Boise Cascade Company Reports 2018 Third Quarter Net Income of $13.8 Million on Sales of $1.3 Billion
For Immediate Release:
Third Quarter 2018 Highlights
3Q 2018 | 3Q 2017 | % change | |||||||||
(in thousands, except per-share data and percentages) | |||||||||||
Consolidated Results | |||||||||||
Sales | $ | 1,338,512 | $ | 1,226,644 | 9 | % | |||||
Net income | 13,848 | 31,661 | (56 | )% | |||||||
Net income per common share - diluted | 0.35 | 0.81 | (57 | )% | |||||||
Adjusted EBITDA 1 | 42,721 | 75,784 | (44 | )% | |||||||
Segment Results | |||||||||||
Wood Products sales | $ | 402,672 | $ | 366,920 | 10 | % | |||||
Wood Products income | 13,929 | 24,027 | (42 | )% | |||||||
Wood Products EBITDA 1 | 32,656 | 39,364 | (17 | )% | |||||||
Building Materials Distribution sales | 1,159,304 | 1,045,646 | 11 | % | |||||||
Building Materials Distribution income | 23,504 | 39,379 | (40 | )% | |||||||
Building Materials Distribution EBITDA 1 | 28,259 | 43,289 | (35 | )% |
1 For reconciliations of non-GAAP measures, see summary notes at the end of this press release.
In the third quarter 2018, total
"While both of our businesses operated well during the quarter, the economic backdrop was challenging given sharp declines in commodity prices and flattening housing data. The impact of a falling price environment was most notable in our distribution business," commented CEO
"As announced this morning, we have decided to permanently curtail laminated veneer lumber production at our
Wood Products
Wood Products sales, including sales to
Wood Products segment income, including the
Comparative average net selling prices and sales volume changes for EWP and plywood are as follows:
3Q 2018 vs. 3Q 2017 | 3Q 2018 vs. 2Q 2018 | |||
Average Net Selling Prices | ||||
LVL | 6% | -% | ||
I-joists | 9% | 3% | ||
Plywood | 10% | (6)% | ||
Sales Volumes | ||||
LVL | 9% | (7)% | ||
I-joists | 8% | (10)% | ||
Plywood | (9)% | -% |
On
Building Materials Distribution
BMD's sales increased
BMD segment income decreased
BMD recently announced the planned acquisition of
Income Taxes
On
Balance Sheet
Boise Cascade ended the third quarter with
On
On
Outlook
We expect to experience seasonally slower demand in fourth quarter 2018. The
Future commodity product pricing and commodity input costs could be volatile in response to industry operating rates, net import and export activity, transportation constraints or disruptions, inventory levels in various distribution channels, and seasonal demand patterns. Commodity product pricing was above historical levels in the first half of 2018; however, prices sharply declined during third quarter 2018 and continued to trend downward during
On
We expect our capital spending, excluding acquisitions, to be
About Boise Cascade
Webcast and Conference Call
Boise Cascade will host a webcast and conference call on
You can join the webcast through the Company's 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 844-795-4410 (international callers should dial 661-378-9637), participant passcode 4383104, at least 10 minutes before the start of the call.
The archived webcast will be available in the Investor Relations section of the Company's website. A replay of the conference call will be available from
Basis of Presentation
We refer to the terms EBITDA and Adjusted EBITDA in this earnings release as supplemental measures of our performance and liquidity that are not required by or presented in accordance with generally accepted accounting principles in
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, income 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 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 the Private Securities Litigation Reform Act of 1995. 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, 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
Consolidated Statements of Operations
(in thousands, except per-share data)
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2018 |
|||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Sales | $ | 1,338,512 | $ | 1,226,644 | $ | 1,408,132 | $ | 3,929,485 | $ | 3,340,026 | |||||||||
Costs and expenses | |||||||||||||||||||
Materials, labor, and other operating expenses (excluding depreciation) | 1,163,020 | 1,045,742 | 1,193,918 | 3,366,716 | 2,872,711 | ||||||||||||||
Depreciation and amortization | 23,881 | 19,686 | 24,296 | 70,288 | 58,631 | ||||||||||||||
Selling and distribution expenses | 93,395 | 87,520 | 96,841 | 273,592 | 243,509 | ||||||||||||||
General and administrative expenses | 16,891 | 16,460 | 19,977 | 52,754 | 45,589 | ||||||||||||||
Other (income) expense, net | 10,870 | 1,138 | (956 | ) | 9,820 | (135 | ) | ||||||||||||
1,308,057 | 1,170,546 | 1,334,076 | 3,773,170 | 3,220,305 | |||||||||||||||
Income from operations | 30,455 | 56,098 | 74,056 | 156,315 | 119,721 | ||||||||||||||
Foreign currency exchange gain (loss) | 163 | 90 | (172 | ) | (272 | ) | 131 | ||||||||||||
Pension expense (excluding service costs) | (11,778 | ) | (90 | ) | (12,380 | ) | (24,402 | ) | (170 | ) | |||||||||
Interest expense | (6,585 | ) | (6,295 | ) | (6,580 | ) | (19,527 | ) | (19,150 | ) | |||||||||
Interest income | 500 | 167 | 237 | 1,001 | 254 | ||||||||||||||
Change in fair value of interest rate swaps | 279 | (33 | ) | 499 | 2,419 | (462 | ) | ||||||||||||
(17,421 | ) | (6,161 | ) | (18,396 | ) | (40,781 | ) | (19,397 | ) | ||||||||||
Income before income taxes | 13,034 | 49,937 | 55,660 | 115,534 | 100,324 | ||||||||||||||
Income tax (provision) benefit | 814 | (18,276 | ) | (13,835 | ) | (22,811 | ) | (36,489 | ) | ||||||||||
Net income | $ | 13,848 | $ | 31,661 | $ | 41,825 | $ | 92,723 | $ | 63,835 | |||||||||
Weighted average common shares outstanding: | |||||||||||||||||||
Basic | 38,998 | 38,660 | 38,981 | 38,920 | 38,601 | ||||||||||||||
Diluted | 39,461 | 39,139 | 39,403 | 39,397 | 38,962 | ||||||||||||||
Net income per common share: | |||||||||||||||||||
Basic | $ | 0.36 | $ | 0.82 | $ | 1.07 | $ | 2.38 | $ | 1.65 | |||||||||
Diluted | $ | 0.35 | $ | 0.81 | $ | 1.06 | $ | 2.35 | $ | 1.64 | |||||||||
Dividends declared per common share | $ | 1.07 | $ | - | $ | 0.07 | $ | 1.21 | $ | - |
See accompanying summary notes to consolidated financial statements and segment information.
Wood Products Segment
Statements of Operations
(in thousands, except percentages)
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2018 |
|||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Segment sales | $ | 402,672 | $ | 366,920 | $ | 425,483 | $ | 1,226,146 | $ | 1,042,854 | |||||||||
Costs and expenses | |||||||||||||||||||
Materials, labor, and other operating expenses (excluding depreciation) | 346,361 | 315,421 | 356,297 | 1,045,217 | 917,757 | ||||||||||||||
Depreciation and amortization | 18,727 | 15,337 | 19,453 | 55,724 | 45,752 | ||||||||||||||
Selling and distribution expenses | 7,809 | 7,580 | 9,382 | 25,304 | 22,879 | ||||||||||||||
General and administrative expenses | 5,031 | 3,408 | 4,678 | 13,401 | 9,491 | ||||||||||||||
Other (income) expense, net | 10,815 | 1,147 | (809 | ) | 9,968 | 165 | |||||||||||||
388,743 | 342,893 | 389,001 | 1,149,614 | 996,044 | |||||||||||||||
Segment income | $ | 13,929 | $ | 24,027 | $ | 36,482 | $ | 76,532 | $ | 46,810 | |||||||||
(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 | % | 86.0 | % | 83.7 | % | 85.2 | % | 88.0 | % | |||||||||
Depreciation and amortization | 4.7 | % | 4.2 | % | 4.6 | % | 4.5 | % | 4.4 | % | |||||||||
Selling and distribution expenses | 1.9 | % | 2.1 | % | 2.2 | % | 2.1 | % | 2.2 | % | |||||||||
General and administrative expenses | 1.2 | % | 0.9 | % | 1.1 | % | 1.1 | % | 0.9 | % | |||||||||
Other (income) expense, net | 2.7 | % | 0.3 | % | (0.2 | )% | 0.8 | % | - | % | |||||||||
96.5 | % | 93.5 | % | 91.4 | % | 93.8 | % | 95.5 | % | ||||||||||
Segment income | 3.5 | % | 6.5 | % | 8.6 | % | 6.2 | % | 4.5 | % |
Building Materials Distribution Segment
Statements of Operations
(in thousands, except percentages)
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2018 |
|||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Segment sales | $ | 1,159,304 | $ | 1,045,646 | $ | 1,213,783 | $ | 3,365,468 | $ | 2,842,035 | |||||||||
Costs and expenses | |||||||||||||||||||
Materials, labor, and other operating expenses (excluding depreciation) | 1,040,342 | 916,340 | 1,067,592 | 2,982,793 | 2,499,988 | ||||||||||||||
Depreciation and amortization | 4,755 | 3,910 | 4,447 | 13,374 | 11,492 | ||||||||||||||
Selling and distribution expenses | 85,520 | 79,846 | 87,394 | 248,095 | 220,342 | ||||||||||||||
General and administrative expenses | 5,128 | 6,189 | 6,787 | 17,745 | 16,730 | ||||||||||||||
Other (income) expense, net | 55 | (18 | ) | (150 | ) | (144 | ) | (370 | ) | ||||||||||
1,135,800 | 1,006,267 | 1,166,070 | 3,261,863 | 2,748,182 | |||||||||||||||
Segment income | $ | 23,504 | $ | 39,379 | $ | 47,713 | $ | 103,605 | $ | 93,853 | |||||||||
(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) | 89.7 | % | 87.6 | % | 88.0 | % | 88.6 | % | 88.0 | % | |||||||||
Depreciation and amortization | 0.4 | % | 0.4 | % | 0.4 | % | 0.4 | % | 0.4 | % | |||||||||
Selling and distribution expenses | 7.4 | % | 7.6 | % | 7.2 | % | 7.4 | % | 7.8 | % | |||||||||
General and administrative expenses | 0.4 | % | 0.6 | % | 0.6 | % | 0.5 | % | 0.6 | % | |||||||||
Other (income) expense, net | - | % | - | % | - | % | - | % | - | % | |||||||||
98.0 | % | 96.2 | % | 96.1 | % | 96.9 | % | 96.7 | % | ||||||||||
Segment income | 2.0 | % | 3.8 | % | 3.9 | % | 3.1 | % | 3.3 | % |
Segment Information
(in thousands)
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2018 |
|||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
Segment sales | |||||||||||||||||||
Wood Products | $ | 402,672 | $ | 366,920 | $ | 425,483 | $ | 1,226,146 | $ | 1,042,854 | |||||||||
Building Materials Distribution | 1,159,304 | 1,045,646 | 1,213,783 | 3,365,468 | 2,842,035 | ||||||||||||||
Intersegment eliminations and other | (223,464 | ) | (185,922 | ) | (231,134 | ) | (662,129 | ) | (544,863 | ) | |||||||||
Total net sales | $ | 1,338,512 | $ | 1,226,644 | $ | 1,408,132 | $ | 3,929,485 | $ | 3,340,026 | |||||||||
Segment income | |||||||||||||||||||
Wood Products | $ | 13,929 | $ | 24,027 | $ | 36,482 | $ | 76,532 | $ | 46,810 | |||||||||
Building Materials Distribution | 23,504 | 39,379 | 47,713 | 103,605 | 93,853 | ||||||||||||||
Total segment income | 37,433 | 63,406 | 84,195 | 180,137 | 140,663 | ||||||||||||||
Unallocated corporate | (6,978 | ) | (7,308 | ) | (10,139 | ) | (23,822 | ) | (20,942 | ) | |||||||||
Income from operations | $ | 30,455 | $ | 56,098 | $ | 74,056 | $ | 156,315 | $ | 119,721 | |||||||||
Segment EBITDA (a) | |||||||||||||||||||
Wood Products | $ | 32,656 | $ | 39,364 | $ | 55,935 | $ | 132,256 | $ | 92,562 | |||||||||
Building Materials Distribution | 28,259 | 43,289 | 52,160 | 116,979 | 105,345 |
See accompanying summary notes to consolidated financial statements and segment information.
Consolidated Balance Sheets
(in thousands)
ASSETS | |||||||
Current | |||||||
Cash and cash equivalents | $ | 181,342 | $ | 177,140 | |||
Receivables | |||||||
Trade, less allowances of |
312,659 | 246,452 | |||||
Related parties | 435 | 345 | |||||
Other | 15,584 | 9,380 | |||||
Inventories | 559,443 | 476,673 | |||||
Prepaid expenses and other | 35,178 | 22,582 | |||||
Total current assets | 1,104,641 | 932,572 | |||||
Property and equipment, net | 552,666 | 565,792 | |||||
Timber deposits | 13,806 | 13,503 | |||||
59,409 | 55,433 | ||||||
Intangible assets, net | 17,104 | 15,066 | |||||
Deferred income taxes | 8,736 | 9,064 | |||||
Other assets | 15,272 | 15,763 | |||||
Total assets | $ | 1,771,634 | $ | 1,607,193 |
Consolidated Balance Sheets (continued)
(in thousands, except per-share data)
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current | |||||||
Accounts payable | |||||||
Trade | $ | 302,829 | $ | 233,562 | |||
Related parties | 1,503 | 1,225 | |||||
Accrued liabilities | |||||||
Compensation and benefits | 83,778 | 84,246 | |||||
Interest payable | 1,833 | 6,742 | |||||
Other | 77,953 | 55,786 | |||||
Total current liabilities | 467,896 | 381,561 | |||||
Debt | |||||||
Long-term debt | 439,149 | 438,312 | |||||
Other | |||||||
Compensation and benefits | 49,485 | 75,439 | |||||
Deferred income taxes | 26,878 | 16,454 | |||||
Other long-term liabilities | 40,464 | 20,878 | |||||
116,827 | 112,771 | ||||||
Commitments and contingent liabilities | |||||||
Stockholders' equity | |||||||
Preferred stock, |
- | - | |||||
Common stock, |
441 | 437 | |||||
(133,979 | ) | (133,979 | ) | ||||
Additional paid-in capital | 526,716 | 523,550 | |||||
Accumulated other comprehensive loss | (51,287 | ) | (76,702 | ) | |||
Retained earnings | 405,871 | 361,243 | |||||
Total stockholders' equity | 747,762 | 674,549 | |||||
Total liabilities and stockholders' equity | $ | 1,771,634 | $ | 1,607,193 |
Consolidated Statements of Cash Flows
(in thousands)
Nine Months Ended |
|||||||
2018 | 2017 | ||||||
Cash provided by (used for) operations | |||||||
Net income | $ | 92,723 | $ | 63,835 | |||
Items in net income not using (providing) cash | |||||||
Depreciation and amortization, including deferred financing costs and other | 71,832 | 60,097 | |||||
Stock-based compensation | 6,893 | 6,931 | |||||
Pension expense | 25,000 | 1,074 | |||||
Deferred income taxes | 883 | 6,019 | |||||
Change in fair value of interest rate swaps | (2,419 | ) | 462 | ||||
Other | 8,695 | (125 | ) | ||||
Decrease (increase) in working capital, net of acquisitions | |||||||
Receivables | (64,261 | ) | (110,646 | ) | |||
Inventories | (88,073 | ) | (26,413 | ) | |||
Prepaid expenses and other | (2,736 | ) | (2,389 | ) | |||
Accounts payable and accrued liabilities | 83,204 | 108,099 | |||||
Pension contributions | (21,566 | ) | (1,666 | ) | |||
Income taxes payable | 6,991 | 11,051 | |||||
Other | 2,655 | 807 | |||||
Net cash provided by operations | 119,821 | 117,136 | |||||
Cash provided by (used for) investment | |||||||
Expenditures for property and equipment | (47,705 | ) | (48,060 | ) | |||
Acquisitions of businesses and facilities | (17,532 | ) | - | ||||
Proceeds from sales of assets and other | 835 | 2,089 | |||||
Net cash used for investment | (64,402 | ) | (45,971 | ) | |||
Cash provided by (used for) financing | |||||||
Borrowings of long-term debt, including revolving credit facility | 7,500 | 410,400 | |||||
Payments of long-term debt, including revolving credit facility | (7,500 | ) | (410,400 | ) | |||
Tax withholding payments on stock-based awards | (5,135 | ) | (2,901 | ) | |||
Dividends paid on common stock | (47,113 | ) | - | ||||
Proceeds from exercise of stock options | 1,412 | 613 | |||||
Other | (381 | ) | (670 | ) | |||
Net cash used for financing | (51,217 | ) | (2,958 | ) | |||
Net increase in cash and cash equivalents | 4,202 | 68,207 | |||||
Balance at beginning of the period | 177,140 | 103,978 | |||||
Balance at end of the period | $ | 181,342 | $ | 172,185 |
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 2017 Form 10-K and the Company's other filings with the
-
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 and loss on extinguishment of debt. The following table reconciles net income to EBITDA and Adjusted EBITDA for the three months ended
September 30, 2018 and 2017, andJune 30, 2018 , and the nine months endedSeptember 30, 2018 and 2017:
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2018 |
|||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
(in thousands) | |||||||||||||||||||
Net income | $ | 13,848 | $ | 31,661 | $ | 41,825 | $ | 92,723 | $ | 63,835 | |||||||||
Interest expense | 6,585 | 6,295 | 6,580 | 19,527 | 19,150 | ||||||||||||||
Interest income | (500 | ) | (167 | ) | (237 | ) | (1,001 | ) | (254 | ) | |||||||||
Income tax provision (benefit) | (814 | ) | 18,276 | 13,835 | 22,811 | 36,489 | |||||||||||||
Depreciation and amortization | 23,881 | 19,686 | 24,296 | 70,288 | 58,631 | ||||||||||||||
EBITDA | 43,000 | 75,751 | 86,299 | 204,348 | 177,851 | ||||||||||||||
Change in fair value of interest rate swaps | (279 | ) | 33 | (499 | ) | (2,419 | ) | 462 | |||||||||||
Adjusted EBITDA | $ | 42,721 | $ | 75,784 | $ | 85,800 | $ | 201,929 | $ | 178,313 |
The following table reconciles segment income and unallocated corporate costs to EBITDA and adjusted EBITDA for the three months ended
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2018 |
|||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
(in thousands) | |||||||||||||||||||
Wood Products | |||||||||||||||||||
Segment income | $ | 13,929 | $ | 24,027 | $ | 36,482 | $ | 76,532 | $ | 46,810 | |||||||||
Depreciation and amortization | 18,727 | 15,337 | 19,453 | 55,724 | 45,752 | ||||||||||||||
EBITDA | $ | 32,656 | $ | 39,364 | $ | 55,935 | $ | 132,256 | $ | 92,562 | |||||||||
Building Materials Distribution | |||||||||||||||||||
Segment income | $ | 23,504 | $ | 39,379 | $ | 47,713 | $ | 103,605 | $ | 93,853 | |||||||||
Depreciation and amortization | 4,755 | 3,910 | 4,447 | 13,374 | 11,492 | ||||||||||||||
EBITDA | $ | 28,259 | $ | 43,289 | $ | 52,160 | $ | 116,979 | $ | 105,345 | |||||||||
Corporate | |||||||||||||||||||
Unallocated corporate expenses | $ | (6,978 | ) | $ | (7,308 | ) | $ | (10,139 | ) | $ | (23,822 | ) | $ | (20,942 | ) | ||||
Foreign currency exchange gain (loss) | 163 | 90 | (172 | ) | (272 | ) | 131 | ||||||||||||
Pension expense (excluding service costs) | (11,778 | ) | (90 | ) | (12,380 | ) | (24,402 | ) | (170 | ) | |||||||||
Change in fair value of interest rate swaps | 279 | (33 | ) | 499 | 2,419 | (462 | ) | ||||||||||||
Depreciation and amortization | 399 | 439 | 396 | 1,190 | 1,387 | ||||||||||||||
EBITDA | (17,915 | ) | (6,902 | ) | (21,796 | ) | (44,887 | ) | (20,056 | ) | |||||||||
Change in fair value of interest rate swaps | (279 | ) | 33 | (499 | ) | (2,419 | ) | 462 | |||||||||||
Corporate adjusted EBITDA | $ | (18,194 | ) | $ | (6,869 | ) | $ | (22,295 | ) | $ | (47,306 | ) | $ | (19,594 | ) | ||||
Total company adjusted EBITDA | $ | 42,721 | $ | 75,784 | $ | 85,800 | $ | 201,929 | $ | 178,313 |
Investor contact:
Media contact:
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: