BOISE, Idaho - Boise Cascade Company (Boise Cascade or Company) BCC -0.82% today reported financial results for the first quarter ended March 31, 2014.

First Quarter 2014 Highlights

- Total Company sales in first quarter 2014 were $767.2 million, 3% above the same quarter in 2013, with sales growth of 9% in Wood Products and 1% in Building Materials Distribution (BMD).

- Net income was $5.6 million in first quarter 2014, or $0.14 per share. First quarter 2013 net income was $80.8 million, or $12.2 million, after adjusting for a $68.7 million income tax benefit associated with recording net deferred tax assets upon the Company's conversion from a limited liability company to a corporation. Earnings per share and adjusted earnings per share in first quarter 2013 were $2.15 and $0.32, respectively.

- The Company reported earnings before interest, taxes, depreciation, and amortization (EBITDA) of $26.8 million in first quarter 2014, down 19% from the $33.0 million recorded in first quarter 2013. Wood Products' first quarter 2014 EBITDA was $23.0 million, down 15% from first quarter 2013. BMD's first quarter 2014 EBITDA was $8.2 million, down 20% from the prior year. BMD's first quarter 2014 EBITDA included a $1.6 million pretax gain from the disposition of two surplus properties.

In first quarter 2014, total and single-family U.S. housing starts both declined 2% from the same period last year. The April 2014 Blue Chip consensus forecast for 2014 reflects 1.08 million total U.S. housing starts, a 17% expected increase from 2013 levels, but still well below the historical average for the last 20 years of approximately 1.4 million starts per year.

"The first quarter presented unusually severe weather conditions in many parts of the country which reduced the demand for building materials, negatively impacted our operating costs, and, at times, disrupted rail and truck shipments to our customers. Lower commodity wood products prices, particularly structural panels, also made the year-over-year quarterly sales and earnings comparisons challenging. However, our sales activity is picking up as we move into the second quarter and we still believe the housing recovery will continue to progress in 2014," commented Tom Carlile, CEO.

                               1Q 2014         1Q 2013         4Q 2013
                               (thousands)
        Consolidated Results
        Sales                  $   767,180     $   744,878     $   798,344
        EBITDA1                26,788          33,035          33,132
        Net income             5,565           80,836          9,828
        Adjusted net income1   5,565           12,170          9,828
        Segment Results
        Wood Products sales    $   293,274     $   269,216     $   301,252
        Wood Products EBITDA1  23,027          27,061          25,100
        BMD sales              585,530         581,129         615,467
        BMD EBITDA1            8,168           10,175          13,388
        Corporate EBITDA1      (4,407      )   (4,201      )   (5,356      )
        


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

Wood Products

Sales, including sales to our Building Materials Distribution segment, increased $24.1 million, or 9%, to $293.3 million for the three months ended March 31, 2014, from $269.2 million for the three months ended March 31, 2013. The Company's acquisition of two plywood manufacturing facilities on September 30, 2013, was the primary factor behind 20% higher plywood sales volumes. The higher plywood sales volumes increased sales by $22.7 million. Price increases of 5% in engineered wood products and 23% in lumber resulted in sales increases of $5.3 million and $4.9 million, respectively. These increases were offset partially by a decrease of $15.2 million due to 11% lower plywood prices.

Wood Products EBITDA decreased $4.1 million to $23.0 million for the three months ended March 31, 2014, from $27.1 million for the three months ended March 31, 2013. The decline was due primarily to lower plywood sales prices and higher wood fiber costs, offset partially by higher EWP and lumber sales prices, as well as EBITDA from the two recently acquired plywood manufacturing facilities.

Building Materials Distribution

Sales increased $4.4 million, or 1%, to $585.5 million for the three months ended March 31, 2014, from $581.1 million for the three months ended March 31, 2013. Compared with the same quarter in the prior year, the overall increase in sales was driven primarily by improvements in sales volumes of 5%, offset partially by a decrease in sales prices of 4%. By product line, sales of EWP (substantially all of which is sourced through our Wood Products segment) increased 7%, or $6.5 million, and general line product sales increased 4%, or $6.4 million, offset partially by a decrease in commodity sales of 3%, or $8.5 million.

BMD EBITDA decreased $2.0 million to $8.2 million for the three months ended March 31, 2014, from $10.2 million for the three months ended March 31, 2013. The decrease in income was driven primarily by a lower gross margin of $1.9 million primarily as a result of lower sales prices. In addition, a $1.9 million increase in selling and distribution expenses was partially offset by a $1.6 million pretax gain recorded in other income from the sale of two surplus properties.

Balance Sheet

Boise Cascade ended the first quarter with $86.0 million of cash and cash equivalents and $341.3 million of undrawn committed bank line availability, for total available liquidity of $427.3 million. The company reported $301.6 million of outstanding debt at March 31, 2014.

Outlook

We expect to continue to experience demand below 20-year average historical levels for the products we manufacture and distribute. The housing industry in the U.S. improved in 2012 and 2013, and we remain optimistic that the improvement in demand for our products will continue in 2014. 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.

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 .

Boise Cascade Company

Consolidated Statements of Operations

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



                                                                                Three Months Ended
                                                                                March 31                      December 31,
                                                                                                               2013
                                                                                2014           2013
        Sales                                                                   $   767,180    $   744,878    $        798,344
        Costs and expenses
        Materials, labor, and other operating expenses (excluding depreciation) 672,608        644,847        690,994
        Depreciation and amortization                                           12,320         8,477          11,833
        Selling and distribution expenses                                       58,930         57,004         61,933
        General and administrative expenses                                     10,665         10,046         12,325
        Other (income) expense, net                                             (1,900      )  (134        )  (162              )
                                                                                752,623        720,240        776,923
        Income from operations                                                  14,557         24,638         21,421
        Foreign currency exchange loss                                          (89         )  (80         )  (122              )
        Interest expense                                                        (5,512      )  (4,891      )  (5,580            )
        Interest income                                                         70             62             29
                                                                                (5,531      )  (4,909      )  (5,673            )
        Income before income taxes                                              9,026          19,729         15,748
        Income tax (provision) benefit (a)                                      (3,461      )  61,107         (5,920            )
        Net income                                                              $   5,565      $   80,836     $        9,828
        Weighted average common shares outstanding:
          Basic                                              39,372         37,569         39,365
          Diluted                                            39,452         37,569         39,435
        Net income per common share:
          Basic                                              $   0.14       $   2.15       $        0.25
          Diluted                                            $   0.14       $   2.15       $        0.25
        

Wood Products Segment

Statements of Operations

(unaudited, in thousands, except percentages)

Three Months Ended March 31 December 31, 2013 2014 2013 Segment sales $ 293,274 $ 269,216 $ 301,252 Costs and expenses Materials, labor, and other operating expenses (excluding depreciation) 260,863 233,384 265,916 Depreciation and amortization 9,980 6,253 9,208 Selling and distribution expenses 6,738 6,693 7,188 General and administrative expenses 2,649 2,131 3,121 Other (income) expense, net (3 ) (53 ) (73 ) 280,227 248,408 285,360 Segment income $ 13,047 $ 20,808 $ 15,892 (percentage of sales) Segment sales 100.0 % 100.0 % 100.0 % Costs and expenses Materials, labor, and other operating expenses (excluding depreciation) 88.9 % 86.7 % 88.3 % Depreciation and amortization 3.4 % 2.3 % 3.1 % Selling and distribution expenses 2.3 % 2.5 % 2.4 % General and administrative expenses 0.9 % 0.8 % 1.0 % Other (income) expense, net - % - % - % 95.6 % 92.3 % 94.7 % Segment income 4.4 % 7.7 % 5.3 %

Building Materials Distribution Segment

Statements of Operations

(unaudited, in thousands, except percentages)

Three Months Ended March 31 December 31, 2013 2014 2013 Segment sales $ 585,530 $ 581,129 $ 615,467 Costs and expenses Materials, labor, and other operating expenses (excluding depreciation) 523,344 517,002 543,404 Depreciation and amortization 2,307 2,178 2,593 Selling and distribution expenses 52,192 50,311 54,745 General and administrative expenses 3,766 3,742 4,039 Other (income) expense, net (1,940 ) (101 ) (109 ) 579,669 573,132 604,672 Segment income $ 5,861 $ 7,997 $ 10,795 (percentage of sales) Segment sales 100.0 % 100.0 % 100.0 % Costs and expenses Materials, labor, and other operating expenses (excluding depreciation) 89.4 % 89.0 % 88.3 % Depreciation and amortization 0.4 % 0.4 % 0.4 % Selling and distribution expenses 8.9 % 8.7 % 8.9 % General and administrative expenses 0.6 % 0.6 % 0.7 % Other (income) expense, net (0.3 )% - % - % 99.0 % 98.6 % 98.2 % Segment income 1.0 % 1.4 % 1.8 %

Segment Information

(unaudited, in thousands)

Three Months Ended March 31 December 31, 2013 2014 2013 Segment sales Wood Products $ 293,274 $ 269,216 $ 301,252 Building Materials Distribution 585,530 581,129 615,467 Intersegment eliminations (111,624 ) (105,467 ) (118,375 ) $ 767,180 $ 744,878 $ 798,344 Segment income (loss) Wood Products $ 13,047 $ 20,808 $ 15,892 Building Materials Distribution 5,861 7,997 10,795 Corporate and Other (4,440 ) (4,247 ) (5,388 ) 14,468 24,558 21,299 Interest expense (5,512 ) (4,891 ) (5,580 ) Interest income 70 62 29 Income before income taxes $ 9,026 $ 19,729 $ 15,748 EBITDA (b) Wood Products $ 23,027 $ 27,061 $ 25,100 Building Materials Distribution 8,168 10,175 13,388 Corporate and Other (4,407 ) (4,201 ) (5,356 ) $ 26,788 $ 33,035 $ 33,132

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

Boise Cascade Company

Consolidated Balance Sheets

(unaudited, in thousands)

March 31, December 31, 2014 2013 ASSETS Current Cash and cash equivalents $ 85,985 $ 118,249 Receivables Trade, less allowances of $2,808 and $2,509 200,101 152,240 Related parties 660 583 Other 6,020 7,268 Inventories 421,059 383,359 Deferred income taxes 18,185 18,151 Prepaid expenses and other 9,707 7,855 Total current assets 741,717 687,705 Property and equipment, net 357,907 360,985 Timber deposits 6,461 6,266 Deferred financing costs 8,051 8,334 Goodwill 21,823 21,823 Intangible assets, net 10,253 10,277 Deferred income taxes 85 760 Other assets 8,210 8,036 Total assets $ 1,154,507 $ 1,104,186

Boise Cascade Company

Consolidated Balance Sheets (continued)

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

March 31, December 31, 2014 2013 LIABILITIES AND STOCKHOLDERS' EQUITY Current Accounts payable Trade $ 197,480 $ 139,636 Related parties 2,143 2,484 Accrued liabilities Compensation and benefits 47,918 60,527 Interest payable 8,080 3,294 Other 30,586 33,076 Total current liabilities 286,207 239,017 Debt Long-term debt 301,565 301,613 Other Compensation and benefits 93,125 96,536 Other long-term liabilities 14,686 14,539 107,811 111,075 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, 43,269 and 43,229 shares issued 433 432 Treasury Stock, 3,864 shares at cost (100,000 ) (100,000 ) Additional paid-in capital 497,474 496,593 Accumulated other comprehensive loss (55,253 ) (55,249 ) Retained earnings 116,270 110,705 Total stockholders' equity 458,924 452,481 Total liabilities and stockholders' equity $ 1,154,507 $ 1,104,186

Boise Cascade Company

Consolidated Statements of Cash Flows

(unaudited, in thousands)

Three Months Ended March 31 2014 2013 Cash provided by (used for) operations Net income $ 5,565 $ 80,836 Items in net income not using (providing) cash Depreciation and amortization, including deferred financing costs and other 12,729 8,888 Stock-based compensation 842 243 Pension expense 278 2,726 Deferred income taxes 643 (68,018 ) Other (1,908 ) (232 ) Decrease (increase) in working capital Receivables (46,707 ) (68,635 ) Inventories (37,700 ) (61,297 ) Prepaid expenses and other (4,880 ) (384 ) Accounts payable and accrued liabilities 48,315 53,793 Pension contributions (390 ) (9,663 ) Income taxes payable 2,314 6,772 Other (3,051 ) (2,472 ) Net cash used for operations (23,950 ) (57,443 ) Cash provided by (used for) investment Expenditures for property and equipment (12,539 ) (5,316 ) Proceeds from sales of assets 4,520 489 Other 61 22 Net cash used for investment (7,958 ) (4,805 ) Cash provided by (used for) financing Net proceeds from issuance of common stock - 262,736 Issuances of long-term debt 13,000 55,000 Payments of long-term debt (13,000 ) (80,000 ) Financing costs (11 ) (149 ) Other (345 ) - Net cash provided by (used for) financing (356 ) 237,587 Net increase (decrease) in cash and cash equivalents (32,264 ) 175,339 Balance at beginning of the period 118,249 45,893 Balance at end of the period $ 85,985 $ 221,232

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 2013 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) Adjusted net income represents net income before certain unusual items. The three months ended March 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 three months ended March 31, 2014 and 2013:

Three Months Ended March 31 2014 2013 (unaudited, in thousands, except per-share amounts) Net income (GAAP basis) $ 5,565 $ 80,836 Impact of deferred tax benefit - (68,666 ) Adjusted net income (non-GAAP basis) $ 5,565 $ 12,170 Weighted average common shares outstanding: Basic 39,372 37,569 Diluted 39,452 37,569 Adjusted net income (non-GAAP basis), per share: Basic $ 0.14 $ 0.32 Diluted $ 0.14 $ 0.32

(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 March 31, 2014 and 2013, and December 31, 2013:

Three Months Ended March 31 December 31, 2013 2014 2013 (unaudited, in thousands) Net income $ 5,565 $ 80,836 $ 9,828 Interest expense 5,512 4,891 5,580 Interest income (70 ) (62 ) (29 ) Income tax provision (benefit) 3,461 (61,107 ) 5,920 Depreciation and amortization 12,320 8,477 11,833 EBITDA $ 26,788 $ 33,035 $ 33,132

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

Three Months Ended March 31 December 31, 2013 2014 2013 (unaudited, in thousands) Wood Products Segment income $ 13,047 $ 20,808 $ 15,892 Depreciation and amortization 9,980 6,253 9,208 EBITDA 23,027 27,061 25,100 Building Materials Distribution Segment income 5,861 7,997 10,795 Depreciation and amortization 2,307 2,178 2,593 EBITDA 8,168 10,175 13,388 Corporate and Other Segment loss (4,440 ) (4,247 ) (5,388 ) Depreciation and amortization 33 46 32 EBITDA (4,407 ) (4,201 ) (5,356 ) Total Company EBITDA $ 26,788 $ 33,035 $ 33,132

Source: Boise Cascade Company

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