BOISE CASCADE REPORTS FINANCIAL RESULTS
BOISE, Idaho, July 15 /PRNewswire/ -- Boise Cascade Corp. (NYSE:BCC) today reported a loss of $17.1 million, or 72 cents per fully diluted share, for the second quarter of 1993. Results included a positive adjustment of $5 million, or 13 cents per share, which reflected the impact of a recently enacted lower Canadian tax rate on the company's deferred tax liabilities. By comparison, the company lost $45.4 million, or $1.39 per fully diluted share, in the second quarter of 1992 and $12.1 million, or 56 cents per fully diluted share, in the first quarter of 1993. Sales in the second quarter of 1993 were $974 million, compared with $922 million in the second quarter of 1992 and $984 million in the first quarter of 1993.
Paper and Paper Products
Losses in the company's paper and paper products segment were significantly reduced in the second quarter from both the year-ago second quarter and this year's first-quarter levels despite a concentration of scheduled downtime associated with annual routine maintenance and capital projects at several of the company's pulp and paper facilities. Weighted-average pulp and paper prices were flat with year-ago levels but increased modestly from those of the first quarter 1993. Average quarterly prices for the company's key grades - uncoated free sheet, coated white papers, and newsprint - rose, while average market pulp, containerboard, and uncoated groundwood paper prices declined relative to first quarter 1993 levels. Unit manufacturing costs declined from year-ago levels and were flat with those of the first quarter.
In the office products segment, dollar sales volume grew 7.5 percent from year-ago levels due to volume from new and recently acquired facilities and was also up modestly on a comparable-unit basis. Despite bearing the cost of start-up operations, the business reported increased profitability from year-ago levels, as reduced costs and higher volume helped expand profit margins. Segment profitability was comparable with first quarter 1993 levels despite normal seasonal weakness.
Income in the company's building products segment in the second quarter was substantially higher than in the second quarter of a year ago but was down sharply from first quarter 1993 levels. Shortages of timber available for commercial harvest in the Pacific Northwest and anticipated future shortages, combined with modestly strengthening demand for wood products, have led to a high degree of volatility in the nation's wood products markets. Lumber and plywood prices, although averaging higher than year-ago prices, declined dramatically from the peaks reached during March and April of this year.
The company's building products business for the full year 1993 is expected to perform better than in 1992. Market conditions are likely to remain volatile due to a reduced supply of timber available for commercial harvest in the Northwest and modestly strengthening demand for wood products. Performance of the company's office products distribution business should also continue to show favorable comparisons with last year's results, as recovering markets and new or recently acquired locations add sales volume and as reduced costs lead to further margin expansion. "Market conditions in our paper business continue to be very difficult, as the overall economy continues to grow much more slowly than expected," said John B. Fery, chairman of the board and chief executive officer. "In the midst of this difficult environment, we're pleased with the progress we've made in reducing the cost structure of our paper business, increasing the output of our facilities, and enhancing the grade mix of our mills. "If the economy continues to grow, we expect the supply and demand of our key grades of paper to continue to come into better balance in the months ahead. That should lead to price improvement, which is occurring in some paper grades now. "In the third quarter of 1993, we expect modestly higher average paper prices for our mix of grades and reduced unit manufacturing costs in our paper business. These factors should result in stronger performance in the third quarter for the company's paper business, compared with that of the second quarter," Fery said. Boise Cascade Corp. is an integrated paper and forest products company headquartered in Boise, Idaho, with operations located in the United States and Canada. The company manufactures and distributes paper and paper products, office products, and building products and owns and manages timberland to support these operations. BOISE CASCADE CORP. LOSS SUMMARY (unaudited) Three months ended June 30 1993 1992 Sales $ 973,990,000 $ 922,200,000 Net loss $ (17,130,000) $ (45,420,000) Net loss per common share Primary $ (.72) $(1.39) Fully diluted $ (.72) $(1.39) Six months ended June 30 Sales $1,958,030,000 $1,876,130,000 Loss before cumulative effect of accounting change $ (29,230,000) $ (88,740,000) Net loss (a) $ (29,230,000) $ (162,190,000) Average primary shares 37,950,000 37,943,000 Net loss per common share (b) Primary Loss before cumulative effect of accounting change $(1.28) $(2.69) Cumulative effect of accounting change, net of tax - (1.94) Net loss per common share $(1.28) $(4.63) Fully diluted Loss before cumulative effect of accounting change $(1.28) $(2.69) Cumulative effect of accounting change, net of tax - (1.94) Net loss per common share $(1.28) $(4.63)
(a) Effective as of January 1, 1993, the Company adopted new
Financial Accounting Standards Board requirements that govern the way deferred taxes are calculated and reported. Adoption of these requirements based on a one-time adjustment had no effect on the Company's first quarter 1993 net loss. Financial statements for prior periods have not been restated. In the second quarter of 1993, the Canadian federal government reduced the statutory tax rate applicable to the Company. Effective as of the beginning of 1993, the rate decreased from 23.8 percent to 22.8 percent, and a further reduction to 21.8 percent will be effective as of the beginning of 1994. In accordance with the requirements of the newly adopted accounting standard, net Canadian deferred tax liabilities were reduced to reflect these rate reductions. The resultant benefit of $5,020,000, or 13 cents per fully diluted common share, has been included in the net loss for the three and six months ended June 30, 1993. The estimated tax rate for the first six months of 1993, exclusive of the impact of the adjustment to deferred taxes, was 38 percent, compared with a rate of 39 percent for the same period in the prior year. These rates were based on actual year -to-date results and projected results for the remainder of the year. During the first quarter of 1993, the Company sold its interest in a specialty paper producer at a pretax gain of $8,644,000, or 14 cents per fully diluted common share after taxes. During the fourth quarter of 1992, the Company adopted, effective as of January 1, 1992, the Financial Accounting Standards Board's new requirements applicable to accounting for postretirement benefits other than pensions. The Company's retiree health care costs that had previously been recorded when paid are now accrued. The cumulative present value of costs payable in the future that are attributable to employee service prior to January 1, 1992, was $73,450,000, net of tax. The Company's 1992 retiree health care costs increased by $3,000,000 before taxes, or 5 cents per fully diluted common share after taxes, as a result of adoption of the new requirements. Net loss reported for each of the first three quarters of 1992 has been restated to include a proportionate share of these costs. At the end of the second quarter of 1992, the Company completed the sale of 11 corrugated container plants. The pre-tax gain of $25,020,000, or 41 cents per fully diluted common share after taxes, from that sale was largely offset by the write-off of certain pulp and paper mill start-up costs that had been capitalized prior to 1987. The write-off reflects a change in the estimated period benefited by such expenditures. Early in the first quarter of 1992, the Company completed the sale of essentially all of its wholesale office products distribution operations.
(b) The computation of fully diluted net loss per common share was
antidilutive; therefore, the amounts reported for primary and fully diluted loss are the same. -0- 7/15/93 /CONTACT: Vincent Hannity of Boise Cascade Corp., 208-384-6390, or after hours, 208-345-8141/ (BCC)
CO: Boise Cascade Corp. ST: Idaho IN: PAP SU: ERN
LG -- NY017 -- 1828 07/15/93 09:54 EDT
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|Date:||Jul 15, 1993|
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