Boise Cascade Company First Quarter 2014 Earnings Webcast April 23, 2014
Forward-Looking Statements
This presentation 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, 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 presentation. 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 presentation.
This presentation includes references to adjusted net income and EBITDA, which are non-GAAP financial measures within the meaning of the Securities and Exchange Commission’s Regulation G. Reconciliations of net income to adjusted net income, net income to EBITDA, and segment income to segment EBITDA are included as an appendix and are posted on the company’s website at www.bc.com.
Slide 2
April 23, 2014
Executive Summary
Slower start to 2014 than anticipated. U.S. housing starts decreased 2% from the same period last year.
First quarter sales were $767.2 million, up 3% from the prior year quarter.
First quarter net income was $5.6 million, or $0.14 per share.
Consensus U.S. housing starts estimate for 2014 has been reduced from 1.1 million to 1.08 million units.
We are seeing improved demand levels as we move into second quarter and remain optimistic that the housing recovery will continue this year.
Slide 3
April 23, 2014
1Q 2014 Financial Highlights
Sales
$ Millions
EBITDA
$ Millions
$1,000
$40
$900
$35
10.2
$800
$30
$700
$767.2 $600
581.1
$500
$15
$300
$100
293.3
269.2 (105.5)
(111.6)
1Q 2013
1Q 2014
($200)
$5
(4.2)
(4.4)
1Q 2013
1Q 2014
($5) ($10)
Wood
Slide 4
23.0
$0
$0 ($100)
27.1
$10
$200
8.2
-19%
$20
+3%
$400
$26.8
$25
585.5
$744.9
$33.0
BMD
Eliminations
Wood
BMD
Corporate
April 23, 2014
Wood Products Plywood Net Sales Price
Sales Volume (mmsf 3/8” basis)
($/msf 3/8” basis)
450
$350
428
414
400 350
346
355
$300
331
328 303
294
302
344
$250 300 250
$200
200
$150
150 $100 100 $50
50 0
$0 1Q
2Q
3Q
1Q
4Q
2013 Slide 5
2Q
3Q
4Q
2014 April 23, 2014
Wood Products EWP LVL
(mmcf) 3.1
(mmelf) 55 50 45 41 40 40 35 30 25 20 15 10 5 0 1Q
3.0
3.0 2.9 2.8 2.7
2.7
2.7
2.7
2.6
2.6 2.5 2.4 1Q
2Q
3Q
4Q
($/cf)
51 44
2Q
44
3Q
4Q
($/melf)
$18
$1,100 1,016
$16
I-Joists
16.0 15.3
15.7
15.9
15.9
$1,000
964
989
1,017
1,024
$900 $800
$14
$700 $12 $600 $10
$500 1Q
Slide 6
2Q
3Q
4Q
1Q
2013
2014
2Q
3Q
4Q April 23, 2014
Building Materials Distribution Sales ($ Millions)
(% of Sales)
$800
100
722 681
$700 $600
615
581 586
$500
15
14
17
17
16
31
35
34
32
32
54
51
49
51
52
1Q13
2Q13
3Q13
4Q13
1Q14
80
60
$400 40
$300 $200
20
$100 $0
0
1Q
2Q 2013
Slide 7
3Q 2014
4Q
Commodity
General Line
EWP
April 23, 2014
Working Capital ($ Millions)
3/31/2014
Receivables Inventory Other current assets*
$
Accounts payable Accrued liabilities
Net working capital*
$
12/31/2013
206.8 421.1 9.7 637.5
$ 160.1 383.4 7.9 551.3
199.6 86.6 286.2
142.1 96.9 239.0
351.3
$ 312.3
Change $
46.7 37.7 1.9 86.2 57.5 (10.3) 47.2
$
39.1
*Excludes cash and deferred taxes
Slide 8
April 23, 2014
Debt and Liquidity Highlights 3/31/2014
($ Millions)
12/31/2013
Net Debt Long-term debt Cash & cash equivalents Net debt
$ $
301.6 (86.0) 215.6
$
341.3 86.0 427.3
$
$
301.6 (118.2) 183.4
Liquidity Position ABL excess availability Cash & cash equivalents Total liquidity
Slide 9
$ $
$
258.3 118.2 376.6
April 23, 2014
Outlook
The current consensus estimate for 2014 U.S. housing starts is 1.08 million vs. 925,000 in 2013.
We believe the long-term demand fundamentals for housing are still sound based on demographics in the U.S. and expect housing starts to return to 1.4 to 1.5 million starts over the next few years.
We are focused on meeting our customers’ needs as demand continues to strengthen.
We expect continued revenue and earnings growth in 2014:
Full year benefit of acquisition of plywood operations we completed September 30, 2013
Growth in EWP sales as single-family new residential construction further improves
Growth in Building Materials Distribution revenues and earnings with higher new construction and repair-and-remodel activity
Slide 10
April 23, 2014
Appendix April 23, 2014
Appendix 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) Impact of deferred tax benefit Adjusted net income (non-GAAP basis) Weighted average common shares outstanding: Basic Diluted Adjusted net income (non-GAAP basis), per share: Basic Diluted
Slide 12
$ $
5,565 5,565
$ 80,836 (68,666) $ 12,170
39,372 39,452
37,569 37,569
$0.14 $0.14
$0.32 $0.32
April 23, 2014
Appendix EBITDA represents income before interest (interest expense and interest income), income taxes, and depreciation and amortization. The following table reconciles net income to EBITDA for the three months ended March 31, 2014 and 2013, and December 31, 2013: ($ Millions) Net income
1Q14 $
5.6
1Q13 $
80.8
4Q13 $
9.8
Interest expense
5.5
4.9
5.6
Interest income
(0.1)
(0.1)
(0.0)
Income tax provision (benefit)
3.5
(61.1)
5.9
Depreciation and amortization
12.3
8.5
11.8
EBITDA
Slide 13
$
26.8
$
33.0
$
33.1
April 23, 2014
Appendix Segment EBITDA represents segment income before depreciation and amortization. The following table reconciles segment income to EBITDA for the three months ended March 31, 2014 and 2013, and December 31, 2013 :
($ Millions)
Three Months Ended 1Q14 1Q13 4Q13
Wood Products Segment income Depreciation and amortization Segment EBITDA
$ 13.0
$ 20.8
$ 15.9
10.0
6.3
9.2
$ 23.0
$ 27.1
$ 25.1
$ 5.9
$ 8.0
$ 10.8
2.3
2.2
2.6
$ 8.2
$ 10.2
$ 13.4
Building Materials Distribution Segment income Depreciation and amortization Segment EBITDA Slide 14
April 23, 2014
