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.”
S&P lowers outlook on BFS
Standard & Poor’s has downgraded Builders FirstSource, following the Dallas pro dealer’s announcement that it has abandoned plans to refinance its existing debt and extend its revolving credit facility due in 2012.
The New York ratings agency lowered the company’s corporate credit rating from a “CCC+” to a “CCC” and gave it a negative outlook. S&P cited “ongoing weakness in new residential housing markets” and possible liquidity problems over the next several quarters.
Builders FirstSource had originally planned to offer $250 million of senior secured notes due 2019 and amend its revolving credit. But on April 25, when the company reported its first-quarter financial results, it announced that it had canceled those plans.
Home orders slow at Beazer
The First Time Homebuyer Tax Credit of 2010 impacted the results of yet another builder, as Beazer Homes reported 1,194 orders for new homes in the first quarter of 2011, a 26.7% drop from the first quarter of 2010. Total home closings from continued operations were 573, a 31.1% decrease from the prior year.
Revenue from continuing operations for the quarter was $127.5 million, compared with $192.5 million in the same period a year ago. The Atlanta-based company recorded a net loss of $54.6 million. For the prior year, Beazer posted net income of $5.3 million.
The home builder’s total backlog was 1,416 homes, with a sales value of $339.6 million compared with 1,781 homes, with a sales value of $394.5 million as of March 31, 2010.
"As expected, year-over-year comparisons were unfavorably impacted this quarter by the First Time Homebuyer Tax Credit, which pulled forward sales volumes into the second quarter of 2010," said Ian McCarthy, president and CEO of Beazer Homes. "However, we did see seasonal improvement with orders and gross margins up over the first quarter of fiscal 2011. We are hopeful that the latest improvements in employment will help lift consumer confidence in the coming quarters, which is necessary for any significant recovery in housing to occur."
Beazer operates in 16 states: Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas and Virginia.