Boise Cascade Company Second Quarter 2013 Earnings Webcast July 23, 2013
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 EBITDA and adjusted net income, which are non-GAAP financial measures within the meaning of the Securities and Exchange Commission’s Regulation G. Reconciliations of net income to EBITDA, segment income (loss) to segment EBITDA, and net income to adjusted net income are included as an appendix and are posted on the company’s website at www.bc.com.
Slide 2
July 23, 2013
Executive Summary
Total U.S. housing starts increased approximately 17% compared with 2Q12. Single-family starts increased approximately 14%
Second quarter sales were $852.3 million, up 16% from 2Q12:
Higher plywood average net sales realization
Continued robust EWP volume growth versus prior year quarter
Price increases on many products purchased and sold by Building Materials Distribution (BMD)
Second quarter net income was $10.4 million, or $0.24 per share
Commodity pricing began a steep descent early in the second quarter with composite panel and lumber prices dropping more than 25% by quarter end
Announced agreement to acquire two plywood facilities in southeastern United States
Slide 3
July 23, 2013
Composite Lumber Price 480 First Quarter
Second Quarter
Third Quarter
Fourth Quarter
440 400 360 320 280 240 200 1
3
5
7
Source: Random Lengths
Slide 4
9
11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 Week
2013
2012
July 23, 2013
Panel Composite Price 560 First Quarter
Second Quarter
Third Quarter
Fourth Quarter
520 480 440 400 360 320 280 240 1
3
5
7
Source: Random Lengths
Slide 5
9
11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 Week
2013
2012
July 23, 2013
2Q 2013 Financial Highlights
Sales
$ Millions
EBITDA
$ Millions $40
$1,000 $900
$35
$800
5.5 $30
$700
$852.3
$600 $500
681.5
$25
580.5 $20
$400
+16%
$200
$732.9
241.8
+9%
$15
$300
$100
$30.7
10.9
$10
29.6
21.7
280.4
$28.2 $5
$0
(89.4)
(109.6)
($100) ($200)
(4.4)
(4.4)
2Q 2012
2Q 2013
-$5
2Q 2012
Wood
Slide 6
$0
2Q 2013
BMD
Eliminations
Wood
BMD
Corporate
July 23, 2013
Wood Products Plywood Net Sales Price
Sales Volume (mmsf 3/8” basis)
($/msf 3/8” basis)
$350
400 350
346 328
355 346
343
331
328
318 304
339
290
$300 267
300
$250
250 $200 200 $150 150 $100
100 50
$50
0
$0 1Q
2Q
3Q
1Q
4Q
2012 Slide 7
2Q
3Q
4Q
2013 July 23, 2013
Wood Products EWP LVL
(mmcf) 3.0
2.7
2.5
2.7
(mmelf) 45 41 40 35 30 30 25 20 15 10 5 0 1Q
2.6
2.3 2.1
2.1
2.0 1.5 1.0 0.5 0.0 1Q
2Q
3Q
4Q
($/cf)
44
42
39 35
2Q
3Q
4Q
($/melf)
$18 $16
I-Joists
$1,000
15.1 15.3
989
964 928
915
909
$900
15.7 14.9
935
14.8
14.5
$800
$14 $700 $12
$600
$10
$500 1Q
Slide 8
2Q
3Q
4Q
1Q
2012
2013
2Q
3Q
4Q July 23, 2013
Building Materials Distribution Sales ($ Millions)
(% of Sales)
$800
100
681
$700 581
$600 $500
605
581
13
13
15
14
15
14
37
39
36
34
31
35
50
48
49
52
54
51
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
80
553
451
60
$400 40
$300 $200
20
$100 $0
0
1Q
2Q 2012
Slide 9
3Q 2013
4Q
Commodity
General Line
EWP
July 23, 2013
Working Capital ($ Millions)
6/30/2013
3/31/2013
Change
Receivables Inventory Other current assets (excluding cash and deferred taxes)
$
$
$
Accounts payable Accrued liabilities
Net working capital (excluding cash and deferred taxes)
Slide 10
212.8 368.4 11.9 593.1 197.2 75.7 272.9
$
320.2
209.9 387.1 8.3 605.3 218.5 82.6 301.1
$
304.2
2.9 (18.7) 3.6 (12.2) (21.3) (6.9) (28.2)
$
16.0
July 23, 2013
Debt and Liquidity Highlights 6/30/2013
($ Millions)
3/31/2013
Net Debt Long-term debt Cash & cash equivalents Net debt
$ $
250.0 (232.7) 17.3
$ $
250.0 (233.5) 16.5
Liquidity Position ABL excess availability Cash & cash equivalents Total liquidity
Slide 11
$ $
290.7 232.7 523.4
$ $
290.2 233.5 523.8
July 23, 2013
Outlook
The current consensus estimate for 2013 U.S. housing starts is 990,000 vs. 780,000 in 2012.
We believe the long-term demand fundamentals for housing are still sound based on demographics in the U.S.
We are focused on meeting our customers’ needs as demand continues to strengthen.
Pricing for the commodity wood products we manufacture and/or distribute (e.g., plywood, OSB, dimension lumber) have improved modestly since quarter end. Future pricing could be volatile in response to operating rates and inventory levels in various distribution channels.
Pricing for our engineered wood products is improving in response to higher demand and higher operating rates.
Acquisition of southeastern plywood operations expected to close late third quarter.
Slide 12
July 23, 2013
Appendix July 23, 2013
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 June 30, 2013 and 2012, and March 31, 2013: ($ Millions) Net income
$
10.4
2Q12 $
15.0
1Q13 $
80.8
Interest expense
4.8
4.8
4.9
Interest income
(0.1)
(0.1)
(0.1)
Income tax provision (benefit)
6.8
0.1
(61.1)
Depreciation and amortization
8.8
8.3
8.5
EBITDA
Slide 14
2Q13
$
30.7
$
28.2
$
33.0
July 23, 2013
Appendix Segment EBITDA represents segment income (loss) before depreciation and amortization. The following table reconciles segment income (loss) to segment EBITDA for the three months ended June 30, 2013 and 2012, and March 31, 2013:
($ Millions) Wood Products Segment income Depreciation and amortization Segment EBITDA Building Materials Distribution Segment income Depreciation and amortization Segment EBITDA
Slide 15
2Q13
2Q12
1Q13
$ 23.0 6.5
$ 15.5 6.1
$ 20.8 6.3
$ 29.6
$ 21.7
$ 27.1
$
3.3 2.2
$
$
$
5.5
$ 10.9
8.7 2.2
8.0 2.2
$ 10.2
July 23, 2013
Appendix First quarter 2013 includes $68.7 million of income tax benefit associated with recording net deferred tax assets upon our conversion from a limited liability company to a corporation. The following table reconciles GAAP net income to adjusted non-GAAP net income for the three months ended June 30, 2013 and 2012, and March 31, 2013: ($ Millions, except per-share amounts) Net income (GAAP basis)
2Q13 $
10.4
Impact of deferred tax benefit Adjusted net income (non-GAAP basis)
2Q12 $
15.0
$
10.4
1Q13 $
80.8
$
15.0
(68.7) $
12.1
Weighted average common shares outstanding Basic
43,229
29,700
37,569
Diluted
43,233
29,700
37,569
Adjusted net income (non-GAAP basis), per share:
Slide 16
Basic
$
0.24
$
0.51
$
0.32
Diluted
$
0.24
$
0.51
$
0.32
July 23, 2013
