Boise Inc. 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.
"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.”