Boise Cascade Company Fourth Quarter 2013 Earnings Webcast February 21, 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
February 21, 2014
Executive Summary
U.S. housing starts were 927,000 for the year, up 19% from 2012’s 781,000 starts. For 2014, we expect about 1.1 million U.S. housing starts, which should provide favorable backdrop for further revenue and earnings growth.
Fourth quarter sales were $798.3 million, up 15% from the prior year quarter.
Fourth quarter net income was $9.8 million, or $0.25 per share.
2013 sales were $3.3 billion, up 18% from 2012.
Net income and adjusted net income for our first year as a public company were $116.9 million and $48.3 million.
Integration of newly acquired plywood operations continues to go well.
Outlook:
First quarter revenue and earnings comparisons will be challenging Full year outlook is positive for EWP and distribution Strong balance sheet to take advantage of opportunities
Slide 3
February 21, 2014
4Q 2013 Financial Highlights
Sales
$ Millions
EBITDA
$ Millions
$1,000
$40
$900
$35
$800
13.4
$30
$33.1
$700
$798.3 $600 $500
615.5
$25 $20
553.1
8.1 $15
$400
+95%
+15% $300 $200 $100
230.5
$694.6
301.3
$5
13.2 $17.0
$0
$0
(89.0)
(118.4)
4Q 2012
4Q 2013
($100) ($200)
(4.3)
(5.4)
4Q 2012
4Q 2013
($5) ($10)
Wood
Slide 4
25.1
$10
BMD
Eliminations
Wood
BMD
Corporate
February 21, 2014
Wood Products Plywood Net Sales Price
Sales Volume (mmsf 3/8” basis)
($/msf 3/8” basis)
450
$350
428
400 350
346 328
346
355
331
290
$300 343 344
328
318 303
304 302
267
339
$250 300 250
$200
200
$150
150 $100 100 $50
50 0
$0 1Q
2Q
3Q
1Q
4Q
2012 Slide 5
2Q
3Q
4Q
2013 February 21, 2014
Wood Products EWP LVL
(mmcf) 3.5
3.0
3.0 2.5
(mmelf) 55 50 45 41 40 35 30 30 25 20 15 10 5 0 1Q
2.7
2.7
2.7
2.6
2.3
2.1
2.1
2.0 1.5 1.0 0.5 0.0 1Q
2Q
3Q
4Q
($/cf)
51 44 39
44
42 35
2Q
3Q
4Q
($/melf)
$18 $16
I-Joists
$1,100
15.1 15.3
15.9
15.7 14.9
14.8
15.9
$1,000
935
964
928
1,024
1,017
989 915
909
$900
14.5
$800
$14
$700 $12 $600 $10
$500 1Q
Slide 6
2Q
3Q
4Q
1Q
2012
2013
2Q
3Q
4Q February 21, 2014
Building Materials Distribution Sales ($ Millions)
(% of Sales)
$800
100
722 681
$700 581
$600 $500
615
605
581
13
13
15
14
15
14
17
17
37
39
36
34
31
35
34
32
50
48
49
52
54
51
49
51
80
553
451
60
$400 40
$300 $200
20
$100 $0
0
1Q
2Q 2012
Slide 7
3Q 2013
4Q
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Commodity
General Line
EWP
February 21, 2014
Working Capital ($ Millions) Receivables Inventory Other current assets*
12/31/2013 12/31/2012 $
Accounts payable Accrued liabilities
Net working capital*
$
160.1 383.4 7.9 551.3
$ 141.6 325.8 5.5 472.9
142.1 96.9 239.0
133.5 94.0 227.6
312.3
$ 245.4
Change $
18.5 57.6 2.3 78.4 8.6 2.9 11.4
$
66.9
*Excludes cash and deferred taxes
Slide 8
February 21, 2014
Debt and Liquidity Highlights ($ Millions)
12/31/2013
12/31/2012
Net Debt Long-term debt Cash & cash equivalents Net debt
$ $
301.6 (118.2) 183.4
$
258.3 118.2 376.6
$
$
275.0 (45.9) 229.1
Liquidity Position ABL excess availability Cash & cash equivalents Total liquidity
Slide 9
$ $
$
195.6 45.9 241.5
February 21, 2014
Outlook
The current consensus estimate for 2014 U.S. housing starts is 1.1 million vs. 927,000 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
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February 21, 2014
Appendix February 21, 2014
Appendix Adjusted net income represents net income before certain unusual items. The year ended December 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 years ended December 31, 2013 and 2012: Year-ended December 31, 2013 2012 (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
$ 116,936 (68,666) $ 48,270
40,203 40,226
$1.20 $1.20
$ 41,496 $ 41,496
29,700 29,700
$1.40 $1.40
February 21, 2014
Appendix EBITDA represents income before interest (interest expense and interest income), income taxes, and depreciation and amortization. The following table reconciles net income to EBITDA for the three months ended December 31, 2013 and 2012, and September 30, 2013, and the years ended December 31, 2013 and 2012: Three Months Ended 4Q13 4Q12 3Q13
($ Millions) Net income
$
9.8
$
1.3
$
15.9
Year Ended 2013 2012 $
116.9
$
41.5
Interest expense
5.6
7.3
5.2
20.4
21.8
Interest income
(0.0)
(0.1)
(0.1)
(0.2)
(0.4)
Income tax provision (benefit)
5.9
0.1
9.6
(38.8)
0.3
Depreciation and amortization
11.8
8.5
9.0
38.0
33.4
EBITDA
Slide 13
$
33.1
$
17.0
$
39.5
$
136.4
$
96.6
February 21, 2014
Appendix Segment EBITDA represents segment income before depreciation and amortization. The following table reconciles segment income to EBITDA for the three months ended December 31, 2013 and 2012, and September 30, 2013, and the years ended December 31, 2013 and 2012: ($ Millions)
Three Months Ended 4Q13 4Q12 3Q13
Year Ended 2013 2012
Wood Products Segment income Depreciation and amortization Segment EBITDA
$ 15.9
$ 7.0
$ 17.9
$ 77.7
$ 55.8
9.2
6.3
6.7
28.7
24.4
$ 25.1
$ 13.2
$ 24.6
$ 106.3
$ 80.2
$ 10.8
$ 5.9
$ 17.9
$ 39.9
$ 24.0
2.6
2.2
2.2
9.2
8.8
$ 13.4
$ 8.1
$ 20.1
$ 49.2
$ 32.9
Building Materials Distribution Segment income Depreciation and amortization Segment EBITDA
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February 21, 2014
