BOISE INC. (BZ) filed Quarterly Report for the period ended 2010-03-31.
Boise Inc. has a market cap of $601 million; its shares were traded at around $7.12 with a P/E ratio of 37.5 and P/S ratio of 0.3. BZ is in the portfolios of Jim Simons of Renaissance Technologies LLC, Chuck Royce of Royce& Associates, Jeremy Grantham of GMO LLC, John Keeley of Keeley Fund Management.
Highlight of Business Operations:Sales prices for our uncoated freesheet papers improved in first quarter 2010, compared with fourth quarter 2009. During the quarter, we implemented a $40-per-short-ton price increase across most of our uncoated freesheet grades, including cut-size office papers, offset, and midweight opaque grades. In April 2010, we announced a $60-per-short-ton price increase effective in May 2010 across the majority of our uncoated office papers and printing and converting grades. There is no assurance the announced price increase will be fully realized. Since a large portion of our cut-size office paper is sold to OfficeMax under a contract whereby the price OfficeMax pays is determined by a published index, changes in price for this product sold to OfficeMax tend to lag behind the general market by approximately 60 days.
Recent linerboard pricing trends have shown improvement. In January 2010, we implemented a $50-per-short-ton and $70-per-short-ton price increase for domestic linerboard sales in the eastern and western U.S., respectively. In April, we announced an additional $60-per-short-ton increase for domestic linerboard sales. These price increases are being passed through to corrugated products as markets and contracts allow. There is no assurance the announced price increase will be fully realized. Packaging demand in agriculture, food, and beverage markets, which has historically been less correlated to broad economic activity, improved in first quarter 2010, compared with first quarter 2009. These markets constitute just over half of our corrugated product end-use markets. Demand in our industrial markets and containerboard export markets is more closely aligned with general economic activity and improved, compared with first quarter 2009.
We have elected to account for these instruments as economic hedges. At March 31, 2010, we recorded the fair value of the derivatives, or $4.8 million, in Accrued liabilities, Other on our Consolidated Balance Sheet. During the three months ended March 31, 2010 and 2009, we recorded the change in fair value of the instruments, or $3.3 million and $2.2 million of expense, respectively, in Materials, labor, and other operating expenses in our Consolidated Statements of Income (Loss).
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