Temple-Inland Posts Increase in 2Q Profit
July 23, 2009 - Temple-Inland Inc. today reported second quarter 2009 net income of $66 million, or $0.61 per diluted share, compared with first quarter 2009 net income of $35 million, or $0.33 per diluted share, and second quarter 2008 net income of $8 million, or $0.07 per diluted share. Second quarter 2009 net income excluding special items was $26 million, or $0.24 per diluted share.
Doyle R. Simons, chairman and chief executive officer of Temple-Inland Inc., said, “We had another very good quarter. We delivered solid operating results, return on investment, and cash flow, despite continued tough economic conditions. In the quarter, we generated $172 million of cash from operations and reduced our debt by $116 million.
“In Corrugated Packaging, we had a record second quarter as both our mills and box plants ran well in the quarter and we continued to drive down cost. Our results reflect the continued benefit from our box plant transformation, the acquisition of PBL, our heavy orientation to the food and beverage market and our integrated system. We reduced our inventories further in the quarter and our quarter-ending inventories were at their lowest level since 2002.
“In Building Products, we did not experience the traditional seasonal pick-up in demand in the quarter. Even so, due to our low cost structure, declining input costs and our favorable mix of products, we generated $8 million of EBITDA in the quarter. We remain focused on matching our supply with our demand, lowering costs, generating cash and returning to profitability in this business.
“As we look forward, economic conditions, while still uncertain, appear to be stabilizing. The actions we have taken to improve asset utilization, drive down costs, match our production to our demand and profitably grow our business, position us to continue to deliver solid relative results.”
Corrugated Packaging operating income was $91 million, a record second quarter. Earnings improved in second quarter 2009 compared with second quarter 2008 as lower mill and converting costs and the benefits of the PBL acquisition more than offset lower box volumes and prices. Operating results declined compared with the all-time record first quarter 2009 earnings due primarily to lower box prices, partially offset by lower costs and higher box volumes.
Building Products operating results declined in second quarter 2009 compared with second quarter 2008 as higher gypsum prices were more than offset by lower lumber prices and lower shipments for lumber, gypsum and panel products. Operating results declined in second quarter 2009 compared with first quarter 2009 principally due to lower gypsum prices and lower shipments for all products.
Special items for second quarter 2009 after tax were $40 million, or $0.37 per diluted share, including: (i) income of $47 million, or $0.43 per diluted share, for alternative fuel mixture tax credits; (ii) a charge of $11 million, or $0.10 per diluted share, related to the previously disclosed substitution in connection with the 2007 sale of the timberland; and (iii) a gain of $5 million, or $0.05 per diluted share, related to the purchase and early retirement of $100 million of our term debt.
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 63 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.