Boise Cascade Company Fourth Quarter 2012 Earnings Webcast March 7, 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 net debt (cash), which are nonGAAP financial measures within the meaning of the Securities and Exchange Commission’s Regulation G. Reconciliations of net income (loss) to EBITDA, segment income (loss) to segment EBITDA, and total debt to net debt (cash) are included as an appendix and are posted on the company’s website at www.bc.com.
Slide 2
March 7, 2013
Executive Summary
U.S. housing starts increased to 780,000 in 2012, up 28% from 2011.
Our Wood Products and Building Materials Distribution (BMD) segments both showed strong sales and earnings leverage with the increase in demand in 2012:
Wood Products’ sales and EBITDA increased $231 million and $67 million, respectively.
BMD’s sales and EBITDA increased $411 million and $22 million, respectively.
We completed the refinance of our long-term debt in late October, lowering the interest rate and extending the maturity.
We finished the year with $54 million of cash and $196 million of unused bank line capacity, for total available liquidity of $250 million.
Successfully completed our initial public offering in early February, raising $263 million of net proceeds.
Slide 3
March 7, 2013
Shareholder Value Priorities Drive strong organic growth in both Wood Products manufacturing and Building Materials Distribution:
Strategic capital focused on veneer self-sufficiency in Wood Products
Working capital necessary for profitable growth in BMD
Pursue acquisition opportunities that can leverage our market position and organization’s capabilities
Return capital to our shareholders in line with business results and investment opportunities
Slide 4
March 7, 2013
4Q 2012 Financial Highlights
Sales
$ Millions
EBITDA
$ Millions
$800
$25
$700
$20
$600
8.1 553.1
$500 $400
$15
$17.0
$694.6
429.4
$10
+3020%
$300
+27%
$200 $100 $0
180.3
$547.4
$5
230.5
(62.2)
(89.0)
4Q 2011
4Q 2012
($100) ($200)
1.3 2.2 (3.0)
$0.5
(4.3)
-$5
-$10
Wood
Slide 5
$0
13.2
BMD
Eliminations
4Q 2011
Wood
4Q 2012
BMD
Corporate
March 7, 2013
2012 Financial Highlights
Sales
$ Millions $3,500
$120
$3,000
$100
$2,500
32.9
$80
$2,779.1
$2,000 $1,500
EBITDA
$ Millions
$96.6
2,190.2 $60
1,779.4 +24%
+919%
$40
80.2
$1,000 $500 $0
$2,248.1
712.5
$20
943.3 $0
(243.7)
(354.4)
13.3
$9.5
(14.2)
(16.5)
2011
2012
($20)
($500) ($1,000)
($40)
2011
Wood
Slide 6
10.4
2012
BMD
Eliminations
Wood
BMD
Corporate
March 7, 2013
Wood Products Plywood Net Sales Price
Sales Volume (mmsf 3/8” basis)
($/msf 3/8” basis)
400
$350
350
250
346
328
300
318
286
343 296
339
304
290
$300 267
284
$250
232
230
229
238
240
$200 200 $150
150
$100
100 50
$50
0
$0 1Q
2Q
3Q
4Q
1Q
2011 Slide 7
2Q
3Q
4Q
2012 March 7, 2013
Wood Products EWP LVL
(mmcf) 3.0
2.6
2.5 2.0
(mmelf) 45 40 35 30 30 22 25 20 15 10 5 0 1Q
2.3
2.1
1.9
1.8
1.6
2.1 1.8
1.5 1.0 0.5 0.0 1Q
2Q
3Q
4Q
($/cf)
42
39
35
32
31 26
2Q
3Q
4Q
($/melf)
$18 $16
I-Joists
$1,000 16.1
15.9 15.1
935
928
958 915
919 909
$900
15.5 14.9
976
974
14.8
14.5 14.5
$800
$14 $700 $12
$600
$10
$500 1Q
Slide 8
2Q
3Q
4Q
1Q
2011
2012
2Q
3Q
4Q March 7, 2013
Building Materials Distribution Sales ($ Millions)
(% of Sales)
$700
100
581
$600 $500 $400
605
451
553 501
471
12
13
14
13
13
15
14
42
41
39
37
39
36
34
46
46
47
50
48
49
52
80 38
429 60
378
$300
40
$200 20
$100 $0
0
1Q
2Q 2011
Slide 9
11
3Q 2012
4Q
51
1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Commodity
General Line
EWP
March 7, 2013
Debt and Liquidity Highlights Pro Forma for IPO
($ Millions)
12/31/2012
12/31/2011
250.0 (292.5) (42.5)
$
275.0 (54.5) 220.5
$
195.6 292.5 488.1
$
195.6 54.5 250.1
$
Net Debt Long-term debt 1 Cash & cash equivalents 1 Net debt (cash)
$ $
$
$
219.6 (182.5) 37.1
Liquidity Position 2
ABL excess availability 1 Cash & cash equivalents 1 Total liquidity
$ $
$
$
141.8 182.5 324.3
1 Reconciliation
of GAAP measures to non-GAAP, as well as a reconciliation of actual 12/31/12 amounts to pro forma for IPO, are provided as an appendix.
2 Net
Slide 10
of a $31.3 million availability threshold at 12/31/2011.
March 7, 2013
Working Capital ($ Millions) Receivables Inventory Other Current Assets (excluding cash)
Accounts Payable Accrued Liabilities
Net Working Capital (excluding cash)
Slide 11
2012
2011
Change
$ 141.6 325.8 5.5 473.0
$ 123.9 284.0 4.9 412.8
$ 17.7 41.8 0.7 60.2
142.1 94.0 236.2
117.9 60.1 178.0
24.2 34.0 58.2
$ 236.8
$ 234.8
$
2.0
March 7, 2013
Cash Flow Highlights ($ Millions) Net Cash Provided By (Used For) Operations
2012
2011
$ 80.1
$ (43.0)
Net Cash Used For Investment
(29.4)
(36.6)
Net Cash Used For Financing
(178.7)
(2.5)
Net Decrease in Cash
(127.9)
(82.1)
182.5
264.6
$ 54.5
$ 182.5
Cash Balance at Beginning of Period Cash Balance at End of Period
Slide 12
March 7, 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) continues to be favorable as a result of improved demand. Capacity restarts have been announced by a number of industry participants.
Pricing for our engineered wood products is improving in response to higher demand and higher operating rates, as well as producer input cost pressures.
Our IPO and recent financing activities position us well for revenue and earnings leverage in 2013 and beyond.
Slide 13
March 7, 2013
Appendix March 7, 2013
Appendix Net debt (cash) includes long- and short-term debt owed to third parties, less cash and cash equivalents. The following table reconciles pro forma and actual total debt to net debt (cash) at December 31, 2012 and 2011: Proforma ($ Millions) Long-term debt
for IPO $
Less cash and cash equivalents Net debt (cash)
(A)
$
250.0
(A)
(292.5)
(B)
(42.5)
Long-term debt at 12/31/2012
12/31/2012
12/31/2011
$
$
275.0 (54.5)
$
220.5
Slide 15
$
37.1
(25.0)
Pro forma long-term debt
$ 250.0
Cash and cash equivalents at 12/31/12
$
54.5
Plus net proceeds from IPO
263.0
Less payment on Revolving Credit Facility with proceeds from IPO
(25.0)
Pro forma cash
(182.5)
$ 275.0
Payment on Revolving Credit Facility with proceeds from IPO
(B)
219.6
$ 292.5
March 7, 2013
Appendix EBITDA represents income (loss) before interest (interest expense and interest income), income taxes, and depreciation and amortization. The following table reconciles net income (loss) to EBITDA for the three months ended December 31, 2012 and 2011, and September 30, 2012: ($ Millions) Net income (loss)
4Q12 $
1.3
4Q11 $
(13.8)
3Q12 $
23.5
Interest expense
7.3
4.8
4.8
Interest income
(0.1)
(0.1)
(0.1)
Income tax provision
0.1
0.1
0.1
Depreciation and amortization
8.5
9.5
8.5
EBITDA
Slide 16
$
17.0
$
0.5
$
36.8
March 7, 2013
Appendix The following table reconciles net income (loss) to EBITDA for the years ended December 31, 2012 and 2011:
Year Ended December 31 2012 2011
($ Millions) Net income (loss) Interest expense Interest income Income tax provision Depreciation and amortization EBITDA
Slide 17
$
41.5 21.8 (0.4) 0.3 33.4
$
(46.4) 19.0 (0.4) 0.2 37.0
$
96.6
$
9.5
March 7, 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 December 31, 2012 and 2011, and September 30, 2012: ($ Millions) Building Materials Distribution Segment income (loss) Depreciation and amortization Segment EBITDA
Wood Products Segment income (loss) Depreciation and amortization Segment EBITDA
Slide 18
4Q12
4Q11
3Q12
$
5.9 2.2
$
(0.8) 2.2
$ 10.3 2.3
$
8.1
$
1.3
$ 12.6
$
7.0 6.3
$
(5.1) 7.3
$ 22.5 6.2
$ 13.2
$
2.2
$ 28.6
March 7, 2013
Appendix The following table reconciles segment income (loss) to segment EBITDA for the years ended December 31, 2012 and 2011:
($ Millions) Building Materials Distribution Segment income Depreciation and amortization Segment EBITDA
Wood Products Segment income (loss) Depreciation and amortization Segment EBITDA
Slide 19
Year Ended December 31 2012 2011
$ 24.0 8.8
$
2.0 8.4
$ 32.9
$ 10.4
$ 55.8 24.4
$ (15.1) 28.4
$ 80.2
$ 13.3
March 7, 2013
