News Releases

For Immediate Release: February 19, 2015

BOISE, Idaho - Boise Cascade Company (Boise Cascade or Company) (NYSE: BCC) today reported financial results for the fourth quarter and year ended December 31, 2014. 

Fourth Quarter and Year End 2014 Highlights

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

Total U.S. housing starts improved 8% in 2014, with single-family starts up 5% from 2013. The February 2015 Blue Chip consensus forecast for 2015 reflects 1.16 million total U.S. housing starts, a 16% expected increase from 2014 levels. Total housing activity levels remain below the historical average for the last 20 years of approximately 1.4 million starts per year.

            "We are pleased by our results in 2014, a year in which the Company generated near double-digit revenue growth and almost $200 million in EBITDA. I would like to recognize the efforts of our employees who helped us achieve those results in spite of U.S. housing starts that remain well below historical averages. With our leading position in both the manufacturing and distribution businesses, we are optimistic about our future," commented Tom Carlile, CEO. "In 2015, I expect the Company to take further advantage of improvements in construction activity. As I move into retirement after 42 years with the Company, I'm pleased with the strength of the leadership team and the culture of the Company. The Company's Board is looking forward to supporting Tom Corrick as he leads the Company in continuing the focus on operating excellence and both organic and strategic growth."

Wood Products

            Sales, including sales to our Building Materials Distribution (BMD) segment, increased $15.8 million, or 5%, to $317.0 million for the three months ended December 31, 2014, from $301.3 million for the three months ended December 31, 2013. The sales growth was driven primarily by plywood and engineered wood products (EWP) price increases, offset partially by sales volume decreases in plywood and EWP. Plywood prices increased 9%, while plywood volumes were 4% lower than prior year results. I-joists and LVL prices increased 7% and 3%, respectively, while I-joists and LVL sales volumes decreased by 10% and 1%, respectively. Improved lumber, particleboard, and byproduct sales volumes also contributed to the increase in sales. Wood Products EBITDA increased $9.1 million to $34.2 million for the three months ended December 31, 2014, from $25.1 million for the three months ended December 31, 2013. The increase in EBITDA was due primarily to higher plywood and EWP sales prices, offset partially by higher log costs.

            For the year ended December 31, 2014, sales, including sales to BMD, increased $182.9 million, or 16%, to $1,317.0 million from $1,134.1 million for the year ended December 31, 2013. Higher plywood and EWP sales volumes, along with higher EWP prices were the primary drivers of the increased sales. Plywood sales volumes increased 12% primarily due to the acquisition of two plywood facilities on September 30, 2013, while plywood sales prices decreased 1%. LVL and I-joists sales volumes were up 11% and 7%, respectively, and LVL and I-joists sales prices increased 4% and 7%, respectively. Improved lumber, particleboard, and byproduct sales also contributed to the increase in sales. Wood Products EBITDA increased $43.5 million to $149.8 million for the year ended December 31, 2014, from $106.3 million for the year ended December 31, 2013. The increase in EBITDA was due primarily to improved operating results in our EWP business from higher pricing and lower OSB costs, higher plywood sales volumes, and higher lumber sales prices. These improvements were offset partially by higher log costs.

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

		4Q 2014 vs. 4Q 2013		2014 vs. 2013
Average Net Selling Prices
Plywood		9%		(1)%
LVL		3%		4%
I-joists		7%		7%
Sales Volumes
Plywood		(4)%		12%
LVL		(1)%		11%
I-joists		(10)%		7%

Building Materials Distribution

            Sales increased $53.9 million, or 9%, to $669.4 million for the three months ended December 31, 2014, from $615.5 million for the three months ended December 31, 2013. Compared with the same quarter in the prior year, the overall increase in sales was driven by sales volume and sales price increases of 7% and 2%, respectively. By product line, sales of general line products increased 14%, EWP increased 7%, and commodity sales increased 6%. BMD's EBITDA decreased $0.4 million from the comparative prior year quarter, as results were negatively impacted by a 50 basis point decrease in gross margin percentage driven by lower margins on commodity lumber products. The gross margin percent decline combined with growth in selling and distribution expenses resulting from higher sales volumes more than offset an additional $3.2 million in gross margins generated by increased sales.

            For the year ended December 31, 2014, sales increased $187.1 million, or 7%, to $2,786.7 million from $2,599.6 million for the year ended December 31, 2013. The increase in sales was driven primarily by improvements in sales volumes of 8%, offset partially by a decrease in sales prices of 1%. By product line, sales of EWP increased 16%, general line product sales increased 9%, and commodity sales increased 3%. BMD EBITDA increased $17.3 million to $66.5 million for the year ended December 31, 2014, from $49.2 million for the year ended December 31, 2013. The increase in EBITDA was driven primarily by a higher gross margin of $34.2 million, including an improvement in gross margin percentage of 50 basis points, as well as a $1.6 million gain in other income from the sale of two surplus properties. These improvements were offset partially by increased selling and distribution expenses of $17.5 million.

Balance Sheet

Boise Cascade ended 2014 with $163.5 million of cash and cash equivalents and $266.8 million of undrawn committed bank line availability, for total available liquidity of $430.3 million. The Company reported $301.4 million of outstanding debt at December 31, 2014.

Outlook

            As in recent years, we expect to continue to experience modest demand growth for the products we manufacture and distribute in 2015. However, the level of construction activity is expected to remain well below 20-year average historical levels. Future commodity product pricing could be volatile in response to industry capacity restarts and operating rates, inventory levels in various distribution channels, and seasonal demand patterns. We expect to manage our production levels to our sales demand, which will likely result in operating some of our facilities below their capacity until demand improves further.

            In first quarter 2015, we expect to report improved EBITDA in our Wood Products business compared to first quarter 2014 primarily as a result of higher plywood prices. Our first quarter 2015 EBITDA results in BMD are expected to be similar to the EBITDA results reported in first quarter 2014.

About Boise Cascade

Boise Cascade Company is one of the largest producers of plywood and engineered wood products in North America and a leading U.S. wholesale distributor of building products. 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, February 19, at 11 a.m. Eastern, at which time we will review the Company's fourth quarter and year-end results.

You can join the webcast through our website by going to www.bc.com and clicking on the Event Calendar link under the Investor Relations heading. Please go to the website at least 15 minutes before the start of the webcast to register. To join the conference call, dial 855-209-5834 (international callers should dial 315-625-6883), participant passcode 71340479, at least 10 minutes before the start of the call.

The archived webcast will be available in the Investor Relations section of our website. A replay of the conference call will be available from Thursday, February 19, at 2 p.m. Eastern through Thursday, February 26, at 11 p.m. Eastern. Replay numbers are 855-859-2056 for U.S. calls and 404-537-3406 for international calls, and the passcode will be 71340479.

Basis of Presentation

We refer to the terms EBITDA and adjusted net income in this earnings release. EBITDA and adjusted net income are 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 before interest (interest expense and interest income), income taxes, and depreciation and amortization. We define adjusted net income as net income before certain unusual items.

EBITDA is the primary measure used by our management to evaluate segment operating performance and to decide how to allocate resources to segments. We believe EBITDA and adjusted net income 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. We believe EBITDA and adjusted net income 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. EBITDA and adjusted net income, however, are not measures of our liquidity or financial performance under GAAP and should not be considered as an alternative to net income, income 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 and adjusted net income instead of net income or segment income 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 these limitations by relying on our GAAP results. Our measures of EBITDA and adjusted net income are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation.

Forward-Looking Statements

            This news release 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 Company
Consolidated Statements of Operations
(in thousands, except per-share data)

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,  2014				December 31
	2014				2013								2014				2013
Segment sales	$	317,019			$	301,252			$	355,697			$	1,317,001			$	1,134,089
Costs and expenses
Materials, labor, and other operating expenses (excluding depreciation)	272,697				265,916				293,569				1,127,122				990,082
Depreciation and amortization	10,722				9,208				10,711				41,457				28,664
Selling and distribution expenses	7,144				7,188				7,622				28,650				27,227
General and administrative expenses	2,859				3,121				2,960				10,886				10,699
Other (income) expense, net	114				(73		)		204				512				(256		)
	293,536				285,360				315,066				1,208,627				1,056,416
Segment income	$	23,483			$	15,892			$	40,631			$	108,374			$	77,673
	(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)	86.0		%		88.3		%		82.5		%		85.6		%		87.3		%
Depreciation and amortization	3.4		%		3.1		%		3.0		%		3.1		%		2.5		%
Selling and distribution expenses	2.3		%		2.4		%		2.1		%		2.2		%		2.4		%
General and administrative expenses	0.9		%		1.0		%		0.8		%		0.8		%		0.9		%
Other (income) expense, net	-		%		-		%		0.1		%		-		%		-		%
	92.6		%		94.7		%		88.6		%		91.8		%		93.2		%
Segment income	7.4		%		5.3		%		11.4		%		8.2		%		6.8		%

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

	Three Months Ended												Year Ended
	December 31								September 30,  2014				December 31
	2014				2013								2014				2013
Segment sales	$	669,367			$	615,467			$	773,391			$	2,786,663			$	2,599,605
Costs and expenses
Materials, labor, and other operating expenses (excluding depreciation)	594,143				543,404				680,303				2,470,145				2,317,299
Depreciation and amortization	2,653				2,593				2,448				9,802				9,233
Selling and distribution expenses	58,204				54,745				65,092				235,523				218,056
General and administrative expenses	4,132				4,039				4,557				16,687				15,436
Other (income) expense, net	(124		)		(109		)		(67		)		(2,173		)		(350		)
	659,008				604,672				752,333				2,729,984				2,559,674
Segment income	$	10,359			$	10,795			$	21,058			$	56,679			$	39,931
	(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)	88.8		%		88.3		%		88.0		%		88.6		%		89.1		%
Depreciation and amortization	0.4		%		0.4		%		0.3		%		0.4		%		0.4		%
Selling and distribution expenses	8.7		%		8.9		%		8.4		%		8.5		%		8.4		%
General and administrative expenses	0.6		%		0.7		%		0.6		%		0.6		%		0.6		%
Other (income) expense, net	-		%		-		%		-		%		(0.1		)%		-		%
	98.5		%		98.2		%		97.3		%		98.0		%		98.5		%
Segment income	1.5		%		1.8		%		2.7		%		2.0		%		1.5		%

Segment Information
(in thousands)

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

Boise Cascade Company
Consolidated Balance Sheets
(in thousands)

Boise Cascade Company
Consolidated Balance Sheets (continued)
(in thousands, except per-share data)

Boise Cascade Company
Consolidated Statements of Cash Flows
(in thousands)

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 do not include all Notes to Consolidated Financial Statements and should be read in conjunction with the Company's other filings with the Securities and Exchange Commission. Net income for all periods presented involved estimates and accruals.

(a)    Adjusted net income represents net income before certain unusual items. The year ended December 31, 2013 includes a $68.7 million income tax benefit associated with the recording of net deferred tax assets upon the Company's conversion from a limited liability company to a corporation. The following table reconciles net income to adjusted net income for the years ended December 31, 2014 and 2013:

(b)    EBITDA represents income before interest (interest expense and interest income), income taxes, and depreciation and amortization. The following table reconciles net income to EBITDA for the three months ended December 31, 2014 and 2013, and September 30, 2014, and the years ended December 31, 2014 and 2013:

	Three Months Ended												Year Ended
	December 31								September 30,  2014				December 31
	2014				2013								2014				2013
	(in thousands)
Net income	$	15,741			$	9,828			$	32,285			$	80,009			$	116,936
Interest expense	5,504				5,580				5,514				22,049				20,426
Interest income	(57		)		(29		)		(57		)		(237		)		(241		)
Income tax provision (benefit)	7,416				5,920				18,133				43,296				(38,788		)
Depreciation and amortization	13,434				11,833				13,203				51,439				38,038
EBITDA	$	42,038			$	33,132			$	69,078			$	196,556			$	136,371

The following table reconciles segment income (loss) to EBITDA for the three months ended December 31, 2014 and 2013, and September 30, 2014, and the years ended December 31, 2014 and 2013:

		Three Months Ended												Year Ended
		December 31								September 30,  2014				December 31
		2014				2013								2014				2013
		(in thousands)
Wood Products
Segment income		$	23,483			$	15,892			$	40,631			$	108,374			$	77,673
Depreciation and amortization		10,722				9,208				10,711				41,457				28,664
EBITDA		34,205				25,100				51,342				149,831				106,337
Building Materials Distribution
Segment income		10,359				10,795				21,058				56,679				39,931
Depreciation and amortization		2,653				2,593				2,448				9,802				9,233
EBITDA		13,012				13,388				23,506				66,481				49,164
Corporate and Other
Segment loss		(5,238		)		(5,388		)		(5,814		)		(19,936		)		(19,271		)
Depreciation and amortization		59				32				44				180				141
EBITDA		(5,179		)		(5,356		)		(5,770		)		(19,756		)		(19,130		)
Total Company EBITDA		$	42,038			$	33,132			$	69,078			$	196,556			$	136,371

Investor contact:  Wayne Rancourt, 208-384-6073
Media contact:  John Sahlberg, 208-384-6451