduction in fiber costs as higher wood chip prices, primarily in the Pacific Northwest, were offset by lower purchased pulp prices and improved pulp production at International Falls, Minnesota, and Jackson, Alabama, which reduced our consumption of purchased pulp.
Webcast and Conference Call
Boise Inc. will host a webcast and conference call on Tuesday, February 26, 2013, at 11:00 a.m. ET, at which time we will review the company's recent performance. To participate in the conference call, dial 866-841-1001 (international callers should dial 832-445-1689). This webcast will be archived from February 26, 2013, at 2:00 p.m. ET through March 26, 2013, at 11:45 p.m. ET. Playback numbers are 855-859-2056 for U.S. callers and 404-537-3406 for international callers. The passcode is 87424464. To access the replay, go to www.BoiseInc.com and click on About Boise Inc. to reach the link to the webcast under Webcasts & Presentations on the Investors menu.
Annual Meeting Date
Boise Inc. intends to hold its annual shareholders' meeting at 9:00 a.m. MDT on Wednesday, April 24, 2013, in Boise, Idaho. The record date to determine shareholders eligible to vote at the meeting is Monday, March 18, 2013.
About Boise Inc.
Headquartered in Boise, Idaho, Boise Inc. (NYSE: BZ) manufactures a wide variety of packaging and paper products. Boise's range of packaging products includes linerboard and corrugating medium, corrugated containers and sheets, and protective packaging products. Boise's paper products include imaging papers for the office and home, printing and converting papers, and papers used in packaging, such as label and release papers. Our employees are committed to delivering excellent value while managing our businesses to sustain environmental resources for future generations. Visit our website at www.BoiseInc.com.
3
Forward-Looking Statements
This news release contains statements that are "forward looking," as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements. Statements regarding announced price increases on our products, cost management efforts, asset configuration changes, and vertical integration levels and the benefits we expect to derive from such outcomes and actions are forward looking. Given the risks and uncertainties involved, there can be no assurance we will be able to achieve our stated goals or realize any benefits. For example, changes in the economy and competitive influences may result in our being unable to implement or realize any additional benefit from our announced price increases. Economic and competitive influences, availability of equipment and suppliers, the performance of the equipment once installed, and other factors could cause the outcome of our asset configuration projects, the related costs, and the timing to differ materially from what we have predicted in this release. For further information about the risks and uncertainties associated with our business, please refer to our filings with the Securities and Exchange Commission. We undertake no obligation to update the forward-looking statements in this release whether as a result of new information, future events, or otherwise.
4
Boise Inc.
Segment Highlights
(dollars in millions)
4Q 2012 | 4Q 2011 | 3Q 2012 | 2012 | 2011 | ||||||||||||||||
Packaging | ||||||||||||||||||||
Sales volumes (thousands of short tons, except corrugated) | ||||||||||||||||||||
Linerboard, Total | 156.8 | 157.9 | 155.7 | 611.1 | 606.5 | |||||||||||||||
Linerboard, External sales | 31.2 | 57.5 | 36.5 | 158.9 | 230.2 | |||||||||||||||
Newsprint | 60.3 | 58.6 | 60.0 | 233.4 | 230.8 | |||||||||||||||
Corrugated containers and sheets (mmsf) (a) | 2,578 | 2,297 | 2,584 | 10,079 | 8,720 | |||||||||||||||
Key input costs | ||||||||||||||||||||
Fiber, including purchased rollstock | $ | 43.4 | $ | 42.3 | $ | 39.8 | $ | 176.9 | $ | 156.9 | ||||||||||
Energy | 16.4 | 15.1 | 16.4 | 61.2 | 65.2 | |||||||||||||||
Chemicals | 10.9 | 10.0 | 10.6 | 42.0 | 38.0 | |||||||||||||||
Outage costs | (0.3 | ) | — | 3.5 | 10.9 | 9.9 | ||||||||||||||
EBITDA (b) | 47.1 | 45.5 | 37.5 | 162.5 | 155.5 | |||||||||||||||
EBITDA excluding special items (b) | 47.1 | 46.9 | 37.5 | 162.5 | 159.3 | |||||||||||||||
Assets | $ | 958.0 | $ | 957.3 | ||||||||||||||||
Paper | ||||||||||||||||||||
Sales volumes (thousands of short tons) | ||||||||||||||||||||
Uncoated freesheet (c) | 302.4 | 294.1 | 313.8 | 1,253.8 | 1,229.8 | |||||||||||||||
Corrugating medium | 34.9 | 33.9 | 33.7 | 135.3 | 135.3 | |||||||||||||||
Market pulp | 15.6 | 20.3 | 18.5 | 52.9 | 90.2 | |||||||||||||||
Key input costs | ||||||||||||||||||||
Fiber | $ | 77.9 | $ | 94.1 | $ | 85.7 | $ | 343.1 | $ | 377.1 | ||||||||||
Energy | 34.2 | 36.4 | 33.4 | 134.8 | 143.9 | |||||||||||||||
Chemicals | 49.6 | 51.1 | 55.6 | 211.6 | 197.8 | |||||||||||||||
Outage costs | 4.6 | 7.8 | 0.4 | 14.8 | 21.5 | |||||||||||||||
EBITDA (b) | 38.2 | 44.4 | 27.3 | 161.6 | 201.5 | |||||||||||||||
EBITDA excluding special items (b) | 38.7 | 44.4 | 58.6 | 193.3 | 201.5 | |||||||||||||||
Assets | $ | 1,144.7 | $ | 1,190.9 | ||||||||||||||||
4Q 2012 vs. 4Q 2011 | 4Q 2012 vs. 3Q 2012 | 2012 vs. 2011 | ||||||||||
Packaging | ||||||||||||
Change in net sales prices (dollars per short ton, except corrugated) (d) | ||||||||||||
Linerboard, Total | $ | 45 | $ | 40 | $ | 8 | ||||||
Linerboard, External sales only | 39 | 31 | (7 | ) | ||||||||
Newsprint | (1 | ) | 3 | (1 | ) | |||||||
Corrugated containers and sheets ($/msf) (a) | 6 | 1 | 8 | |||||||||
Paper | ||||||||||||
Change in net sales prices (dollars per short ton) (d) | ||||||||||||
Uncoated freesheet (c) | $ | (45 | ) | $ | (27 | ) | $ | (22 | ) | |||
Corrugating medium | 77 | 53 | 28 | |||||||||
Market pulp | (12 | ) | (6 | ) | (107 | ) | ||||||
____________
(a) | Includes corrugated container and sheet volumes for Tharco and protective packaging product volumes for Hexacomb since the acquisitions on March 1 and December 1, 2011, respectively. Increase in sales price during 2012 is primarily due to Hexacomb. |
(b) | For reconciliations of non-GAAP measures, see "Summary Notes to Consolidated Financial Statements and Segment Information." |
(c) | Includes cut-size office papers, printing and converting papers, and label and release papers. |
(d) | Average net selling prices for our principal products represent sales less freight costs, discounts, and allowances. |
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Boise Inc.
Consolidated Statements of Income
(dollars and shares in thousands, except per-share data)
Three Months Ended | Year Ended | ||||||||||||||||||
December 31 | September 30, | December 31 | |||||||||||||||||
2012 | 2011 (2) | 2012 | 2012 | 2011 (2) | |||||||||||||||
Sales | |||||||||||||||||||
Trade | $ | 611,925 | $ | 591,524 | $ | 631,054 | $ | 2,495,092 | $ | 2,364,024 | |||||||||
Related parties | 15,567 | 8,917 | 14,131 | 60,271 | 40,057 | ||||||||||||||
627,492 | 600,441 | 645,185 | 2,555,363 | 2,404,081 | |||||||||||||||
Costs and expenses | |||||||||||||||||||
Materials, labor, and other operating expenses (excluding depreciation) (1) | 491,554 | 462,315 | 502,848 | 2,004,044 | 1,880,271 | ||||||||||||||
Fiber costs from related parties | 5,094 | 5,154 | 5,266 | 19,772 | 18,763 | ||||||||||||||
Depreciation, amortization, and depletion | 39,907 | 37,320 | 37,540 | 152,306 | 143,758 | ||||||||||||||
Selling and distribution expenses | 30,602 | 28,999 | 30,015 | 121,827 | 107,654 | ||||||||||||||
General and administrative expenses | 20,492 | 18,872 | 19,213 | 79,748 | 60,587 | ||||||||||||||
St. Helens charges (1) | 111 | — | 27,448 | 27,559 | — | ||||||||||||||
Other (income) expense, net (3) | 982 | 1,860 | 1,509 | 2,572 | 1,994 | ||||||||||||||
588,742 | 554,520 | 623,839 | 2,407,828 | 2,213,027 | |||||||||||||||
Income from operations | 38,750 | 45,921 | 21,346 | 147,535 | 191,054 | ||||||||||||||
Foreign exchange gain (loss) | (376 | ) | 430 | 296 | 179 | 135 | |||||||||||||
Loss on extinguishment of debt (4) | — | (2,300 | ) | — | — | (2,300 | ) | ||||||||||||
Interest expense | (15,484 | ) | (15,653 | ) | (15,458 | ) | (61,740 | ) | (63,817 | ) | |||||||||
Interest income | 59 | 59 | 3 | 160 | 269 | ||||||||||||||
(15,801 | ) | (17,464 | ) | (15,159 | ) | (61,401 | ) | (65,713 | ) | ||||||||||
Income before income taxes | 22,949 | 28,457 | 6,187 | 86,134 | 125,341 | ||||||||||||||
Income tax provision | (9,402 | ) | (12,202 | ) | (2,584 | ) | (33,984 | ) | (50,131 | ) | |||||||||
Net income | $ | 13,547 | $ | 16,255 | $ | 3,603 | $ | 52,150 | $ | 75,210 | |||||||||
Weighted average common shares outstanding: | |||||||||||||||||||
Basic | 100,167 | 103,991 | 100,144 | 99,872 | 101,941 | ||||||||||||||
Diluted | 101,180 | 106,613 | 101,030 | 101,143 | 106,746 | ||||||||||||||
Net income per common share: | |||||||||||||||||||
Basic | $ | 0.14 | $ | 0.16 | $ | 0.04 | $ | 0.52 | $ | 0.74 | |||||||||
Diluted | $ | 0.13 | $ | 0.15 | $ | 0.04 | $ | 0.52 | $ | 0.70 | |||||||||
For footnotes, see Summary Notes to Consolidated Financial Statements and Segment Information.
6
Boise Inc.
Segment Information
(dollars in thousands)
Three Months Ended | Year Ended | ||||||||||||||||||
December 31 | September 30, | December 31 | |||||||||||||||||
2012 | 2011 | 2012 | 2012 | 2011 | |||||||||||||||
Segment sales | |||||||||||||||||||
Packaging (2) | $ | 287,332 | $ | 251,388 | $ | 285,705 | $ | 1,130,102 | $ | 949,710 | |||||||||
Paper | 352,702 | 359,697 | 369,952 | 1,468,344 | 1,496,537 | ||||||||||||||
Intersegment eliminations and other | (12,542 | ) | (10,644 | ) | (10,472 | ) | (43,083 | ) | (42,166 | ) | |||||||||
$ | 627,492 | $ | 600,441 | $ | 645,185 | $ | 2,555,363 | $ | 2,404,081 | ||||||||||
Segment income (loss) | |||||||||||||||||||
Packaging (2) (3) | $ | 31,630 | $ | 31,837 | $ | 22,715 | $ | 101,626 | $ | 104,996 | |||||||||
Paper (1) | 14,926 | 21,794 | 5,463 | 73,913 | 112,051 | ||||||||||||||
Corporate and Other (3) | (8,182 | ) | (7,280 | ) | (6,536 | ) | (27,825 | ) | (25,858 | ) | |||||||||
38,374 | 46,351 | 21,642 | 147,714 | 191,189 | |||||||||||||||
Loss on extinguishment of debt (4) | — | (2,300 | ) | — | — | (2,300 | ) | ||||||||||||
Interest expense | (15,484 | ) | (15,653 | ) | (15,458 | ) | (61,740 | ) | (63,817 | ) | |||||||||
Interest income | 59 | 59 | 3 | 160 | 269 | ||||||||||||||
Income before income taxes | $ | 22,949 | $ | 28,457 | $ | 6,187 | $ | 86,134 | $ | 125,341 | |||||||||
EBITDA (5) | |||||||||||||||||||
Packaging (2) (3) | $ | 47,089 | $ | 45,518 | $ | 37,538 | $ | 162,542 | $ | 155,543 | |||||||||
Paper (1) | 38,244 | 44,390 | 27,275 | 161,563 | 201,533 | ||||||||||||||
Corporate and Other (3) (4) | (7,052 | ) | (8,537 | ) | (5,631 | ) | (24,085 | ) | (24,429 | ) | |||||||||
$ | 78,281 | $ | 81,371 | $ | 59,182 | $ | 300,020 | $ | 332,647 | ||||||||||
EBITDA excluding special items (5) | |||||||||||||||||||
Packaging (2) (3) | $ | 47,089 | $ | 46,882 | $ | 37,538 | $ | 162,542 | $ | 159,334 | |||||||||
Paper (1) | 38,701 | 44,390 | 58,563 | 193,308 | 201,533 | ||||||||||||||
Corporate and Other (3) (4) | (7,052 | ) | (6,237 | ) | (5,631 | ) | (24,085 | ) | (20,626 | ) | |||||||||
$ | 78,738 | $ | 85,035 | $ | 90,470 | $ | 331,765 | $ | 340,241 | ||||||||||
For footnotes, see Summary Notes to Consolidated Financial Statements and Segment Information.
7
Boise Inc.
Consolidated Balance Sheets
(dollars in thousands)
December 31, 2012 | December 31, 2011 | ||||||
ASSETS | |||||||
Current | |||||||
Cash and cash equivalents | $ | 49,707 | $ | 96,996 | |||
Receivables | |||||||
Trade, less allowances of $1,382 and $1,343 | 240,459 | 228,838 | |||||
Other | 8,267 | 7,622 | |||||
Inventories | 294,484 | 307,305 | |||||
Deferred income taxes | 17,955 | 20,379 | |||||
Prepaid and other | 8,828 | 6,944 | |||||
619,700 | 668,084 | ||||||
Property | |||||||
Property and equipment, net | 1,223,001 | 1,235,269 | |||||
Fiber farms | 24,311 | 21,193 | |||||
1,247,312 | 1,256,462 | ||||||
Deferred financing costs | 26,677 | 30,956 | |||||
Goodwill | 160,130 | 161,691 | |||||
Intangible assets, net | 147,564 | 159,120 | |||||
Other assets | 7,029 | 9,757 | |||||
Total assets | $ | 2,208,412 | $ | 2,286,070 | |||
For footnotes, see Summary Notes to Consolidated Financial Statements and Segment Information.
8
Boise Inc.
Consolidated Balance Sheets (continued)
(dollars and shares in thousands, except per-share data)
December 31, 2012 | December 31, 2011 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current | |||||||
Current portion of long-term debt | $ | 10,000 | $ | 10,000 | |||
Accounts payable | 185,078 | 202,584 | |||||
Accrued liabilities | |||||||
Compensation and benefits | 70,950 | 64,907 | |||||
Interest payable | 10,516 | 10,528 | |||||
Other | 20,528 | 22,540 | |||||
297,072 | 310,559 | ||||||
Debt | |||||||
Long-term debt, less current portion | 770,000 | 790,000 | |||||
Other | |||||||
Deferred income taxes | 198,370 | 161,260 | |||||
Compensation and benefits | 121,682 | 172,394 | |||||
Other long-term liabilities | 73,102 | 57,010 | |||||
393,154 | 390,664 | ||||||
Commitments and contingent liabilities | |||||||
Stockholders’ equity | |||||||
Preferred stock, $0.0001 par value per share: 1,000 shares authorized; none issued | — | — | |||||
Common stock, $0.0001 par value per share: 250,000 shares authorized; 100,503 and 100,272 shares issued and outstanding | 12 | 12 | |||||
Treasury stock, 21,151 shares held | (121,423 | ) | (121,421 | ) | |||
Additional paid-in capital | 868,840 | 866,901 | |||||
Accumulated other comprehensive income (loss) | (101,304 | ) | (121,962 | ) | |||
Retained earnings | 102,061 | 171,317 | |||||
Total stockholders’ equity | 748,186 | 794,847 | |||||
Total liabilities and stockholders’ equity | $ | 2,208,412 | $ | 2,286,070 | |||
For footnotes, see Summary Notes to Consolidated Financial Statements and Segment Information.
9
Boise Inc.
Consolidated Statements of Cash Flows
(dollars in thousands)
Year Ended December 31 | |||||||
2012 | 2011 | ||||||
Cash provided by (used for) operations | |||||||
Net income | $ | 52,150 | $ | 75,210 | |||
Items in net income not using (providing) cash | |||||||
Depreciation, depletion, and amortization of deferred financing costs and other | 157,040 | 149,715 | |||||
Share-based compensation expense | 5,983 | 3,695 | |||||
Pension expense | 11,279 | 10,916 | |||||
Deferred income taxes | 33,684 | 44,301 | |||||
St. Helens charges | 28,481 | — | |||||
Other | 1,868 | 1,878 | |||||
Loss on extinguishment of debt (4) | — | 2,300 | |||||
Decrease (increase) in working capital, net of acquisitions | |||||||
Receivables | (9,803 | ) | 1,624 | ||||
Inventories | 8,136 | (22,237 | ) | ||||
Prepaid expenses | (814 | ) | (275 | ) | |||
Accounts payable and accrued liabilities | (16,505 | ) | 3,803 | ||||
Current and deferred income taxes | (1,938 | ) | 4,632 | ||||
Pension payments | (35,205 | ) | (25,414 | ) | |||
Other | 674 | 43 | |||||
Cash provided by operations | 235,030 | 250,191 | |||||
Cash provided by (used for) investment | |||||||
Acquisition of businesses and facilities, net of cash acquired (2) | — | (326,223 | ) | ||||
Expenditures for property and equipment | (137,642 | ) | (128,762 | ) | |||
Purchases of short-term investments | — | (3,494 | ) | ||||
Maturities of short-term investments | — | 14,114 | |||||
Other | 1,393 | 1,048 | |||||
Cash used for investment | (136,249 | ) | (443,317 | ) | |||
Cash provided by (used for) financing | |||||||
Issuances of long-term debt | 5,000 | 275,000 | |||||
Payments of long-term debt | (25,000 | ) | (256,831 | ) | |||
Payments of financing costs | (188 | ) | (8,613 | ) | |||
Repurchases of common stock | (2 | ) | (121,421 | ) | |||
Proceeds from exercise of warrants | — | 284,785 | |||||
Payment of special dividends | (119,653 | ) | (47,916 | ) | |||
Tax withholdings on net settlements of share-based awards | (5,833 | ) | (2,775 | ) | |||
Other | (394 | ) | 1,060 | ||||
Cash provided by (used for) financing | (146,070 | ) | 123,289 | ||||
Decrease in cash and cash equivalents | (47,289 | ) | (69,837 | ) | |||
Balance at beginning of the period | 96,996 | 166,833 | |||||
Balance at end of the period | $ | 49,707 | $ | 96,996 | |||
For footnotes, see Summary Notes to Consolidated Financial Statements and Segment Information.
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Summary Notes to Consolidated Financial Statements and Segment Information
The Consolidated Statements of Income, Consolidated Balance Sheets, Consolidated Statements of Cash Flows, and Segment Information do not include all Notes to Consolidated Financial Statements and should be read in conjunction with the Company's 2012 Annual Report on Form 10-K, as well as other reports the Company files with the SEC. Net income for all periods presented involved estimates and accruals.
1. | In September 2012, we committed to a plan to cease paper production on our one remaining paper machine at our St. Helens, Oregon, paper mill, which we shut down in December 2012. During the three months ended September 30, 2012 and the year ended December 31, 2012, we recorded $31.3 million and $31.7 million, respectively, of pretax costs related primarily to ceasing operations at the mill. These costs are recorded in our Paper segment. The $31.7 million of costs for the year ended December 31, 2012, included approximately $14.2 million of noncash charges related primarily to the impairment of property, plant and equipment, and inventory; and approximately $17.5 million of cash costs of which we expect to pay approximately $7.3 million of employee-related and other costs in early 2013 and the remaining amounts over a longer term. During the three months ended September 30, 2012 and the year ended December 31, 2012, we recorded $27.4 million and $27.6 million, respectively, in "St. Helens charges" and $3.9 million and $4.1 million, respectively, related primarily to inventory in Materials, labor, and other operating expenses (excluding depreciation)" in our Consolidated Statements of Income. |
2. | On March 1 and December 1, 2011, we completed the acquisitions of Tharco Packaging (Tharco) and Hexacomb Corporation (Hexacomb), respectively. Total cash consideration was $326.2 million. Financial results for Tharco and Hexacomb are included in our Packaging segment following the dates of acquisition. |
In connection with the Tharco purchase price allocation, inventories were written up to their estimated fair market value. As the related inventories were sold, we recognized $2.2 million of expense in "Materials, labor, and other operating expenses (excluding depreciation)" in our Consolidated Statement of Income for the year ended December 31, 2011.
3. | During the three months ended December 31, 2011, we recorded $1.4 million of transaction-related expenses in the Packaging segment, and during the year ended December 31, 2011, we recorded $1.6 million and $1.5 million of expenses in our Packaging and Corporate and Other segments, respectively. Transaction-related expenses include expenses associated with transactions, whether consummated or not, and do not include integration costs. |
4. | The year ended December 31, 2011, included $2.3 million of expense related to losses on the extinguishment of debt. |
5. | This release contains several financial measures that are not measures under U.S. generally accepted accounting principles (GAAP). These measures include EBITDA, EBITDA excluding special items, net income excluding special items, free cash flow, and other similar measures. Management uses these measures to evaluate ongoing operations and believes they are useful to investors because they enable them to perform meaningful comparisons of past and present operating results. The tables that follow reconcile these non-GAAP measures with the most directly comparable GAAP measures. |
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EBITDA represents income before interest (interest expense and interest income), income taxes, and depreciation, amortization, and depletion. The following table reconciles net income to EBITDA and EBITDA to EBITDA excluding special items (unaudited, dollars in thousands):
Three Months Ended | Year Ended | ||||||||||||||||||
December 31 | September 30, | December 31 | |||||||||||||||||
2012 | 2011 | 2012 | 2012 | 2011 | |||||||||||||||
Net income | $ | 13,547 | $ | 16,255 | $ | 3,603 | $ | 52,150 | $ | 75,210 | |||||||||
Interest expense | 15,484 | 15,653 | 15,458 | 61,740 | 63,817 | ||||||||||||||
Interest income | (59 | ) | (59 | ) | (3 | ) | (160 | ) | (269 | ) | |||||||||
Income tax provision | 9,402 | 12,202 | 2,584 | 33,984 | 50,131 | ||||||||||||||
Depreciation, amortization, and depletion | 39,907 | 37,320 | 37,540 | 152,306 | 143,758 | ||||||||||||||
EBITDA | $ | 78,281 | $ | 81,371 | $ | 59,182 | $ | 300,020 | $ | 332,647 | |||||||||
St. Helens charges | $ | 457 | $ | — | $ | 31,288 | $ | 31,745 | $ | — | |||||||||
Inventory purchase accounting expense | — | — | — | — | 2,200 | ||||||||||||||
Loss on extinguishment of debt | — | 2,300 | — | — | 2,300 | ||||||||||||||
Transaction-related costs | — | 1,364 | — | — | 3,094 | ||||||||||||||
EBITDA excluding special items | $ | 78,738 | $ | 85,035 | $ | 90,470 | $ | 331,765 | $ | 340,241 | |||||||||
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The following table reconciles segment income (loss) and EBITDA to EBITDA excluding special items (dollars in thousands):
Three Months Ended | Year Ended | ||||||||||||||||||
December 31 | September 30, | December 31 | |||||||||||||||||
2012 | 2011 | 2012 | 2012 | 2011 | |||||||||||||||
Packaging | |||||||||||||||||||
Segment income | $ | 31,630 | $ | 31,837 | $ | 22,715 | $ | 101,626 | $ | 104,996 | |||||||||
Depreciation, amortization, and depletion | 15,459 | 13,681 | 14,823 | 60,916 | 50,547 | ||||||||||||||
EBITDA | 47,089 | 45,518 | 37,538 | 162,542 | 155,543 | ||||||||||||||
Inventory purchase accounting expense | — | — | — | — | 2,200 | ||||||||||||||
Transaction-related costs (a) | — | 1,364 | — | — | 1,591 | ||||||||||||||
EBITDA excluding special items | $ | 47,089 | $ | 46,882 | $ | 37,538 | $ | 162,542 | $ | 159,334 | |||||||||
Paper | |||||||||||||||||||
Segment income | $ | 14,926 | $ | 21,794 | $ | 5,463 | $ | 73,913 | $ | 112,051 | |||||||||
Depreciation, amortization, and depletion | 23,318 | 22,596 | 21,812 | 87,650 | 89,482 | ||||||||||||||
EBITDA | 38,244 | 44,390 | 27,275 | 161,563 | 201,533 | ||||||||||||||
St. Helens charges | 457 | — | 31,288 | 31,745 | — | ||||||||||||||
EBITDA excluding special items | $ | 38,701 | $ | 44,390 | $ | 58,563 | $ | 193,308 | $ | 201,533 | |||||||||
Corporate and Other | |||||||||||||||||||
Segment loss | $ | (8,182 | ) | $ | (7,280 | ) | $ | (6,536 | ) | $ | (27,825 | ) | $ | (25,858 | ) | ||||
Depreciation, amortization, and depletion | 1,130 | 1,043 | 905 | 3,740 | 3,729 | ||||||||||||||
Loss on extinguishment of debt | — | (2,300 | ) | — | — | (2,300 | ) | ||||||||||||
EBITDA | (7,052 | ) | (8,537 | ) | (5,631 | ) | (24,085 | ) | (24,429 | ) | |||||||||
Loss on extinguishment of debt | — | 2,300 | — | — | 2,300 | ||||||||||||||
Transaction-related costs (a) | — | — | — | — | 1,503 | ||||||||||||||
EBITDA excluding special items | $ | (7,052 | ) | $ | (6,237 | ) | $ | (5,631 | ) | $ | (24,085 | ) | $ | (20,626 | ) | ||||
EBITDA | $ | 78,281 | $ | 81,371 | $ | 59,182 | $ | 300,020 | $ | 332,647 | |||||||||
EBITDA excluding special items | $ | 78,738 | $ | 85,035 | $ | 90,470 | $ | 331,765 | $ | 340,241 | |||||||||
____________
(a) Transaction-related costs include expenses associated with transactions, whether consummated or not, and do not include integration costs.
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The following table reconciles net income to net income excluding special items and presents net income per diluted share excluding special items (unaudited, dollars and shares in thousands, except per-share data):
Three Months Ended | Year Ended | ||||||||||||||||||
December 31 | September 30, | December 31 | |||||||||||||||||
2012 | 2011 | 2012 | 2012 | 2011 | |||||||||||||||
Net income | $ | 13,547 | $ | 16,255 | $ | 3,603 | $ | 52,150 | $ | 75,210 | |||||||||
St. Helens charges | 457 | — | 31,288 | 31,745 | — | ||||||||||||||
Inventory purchase accounting expense | — | — | — | — | 2,200 | ||||||||||||||
Loss on extinguishment of debt | — | 2,300 | — | — | 2,300 | ||||||||||||||
Transaction-related costs | — | 1,364 | — | — | 3,094 | ||||||||||||||
Tax provision for special items (a) | (177 | ) | (1,418 | ) | (12,108 | ) | (12,285 | ) | (2,939 | ) | |||||||||
Net income excluding special items | $ | 13,827 | $ | 18,501 | $ | 22,783 | $ | 71,610 | $ | 79,865 | |||||||||
Weighted average common shares outstanding: diluted | 101,180 | 106,613 | 101,030 | 101,143 | 106,746 | ||||||||||||||
Net income excluding special items per diluted share | $ | 0.14 | $ | 0.17 | $ | 0.23 | $ | 0.71 | $ | 0.75 | |||||||||
____________
(a) | Taxes are applied to special items in the aggregate at the combined federal and state statutory rate in effect for the period. |
The following table reconciles cash provided by operations to free cash flow (unaudited, dollars in thousands):
Three Months Ended | Year Ended | ||||||||||||||||||
December 31 | September 30, | December 31 | |||||||||||||||||
2012 | 2011 | 2012 | 2012 | 2011 | |||||||||||||||
Cash provided by operations | $ | 69,756 | $ | 74,646 | $ | 92,147 | $ | 235,030 | $ | 250,191 | |||||||||
Expenditures for property and equipment | (55,349 | ) | (44,893 | ) | (29,836 | ) | (137,642 | ) | (128,762 | ) | |||||||||
Free cash flow | $ | 14,407 | $ | 29,753 | $ | 62,311 | $ | 97,388 | $ | 121,429 | |||||||||
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