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Boise Cascade Company Reports Third Quarter 2023 Results

Boise Cascade Company ("Boise Cascade," the "Company," "we," or "our") (NYSE: BCC) today reported net income of $143.1 million, or $3.58 per share, on sales of $1.8 billion for the third quarter ended September 30, 2023, compared with net income of $219.6 million, or $5.52 per share, on sales of $2.2 billion for the third quarter ended September 30, 2022.

“After another solid quarter of operating and financial performance, I want to first thank our associates for their continued focus, hard work, and loyalty. In addition, we are pleased to have recently completed the acquisition of BROSCO and welcome their outstanding team to Boise Cascade. The acquisition supports BMD's growth in the door and millwork business and brings us immediate scale in the Northeast markets,” stated Nate Jorgensen, CEO. “The strength and flexibility of our balance sheet allows us to remain committed to our reinvestment and growth strategies while also rewarding our shareholders, as evidenced by our most recent special dividend announcement. As we look forward to 2024, we are dedicated to supporting our vendor and customer partners and appreciate their ongoing confidence and trust in us. We are well positioned to navigate market uncertainties as near-term demand for new residential construction evolves.”

Third Quarter 2023 Highlights

 

 

3Q 2023

 

3Q 2022

 

% change

 

 

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

Consolidated Results

 

 

 

 

 

 

Sales

 

$

1,834,441

 

$

2,154,647

 

(15

)%

Net income

 

 

143,068

 

 

219,587

 

(35

)%

Net income per common share - diluted

 

 

3.58

 

 

5.52

 

(35

)%

Adjusted EBITDA 1

 

 

216,465

 

 

326,029

 

(34

)%

Segment Results

 

 

 

 

 

 

Wood Products sales

 

$

515,225

 

$

595,320

 

(13

)%

Wood Products income

 

 

99,574

 

 

155,972

 

(36

)%

Wood Products EBITDA 1

 

 

122,924

 

 

177,257

 

(31

)%

Building Materials Distribution sales

 

 

1,670,296

 

 

1,956,802

 

(15

)%

Building Materials Distribution income

 

 

97,076

 

 

154,436

 

(37

)%

Building Materials Distribution EBITDA 1

 

 

104,857

 

 

161,196

 

(35

)%

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

In third quarter 2023, total U.S. housing starts decreased 6%, driven by a decrease in multi-family housing starts compared to the same period in 2022. However, single-family housing starts increased 7% compared to the same period in 2022. On a year-to-date basis through September 2023, total housing starts and single-family housing starts decreased 12% and 13%, respectively, compared to the same period in 2022. Single-family housing starts are the key demand driver for our sales.

Wood Products

Wood Products' sales, including sales to Building Materials Distribution (BMD), decreased $80.1 million, or 13%, to $515.2 million for the three months ended September 30, 2023, from $595.3 million for the three months ended September 30, 2022. The decrease in sales was driven by lower plywood sales prices, lower sales prices for I-joists and LVL (collectively referred to as EWP), and lower LVL sales volumes. These decreases were offset partially by higher plywood sales volumes.

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

 

 

3Q 2023 vs. 3Q 2022

 

3Q 2023 vs. 2Q 2023

 

 

 

 

 

Average Net Selling Prices

 

 

 

 

LVL

 

(14)%

 

(4)%

I-joists

 

(16)%

 

(3)%

Plywood

 

(20)%

 

5%

Sales Volumes

 

 

 

 

LVL

 

(5)%

 

6%

I-joists

 

—%

 

2%

Plywood

 

19%

 

(11)%

Wood Products' segment income decreased $56.4 million to $99.6 million for the three months ended September 30, 2023, from $156.0 million for the three months ended September 30, 2022. The decrease in segment income was due primarily to lower EWP and plywood sales prices, as well as lower LVL sales volumes. These decreases in segment income were offset partially by lower wood fiber costs and higher plywood sales volumes.

Building Materials Distribution

BMD's sales decreased $286.5 million, or 15%, to $1,670.3 million for the three months ended September 30, 2023, from $1,956.8 million for the three months ended September 30, 2022. Compared with the same quarter in the prior year, the overall decrease in sales was driven by sales price and sales volume decreases of 14% and 1%, respectively. By product line, commodity sales decreased 20%, general line product sales decreased 5%, and EWP sales (substantially all of which are sourced through our Wood Products segment) decreased 21%.

BMD segment income decreased $57.3 million to $97.1 million for the three months ended September 30, 2023, from $154.4 million in the comparative prior year quarter. The decline in segment income was driven by a gross margin decrease of $48.4 million, resulting primarily from lower margins on EWP. In addition, selling and distribution expenses increased $6.0 million.

Recent Developments

On October 2, 2023, the Company completed the acquisition of Brockway-Smith Company (BROSCO) for a purchase price of $168 million, inclusive of estimated working capital at closing of $51 million, which is subject to post-closing adjustments. The Company funded the acquisition and related costs with cash on hand.

Balance Sheet and Liquidity

Boise Cascade ended third quarter 2023 with $1,273.0 million of cash and cash equivalents and $395.9 million of undrawn committed bank line availability, for total available liquidity of $1,668.9 million. The Company had $445.1 million of outstanding debt at September 30, 2023.

Capital Allocation

Excluding acquisitions, we expect capital expenditures in 2023 to total approximately $190 million to $210 million. Our 2023 capital expenditures range includes funding for greenfield distribution centers in South Carolina and Texas, projects at our mills in the southeast to expand our EWP capacity, spending related to new door shop assembly operations in Kansas City, Missouri, and Denver, Colorado, and the purchase of a distribution center in West Palm Beach, Florida.

For the nine months ended September 30, 2023, the Company paid common stock dividends of $140.9 million. In addition, on October 26, 2023, our board of directors declared quarterly and special dividends of $0.20 per share and $5.00 per share, respectively, on our common stock. The fourth quarter dividends will total approximately $206 million and are payable on December 15, 2023, to stockholders of record on December 1, 2023.

As of September 30, 2023, approximately 2.0 million shares were available for repurchase under our existing share repurchase program.

Outlook

Demand for the products we manufacture, as well as the products we purchase and distribute, is correlated with new residential construction, residential repair-and-remodeling activity and light commercial construction. Various industry forecasts for 2023 U.S. housing starts are estimated to be 1.4 million units, compared with actual housing starts of 1.55 million in 2022, as reported by the U.S. Census Bureau. Throughout 2023, home affordability has been a challenge for consumers given higher mortgage rates and limited home price decreases. However, given a resilient economy and low levels of existing home inventory for sale, demand for new residential construction has been stronger than anticipated. Homebuilders have also addressed affordability challenges facing homebuyers in various ways, including smaller home sizes, fewer amenities, price incentives, and mortgage rate buydowns. Economic uncertainties, escalating mortgage rates, and home affordability are expected to continue to influence the near-term demand environment. Consensus forecasts for 2024 single- and multi-family housing starts in the U.S. generally range from 1.3 million to 1.4 million units, which is comparable with 2023. Regarding home improvement spending, the age of U.S. housing stock and elevated levels of homeowner equity have provided a favorable backdrop for repair-and-remodel spending. However, industry forecasts project continued moderation of year-over-year growth in renovation spending, and economic uncertainty may also negatively impact homeowners' further investment in their residences.

As a manufacturer of certain commodity products, we have sales and profitability exposure to declines in commodity product prices and rising input costs. Our distribution business purchases and resells a broad mix of commodity products with periods of increasing prices providing the opportunity for higher sales and increased margins, while declining price environments expose us to declines in sales and profitability. Future commodity product pricing and commodity input costs may be volatile in response to economic uncertainties, industry operating rates, transportation constraints or disruptions, net import and export activity, inventory levels in various distribution channels, and seasonal demand patterns. During fourth quarter 2023, we expect to experience seasonally slower demand for the products we manufacture and distribute, as well as modest EWP price erosion.

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 third quarter earnings on Tuesday, October 31, 2023, at 11 a.m. Eastern.

To join the webcast, go to the Investors section of our website at www.bc.com/investors and select the Event Calendar link. Analysts and investors who wish to ask questions during the Q&A session can register for the call here.

The archived webcast will be available in the Investors section of Boise Cascade's website.

Use of Non-GAAP Financial Measures

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

We believe EBITDA and Adjusted EBITDA are meaningful measures because they present a transparent view of our recurring operating performance and allow management to readily view operating trends, perform analytical comparisons, and identify strategies to improve operating performance. We also believe EBITDA and Adjusted EBITDA are useful to investors because they provide a means to evaluate the operating performance of our segments and our Company on an ongoing basis using criteria that are used by our management and because they are frequently used by investors and other interested parties when comparing companies in our industry that have different financing and capital structures and/or tax rates. EBITDA and Adjusted EBITDA, however, are not measures of our liquidity or financial performance under GAAP and should not be considered as alternatives to net income (loss), income (loss) from operations, or any other performance measure derived in accordance with GAAP or as alternatives to cash flow from operating activities as a measure of our liquidity. The use of EBITDA and Adjusted EBITDA instead of net income (loss) or segment income (loss) have limitations as analytical tools, including: the inability to determine profitability; the exclusion of interest expense, interest income, and associated significant cash requirements; and the exclusion of depreciation and amortization, which represent unavoidable operating costs. Management compensates for these limitations by relying on our GAAP results. Our measures of EBITDA and Adjusted EBITDA are not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the methods of calculation.

Forward-Looking Statements

This press release includes statements about our expectations of future operational and financial performance that are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, but not limited to, statements regarding our outlook. 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, our ability to efficiently and effectively integrate the BROSCO acquisition, mortgage rates and availability, housing demand, housing vacancy rates, governmental regulations, unforeseen production disruptions, as well as natural disasters. These and other factors that could cause actual results to differ materially from such forward-looking statements are discussed in greater detail in our filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date of this press release. We undertake no obligation to revise them in light of new information. Finally, we undertake no obligation to review or confirm analyst expectations or estimates that might be derived from this release.

Boise Cascade Company

Consolidated Statements of Operations

(in thousands, except per-share data) (unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

September 30

 

June 30, 2023

 

September 30

 

2023

 

2022

 

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

Sales

$

1,834,441

 

 

$

2,154,647

 

 

$

1,815,219

 

 

$

5,193,989

 

 

$

6,759,001

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

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

 

1,442,178

 

 

 

1,655,979

 

 

 

1,426,436

 

 

 

4,099,249

 

 

 

5,183,823

 

Depreciation and amortization

 

31,474

 

 

 

28,374

 

 

 

30,722

 

 

 

93,382

 

 

 

69,611

 

Selling and distribution expenses

 

147,714

 

 

 

142,176

 

 

 

139,205

 

 

 

415,707

 

 

 

423,106

 

General and administrative expenses

 

27,583

 

 

 

27,622

 

 

 

30,147

 

 

 

84,193

 

 

 

81,375

 

Other (income) expense, net

 

(141

)

 

 

1,126

 

 

 

(1,266

)

 

 

(1,752

)

 

 

(987

)

 

 

1,648,808

 

 

 

1,855,277

 

 

 

1,625,244

 

 

 

4,690,779

 

 

 

5,756,928

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

185,633

 

 

 

299,370

 

 

 

189,975

 

 

 

503,210

 

 

 

1,002,073

 

 

 

 

 

 

 

 

 

 

 

Foreign currency exchange gain (loss)

 

(602

)

 

 

(1,674

)

 

 

320

 

 

 

(355

)

 

 

(2,041

)

Pension expense (excluding service costs)

 

(40

)

 

 

(41

)

 

 

(41

)

 

 

(122

)

 

 

(253

)

Interest expense

 

(6,351

)

 

 

(6,398

)

 

 

(6,339

)

 

 

(19,051

)

 

 

(18,969

)

Interest income

 

13,760

 

 

 

3,238

 

 

 

11,519

 

 

 

34,964

 

 

 

4,688

 

Change in fair value of interest rate swaps

 

(327

)

 

 

1,134

 

 

 

333

 

 

 

(798

)

 

 

3,594

 

 

 

6,440

 

 

 

(3,741

)

 

 

5,792

 

 

 

14,638

 

 

 

(12,981

)

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

192,073

 

 

 

295,629

 

 

 

195,767

 

 

 

517,848

 

 

 

989,092

 

Income tax provision

 

(49,005

)

 

 

(76,042

)

 

 

(49,447

)

 

 

(131,727

)

 

 

(248,794

)

Net income

$

143,068

 

 

$

219,587

 

 

$

146,320

 

 

$

386,121

 

 

$

740,298

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

39,675

 

 

 

39,544

 

 

 

39,675

 

 

 

39,648

 

 

 

39,521

 

Diluted

 

39,983

 

 

 

39,776

 

 

 

39,834

 

 

 

39,849

 

 

 

39,762

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

Basic

$

3.61

 

 

$

5.55

 

 

$

3.69

 

 

$

9.74

 

 

$

18.73

 

Diluted

$

3.58

 

 

$

5.52

 

 

$

3.67

 

 

$

9.69

 

 

$

18.62

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

$

0.20

 

 

$

0.12

 

 

$

3.15

 

 

$

3.50

 

 

$

2.86

 

Wood Products Segment

Statements of Operations

(in thousands, except percentages) (unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

September 30

 

June 30, 2023

 

September 30

 

2023

 

2022

 

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

Segment sales

$

515,225

 

 

$

595,320

 

 

$

530,273

 

 

$

1,482,926

 

 

$

1,690,294

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

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

 

376,754

 

 

 

398,008

 

 

 

387,407

 

 

 

1,091,900

 

 

 

1,093,274

 

Depreciation and amortization

 

23,350

 

 

 

21,285

 

 

 

23,005

 

 

 

70,145

 

 

 

48,578

 

Selling and distribution expenses

 

10,786

 

 

 

11,164

 

 

 

11,437

 

 

 

33,901

 

 

 

30,743

 

General and administrative expenses

 

5,018

 

 

 

7,717

 

 

 

5,364

 

 

 

15,560

 

 

 

18,189

 

Other (income) expense, net

 

(257

)

 

 

1,174

 

 

 

(975

)

 

 

(1,584

)

 

 

(679

)

 

 

415,651

 

 

 

439,348

 

 

 

426,238

 

 

 

1,209,922

 

 

 

1,190,105

 

 

 

 

 

 

 

 

 

 

 

Segment income

$

99,574

 

 

$

155,972

 

 

$

104,035

 

 

$

273,004

 

 

$

500,189

 

 

 

 

 

 

 

 

 

 

 

 

(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)

 

73.1

%

 

 

66.9

%

 

 

73.1

%

 

 

73.6

%

 

 

64.7

%

Depreciation and amortization

 

4.5

%

 

 

3.6

%

 

 

4.3

%

 

 

4.7

%

 

 

2.9

%

Selling and distribution expenses

 

2.1

%

 

 

1.9

%

 

 

2.2

%

 

 

2.3

%

 

 

1.8

%

General and administrative expenses

 

1.0

%

 

 

1.3

%

 

 

1.0

%

 

 

1.0

%

 

 

1.1

%

Other (income) expense, net

 

%

 

 

0.2

%

 

 

(0.2

)%

 

 

(0.1

%)

 

 

%

 

 

80.7

%

 

 

73.8

%

 

 

80.4

%

 

 

81.6

%

 

 

70.4

%

 

 

 

 

 

 

 

 

 

 

Segment income

 

19.3

%

 

 

26.2

%

 

 

19.6

%

 

 

18.4

%

 

 

29.6

%

Building Materials Distribution Segment

Statements of Operations

(in thousands, except percentages) (unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

September 30

 

June 30, 2023

 

September 30

 

2023

 

2022

 

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

Segment sales

$

1,670,296

 

 

$

1,956,802

 

 

$

1,636,538

 

 

$

4,686,076

 

 

$

6,199,835

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

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

 

1,417,153

 

 

 

1,655,257

 

 

 

1,391,015

 

 

 

3,983,718

 

 

 

5,221,905

 

Depreciation and amortization

 

7,781

 

 

 

6,760

 

 

 

7,386

 

 

 

22,237

 

 

 

20,064

 

Selling and distribution expenses

 

136,982

 

 

 

131,012

 

 

 

127,786

 

 

 

381,878

 

 

 

392,363

 

General and administrative expenses

 

11,195

 

 

 

9,480

 

 

 

12,089

 

 

 

33,314

 

 

 

31,264

 

Other (income) expense, net

 

109

 

 

 

(143

)

 

 

(288

)

 

 

(382

)

 

 

(397

)

 

 

1,573,220

 

 

 

1,802,366

 

 

 

1,537,988

 

 

 

4,420,765

 

 

 

5,665,199

 

 

 

 

 

 

 

 

 

 

 

Segment income

$

97,076

 

 

$

154,436

 

 

$

98,550

 

 

$

265,311

 

 

$

534,636

 

 

 

 

 

 

 

 

 

 

 

 

(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)

 

84.8

%

 

 

84.6

%

 

 

85.0

%

 

 

85.0

%

 

 

84.2

%

Depreciation and amortization

 

0.5

%

 

 

0.3

%

 

 

0.5

%

 

 

0.5

%

 

 

0.3

%

Selling and distribution expenses

 

8.2

%

 

 

6.7

%

 

 

7.8

%

 

 

8.1

%

 

 

6.3

%

General and administrative expenses

 

0.7

%

 

 

0.5

%

 

 

0.7

%

 

 

0.7

%

 

 

0.5

%

Other (income) expense, net

 

%

 

 

%

 

 

%

 

 

%

 

 

%

 

 

94.2

%

 

 

92.1

%

 

 

94.0

%

 

 

94.3

%

 

 

91.4

%

 

 

 

 

 

 

 

 

 

 

Segment income

 

5.8

%

 

 

7.9

%

 

 

6.0

%

 

 

5.7

%

 

 

8.6

%

Segment Information

(in thousands) (unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

September 30

 

June 30, 2023

 

September 30

 

2023

 

2022

 

 

2023

 

2022

Segment sales

 

 

 

 

 

 

 

 

 

Wood Products

$

515,225

 

 

$

595,320

 

 

$

530,273

 

 

$

1,482,926

 

 

$

1,690,294

 

Building Materials Distribution

 

1,670,296

 

 

 

1,956,802

 

 

 

1,636,538

 

 

 

4,686,076

 

 

 

6,199,835

 

Intersegment eliminations

 

(351,080

)

 

 

(397,475

)

 

 

(351,592

)

 

 

(975,013

)

 

 

(1,131,128

)

Total net sales

$

1,834,441

 

 

$

2,154,647

 

 

$

1,815,219

 

 

$

5,193,989

 

 

$

6,759,001

 

 

 

 

 

 

 

 

 

 

 

Segment income

 

 

 

 

 

 

 

 

 

Wood Products

$

99,574

 

 

$

155,972

 

 

$

104,035

 

 

$

273,004

 

 

$

500,189

 

Building Materials Distribution

 

97,076

 

 

 

154,436

 

 

 

98,550

 

 

 

265,311

 

 

 

534,636

 

Total segment income

 

196,650

 

 

 

310,408

 

 

 

202,585

 

 

 

538,315

 

 

 

1,034,825

 

Unallocated corporate costs

 

(11,017

)

 

 

(11,038

)

 

 

(12,610

)

 

 

(35,105

)

 

 

(32,752

)

Income from operations

$

185,633

 

 

$

299,370

 

 

$

189,975

 

 

$

503,210

 

 

$

1,002,073

 

 

 

 

 

 

 

 

 

 

 

Segment EBITDA

 

 

 

 

 

 

 

 

 

Wood Products

$

122,924

 

 

$

177,257

 

 

$

127,040

 

 

$

343,149

 

 

$

548,767

 

Building Materials Distribution

 

104,857

 

 

 

161,196

 

 

 

105,936

 

 

 

287,548

 

 

 

554,700

 

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

Boise Cascade Company

Consolidated Balance Sheets

(in thousands) (unaudited)

 

 

September 30, 2023

 

December 31, 2022

 

 

ASSETS

 

 

 

 

 

 

 

Current

 

 

 

Cash and cash equivalents

$

1,272,963

 

$

998,344

Receivables

 

 

 

Trade, less allowances of $4,190 and $3,264

 

463,086

 

 

297,237

Related parties

 

197

 

 

19

Other

 

15,752

 

 

23,023

Inventories

 

683,406

 

 

697,551

Prepaid expenses and other

 

30,839

 

 

47,878

Total current assets

 

2,466,243

 

 

2,064,052

 

 

 

 

Property and equipment, net

 

789,541

 

 

770,023

Operating lease right-of-use assets

 

50,812

 

 

55,582

Finance lease right-of-use assets

 

24,616

 

 

26,501

Timber deposits

 

8,890

 

 

7,519

Goodwill

 

137,958

 

 

137,958

Intangible assets, net

 

148,651

 

 

161,433

Deferred income taxes

 

5,831

 

 

6,116

Other assets

 

9,891

 

 

11,330

Total assets

$

3,642,433

 

$

3,240,514

Boise Cascade Company

Consolidated Balance Sheets (continued)

(in thousands, except per-share data) (unaudited)

 

 

September 30, 2023

 

December 31, 2022

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

Current

 

 

 

Accounts payable

 

 

 

Trade

$

403,682

 

 

$

269,785

 

Related parties

 

1,599

 

 

 

1,019

 

Accrued liabilities

 

 

 

Compensation and benefits

 

148,472

 

 

 

142,463

 

Interest payable

 

5,071

 

 

 

9,955

 

Other

 

135,900

 

 

 

122,606

 

Total current liabilities

 

694,724

 

 

 

545,828

 

 

 

 

 

Debt

 

 

 

Long-term debt

 

445,058

 

 

 

444,392

 

 

 

 

 

Other

 

 

 

Compensation and benefits

 

36,466

 

 

 

33,226

 

Operating lease liabilities, net of current portion

 

44,418

 

 

 

48,668

 

Finance lease liabilities, net of current portion

 

28,590

 

 

 

30,022

 

Deferred income taxes

 

67,535

 

 

 

63,454

 

Other long-term liabilities

 

18,047

 

 

 

16,949

 

 

 

195,056

 

 

 

192,319

 

 

 

 

 

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, 44,983 and 44,827 shares issued, respectively

 

450

 

 

 

448

 

Treasury stock, 5,393 and 5,367 shares at cost, respectively

 

(140,448

)

 

 

(138,909

)

Additional paid-in capital

 

556,805

 

 

 

551,215

 

Accumulated other comprehensive loss

 

(501

)

 

 

(520

)

Retained earnings

 

1,891,289

 

 

 

1,645,741

 

Total stockholders' equity

 

2,307,595

 

 

 

2,057,975

 

Total liabilities and stockholders' equity

$

3,642,433

 

 

$

3,240,514

 

Boise Cascade Company

Consolidated Statements of Cash Flows

(in thousands) (unaudited)

 

 

Nine Months Ended September 30

 

2023

 

2022

Cash provided by (used for) operations

 

 

 

Net income

$

386,121

 

 

$

740,298

 

Items in net income not using (providing) cash

 

 

 

Depreciation and amortization, including deferred financing costs and other

 

95,516

 

 

 

71,213

 

Stock-based compensation

 

11,518

 

 

 

8,690

 

Pension expense

 

122

 

 

 

253

 

Deferred income taxes

 

4,351

 

 

 

45,365

 

Change in fair value of interest rate swaps

 

798

 

 

 

(3,594

)

Other

 

(1,877

)

 

 

(830

)

Decrease (increase) in working capital, net of acquisitions

 

 

 

Receivables

 

(158,756

)

 

 

(51,027

)

Inventories

 

14,145

 

 

 

(83,539

)

Prepaid expenses and other

 

(6,604

)

 

 

(5,901

)

Accounts payable and accrued liabilities

 

152,303

 

 

 

78,444

 

Pension contributions

 

(403

)

 

 

(922

)

Income taxes payable

 

23,664

 

 

 

14,970

 

Other

 

231

 

 

 

705

 

Net cash provided by operations

 

521,129

 

 

 

814,125

 

 

 

 

 

Cash provided by (used for) investment

 

 

 

Expenditures for property and equipment

 

(99,251

)

 

 

(61,835

)

Acquisitions of businesses and facilities

 

 

 

 

(516,881

)

Proceeds from sales of assets and other

 

2,450

 

 

 

3,094

 

Net cash used for investment

 

(96,801

)

 

 

(575,622

)

 

 

 

 

Cash provided by (used for) financing

 

 

 

Dividends paid on common stock

 

(140,885

)

 

 

(114,025

)

Tax withholding payments on stock-based awards

 

(5,926

)

 

 

(3,930

)

Treasury stock purchased

 

(1,539

)

 

 

 

Payments of deferring financing costs

 

 

 

 

(1,170

)

Other

 

(1,359

)

 

 

(1,221

)

Net cash used for financing

 

(149,709

)

 

 

(120,346

)

 

 

 

 

Net increase in cash and cash equivalents

 

274,619

 

 

 

118,157

 

 

 

 

 

Balance at beginning of the period

 

998,344

 

 

 

748,907

 

 

 

 

 

Balance at end of the period

$

1,272,963

 

 

$

867,064

 

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 2022 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.

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 (i) the three months ended September 30, 2023 and 2022, (ii) the three months ended June 30, 2023, and (iii) the nine months ended September 30, 2023 and 2022:

 

Three Months Ended

 

Nine Months Ended

 

September 30

 

June 30, 2023

 

September 30

 

2023

 

2022

 

 

2023

 

2022

 

(in thousands)

Net income

$

143,068

 

 

$

219,587

 

 

$

146,320

 

 

$

386,121

 

 

$

740,298

 

Interest expense

 

6,351

 

 

 

6,398

 

 

 

6,339

 

 

 

19,051

 

 

 

18,969

 

Interest income

 

(13,760

)

 

 

(3,238

)

 

 

(11,519

)

 

 

(34,964

)

 

 

(4,688

)

Income tax provision

 

49,005

 

 

 

76,042

 

 

 

49,447

 

 

 

131,727

 

 

 

248,794

 

Depreciation and amortization

 

31,474

 

 

 

28,374

 

 

 

30,722

 

 

 

93,382

 

 

 

69,611

 

EBITDA

 

216,138

 

 

 

327,163

 

 

 

221,309

 

 

 

595,317

 

 

 

1,072,984

 

Change in fair value of interest rate swaps

 

327

 

 

 

(1,134

)

 

 

(333

)

 

 

798

 

 

 

(3,594

)

Adjusted EBITDA

$

216,465

 

 

$

326,029

 

 

$

220,976

 

 

$

596,115

 

 

$

1,069,390

 

The following table reconciles segment income and unallocated corporate costs to EBITDA and adjusted EBITDA for the (i) three months ended September 30, 2023 and 2022, (ii) three months ended June 30, 2023, and (iii) nine months ended September 30, 2023 and 2022:

 

Three Months Ended

 

Nine Months Ended

 

September 30

 

June 30, 2023

 

September 30

 

2023

 

2022

 

 

2023

 

2022

 

(in thousands)

Wood Products

 

 

 

 

 

 

 

 

 

Segment income

$

99,574

 

 

$

155,972

 

 

$

104,035

 

 

$

273,004

 

 

$

500,189

 

Depreciation and amortization

 

23,350

 

 

 

21,285

 

 

 

23,005

 

 

 

70,145

 

 

 

48,578

 

EBITDA

$

122,924

 

 

$

177,257

 

 

$

127,040

 

 

$

343,149

 

 

$

548,767

 

 

 

 

 

 

 

 

 

 

 

Building Materials Distribution

 

 

 

 

 

 

 

 

 

Segment income

$

97,076

 

 

$

154,436

 

 

$

98,550

 

 

$

265,311

 

 

$

534,636

 

Depreciation and amortization

 

7,781

 

 

 

6,760

 

 

 

7,386

 

 

 

22,237

 

 

 

20,064

 

EBITDA

$

104,857

 

 

$

161,196

 

 

$

105,936

 

 

$

287,548

 

 

$

554,700

 

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

 

 

 

 

 

 

 

Unallocated corporate costs

$

(11,017

)

 

$

(11,038

)

 

$

(12,610

)

 

$

(35,105

)

 

$

(32,752

)

Foreign currency exchange gain (loss)

 

(602

)

 

 

(1,674

)

 

 

320

 

 

 

(355

)

 

 

(2,041

)

Pension expense (excluding service costs)

 

(40

)

 

 

(41

)

 

 

(41

)

 

 

(122

)

 

 

(253

)

Change in fair value of interest rate swaps

 

(327

)

 

 

1,134

 

 

 

333

 

 

 

(798

)

 

 

3,594

 

Depreciation and amortization

 

343

 

 

 

329

 

 

 

331

 

 

 

1,000

 

 

 

969

 

EBITDA

 

(11,643

)

 

 

(11,290

)

 

 

(11,667

)

 

 

(35,380

)

 

 

(30,483

)

Change in fair value of interest rate swaps

 

327

 

 

 

(1,134

)

 

 

(333

)

 

 

798

 

 

 

(3,594

)

Corporate adjusted EBITDA

$

(11,316

)

 

$

(12,424

)

 

$

(12,000

)

 

$

(34,582

)

 

$

(34,077

)

 

 

 

 

 

 

 

 

 

 

Total Company adjusted EBITDA

$

216,465

 

 

$

326,029

 

 

$

220,976

 

 

$

596,115

 

 

$

1,069,390

 

 

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