Boise Paper Holdings LLC : Boise Inc. Reports Financial Results for First Quarter 2013 and Announces an Investment at DeRidder

  Boise Paper Holdings LLC : Boise Inc. Reports Financial Results for First
     Quarter 2013 and Announces an Investment at DeRidder and Changes at
                             International Falls

BOISE, Idaho - Boise Inc. (NYSE: BZ) today reported a net loss of $(1.2)
million, or $(0.01) per diluted share, for first quarter 2013, compared with
net income of $21.3 million, or $0.21 per diluted share, for the same period
in 2012. EBITDA (1) was $56.2 million for first quarter 2013, compared with
$87.4 million for first quarter 2012. The pre-tax maintenance cold outage
costs at our mill in DeRidder, Louisiana, which occur once every five years,
reduced our first quarter results by $22.4 million. In addition, incremental
depreciation expense related to shortening the useful lives of some of our
assets, primarily at our mill in International Falls, Minnesota, reduced our
results by $5.3 million.

Financial Highlights
(in millions, except per-share data)

                                                  1Q 2013  1Q 2012  4Q 2012
Sales                                              $607.0  $644.8  $627.5
Net income (loss)                                  $(1.2)   $21.3   $13.5
Net income (loss) per diluted share               $(0.01)   $0.21   $0.13
Net income excluding special items (1)               $2.0   $21.3   $13.8
Net income per diluted share excluding special
items (1)                                           $0.02   $0.21   $0.14
Weighted average diluted shares outstanding (1)      100.2    101.4    101.2
EBITDA (1)                                          $56.2   $87.4   $78.3
EBITDA excluding special items (1)                  $56.2   $87.4   $78.7

(1) For reconciliations of non-GAAP measures, see "Summary Notes to
Consolidated Financial Statements and Segment Information."

"We completed the DeRidder outage safely and on budget. Nevertheless, our
first quarter results fell short of our expectations," said Alexander Toeldte,
president and chief executive officer. "We experienced unfavorable mix changes
in our Packaging segment that partially offset the benefits of the fall 2012
linerboard price increase. In addition, decreasing prices for uncoated
freesheet negatively affected our results in Paper."

"In pursuit of our long-term strategic objectives, we are pleased to announce
our decision to invest between $110 and $120 million in the conversion of our
idled newsprint machine at DeRidder to produce lightweight linerboard and
corrugating medium. We will also install an OCC pulping facility at the mill
as part of the project. The investment adds approximately 270,000 tons of
lightweight containerboard capacity to our system and allows us to optimize
the product mix on our current linerboard machine, increasing the mill's
overall containerboard output by approximately 300,000 tons. We are targeting
a mid-2014 start-up for the completed project, which we expect will create
about 50 jobs."

"To improve the cost competitiveness of our Paper business, where we operate
against the background of secularly declining demand for our products, we have
made the difficult decision to close two paper machines and an off-machine
coater at our International Falls mill. These closures, which we expect to
occur no later than fourth quarter 2013, will reduce our annual uncoated
freesheet capacity by approximately 115,000 tons, or 9%, and allow us to focus
our efforts on key products and machines that drive our profitability, improve
our cash flow, and enhance the overall competitiveness of our International
Falls mill and our Paper business. This decision will result in the loss of
approximately 300 jobs. We understand the impact this decision has on our
dedicated employees, as well as the community of International Falls. We
appreciate their efforts and support over the years."

Packaging Segment

Packaging segment sales for first quarter 2013 were $287.0 million, an
increase of $14.8 million, or 5%, compared with first quarter 2012. The
increase was related primarily to 5% sales volume growth in our network of box
plants and the benefit from implementation of the 2012 fall linerboard price
increase, offset partially by unfavorable mix changes in our corrugated
products and decreases in sales prices and volumes of newsprint. Prices for
our corrugated containers and sheets increased $2 per msf or 3% in first
quarter 2013, compared with first quarter 2012. Unfavorable mix changes in our
corrugated products include the effect of lower prices due to competitive
pressures in some of the markets we serve.

Packaging segment EBITDA was $17.2 million for first quarter 2013, a decrease
compared with $37.9 million for the same period last year. The decrease
resulted from maintenance cold outage costs at DeRidder of approximately $22.4
million in first quarter 2013, compared with $1.8 million of outage costs in
the prior-year quarter. These costs include both maintenance costs and lost
sales volume resulting from the downtime. The benefit from the implementation
of the 2012 fall linerboard price increase was offset partially by unfavorable
mix changes in our corrugated products, higher medium costs, and decreases in
sales prices and volumes of newsprint. We expect the combination of announced
price increases, business improvements, and lower maintenance outage costs to
improve our results for the rest of the year.

Paper Segment

Lower uncoated freesheet net sales prices affected our first quarter 2013
sales, compared with first quarter and fourth quarter 2012. Paper segment
sales for first quarter 2013 were $332.7 million, a decrease of $49.7 million,
or 13%, compared with first quarter 2012. Our average net sales price for
uncoated freesheet declined from $976 per short ton in first quarter 2012 to
$929 in first quarter 2013, or 5%. Total uncoated freesheet sales volumes
decreased 8% versus the prior-year period, and 1% compared with fourth quarter
2012. Sales volumes and prices in first quarter were also lower due to our
decision to cease paper production at our St. Helens, Oregon, mill in 2012,
which represented approximately 5% of our annual paper capacity. Excluding St.
Helens, our volumes declined 5% and our prices declined $43 per short ton, or
4%.

In first quarter 2013, Paper segment EBITDA was $45.6 million, a decrease of
$9.5 million, or 17% compared with first quarter 2012. The decrease was due
primarily to lower net sales prices of uncoated freesheet papers.

Webcast and Conference Call

Boise Inc. will host a webcast and conference call on Thursday, May 2, 2013,
at 11:00 a.m. ET, at which time we will review the company's recent
performance and long-term strategic objectives. To participate in the
conference call, dial 866-841-1001 (international callers should dial
832-445-1689). The webcast may be accessed through Boise's Internet site and
will be archived for four weeks following the call. 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.

A replay of the conference call will be available in Webcasts & Presentations
from May 2, 2013, at 2:00 p.m. ET through June 2, 2012, 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 33461765.

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.

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, asset
configuration changes, 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, order pattern, customer service
requirements, machine product loading, timing of cost reductions, and other
factors could cause the outcome of our asset configuration projects, the
related costs, the effect on our labor pool, 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.

Boise Inc.
Segment Highlights
(unaudited, dollars in millions)

                                                    Three Months Ended
                                                 March 31       December 31,
                                              2013     2012        2012
Packaging                                                     
Sales volumes (thousands of short tons,
except corrugated)
Linerboard, Total                               138.9    152.6         156.8
Linerboard, External sales                       36.8     53.0          31.2
Newsprint                                        53.8     54.8          60.3
Corrugated containers and sheets (mmsf)         2,552    2,433         2,578
Key input costs                                               
 Fiber, including purchased rollstock (a)     $74.2    $65.4         $57.4
 Energy                                        16.3     15.0          16.4
 Chemicals                                     10.9     10.2          10.9
Outage costs                                     22.4      1.8         (0.3)
EBITDA and EBITDA excluding special items (b)    17.2     37.9          47.1
Assets                                          959.7    932.0         958.0
Paper                                                         
Sales volumes (thousands of short tons)                       
Uncoated freesheet (c)                          298.8    325.1         302.4
Corrugating medium                               33.2     32.5          34.9
Market pulp, External sales                       1.3      8.5          15.6
Key input costs                                               
 Fiber                                        $69.5    $84.9         $66.4
 Energy                                        34.4     35.0          34.2
 Chemicals                                     50.8     53.3          49.6
Outage costs                                      0.4        -           4.6
EBITDA (b)                                       45.6     55.2          38.2
EBITDA excluding special items (b)               45.6     55.2          38.7
Assets                                        1,142.6  1,207.6       1,144.7

                                               1Q 2013 vs. 1Q   1Q 2013 vs. 4Q
                                              2012            2012
Packaging                                                     
Change in net sales prices (dollars per short
ton, except corrugated) (d)
Linerboard, Total                                         $56              $3
Linerboard, External sales                                 66              12
Newsprint                                                (17)            (17)
Corrugated containers and sheets ($/msf)                    2               1
Paper                                                         
Change in net sales prices (dollars per short
ton) (d)                                                      
Uncoated freesheet (c)                                  $(47)           $(19)
Corrugating medium                                         79             (1)
Market pulp, External sales                              (14)              20

(a) Includes purchases of corrugating medium from our Paper segment, which are
eliminated in consolidation.
(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. Excluding St. Helens, our uncoated freesheet sales volumes
were 309.5 thousand short tons and 287.9 thousand short tons, respectively,
for the three months ended March 31, 2012, and December 31, 2012. Excluding
St. Helens, the change in our net sales price of uncoated freesheet was ($43)
per short ton and ($12) per short ton, respectively, when comparing the three
months ended March 31, 2013, with the three months ended March 31, 2012, and
December 31, 2012.
(d) Average net selling prices for our principal products represent sales less
freight costs, discounts, and allowances.

Boise Inc.
Consolidated Statements of Operations
(unaudited, dollars and shares in thousands, except per-share data)

                                                  Three Months Ended
                                                 March 31        December 31,
                                             2013        2012         2012
Sales                                                         
Trade                                       $591,321  $633,528      $611,925
Related party                                 15,697    11,318        15,567
                                            607,018   644,846       627,492
                                                              
Costs and expenses                                            
Materials, labor, and other operating
expenses (excluding depreciation)            496,269   502,299       491,554
Fiber costs from related party                 6,146     4,946         5,094
Depreciation, amortization, and depletion
(1)                                           43,428    37,556        39,907
Selling and distribution expenses             28,849    30,642        30,602
General and administrative expenses           18,923    20,008        20,492
Other (income) expense, net                      331     (300)         1,093
                                            593,946   595,151       588,742
                                                              
Income from operations                        13,072    49,695        38,750
                                                              
Foreign exchange gain (loss)                   (341)       157         (376)
Interest expense                            (15,419)  (15,365)      (15,484)
Interest income                                   27        44            59
                                           (15,733)  (15,164)      (15,801)
                                                              
Income (loss) before income taxes            (2,661)    34,531        22,949
Income tax (provision) benefit                 1,436  (13,193)       (9,402)
Net income (loss)                          $(1,225)  $21,338      $13,547
                                                             
Weighted average common shares
outstanding:                                                  
Basic                                        100,242    99,052       100,167
Diluted                                      100,242    01,414       101,180
                                                             
Net income (loss) per common share:                           
Basic                                       $(0.01)    $0.22        $0.14
Diluted                                     $(0.01)    $0.21        $0.13

For Footnotes, see Summary Notes to Consolidated Financial Statements and
Segment Information.

Boise Inc.
Segment Information
(unaudited, dollars in thousands)

                                            Three Months Ended
                                         March 31         December 31,
                                     2013        2012         2012
Segment sales                                           
Packaging                            $287,047   $272,293      $287,332
Paper                                 332,742    382,432       352,702
Intersegment eliminations and other  (12,771)    (9,879)      (12,542)
                                    $607,018   $644,846      $627,492
                                                       
Segment income (loss)                                   
Packaging                                $893    $22,435       $31,630
Paper                                  19,675     33,949        14,926
Corporate and Other                   (7,837)    (6,532)       (8,182)
                                      12,731     49,852        38,374
                                                       
Interest expense                    $(15,419)  $(15,365)     $(15,484)
Interest income                            27         44            59
Income (loss) before income taxes    $(2,661)    $34,531       $22,949
                                                       
EBITDA (2)                                              
Packaging                             $17,224    $37,920       $47,089
Paper                                  45,626     55,164        38,244
Corporate and Other                   (6,691)    (5,676)       (7,052)
                                     $56,159    $87,408       $78,281
EBITDA excluding special items (2)
Packaging                             $17,224     $37,920        $47,089
Paper                                  45,626      55,164         38,701
Corporate and Other                   (6,691)     (5,676)        (7,052)
                                      $56,159     $87,408        $78,738

For Footnotes, see Summary Notes to Consolidated Financial Statements and
Segment Information.

Boise Inc.
Consolidated Balance Sheets
(unaudited, dollars in thousands)

                                           March 31, 2013  December 31, 2012
ASSETS                                                     
                                                          
Current                                                    
Cash and cash equivalents                          $57,416            $49,707
Receivables                                                
 Trade, less allowances of $1,425 and
$1,382                                             247,172            240,459
 Other                                              9,289              8,267
Inventories                                        306,752            294,484
Deferred income taxes                                9,521             17,955
Prepaid and other                                   10,321              8,828
                                                  640,471            619,700
                                                          
Property                                                   
Property and equipment, net                      1,214,785          1,223,001
Fiber farms                                         24,170             24,311
                                                1,238,955          1,247,312
                                                          
Deferred financing costs                            25,528             26,677
Goodwill                                           160,219            160,130
Intangible assets, net                             144,598            147,564
Other assets                                         6,802              7,029
Total assets                                    $2,216,573         $2,208,412

For Footnotes, see Summary Notes to Consolidated Financial Statements and
Segment Information.

Boise Inc.
Consolidated Balance Sheets (continued)
(unaudited, dollars and shares in thousands, except per-share data)

                                           March 31, 2013  December 31, 2012
LIABILITIES AND STOCKHOLDERS' EQUITY                       
                                                          
Current                                                    
Current portion of long-term debt                 $10,000           $10,000
Accounts payable                                   206,778            185,078
Accrued liabilities                                        
 Compensation and benefits                         54,669             70,950
 Interest payable                                  23,724             10,516
 Other                                             21,145             20,528
                                                  316,316            297,072
                                                          
Debt                                                       
Long-term debt, less current portion               765,000            770,000
                                                          
Other                                                      
Deferred income taxes                              190,541            198,370
Compensation and benefits                          121,311            121,682
Other long-term liabilities                         73,076             73,102
                                                  384,928            393,154
                                                          
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; 100,885 shares
and 100,503 shares issued and outstanding               12                 12
Treasury stock, 21,151 shares held               (121,423)          (121,423)
Additional paid-in capital                         869,540            868,840
Accumulated other comprehensive income
(loss)                                            (98,682)          (101,304)
Retained earnings                                  100,882            102,061
Total stockholders' equity                         750,329            748,186
                                                          
Total liabilities and stockholders' equity      $2,216,573         $2,208,412

For Footnotes, see Summary Notes to Consolidated Financial Statements and
Segment Information.

Boise Inc.
Consolidated Statements of Cash Flows
(unaudited, dollars in thousands)

                                                  Three Months Ended March 31
                                                       2013            2012
Cash provided by (used for) operations                            
Net income (loss)                                     $(1,225)      $21,338
Items in net income (loss) not using (providing)
cash                                                              
 Depreciation, depletion, and amortization of
deferred financing costs and other                       44,659        38,702
 Share-based compensation expense                        1,324         1,233
 Pension expense                                         1,348         2,771
 Deferred income taxes                                 (1,003)         8,838
 Other                                                    (92)         (429)
Decrease (increase) in working capital                            
 Receivables                                           (7,070)      (12,313)
 Inventories                                          (12,316)      (12,467)
 Prepaid expenses                                          746          (21)
 Accounts payable and accrued liabilities               13,965       (7,585)
Current and deferred income taxes                         (770)         (684)
Pension payments                                           (49)       (9,094)
Other                                                       346         1,190
 Cash provided by operations                            39,863        31,479
Cash provided by (used for) investment                            
Expenditures for property and equipment                (26,610)      (23,133)
Other                                                       412           590
 Cash used for investment                             (26,198)      (22,543)
Cash provided by (used for) financing                             
Payments of long-term debt                              (5,000)       (2,500)
Payments of special dividend                                 -      (47,483)
Other                                                     (956)       (1,300)
 Cash used for financing                               (5,956)      (51,283)
Increase (decrease) in cash and cash equivalents          7,709      (42,347)
Balance at beginning of the period                       49,707        96,996
Balance at end of the period                           $57,416      $54,649

For Footnotes, see Summary Notes to Consolidated Financial Statements and
Segment Information.

Summary Notes to Consolidated Financial Statements and Segment Information

The Consolidated Statements of Operations, 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 and the
Company's Quarterly Report on Form 10-Q for the period ended March 31, 2013,
as well as other reports the Company files with the SEC. Net income (loss) for
all periods presented involved estimates and accruals.

1. During the three months ended March 31, 2013, we recognized $5.3 million
of incremental depreciation expense related to shortening the useful lives of
some of our assets, primarily at International Falls, Minnesota.

2. 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.

EBITDA represents income (loss) before interest (interest expense and interest
income), income taxes, and depreciation, amortization, and depletion. The
following table reconciles net income (loss) to EBITDA and EBITDA excluding
special items (unaudited, dollars in thousands):

                                                Three Months Ended
                                              March 31       December 31,
                                           2013      2012        2012
Net income (loss)                         $(1,225)  $21,338       $13,547
Interest expense                            15,419   15,365        15,484
Interest income                               (27)     (44)          (59)
Income tax provision (benefit)             (1,436)   13,193         9,402
Depreciation, amortization, and depletion   43,428   37,556        39,907
EBITDA                                     $56,159  $87,408       $78,281
                                                          
St. Helens charges (a)                          $-       $-          $457
EBITDA excluding special items             $56,159  $87,408       $78,738

(a) In December 2012, we ceased paper production on our one remaining paper
machine at our St. Helens, Oregon paper mill. During the three months ended
December 31, 2012, we recorded $0.5 million, of pretax costs primarily related
to ceasing operations at the mill. These costs are recorded in our Paper
segment in "Materials, labor, and other operating expenses (excluding
depreciation)" and "Other (income) expense, net" in our Consolidated
Statements of Operations.

The following table reconciles segment income (loss) and EBITDA to EBITDA
excluding special items (unaudited, dollars in thousands):

                                                 Three Months Ended
                                              March 31        December 31,
                                           2013      2012        2012
Packaging                                                   
Segment income                                $893   $22,435       $31,630
Depreciation, amortization, and depletion   16,331    15,485        15,459
EBITDA                                     $17,224   $37,920       $47,089
                                                           
Paper                                                       
Segment income                             $19,675   $33,949       $14,926
Depreciation, amortization, and depletion   25,951    21,215        23,318
EBITDA                                     $45,626   $55,164       $38,244
St. Helens charges                              -        -           457
EBITDA excluding special items             $45,626   $55,164       $38,701
                                                           
Corporate and Other                                         
Segment loss                              $(7,837)  $(6,532)      $(8,182)
Depreciation, amortization, and depletion    1,146       856         1,130
EBITDA                                    $(6,691)  $(5,676)      $(7,052)
                                                           
EBITDA                                     $56,159   $87,408       $78,281
                                                           
EBITDA excluding special items             $56,159   $87,408       $78,738

The following table reconciles net income (loss) 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
                                                  March 31        December 31,
                                              2013     2012        2012
Net income (loss)                            $(1,225)  $21,338       $13,547
Incremental depreciation due to changes in
estimated useful lives                          5,316       -            -
St. Helens charges                                 -       -           457
Tax provision for special items (a)           (2,057)       -         (177)
Net income excluding special items             $2,034  $21,338       $13,827
                                                             
Weighted average diluted shares outstanding:
(b)                                           100,890  101,414       101,180
Net income per diluted share excluding
special items                                   $0.02    $0.21         $0.14

(a) Taxes are applied to special items in the aggregate at the combined
federal and state statutory rate in effect for the period.

(b) For the three months ended March 31, 2013, both basic and diluted weighted
average common shares outstanding reported in our Consolidated Statements of
Operations were 100.2 million, as we reported a net loss. Adjusting for the
special items above, diluted weighted average common shares outstanding
increased 0.6 million shares to reflect the incremental effect of dilutive
common stock equivalents.

The following table reconciles cash provided by operations to free cash flow
(unaudited, dollars in thousands):

                                       Three Months Ended March 31
                                           2013            2012
Cash provided by operations                  $39,863       $31,479
Expenditures for property and equipment     (26,610)      (23,133)
Free cash flow                               $13,253        $8,346

SOURCE: Boise Inc.

Greg Jones
Director, Investor Relations
208-384-7141

Virginia Aulin
Vice President, Human Resources and Corporate Affairs
208-384-7837

http://www.boiseinc.com/

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Source: Boise Paper Holdings LLC via Thomson Reuters ONE
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