Document
false0001328581 0001328581 2020-05-07 2020-05-07


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): May 7, 2020
BOISE CASCADE COMPANY
(Exact name of registrant as specified in its charter)
Delaware
 
1-35805
 
20-1496201
(State or other jurisdiction of incorporation)
 
(Commission File Number)
 
(IRS Employer Identification No.)

1111 West Jefferson Street, Suite 300
Boise, Idaho 83702-5389
(Address of principal executive offices) (Zip Code)
(208) 384-6161
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.01 par value per share
BCC
New York Stock Exchange





Item 2.02 Results of Operations and Financial Condition.
On May 7, 2020, Boise Cascade Company (the "Company") issued a press release announcing its first quarter 2020 financial results and COVID-19 business update, a copy of which is furnished as Exhibit 99.1 to this Report on Form 8-K. Additionally, Exhibit 99.2, a copy of which is furnished hereby, includes certain statistical information relative to the Company's quarterly performance.

The Company has reconciled all non-GAAP measures presented to the most directly comparable GAAP measure.

Item 9.01 Financial Statements and Exhibits.
(d)     Exhibits.

The following exhibits are furnished as part of this Report on Form 8-K:
Exhibit
Description
 
 
 
 
 
 
101
Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document.
 
 
104
The cover page from this Current Report on Form 8-K, formatted as Inline XBRL.






SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
BOISE CASCADE COMPANY
 
 
 
 
By
/s/ Jill Twedt
 
 
Jill Twedt
Vice President, General Counsel and Secretary
Date: May 7, 2020
 
 




Exhibit


Boise Cascade Company
Exhibit 99.1
1111 West Jefferson Street, Suite 300
 
Boise, ID 83702
 
News Release
Investor Relations Contact - Wayne Rancourt
208 384 6073
 
Media Contact - Lisa Chapman
208 384 6552

For Immediate Release: May 7, 2020

Boise Cascade Company Reports First Quarter 2020 Results and Provides COVID-19 Business Update

BOISE, Idaho - Boise Cascade Company ("Boise Cascade," the "Company," "we," or "our") (NYSE: BCC) today reported net income of $12.2 million, or $0.31 per share, on sales of $1.2 billion for the first quarter ended March 31, 2020. First quarter 2020 results include $15.0 million and $1.7 million, respectively, of pre-tax accelerated depreciation and other curtailment related costs, or $0.32 per share after-tax, due to the previously announced permanent curtailment of I-joist production at our Roxboro, North Carolina, facility.

“As we respond to the impacts and uncertainties of COVID-19, our focus remains on the health and safety of our associates, followed by business continuity. At the same time, we are fortunate to have entered 2020 in a sound financial position,” commented Nate Jorgensen, CEO. “Our first quarter financial results were strong in both businesses, demonstrating the strength of our integrated business model. We will continue to take the necessary steps to preserve our financial position and effectively support our customers, and ultimately will strive to balance the priorities of the various stakeholders that depend on us."

For discussion of the impacts and our continued response to COVID-19, see 'Balance Sheet and Liquidity' and 'Outlook' below.

First Quarter 2020 Highlights
 
 
1Q 2020
 
1Q 2019
 
% change
 
 
(in thousands, except per-share data and percentages)
Consolidated Results
 
 
 
 
 
 
Sales
 
$
1,170,534

 
$
1,042,086

 
12
 %
Net income
 
12,200

 
11,389

 
7
 %
Net income per common share - diluted
 
0.31

 
0.29

 
7
 %
Adjusted EBITDA 1
 
59,619

 
40,734

 
46
 %
Segment Results
 
 
 
 
 
 
Wood Products sales
 
$
320,061

 
$
319,523

 
 %
Wood Products income
 
3,763

 
11,630

 
(68
)%
Wood Products EBITDA 1
 
33,366

 
25,368

 
32
 %
Building Materials Distribution sales
 
1,049,997

 
907,708

 
16
 %
Building Materials Distribution income
 
29,302

 
17,517

 
67
 %
Building Materials Distribution EBITDA 1
 
34,646

 
22,649

 
53
 %
1 For reconciliations of non-GAAP measures, see summary notes at the end of this press release.



In the first quarter 2020, total U.S. housing starts increased 22% compared to the same period last year. Single-family housing starts, the primary driver of our sales volumes, also increased 12%

Wood Products

Wood Products sales, including sales to Building Materials Distribution (BMD), increased $0.5 million to $320.1 million for the three months ended March 31, 2020, from $319.5 million for the three months ended March 31, 2019. The modest increase in sales was driven primarily by higher sales volumes for I-joists and LVL (I-joists and LVL are collectively referred to as EWP). These increases were offset partially by decreases in sales prices and sales volumes for plywood. In addition, LVL net sales prices decreased and I-joists net sales prices were relatively flat compared with the prior year quarter.

Wood Products segment income decreased $7.9 million to $3.8 million for the three months ended March 31, 2020, from $11.6 million for the three months ended March 31, 2019. The decrease in segment income was due primarily to accelerated depreciation of $15.0 million and other closure-related costs of $1.7 million at our Roxboro, North Carolina facility, as well as lower plywood prices. These decreases were offset partially by lower manufacturing costs and higher EWP volumes.

Comparative average net selling prices and sales volume changes for EWP and plywood are as follows:
    
 
 
1Q 2020 vs. 1Q 2019
 
1Q 2020 vs. 4Q 2019
 
 
 
 
 
 Average Net Selling Prices
 
 
 
 
    LVL
 
(2)%
 
—%
    I-joists
 
1%
 
1%
    Plywood
 
(7)%
 
6%
 Sales Volumes
 
 
 
 
    LVL
 
8%
 
8%
    I-joists
 
14%
 
10%
    Plywood
 
(5)%
 
1%
    
On February 20, 2020, we decided to permanently curtail I-joist production at our Roxboro, North Carolina facility by March 31, 2020. As a result of the curtailment, we recorded $15.0 million of accelerated depreciation during first quarter 2020 to fully depreciate the curtailed I-joist assets. In addition, we recorded $1.7 million of various closure-related costs.

Building Materials Distribution

BMD's sales increased $142.3 million, or 16%, to $1,050.0 million for the three months ended March 31, 2020, from $907.7 million for the three months ended March 31, 2019. Compared with the same quarter in the prior year, the overall increase in sales was driven by a sales volume increase of 17% offset partially by a sales price decrease of 1%. By product line, commodity sales increased 11%, general line product sales increased 23%, and sales of EWP (substantially all of which is sourced through our Wood Products segment) increased 14%.

BMD segment income increased $11.8 million to $29.3 million for the three months ended March 31, 2020, from $17.5 million in the comparative prior year quarter. The increase in segment income was driven primarily by a gross margin increase of $24.6 million, resulting from improved gross margins on commodity products and higher sales of general line products and EWP compared with first quarter 2019. This improvement was offset partially by increased selling and distribution expenses of $12.2 million.






2


Balance Sheet and Liquidity

Boise Cascade ended first quarter 2020 with $215.0 million of cash and cash equivalents and $345.4 million of undrawn committed bank line availability, for total available liquidity of $560.4 million. The Company had $439.9 million of outstanding debt at March 31, 2020, with no maturities prior to 2024.

On March 13, 2020, we entered into the sixth amendment to the Amended and Restated Credit Agreement (the Amendment) related to the Company's senior secured asset-based revolving credit facility and term loan. The Amendment extends the maturity date of the agreement from May 1, 2022, to the earlier of (i) March 13, 2025 and (ii) 90 days prior to the maturity of our $350 million of 5.625% senior notes due September 1, 2024 (or the maturity date of any permitted refinancing indebtedness in respect thereof). In addition, the Amendment reduces the maximum amount available for revolving loans under the agreement from $370.0 million to $350.0 million. The term loan within the Credit Agreement remains at $50.0 million.

In response to the impacts of COVID-19, we have reduced our planned capital spending for 2020 from our previously expected range of $85-to-$95 million to $50-to-$70 million. Included in our 2020 capital spending is the completion of the log utilization center improvement project at our plywood and veneer facility in Florien, Louisiana, as well as BMD's door shop expansion in Dallas, Texas. We have reduced discretionary spending in response to the COVID-19 impact. In addition, we have identified a number of other cash saving measures that may be implemented in the near term, the timing and extent of which will depend upon the depth and duration of COVID-19 and its impact on our operating results.

Although significant uncertainty remains regarding the impact of COVID-19 on our 2020 operating results and cash flows, we believe that our cash flows from operations, combined with our current cash levels and available borrowing capacity, will be adequate to fund debt service requirements and provide cash, as required, to support our ongoing operations, capital expenditures, funding of acquisitions, lease obligations, working capital, pension contributions, and to pay cash dividends to holders of our common stock over the next 12 months. We expect to fund our seasonal and intra-month working capital requirements in 2020 from cash on hand and, if necessary, borrowings under our revolving credit facility.
 
Dividends
    
On May 7, 2020, our board of directors declared a dividend of $0.10 per share on our common stock, payable on June 15, 2020, to stockholders of record on June 1, 2020.

Future dividend declarations, including amount per share, record date and payment date, will be made at the discretion of our board of directors and will depend upon, among other things, legal capital requirements and surplus, our future operations and earnings, general financial condition, contractual restrictions, and other factors that our board of directors may deem relevant.



3


Outlook
    
The full impacts of the global emergence of COVID-19 on our business and financial results are currently unknown. We are conducting business with modifications to our manufacturing production levels, mill and distribution center housekeeping and cleanliness protocols, employee travel, employee work locations, and virtualization or cancellation of certain sales and marketing events, among other modifications. We have observed other companies as well as various governmental agencies taking precautionary and preemptive actions to address COVID-19, and further actions may yet be taken that alter our normal business operations as well as those in our industry. The U.S. Department of Homeland Security (DHS) has designated the forest products industry, and thereby wood products manufacturing and building materials distribution, as part of the Essential Critical Infrastructure Workforce. However, state and local agencies are not mandated to follow the DHS designations, and in certain geographies across the U.S., additional restrictions have been imposed that further limit or preclude residential construction activity.

Given the current outlook and with sufficient inventory on hand, our Wood Products segment has implemented changes to reduce the volume of EWP and plywood it will produce. In April 2020, we temporarily curtailed or reduced operating schedules at essentially all of our manufacturing facilities, and we expect to continue temporary curtailment of certain operations until market conditions improve. All of our distribution facilities continue to operate, but at reduced activity levels, particularly at locations whose trade areas have been subject to additional state or local restrictions. We expect activity levels across our distribution network to continue to vary widely as COVID-19 impacts geographies across the U.S. to differing degrees and federal, state or local restrictions are implemented or rescinded. To date, we have not experienced disruptions to our supply chain and have been able to source the necessary raw materials and finished goods needed by our operations. We continue to actively monitor evolving developments and may take further actions that alter our business operations as may be required by federal, state or local authorities, or that we determine are in the best interests of our associates, customers, suppliers and stockholders.

Demand for the products we manufacture, as well as the products we purchase and distribute, is closely correlated with new residential construction in the U.S., which has been historically cyclical. To a lesser extent, demand for our products correlates with residential repair-and-remodeling activity and light commercial construction. The full impacts of the global emergence of COVID-19 on housing starts, residential repair-and-remodeling activity, and light commercial construction is uncertain. However, economists predict that housing starts will be negatively impacted compared to expectations prior to the COVID-19 outbreak. As of April 2020, the Blue Chip Economic Indicators consensus forecast for 2020 and 2021 single- and multi-family housing starts in the U.S. were 1.16 million and 1.25 million units, respectively, compared with actual housing starts of 1.29 million in 2019, as reported by the U.S. Census Bureau. Based upon current housing market indices, among other indicators, housing start levels for the second quarter of 2020 are likely to be below 1.00 million on a seasonally adjusted annual basis.

Although we believe that current U.S. demographics are supportive of higher levels of housing starts, we expect the economic consequences of COVID-19 to negatively impact residential construction. In particular, COVID-19 is expected to adversely affect the pace of household formation rates and residential repair-and-remodeling activity due to high unemployment rates, lower wages, low consumer confidence, prospective home buyers' lack of ability to view homes in person, prospective home buyers' access to and cost of financing, and housing affordability, as well as other factors. Household formation rates in turn will be a key factor behind the demand for new construction.
    
Robust construction activity in the first two months of 2020, as evidenced by seasonally adjusted annual rates of housing starts around 1.6 million, drove sharp increases in commodity products pricing that peaked in mid-March. However, concerns and uncertainty about the impacts of COVID-19 since then have negatively impacted residential construction activity and building products demand, resulting in curtailments of production across the industry and a sharp decline in commodity prices. Current composite panel and lumber prices are approximately 15% below the peaks of mid-March 2020 and are at similar levels to those experienced in second quarter 2019. We anticipate that commodity products pricing in the second quarter of 2020 will remain at current low levels, with the balance of the year subject to price volatility that will be dependent on the impact of COVID-19 on residential construction, industry operating rates, net import and export activity, transportation constraints or disruptions, inventory levels in various distribution channels, and seasonal demand patterns.


4


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 first quarter earnings, and our continued response to the COVID-19 situation on Friday, May 8, 2020, at 11 a.m. Eastern.

To participate in the conference call, dial 844-795-4410 and use participant passcode 6587475 (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 Friday, May 8, 2020 at 2 p.m. Eastern through Friday, May 15, 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 6587475. 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.
    

5


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, the effect of COVID-19, 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 including the risk of impairment of long-lived assets and goodwill due to the severity of the COVID-19 impact on the economy should it continue unabated. 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.
    


6


Boise Cascade Company
Consolidated Statements of Operations
(in thousands, except per-share data)
 
Three Months Ended
 
March 31
 
December 31,
2019
 
2020
 
2019
 
 
 
 
 
 
 
Sales
$
1,170,534

 
$
1,042,086

 
$
1,101,713

 
 
 
 
 
 
Costs and expenses
 
 
 
 
 
Materials, labor, and other operating expenses (excluding depreciation)
992,270

 
897,822

 
939,375

Depreciation and amortization
35,332

 
19,217

 
20,501

Selling and distribution expenses
99,463

 
87,026

 
98,280

General and administrative expenses
16,084

 
16,675

 
19,008

Loss on curtailment of facility
1,669

 

 

Other (income) expense, net
169

 
(308
)
 
(226
)
 
1,144,987

 
1,020,432

 
1,076,938

 
 
 
 
 
 
Income from operations
25,547

 
21,654

 
24,775

 
 
 
 
 
 
Foreign currency exchange gain (loss)
(873
)
 
162

 
239

Pension expense (excluding service costs)
(387
)
 
(299
)
 
(272
)
Interest expense
(6,421
)
 
(6,437
)
 
(6,596
)
Interest income
655

 
492

 
1,066

Change in fair value of interest rate swaps
(2,314
)
 
(983
)
 
140

 
(9,340
)
 
(7,065
)
 
(5,423
)
 
 
 
 
 
 
Income before income taxes
16,207

 
14,589

 
19,352

Income tax provision
(4,007
)
 
(3,200
)
 
(4,705
)
Net income
$
12,200

 
$
11,389

 
$
14,647

 
 
 
 
 
 
Weighted average common shares outstanding:
 
 
 
 
 
  Basic
39,163

 
38,884

 
39,093

  Diluted
39,405

 
39,203

 
39,418

 
 
 
 
 
 
Net income per common share:
 
 
 
 
 
  Basic
$
0.31

 
$
0.29

 
$
0.37

  Diluted
$
0.31

 
$
0.29

 
$
0.37

 
 
 
 
 
 
Dividends declared per common share
$
0.10

 
$
0.09

 
$
1.10


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

7


Wood Products Segment
Statements of Operations
(in thousands, except percentages)
 
Three Months Ended
 
March 31
 
December 31,
2019
 
2020
 
2019
 
 
 
 
 
 
 
Segment sales
$
320,061

 
$
319,523

 
$
296,286

 
 
 
 
 
 
Costs and expenses
 
 
 

 
 

Materials, labor, and other operating expenses (excluding depreciation)
274,034

 
283,030

 
261,611

Depreciation and amortization
29,603

 
13,738

 
14,589

Selling and distribution expenses
7,984

 
7,705

 
8,201

General and administrative expenses
3,012

 
3,628

 
3,962

Loss on curtailment of facility
1,669

 

 

Other (income) expense, net
(4
)
 
(208
)
 
(139
)
 
316,298

 
307,893

 
288,224

 
 
 
 
 
 
Segment income
$
3,763

 
$
11,630

 
$
8,062

 
 
 
 
 
 
 
(percentage of sales)
 
 
 
 
 
 
Segment sales
100.0
 %
 
100.0
 %
 
100.0
 %
 
 
 
 
 
 
Costs and expenses
 
 
 
 
 
Materials, labor, and other operating expenses (excluding depreciation)
85.6
 %
 
88.6
%
 
88.3
 %
Depreciation and amortization
9.2
 %
 
4.3
%
 
4.9
 %
Selling and distribution expenses
2.5
 %
 
2.4
%
 
2.8
 %
General and administrative expenses
0.9
 %
 
1.1
%
 
1.3
 %
Loss on curtailment of facility
0.5
 %
 
%
 
 %
Other (income) expense, net
 %
 
(0.1
%)
 
 %
 
98.8
 %
 
96.4
%
 
97.3
 %
 
 
 
 
 
 
Segment income
1.2
 %
 
3.6
%
 
2.7
 %


8


Building Materials Distribution Segment
Statements of Operations
(in thousands, except percentages)

 
Three Months Ended
 
March 31
 
December 31,
2019
 
2020
 
2019
 
 
 
 
 
 
 
Segment sales
$
1,049,997

 
$
907,708

 
$
986,969

 
 
 
 
 
 
Costs and expenses
 
 
 
 
 
Materials, labor, and other operating expenses (excluding depreciation)
917,841

 
800,200

 
859,102

Depreciation and amortization
5,344

 
5,132

 
5,331

Selling and distribution expenses
91,423

 
79,265

 
90,027

General and administrative expenses
6,135

 
5,694

 
6,365

Other (income) expense, net
(48
)
 
(100
)
 
(110
)
 
1,020,695

 
890,191

 
960,715

 
 
 
 
 
 
Segment income
$
29,302

 
$
17,517

 
$
26,254

 
 
 
 
 
 
 
(percentage of sales)
 
 
 
 
 
 
Segment sales
100.0
 %
 
100.0
 %
 
100.0
 %
 
 
 
 
 
 
Costs and expenses
 
 
 
 
 
Materials, labor, and other operating expenses (excluding depreciation)
87.4
 %
 
88.2
 %
 
87.0
 %
Depreciation and amortization
0.5
 %
 
0.6
 %
 
0.5
 %
Selling and distribution expenses
8.7
 %
 
8.7
 %
 
9.1
 %
General and administrative expenses
0.6
 %
 
0.6
 %
 
0.6
 %
Other (income) expense, net
 %
 
 %
 
 %
 
97.2
 %
 
98.1
 %
 
97.3
 %
 
 
 
 
 
 
Segment income
2.8
 %
 
1.9
 %
 
2.7
 %

                              

9


Segment Information
(in thousands)
 
Three Months Ended
 
March 31
 
December 31,
2019
 
2020
 
2019
 
Segment sales
 
 
 
 
 
Wood Products
$
320,061

 
$
319,523

 
$
296,286

Building Materials Distribution
1,049,997

 
907,708

 
986,969

Intersegment eliminations
(199,524
)
 
(185,145
)
 
(181,542
)
Total net sales
$
1,170,534

 
$
1,042,086

 
$
1,101,713

 
 
 
 
 
 
Segment income
 
 
 
 
 
Wood Products
$
3,763

 
$
11,630

 
$
8,062

Building Materials Distribution
29,302

 
17,517

 
26,254

Total segment income
33,065

 
29,147

 
34,316

Unallocated corporate costs
(7,518
)
 
(7,493
)
 
(9,541
)
Income from operations
$
25,547

 
$
21,654

 
$
24,775

 
 
 
 
 
 
Segment EBITDA (a)
 
 
 
 
 
Wood Products
$
33,366

 
$
25,368

 
$
22,651

Building Materials Distribution
34,646

 
22,649

 
31,585


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



10


Boise Cascade Company
Consolidated Balance Sheets
(in thousands)
 
March 31, 2020
 
December 31, 2019
 
 
ASSETS
 
 
 
 
 
 
 
Current
 
 
 
Cash and cash equivalents
$
214,992

 
$
285,237

Receivables
 
 
 
Trade, less allowances of $980 and $591
327,254

 
215,894

Related parties
585

 
568

Other
12,288

 
15,184

Inventories
536,314

 
497,596

Prepaid expenses and other
13,957

 
8,285

Total current assets
1,105,390

 
1,022,764

 
 
 
 
Property and equipment, net
455,506

 
476,949

Operating lease right-of-use assets
64,496

 
64,228

Finance lease right-of-use assets
22,325

 
21,798

Timber deposits
14,658

 
12,287

Goodwill
60,382

 
60,382

Intangible assets, net
17,492

 
17,797

Deferred income taxes
7,509

 
7,952

Other assets
7,609

 
9,194

Total assets
$
1,755,367

 
$
1,693,351



11


Boise Cascade Company
Consolidated Balance Sheets (continued)
(in thousands, except per-share data)
 
March 31, 2020
 
December 31, 2019
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
Current
 
 
 
Accounts payable
 
 
 
Trade
$
307,224

 
$
222,930

Related parties
2,431

 
1,624

Accrued liabilities
 
 
 
Compensation and benefits
56,379

 
83,943

Interest payable
1,782

 
6,723

Other
71,120

 
69,772

Total current liabilities
438,936

 
384,992

 
 
 
 
Debt
 
 
 
Long-term debt
439,915

 
440,544

 
 
 
 
Other
 
 
 
Compensation and benefits
41,953

 
45,586

Operating lease liabilities, net of current portion
58,367

 
58,029

Finance lease liabilities, net of current portion
23,919

 
23,419

Deferred income taxes
28,128

 
26,694

Other long-term liabilities
15,878

 
12,757

 
168,245

 
166,485

 
 
 
 
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, 44,564 and 44,353 shares issued, respectively
446

 
444

Treasury stock, 5,367 shares at cost
(138,909
)
 
(138,909
)
Additional paid-in capital
531,735

 
533,345

Accumulated other comprehensive loss
(50,033
)
 
(50,248
)
Retained earnings
365,032

 
356,698

Total stockholders' equity
708,271

 
701,330

Total liabilities and stockholders' equity
$
1,755,367

 
$
1,693,351



12


Boise Cascade Company
Consolidated Statements of Cash Flows
(in thousands)
 
Three Months Ended March 31
 
2020
 
2019
Cash provided by (used for) operations
 
 
 
Net income
$
12,200

 
$
11,389

Items in net income not using (providing) cash
 
 
 
Depreciation and amortization, including deferred financing costs and other
35,859

 
19,788

Stock-based compensation
1,674

 
2,200

Pension expense
555

 
460

Deferred income taxes
1,197

 
1,313

Change in fair value of interest rate swaps
2,314

 
983

Loss on curtailment of facility (excluding severance)
1,438

 

Other
155

 
(49
)
Decrease (increase) in working capital
 
 
 
Receivables
(108,229
)
 
(75,606
)
Inventories
(39,045
)
 
(39,483
)
Prepaid expenses and other
(3,205
)
 
(1,883
)
Accounts payable and accrued liabilities
55,629

 
29,810

Pension contributions
(726
)
 
(469
)
Income taxes payable
(2,111
)
 
12,753

Other
(172
)
 
1,835

Net cash used for operations
(42,467
)
 
(36,959
)
 
 
 
 
Cash provided by (used for) investment
 
 
 
Expenditures for property and equipment
(18,563
)
 
(14,347
)
Proceeds from sales of facilities

 
2,493

Proceeds from sales of assets and other
103

 
1,149

Net cash used for investment
(18,460
)
 
(10,705
)
 
 
 
 
Cash provided by (used for) financing
 
 
 
Dividends paid on common stock
(4,645
)
 
(4,053
)
Tax withholding payments on stock-based awards
(3,309
)
 
(3,569
)
Other
(1,364
)
 
(181
)
Net cash used for financing
(9,318
)
 
(7,803
)
 
 
 
 
Net decrease in cash and cash equivalents
(70,245
)
 
(55,467
)
 
 
 
 
Balance at beginning of the period
285,237

 
191,671

 
 
 
 
Balance at end of the period
$
214,992

 
$
136,204


13


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 for all periods presented involved estimates and accruals.
(a)
EBITDA represents income 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 to EBITDA and Adjusted EBITDA for the three months ended March 31, 2020 and 2019, and December 31, 2019:
 
Three Months Ended
 
March 31
 
December 31,
2019
 
2020
 
2019
 
 
(in thousands)
Net income
$
12,200

 
$
11,389

 
$
14,647

Interest expense
6,421

 
6,437

 
6,596

Interest income
(655
)
 
(492
)
 
(1,066
)
Income tax provision
4,007

 
3,200

 
4,705

Depreciation and amortization
35,332

 
19,217

 
20,501

EBITDA
57,305

 
39,751

 
45,383

Change in fair value of interest rate swaps
2,314

 
983

 
(140
)
Adjusted EBITDA
$
59,619

 
$
40,734

 
$
45,243


14


The following table reconciles segment income and unallocated corporate costs to EBITDA and adjusted EBITDA for the three months ended March 31, 2020 and 2019, and December 31, 2019:
 
Three Months Ended
 
March 31
 
December 31,
2019
 
2020
 
2019
 
 
(in thousands)
Wood Products
 
 
 
 
 
Segment income
$
3,763

 
$
11,630

 
$
8,062

Depreciation and amortization
29,603

 
13,738

 
14,589

EBITDA
$
33,366

 
$
25,368

 
$
22,651

 
 
 
 
 
 
Building Materials Distribution
 
 
 
 
 
Segment income
$
29,302

 
$
17,517

 
$
26,254

Depreciation and amortization
5,344

 
5,132

 
5,331

EBITDA
$
34,646

 
$
22,649

 
$
31,585

 
 
 
 
 
 
Corporate
 
 
 
 
 
Unallocated corporate costs
$
(7,518
)
 
$
(7,493
)
 
$
(9,541
)
Foreign currency exchange gain (loss)
(873
)
 
162

 
239

Pension expense (excluding service costs)
(387
)
 
(299
)
 
(272
)
Change in fair value of interest rate swaps
(2,314
)
 
(983
)
 
140

Depreciation and amortization
385

 
347

 
581

EBITDA
(10,707
)
 
(8,266
)
 
(8,853
)
Change in fair value of interest rate swaps
2,314

 
983

 
(140
)
Corporate adjusted EBITDA
$
(8,393
)
 
$
(7,283
)
 
$
(8,993
)
 
 
 
 
 
 
Total company adjusted EBITDA
$
59,619

 
$
40,734

 
$
45,243






15
Exhibit


Exhibit 99.2
Boise Cascade Company
Quarterly Statistical Information
Wood Products Segment
 
 
 
 
 
 
2020
 
Q1
Q2
Q3
Q4
YTD
 LVL sales volume (MCF)
4,673

 
 
 
4,673

 I-joist sales volume (MELF)
59,487

 
 
 
59,487

 Plywood sales volume (MSF 3/8")
317,843

 
 
 
317,843

 Lumber sales volume (MBF)
22,807

 
 
 
22,807

 LVL mill net sales price ($/CF)
$
18.50

 
 
 
$
18.50

 I-joist mill net sales price ($/MELF)
$
1,276

 
 
 
$
1,276

 Plywood net sales price ($/MSF 3/8")
$
267

 
 
 
$
267

 Lumber net sales price ($/MBF)
$
520

 
 
 
$
520

 Segment sales (000)
$
320,061

 
 
 
$
320,061

 Segment income
$
3,763

 
 
 
$
3,763

 Segment depreciation and amortization (000)3
$
29,603

 
 
 
$
29,603

 Segment EBITDA (000)1
$
33,366

 
 
 
$
33,366

 EBITDA as a percentage of sales
10.4
%
 
 
 
10.4
%
 Capital spending (000)
$
11,341

 
 
 
$
11,341

 Receivables (000)
$
69,136

 
 
 
 
 Inventories (000)
$
164,230

 
 
 
 
 Accounts payable (000)
$
44,315

 
 
 
 
 
 
 
 
 
 
 
2019
 
Q1
Q2
Q3
Q4
YTD
 LVL sales volume (MCF)
4,332

4,594

4,632

4,343

17,901

 I-joist sales volume (MELF)
52,166

60,402

60,018

53,966

226,552

 Plywood sales volume (MSF 3/8")
335,989

343,035

343,422

314,769

1,337,215

 Lumber sales volume (MBF)
20,394

22,059

22,001

20,816

85,270

 LVL mill net sales price ($/CF)
$
18.87

$
18.70

$
18.59

$
18.51

$
18.66

 I-joist mill net sales price ($/MELF)
$
1,266

$
1,279

$
1,268

$
1,266

$
1,270

 Plywood net sales price ($/MSF 3/8")
$
287

$
272

$
254

$
251

$
266

 Lumber net sales price ($/MBF)
$
653

$
637

$
601

$
552

$
611

 Segment sales (000)
$
319,523

$
334,256

$
325,102

$
296,286

$
1,275,167

 Segment income
$
11,630

$
18,908

$
15,597

$
8,062

$
54,197

 Segment depreciation and amortization (000)
$
13,738

$
14,092

$
15,252

$
14,589

$
57,671

 Segment EBITDA (000)1
$
25,368

$
33,000

$
30,849

$
22,651

$
111,868

 EBITDA as a percentage of sales
7.9
%
9.9
%
9.5
%
7.6
%
8.8
%
 Capital spending (000)
$
10,694

$
10,883

$
9,045

$
22,838

$
53,460

 Receivables (000)
$
65,977

$
69,742

$
65,340

$
46,712

 
 Inventories (000)
$
183,413

$
163,846

$
153,801

$
158,746

 
 Accounts payable (000)
$
45,370

$
50,589

$
46,238

$
44,356

 

1





Boise Cascade Company
Quarterly Statistical Information (continued)
Wood Products Segment (continued)
 
 
 
 
 
 
2018
 
Q1
Q2
Q3
Q4
YTD
 LVL sales volume (MCF)
4,813

4,816

4,463

3,577

17,669

 I-joist sales volume (MELF)
62,525

68,060

61,434

44,995

237,014

 Plywood sales volume (MSF 3/8")
359,911

368,897

368,046

325,870

1,422,724

 Lumber sales volume (MBF)
47,353

45,913

33,911

25,378

152,555

 LVL mill net sales price ($/CF)
$
17.30

$
18.25

$
18.33

$
18.73

$
18.11

 I-joist mill net sales price ($/MELF)
$
1,179

$
1,220

$
1,261

$
1,213

$
1,218

 Plywood net sales price ($/MSF 3/8")
$
356

$
379

$
357

$
306

$
351

 Lumber net sales price ($/MBF)
$
556

$
570

$
623

$
629

$
588

 Segment sales (000)
$
397,991

$
425,483

$
402,672

$
307,124

$
1,533,270

 Segment income (loss) (000)2
$
26,121

$
36,482

$
13,929

$
(86,554
)
$
(10,022
)
 Segment depreciation and amortization (000)4
$
17,544

$
19,453

$
18,727

$
71,265

$
126,989

 Segment EBITDA (000)1,2
$
43,665

$
55,935

$
32,656

$
(15,289
)
$
116,967

 EBITDA as a percentage of sales
11.0
%
13.1
%
8.1
%
(5.0
)%
7.6
%
 Capital spending (000)
$
8,656

$
6,279

$
12,208

$
26,249

$
53,392

 Receivables (000)
$
91,190

$
88,073

$
81,870

$
66,687


 Inventories (000)
$
167,579

$
169,492

$
181,534

$
188,380


 Accounts payable (000)
$
54,774

$
66,285

$
66,379

$
45,260

 
 
 
 
 
 
 
1Segment EBITDA is calculated as segment income (loss) before depreciation and amortization.
2Segment income (loss) and segment EBITDA in third and fourth quarters 2018 include $11.0 million and $24.0 million, respectively, of charges related to the sale of assets.
3Segment depreciation and amortization in first quarter 2020 includes accelerated depreciation of $15.0 million to fully depreciate the curtailed I-joist production assets at our Roxboro, North Carolina facility.
4Segment depreciation and amortization in fourth quarter 2018 includes accelerated depreciation of $55.0 million to fully depreciate the curtailed LVL production assets at our Roxboro, North Carolina facility.

2




Boise Cascade Company
Quarterly Statistical Information (continued)
Building Materials Distribution Segment
 
 
 
 
 
2020
 
Q1
Q2
Q3
Q4
YTD
 Commodity sales
41.9
%
 
 
 
41.9
%
 General line sales
37.9
%
 
 
 
37.9
%
 EWP sales
20.2
%
 
 
 
20.2
%
 Total sales (000)
$
1,049,997

 
 
 
$
1,049,997

 Gross margin1
12.6
%
 
 
 
12.6
%
 Segment income (000)
$
29,302

 
 
 
$
29,302

 Segment depreciation and amortization (000)
$
5,344

 
 
 
$
5,344

 Segment EBITDA (000)2
$
34,646

 
 
 
$
34,646

 EBITDA as a percentage of sales
3.3
%
 
 
 
3.3
%
 Capital spending (000)
$
6,528

 
 
 
$
6,528

 Receivables (000)
$
304,082

 
 
 
 
 Inventories (000)
$
372,084

 
 
 
 
 Accounts payable (000)
$
282,886

 
 
 
 
 
 
 
 
 
 
 
2019
 
Q1
Q2
Q3
Q4
YTD
 Commodity sales
43.9
%
41.0
%
40.8
%
41.4
%
41.7
%
 General line sales
35.6
%
39.2
%
39.7
%
37.8
%
38.2
%
 EWP sales
20.5
%
19.8
%
19.5
%
20.8
%
20.1
%
 Total sales (000)
$
907,708

$
1,097,421

$
1,145,621

$
986,969

$
4,137,719

 Gross margin1
11.8
%
12.4
%
13.0
%
13.0
%
12.6
%
 Segment income (000)
$
17,517

$
33,800

$
38,665

$
26,254

$
116,236

 Segment depreciation and amortization (000)
$
5,132

$
5,028

$
5,278

$
5,331

$
20,769

 Segment EBITDA (000)2
$
22,649

$
38,828

$
43,943

$
31,585

$
137,005

 EBITDA as a percentage of sales
2.5
%
3.5
%
3.8
%
3.2
%
3.3
%
 Capital spending (000)3
$
3,634

$
5,163

$
10,582

$
5,667

$
25,046

 Receivables (000)
$
264,867

$
288,032

$
276,407

$
204,410

 
 Inventories (000)
$
390,447

$
360,605

$
338,787

$
338,851

 
 Accounts payable (000)
$
259,368

$
238,932

$
257,818

$
177,155






3



Boise Cascade Company
Quarterly Statistical Information (continued)
Building Materials Distribution Segment (continued)
 
 
 
 
2018
 
Q1
Q2
Q3
Q4
YTD
 Commodity sales
49.4
%
49.6
%
47.9
%
45.8
%
48.3
%
 General line sales
31.8
%
32.4
%
33.2
%
35.5
%
33.1
%
 EWP sales
18.8
%
18.0
%
18.9
%
18.7
%
18.6
%
 Total sales (000)
$
992,381

$
1,213,783

$
1,159,304

$
922,234

$
4,287,702

 Gross margin1
11.8
%
12.0
%
10.3
%
10.9
%
11.3
%
 Segment income (000)
$
32,388

$
47,713

$
23,504

$
8,905

$
112,510

 Segment depreciation and amortization (000)
$
4,172

$
4,447

$
4,755

$
4,906

$
18,280

 Segment EBITDA (000)2
$
36,560

$
52,160

$
28,259

$
13,811

$
130,790

 EBITDA as a percentage of sales
3.7
%
4.3
%
2.4
%
1.5
%
3.1
%
 Capital spending (000)4
$
4,419

$
8,716

$
7,098

$
5,591

$
25,824

 Receivables (000)
$
294,940

$
321,310

$
277,928

$
193,759

 
 Inventories (000)
$
371,144

$
403,114

$
377,909

$
344,669

 
 Accounts payable (000)
$
282,678

$
304,364

$
260,083

$
178,182

 
 
 
 
 
 
 
1We define gross margin as "Sales" less "Materials, labor, and other operating expenses (excluding depreciation)." Substantially all costs included in "Materials, labor, and other operating expenses (excluding depreciation)" for our Building Materials Distribution segment are for inventory purchased for resale. Gross margin percentage is gross margin as a percentage of segment sales.
2Segment EBITDA is calculated as segment income before depreciation and amortization.
3During 2019, capital spending in second quarter excludes $15.7 million of cash paid for the acquisition of businesses and facilities.
4During 2018, capital spending in second and fourth quarters excludes $17.6 million and $8.0 million, respectively, of cash paid for the acquisition of businesses and facilities.



4



Boise Cascade Company
Quarterly Statistical Information (continued)
Reconciliation of Non-GAAP Financial Measures
(000)
Total Boise Cascade Company
 
 
 
 
 
 
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 tables reconcile net income (loss) to EBITDA and Adjusted EBITDA for the periods noted below:
 
2020
 
Q1
Q2
Q3
Q4
YTD
 
 
 
 
 
 
Net income
$
12,200

 
 
 
$
12,200

Interest expense
6,421

 
 
 
6,421

Interest income
(655
)
 
 
 
(655
)
Income tax provision
4,007

 
 
 
4,007

Depreciation and amortization
35,332

 
 
 
35,332

EBITDA
57,305

 
 
 
57,305

Change in fair value of interest rate swaps
2,314

 
 
 
2,314

Adjusted EBITDA
$
59,619

 
 
 
$
59,619

 
 
 
 
 
 
 
2019
 
Q1
Q2
Q3
Q4
YTD
 
 
 
 
 
 
Net income
$
11,389

$
27,718

$
27,171

$
14,647

$
80,925

Interest expense
6,437

6,486

6,532

6,596

26,051

Interest income
(492
)
(416
)
(837
)
(1,066
)
(2,811
)
Income tax provision
3,200

9,751

9,650

4,705

27,306

Depreciation and amortization
19,217

19,454

20,969

20,501

80,141

EBITDA
39,751

62,993

63,485

45,383

211,612

Change in fair value of interest rate swaps
983

1,551

569

(140
)
2,963

Adjusted EBITDA
$
40,734

$
64,544

$
64,054

$
45,243

$
214,575

 
 
 
 
 
 
 
2018
 
Q1
Q2
Q3
Q4
YTD
 
 
 
 
 
 
Net income (loss)
$
37,050

$
41,825

$
13,848

$
(72,246
)
$
20,477

Interest expense
6,362

6,580

6,585

6,666

26,193

Interest income
(264
)
(237
)
(500
)
(648
)
(1,649
)
Income tax provision (benefit)
9,790

13,835

(814
)
(21,186
)
1,625

Depreciation and amortization
22,111

24,296

23,881

76,549

146,837

EBITDA
75,049

86,299

43,000

(10,865
)
193,483

Change in fair value of interest rate swaps
(1,641
)
(499
)
(279
)
1,868

(551
)
Adjusted EBITDA
$
73,408

$
85,800

$
42,721

$
(8,997
)
$
192,932


For additional information regarding the non-GAAP measures presented in this document, please refer to our press release announcing our first quarter 2020 financial results, a copy of which attached as Exhibit 99.1 to our Current Report on Form 8-K furnished to the Securities and Exchange Commission on May 7, 2020.


5
v3.20.1
Document and Entity Information Document Document and Entity Information Document
May 07, 2020
Cover [Abstract]  
Document Type 8-K
Document Period End Date May 07, 2020
Entity Registrant Name BOISE CASCADE COMPANY
Entity Incorporation, State or Country Code DE
Entity File Number 1-35805
Entity Tax Identification Number 20-1496201
Entity Address, Address Line One 1111 West Jefferson Street, Suite 300
Entity Address, City or Town Boise
Entity Address, State or Province ID
Entity Address, Postal Zip Code 83702-5389
City Area Code 208
Local Phone Number 384-6161
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Title of 12(b) Security Common Stock, $0.01 par value per share
Trading Symbol BCC
Security Exchange Name NYSE
Entity Central Index Key 0001328581
Amendment Flag false