Boise Cascade Company Reports Fourth Quarter and Full Year 2019 Results

BOISE, Idaho--()--Boise Cascade Company ("Boise Cascade," the "Company," "we," or "our") (NYSE: BCC) today reported fourth quarter net income of $14.6 million, or $0.37 per share, on sales of $1.1 billion. For the full year 2019, Boise Cascade reported net income of $80.9 million, or $2.06 per share, on sales of $4.6 billion. For 2018 comparative results, see the table below, as well as 'Other Items Impacting 2018 Results.'

Fourth Quarter and Year End 2019 Highlights

 

 

4Q 2019

 

4Q 2018

 

%
change

 

2019

 

2018

 

%
change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands, except per-share data and percentages)

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated Results

 

 

 

 

 

 

 

 

 

 

 

 

Sales

 

$

1,101,713

 

 

$

1,065,805

 

 

3

%

 

$

4,643,404

 

 

$

4,995,290

 

 

(7

)%

Net income (loss)

 

14,647

 

 

(72,246

)

 

N/M

 

80,925

 

 

20,477

 

 

N/M

Net income (loss) per common share - diluted

 

0.37

 

 

(1.85

)

 

N/M

 

2.06

 

 

0.52

 

 

N/M

Adjusted EBITDA 1

 

45,243

 

 

(8,997

)

 

N/M

 

214,575

 

 

192,932

 

 

11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment Results

 

 

 

 

 

 

 

 

 

 

 

 

Wood Products sales

 

$

296,286

 

 

$

307,124

 

 

(4

)%

 

$

1,275,167

 

 

$

1,533,270

 

 

(17

)%

Wood Products income (loss)

 

8,062

 

 

(86,554

)

 

N/M

 

54,197

 

 

(10,022

)

 

N/M

Wood Products EBITDA 1

 

22,651

 

 

(15,289

)

 

N/M

 

111,868

 

 

116,967

 

 

(4

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Building Materials Distribution sales

 

986,969

 

 

922,234

 

 

7

%

 

4,137,719

 

 

4,287,702

 

 

(3

)%

Building Materials Distribution income

 

26,254

 

 

8,905

 

 

195

%

 

116,236

 

 

112,510

 

 

3

%

Building Materials Distribution EBITDA 1

 

31,585

 

 

13,811

 

 

129

%

 

137,005

 

 

130,790

 

 

5

%

1 For reconciliations of non-GAAP measures, see summary notes at the end of this press release.

In the fourth quarter 2019, total U.S. housing starts increased 20% compared to the same period last year. Single-family starts, the primary driver of our sales volumes, also increased 15%. For the full year 2019, total and single-family housing starts increased 3% and 1%, respectively, from the same period in 2018.

We had stronger than expected financial performance in the quarter as favorable weather allowed homebuilders to maintain solid activity levels, driving product demand. Our full year results illustrate our strategic progress since our initial public offering in 2013. Both businesses performed well given limited residential construction growth and persistent weakness in commodity wood products pricing. Our continued progress towards growing our engineered wood products and distribution businesses has increased our earnings stability,” commented Tom Corrick, CEO. “As I move into retirement after nearly 38 years with the Company, I'm pleased with our strategic progress as well as the strength of the leadership team and the culture of the Company. The Company's Board is looking forward to supporting Nate Jorgensen and the team as they execute our strategy and focus on operational excellence, growing our businesses, and providing exceptional customer service."

Other Items Impacting 2018 Results

Fourth quarter 2018 results included $24.0 million of pre-tax impairment and sale related losses, or $0.46 per share after-tax, related to the sale of our hardwood plywood facility in Moncure, North Carolina. The results also included $55.0 million and $2.8 million, respectively, of pre-tax accelerated depreciation and other curtailment related costs, or $1.11 per share after-tax, due to the permanent curtailment of LVL production at our Roxboro, North Carolina, facility.

Full year 2018 results included the above items, as well as $11.5 million of pre-tax impairment and sale related losses, or $0.22 per share after-tax, related to the sale of three Wood Products facilities in Northeast Oregon, and $23.3 million of pre-tax pension settlement charges, or $0.44 per share after-tax, due to pension risk transfer transactions.

Wood Products

Wood Products sales, including sales to Building Materials Distribution (BMD), decreased $10.8 million, or 4%, to $296.3 million for the three months ended December 31, 2019, from $307.1 million for the three months ended December 31, 2018. The decline in sales was driven by lower sales prices and sales volumes for plywood. The decrease in sales was also attributable to lower sales volumes of lumber and particleboard due to the facility sales and closures in fourth quarter 2018, discussed above. These decreases were offset partially by increases in LVL and I-joists sales volumes (LVL and I-joists are collectively referred to as EWP) and net sale prices for I-joists. For the three months ended December 31, 2019, Wood Products segment income was $8.1 million compared to a segment loss of $86.6 million for the three months ended December 31, 2018. Fourth quarter 2018 results included accelerated depreciation, as well as facility sale and curtailment related losses, discussed above. Excluding these losses, segment income improved approximately $13 million due to improved EWP volumes and prices, lower costs of OSB (used in the manufacture of I-joists) and logs, and lower per-unit conversion costs. In addition, excluding the accelerated depreciation, depreciation and amortization expense decreased $1.7 million due primarily to discontinued depreciation on manufacturing facilities curtailed and sold in 2018. These improvements were offset partially by lower plywood prices.

For the year ended December 31, 2019, sales, including sales to BMD, decreased $258.1 million, or 17%, to $1,275.2 million from $1,533.3 million in 2018. The decrease in sales was driven primarily by lower sales prices and sales volumes for plywood, as well as lower sales volumes for I-joists. The lower sales volume for plywood was mostly due to weaker market conditions and downtime for facility capital improvements, as well as the sale of the Moncure plywood facility on March 1, 2019. In addition, almost one-third of the decrease in sales was attributable to lower sales volumes of lumber and particleboard due to the facility sales or closures in 2018, discussed above. These decreases were offset partially by increases in EWP sales prices and LVL sales volumes. For the year ended December 31, 2019, Wood Products segment income was $54.2 million compared to a segment loss of $10.0 million for the year ended December 31, 2018. The results in 2018 included accelerated depreciation, and facility sale and curtailment related losses, discussed above. Excluding these losses, segment income decreased approximately $29 million due to lower sales prices of plywood, offset partially by lower wood fiber costs, particularly OSB (used in the manufacture of I-joists) and logs, as well as higher EWP prices. In addition, general and administrative expenses also decreased $3.6 million. Excluding the accelerated depreciation in 2018, depreciation and amortization expense decreased $14.3 million due primarily to discontinued depreciation on manufacturing facilities curtailed and sold in 2018.

Comparative average net selling prices and sales volume changes for EWP and plywood are as follows:

 

 

4Q 2019 vs. 4Q 2018

 

2019 vs. 2018

 

 

 

 

 

Average Net Selling Prices

 

 

 

 

LVL

 

(1)%

 

3%

I-joists

 

4%

 

4%

Plywood

 

(18)%

 

(24)%

Sales Volumes

 

 

 

 

LVL

 

21%

 

1%

I-joists

 

20%

 

(4)%

Plywood

 

(3)%

 

(6)%

Building Materials Distribution

BMD's sales increased $64.7 million, or 7%, to $987.0 million for the three months ended December 31, 2019, from $922.2 million for the three months ended December 31, 2018. Compared with the same quarter in the prior year, the overall increase in sales was driven by a sales volume increase of 11% offset partially by a sales price decrease of 4%. Excluding the impact of the acquisition of wholesale building material distribution locations in Nashville, Tennessee, Medford, Oregon, and Cincinnati, Ohio during 2018, and the Birmingham, Alabama acquisition in 2019 (the "BMD Acquisitions"), BMD sales would have increased 4%. By product line, commodity sales decreased 3%, general line product sales increased 14%, and sales of EWP (substantially all of which is sourced through our Wood Products segment) increased 19%. BMD segment income increased $17.3 million to $26.3 million for the three months ended December 31, 2019, from $8.9 million in the comparative prior year quarter. The improvement in segment income was driven primarily by a gross margin increase of $27.3 million, resulting from improved gross margins on commodity products and higher sales of general line products and EWP compared with fourth quarter 2018. Gross margins on commodity products in the prior year quarter were negatively impacted by sharply falling prices. The increase in gross margin during fourth quarter 2019 was offset partially by increased selling and distribution expenses of $8.4 million.

For the year ended December 31, 2019, sales decreased $150.0 million, or 3%, to $4,137.7 million from $4,287.7 million in 2018. The decrease in sales was driven by a sales price decrease of 9%, offset partially by a sales volume increase of 6%. Excluding the impact of the BMD Acquisitions, BMD sales would have decreased 6%. By product line, commodity sales decreased 17%, general line product sales increased 11%, and sales of EWP increased 4%. BMD segment income increased $3.7 million to $116.2 million for the year ended December 31, 2019, from $112.5 million for the year ended December 31, 2018. The increase in segment income was driven primarily by a gross margin increase of $37.0 million, resulting from higher sales of general line products and improved gross margins on commodity products compared with 2018. The majority of the improvement in gross margins was offset by increased selling and distribution expenses and depreciation and amortization of $29.3 million and $2.5 million, respectively.

Balance Sheet

Boise Cascade ended fourth quarter 2019 with $285.2 million of cash and cash equivalents and $336.7 million of undrawn committed bank line availability, for total available liquidity of $621.9 million. The Company had $440.5 million of outstanding debt at December 31, 2019.

We adopted the new lease accounting standard on January 1, 2019. The most significant impact of the adoption was the recognition of right-of-use assets and lease liabilities for operating leases, as reflected on the face of our balance sheet as of December 31, 2019. The standard did not have a material impact on our consolidated net earnings and cash flows. For additional information on the impact of this standard on our accounting for leases and additional required qualitative disclosures of our lease policies, see our Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission on February 24, 2020.

During 2019, Boise Cascade transferred $19.8 million of its qualified defined benefit pension plan assets to The Prudential Insurance Company of America for the purchase of a group annuity contract. As a result of the pension risk transfer transaction, we recorded $1.3 million of pre-tax settlement charges, or $0.03 per share after-tax.

Dividends

On February 10, 2020, our board of directors declared a dividend of $0.10 per share of our common stock, payable on March 16, 2020, to stockholders of record on February 24, 2020.

Outlook

The February 2020 Blue Chip consensus forecast for 2020 and 2021 reflects 1.34 million and 1.35 million total U.S. housing starts, respectively, compared with actual housing starts of 1.29 million in 2019. Although we believe U.S. demographics are supportive of higher levels of housing starts, we expect only modest near-term residential construction growth due to constraints faced by builders, such as availability of labor and building lots, as well as affordability constraints faced by prospective buyers. The pace of household formation rates and residential repair-and-remodeling activity will be affected by employment growth, wage growth, prospective home buyers' access to and cost of financing, housing affordability, and consumer confidence, as well as other factors. Household formation rates in turn will be a key factor behind the demand for new construction. In addition, the size of new single-family residences as well as the mix of single and multi-family starts will influence product consumption. We will continue to manage our production levels to our sales demand.

As both a manufacturer and a distributor, our 2019 financial results were impacted by lower lumber, OSB, and plywood pricing compared to pricing in 2018. Additional industry capacity brought on in 2018, and more plywood imports from South America, when coupled with a generally flat residential construction activity, led to supply and demand imbalances. Commodity wood product pricing during 2020 will be a key driver of our financial results and will be dependent on industry operating rates, net import and export activity, transportation constraints or disruptions, inventory levels in various distribution channels, and seasonal demand patterns.

On February 20, 2020, we made a decision to permanently curtail I-joist production at our Roxboro, North Carolina facility by March 31, 2020. Across our industry, I-joist consumption per housing start has trended downward in recent years which we believe is due to decreases in the median home size and an increasing proportion of slab on grade new home construction. Because Roxboro is a higher cost facility and we have additional available I-joist capacity at our Alexandria, Louisiana facility, we plan to permanently curtail Roxboro I-joist production. We do not anticipate any impact on our customers. We expect to record approximately $18 million of charges during first quarter 2020, substantially all of which will be to fully depreciate the curtailed I-joist production assets.

Consistent with historical patterns, we expect working capital increases to use cash in the first quarter of 2020. In addition, we expect our capital spending, excluding acquisitions, to be $85-$95 million in 2020, including spending to improve the efficiency of veneer production at our Florien, Louisiana, facility.

About Boise Cascade

Boise Cascade Company is one of the largest producers of engineered wood products and plywood in North America and a leading U.S. wholesale distributor of building products. For more information, please visit the Company's website at www.bc.com.

Webcast and Conference Call

Boise Cascade will host a webcast and conference call to discuss fourth quarter and full year earnings on Tuesday, February 25, 2020, at 11 a.m. Eastern.

To participate in the conference call, dial 844-795-4410 and use participant passcode 1196288 (international callers should dial 661-378-9637). To join the webcast go to the Investor Relations section at www.bc.com and select the Event Calendar link.

A replay of the conference call will be available from Tuesday, February 25, 2020 at 2 p.m. Eastern through Tuesday, March 3, 2020 at 2 p.m. Eastern. Replay numbers are 855-859-2056 for U.S. callers and 404-537-3406 for international callers with a passcode of 1196288. The archived webcast will be available in the Investor Relations section of Boise Cascade's website.

Use of Non-GAAP Financial Measures

We refer to the terms EBITDA and Adjusted EBITDA in this earnings release and the accompanying Quarterly Statistical Information as supplemental measures of our performance and liquidity that are not required by or presented in accordance with generally accepted accounting principles in the United States (GAAP). We define EBITDA as income (loss) before interest (interest expense and interest income), income taxes, and depreciation and amortization. Additionally, we disclose Adjusted EBITDA, which further adjusts EBITDA to exclude the change in fair value of interest rate swaps.

We believe EBITDA and Adjusted EBITDA are meaningful measures because they present a transparent view of our recurring operating performance and allow management to readily view operating trends, perform analytical comparisons, and identify strategies to improve operating performance. We also believe EBITDA and Adjusted EBITDA are useful to investors because they provide a means to evaluate the operating performance of our segments and our Company on an ongoing basis using criteria that are used by our management and because they are frequently used by investors and other interested parties when comparing companies in our industry that have different financing and capital structures and/or tax rates. EBITDA and Adjusted EBITDA, however, are not measures of our liquidity or financial performance under GAAP and should not be considered as alternatives to net income (loss), income (loss) from operations, or any other performance measure derived in accordance with GAAP or as alternatives to cash flow from operating activities as a measure of our liquidity. The use of EBITDA and Adjusted EBITDA instead of net income (loss) or segment income (loss) have limitations as analytical tools, including: the inability to determine profitability; the exclusion of interest expense, interest income, and associated significant cash requirements; and the exclusion of depreciation and amortization, which represent unavoidable operating costs. Management compensates for these limitations by relying on our GAAP results. Our measures of EBITDA and Adjusted 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 press release includes statements about our expectations of future operational and financial performance that are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements preceded or followed by, or that otherwise include, the words "believes," "expects," "anticipates," "intends," "project," "estimates," "plans," "forecast," "is likely to," and similar expressions or future or conditional verbs such as "will," "may," "would," "should," and "could" are generally forward-looking in nature and not historical facts. Such statements are based upon the current beliefs and expectations of our management and are subject to significant risks and uncertainties. The accuracy of such statements is subject to a number of risks, uncertainties, and assumptions that could cause our actual results to differ materially from those projected, including, but not limited to, prices for building products, changes in the competitive position of our products, commodity input costs, the effect of general economic conditions, mortgage rates and availability, housing demand, housing vacancy rates, governmental regulations, unforeseen production disruptions, as well as natural disasters. These and other factors that could cause actual results to differ materially from such forward-looking statements are discussed in greater detail in our filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date of this press release. We undertake no obligation to revise them in light of new information. Finally, we undertake no obligation to review or confirm analyst expectations or estimates that might be derived from this release.

Boise Cascade Company

Consolidated Statements of Operations

(in thousands, except per-share data)

 

 

Three Months Ended

 

Year Ended

 

December 31

 

September 30,

 

December 31

 

2019

 

2018

 

2019

 

2019

 

2018

 

 

 

 

 

 

 

 

 

 

Sales

$

1,101,713

 

 

$

1,065,805

 

 

$

1,269,524

 

 

$

4,643,404

 

 

$

4,995,290

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

Materials, labor, and other operating expenses (excluding depreciation)

939,375

 

 

940,878

 

 

1,078,924

 

 

3,965,776

 

 

4,307,594

 

Depreciation and amortization

20,501

 

 

76,549

 

 

20,969

 

 

80,141

 

 

146,837

 

Selling and distribution expenses

98,280

 

 

89,546

 

 

106,567

 

 

390,739

 

 

363,138

 

General and administrative expenses

19,008

 

 

16,057

 

 

18,603

 

 

71,072

 

 

68,811

 

Loss on sale and curtailment of facilities

 

 

27,288

 

 

 

 

 

 

38,314

 

Other (income) expense, net

(226

)

 

(236

)

 

(437

)

 

(783

)

 

(1,442

)

 

1,076,938

 

 

1,150,082

 

 

1,224,626

 

 

4,506,945

 

 

4,923,252

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

24,775

 

 

(84,277

)

 

44,898

 

 

136,459

 

 

72,038

 

 

 

 

 

 

 

 

 

 

 

Foreign currency exchange gain (loss)

239

 

 

(672

)

 

(200

)

 

449

 

 

(944

)

Pension expense (excluding service costs)

(272

)

 

(597

)

 

(1,613

)

 

(2,474

)

 

(24,999

)

Interest expense

(6,596

)

 

(6,666

)

 

(6,532

)

 

(26,051

)

 

(26,193

)

Interest income

1,066

 

 

648

 

 

837

 

 

2,811

 

 

1,649

 

Change in fair value of interest rate swaps

140

 

 

(1,868

)

 

(569

)

 

(2,963

)

 

551

 

 

(5,423

)

 

(9,155

)

 

(8,077

)

 

(28,228

)

 

(49,936

)

 

 

 

 

 

 

 

 

 

 

Income (loss) before income taxes

19,352

 

 

(93,432

)

 

36,821

 

 

108,231

 

 

22,102

 

Income tax (provision) benefit

(4,705

)

 

21,186

 

 

(9,650

)

 

(27,306

)

 

(1,625

)

Net income (loss)

$

14,647

 

 

$

(72,246

)

 

$

27,171

 

 

$

80,925

 

 

$

20,477

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

39,093

 

 

38,968

 

 

39,087

 

 

39,039

 

 

38,932

 

Diluted

39,418

 

 

38,968

 

 

39,292

 

 

39,242

 

 

39,387

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per common share:

 

 

 

 

 

 

 

 

 

Basic

$

0.37

 

 

$

(1.85

)

 

$

0.70

 

 

$

2.07

 

 

$

0.53

 

Diluted

$

0.37

 

 

$

(1.85

)

 

$

0.69

 

 

$

2.06

 

 

$

0.52

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

$

1.10

 

 

$

0.09

 

 

$

0.09

 

 

$

1.37

 

 

$

1.30

 

See accompanying summary notes to consolidated financial statements and segment information.

Wood Products Segment

Statements of Operations

(in thousands, except percentages)

 

 

Three Months Ended

 

Year Ended

 

December 31

 

September 30,

 

December 31

 

2019

 

2018

 

2019

 

2019

 

2018

 

 

 

 

 

 

 

 

 

 

Segment sales

$

296,286

 

 

$

307,124

 

 

$

325,102

 

 

$

1,275,167

 

 

$

1,533,270

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

Materials, labor, and other operating expenses (excluding depreciation)

261,611

 

 

282,795

 

 

283,354

 

 

1,117,540

 

 

1,328,012

 

Depreciation and amortization

14,589

 

 

71,265

 

 

15,252

 

 

57,671

 

 

126,989

 

Selling and distribution expenses

8,201

 

 

7,886

 

 

7,718

 

 

31,485

 

 

33,190

 

General and administrative expenses

3,962

 

 

4,642

 

 

3,379

 

 

14,442

 

 

18,043

 

Loss on sale and curtailment of facilities

 

 

27,288

 

 

 

 

 

 

38,314

 

Other (income) expense, net

(139

)

 

(198

)

 

(198

)

 

(168

)

 

(1,256

)

 

288,224

 

 

393,678

 

 

309,505

 

 

1,220,970

 

 

1,543,292

 

 

 

 

 

 

 

 

 

 

 

Segment income (loss)

$

8,062

 

 

$

(86,554

)

 

$

15,597

 

 

$

54,197

 

 

$

(10,022

)

 

 

 

 

 

 

 

 

 

 

 

(percentage of sales)

 

 

 

 

 

 

 

 

 

 

Segment sales

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

Materials, labor, and other operating expenses (excluding depreciation)

88.3

%

 

92.1

%

 

87.2

%

 

87.6

%

 

86.6

%

Depreciation and amortization

4.9

%

 

23.2

%

 

4.7

%

 

4.5

%

 

8.3

%

Selling and distribution expenses

2.8

%

 

2.6

%

 

2.4

%

 

2.5

%

 

2.2

%

General and administrative expenses

1.3

%

 

1.5

%

 

1.0

%

 

1.1

%

 

1.2

%

Loss on sale and curtailment of facilities

%

 

8.9

%

 

%

 

%

 

2.5

%

Other (income) expense, net

%

 

(0.1

%)

 

(0.1

)%

 

%

 

(0.1

%)

 

97.3

%

 

128.2

%

 

95.2

%

 

95.7

%

 

100.7

%

 

 

 

 

 

 

 

 

 

 

Segment income (loss)

2.7

%

 

(28.2

%)

 

4.8

%

 

4.3

%

 

(0.7

)%

Building Materials Distribution Segment

Statements of Operations

(in thousands, except percentages)

 

 

Three Months Ended

 

Year Ended

 

December 31

 

September 30,

 

December 31

 

2019

 

2018

 

2019

 

2019

 

2018

 

 

 

 

 

 

 

 

 

 

Segment sales

$

986,969

 

 

$

922,234

 

 

$

1,145,621

 

 

$

4,137,719

 

 

$

4,287,702

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

Materials, labor, and other operating expenses (excluding depreciation)

859,102

 

 

821,703

 

 

996,313

 

 

3,617,477

 

 

3,804,496

 

Depreciation and amortization

5,331

 

 

4,906

 

 

5,278

 

 

20,769

 

 

18,280

 

Selling and distribution expenses

90,027

 

 

81,596

 

 

98,797

 

 

359,039

 

 

329,691

 

General and administrative expenses

6,365

 

 

5,164

 

 

6,759

 

 

24,785

 

 

22,909

 

Other (income) expense, net

(110

)

 

(40

)

 

(191

)

 

(587

)

 

(184

)

 

960,715

 

 

913,329

 

 

1,106,956

 

 

4,021,483

 

 

4,175,192

 

 

 

 

 

 

 

 

 

 

 

Segment income

$

26,254

 

 

$

8,905

 

 

$

38,665

 

 

$

116,236

 

 

$

112,510

 

 

 

 

 

 

 

 

 

 

 

 

(percentage of sales)

 

 

 

 

 

 

 

 

 

 

Segment sales

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 

100.0

%

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

Materials, labor, and other operating expenses (excluding depreciation)

87.0

%

 

89.1

%

 

87.0

%

 

87.4

%

 

88.7

%

Depreciation and amortization

0.5

%

 

0.5

%

 

0.5

%

 

0.5

%

 

0.4

%

Selling and distribution expenses

9.1

%

 

8.8

%

 

8.6

%

 

8.7

%

 

7.7

%

General and administrative expenses

0.6

%

 

0.6

%

 

0.6

%

 

0.6

%

 

0.5

%

Other (income) expense, net

%

 

%

 

%

 

%

 

%

 

97.3

%

 

99.0

%

 

96.6

%

 

97.2

%

 

97.4

%

 

 

 

 

 

 

 

 

 

 

Segment income

2.7

%

 

1.0

%

 

3.4

%

 

2.8

%

 

2.6

%

Segment Information

(in thousands)

 

 

Three Months Ended

 

Year Ended

 

December 31

 

September 30,

 

December 31

 

2019

 

2018

 

2019

 

2019

 

2018

Segment sales

 

 

 

 

 

 

 

 

 

Wood Products

$

296,286

 

 

$

307,124

 

 

$

325,102

 

 

$

1,275,167

 

 

$

1,533,270

 

Building Materials Distribution

986,969

 

 

922,234

 

 

1,145,621

 

 

4,137,719

 

 

4,287,702

 

Intersegment eliminations and other

(181,542

)

 

(163,553

)

 

(201,199

)

 

(769,482

)

 

(825,682

)

Total net sales

$

1,101,713

 

 

$

1,065,805

 

 

$

1,269,524

 

 

$

4,643,404

 

 

$

4,995,290

 

 

 

 

 

 

 

 

 

 

 

Segment income (loss)

 

 

 

 

 

 

 

 

 

Wood Products

$

8,062

 

 

$

(86,554

)

 

$

15,597

 

 

$

54,197

 

 

$

(10,022

)

Building Materials Distribution

26,254

 

 

8,905

 

 

38,665

 

 

116,236

 

 

112,510

 

Total segment income (loss)

34,316

 

 

(77,649

)

 

54,262

 

 

170,433

 

 

102,488

 

Unallocated corporate

(9,541

)

 

(6,628

)

 

(9,364

)

 

(33,974

)

 

(30,450

)

Income (loss) from operations

$

24,775

 

 

$

(84,277

)

 

$

44,898

 

 

$

136,459

 

 

$

72,038

 

 

 

 

 

 

 

 

 

 

 

Segment EBITDA (a)

 

 

 

 

 

 

 

 

 

Wood Products

$

22,651

 

 

$

(15,289

)

 

$

30,849

 

 

$

111,868

 

 

$

116,967

 

Building Materials Distribution

31,585

 

 

13,811

 

 

43,943

 

 

137,005

 

 

130,790

 

See accompanying summary notes to consolidated financial statements and segment information.

Boise Cascade Company

Consolidated Balance Sheets

(in thousands)

 

 

December 31, 2019

 

December 31, 2018

 

 

ASSETS

 

 

 

 

 

 

 

Current

 

 

 

Cash and cash equivalents

$

285,237

 

 

$

191,671

 

Receivables

 

 

 

Trade, less allowances of $591 and $1,062

215,894

 

 

214,338

 

Related parties

568

 

 

436

 

Other

15,184

 

 

14,466

 

Inventories

497,596

 

 

533,049

 

Prepaid expenses and other

8,285

 

 

31,818

 

Total current assets

1,022,764

 

 

985,778

 

 

 

 

 

Property and equipment, net

476,949

 

 

487,224

 

Operating lease right-of-use assets

64,228

 

 

 

Finance lease right-of-use assets

21,798

 

 

 

Timber deposits

12,287

 

 

12,568

 

Goodwill

60,382

 

 

59,159

 

Intangible assets, net

17,797

 

 

16,851

 

Deferred income taxes

7,952

 

 

8,211

 

Other assets

9,194

 

 

11,457

 

Total assets

$

1,693,351

 

 

$

1,581,248

 

Boise Cascade Company

Consolidated Balance Sheets (continued)

(in thousands, except per-share data)

 

 

December 31, 2019

 

December 31, 2018

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

Current

 

 

 

Accounts payable

 

 

 

Trade

$

222,930

 

 

$

210,587

 

Related parties

1,624

 

 

1,070

 

Accrued liabilities

 

 

 

Compensation and benefits

83,943

 

 

87,911

 

Interest payable

6,723

 

 

6,748

 

Other

69,772

 

 

63,509

 

Total current liabilities

384,992

 

 

369,825

 

 

 

 

 

Debt

 

 

 

Long-term debt

440,544

 

 

439,428

 

 

 

 

 

Other

 

 

 

Compensation and benefits

45,586

 

 

41,283

 

Operating lease liabilities, net of current portion

58,029

 

 

 

Finance lease liabilities, net of current portion

23,419

 

 

 

Deferred income taxes

26,694

 

 

19,218

 

Other long-term liabilities

12,757

 

 

38,904

 

 

166,485

 

 

99,405

 

 

 

 

 

Commitments and contingent liabilities

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

Preferred stock, $0.01 par value per share; 50,000 shares authorized, no shares issued and outstanding

 

 

 

Common stock, $0.01 par value per share; 300,000 shares authorized, 44,353 and 44,076 shares issued, respectively

444

 

 

441

 

Treasury stock 5,367 shares at cost

(138,909

)

 

(138,909

)

Additional paid-in capital

533,345

 

 

528,654

 

Accumulated other comprehensive loss

(50,248

)

 

(47,652

)

Retained earnings

356,698

 

 

330,056

 

Total stockholders' equity

701,330

 

 

672,590

 

Total liabilities and stockholders' equity

$

1,693,351

 

 

$

1,581,248

 

Boise Cascade Company

Consolidated Statements of Cash Flows

(in thousands)

 

 

Year Ended December 31

 

2019

 

2018

Cash provided by (used for) operations

 

 

 

Net income

$

80,925

 

 

$

20,477

 

Items in net income not using (providing) cash

 

 

 

Depreciation and amortization, including deferred financing costs and other

82,377

 

 

148,937

 

Stock-based compensation

7,973

 

 

8,831

 

Pension expense

3,121

 

 

25,793

 

Deferred income taxes

9,025

 

 

(7,965

)

Change in fair value of interest rate swaps

2,963

 

 

(551

)

Loss on sale and curtailment of facilities (excluding severance)

 

 

37,331

 

Other

(353

)

 

(1,688

)

Decrease (increase) in working capital, net of acquisitions

 

 

 

Receivables

2,160

 

 

37,561

 

Inventories

40,176

 

 

(64,190

)

Prepaid expenses and other

(132

)

 

(500

)

Accounts payable and accrued liabilities

5,212

 

 

(14,531

)

Pension contributions

(5,238

)

 

(26,081

)

Income taxes payable

19,387

 

 

(4,186

)

Other

(1,949

)

 

4,373

 

Net cash provided by operations

245,647

 

 

163,611

 

 

 

 

 

Cash provided by (used for) investment

 

 

 

Expenditures for property and equipment

(82,720

)

 

(79,987

)

Acquisitions of businesses and facilities

(15,676

)

 

(25,482

)

Proceeds from sales of facilities

2,493

 

 

15,003

 

Proceeds from sales of assets and other

1,838

 

 

1,209

 

Net cash used for investment

(94,065

)

 

(89,257

)

 

 

 

 

Cash provided by (used for) financing

 

 

 

Borrowings of long-term debt, including revolving credit facility

5,500

 

 

7,500

 

Payments of long-term debt, including revolving credit facility

(5,500

)

 

(7,500

)

Treasury stock purchased

 

 

(4,930

)

Dividends paid on common stock

(53,954

)

 

(50,615

)

Tax withholding payments on stock-based awards

(3,574

)

 

(5,135

)

Other

(488

)

 

857

 

Net cash used for financing

(58,016

)

 

(59,823

)

 

 

 

 

Net increase in cash and cash equivalents

93,566

 

 

14,531

 

 

 

 

 

Balance at beginning of the period

191,671

 

 

177,140

 

 

 

 

 

Balance at end of the period

$

285,237

 

 

$

191,671

 

Summary Notes to Consolidated Financial Statements and Segment Information

The Consolidated Statements of Operations, Segment Statements of Operations, Consolidated Balance Sheets, Consolidated Statements of Cash Flows, and Segment Information presented herein do not include the notes accompanying the Company's Consolidated Financial Statements and should be read in conjunction with the Company’s 2019 Form 10-K and the Company's other filings with the Securities and Exchange Commission. Net income (loss) for all periods presented involved estimates and accruals.

(a) EBITDA represents income (loss) before interest (interest expense and interest income), income taxes, and depreciation and amortization. Additionally, we disclose Adjusted EBITDA, which further adjusts EBITDA to exclude the change in fair value of interest rate swaps. The following table reconciles net income (loss) to EBITDA and Adjusted EBITDA for the three months ended December 31, 2019 and 2018, and September 30, 2019, and the years ended December 31, 2019 and 2018:

 

Three Months Ended

 

Year Ended

 

December 31

 

September 30,

 

December 31

 

2019

 

2018

 

2019

 

2019

 

2018

 

(in thousands)

Net income (loss)

$

14,647

 

 

$

(72,246

)

 

$

27,171

 

 

$

80,925

 

 

$

20,477

 

Interest expense

6,596

 

 

6,666

 

 

6,532

 

 

26,051

 

 

26,193

 

Interest income

(1,066

)

 

(648

)

 

(837

)

 

(2,811

)

 

(1,649

)

Income tax provision (benefit)

4,705

 

 

(21,186

)

 

9,650

 

 

27,306

 

 

1,625

 

Depreciation and amortization

20,501

 

 

76,549

 

 

20,969

 

 

80,141

 

 

146,837

 

EBITDA

45,383

 

 

(10,865

)

 

63,485

 

 

211,612

 

 

193,483

 

Change in fair value of interest rate swaps

(140

)

 

1,868

 

 

569

 

 

2,963

 

 

(551

)

Adjusted EBITDA

$

45,243

 

 

$

(8,997

)

 

$

64,054

 

 

$

214,575

 

 

$

192,932

 

The following table reconciles segment income (loss) and unallocated corporate costs to EBITDA and adjusted EBITDA for the three months ended December 31, 2019 and 2018, and September 30, 2019, and the years ended December 31, 2019 and 2018:

 

Three Months Ended

 

Year Ended

 

December 31

 

September 30,

 

December 31

 

2019

 

2018

 

2019

 

2019

 

2018

 

(in thousands)

Wood Products

 

 

 

 

 

 

 

 

 

Segment income (loss)

$

8,062

 

 

$

(86,554

)

 

$

15,597

 

 

$

54,197

 

 

$

(10,022

)

Depreciation and amortization

14,589

 

 

71,265

 

 

15,252

 

 

57,671

 

 

126,989

 

EBITDA

$

22,651

 

 

$

(15,289

)

 

$

30,849

 

 

$

111,868

 

 

$

116,967

 

 

 

 

 

 

 

 

 

 

 

Building Materials Distribution

 

 

 

 

 

 

 

 

 

Segment income

$

26,254

 

 

$

8,905

 

 

$

38,665

 

 

$

116,236

 

 

$

112,510

 

Depreciation and amortization

5,331

 

 

4,906

 

 

5,278

 

 

20,769

 

 

18,280

 

EBITDA

$

31,585

 

 

$

13,811

 

 

$

43,943

 

 

$

137,005

 

 

$

130,790

 

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

 

 

 

 

 

 

 

Unallocated corporate expenses

$

(9,541

)

 

$

(6,628

)

 

$

(9,364

)

 

$

(33,974

)

 

$

(30,450

)

Foreign currency exchange gain (loss)

239

 

 

(672

)

 

(200

)

 

449

 

 

(944

)

Pension expense (excluding service costs)

(272

)

 

(597

)

 

(1,613

)

 

(2,474

)

 

(24,999

)

Change in fair value of interest rate swaps

140

 

 

(1,868

)

 

(569

)

 

(2,963

)

 

551

 

Depreciation and amortization

581

 

 

378

 

 

439

 

 

1,701

 

 

1,568

 

EBITDA

(8,853

)

 

(9,387

)

 

(11,307

)

 

(37,261

)

 

(54,274

)

Change in fair value of interest rate swaps

(140

)

 

1,868

 

 

569

 

 

2,963

 

 

(551

)

Corporate adjusted EBITDA

$

(8,993

)

 

$

(7,519

)

 

$

(10,738

)

 

$

(34,298

)

 

$

(54,825

)

 

 

 

 

 

 

 

 

 

 

Total company adjusted EBITDA

$

45,243

 

 

$

(8,997

)

 

$

64,054

 

 

$

214,575

 

 

$

192,932

 

 

Contacts

Investor Relations Contact
Wayne Rancourt
208 384 6073

Media Contact
Lisa Chapman
208 384 6552

Contacts

Investor Relations Contact
Wayne Rancourt
208 384 6073

Media Contact
Lisa Chapman
208 384 6552