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Boise Cascade Company Reports Third Quarter 2022 Results

Boise Cascade Company ("Boise Cascade," the "Company," "we," or "our") (NYSE: BCC) today reported 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, compared with net income of $91.7 million, or $2.31 per share, on sales of $1.9 billion for the third quarter ended September 30, 2021.

"The outstanding work of associates across our organization was evident as both businesses reported strong financial results during the third quarter despite the softening economic landscape. In addition, we have made good progress on successfully integrating the recently acquired Coastal operations as we work to expand our EWP capacity and further leverage our integrated business model," commented Nate Jorgensen, CEO. "We also recently rewarded our shareholders with an increase in our quarterly dividend and an additional special dividend without sacrificing significant balance sheet flexibility. We remain committed to supporting our vendor and customer partners and executing our key strategic priorities as we navigate market uncertainties and clear signals of weaker near-term demand for new residential construction."

Third Quarter 2022 Highlights

 

 

3Q 2022

 

3Q 2021

 

% change

 

 

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

Consolidated Results

 

 

 

 

 

 

Sales

 

$

2,154,647

 

$

1,879,451

 

15

%

Net income

 

 

219,587

 

 

 

91,699

 

 

139

%

Net income per common share - diluted

 

 

5.52

 

 

 

2.31

 

 

139

%

Adjusted EBITDA 1

 

 

326,029

 

 

 

149,313

 

 

118

%

Segment Results

 

 

 

 

 

 

Wood Products sales

 

$

595,320

 

 

$

497,316

 

 

20

%

Wood Products income

 

 

155,972

 

 

 

122,056

 

 

28

%

Wood Products EBITDA 1

 

 

177,257

 

 

 

135,970

 

 

30

%

Building Materials Distribution sales

 

 

1,956,802

 

 

 

1,721,244

 

 

14

%

Building Materials Distribution income

 

 

154,436

 

 

 

16,565

 

 

832

%

Building Materials Distribution EBITDA 1

 

 

161,196

 

 

 

22,578

 

 

614

%

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

In third quarter 2022, total U.S. housing starts decreased 7%, driven by a decrease in single-family housing starts of 18% compared to the same period in 2021. On a year-to-date basis through September 2022, total housing starts increased 1%, driven by an increase in multi-family housing starts compared to the same period in 2021. However, single-family housing starts decreased 6% when compared with the same period in 2021. Single-family housing starts are the key demand driver for our sales.

Wood Products

Wood Products' sales, including sales to Building Materials Distribution (BMD), increased $98.0 million, or 20%, to $595.3 million for the three months ended September 30, 2022, from $497.3 million for the three months ended September 30, 2021. The increase in sales was driven primarily by higher sales prices for I-joists and LVL (collectively referred to as EWP) and higher sales volumes for LVL. In addition, plywood sales volumes increased due to our acquisition of Coastal Plywood and its plywood manufacturing operations on July 25, 2022 (the Acquisition). These increases were offset partially by lower plywood sales prices and lower sales volumes for I-joists.

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

 

 

3Q 2022 vs. 3Q 2021

 

3Q 2022 vs. 2Q 2022

 

 

 

 

 

Average Net Selling Prices

 

 

 

 

LVL

 

52%

 

19%

I-joists

 

54%

 

18%

Plywood

 

(15)%

 

(16)%

Sales Volumes

 

 

 

 

LVL

 

12%

 

13%

I-joists

 

(15)%

 

(7)%

Plywood

 

5%

 

17%

Wood Products' segment income increased $33.9 million to $156.0 million for the three months ended September 30, 2022, from $122.1 million for the three months ended September 30, 2021. The increase in segment income was due primarily to higher EWP sales prices, offset partially by lower plywood sales prices, as well as higher manufacturing costs. In addition, the Acquisition was the primary driver of the increase in depreciation and amortization and general and administrative expenses.

Building Materials Distribution

BMD's sales increased $235.6 million, or 14%, to $1,956.8 million for the three months ended September 30, 2022, from $1,721.2 million for the three months ended September 30, 2021. Compared with the same quarter in the prior year, the overall increase in sales was driven by a sales price increase of 15%, offset partially by a sales volume decrease of 1%. By product line, commodity sales increased 1%, general line product sales increased 19%, and sales of EWP (substantially all of which are sourced through our Wood Products segment) increased 33%.

BMD segment income increased $137.8 million to $154.4 million for the three months ended September 30, 2022, from $16.6 million in the comparative prior year quarter. The increase in segment income was driven primarily by a gross margin increase of $166.1 million, resulting primarily from margin improvements on commodity products. In addition, selling and distribution expenses increased $25.7 million.

Balance Sheet and Liquidity

Boise Cascade ended third quarter 2022 with $867.1 million of cash and cash equivalents and $396.2 million of undrawn committed bank line availability, for total available liquidity of $1,263.2 million. The Company had $444.2 million of outstanding debt at September 30, 2022.

On September 9, 2022, we entered into the Eighth Amendment to the Amended and Restated Credit Agreement (the Amendment) related to the Company's senior secured asset-based revolving credit facility and term loan. The Amendment increases the maximum amount available for revolving loans from $350 million to $400 million, extends the maturity date of the agreement, and replaced the LIBOR rate with Secured Overnight Financing Rate (SOFR). The term loan remains at $50.0 million. For additional information regarding the Amendment, see our Form 10-Q for the quarterly period ended September 30, 2022, filed with the Securities and Exchange Commission.

Excluding acquisitions, we expect capital expenditures in 2022 to total approximately $100 million to $120 million. Our 2022 capital expenditures range includes funding for our BMD organic expansions in Ohio, Kentucky, and Minnesota, replacement of a dryer at our Chester, South Carolina, veneer and plywood plant, and post-acquisition veneer equipment related spending at our Chapman, Alabama facility. We expect capital expenditures in 2023 to total approximately $120 million to $140 million. These levels of capital expenditures could increase or decrease as a result of several factors, including acquisitions, efforts to further accelerate organic growth, exercise of lease purchase options, our financial results, future economic conditions, availability of engineering and construction resources, and timing and availability of equipment purchases.

Dividends

On October 27, 2022, our board of directors declared a quarterly dividend of $0.15 per share on our common stock, as well as a special dividend of $1.00 per share on our common stock, both payable on December 15, 2022, to stockholders of record on December 1, 2022.

Future dividend declarations, including amount per share, record date and payment date, will be made at the discretion of our board of directors and will depend upon, among other things, legal capital requirements and surplus, our future operations and earnings, general financial condition, material cash requirements, restrictions imposed by our asset-based credit facility and the indenture governing our senior notes, applicable laws, and other factors that our board of directors may deem relevant.

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. Consensus forecasts for 2022 single- and multi-family housing starts in the U.S are between 1.5 million and 1.6 million units, or essentially flat compared to 2021. In addition, the age of U.S. housing stock and elevated levels of homeowner equity provide a favorable backdrop for repair-and-remodel spending. However, continued actions by the Federal Reserve to increase interest rates to combat high levels of inflation have significantly increased mortgage rates and created a great deal of uncertainty broadly across the U.S. economy. As such, due to home affordability constraints and a weakening economy, the pace of new residential construction has slowed and we expect demand to continue to decline for the remainder of 2022 and into 2023. Consensus forecasts for 2023 single- and multi-family housing starts in the U.S. are estimated to be 15% to 20% below 2022 levels. While likely tempered by an economic slowdown, we anticipate the primary drivers of repair-and-remodeling activity to continue to be supportive of 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. We expect future commodity product pricing and commodity input costs to 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. In addition, we expect future price erosion on our EWP and general line products as economic activity slows and demand weakens for new residential construction.

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, November 1, 2022, at 11 a.m. Eastern.

To join the webcast, go to the Investor Relations section at www.bc.com 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 Investor Relations 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 Coastal Plywood acquisition, the effect of COVID-19 and related variants, 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, 2022

 

September 30

 

2022

 

2021

 

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

Sales

$

2,154,647

 

 

$

1,879,451

 

 

$

2,278,072

 

 

$

6,759,001

 

 

$

6,143,928

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

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

 

1,655,979

 

 

 

1,594,405

 

 

 

1,797,948

 

 

 

5,183,823

 

 

 

4,909,362

 

Depreciation and amortization

 

28,374

 

 

 

20,299

 

 

 

20,694

 

 

 

69,611

 

 

 

60,258

 

Selling and distribution expenses

 

142,176

 

 

 

114,466

 

 

 

134,279

 

 

 

423,106

 

 

 

366,119

 

General and administrative expenses

 

27,622

 

 

 

21,002

 

 

 

27,701

 

 

 

81,375

 

 

 

64,252

 

Other (income) expense, net

 

1,126

 

 

 

(107

)

 

 

375

 

 

 

(987

)

 

 

(485

)

 

 

1,855,277

 

 

 

1,750,065

 

 

 

1,980,997

 

 

 

5,756,928

 

 

 

5,399,506

 

 

 

 

 

 

 

 

 

 

 

Income from operations

 

299,370

 

 

 

129,386

 

 

 

297,075

 

 

 

1,002,073

 

 

 

744,422

 

 

 

 

 

 

 

 

 

 

 

Foreign currency exchange loss

 

(1,674

)

 

 

(353

)

 

 

(499

)

 

 

(2,041

)

 

 

(52

)

Pension expense (excluding service costs)

 

(41

)

 

 

(19

)

 

 

(41

)

 

 

(253

)

 

 

(57

)

Interest expense

 

(6,398

)

 

 

(6,279

)

 

 

(6,317

)

 

 

(18,969

)

 

 

(18,501

)

Interest income

 

3,238

 

 

 

63

 

 

 

1,385

 

 

 

4,688

 

 

 

173

 

Change in fair value of interest rate swaps

 

1,134

 

 

 

59

 

 

 

394

 

 

 

3,594

 

 

 

1,058

 

 

 

(3,741

)

 

 

(6,529

)

 

 

(5,078

)

 

 

(12,981

)

 

 

(17,379

)

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

295,629

 

 

 

122,857

 

 

 

291,997

 

 

 

989,092

 

 

 

727,043

 

Income tax provision

 

(76,042

)

 

 

(31,158

)

 

 

(73,886

)

 

 

(248,794

)

 

 

(183,632

)

Net income

$

219,587

 

 

$

91,699

 

 

$

218,111

 

 

$

740,298

 

 

$

543,411

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

39,544

 

 

 

39,442

 

 

 

39,544

 

 

 

39,521

 

 

 

39,413

 

Diluted

 

39,776

 

 

 

39,661

 

 

 

39,763

 

 

 

39,762

 

 

 

39,623

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

Basic

$

5.55

 

 

$

2.32

 

 

$

5.52

 

 

$

18.73

 

 

$

13.79

 

Diluted

$

5.52

 

 

$

2.31

 

 

$

5.49

 

 

$

18.62

 

 

$

13.71

 

 

 

 

 

 

 

 

 

 

 

Dividends declared per common share

$

0.12

 

 

$

0.10

 

 

$

2.62

 

 

$

2.86

 

 

$

2.30

 

 

Wood Products Segment

Statements of Operations

(in thousands, except percentages) (unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

September 30

 

June 30, 2022

 

September 30

 

2022

 

2021

 

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

Segment sales

$

595,320

 

 

$

497,316

 

 

$

536,030

 

 

$

1,690,294

 

 

$

1,524,220

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

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

 

398,008

 

 

 

348,167

 

 

 

351,557

 

 

 

1,093,274

 

 

 

1,010,691

 

Depreciation and amortization

 

21,285

 

 

 

13,914

 

 

 

13,653

 

 

 

48,578

 

 

 

41,388

 

Selling and distribution expenses

 

11,164

 

 

 

9,124

 

 

 

10,349

 

 

 

30,743

 

 

 

26,958

 

General and administrative expenses

 

7,717

 

 

 

4,023

 

 

 

5,826

 

 

 

18,189

 

 

 

12,214

 

Other (income) expense, net

 

1,174

 

 

 

32

 

 

 

544

 

 

 

(679

)

 

 

100

 

 

 

439,348

 

 

 

375,260

 

 

 

381,929

 

 

 

1,190,105

 

 

 

1,091,351

 

 

 

 

 

 

 

 

 

 

 

Segment income

$

155,972

 

 

$

122,056

 

 

$

154,101

 

 

$

500,189

 

 

$

432,869

 

 

 

 

 

 

 

 

 

 

 

 

(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)

 

66.9

%

 

 

70.0

%

 

 

65.6

%

 

 

64.7

%

 

 

66.3

%

Depreciation and amortization

 

3.6

%

 

 

2.8

%

 

 

2.5

%

 

 

2.9

%

 

 

2.7

%

Selling and distribution expenses

 

1.9

%

 

 

1.8

%

 

 

1.9

%

 

 

1.8

%

 

 

1.8

%

General and administrative expenses

 

1.3

%

 

 

0.8

%

 

 

1.1

%

 

 

1.1

%

 

 

0.8

%

Other (income) expense, net

 

0.2

%

 

 

%

 

 

0.1

%

 

 

%

 

 

%

 

 

73.8

%

 

 

75.5

%

 

 

71.3

%

 

 

70.4

%

 

 

71.6

%

 

 

 

 

 

 

 

 

 

 

Segment income

 

26.2

%

 

 

24.5

%

 

 

28.7

%

 

 

29.6

%

 

 

28.4

%

 

Building Materials Distribution Segment

Statements of Operations

(in thousands, except percentages) (unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

September 30

 

June 30, 2022

 

September 30

 

2022

 

2021

 

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

Segment sales

$

1,956,802

 

 

$

1,721,244

 

 

$

2,131,200

 

 

$

6,199,835

 

 

$

5,528,765

 

 

 

 

 

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

 

 

 

 

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

 

1,655,257

 

 

 

1,585,804

 

 

 

1,835,845

 

 

 

5,221,905

 

 

 

4,806,084

 

Depreciation and amortization

 

6,760

 

 

 

6,013

 

 

 

6,728

 

 

 

20,064

 

 

 

17,749

 

Selling and distribution expenses

 

131,012

 

 

 

105,342

 

 

 

123,930

 

 

 

392,363

 

 

 

339,163

 

General and administrative expenses

 

9,480

 

 

 

7,816

 

 

 

10,558

 

 

 

31,264

 

 

 

24,627

 

Other (income) expense, net

 

(143

)

 

 

(296

)

 

 

(169

)

 

 

(397

)

 

 

(1,980

)

 

 

1,802,366

 

 

 

1,704,679

 

 

 

1,976,892

 

 

 

5,665,199

 

 

 

5,185,643

 

 

 

 

 

 

 

 

 

 

 

Segment income

$

154,436

 

 

$

16,565

 

 

$

154,308

 

 

$

534,636

 

 

$

343,122

 

 

 

 

 

 

 

 

 

 

 

 

(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)

 

84.6

%

 

 

92.1

%

 

 

86.1

%

 

 

84.2

%

 

 

86.9

%

Depreciation and amortization

 

0.3

%

 

 

0.3

%

 

 

0.3

%

 

 

0.3

%

 

 

0.3

%

Selling and distribution expenses

 

6.7

%

 

 

6.1

%

 

 

5.8

%

 

 

6.3

%

 

 

6.1

%

General and administrative expenses

 

0.5

%

 

 

0.5

%

 

 

0.5

%

 

 

0.5

%

 

 

0.4

%

Other (income) expense, net

 

%

 

 

%

 

 

%

 

 

%

 

 

%

 

 

92.1

%

 

 

99.0

%

 

 

92.8

%

 

 

91.4

%

 

 

93.8

%

 

 

 

 

 

 

 

 

 

 

Segment income

 

7.9

%

 

 

1.0

%

 

 

7.2

%

 

 

8.6

%

 

 

6.2

%

 

Segment Information

(in thousands) (unaudited)

 

 

Three Months Ended

 

Nine Months Ended

 

September 30

 

June 30, 2022

 

September 30

 

2022

 

2021

 

 

2022

 

2021

Segment sales

 

 

 

 

 

 

 

 

 

Wood Products

$

595,320

 

 

$

497,316

 

 

$

536,030

 

 

$

1,690,294

 

 

$

1,524,220

 

Building Materials Distribution

 

1,956,802

 

 

 

1,721,244

 

 

 

2,131,200

 

 

 

6,199,835

 

 

 

5,528,765

 

Intersegment eliminations

 

(397,475

)

 

 

(339,109

)

 

 

(389,158

)

 

 

(1,131,128

)

 

 

(909,057

)

Total net sales

$

2,154,647

 

 

$

1,879,451

 

 

$

2,278,072

 

 

$

6,759,001

 

 

$

6,143,928

 

 

 

 

 

 

 

 

 

 

 

Segment income

 

 

 

 

 

 

 

 

 

Wood Products

$

155,972

 

 

$

122,056

 

 

$

154,101

 

 

$

500,189

 

 

$

432,869

 

Building Materials Distribution

 

154,436

 

 

 

16,565

 

 

 

154,308

 

 

 

534,636

 

 

 

343,122

 

Total segment income

 

310,408

 

 

 

138,621

 

 

 

308,409

 

 

 

1,034,825

 

 

 

775,991

 

Unallocated corporate costs

 

(11,038

)

 

 

(9,235

)

 

 

(11,334

)

 

 

(32,752

)

 

 

(31,569

)

Income from operations

$

299,370

 

 

$

129,386

 

 

$

297,075

 

 

$

1,002,073

 

 

$

744,422

 

 

 

 

 

 

 

 

 

 

 

Segment EBITDA (a)

 

 

 

 

 

 

 

 

 

Wood Products

$

177,257

 

 

$

135,970

 

 

$

167,754

 

 

$

548,767

 

 

$

474,257

 

Building Materials Distribution

 

161,196

 

 

 

22,578

 

 

 

161,036

 

 

 

554,700

 

 

 

360,871

 

 

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

Boise Cascade Company

Consolidated Balance Sheets

(in thousands) (unaudited)

 

 

September 30, 2022

 

December 31, 2021

 

 

ASSETS

 

 

 

 

 

 

 

Current

 

 

 

Cash and cash equivalents

$

867,064

 

$

748,907

Receivables

 

 

 

Trade, less allowances of $3,165 and $2,054

 

511,047

 

 

 

444,325

 

Related parties

 

191

 

 

 

211

 

Other

 

18,004

 

 

 

17,692

 

Inventories

 

767,187

 

 

 

660,671

 

Prepaid expenses and other

 

17,944

 

 

 

14,072

 

Total current assets

 

2,181,437

 

 

 

1,885,878

 

 

 

 

 

Property and equipment, net

 

744,547

 

 

 

495,240

 

Operating lease right-of-use assets

 

59,631

 

 

 

62,663

 

Finance lease right-of-use assets

 

27,151

 

 

 

29,057

 

Timber deposits

 

9,563

 

 

 

9,461

 

Goodwill

 

134,356

 

 

 

60,382

 

Intangible assets, net

 

169,538

 

 

 

15,351

 

Deferred income taxes

 

7,852

 

 

 

6,589

 

Other assets

 

14,459

 

 

 

8,019

 

Total assets

$

3,348,534

 

 

$

2,572,640

 

 

Boise Cascade Company

Consolidated Balance Sheets (continued)

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

 

 

September 30, 2022

 

December 31, 2021

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

Current

 

 

 

Accounts payable

 

 

 

Trade

$

398,397

 

 

$

334,985

 

Related parties

 

1,988

 

 

 

1,498

 

Accrued liabilities

 

 

 

Compensation and benefits

 

147,548

 

 

 

128,518

 

Income taxes payable

 

12,365

 

 

 

 

Interest payable

 

5,081

 

 

 

9,886

 

Other

 

174,084

 

 

 

165,859

 

Total current liabilities

 

739,463

 

 

 

640,746

 

 

 

 

 

Debt

 

 

 

Long-term debt

 

444,175

 

 

 

444,628

 

 

 

 

 

Other

 

 

 

Compensation and benefits

 

30,562

 

 

 

28,365

 

Operating lease liabilities, net of current portion

 

51,992

 

 

 

55,263

 

Finance lease liabilities, net of current portion

 

30,547

 

 

 

31,898

 

Deferred income taxes

 

50,884

 

 

 

3,641

 

Other long-term liabilities

 

17,839

 

 

 

15,480

 

 

 

181,824

 

 

 

134,647

 

 

 

 

 

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, 44,815 and 44,698 shares issued, respectively

 

448

 

 

 

447

 

Treasury stock, 5,367 shares at cost

 

(138,909

)

 

 

(138,909

)

Additional paid-in capital

 

548,035

 

 

 

543,249

 

Accumulated other comprehensive loss

 

(902

)

 

 

(1,047

)

Retained earnings

 

1,574,400

 

 

 

948,879

 

Total stockholders' equity

 

1,983,072

 

 

 

1,352,619

 

Total liabilities and stockholders' equity

$

3,348,534

 

 

$

2,572,640

 

 

Boise Cascade Company

Consolidated Statements of Cash Flows

(in thousands) (unaudited)

 

 

Nine Months Ended September 30

 

2022

 

2021

Cash provided by (used for) operations

 

 

 

Net income

$

740,298

 

 

$

543,411

 

Items in net income not using (providing) cash

 

 

 

Depreciation and amortization, including deferred financing costs and other

 

71,213

 

 

 

61,559

 

Stock-based compensation

 

8,690

 

 

 

5,684

 

Pension expense

 

253

 

 

 

57

 

Deferred income taxes

 

45,365

 

 

 

(12,017

)

Change in fair value of interest rate swaps

 

(3,594

)

 

 

(1,058

)

Other

 

(830

)

 

 

928

 

Decrease (increase) in working capital, net of acquisitions

 

 

 

Receivables

 

(51,027

)

 

 

(99,881

)

Inventories

 

(83,539

)

 

 

(142,171

)

Prepaid expenses and other

 

(5,901

)

 

 

(7,007

)

Accounts payable and accrued liabilities

 

78,444

 

 

 

186,090

 

Pension contributions

 

(922

)

 

 

(229

)

Income taxes payable

 

14,970

 

 

 

(7,927

)

Other

 

705

 

 

 

(348

)

Net cash provided by operations

 

814,125

 

 

 

527,091

 

 

 

 

 

Cash provided by (used for) investment

 

 

 

Expenditures for property and equipment

 

(61,835

)

 

 

(51,460

)

Acquisitions of businesses and facilities

 

(516,881

)

 

 

 

Proceeds from sales of assets and other

 

3,094

 

 

 

636

 

Net cash used for investment

 

(575,622

)

 

 

(50,824

)

 

 

 

 

Cash provided by (used for) financing

 

 

 

Borrowings of long-term debt, including revolving credit facility

 

 

 

 

28,000

 

Payments of long-term debt, including revolving credit facility

 

 

 

 

(28,000

)

Payments of deferring financing costs

 

(1,170

)

 

 

 

Dividends paid on common stock

 

(114,025

)

 

 

(90,969

)

Tax withholding payments on stock-based awards

 

(3,930

)

 

 

(2,729

)

Other

 

(1,221

)

 

 

(1,065

)

Net cash used for financing

 

(120,346

)

 

 

(94,763

)

 

 

 

 

Net increase in cash and cash equivalents

 

118,157

 

 

 

381,504

 

 

 

 

 

Balance at beginning of the period

 

748,907

 

 

 

405,382

 

 

 

 

 

Balance at end of the period

$

867,064

 

 

$

786,886

 

 

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 2021 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)

 

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, 2022 and 2021, (ii) the three months ended June 30, 2022, and (iii) the nine months ended September 30, 2022 and 2021:

 

Three Months Ended

 

Nine Months Ended

 

September 30

 

June 30, 2022

 

September 30

 

2022

 

2021

 

 

2022

 

2021

 

(in thousands)

Net income

$

219,587

 

 

$

91,699

 

 

$

218,111

 

 

$

740,298

 

 

$

543,411

 

Interest expense

 

6,398

 

 

 

6,279

 

 

 

6,317

 

 

 

18,969

 

 

 

18,501

 

Interest income

 

(3,238

)

 

 

(63

)

 

 

(1,385

)

 

 

(4,688

)

 

 

(173

)

Income tax provision

 

76,042

 

 

 

31,158

 

 

 

73,886

 

 

 

248,794

 

 

 

183,632

 

Depreciation and amortization

 

28,374

 

 

 

20,299

 

 

 

20,694

 

 

 

69,611

 

 

 

60,258

 

EBITDA

 

327,163

 

 

 

149,372

 

 

 

317,623

 

 

 

1,072,984

 

 

 

805,629

 

Change in fair value of interest rate swaps

 

(1,134

)

 

 

(59

)

 

 

(394

)

 

 

(3,594

)

 

 

(1,058

)

Adjusted EBITDA

$

326,029

 

 

$

149,313

 

 

$

317,229

 

 

$

1,069,390

 

 

$

804,571

 

The following table reconciles segment income and unallocated corporate costs to EBITDA and adjusted EBITDA for the (i) three months ended September 30, 2022 and 2021, (ii) three months ended June 30, 2022, and (iii) the nine months ended September 30, 2022 and 2021:

 

Three Months Ended

 

Nine Months Ended

 

September 30

 

June 30, 2022

 

September 30

 

2022

 

2021

 

 

2022

 

2021

 

(in thousands)

Wood Products

 

 

 

 

 

 

 

 

 

Segment income

$

155,972

 

 

$

122,056

 

 

$

154,101

 

 

$

500,189

 

 

$

432,869

 

Depreciation and amortization

 

21,285

 

 

 

13,914

 

 

 

13,653

 

 

 

48,578

 

 

 

41,388

 

EBITDA

$

177,257

 

 

$

135,970

 

 

$

167,754

 

 

$

548,767

 

 

$

474,257

 

 

 

 

 

 

 

 

 

 

 

Building Materials Distribution

 

 

 

 

 

 

 

 

 

Segment income

$

154,436

 

 

$

16,565

 

 

$

154,308

 

 

$

534,636

 

 

$

343,122

 

Depreciation and amortization

 

6,760

 

 

 

6,013

 

 

 

6,728

 

 

 

20,064

 

 

 

17,749

 

EBITDA

$

161,196

 

 

$

22,578

 

 

$

161,036

 

 

$

554,700

 

 

$

360,871

 

 

 

 

 

 

 

 

 

 

 

Corporate

 

 

 

 

 

 

 

 

 

Unallocated corporate costs

$

(11,038

)

 

$

(9,235

)

 

$

(11,334

)

 

$

(32,752

)

 

$

(31,569

)

Foreign currency exchange loss

 

(1,674

)

 

 

(353

)

 

 

(499

)

 

 

(2,041

)

 

 

(52

)

Pension expense (excluding service costs)

 

(41

)

 

 

(19

)

 

 

(41

)

 

 

(253

)

 

 

(57

)

Change in fair value of interest rate swaps

 

1,134

 

 

 

59

 

 

 

394

 

 

 

3,594

 

 

 

1,058

 

Depreciation and amortization

 

329

 

 

 

372

 

 

 

313

 

 

 

969

 

 

 

1,121

 

EBITDA

 

(11,290

)

 

 

(9,176

)

 

 

(11,167

)

 

 

(30,483

)

 

 

(29,499

)

Change in fair value of interest rate swaps

 

(1,134

)

 

 

(59

)

 

 

(394

)

 

 

(3,594

)

 

 

(1,058

)

Corporate adjusted EBITDA

$

(12,424

)

 

$

(9,235

)

 

$

(11,561

)

 

$

(34,077

)

 

$

(30,557

)

 

 

 

 

 

 

 

 

 

 

Total Company adjusted EBITDA

$

326,029

 

 

$

149,313

 

 

$

317,229

 

 

$

1,069,390

 

 

$

804,571

 

 

Contacts

Investor Relations Contact - Kelly Hibbs

208 384 3638

Media Contact - Lisa Tschampl

208 384 6552

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