BOISE, ID - Boise Cascade Holdings, L.L.C. (Boise Cascade or Company) reported second quarter 2012 net income of $15.0 million and earnings before interest, taxes, depreciation, and amortization (EBITDA) of $28.2 million. Sales in second quarter 2012 were $733 million, a 24% increase over the same quarter a year ago. Reported net loss and EBITDA was $9.9 million and $3.9 million, respectively, in second quarter 2011. First quarter 2012 net income and EBITDA was $1.7 million and $14.6 million, respectively.
The Company generated $9.6 million of cash during the second quarter 2012 driven by improved operating results. At June 30, 2012, Boise Cascade had total available liquidity of $412.5 million, with $174.1 million in cash and committed bank line availability of $238.4 million.
Second quarter 2012 revenues and earnings were higher on improved demand for our products and commodity price increases relative to the year-ago quarter. The Company's revenues and earnings continue to be impacted by demand below historical levels for the products it distributes and manufactures. However, improved residential construction activity and market share gains in engineered wood products (EWP) and plywood contributed to an improved second quarter. U.S. housing starts increased approximately 29% in second quarter 2012 from the levels experienced in 2011. Single-family starts, which are a primary driver of the Company's sales, experienced an increase of 23% from the year-ago quarter. Blue Chip consensus forecast for U.S. housing starts for 2012 was 740,000 as of July 10, 2012. The final U.S. housing starts level reported for 2011 was 609,000.
"Our improved operating results experienced in the first quarter continued into the second quarter. We are encouraged by the improved operating environment and are cautiously optimistic the improved demand for our products will carry through to the second half of the year. Our strong liquidity position has allowed us to take advantage of the improvement in the markets and of business opportunities," commented Tom Carlile, CEO.
Building Materials Distribution (BMD) segment sales were $580.5 million in second quarter 2012, up 23% from the same quarter a year ago. Volumes for the segment were up approximately 15%, with prices up about 8%. BMD reported $10.9 million of EBITDA in second quarter 2012, compared to $3.4 million and $1.4 million in second quarter 2011 and first quarter 2012, respectively.
Wood Products segment sales in the second quarter 2012 were $241.8 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. The segment reported $21.7 million of EBITDA in second quarter 2012 compared to $4.5 million and $16.7 million in second quarter 2011 and first quarter 2012, respectively.
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. Industry commodity wood product prices 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, August 2, 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 800-591-6944 (international callers should dial 617-614-4910), participant passcode 31259078, 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, August 2, at 2 p.m. Eastern through Thursday, August 9, 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 47426166.
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.
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 Six Months Ended June30 March31, June30 2012 2012 2011 2012 2011 Sales Trade $ 728,434 $ 585,031 $ 582,040 $ 1,310,474 $ 1,063,838 Related parties 4,466 4,382 4,946 9,412 8,822 732,900 589,413 586,986 1,319,886 1,072,660 Costs and expenses Materials, labor, and other operating expenses 613,352 514,221 498,806 1,112,158 937,053 Materials, labor, and other operating expenses from related party 19,255 10,351 11,318 30,573 18,794 Depreciation and amortization 8,338 9,241 8,119 16,457 18,148 Selling and distribution expenses 60,468 51,016 53,814 114,282 97,986 General and administrative expenses 10,689 9,880 9,048 19,737 18,158 Other (income) expense, net (a) 653 50 (368) 285 2,639 712,755 594,759 580,737 1,293,492 1,092,778 Income (loss) from operations 20,145 (5,346) 6,249 26,394 (20,118) Foreign exchange gain (loss) (289) 30 186 (103) 340 Interest expense (4,818) (4,584) (4,813) (9,631) (9,173) Interest income 87 77 107 194 223 (5,020) (4,477) (4,520) (9,540) (8,610) Income (loss) before income taxes 15,125 (9,823) 1,729 16,854 (28,728) Income tax provision (78) (38) (61) (139) (134) Net income (loss) $ 15,047 $ (9,861) $ 1,668 $ 16,715 $ (28,862) See accompanying summary notes to consolidated financial statements and segment information.
(unaudited, in thousands)
Three Months Ended Six Months Ended June30 March31, June30 2012 2012 2011 2012 2011 Segment sales Building Materials Distribution $ 580,545 $ 470,691 $ 451,416 $ 1,031,961 $ 848,487 Wood Products 241,842 182,427 211,143 452,985 337,368 Intersegment eliminations and other (89,487) (63,705) (75,573) (165,060) (113,195) $ 732,900 $ 589,413 $ 586,986 $ 1,319,886 $ 1,072,660 Segment income (loss) Building Materials Distribution (a) $ 8,699 $ 1,337 $ (819) $ 7,880 $ (3,222) Wood Products (a) 15,548 (2,662) 10,811 26,359 (9,927) Corporate and Other (4,391) (3,991) (3,557) (7,948) (6,629) 19,856 (5,316) 6,435 26,291 (19,778) Interest expense (4,818) (4,584) (4,813) (9,631) (9,173) Interest income 87 77 107 194 223 Income (loss) before income taxes $ 15,125 $ (9,823) $ 1,729 $ 16,854 $ (28,728) EBITDA (b) Building Materials Distribution (a) $ 10,893 $ 3,387 $ 1,363 $ 12,256 $ 876 Wood Products (a) 21,661 4,467 16,716 38,377 3,999 Corporate and Other (4,360) (3,929) (3,525) (7,885) (6,505) $ 28,194 $ 3,925 $ 14,554 $ 42,748 $ (1,630) See accompanying summary notes to consolidated financial statements and segment information. Source: Boise Cascade
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