2012-10-25 14:46:47 -
For Immediate Release: October 25, 2012
BOISE, Idaho - Boise Cascade Holdings, L.L.C. (Boise Cascade or Company)
announced third quarter 2012 net income of $23.5 million and earnings before
interest, taxes, depreciation, and amortization (EBITDA) of $36.8 million. Year-
to-date net income and EBITDA results of $40.2 million and $79.6 million,
respectively, reflect a significant improvement over a net loss of $32.6 million
and EBITDA of $8.9 million reported in the first nine months of 2011. Sales in
third quarter 2012 were $764.6 million, a 22% increase over the same quarter a
year ago. Third quarter 2011 reported net loss and EBITDA were $3.7 million and
$10.6 million, respectively. Second quarter 2012 net income and EBITDA were
$15.0 million and $28.2 million, respectively.
The Company generated $50.3 million of cash during the third quarter
2012 driven
by improved operating results and working capital reductions. At September
30, 2012, Boise Cascade had total available liquidity of $483.8 million, with
$224.4 million in cash and committed bank line availability of $259.4 million.
On October 15, we redeemed $75 million of our 7 1/8% senior subordinated notes
at par value. On October 22, the Company issued $250 million of 6 3/8% senior
unsecured notes due November 1, 2020. The net proceeds from the offering were
used to repay the remaining $144.6 million of our 7 1/8% senior subordinated
notes and enhance our cash position by nearly $100 million.
U.S. housing starts increased approximately 28% in third quarter 2012 from the
levels experienced in third quarter 2011. Housing start levels remain
significantly below the last 10 year historical average of approximately 1.3
million units per year. Blue Chip consensus forecast for U.S. housing starts for
2012 was 760,000 as of October 10, 2012. The final U.S. housing starts level
reported for 2011 was 609,000.
"We experienced a third consecutive quarter of sequentially improved income from
operations, resulting in $50 million of cash generated and $37 million of EBITDA
in the third quarter, underscored by strong plywood prices. The cash generated,
together with our recently completed debt refinancing, has strengthened our
liquidity position and allows us greater flexibility to take advantage of
improvement in the markets and of business opportunities," stated Tom Carlile,
CEO. "We are encouraged by the improved operating environment and remain
cautiously optimistic the recent improvement in demand for our products will
carry into 2013."
Building Materials Distribution (BMD) segment sales were $605.2 million in third
quarter 2012, up 21% from the same quarter a year ago. Volumes for the segment
were up approximately 8%, with prices up about 13%. In third quarter 2012, BMD
reported $12.6 million of EBITDA compared to $8.2 million in third quarter 2011
and $10.9 million in second quarter 2012.
Wood Products segment sales in the third quarter 2012 were $259.8 million, up
33% from the same quarter a year ago. The increase in sales was due primarily to
higher plywood volumes and prices and increased EWP shipments, offset in part by
lower EWP sales price realizations. In third quarter 2012, Wood Products
reported $28.6 million of EBITDA compared to $7.1 million in third quarter 2011
and $21.7 million in second quarter 2012.
Outlook
The housing industry is showing signs of improvement in many areas within the
U.S.; however, we expect to continue to experience below historical demand for
the products we distribute and manufacture. Favorable commodity wood product
prices experienced year to date began to decline mid-September 2012 and could be
volatile in response to operating rates and inventory levels in various
distribution channels. We expect to manage our production levels to our sales
demand, which will likely result in us operating some of our facilities below
their capacity.
About Boise Cascade
Boise Cascade is a leading U.S. wholesale distributor of building products and
one of the largest producers of engineered wood products and plywood in North
America. The Company is privately held and headquartered in Boise, Idaho. For
more information, please visit our website at www.bc.com.
Webcast and Conference Call
Boise Cascade will host a webcast and conference call on Thursday, October 25,
at 11 a.m. Eastern, at which time we will review the Company's recent
performance. You can join the webcast through the Boise Cascade website. Go to
www.bc.com and click on the link to the webcast under the News & Events heading.
Please go to the website at least 15 minutes before the start of the webcast to
register. To join the conference call, dial 800-573-4842 (international callers
should dial 617-224-4327), participant passcode 79973836, at least 10 minutes
before the start of the call.
The archived webcast will be available in the News & Events section of Boise
Cascade's website. A replay of the conference call will be available from
Thursday, October 25, at 2 p.m. Eastern through Thursday, November 1, at
11 p.m. Eastern. Playback numbers are 888-286-8010 for U.S. calls and
617-801-6888 for international calls, and the passcode will be 79269575.
Basis of Presentation
We present our consolidated financial statements in accordance with U.S.
generally accepted accounting principles (GAAP). Our earnings release also
supplements the GAAP presentations by reflecting EBITDA, a non-GAAP financial
measure. EBITDA represents income (loss) before interest (interest expense and
interest income), income taxes, and depreciation and amortization. EBITDA is the
primary measure used by our chief operating decision maker 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 when comparing
companies in our industry that have different financing and capital structures
and/or tax rates. 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. 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, and
associated significant cash requirements; and the exclusion of depreciation and
amortization, which represent unavoidable operating costs. Management
compensates for the limitations of EBITDA by relying on our GAAP results. Our
measure of EBITDA is 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 contains 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.
Boise Cascade Holdings, L.L.C.
Consolidated Statements of Income (Loss)
(unaudited, in thousands)
Three Months Ended Nine Months Ended
----------------------------------------- ------------------------------
September 30 September 30
--------------------------- June 30, ------------------------------
2012 2011 2012 2012 2011
------------- ------------- ------------- --------------- --------------
Sales
Trade $ 759,330 $ 623,199 $ 728,434 $ 2,069,804 $ 1,687,037
Related party 5,266 4,787 4,466 14,678 13,609
------------- ------------- ------------- --------------- --------------
764,596 627,986 732,900 2,084,482
1,700,646
------------- ------------- ------------- --------------- --------------
Costs and
expenses
Materials,
labor, and
other
operating
expenses 638,994 538,794 613,352 1,751,152 1,475,847
Materials,
labor, and
other
operating
expenses from
related party 14,131 12,346 19,255 44,704 31,140
Depreciation
and
amortization 8,461 9,352 8,338 24,918 27,500
Selling and
distribution
expenses 62,572 55,346 60,468 176,854 153,332
General and
administrative
expenses 12,186 10,299 10,689 31,923 28,457
Other (income)
expense, net 121 (298 ) 653 406 2,341
------------- ------------- ------------- --------------- --------------
736,465 625,839 712,755 2,029,957
1,718,617
------------- ------------- ------------- --------------- --------------
Income (loss)
from
operations 28,131 2,147 20,145 54,525 (17,971
)
------------- ------------- ------------- --------------- --------------
Foreign
exchange gain
(loss) 228 (936 ) (289 ) 125 (596 )
Interest
expense (4,840 ) (5,001 ) (4,818 ) (14,471 ) (14,174 )
Interest
income 87 91 87 281 314
------------- ------------- ------------- --------------- --------------
(4,525 ) (5,846 ) (5,020 ) (14,065 ) (14,456 )
------------- ------------- ------------- --------------- --------------
Income (loss)
before income
taxes 23,606 (3,699 ) 15,125 40,460 (32,427
)
Income tax
provision (104 ) (12 ) (78 ) (243 ) (146 )
------------- ------------- ------------- --------------- --------------
Net income
(loss) $ 23,502 $ (3,711 ) $ 15,047 $ 40,217 $ (32,573
)
------------- ------------- ------------- --------------- --------------
Segment Information
(unaudited, in thousands)
Three Months Ended Nine Months Ended
----------------------------------------- ------------------------------
September 30 September 30
--------------------------- June 30, ------------------------------
2012 2011 2012 2012 2011
------------- ------------- ------------- --------------- --------------
Segment
sales
Building
Materials
Distribution $ 605,206 $ 501,458 $ 580,545 $ 1,637,167 $ 1,349,945
Wood
Products 259,759 194,843 241,842 712,744 532,211
Intersegment
eliminations (100,369 ) (68,315 ) (89,487 ) (265,429 ) (181,510 )
------------- ------------- ------------- --------------- --------------
$ 764,596 $ 627,986 $ 732,900 $ 2,084,482 $ 1,700,646
------------- ------------- ------------- --------------- --------------
Segment
income
(loss)
Building
Materials
Distribution $ 10,300 $ 6,040 $ 8,699 $ 18,180 $ 2,818
Wood
Products 22,464 (71 ) 15,548 48,823 (9,998 )
Corporate
and Other (4,405 ) (4,758 ) (4,391 ) (12,353 ) (11,387 )
------------- ------------- ------------- --------------- --------------
28,359 1,211 19,856 54,650 (18,567
)
------------- ------------- ------------- --------------- --------------
Interest
expense (4,840 ) (5,001 ) (4,818 ) (14,471 ) (14,174 )
Interest
income 87 91 87 281 314
------------- ------------- ------------- --------------- --------------
Income
(loss)
before
income taxes $ 23,606 $ (3,699 ) $ 15,125 $ 40,460 $ (32,427 )
------------- ------------- ------------- --------------- --------------
EBITDA (a)
Building
Materials
Distribution $ 12,563 $ 8,164 $ 10,893 $ 24,819 $ 9,040
Wood
Products 28,628 7,101 21,661 67,005 11,100
Corporate
and Other (4,371 ) (4,702 ) (4,360 ) (12,256 ) (11,207 )
------------- ------------- ------------- --------------- --------------
$ 36,820 $ 10,563 $ 28,194 $ 79,568 $ 8,933
------------- ------------- ------------- --------------- --------------
See accompanying summary notes to consolidated financial statements and segment
information.
Boise Cascade Holdings, L.L.C.
Consolidated Balance Sheets
(unaudited, in thousands)
September 30, December 31,
2012 2011
--------------- -------------
ASSETS
Current
Cash and cash equivalents $ 224,421 $ 182,459
Receivables
Trade, less allowances of $2,894 and $2,142 172,498 118,901
Related parties 506 1,236
Other 4,687 3,796
Inventories 318,577 283,978
Prepaid expenses and other 8,457 4,864
--------------- -------------
Total current assets 729,146 595,234
--------------- -------------
Property and equipment, net 263,671 266,456
Timber deposits 6,338 8,327
Deferred financing costs 3,843 4,962
Goodwill 12,170 12,170
Intangible assets, net 8,900 8,900
Other assets 7,405 6,786
--------------- -------------
Total assets $ 1,031,473 $ 902,835
--------------- -------------
Boise Cascade Holdings, L.L.C.
Consolidated Balance Sheets (continued)
(unaudited, in thousands)
September 30, December 31,
2012 2011
--------------- -------------
LIABILITIES AND CAPITAL
Current
Current portion of long-term debt $ 25,000 $ -
Accounts payable
Trade 165,753 116,758
Related parties 1,922 1,142
Accrued liabilities
Compensation and benefits 59,950 32,267
Interest payable 7,250 3,326
Other 31,616 24,486
--------------- -------------
291,491 177,979
--------------- -------------
Debt
Long-term debt, less current portion 194,560 219,560
--------------- -------------
Other
Compensation and benefits 196,589 200,248
Other long-term liabilities 14,105 13,676
--------------- -------------
210,694 213,924
--------------- -------------
Redeemable equity units
Series B equity units - 2,426 units and 2,522
units outstanding 2,426 2,522
Series C equity units - 13,475 units and
13,715 units outstanding 6,089 6,227
--------------- -------------
8,515 8,749
--------------- -------------
Commitments and contingent liabilities
Capital
Series A equity units - no par value; 66,000
units authorized and outstanding 109,011 104,008
Series B equity units - no par value; 550,000
units authorized; 532,898 units and 532,802
units outstanding, respectively 332,115 299,460
Series C equity units - no par value; 44,000
units authorized; 12,930 units and 12,690 units
outstanding, respectively - -
Accumulated other comprehensive loss (114,913 ) (120,845 )
--------------- -------------
Total capital 326,213 282,623
--------------- -------------
Total liabilities and capital $ 1,031,473 $ 902,835
--------------- -------------
Boise Cascade Holdings, L.L.C.
Consolidated Statements of Cash Flows
(unaudited, in thousands)
Nine Months Ended
September 30
--------------------------
2012 2011
------------- ------------
Cash provided by (used for) operations
Net income (loss) $ 40,217 $ (32,573 )
Items in net income (loss) not using (providing)
cash
Depreciation and amortization, including deferred
financing costs and other 26,732 29,118
Pension expense 9,398 8,933
Other (500 ) 1,515
Decrease (increase) in working capital, net of
acquisitions
Receivables (53,308 ) (45,700 )
Inventories (34,599 ) (8,423 )
Prepaid expenses and other (1,973 ) (1,221 )
Accounts payable and accrued liabilities 82,333 27,598
Pension contributions (8,181 ) (10,274 )
Other 4,752 (90 )
------------- ------------
Net cash provided by (used for) operations 64,871 (31,117 )
------------- ------------
Cash provided by (used for) investment
Expenditures for property and equipment (17,682 ) (25,299 )
Acquisitions of businesses and facilities (2,355 ) (5,782 )
Proceeds from sales of assets 171 3,053
Other (3 ) 211
------------- ------------
Net cash used for investment (19,869 ) (27,817 )
------------- ------------
Cash provided by (used for) financing
Distributions to members (2,790 ) -
Credit facility financing costs (250 ) (2,547 )
------------- ------------
Net cash used for financing (3,040 ) (2,547 )
------------- ------------
Net increase (decrease) in cash and cash
equivalents 41,962 (61,481 )
Balance at beginning of the period 182,459 264,606
------------- ------------
Balance at end of the period $ 224,421 $ 203,125
------------- ------------
Summary Notes to Consolidated Financial Statements and Segment Information
The Consolidated Statements of Income (Loss), 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 2011 Form 10-K and the company's Quarterly Report
on Form 10-Q for the period ended September 30, 2012. 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. The
following table reconciles net income (loss) to EBITDA for the three months
ended September 30, 2012 and 2011, and June 30, 2012, and the nine months
ended September 30, 2012 and 2011:
Three Months Ended Nine Months Ended
-------------------------------------- -------------------------
September 30 September 30
------------------------- June 30, -------------------------
2012 2011 2012 2012 2011
------------ ------------ ------------ ------------ ------------
(unaudited, in thousands)
Net income
(loss) $ 23,502 $ (3,711 ) $ 15,047 $ 40,217 $ (32,573 )
Interest
expense 4,840 5,001 4,818 14,471 14,174
Interest
income (87 ) (91 ) (87 ) (281 ) (314 )
Income tax
provision 104 12 78 243 146
Depreciation
and
amortization 8,461 9,352 8,338 24,918 27,500
------------ ------------ ------------ ------------ ------------
EBITDA $ 36,820 $ 10,563 $ 28,194 $ 79,568 $ 8,933
------------ ------------ ------------ ------------ ------------
The following table reconciles segment income (loss) to EBITDA for the three
months ended September 30, 2012 and 2011, and June 30, 2012 and the nine months
ended September 30, 2012 and 2011:
Three Months Ended Nine Months Ended
-------------------------------------- -----------------------
September 30 September 30
------------------------- June 30, -----------------------
2012 2011 2012 2012 2011
------------ ------------ ------------ ------------ ----------
(unaudited, in thousands)
Building
Materials
Distribution
Segment income $ 10,300 $ 6,040 $ 8,699 $ 18,180 $ 2,818
Depreciation
and
amortization 2,263 2,124 2,194 6,639 6,222
------------ ------------ ------------ ------------ ----------
EBITDA 12,563 8,164 10,893 24,819 9,040
------------ ------------ ------------ ------------ ----------
Wood Products
Segment income
(loss) 22,464 (71 ) 15,548 48,823 (9,998 )
Depreciation
and
amortization 6,164 7,172 6,113 18,182 21,098
------------ ------------ ------------ ------------ ----------
EBITDA 28,628 7,101 21,661 67,005 11,100
------------ ------------ ------------ ------------ ----------
Corporate and
Other
Segment loss (4,405 ) (4,758 ) (4,391 ) (12,353 ) (11,387 )
Depreciation
and
amortization 34 56 31 97 180
------------ ------------ ------------ ------------ ----------
EBITDA (4,371 ) (4,702 ) (4,360 ) (12,256 ) (11,207 )
------------ ------------ ------------ ------------ ----------
EBITDA $ 36,820 $ 10,563 $ 28,194 $ 79,568 $ 8,933
------------ ------------ ------------ ------------ ----------
Investor Contact: Wayne Rancourt, 208 384 6073
This announcement is distributed by Thomson Reuters on behalf of
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(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Boise Cascade LLC via Thomson Reuters ONE
[HUG#1652174]
