BOISE SEES OPTIMISM IN THIRD QUARTER REPORTS
Boise's three business units all have reported higher sales for the third quarter although the corporation reported third-quarter net income was down 7 cents per share.
While two divisions of the corporation see brighter days ahead, the building products part of the corporation will have to wait for a recovery from a fourth-quarter seasonal downturn before expecting more profitable days.
Boise Cascade Corp. as a whole reported net income of $8.5 million, or 9 cents a share, for the quarter, compared to $12.2 million, or 16 cents a share, for the same period in 2001.
The second-quarter 2002 loss was $800,000, also 7 cents per share, before non-routine items, the quarterly report stated.
Boise Building Solutions had operating income of $14.5 million in the third quarter, compared to $14.2 million the same quarter a year ago and $14.0 million in the second quarter 2002.
Company officials said weak prices for wood products were partially offset by higher sales volumes and lower wood costs, while there were stronger sales in engineered wood products and distribution aided results, compared with the year-earlier period.
Boise said the average prices for oriented strand board and plywood fell 11 percent and 8 percent, respectively, year over year and were lower than average second-quarter prices.
Lumber prices averaged slightly higher than in comparison quarters. Sales of engineered wood products increased 17 percent, compared with the year-earlier period.
Sales in the building materials distribution operations were up 6 percent over a year ago, while volume increased 10 percent, the company reported.
The operating income in the Boise Paper Solutions section of the company was $17.2 million in the quarter compared to $15.3 million in the same quarter of 2001 and to $8.8 million in the second quarter this year.
In Boise Office Solutions, sales in the third quarter of 2002 increased 6 percent to $900 million over a year previous. The sales were 5 percent higher than in the second quarter of this year.
Company officials view the future with optimism, although there likely will be a seasonal downturn in the Building Solutions aspect of the corporation, officials said.
"Assuming that the U.S. economy continues to strengthen, however slowly, Boise's financial performance should continue to improve," said George J. Harad, chairman and chief executive officer.
"Near-term, year-over-year, same-store sales comparisons in Boise Office Solutions have turned positive and should continue to be positive," he said.
"We expect building products markets to weaken seasonally and Boise Building Solutions to post lower results in the fourth quarter than in the third.
"But our paper business should post stronger results in the fourth quarter because of the gradually tightening uncoated free sheet markets and our continued focus on reducing costs," Harad said.
Boise is a major manufacturer and distributor of building products, including lumber, plywood, oriented strand board and particleboard panels, engineered wood, and specialty wood products. There are four plants in La Grande and Elgin.
Boise Paper Solutions manufactures uncoated free sheet papers, containerboard and corrugated containers, newsprint, and market pulp.
Boise Office Solutions produces office supplies, office papers, technology products and office furniture. It serves customers throughout the United States, Canada, Australia, New Zealand and Mexico.