Boise Cascade posts losses
Boise Cascade Holdings has announced a $19.0 million net loss for its first fiscal quarter, which ended March 31. BC Holdings' building products subsidiary, Boise Cascade L.L.C., reported a first-quarter loss of $5.6 million before interest, taxes, depreciation and amortization (EBITDA), which included $2.6 million of charges related to the curtailment of a production facility and noncash asset write-downs. Boise Cascade reported EBITDA losses of $1.8 million in the first quarter of 2010.
Building Materials Distribution (BMD) segment sales were $377.8 million in the first quarter, down 3% from the same quarter a year ago. Prices for the segment were up approximately 3%, with volumes down about 6%. The BMD unit reported a net loss of $4.5 million, compared with a loss of $733,000 a year ago.
Wood Products segment sales in the first quarter were $154.9 million, up about 5% from the same quarter a year ago. The increase in sales was due primarily to increased plywood prices and volumes, higher lumber volumes and higher by-product chip sales. Net loss for the segment was $7.26 million, compared with $6.59 million in the same quarter last year.
Engineered wood products (EWP) prices were up about 8%, but lower EWP sales volumes mostly offset that increase.
“New residential construction activity was abysmal in the first few months of 2011, as a number of major market areas in the U.S. contended with the ongoing overhang of distressed housing inventory, exceptionally harsh winter weather, or both,” said company CEO Tom Carlile in a prepared statement. “March sales improved in a number of our key markets, but we remain concerned about the overall new residential construction environment and the prospects for a meaningful recovery in housing starts this year. We took advantage of our balance sheet strength to invest in inventories earlier this year and believe it will pay off as we move through the second quarter.”
The company’s outlook, as stated in its released earnings, was: “Absent a decline in unemployment and a reduction in the housing supply overhang, we expect to continue to experience below-normal demand for the products we distribute and manufacture. Industry commodity wood product prices could be volatile in response to operating rates and inventory levels in various distribution channels. We expect to manage our production levels to our sales demand, which will likely cause us to operate our facilities below their capacity.”