Boise Cascade Holdings, L.L.C. 8-K Boise Announces Second Quarter 2007 Financial Results

EXHIBIT 99.1

Boise Cascade
Investor Relations
1111 West Jefferson Street   PO Box 50   Boise, ID 83728
T 208 384 7023   F 208 384 4913

News Release

Investor Relations Contact

Rob McNutt

Office 208 384 7023

For Immediate Release:  August 14, 2007

BOISE ANNOUNCES SECOND QUARTER 2007 FINANCIAL RESULTS

BOISE, Idaho — Boise Cascade Holdings, L.L.C. today reported net income of $28.9 million for the second quarter 2007, compared with net income of $31.2 million for the second quarter 2006 and $10.5 million for the first quarter 2007.  Income from operations for the second quarter 2007 was $48.6 million, compared with $57.8 million in the same period of 2006 and $33.3 million for the first quarter 2007.

“The second quarter results continued to show the strength of our business model in our building products segments, which continued to perform well in a very difficult market environment,” said Tom Stephens, chairman and chief executive officer.  “Our Building Materials Distribution and Wood Products businesses were both solidly profitable despite the continued challenges in the housing market.  Our Paper business earnings were negatively impacted by planned outages at three of our four white paper mills, and our Packaging & Newsprint business operating performance was negatively impacted by lower newsprint prices coupled with high fiber costs.  On the strategic front, we successfully completed the enhancements to our fine paper machine in Wallula, Washington, to allow it to produce both pressure-sensitive papers as well as its historical mix of commodity papers.  We have shipped product to customers for qualification, and initial reports are positive.”

FINANCIAL HIGHLIGHTS

($ in millions)

	2Q 2007		2Q 2006		1Q 2007
Sales	$	1,448.4	$	1,559.8	$	1,321.0
Income from operations	$	48.6	$	57.8	$	33.3
Net income	$	28.9	$	31.2	$	10.5
EBITDA(a)	$	91.4	$	97.6	$	73.9

(a) For reconciliation of net income to EBITDA, see "Segment Information" in the financial section.

Sales

Sales for the second quarter 2007 were $1.4 billion, compared to $1.6 billion in the second quarter 2006 and $1.3 billion in the first quarter 2007.  Year-over-year sales were lower in both our Building Materials Distribution and Wood Products segments offset, in part, by sales increases in both our Paper and Packaging & Newsprint segments.

Comparing the second quarter 2007 to the same period of 2006, Building Materials Distribution segment sales decreased 13% due to lower sales volumes and lower commodity sales prices.  Wood Products segment sales were down 11% due primarily to lower sales volumes and prices for engineered wood and plywood and lower sales prices for lumber.  Paper segment sales were up 5% over the same period in 2006 due to higher sales prices offset, in part, by lower sales volumes for many of our paper grades.  Packaging & Newsprint segment sales increased 1% due to higher corrugated container and sheet and linerboard sales prices offset, in part, by lower newsprint prices.

Income From Operations

Income from operations decreased 16% in the second quarter 2007 to $48.6 million from $57.8 million in second quarter 2006.  Segment income decreased in both Building Materials Distribution and Wood Products driven by softer housing markets.  Segment income decreased in Paper due primarily to planned shutdowns.  Packaging & Newsprint segment income decreased primarily due to softer newsprint markets and tight fiber markets.

Comparing second quarter 2007 with second quarter 2006, segment income in Building Materials Distribution decreased $4.9 million, from $25.3 million in 2006 to $20.4 million, due primarily to lower sales volumes and lower commodity sales prices offset, in part, by lower purchased materials costs.  Segment income in Wood Products decreased $1.5 million, from $17.2 million in the second quarter 2006 to $15.7 million in the second quarter 2007, due primarily to lower sales prices, coupled with higher conversion costs, offset in part, by lower wood costs.  Paper segment income decreased $1.5 million, from $14.7 million in second quarter 2006 to $13.2 million in second quarter 2007, due primarily to higher costs related to planned outages for maintenance and capital projects and lower sales volumes offset, in part, by higher sales prices.  Packaging & Newsprint segment income decreased $11.1 million, from $13.4 million in

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second quarter 2006 to $2.3 million, due primarily to lower newsprint prices, coupled with higher fiber costs, offset in part, by higher linerboard and corrugated container and sheet prices.

About Boise Cascade

Boise, headquartered in Boise, Idaho, manufactures engineered wood products, plywood, lumber, and particleboard and distributes a broad line of building materials, including wood products manufactured by the company.  Boise also manufactures a wide range of specialty and premium papers, including imaging papers for the office and home and papers for pressure-sensitive applications, as well as printing and converting papers, containerboard and corrugated boxes, newsprint, and market pulp.  Visit Boise’s website at www.bc.com.

Webcast and Conference Call

Boise will host an audiovisual webcast and conference call on Wednesday, August 15, 2007, at 11:00 a.m. Eastern, at which time we will review the company’s recent performance.  You can join the webcast through the Boise website. Go to http://www.bc.com and click on the link to the webcast under the News & Events heading.  Slides will be posted 15 minutes before the beginning of the webcast.  Please go to the website at least 15 minutes before the start of the webcast to register and to download and install any necessary audio software.  To join the conference call, dial (800) 374-0165 (international callers should dial (706) 634-0995) at least 10 minutes before the start of the call.

The archived webcast will be available in News & Events (link in the About Boise section) of Boise’s website.  A replay of the conference call will be available from August 15 at 12:00 noon Eastern through September 15 at 11:59 p.m. Eastern.  Playback numbers are (800) 642-1687 for U.S. calls and (706) 645-9291 for international calls, and the passcode will be 10972623.

Basis of Presentation

We present our consolidated financial statements in accordance with generally accepted accounting principles (GAAP).  Our earnings release also supplements the GAAP presentations by reflecting EBITDA.  EBITDA represents income (loss) before interest (interest expense, interest income, and change in fair value of interest rate swaps), income tax provision (benefit), and depreciation, amortization, and depletion.  EBITDA is the primary measure used by our chief operating decision makers

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to evaluate segment operating performance and to decide how to allocate resources to segments.  We believe EBITDA is useful to investors because it provides a means to evaluate the operating performance of our segments and our company on an ongoing basis using criteria that are used by our internal decision makers and because it is frequently used by investors and other interested parties in the evaluation of companies with substantial financial leverage.  We believe EBITDA is a meaningful measure because it presents a transparent view of our recurring operating performance and allows management to readily view operating trends, perform analytical comparisons, and identify strategies to improve operating performance.  For example, we believe that the inclusion of items such as taxes, interest expense, and interest income distorts management’s ability to assess and view the core operating trends in our segments.  EBITDA, however, is not a measure of our liquidity or financial performance under GAAP and should not be considered as an alternative to net income (loss), income (loss) from operations, or any other performance measure derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity.  The use of EBITDA instead of net income (loss) or segment income (loss) has limitations as an analytical tool, including the inability to determine profitability; the exclusion of interest expense, interest income, change in the fair value of interest rate swaps, and associated significant cash requirements; and the exclusion of depreciation, amortization, and depletion, which represent significant and unavoidable operating costs, given the level of our indebtedness and the capital expenditures needed to maintain our businesses.  Management compensates for these limitations by relying on our GAAP results.  Our measures of EBITDA are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation.

Forward-Looking Statements

This news release may contain statements that are “forward looking” within the Private Securities Litigation Reform Act of 1995.  These statements speak only as of the date of this press release.  While they are based on the current expectations and beliefs of management, they are subject to a number of uncertainties and assumptions that could cause actual results to differ from the expectations expressed in this release.

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Boise Cascade Holdings, L.L.C.
Consolidated Statements of Income

(unaudited, in thousands)

	Three Months Ended
	June 30						March 31,
	2007			2006 (a)			2007
Sales
Trade	$	1,288,921		$	1,415,784		$	1,163,173
Related parties	159,477			144,005			157,795
	1,448,398			1,559,789			1,320,968
Costs and expenses
Materials, labor, and other operating expenses	1,270,294			1,362,517			1,156,899
Depreciation, amortization, and depletion	40,722			38,459			40,360
Selling and distribution expenses	73,620			71,607			68,408
General and administrative expenses	20,210			26,158			19,495
Other (income) expense, net	(5,091		) (b)	3,233			2,546
	1,399,755			1,501,974			1,287,708
Income from operations	48,643			57,815			33,260
Foreign exchange gain	2,020			1,360			242
Change in fair value of interest rate swaps (c)	5,395			—			—
Interest expense (d)	(24,352		)	(28,610		)	(22,343		)
Interest income	642			934			601
	(16,295		)	(26,316		)	(21,500		)
Income before income taxes	32,348			31,499			11,760
Income tax provision	(3,450		)	(305		)	(1,223		)
Net income	$	28,898		$	31,194		$	10,537

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Segment Information

(unaudited, in thousands)

	Three Months Ended
	June 30						March 31,
	2007			2006 (a)			2007
Segment sales
Building Materials Distribution	$	723,732		$	832,700		$	608,658
Wood Products	278,658			314,656			253,923
Paper	401,098			381,695			395,034
Packaging & Newsprint	192,933			190,809			193,972
Intersegment eliminations and other	(148,023		)	(160,071		)	(130,619		)
	$	1,448,398		$	1,559,789		$	1,320,968
Segment income (loss)
Building Materials Distribution	$	20,386		$	25,310		$	10,455
Wood Products	15,740			17,190			3,709
Paper	13,198			14,736			18,026
Packaging & Newsprint	2,337			13,383			8,083
Corporate and Other	(998		) (b)	(11,444		)	(6,771		)
	50,663			59,175			33,502
Change in fair value of interest rate swaps (c)	5,395			—			—
Interest expense (d)	(24,352		)	(28,610		)	(22,343		)
Interest income	642			934			601
Income before income taxes	$	32,348		$	31,499		$	11,760
EBITDA (e)
Building Materials Distribution	$	22,246		$	27,714		$	12,331
Wood Products	23,309			23,860			10,993
Paper	29,311			30,189			34,599
Packaging & Newsprint	16,228			26,068			21,495
Corporate and Other	291		(b)	(10,197		)	(5,556		)
	$	91,385		$	97,634		$	73,862

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Boise Cascade Holdings, L.L.C.
Consolidated Statements of Income

(unaudited, in thousands)

	Six Months Ended
	June 30
	2007			2006 (a)
Sales
Trade	$	2,452,094		$	2,753,282
Related parties	317,272			276,770
	2,769,366			3,030,052
Costs and expenses
Materials, labor, and other operating expenses	2,427,193			2,673,329
Depreciation, amortization, and depletion	81,082			75,116
Selling and distribution expenses	142,028			142,684
General and administrative expenses	39,705			47,620
Other (income) expense, net	(2,545		) (b)	1,108		(b)
	2,687,463			2,939,857
Income from operations	81,903			90,195
Foreign exchange gain	2,262			1,739
Change in fair value of interest rate swaps (c)	5,395			—
Interest expense (d)	(46,695		)	(58,786		)
Interest income	1,243			1,538
	(37,795		)	(55,509		)
Income before income taxes	44,108			34,686
Income tax provision	(4,673		)	(1,523		)
Net income	$	39,435		$	33,163

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Segment Information

(unaudited, in thousands)

	Six Months Ended
	June 30
	2007			2006 (a)
Segment sales
Building Materials Distribution	$	1,332,390		$	1,594,546
Wood Products	532,581			627,295
Paper	796,132			752,059
Packaging & Newsprint	386,905			369,596
Intersegment eliminations and other	(278,642		)	(313,444		)
	$	2,769,366		$	3,030,052
Segment income (loss)
Building Materials Distribution	$	30,841		$	43,901
Wood Products	19,449			36,013
Paper	31,224			15,529
Packaging & Newsprint	10,420			14,252
Corporate and Other	(7,769		) (b)	(17,761		) (b)
	84,165			91,934
Change in fair value of interest rate swaps (c)	5,395			-
Interest expense (d)	(46,695		)	(58,786		)
Interest income	1,243			1,538
Income before income taxes	$	44,108		$	34,686
EBITDA (e)
Building Materials Distribution	$	34,577		$	48,653
Wood Products	34,302			49,000
Paper	63,910			45,599
Packaging & Newsprint	37,723			39,009
Corporate and Other	(5,265		) (b)	(15,211		) (b)
	$	165,247		$	167,050

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Summary Notes to Consolidated Statements of Income and Segment Information

The Consolidated Statements of Income, Consolidated Balance Sheets, Consolidated Statements of Cash Flows, and Segment Information do not include all Notes to Consolidated Financial Statements and should be read in conjunction with the company’s 2006 Annual Report on Form 10-K.  Net income for all periods presented involved estimates and accruals.

(a)In January 2007, we adopted Financial Accounting Standards Board Staff Position (FSP) No. AUG AIR-1, Accounting for Planned Major Maintenance Activities.  Prior to adopting this FSP, we charged planned shutdown maintenance costs in our Paper and Packaging & Newsprint segments to income (loss) ratably over the year.  The FSP prohibits this and as a result, we recast our 2006 interim financial information using the direct expense method.  The FSP increases the volatility of earnings in the period a planned shutdown occurs, but it has no impact on our annual results of operations.  For the three and six months ended June 30, 2006, income increased (decreased) by the following amounts:

	Three Months			Six Months
	Ended			Ended
	June 30, 2006
	(unaudited, in thousands)
Paper	$	(1,777	)	$	1,584
Packaging & Newsprint	(460		)	(1,911		)
	$	(2,237	)	$	(327	)

(b)The three and six months ended June 30, 2007, includes a $4.4 million gain for changes in our retiree healthcare programs. The six months ended June 30, 2006, includes a $3.7 million gain for changes in our retiree healthcare programs.

(c)Includes the change in the fair value of interest rate swaps related to the anticipated repayment of our senior unsecured floating-rate notes, when they become callable at par in October 2007.

(d)The three and six months ended June 30, 2007, includes the write-off of $1.8 million of deferred financing costs resulting from the repayment of our Tranche D term loan and reduction in borrowing capacity under our revolving credit facility.

(e)EBITDA represents income before interest (interest expense, interest income, and change in fair value of interest rate swaps), income taxes, and depreciation, amortization, and depletion.  The following table reconciles net income to EBITDA for the three months ended June 30, 2007 and 2006, and March 31, 2007:

	Three Months Ended
	June 30						March 31,
	2007			2006 (a)			2007
	(unaudited, in thousands)
Net income	$	28,898	(b)	$	31,194		$	10,537
Change in fair value of interest rate swaps (c)	(5,395		)	—			—
Interest expense (d)	24,352			28,610			22,343
Interest income	(642		)	(934		)	(601		)
Income tax provision	3,450			305			1,223
Depreciation, amortization, and depletion	40,722			38,459			40,360
EBITDA	$	91,385		$	97,634		$	73,862

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The following table reconciles net income to EBITDA for the six months ended June 30, 2007 and 2006.

	Six Months Ended
	June 30
	2007			2006 (a)
	(unaudited, in thousands)
Net income	$	39,435	(b)	$	33,163	(b)
Change in fair value of interest rate swaps (c)	(5,395		)	—
Interest expense (d)	46,695			58,786
Interest income	(1,243		)	(1,538		)
Income tax provision	4,673			1,523
Depreciation, amortization, and depletion	81,082			75,116
EBITDA	$	165,247		$	167,050

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Boise Cascade Holdings, L.L.C.

Consolidated Balance Sheets

(unaudited, in thousands)

	June 30,		December 31,
	2007		2006
ASSETS
Current
Cash and cash equivalents	$	74,837	$	45,169
Receivables
Trade, less allowances of $1,525 and $1,734	397,196		327,138
Related parties	47,376		37,986
Other	12,522		19,027
Inventories	638,029		640,826
Other	17,540		13,027
	1,187,500		1,083,173
Property
Property and equipment, net	1,472,888		1,462,315
Fiber farms and timber deposits	42,509		40,492
	1,515,397		1,502,807
Deferred financing costs	29,195		31,474
Goodwill	21,846		21,846
Intangible assets, net	35,168		37,507
Other assets	26,497		28,390
Total assets	$	2,815,603	$	2,705,197

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Boise Cascade Holdings, L.L.C.
Consolidated Balance Sheets (continued)

(unaudited, in thousands, except for equity units)

	June 30,		December 31,
	2007		2006
LIABILITIES AND CAPITAL
Current
Short-term borrowings	$	—	$	3,200
Current portion of long-term debt	5,250		—
Accounts payable	386,310		341,201
Accrued liabilities
Compensation and benefits	82,901		93,287
Interest payable	11,785		11,847
Other	45,578		54,600
	531,824		504,135
Debt
Long-term debt, less current portion	1,238,438		1,213,900
Other
Compensation and benefits	126,344		111,676
Other long-term liabilities	38,465		36,642
	164,809		148,318
Redeemable equity units
Series B equity units – 16,995,889 and 17,107,889 units outstanding	17,365		17,477
Series C equity units – 39,527,950 and 39,576,540 units outstanding	7,984		6,434
	25,349		23,911
Commitments and contingent liabilities
Capital
Series A equity units – no par value; 66,000,000 and 66,000,000 units authorized and outstanding	75,421		78,290
Series B equity units – no par value; 550,000,000 and 550,000,000 units authorized; 530,356,601 and 530,356,601 units outstanding	765,681		724,988
Series C equity units – no par value; 44,000,000 and 44,000,000 units authorized	14,081		11,655
Total capital	855,183		814,933
Total liabilities and capital	$	2,815,603	$	2,705,197

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Boise Cascade Holdings, L.L.C.
Consolidated Statements of Cash Flows

(unaudited, in thousands)

	Six Months Ended
	June 30
	2007			2006
Cash provided by (used for) operations
Net income	$	39,435		$	33,163
Items in net income not using (providing) cash
Depreciation, depletion, and amortization of deferred financing costs and other	82,260			77,567
Related-party interest expense	—			8,922
Deferred income taxes	1,913			—
Pension and other postretirement benefit expense	12,538			13,977
Gain on changes in retiree healthcare programs	(4,367		)	(3,741		)
Change in fair value of interest rate swaps	(5,395		)	—
Management equity units expense	1,550			1,965
Other	(2,319		)	(90		)
Decrease (increase) in working capital, net of acquisitions
Receivables	(73,658		)	(69,188		)
Inventories	(365		)	(18,820		)
Prepaid expenses	(1,456		)	(2,465		)
Accounts payable and accrued liabilities	22,336			36,498
Pension and other postretirement benefit payments	(524		)	(463		)
Current and deferred income taxes	1,712			4,263
Other	3,959			1,484
Cash provided by operations	77,619			83,072
Cash provided by (used for) investment
Expenditures for property and equipment	(89,913		)	(71,344		)
Acquisitions of businesses and facilities	—			(42,549		)
Sales of assets	16,903			27,744
Other	1,291			1,737
Cash used for investment	(71,719		)	(84,412		)
Cash provided by (used for) financing
Issuances of long-term debt	705,000			238,300
Payments of long-term debt	(675,212		)	(259,100		)
Short-term borrowings	(3,200		)	—
Note payable to related party, net	—			(1,139		)
Proceeds from changes to interest rate swaps	2,848			25,620
Tax distributions to members	(2,753		)	(10,725		)
Other	(2,915		)	132
Cash provided by (used for) financing	23,768			(6,912		)
Increase (decrease) in cash and cash equivalents	29,668			(8,252		)
Balance at beginning of the period	45,169			88,171
Balance at end of the period	$	74,837		$	79,919

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