Temple-Inland debt repurchases reduce fixed-term debt by $67 million

By Jennifer Lanning Drey

Portland, Ore., April 22 - Temple-Inland Inc. reduced its fixed-term debt by $67 million during the first quarter through debt repurchases that included $53 million of senior notes bought in the open market, Randall Levy, chief financial officer of Temple-Inland, said Wednesday during the company's first-quarter earnings conference call.

Temple-Inland also repurchased the remaining $14 million of its 6¾% notes that matured on March 1, he said.

At quarter-end, long-term debt stood at $1.143 billion, down $49 million from the long-term debt total at the end of 2008.

The company generated cash provided by operations of $80 million during the quarter and ended the period with cash and cash equivalents of $24 million, which was down from $41 million at the end of 2008.

Temple-Inland had unused borrowing capacity on its credit facilities of $685 million at quarter-end.

The debt-to-capital ratio at quarter-end was 57.5% versus a maximum permitted under its debt covenants of 70%. Interest coverage was 5.2 times at quarter-end, compared to a minimum allowable level of 3.0 times.

The company posted first-quarter net income of $35 million, compared with a net loss of $13 million in the first quarter of 2008.

"We were very pleased with our results in the first quarter of 2009," Doyle R. Simons, chief executive officer of Temple-Inland, said during the call.

Temple-Inland said it posted record earnings in its corrugated packaging segment for the quarter, resulting from its box plant transformation, the success of its PBL acquisition, its heavy orientation toward the food and beverage market, its integrated system and lower input costs.

In the building products segment, operating results were up $19 million over the year-ago level despite a decline in housing starts.

Austin, Texas-based Temple-Inland manufactures containerboard and converts it into a line of corrugated packaging.

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