Temple-Inland Reports Third Quarter Result
Oct. 28, 2008 - Temple-Inland Inc. reported third quarter 2008 net income of $3 million, or $0.03 per diluted share, compared with third quarter 2007 net income of $36 million, or $0.33 per diluted share, and second quarter 2008 net income of $8 million, or $0.07 per diluted share.
Results for third quarter 2008 include special items of $0.06 per share, consisting of (i) an after tax benefit of $7 million, or $0.07 per share, resulting from an increase in the estimated 2008 effective tax rate on previously reported special items; and (ii) an after tax charge of $1 million, or $0.01 per share, primarily related to early repayment of Premier Boxboard Limited LLC debt.
Corrugated packaging segment operating income declined in third quarter 2008 compared with third quarter 2007 as higher box prices were more than offset by lower box shipments, higher energy, freight, and chemical costs, and 38,000 tons of downtime and expenses associated with Hurricanes Gustav and Ike. The earnings impact from the hurricanes was approximately $13 million in third quarter 2008. Operating income declined in third quarter 2008 compared with second quarter 2008 as higher box prices were more than offset by lower box shipments and hurricane related expenses noted above.
Building products segment operating income declined in third quarter 2008 compared with third quarter 2007 as higher lumber and particleboard prices were more than offset by declining volumes for lumber, gypsum and particleboard, the impact of hurricane-related downtime and expenses, and severance charges. The impact from the hurricanes was approximately $1 million and the severance charges were approximately $1 million. Operating income declined in third quarter 2008 compared with second quarter 2008 principally due to lower volumes for all products, hurricane related downtime and expenses, and severance charges.
Doyle R. Simons, chairman and chief executive officer of Temple-Inland Inc., said, “Third quarter results reflect the negative effect on our operations of Hurricanes Gustav and Ike and the impact of a weakening economy on the demand for our products, especially in the month of September.
“In corrugated packaging, we successfully implemented a box price increase during the third quarter and will realize a full quarter’s benefit of the box price increase in the fourth quarter. We continue to make progress on our strategic initiative of lowering costs at our converting facilities through improved asset utilization. We expect to see the benefit from these efforts in fourth quarter 2008 and into 2009.
“In building products, shipments for all of our products declined in the third quarter, reflecting continued difficult market conditions. We remain focused on matching our supply with demand and lowering costs. In the quarter, we further reduced our headcount and incurred $1 million of severance charges.
“We acquired the remaining 50% interest in Premier Boxboard Limited from Caraustar Industries in the third quarter and are pleased with the integration of the mill into our system. We remain confident that we will quickly realize all planned synergies.”
Temple-Inland Inc. is a manufacturing company focused on corrugated packaging and building products. The fully integrated corrugated packaging operation consists of 7 mills and 64 converting facilities. The building products operation manufactures a diverse line of building products for new home construction, commercial and repair and remodeling markets.
SOURCE: Temple-Inland Inc.