Document text
Boise Cascade optimistic despite loss By SCOTT SMITH BOISE, Idaho � Boise Cascade Corp. reported a $35.5 million loss in the first quarter of 2001, but company officials say they see the end of a cyclical downturn in the wood products industry. Excluding one-time expenses, the company actually would have reported net income of $7.1 million, still well below the $39.6 million income reported for the same quarter last year. The one-time expenses included a pretax charge related to the closure of two mills in Idaho, a write-off of investments in a $160 million oriented strand board factory project in Chile, and an accrual for post-retirement benefits. Boise Cascade operates four mills in the Rogue Valley, including two in White City and two in Medford. Fourth-quarter 2000 net income was $20.7 million before nonroutine expenses. The plummeting income is related to increased power costs and a depressed demand for and oversupply of building products, one of the company�s core product sectors. Those and other similar operations have been hit hard by the high cost of raw materials and rock-bottom prices the finished products are fetching. The depressed market is the primary reason the company abandoned its OSB project in Chile. "First-quarter results from operations were substantially lower than those of a year ago," said George J. Harad, chairman of the board and chief executive officer. "Significantly weaker wood products markets and higher energy costs in our paper business offset solid performance" in Boise Cascade�s other segments. The company�s building products segment reported an operating loss of $7.5 million in first quarter 2001 compared with operating income of $29.2 million in the same quarter a year ago and $2 million in fourth quarter 2000. Average plywood product prices fell 12 percent, oriented strand board prices fell 50 percent and lumber prices were 20 percent lower than a year ago. "The economic downturn and higher energy costs are affecting all of our businesses, but particularly building products and paper," Harad said. "We believe wood products markets are near a cyclical low point and expect a gradual improvement during the spring building season, helped by lower interest rates. "Our paper business should continue to post solid performance, although high energy costs will continue to hamper results in coming quarters. We expect sales in our office products business to decline seasonally in the second quarter, as they normally do, but to continue to grow at healthy rates for the year as a whole." Mail Tribune Home | Ottaway Newspapers, Inc. | Dow Jones & Co., Inc. | Privacy | Contact Us Copyright � 2001 Mail Tribune, Inc.