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EX-99.2 - QUARTERLY STATISTICAL INFORMATION - BOISE CASCADE Cobccexhibit99212312017.htm
8-K - 8-K - BOISE CASCADE Cobcc8-k12312017.htm


Boise Cascade
 
Exhibit 99.1
 
1111 West Jefferson Street Ste 300 PO Box 50 Boise, ID 83728
 
 
 
News Release
bcclogoa02a01.jpg
Investor Relations Contact - Wayne Rancourt
208 384 6073
 
Media Contact - John Sahlberg
208 384 6451

For Immediate Release: February 26, 2018
Boise Cascade Company Reports Fourth Quarter Results
BOISE, Idaho - Boise Cascade Company ("Boise Cascade," the "Company," "we," or "our") (NYSE: BCC) today reported fourth quarter net income of $19.1 million, or $0.49 per share, on sales of $1.1 billion. For the full year 2017, Boise Cascade reported net income of $83.0 million, or $2.12 per share, on sales of $4.4 billion. Fourth quarter and full year results for 2017 include an $8.1 million, or $0.21 per share, income tax benefit associated with the effects of the Tax Cuts and Jobs Act. See 'Income Taxes' below for further information. For 2016 comparative period results, see the table below, as well as 'Other Items Impacting 2016 Results.'

Fourth Quarter and Year End 2017 Highlights
 
 
4Q 2017
 
4Q 2016
 
% change
 
2017
 
2016
 
% change
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands, except per-share data and percentages)

 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Results
 
 
 
 
 
 
 
 
 
 
 
 
Sales
 
$
1,091,965

 
$
919,533

 
19
%
 
$
4,431,991

 
$
3,911,215

 
13
%
Net income
 
19,122

 
4,095

 
367
%
 
82,957

 
38,254

 
117
%
Net income per common share - diluted
 
0.49

 
0.11

 
345
%
 
2.12

 
0.98

 
116
%
Adjusted EBITDA 1
 
43,939

 
16,530

 
166
%
 
222,252

 
152,544

 
46
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment Results
 
 
 
 
 
 
 
 
 
 
 
 
Wood Products sales
 
$
330,906

 
$
289,672

 
14
%
 
$
1,373,760

 
$
1,280,415

 
7
%
Wood Products income (loss)
 
6,819

 
(7,829
)
 
N/M

 
53,629

 
25,929

 
107
%
Wood Products EBITDA 1
 
24,182

 
7,664

 
216
%
 
116,744

 
83,450

 
40
%
 
 
 
 
 
 
 
 
 
 
 
 
 
Building Materials Distribution sales
 
931,775

 
770,885

 
21
%
 
3,773,810

 
3,227,207

 
17
%
Building Materials Distribution income
 
22,907

 
15,454

 
48
%
 
116,760

 
84,359

 
38
%
Building Materials Distribution EBITDA 1
 
26,919

 
19,113

 
41
%
 
132,264

 
98,121

 
35
%
1 For reconciliations of non-GAAP measures, see summary notes at the end of this press release.

In the fourth quarter 2017, total U.S. housing starts were flat compared to the same period last year. Consistent with the trend in 2017, fourth quarter single-family starts increased from the comparative period, growing



by 7%, whereas multi-family starts decreased by 13%. Single-family residential construction is the primary demand driver of our sales. For the full year 2017, total U.S. housing starts improved 2% compared to 2016, driven by an approximate 9% increase in single-family starts, offset by an approximate 10% decrease in multi-family starts.

“Our distribution business closed out 2017 with another strong quarter of revenue and earnings growth. In 2017, the team in BMD far exceeded their previous annual revenue and earnings records. Very strong plywood pricing and favorable sales prices and volumes for our engineered wood products compared to those in last year’s fourth quarter combined to drive substantial improvement in our Wood Products earnings,” commented Tom Corrick, CEO. “We were successful in improving our free cash flow generation and balance sheet during 2017 and are very well positioned to take advantage of the continued recovery in single-family residential construction as 2018 progresses.”

Wood Products

Wood Products sales, including sales to Building Materials Distribution (BMD), increased $41.2 million, or 14%, to $330.9 million for the three months ended December 31, 2017, from $289.7 million for the three months ended December 31, 2016. The increase in sales was driven primarily by increases in plywood and lumber sales prices and increases in LVL and I-joist (collectively EWP) sales volumes. In addition, sales prices of LVL and I-joists increased. These increases were offset partially by a decrease in plywood sales volumes. Wood Products segment income increased $14.6 million to income of $6.8 million for the three months ended December 31, 2017, from a loss of $7.8 million for the three months ended December 31, 2016. The improvement in segment income was due primarily to higher sales prices of plywood, EWP, and lumber. These improvements were offset partially by higher oriented strand board (OSB) costs used in the manufacture of I-joists, as well as higher per-unit conversion costs.

For the year ended December 31, 2017, sales, including sales to BMD, increased $93.3 million, or 7%, to $1,373.8 million from $1,280.4 million for the year ended December 31, 2016. The increase in sales was driven primarily by higher sales prices for plywood and lumber, as well as higher sales volumes of LVL and I-joists. An increase in sales prices for both LVL and I-joists also contributed to the improved sales. These increases were offset by decreases in plywood and lumber sales volumes. We have shifted a higher proportion of our internally produced veneer into EWP, resulting in the decline in plywood production and sales volumes. Wood Products segment income increased $27.7 million to $53.6 million for the year ended December 31, 2017, from $25.9 million for the year ended December 31, 2016. The increase in segment income was due primarily to higher plywood, lumber, and EWP sales prices. In addition, the year ended December 31, 2016, included $3.6 million of acquisition-related expenses. These improvements were offset partially by higher OSB costs used in the manufacture of I-joists, as well as higher per-unit conversion costs. In addition, depreciation and amortization expense increased $5.6 million due primarily to the acquisition of two EWP facilities on March 31, 2016, and other capital expenditures.

Comparative average net selling prices and sales volume changes for EWP, plywood, and lumber are as follows:
    
 
 
4Q 2017 vs. 4Q 2016
 
2017 vs. 2016
 
 
 
 
 
 Average Net Selling Prices
 
 
 
 
    LVL
 
3%
 
1%
    I-joists
 
4%
 
1%
    Plywood
 
26%
 
15%
Lumber
 
12%
 
14%
 Sales Volumes
 
 
 
 
    LVL
 
8%
 
6%
    I-joists
 
6%
 
4%
    Plywood
 
(5)%
 
(3)%
Lumber
 
(3)%
 
(8)%


2


Building Materials Distribution

Sales increased $160.9 million, or 21%, to $931.8 million for the three months ended December 31, 2017, from $770.9 million for the three months ended December 31, 2016. Compared with the same quarter in the prior year, the overall increase in sales was driven by sales price and sales volume increases of 14% and 7%, respectively. By product line, commodity sales increased 30%, general line product sales increased 9%, and sales of EWP (substantially all of which is sourced through our Wood Products segment) increased 20%. BMD segment income increased $7.5 million to $22.9 million for the three months ended December 31, 2017, from $15.5 million in the comparative prior year quarter, driven primarily by a higher gross margin of $17.9 million generated from a sales increase of 21%. The increase in gross margin was offset partially by higher selling and distribution expenses and general and administrative expenses.

For the year ended December 31, 2017, sales increased $546.6 million, or 17%, to $3,773.8 million from $3,227.2 million for the year ended December 31, 2016. The increase in sales was driven by sales price and sales volume increases of 9% and 8%, respectively. By product line, commodity sales increased 20%, general line product sales increased 11%, and sales of EWP (substantially all of which is sourced through our Wood Products segment) increased 20%. BMD segment income increased $32.4 million to $116.8 million for the year ended December 31, 2017, from $84.4 million for the year ended December 31, 2016. The increase in segment income was driven primarily by a higher gross margin of $65.1 million generated from a sales increase of 17%. This improvement was offset partially by increased selling and distribution expenses and general and administrative expenses.

Income Taxes

Fourth quarter and full year net income includes an $8.1 million income tax benefit associated with the remeasurement of our deferred tax assets and liabilities at the new federal corporate income tax rate of 21% as of December 22, 2017 (date of enactment of the Tax Cuts and Jobs Act). The most significant impact to our financial statements is the reduction of the corporate federal income tax rate from 35% to 21%. Other relevant provisions which may impact our financial statements in the future include, but are not limited to, the elimination of the production activities deduction, limitations on the deductibility of certain executive compensation, bonus depreciation to allow immediate expensing of qualified property, and limitations on deductible interest expense.

Other Items Impacting 2016 Results

For the fourth quarter 2016, the Company's financial results include after-tax losses associated with the early extinguishment of debt and voluntary lump-sum payments to pension plan participants of $3.0 million and $2.4 million, respectively. In addition, the Company's financial results include an $8.5 million income tax benefit primarily associated with the reversal of valuation allowances on foreign deferred tax assets, net of other tax adjustments. Collectively, these items resulted in a net $3.1 million after-tax gain, or $0.08 per share impact on fourth quarter 2016. For the year ended December 31, 2016, these items amounted to an after-tax loss of $2.8 million, or $0.07 per share, as the Company recorded an additional $5.9 million after-tax loss on the early extinguishment of debt during third quarter 2016.

Balance Sheet

Boise Cascade ended 2017 with $177.1 million of cash and cash equivalents and $379.8 million of undrawn committed bank line availability, for total available liquidity of $556.9 million. The Company had $438.3 million of outstanding debt at December 31, 2017.

Dividends

On November 14, 2017, the Company announced that our board of directors approved a dividend policy to pay quarterly cash dividends to holders of our common stock. The Company also declared an initial dividend of $0.07 per share of our common stock, paid on December 15, 2017, to stockholders of record on November 27, 2017. As such, the Company paid $2.7 million in dividends to shareholders for the year ended December 31, 2017.

On February 7, 2018, the Company declared a dividend of $0.07 per share of its common stock, payable on March 15, 2018, to stockholders of record on March 1, 2018.

3



Outlook

As in recent years, we expect to continue to experience modest demand growth for the products we manufacture and distribute in 2018. Total housing starts in the U.S. continue to show modest improvement, with single-family starts growth offsetting weakness in multi-family starts in 2017. The February 2018 Blue Chip consensus forecast for 2018 reflects 1.28 million total U.S. housing starts, a 7% expected increase from 2017 levels. We remain optimistic that the improvement in demand for our products will continue as household formation rates and residential construction continue to recover. We will continue to manage our production levels to our sales demand, which will likely result in operating some of our facilities below their capacity until demand further improves. Future commodity product pricing and commodity input costs could be volatile in response to industry operating rates, net import and export activity, the North American softwood lumber trade dispute, inventory levels in various distribution channels, and seasonal demand patterns.

We have successfully grown revenues and earnings in our distribution business as residential construction has recovered in the U.S. over the last several years. As we consider potential acquisitions, much of our activity is focused on adding to our distribution capabilities.

We expect our capital spending, excluding acquisitions, to be $75-$85 million during 2018.

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 on Monday, February 26, at 11 a.m. Eastern, to review the Company's fourth quarter and year-end results.

You can join the webcast through the Company's website by going to www.bc.com and clicking on the Event Calendar link under the Investor Relations heading. Please go to the website at least 15 minutes before the start of the webcast to register. To join the conference call, dial 844-795-4410 (international callers should dial 661-378-9637), participant passcode 8365486, at least 10 minutes before the start of the call.

The archived webcast will be available in the Investor Relations section of the Company's website. A replay of the conference call will be available from Monday, February 26, at 2 p.m. Eastern through Monday, March 5, at 11 p.m. Eastern. Replay numbers are 855-859-2056 for U.S. callers and 404-537-3406 for international callers, and the passcode will be 8365486.

Basis of Presentation
    
As of January 1, 2017, we operate our business using two reportable segments: Wood Products and Building Materials Distribution. Prior to January 1, 2017, we operated our business using three reportable segments: Wood Products, Building Materials Distribution, and Corporate and Other. This change is based on Corporate and Other no longer earning revenue as of January 1, 2017, and thus no longer meeting the definition of a reportable segment. Corporate results are now presented as reconciling items to arrive at total net sales and operating income. Corresponding information for the quarter and year ended December 31, 2016 has been revised to conform with current presentation.

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


4


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

This press release includes statements about our expectations of future operational and financial performance that are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The accuracy of such statements is subject to a number of risks, uncertainties, and assumptions that could cause our actual results to differ materially from those projected, including, but not limited to, prices for building products, commodity input costs, the effect of general economic conditions, mortgage rates and availability, housing demand, housing vacancy rates, governmental regulations, unforeseen production disruptions, as well as natural disasters. These and other factors that could cause actual results to differ materially from such forward-looking statements are discussed in greater detail in our filings with the 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.
    



5


Boise Cascade Company
Consolidated Statements of Operations
(in thousands, except per-share data)
 
Three Months Ended
 
Year Ended
 
December 31
 
September 30,
2017
 
December 31
 
2017
 
2016
 
 
2017
 
2016
 
 
 
 
 
 
 
 
 
 
Sales
$
1,091,965

 
$
919,533

 
$
1,226,644

 
$
4,431,991

 
$
3,911,215

 
 
 
 
 
 
 
 
 
 
Costs and expenses
 
 
 
 
 
 
 
 
 
Materials, labor, and other operating expenses (excluding depreciation)
946,894

 
812,073

 
1,045,772

 
3,819,659

 
3,398,433

Depreciation and amortization
21,748

 
19,598

 
19,686

 
80,379

 
72,847

Selling and distribution expenses
83,754

 
75,875

 
87,564

 
327,355

 
300,797

General and administrative expenses
17,455

 
14,554

 
16,476

 
63,068

 
60,585

Other (income) expense, net
512

 
434

 
1,138

 
377

 
(1,025
)
 
1,070,363

 
922,534

 
1,170,636

 
4,290,838

 
3,831,637

 
 
 
 
 
 
 
 
 
 
Income (loss) from operations
21,602

 
(3,001
)
 
56,008

 
141,153

 
79,578

 
 
 
 
 
 
 
 
 
 
Foreign currency exchange gain (loss)
589

 
(67
)
 
90

 
720

 
119

Interest expense
(6,220
)
 
(7,328
)
 
(6,295
)
 
(25,370
)
 
(26,692
)
Interest income
293

 
154

 
167

 
547

 
390

Change in fair value of interest rate swaps
1,000

 
4,975

 
(33
)
 
538

 
4,210

Loss on extinguishment of debt

 
(4,779
)
 

 

 
(14,304
)
 
(4,338
)
 
(7,045
)
 
(6,071
)
 
(23,565
)
 
(36,277
)
 
 
 
 
 
 
 
 
 
 
Income (loss) before income taxes
17,264

 
(10,046
)
 
49,937

 
117,588

 
43,301

Income tax (provision) benefit
1,858

 
14,141

 
(18,276
)
 
(34,631
)
 
(5,047
)
Net income
$
19,122

 
$
4,095

 
$
31,661

 
$
82,957

 
$
38,254

 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
 
 
  Basic
38,688

 
38,565

 
38,660

 
38,623

 
38,761

  Diluted
39,351

 
38,942

 
39,139

 
39,074

 
38,925

 
 
 
 
 
 
 
 
 
 
Net income per common share:
 
 
 
 
 
 
 
 
 
  Basic
$
0.49

 
$
0.11

 
$
0.82

 
$
2.15

 
$
0.99

  Diluted
$
0.49

 
$
0.11

 
$
0.81

 
$
2.12

 
$
0.98


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



6


Wood Products Segment
Statements of Operations
(in thousands, except percentages)
 
Three Months Ended
 
Year Ended
 
December 31
 
September 30,
2017
 
December 31
 
2017
 
2016
 
 
2017
 
2016
 
 
 
 
 
 
 
 
 
 
Segment sales
$
330,906

 
$
289,672

 
$
366,920

 
$
1,373,760

 
$
1,280,415

 
 
 
 
 
 
 
 
 
 
Costs and expenses
 
 
 

 
 

 
 

 
 

Materials, labor, and other operating expenses (excluding depreciation)
293,780

 
270,730

 
315,421

 
1,211,537

 
1,151,142

Depreciation and amortization
17,363

 
15,493

 
15,337

 
63,115

 
57,521

Selling and distribution expenses
8,381

 
7,968

 
7,580

 
31,260

 
31,045

General and administrative expenses
3,991

 
2,902

 
3,408

 
13,482

 
15,151

Other (income) expense, net
572

 
408

 
1,147

 
737

 
(373
)
 
324,087

 
297,501

 
342,893

 
1,320,131

 
1,254,486

 
 
 
 
 
 
 
 
 
 
Segment income (loss)
$
6,819

 
$
(7,829
)
 
$
24,027

 
$
53,629

 
$
25,929

 
 
 
 
 
 
 
 
 
 
 
(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)
88.8
%
 
93.5
%
 
86.0
%
 
88.2
%
 
89.9
%
Depreciation and amortization
5.2
%
 
5.3
%
 
4.2
%
 
4.6
%
 
4.5
%
Selling and distribution expenses
2.5
%
 
2.8
%
 
2.1
%
 
2.3
%
 
2.4
%
General and administrative expenses
1.2
%
 
1.0
%
 
0.9
%
 
1.0
%
 
1.2
%
Other (income) expense, net
0.2
%
 
0.1
%
 
0.3
%
 
0.1
%
 
%
 
97.9
%
 
102.7
%
 
93.5
%
 
96.1
%
 
98.0
%
 
 
 
 
 
 
 
 
 
 
Segment income (loss)
2.1
%
 
(2.7
%)
 
6.5
%
 
3.9
%
 
2.0
 %










7


Building Materials Distribution Segment
Statements of Operations
(in thousands, except percentages)

 
Three Months Ended
 
Year Ended
 
December 31
 
September 30,
2017
 
December 31
 
2017
 
2016
 
 
2017
 
2016
 
 
 
 
 
 
 
 
 
 
Segment sales
$
931,775

 
$
770,885

 
$
1,045,646

 
$
3,773,810

 
$
3,227,207

 
 
 
 
 
 
 
 
 
 
Costs and expenses
 
 
 
 
 
 
 
 
 
Materials, labor, and other operating expenses (excluding depreciation)
823,645

 
680,670

 
916,340

 
3,323,633

 
2,842,126

Depreciation and amortization
4,012

 
3,659

 
3,910

 
15,504

 
13,762

Selling and distribution expenses
75,234

 
66,089

 
79,846

 
295,576

 
267,402

General and administrative expenses
6,039

 
4,999

 
6,189

 
22,769

 
20,309

Other (income) expense, net
(62
)
 
14

 
(18
)
 
(432
)
 
(751
)
 
908,868

 
755,431

 
1,006,267

 
3,657,050

 
3,142,848

 
 
 
 
 
 
 
 
 
 
Segment income
$
22,907

 
$
15,454

 
$
39,379

 
$
116,760

 
$
84,359

 
 
 
 
 
 
 
 
 
 
 
(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)
88.4
 %
 
88.3
%
 
87.6
 %
 
88.1
 %
 
88.1
 %
Depreciation and amortization
0.4
 %
 
0.5
%
 
0.4
 %
 
0.4
 %
 
0.4
 %
Selling and distribution expenses
8.1
 %
 
8.6
%
 
7.6
 %
 
7.8
 %
 
8.3
 %
General and administrative expenses
0.6
 %
 
0.6
%
 
0.6
 %
 
0.6
 %
 
0.6
 %
Other (income) expense, net
 %
 
%
 
 %
 
 %
 
 %
 
97.5
 %
 
98.0
%
 
96.2
 %
 
96.9
 %
 
97.4
 %
 
 
 
 
 
 
 
 
 
 
Segment income
2.5
 %
 
2.0
%
 
3.8
 %
 
3.1
 %
 
2.6
 %

                              

8


Segment Information
(in thousands)
 
Three Months Ended
 
Year Ended
 
December 31
 
September 30,
2017
 
December 31
 
2017
 
2016
 
 
2017
 
2016
Segment sales
 
 
 
 
 
 
 
 
 
Wood Products
$
330,906

 
$
289,672

 
$
366,920

 
$
1,373,760

 
$
1,280,415

Building Materials Distribution
931,775

 
770,885

 
1,045,646

 
3,773,810

 
3,227,207

Intersegment eliminations and other
(170,716
)
 
(141,024
)
 
(185,922
)
 
(715,579
)
 
(596,407
)
Total net sales
$
1,091,965

 
$
919,533

 
$
1,226,644

 
$
4,431,991

 
$
3,911,215

 
 
 
 
 
 
 
 
 
 
Segment income (loss)
 
 
 
 
 
 
 
 
 
Wood Products
$
6,819

 
$
(7,829
)
 
$
24,027

 
$
53,629

 
$
25,929

Building Materials Distribution
22,907

 
15,454

 
39,379

 
116,760

 
84,359

Total segment income
29,726

 
7,625

 
63,406

 
170,389

 
110,288

Unallocated corporate
(8,124
)
 
(10,626
)
 
(7,398
)
 
(29,236
)
 
(30,710
)
Income (loss) from operations
$
21,602

 
$
(3,001
)
 
$
56,008

 
$
141,153

 
$
79,578

 
 
 
 
 
 
 
 
 
 
Segment EBITDA (a)
 
 
 
 
 
 
 
 
 
Wood Products
$
24,182

 
$
7,664

 
$
39,364

 
$
116,744

 
$
83,450

Building Materials Distribution
26,919

 
19,113

 
43,289

 
132,264

 
98,121


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



9


Boise Cascade Company
Consolidated Balance Sheets
(in thousands)
 
 
December 31
 
 
2017
 
2016
ASSETS
 
 
 
 
 
 
 
 
 
Current
 
 
 
 
Cash and cash equivalents
 
$
177,140

 
$
103,978

Receivables
 
 
 
 
Trade, less allowances of $945 and $1,459
 
246,452

 
199,191

Related parties
 
345

 
506

Other
 
9,380

 
10,952

Inventories
 
476,673

 
433,451

Prepaid expenses and other
 
22,582

 
12,381

Total current assets
 
932,572

 
760,459

 
 
 
 
 
Property and equipment, net
 
565,792

 
568,702

Timber deposits
 
13,503

 
14,901

Goodwill
 
55,433

 
55,433

Intangible assets, net
 
15,066

 
15,547

Deferred income taxes
 
9,064

 
8,840

Other assets
 
15,763

 
15,315

Total assets
 
$
1,607,193

 
$
1,439,197



10


Boise Cascade Company
Consolidated Balance Sheets (continued)
(in thousands, except per-share data)
 
 
December 31
 
 
2017
 
2016
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
 
 
 
 
 
 
 
Current
 
 
 
 
Accounts payable
 
 
 
 
Trade
 
$
233,562

 
$
194,010

Related parties
 
1,225

 
1,903

Accrued liabilities
 
 
 
 
Compensation and benefits
 
84,246

 
67,752

Interest payable
 
6,742

 
6,860

Other
 
55,786

 
42,339

Total current liabilities
 
381,561

 
312,864

 
 
 
 
 
Debt
 
 
 
 
Long-term debt
 
438,312

 
437,629

 
 
 
 
 
Other
 
 
 
 
Compensation and benefits
 
75,439

 
83,164

Deferred income taxes
 
16,454

 
6,339

Other long-term liabilities
 
20,878

 
19,197

 
 
112,771

 
108,700

 
 
 
 
 
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, 43,748 and 43,520 shares issued, respectively
 
437

 
435

Treasury stock, 5,167 shares at cost
 
(133,979
)
 
(133,979
)
Additional paid-in capital
 
523,550

 
515,410

Accumulated other comprehensive loss
 
(76,702
)
 
(83,012
)
Retained earnings
 
361,243

 
281,150

Total stockholders' equity
 
674,549

 
580,004

Total liabilities and stockholders' equity
 
$
1,607,193

 
$
1,439,197



11


Boise Cascade Company
Consolidated Statements of Cash Flows
(in thousands)
 
 
Year Ended December 31
 
 
2017
 
2016
Cash provided by (used for) operations
 
 
 
 
Net income
 
$
82,957

 
$
38,254

Items in net income not using (providing) cash
 
 
 
 
Depreciation and amortization, including deferred financing costs and other
 
82,321

 
74,927

Stock-based compensation
 
9,730

 
8,177

Pension expense
 
1,464

 
6,240

Deferred income taxes
 
8,117

 
(7,823
)
Change in fair value of interest rate swaps
 
(538
)
 
(4,210
)
Other
 
376

 
491

Loss on extinguishment of debt
 

 
14,304

Decrease (increase) in working capital, net of acquisitions
 
 
 
 
Receivables
 
(41,778
)
 
(1,118
)
Inventories
 
(43,222
)
 
(30,757
)
Prepaid expenses and other
 
(887
)
 
(1,614
)
Accounts payable and accrued liabilities
 
68,124

 
45,651

Pension contributions
 
(2,193
)
 
(3,844
)
Income taxes payable
 
(14,292
)
 
6,385

Other
 
1,388

 
6,844

Net cash provided by operations
 
151,567

 
151,907

 
 
 
 
 
Cash provided by (used for) investment
 
 
 
 
Expenditures for property and equipment
 
(75,450
)
 
(83,583
)
Acquisitions of businesses and facilities
 

 
(215,900
)
Proceeds from sales of assets and other
 
2,238

 
644

Net cash used for investment
 
(73,212
)
 
(298,839
)
 
 
 
 
 
Cash provided by (used for) financing
 
 
 
 
Borrowings of long-term debt, including revolving credit facility
 
410,400

 
837,800

Payments of long-term debt, including revolving credit facility
 
(410,400
)
 
(754,071
)
Treasury stock purchased
 

 
(10,268
)
Financing costs
 
(478
)
 
(6,422
)
Tax withholding payments on stock-based awards
 
(2,902
)
 
(383
)
Proceeds from exercise of stock options
 
1,144

 

Dividends paid on common stock
 
(2,701
)
 

Other
 
(256
)
 
(242
)
Net cash provided by (used for) financing
 
(5,193
)
 
66,414

 
 
 
 
 
Net increase (decrease) in cash and cash equivalents
 
73,162

 
(80,518
)
 
 
 
 
 
Balance at beginning of the period
 
103,978

 
184,496

 
 
 
 
 
Balance at end of the period
 
$
177,140

 
$
103,978


12


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 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 and loss on extinguishment of debt. The following table reconciles net income to EBITDA and Adjusted EBITDA for the three months ended December 31, 2017 and 2016, and September 30, 2017, and the years ended December 31, 2017 and 2016:
 
Three Months Ended
 
Year Ended
 
December 31
 
September 30,
2017
 
December 31
 
2017
 
2016
 
 
2017
 
2016
 
(in thousands)
Net income
$
19,122

 
$
4,095

 
$
31,661

 
$
82,957

 
$
38,254

Interest expense
6,220

 
7,328

 
6,295

 
25,370

 
26,692

Interest income
(293
)
 
(154
)
 
(167
)
 
(547
)
 
(390
)
Income tax provision (benefit)
(1,858
)
 
(14,141
)
 
18,276

 
34,631

 
5,047

Depreciation and amortization
21,748

 
19,598

 
19,686

 
80,379

 
72,847

EBITDA
44,939

 
16,726

 
75,751

 
222,790

 
142,450

Change in fair value of interest rate swaps
(1,000
)
 
(4,975
)
 
33

 
(538
)
 
(4,210
)
Loss on extinguishment of debt

 
4,779

 

 

 
14,304

Adjusted EBITDA
$
43,939

 
$
16,530

 
$
75,784

 
$
222,252

 
$
152,544


13


The following table reconciles segment income and unallocated corporate costs to EBITDA and adjusted EBITDA for the three months ended December 31, 2017 and 2016, and September 30, 2017, and the years ended December 31, 2017 and 2016:
 
 
Three Months Ended
 
Year Ended
 
 
December 31
 
September 30,
2017
 
December 31
 
 
2017
 
2016
 
 
2017
 
2016
 
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands)
Wood Products
 
 
 
 
 
 
 
 
 
 
Segment income (loss)
 
$
6,819

 
$
(7,829
)
 
$
24,027

 
$
53,629

 
$
25,929

Depreciation and amortization
 
17,363

 
15,493

 
15,337

 
63,115

 
57,521

EBITDA
 
$
24,182

 
$
7,664

 
$
39,364

 
$
116,744

 
$
83,450

 
 
 
 
 
 
 
 
 
 
 
Building Materials Distribution
 
 
 
 
 
 
 
 
 
 
Segment income
 
$
22,907

 
$
15,454

 
$
39,379

 
$
116,760

 
$
84,359

Depreciation and amortization
 
4,012

 
3,659

 
3,910

 
15,504

 
13,762

EBITDA
 
$
26,919

 
$
19,113

 
$
43,289

 
$
132,264

 
$
98,121

 
 
 
 
 
 
 
 
 
 
 
Corporate
 
 
 
 
 
 
 
 
 
 
Unallocated corporate expenses
 
$
(8,124
)
 
$
(10,626
)
 
$
(7,398
)
 
$
(29,236
)
 
$
(30,710
)
Foreign currency exchange gain (loss)
 
589

 
(67
)
 
90

 
720

 
119

Change in fair value of interest rate swaps
 
1,000

 
4,975

 
(33
)
 
538

 
4,210

Loss on extinguishment of debt
 

 
(4,779
)
 

 

 
(14,304
)
Depreciation and amortization
 
373

 
446

 
439

 
1,760

 
1,564

EBITDA
 
(6,162
)
 
(10,051
)
 
(6,902
)
 
(26,218
)
 
(39,121
)
Change in fair value of interest rate swaps
 
(1,000
)
 
(4,975
)
 
33

 
(538
)
 
(4,210
)
Loss on extinguishment of debt
 

 
4,779

 

 

 
14,304

Corporate adjusted EBITDA
 
$
(7,162
)
 
$
(10,247
)
 
$
(6,869
)
 
$
(26,756
)
 
$
(29,027
)
 
 
 
 
 
 
 
 
 
 
 
Total company adjusted EBITDA
 
$
43,939

 
$
16,530

 
$
75,784

 
$
222,252

 
$
152,544






14